Anathema To Our Ways and Destructive To The Progress Made!

SKIDAWAY ISLAND REPUBLICAN CLUB

PRESIDENTS’ DAY DINNER

“SPIRIT OF AMERICA”

MONDAY, FEBRUARY 20, 2012

6:00 PM

PLANTATION CLUB BALLROOM

Bernie Marcus has become a well-known businessman and philanthropist in the Atlanta community since cofounding the Home Depot in 1979.  He is a frequent guest on Fox News due to his year-long efforts to unseat President Obama on behalf of small business and our economy.

Banquet Chairmen   -  Gary Bocard and Tom Osborn

$125/person    Individual Seats Available Freedom Tables Only

For Reservations, Contact:  Tom Sharp (5422) or Gary Bocard (1038)

All checks payable to SIRC

Mail to Tom Sharp, 6 Sedgewater Retreat, Savannah, GA  31411

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Message to the petty earth scorchers - Newt, Santorum, Perry,  Etc.: Obama is the opponent not each other (See 1 and 1a below.)

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I have seen reports that China is beginning to have second thoughts about their close commercial ties with Iran. Is Turkey also beginning to come to its senses? 

One never really knows what is happening behind the scenes and perhaps the Administration's recent statements by  Sec. of Defense Panetta are beginning to sink in and creating the desired effect, ie. we are willing to draw lines in the water. The question remains, however, will we actually do anything to stop Iran's nuclear drive or are we just posturing ?  You decide.   (See 2 and 2a below.)

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Romney maintains he knows how to get Americans back to word.  The key is remove the uncertainty.  No sane businessman spends money to expand when the outlook is murky and the prospects of an adequate return are unclear.

Uncertainty is caused by the policies of this administration in the field of costly regulation that goes beyond solution, the threat of inflation and erosion in the value of the dollar by excessive spending , attacks on Capitalism, Wall Streeters and executives, pandering to unions, the threat of increased and punitive taxes and a foreign policy that is weakening our nation in the eyes of the world.

It does not take a rocket scientist to understand 'PNF/F's' divide and conquer approach is a downer and has a negative effect on the nation's psyche.  Americans are upbeat by nature and over time we have worked hard and effectively at addressing and solving many of  our social and racial problems. This president has been destructive and his win re-election at any cost is anathema to our ways. (See 3 and 3a below.)
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Is this administration and Attorney General Holder's over reach to defy the underlying precepts of our Constitution forcing the Supreme Court to return to its roots , ie interpret our Constitution's underlying meaning as intended?

My father, who practiced law for over 50 years, always said the way to get rid of bad law was to enforce it.  (See 4 below.)
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Free markets have a way of self correcting. It might take time but eventually excessive  trends will right themselves as public demand for same rises.  The key is for government to call attention and to highlight and then step out of the way and let the free markets adjust the excess.

The current administration apparently does not believe  the free market is capable of adjusting and that government knows what is the best ultimate solution.  This is where 'PNF/F' arrogantly goes wrong and this is why our recovery has been slower than usual along with bad policy, government manipulation and improperly focused and directed  overspending . (See 5 below.)

India seems to be entering the arena of what we forgot.  (See 5a below.)

This was sent to me by a friend and fellow memo reader.  It hits the squirrels on the head: "This is Sooooooo...close to being factual it's not funny!!!

Watch it here:  http://www.youtube.com/embed/KV-RqPtT2PU"
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One of the best minds, Elliot Abrams, analyzes the prospects for Mideast Peace.  He lays out factors which are likely to shape Abbas, Netayahu and 'PNF/F's' responses.  (See 6 below.)
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Dick

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1)Refocus: It's Obama

By J. Robert Smith

The best description yet of Mitt Romney was just penned by Jonah Goldberg at National Review Online.  Goldberg fancies Romney as "a super-helpful manager at a rental car company."  That's on the order of Alice Roosevelt Longworth (Teddy's daughter)'s withering depiction of Thomas E. Dewey (failed GOP presidential nominee in '44 and '48, and Romney's political establishment ancestor) as "The Little Man on the Wedding Cake." 

Goldberg was being descriptive, not demeaning like the acid-tongued Alice.  Yet for past and present business travelers, particularly, the connection between Romney and the vacuously smilin', very accommodating rental car manager resonates.   

Image-wise, grassroots conservatives would prefer a GOP presidential nominee to be a white-hat cowboy on a horse riding the range (remember Barry Goldwater and Ronald Reagan?), rather than a guy in an emerald-green sleeveless sweater and tan pants scooting around a rental car lot in a golf cart.  But in today's postmodern-everything America, perhaps rental car managers are it. 

But it doesn't really matter lots about Mitt Romney's image.  Assuming Romney capitalizes on his New Hampshire primary performance with similar or better performances in South Carolina and Florida, then Romney's The Man.  He'll carry the GOP standard into the 2012 general election.  Thanks to a fractured conservative base, Romney's Last Man Standing strategy will have worked like a charm.

For Romney to defeat that disaster named Barack Obama, the presidential sweepstakes needs to be exclusively about the current occupant of the nation's executive mansion -- meaning that grassroots conservatives and their GOP establishment brethren need to join hands and return to the idea that the coming election is a referendum on Mr. Obama.  An up-or-down vote on our left-leaning, European socialist-loving chief executive is Romney's ticket to four years of Easter egg-hunts on the White House lawn.

Some variation of Romney's Last Man Standing gambit is what might get him past Barack Obama and into the White House.  Perhaps Romney's general election strategy could be termed "Man Still Standing" (that could be Romney's Indian name, too, for any tribe desirous of adopting him). 

"Still standing" is apt, because Mr. Obama and his legions from the bowels of the left intend to direct about a billion dollars' worth of heavy fire at the GOP's smilin' car rental manager.  The mainstream media, always willing to enable Democrats and the left, will add their heft to the "Get Mitt" offensive.  For Romney to win means staying on both feet while being slugged to near senselessness by a very desperate and mean-spirited Mr. Obama and his leftist trolls. 

Romney and the right do have a potent counter, however.  Romney can't be just the Weeble that wobbles but doesn't fall down and expect to win.  As Romney has been doing lately, his focus needs to stay relentlessly on the president and his awful record.  Are Americans better off now than they were four years ago?  Voters might have some ambiguity about answering that question with an unqualified "yes."  But how about answering this question: "Are Americans -- and the nation generally -- worse off than four years ago?"  If Rasmussen's right track/wrong track numbers are any indication, the answer to the last question is overwhelmingly "yes."

The key to victory for any candidate isn't playing defense.  Muhammad Ali's old Rope-a-Dope routine won't work.  Democrats know this well.  A candidate plays defense when he has no other choice, and only does so temporarily, while he seeks to employ tactics that put him back on the offensive.  Romney needs to satisfy most voters and reassure others that he's competent to perform the job of president and that his proposals move away from Mr. Obama's statist overreach and toward reviving the nation's flagging economy. 

Under Romney's emerald-green sweater needs to be a warrior's spirit and -- dare we say -- a taste for blood.  Romney has to go after Mr. Obama like a pit bull and, once he clamps down on Mr. Obama's boney wrist or ankle, not let go.

For the coming election, the economy is all-important (unless or until there's a foreign crisis).  In fact, the economy is the driver throughout the 2012 election cycle.  Romney needs to awaken mornings thinking about what he's going to say about the economy, talk about it all day long on the campaign trail, and go to bed at night thinking -- you guessed it -- about the economy and his next angle to convince voters that four more years of the dour Mr. Obama is a catastrophe in the making.

In an interview with the Fox and Friends crew on Wednesday morning, Romney was asked if falling unemployment figures bode ill for his efforts to make the economy the centerpiece of his campaign against Mr. Obama.  Romney answered rightly that more Americans finding jobs are a welcome development.  Moving forward, though, Romney needs to pivot hard when asked that question; he needs to challenge the validity of the jobs stats proffered.  The numbers are cooked to the benefit of Mr. Obama and faithfully regurgitated by the fossil media to boost the president's reelection chance.  Romney needs to stand up for the underemployed and the given-up unemployed. 

But the perception of an improving economy, however slight and misleading, undercuts Romney's arguments about the economy, you say?  Romney certainly can't buck perceptions entirely, but he and the right will need to attempt to shape and direct those perceptions.  Romney could say that any improvements in the economy are the result of the extraordinary efforts of entrepreneurs and businessmen and women who are acting in the face of a president whose policies are unremittingly hostile.  Giving Barack Obama a lame-duck term will not only continue those hostile policies, but open the door to worse policies, which risk greater economic trouble. 

Romney should play the lame duck theme about Mr. Obama continuously.  "Imagine," Romney should say to audiences, "giving Barack Obama four more years in the White House with nothing to lose."  And then Romney could supplement his scenario with a litany of Mr. Obama's harmful policies.  Just paint the picture for voters, Mitt.      

For Romney to win the White House and the GOP to capture the Senate (holding the U.S. House seems probable), this election boils down to voters rejecting Mr. Obama and feeling comfortable enough with Mitt Romney.  All voters want from Romney is for him to rent them a car that goes in the right direction and gets them to their destination.  Upgrades aren't required.




1a)Jon Huntsman urges Republicans to halt Bain attacks on Romney

By Sandhya Somashekhar

Jon Huntsman on Wednesday joined the chorus of Republicans urging Mitt Romney’s opponents to tone down their attacks on the former Massachusetts governor over his time at the investment firm Bain Capital.

Former Utah governor Jon Huntsman (R). (Cheryl Senter/Associated Press)“If you have creative destruction in capitalism, which has always been a part of capitalism, it becomes a little disingenuous to take on Bain Capital,” Huntsman told reporters Wednesday after a campaign appearance at the University of South Carolina in Columbia. “I think it’s more instructive to look at governor Romney’s record as governor.”

But later, Huntsman’s spokesman Michael Levoff struck a somewhat different tone.

“Gov. Huntsman believes Romney has an electability problem regarding his time at Bain, but he does not believe attacking the venture capital business model is productive,” he said in a statement.

Newt Gingrich and Texas Gov. Rick Perry have lately stepped up their criticism of Romney over his time at the firm, which was responsible for saving many companies but at the cost of thousands of jobs. But some conservative groups have criticized the attacks as anti-capitalist and urged GOP candidates to stop following the line of attack.

At his first appearance in South Carolina after coming in third in Tuesday’s New Hampshire primary, Huntsman said the best way to deal with the inevitable job losses that occur in a capitalist system, in which companies are always breaking up and merging, is to have a strong economy so that laid-off workers can find new positions. He likened it to breaking up large banks, which he favors.

“You can’t be on both sides of this issue. If you’re going to stand for breaking up the banks then you can’t criticize Bain Capital for doing some of what it did,” he said.

Asked about his chances in South Carolina, Huntsman said his expectations were “very low” but did not elaborate. He indicated that he planned to stay in the race despite his relatively lackluster performance in Tuesday’s primary and said he was looking forward to the next contest, in Florida

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2)Turkey halts Iranian arms corridor to Syria, balks at nuclear Iran 

Turkish FM Davutoglu with Iranian President Ahmadinejad

When IDF Military Intelligence chief Maj.-Gen. Aviv Kochavi accused Iran and Hizballah Wednesday, Jan. 11of directly helping Bashar Assad repress the uprising against him with arms, Turkey had just taken a stand against the Iranian corridor running weapons to Syria via its territory,

Earlier this week, Ankara reported halting five Iranian trucks loaded with weapons for Syria at the Killis Turkish-Syrian border crossing and impounding its freight. According to intelligence sources, the Iranian convoy was not really stopped at Killis but at the eastern Turkish Dobubayazit border crossing with Iran, near Mount Ararat. This supply route for Syria had been going strong for months. Ankara's decision to suspend it has reduced its volume by 60 percent.

The Turks kept very quiet about the Dogubayazit route because disclosure would have exposed them as working two sides of the Syrian conflict – letting Tehran set up a clandestine arms route for helping the Assad regime crack down on protest, while publicly posing as the leading champions of the Syrian protest movement – even to providing the Free Syria Army with bases and training facilities.

The influx of Iranian arms supplies via Turkey gave the Syrian army a major boost in quelling the uprising especially in the restive towns of Hama, Homs and Idlib, where demonstrations have dwindled. Now Ankara is worried about the consequences. Thursday, President Abdullah Gul raised fears of the Syrian uprising mutating into civil war. Our sources report that Ankara is concerned that sectarian conflict in Syria could spill over into Turkey.

Sources report exclusively, Ankara changed course against Iran after Turkish Foreign Minister Ahmet Davutoglu visited Tehran on Jan. 5. His mission was to warn Iranian leaders including President Mahmoud Ahmadinejad whom he met that Turkey will not stand for Iran acquiring a nuclear bomb and would act to disrupt its program.

Although his visit was officially presented as an effort to broker the resumption of long-stalled nuclear talks between Tehran and the five world powers plus Germany (P5+1), Davutoglu in fact informed Ahmadinejad in no-nonsense terms, “Turkey can't live between two nuclear powers, one to the north (Russia) and one to the east (Iran)." The minister warned that if Tehran goes into production of a nuclear weapon, Ankara's first step would be to open the door for NATO forces to deploy along its border with Iran.

Apparently, Davutoglu gave Ahmadinejad a week to clarify the information reaching the West that Tehran had already begun assembling a nuclear weapon, so belying the persistent Iranian claim that its nuclear program is peaceful. After that, he said, Ankara would embark on progressively tougher counter-action.

And indeed, when clarifications from Tehran had not been received by Tuesday, Jan. 10, Turkey went into action to halt the Iranian weapons convoy to Syria.

Taking advantage of the new opportunities presented by the US military departure from Iraq last month, Iranian officials the next day, Wednesday, Jan. 11, ordered Iraqi Prime Minister Nouri al-Maliki to shut the Iraqi-Jordanian border to convoys carrying Turkish export goods to Persian Gulf destinations.

The following day, Thursday, Iran's Speaker of Parliament, Ali Larijani, turned up in Ankara to try and sort things out between Iran and Turkey before they got out of hand. 

2a)In secret study, CIA and 15 other U.S. intelligence agencies warn Obama against leaving Afghanistan too soon

By Ken Dilanian and David S. Cloud

Classified National Intelligence Estimate completed last month and delivered to the White House, at odds with recent optimistic statements by Pentagon officials and have deepened divisions between U.S. intelligence agencies and American military commanders about progress in the decade-old war

The U.S. intelligence community says in a secret new assessment that the war in Afghanistan is mired in stalemate, and warns that security gains from an increase in American troops have been undercut by pervasive corruption, incompetent governance and Taliban fighters operating from neighboring Pakistan, according to U.S. officials.

The sobering judgments, laid out in a classified National Intelligence Estimate completed last month and delivered to the White House, appeared at odds with recent optimistic statements by Pentagon officials and have deepened divisions between U.S. intelligence agencies and American military commanders about progress in the decade-old war.

The detailed document, known as an NIE, runs more than 100 pages and represents the consensus view of the CIA and 15 other U.S. intelligence agencies. Similar in tone to an NIE prepared a year ago, it challenges the Pentagon's claim to have achieved lasting security gains in Taliban strongholds in southern Afghanistan, said U.S. officials who have read or been briefed on its contents.

In a section looking at future scenarios, the NIE also asserts that the Afghan government in Kabul may not be able to survive as the U.S. steadily pulls out its troops and reduces military and civilian assistance.

"Its viability is tenuous," said one official, citing the report. He requested anonymity to discuss classified material.

Although the review gives the U.S. military and its allies credit for driving the Taliban out of some areas last year, it says the gains were not enough to bolster the weak central government, haven't diminished the Taliban's will to keep fighting and haven't instilled confidence among Afghans in much of the country.

As a result, the NIE says the overall difficulties could jeopardize the Obama administration's plans to withdraw most U.S. troops and hand over responsibility for the war to the Afghan government by 2014.

The findings prompted a sharp response from Marine Corps Gen. John Allen, the U.S. commander of Western forces in the war, and Ryan Crocker, the U.S. ambassador to Afghanistan, who filed their objections in a one-page written dissent.

The comment was also signed by Marine Corps Gen. James Mattis, commander of Central Command, and Adm. James Stavridis, supreme allied commander of NATO.

Military and Pentagon officials argued that assumptions used by intelligence agencies were flawed.

"It assumes a quicker drawdown of U.S. support to the Afghan government than a lot of people are projecting," said one U.S. official familiar with Pentagon thinking, speaking of the assessment.

Military officials also cited what they say are gaps in the intelligence agencies' understanding of the Taliban leadership's thinking, the officials said.

Some in Congress and the Obama administration are concerned that the bleak assessment suggests that little progress has been made in the last year. During that time, the U.S. has suffered more than 400 military fatalities and spent more than $100 billion. As of Wednesday, 1,873 Americans had been killed in Afghanistan since U.S. forces invaded in late 2001, according to the website icasualties.org.

Army Gen. David H. Petraeus wrote a dissent to last year's NIE when he was U.S. commander in the war. He is now director of the CIA, and he pledged during his Senate confirmation hearings not to allow his personal views as a former commander to color the CIA's analysis.

The recent NIE agrees with the military that Afghan Taliban fighters have found safe haven in Pakistan's tribal areas. After a six-week lull, CIA drone strikes resumed this week in North Waziristan, reportedly killing four people Wednesday, but U.S. officials warned that drone strikes alone cannot prevent Afghan insurgents from regrouping there.

"It's all about the safe haven," one congressional official said. "That has to be solved."

Military officials have acknowledged that there are no easy answers, and that a peace deal may be the only solution.

The Taliban has suffered heavy losses, particularly in southern Afghanistan, but it also has gained ground in the country's east, near Pakistan, according to officials briefed on the NIE. But the intelligence community is not convinced that military gains in the south can be maintained once large numbers of U.S. forces withdraw.

The Afghan army and in particular the police forces face enormous problems contending with the insurgency as U.S. assistance declines, the document concludes. But it also raises doubt about whether Afghan civilian ministries can govern successfully in the south and other areas.

In late 2009, President Barack Obama agreed to deploy 33,000 additional troops to Afghanistan, and the total U.S. force in the country peaked at about 100,000 last summer. The U.S. now has 91,000 troops there, and all combat forces are scheduled to withdraw by 2014.

Pentagon planners assume that a residual force will remain to train and assist the Afghans, but the White House has yet to sign off on that. The Obama administration is negotiating a long-term military alliance with the government of Afghan President Hamid Karzai.

Pentagon officials insist that the troop increase has put the Taliban on its heels.

"We're moving in the right direction and we're winning this very tough conflict," Defense Secretary Leon E. Panetta told troops Dec. 14 at Forward Operating Base Sharana in the eastern province of Paktika.

Pentagon spokesman George Little said Wednesday that Panetta continues to believe there has been "substantial progress." The key, he said, is "to strengthen Afghan security forces and to build toward a long-term relationship with Afghanistan."

National intelligence estimates often carry significant weight in U.S. policy circles, although they are hardly immune to errors.

Most famously, the 2002 NIE on Iraq judged with high confidence that Saddam Hussein was secretly amassing chemical and biological weapons, and trying to build a nuclear bomb.

The George W. Bush administration repeatedly cited that NIE before the 2003 invasion of Iraq, but it ultimately was proved inaccurate in almost every respect.

Although they declined to discuss the contents of the current NIE, some members of Congress with access to intelligence said they are concerned about the lack of progress in Afghanistan.

"I think there are real problems," said Sen. Dianne Feinstein, D-Calif., who chairs the Senate Intelligence Committee. "There have been gains in security . . . but the Taliban is still a force to be reckoned with. They still occupy considerable land in the country."

Rep. Jan Schakowsky, D-Ill., a member of the House Intelligence Committee, said the Obama administration should release an unclassified version of the NIE for public debate.

"I do think it would be very helpful to release an unclassified version," she said. "Given the expense and the lives that are at stake, the American people should see some of the top-line conclusions of the NIE

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3)The American Jobs and Growth Agenda

By Thomas Donohue

Each year, ahead of the president’s State of the Union address, the U.S. Chamber of Commerce takes stock of the state of American business. As we begin 2012, the state of American business is gradually improving—but it is doing so weakly, slowly, and insufficiently to put our nation back to work. While everyone was pleased to see unemployment inch down to 8.5% last month, let’s not forget that it was 5% in December 2007. We’re still down 6 million jobs since the recession hit, and there are more than 23 million Americans who are either unemployed, working part time, or who have given up looking for jobs. Our nation’s highest priority must be to put these Americans back to work.

To achieve this goal, our economy has to grow much faster than it is today. But government policies and Washington politics are undermining business and slowing our recovery. While the federal government expands its powers, costs, obligations, and debt at a record pace, businesses are buckling under uncertainty and are paralyzed by an onslaught of new regulations and taxes.

Without question, we must embark on a concerted, coordinated effort to accelerate economic growth and create jobs. We can do it if our leaders in Washington work with each other and with the business community to clear away the impediments that are standing in the way of a stronger economy. Our leaders must make 2012 a year of urgent action, not delay and dithering.

The Chamber is advancing an ambitious, practical, commonsense American Jobs and Growth Agenda that will spur our economy and create millions of jobs—without raising taxes or adding to the deficit. Here’s how:

America should make strong investments in natural resources and infrastructure. We are the on the cusp of an energy revolution that could employ millions of Americans, reduce our dangerous dependence on foreign sources, generate billions, and reinvigorate U.S. manufacturing. To realize that potential, we must remove barriers to our vast domestic resources and strengthen our supply through key energy infrastructure projects like the Keystone XL pipeline. At the same time, let’s modernize our overall infrastructure system by passing multiyear transportation funding bills and knocking down roadblocks to $250 billion in private capital.

America should expand global commerce through trade, investment, and tourism. Ninety-five percent of the world’s customers live outside the United States. We’ll lose access to lucrative global markets—and sales and jobs—without a bold, forward-looking trade agenda. We need to attract more foreign investment to the United States, which already supports five million direct jobs in America. And by drawing as many global travelers to our shores today as we did in 2001, we could realize $860 billion in economic stimulus and create 1.3 million new jobs.

America should maintain and advance its competitive edge. We can’t allow our ideas, innovations, and jobs to be stolen by foreign rogue websites. Nor can we allow our workforce to fall behind. A competitive workforce requires major improvements to our public K-12 education system and high-skilled visa reform to ensure that foreign nationals educated in America put their skills to work in our economy. And to keep our businesses thriving and competitive, we’ve got to modernize a regulatory system that is currently suffocating business expansion and stifling job creation. Likewise, our antiquated tax code must be reformed to lower rates for individuals and corporations, while broadening the overall tax base.

Finally, America should reassert its economic leadership by reining in government spending and curbing deficits and debt. That requires serious entitlement reform. Entitlements already consume over 55 percent of federal outlays. And without reform, they will soon devour the entire budget.

Our nation has challenges. But we also have ideas, assets, and opportunities. Now we need leaders who are ready to seize them and solve America’s problems. We need leaders willing to confront reality, not ignore it. We need leaders who understand that Americans can have big differences in philosophy but still find common ground. And we need leaders who will act with urgency—election year or not.

The business community has a responsibility to lead as well. We must not lose the spirit of enterprise and risk-taking that have served the country and our economy so well. And if government starts removing the impediments that are stifling growth and jobs, then it will be incumbent on business to start taking a few more risks and making some new investments.

The state of American business is one of readiness—we’re ready to invest, to compete, and to hire. But we need Washington leaders to be our partners in this effort. The only way out of the problems we face is to drive economic growth from one end of the country to the other. So let’s go do it.

Mr. Donohue is President and CEO of the U.S. Chamber of Commerce




3a)A Step Backward for Economic Freedom in 2012

Countries in North America and Europe led the global decline thanks to excessive government regulation and stimulus spending.

By EDWIN J. FEULNER

The world economy is in trouble, and governments are making things worse. Here's the story, right out of the pages of the 2012 Index of Economic Freedom, published Thursday by the Heritage Foundation and The Wall Street Journal:

"Rapid expansion of government, more than any market factor, appears to be responsible for flagging economic dynamism. Government spending has not only failed to arrest the economic crisis, but also—in many countries—seems to be prolonging it. The big-government approach has led to bloated public debt, turning an economic slowdown into a fiscal crisis with economic stagnation fueling long-term unemployment."

The new index documents a world in which economic freedom is contracting, hammered by excessive government regulations and stimulus spending that seems only to line the pockets of the politically well-connected. Government spending rose on average to 35.2% of gross domestic product (GDP) from 33.5% last year as measured by the 2012 index.

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Most of the decline in economic freedom was in countries in North America and Europe. Canada, the United States and Mexico all lost ground in the index, and 31 of the 43 countries in Europe suffered contractions. They ought to know better. These are the very countries that have led the world-wide revolution in political and economic freedom since the end of World War II. But now, weighed down by huge welfare programs and social spending that is out of control, many governments are expanding their reach in ways more reminiscent of the 1930s than the 1980s.

How about the U.S., historically the country more responsible than any other for leading the march of freedom? Under President Barack Obama, it has moved to the back of the band. Its economic freedom score has dropped to 76.3 in 2012 from 81.2 in 2007 (on a scale of 0-100). Government expenditures have grown to a level equivalent to over 40% of GDP, and total public debt exceeds the size of the economy.

The expansion of government has brought with it another critical challenge to economic freedom: corruption. The U.S. score on the index's Freedom from Corruption indicator has dropped to 71.0 in 2012 from 76.0 in 2007. That's not surprising, given the administration's excessive regulatory zeal. Each new edict means a new government bureaucracy that individuals and businesses must navigate. Each new law opens the door for political graft and cronyism.

There are some bright spots. Economic freedom has continued to increase in Asia and Africa. In fact, four Asia-Pacific economies—Hong Kong, Singapore, Australia and New Zealand—top the Index of Economic Freedom this year. Taiwan showed impressive gains, moving into the index's top 20. Eleven of the 46 economies in sub-Saharan Africa gained at least a full point on the index's economic freedom scale, and Mauritius jumped into the top 10 with the highest ranking—8th place—ever achieved by an African country.

The 2012 index results confirm again the vital linkage between advancing economic freedom and eradicating poverty. Countries that rank "mostly unfree" or "repressed" in the index have levels of poverty intensity, as measured by the United Nations' new Multidimensional Poverty Index, that are three times higher than those of countries with more economic freedom.

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AFP/Getty Images

Taiwan showed impressive gains, moving into the Index's Top 20.

Countries with higher levels of economic freedom have much higher levels of per capita GDP on average. In Asia, for example, the five freest economies have per capita incomes 12 times higher than in the five least free economies. Economic growth rates are higher, too, in countries where economic freedom is advancing. The average growth rate for the most-improved countries in the index over the last decade was 3.7%, more than a point-and-a-half higher than in countries where economic freedom showed little or no gain.

Positive measures of human development in areas such as health and education are highly correlated with high levels of economic freedom, and economically free countries do a much better job of protecting the environment than their more regulated competitors. When you actually look at the performance data, it turns out that the "progressive" outcomes so highly touted by those favoring big government programs to address every societal ill are actually achieved more efficiently and dependably by the marketplace and the invisible hand of free economies.

Unfortunately, most of the world's people still live in countries where economic freedom is heavily constrained by government control and bureaucracy. India and China, with about one-third of the world's population, have economic freedom scores barely above 50 (a perfect score would be 100). In a globalized world, both countries are benefiting from the trade and investment liberalization that has taken place elsewhere. But sustained long-term growth will depend on advances in economic freedom within each of these giants so that broad-based market systems may develop.

The Index of Economic Freedom has recorded a step back over the last year for the world as a whole. It was only a small step, with average scores declining less than a point, but the consequences have been severe: slower growth, fiscal and debt crises, and high unemployment. The biggest losers have been the economies in North America and Europe, regions that have led the world in economic freedom over the years.

The 2012 results show the torch of leadership in advancing freedom passing to other regions. Whether this is a long-term trend remains to be seen, but it is clear that if America and Europe do not soon regain trust in the principles of economic freedom on which their historical successes have been built, their people, and perhaps those of the world as a whole, are in for dark days ahead.

Mr. Feulner is president of the Heritage Foundation and co-editor of the 2012 Index of Economic Freedom.---------------------------------------------------------------------------------------------------------------------------------------------

4) Supreme Court delivers a knockout punch to the White House

By Peter Johnson Jr.

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• AP Photo/Carolyn Kaster
  Dec. 12, 2011: President Barack Obama pauses during his news conference with Iraq's Prime Minister Nouri al-Maliki, in the South Court Auditorium on the White House complex in Washington.

Wednesday the United States Supreme Court delivered a knockout blow to the White House in the cause of religious liberty. 

Chief Justice John Roberts, writing for a unanimous court swatted away the government’s claim that the Lutheran Church did not have the right to fire a “minister of religion” who, after six years of Lutheran religious training had been commissioned as a minister, upon election by her congregation. 

The fired minister -- who also taught secular subjects -- claimed discrimination in employment. The Obama administration, always looking for opportunities to undermine the bedrock of First Amendment religious liberty, eagerly agreed.

There was just one big problem standing in the way of the government's plan: the U.S. Constitution. For a long time American courts have recognized the existence of a "ministerial exemption" which keeps government’s hands off the employment relationship between a religious institution and its ministers or clergy.

Here, in this case, the Department of Justice had the nerve to not only challenge the exemption’s application but also its very existence.

But, Chief Justice Roberts pushed back hard, telling the government essentially to butt out: 

“Requiring a church to accept or retain an unwanted minister, or punishing a church for failing to do so, intrudes upon more than a mere employment decision. Such action interferes with the internal governance of the church, depriving the church of control over the selection of those who will personify its beliefs. By imposing an unwanted minister, the state infringes the free exercise clause, which protects a religious group’s right to shape its own faith and mission through its appointments. According the state the power to determine which individuals will minister to the faithful also violates the establishment clause, which prohibits government involvement in such ecclesiastical decisions.”

Citing well-known legal precedent dating as far back as Reconstruction, the court made it clear that it is not up to the government to contradict a faith’s determination as to who should -- and should not -- be performing religious functions.

The Supreme Court clearly announced Wednesday that the First Amendment itself gives special recognition to the rights of religious organizations and rejected the government’s view that the Religion Clauses of the Constitution don’t apply to religious organizations’ freedom to select their own ministers, priests, rabbis and imams.

The Court also took aim at Plaintiff’s Cheryl Perich’s claims for back pay finding that such relief would operate as an unconstitutional penalty against a religious institution for terminating an unwanted minister and exercising its constitutional right to make decisions about internal church governance. Unfortunately, the federal government has become expert in imposing penalties for practicing one’s faith.

As the new year rolls on, Americans face even greater issues in their desire to retain their religious freedom. The mandates of ObamaCare -- with its narrowly tailored if not measly conscience exemptions protecting some religious orders from compliance -- will mandate thousands of other religious organizations ranging from educational institutions to insurance companies to insure and/or provide procedures like free sterilization and abortifacients like Plan B known to be violative of many Christians and Jewish faiths.

Will the government continue to test the bounds of religious liberty? 

Will the government continue to pick fights against religious freedom? 

Will the government continue to demand that Americans violate their faith tenets or worse from an intolerant government? Only time will tell. 

But for today, the founding fathers are smiling down at a Supreme Court that could not agree more about how wrong-headed our government is in trying to hijack our constitutional right to religious liberty

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5)Banker Pay Heads to Ballot

By BRETT PHILBIN

Wall Street pay is set to be reduced after a dismal year but the cuts won't spare banking chiefs from potentially bruising encounters with investors during coming shareholders meetings.

Investors ranging from charitable foundations to large state pension funds are preparing to challenge large financial firms on their pay practices. As a result, this year's "proxy season"—the period, usually in the spring, when companies hold annual shareholder meetings—promises to be an eventful one in the financial sector, compensation consultants and corporate-governance experts say.

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Bloomberg News

James Dimon, of J.P. Morgan Chase, was a top earner last year.

This follows a year in which the sector's shares have sharply underperformed the broader market. "Shareholders are always a little happier when they see their stocks rise," said Paul Hodgson, a compensation expert at corporate-research firm GovernanceMetrics International, who added the season is expected to be "a lively one."

Further, in the past year everyone from lawmakers to Occupy Wall Street protesters has railed against what they see as excessive compensation for bankers.

Annual meetings have historically been ritualistic affairs, but regulatory measures in recent years have sought to give more of a voice to institutional holders. That allows activist investors to press their cases on issues such as executive pay.

Giant firms are expected to cut executive pay by some 30% from 2010 levels, consultants say. And since the financial crisis of 2008, firms have reduced cash bonuses, increased their use of company stock and added clauses that allow them to recoup—or "claw back"—pay in certain circumstances.

Even so, some investors want more changes. In December, the Nathan Cummings Foundation—a private charitable organization and institutional shareholder—filed proposals asking that directors at Goldman Sachs Group Inc. and J.P. Morgan Chase & Co. address potential reputational damage that big pay packages could bring to the banks, said Laura Campos, director of shareholder activities at the foundation. The proposals also request that they study how such awards could reduce banks' ability to spend money on other areas, and report those findings to shareholders.

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The foundation has a small stake in both Goldman Sachs and J.P. Morgan.

Another new proposal, filed by the New York City pension funds—which had $115 billion in assets under management as of Oct. 31—called on directors at the two firms and Morgan Stanley to impose tougher clawbacks on executives who act improperly. Representatives for Goldman Sachs and J.P. Morgan declined to comment.

Other proposals could emerge in the coming weeks as banks typically disclose interactions with shareholders ahead of proxy season.

Thanks to the Dodd-Frank financial overhaul law, firms must hold nonbinding shareholder votes at least once every three years on their executive compensation policies. The biggest U.S. financial firms—J.P. Morgan, Bank of America Corp., Citigroup Inc., Wells Fargo & Co., Goldman Sachs and Morgan Stanley—each set plans last year to hold annual votes. All six last year received broad shareholder approval of their pay plans.

But a comfortable majority doesn't always translate into investor approval. An October survey of institutional investors, corporate issuers and industry peers showed that when shareholder support for executive pay falls below 70%, it "should trigger an examination," according to Institutional Shareholder Services, a proxy-advisory firm owned by financial-information company MSCI Inc.

Just 7% of the 3,000 large companies tracked by ISS fell below that threshold, said Carol Bowie, head of compensation-policy development at ISS.

One bank executive says company boards likely wouldn't adjust their planned compensation awards if a say-on-pay vote failed to garner 70% support, but he acknowledges that such a result could lead them to "tread carefully" on pay the following year.

Last year, the highest pay packages in the industry were awarded to the likes of BlackRockInc. Chairman and Chief Executive Laurence Fink, J.P. Morgan's James Dimon andJefferies Group Inc. Chairman and CEO Richard Handler.

Some executives already have made concessions. Mr. Handler, whose 2010 pay disclosure reflected a $39 million restricted-stock award, said he and other senior executives at Jefferies wouldn't take a bonus for 2011.

"We recognize our shareholders had a tough year," he told analysts on a conference call.

—Matthias Rieker contributed to this article.

5a)Multinationals Brace for India Ruling on Vodafone

By MOL SHARMA, PAUL BECKETT and MEGHA BAHREE

NEW DELHI—It wasn't long ago that India was hailed as one of the world's most promising growth markets. But mercurial regulation, stifling bureaucracy and slower economic growth have shaken foreign companies' confidence about making big investments here.

Now a case at the country's highest court threatens to make the climate chillier still.

India's Supreme Court is preparing to issue its decision on whether U.K.-based Vodafone GroupPLC must pay about $2.6 billion in taxes on an $11.1 billion deal it struck in 2007 with a unit of Hong Kong's Hutchison Whampoa Ltd. to enter India.

A Vodafone loss would damp cross-border mergers and acquisitions here, many deal experts say, rendering standard transaction structures too risky and forcing foreign companies to weigh potentially new litigation and insurance costs. Some companies might simply decide that India isn't worth the headache. A ruling is expected in weeks.

WSJ's Amol Sharma has details of a pending decision from India's Supreme Court regarding Vodafone's tax liability stemming from a 2007 deal. REUTERS/Mukesh Gupta

If the decision goes against Vodafone, investors will "think twice before going for opportunities in India," says Mahesh Kumar, an M&A lawyer at Nishith Desai Associates who advises foreign clients. "It could severely damage the entire investment scene." His firm provided advice to Vodafone at the lower-court level.

Vodafone has said India doesn't have jurisdiction to tax the Hutchison deal because it was structured as a transaction between two overseas entities. The government says it has authority because the underlying asset was Indian.

Several other companies, including AT&T Inc. of the U.S. and Britain's SABMiller PLC, are fighting similar tax claims and Indian authorities have been handing out tax notices to other companies, deal lawyers say.

The government last month reversed its decision to allow multibrand foreign retailers, such as U.S.-based Wal-Mart Stores Inc. and the U.K.'s Tesco PLC to invest in India. The flip-flop quashed what would have been a turning point in business here and left many foreign companies questioning whether they can trust New Delhi's future promises. (Single-brand retailers, such as Nike Inc. and IKEA, are permitted to invest, and New Delhi on Tuesday removed a 51% ownership cap for them.)A tough stance on corporate taxes would add to a passel of developments that have caused many companies to sour on India.

Meanwhile, exiting investments in unlisted businesses is getting tougher for foreign companies. India's central bank is threatening to block deals in which closely held Indian businesses are contractually required to buy back shares from foreign investors, usually because the Indian companies haven't met performance benchmarks. The Reserve Bank of India says such arrangements amount to equity-derivative transactions, from which foreign firms are barred.

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Agence France-Presse/Getty Images

Germany's Fraport AG has a stake in Delhi's airport, above, but has been stymied elsewhere in the country

That comes against the backdrop of an economy that has lost some steam. Gross domestic product, once projected to increase 9% in the fiscal year ending March 31, is now expected to rise at a 7% pace or slower. And interest-rate increases are crimping corporate investment. Corruption scandals also have left bureaucrats afraid of making decisions for fear of being investigated later.

After a net inflow of $29 billion from foreign investors in Indian stocks in 2010, there was a $540 million net outflow last year, one reason the country's benchmark index sank 25% last year.

India says it remains committed to attracting foreign investment and that foreigners' confidence will increase as the economy recovers. "They pick up the mood of domestic industry," says Kaushik Basu, India's chief economic adviser. Foreign direct investment plunged in fiscal 2011, but Mr. Basu says he expects a strong rebound for the current year. On Wednesday, a government panel recommended allowing foreign airlines to acquire up to 49% of domestic carriers.

For now, though, many companies are gloomy.Mr. Basu says foreign multibrand retailing could be reconsidered this year. "It still has a decent chance, but has to be tweaked a bit," he says.

"Two years ago we had high expectations and those have evaporated," says Ansgar Sickert, managing director of Fraport India. Its parent, Frankfurt-based airport operatorFraport AG, has a 10% stake in the joint venture that owns Delhi's airport. But government promises to privatize other existing airports have fizzled.

"There has been a lot of talk—a lot of deadlines come and go—but nothing concrete is happening," Mr. Sickert says. Fraport in response has shifted its focus to Brazil and is likely to close its Delhi office later this year, he says.

The Civil Aviation Ministry didn't respond to requests for comment.

Germany's Würth Elektronik GmbH, which makes circuit boards used in an array of products including cars and cellphone towers, in 2006 set out to build a plant in India's southern state of Karnataka but still hasn't been able to acquire land.

"There are so many bureaucratic hurdles and procedures—you get muddled and stuck," says Harsha Adya, a Würth executive in India. The company says it refused to use middlemen to pay off bureaucrats to speed matters along—something many Indian entrepreneurs consider a cost of doing business.

Würth, meanwhile, has built a 200-acre industrial park in China, where government officials have sought investment from the company, Mr. Adya says.

The state agency that reviews investment and land-acquisition proposals in Karnataka didn't respond to requests for comment.

Not all companies are losing faith in India.

Ford Motor Co. Chief Executive Alan Mulally says the auto maker remains optimistic about India. Ford in July announced plans to invest nearly $1 billion in a new factory in the western state of Gujarat, the company's second plant in India. "This is about serving Indian customers and we are more bullish about that than ever," says Mr. Mulally, in town for a trade show this month.

But executives at other firms voice frustration. BP PLC in August closed a $7.2 billion deal to acquire stakes in oil-and-gas exploration blocks controlled by India's Reliance Industries Ltd. Last month, however, BP Chief Executive Bob Dudley complained to Indian Petroleum Minister Jaipal Reddy about bureaucratic delays.

"I am deeply concerned that unless we get approvals and permits to begin these seabed surveys this December, we will lose a year in our goal of bringing materially new amounts of gas to the Indian market," Mr. Dudley wrote, according to a copy of a letter reviewed by The Wall Street Journal. It isn't clear whether the U.K.-based company ultimately got the approvals. The company declined to comment for this article. An Oil Ministry spokesman said he couldn't comment.

Coming after such hurdles, the Vodafone tax case has taken on heightened significance.

Corporate lawyer Rajiv Luthra says a Vodafone loss would place India in contrast to most other countries, which don't tax deals involving two overseas entities, and could encourage India to tax deals that hadn't been in its jurisdiction. "It's a slippery path," the Luthra & Luthra managing partner says.

Some deal lawyers say a ruling against Vodafone might not be so dire. "Foreign investments are made not on tax policies, but on long-term prospects for growth," says tax lawyer H.P. Ranina. Others say that even if Vodafone loses, an unambiguous ruling at least will provide clarity.

Even if Vodafone prevails, however, its four-year trek through India's courts can serve as a cautionary note.

The case stems from Vodafone's 2007 purchase of a controlling stake in Indian mobile-phone company Hutchison Essar Ltd. Since a Dutch subsidiary of Vodafone acquired a Cayman Islands company that held Hutchison Whampoa's India assets, Vodafone says India doesn't have tax jurisdiction.

Indian authorities argue that since the underlying asset was an Indian cellphone company, the deal is taxable here.

A Mumbai court sided with Indian tax authorities last year, prompting Vodafone's appeal to the Supreme Court.

A Vodafone spokesman declined to comment. A spokeswoman for India's tax department couldn't be reached.

—Rakesh Sharma contributed to this article-------------------------------------------------------------6)A Year for Elections, Not Mideast Peace

Obama will trumpet his commitment to Israel while wondering if it will attack Iran.

By ELLIOTT ABRAMS

Last week Israelis and Palestinians held talks for the first time since September 2010. Back then, Israeli Prime Minister Benjamin Netanyahu and Palestinian President Mahmoud Abbas met at the White House, under bright lights and with great expectations, along with Jordanian King Abdullah and Egyptian President Hosni Mubarak. In a matter of weeks the talks failed—and Mr. Mubarak didn't last much longer himself. What to expect this time?

For starters, note that these talks—hosted in Amman by the Jordanian government—aren't even "negotiations." The Palestinians made clear that these were only discussions of whether negotiations are possible. The most one can hope for is that these exploratory talks extend for several more months or lead at some point to a Netanyahu-Abbas session. This is kicking the can down the road, to be sure, but that is a reasonably accurate way of describing the "peace process" anyway.

Whatever the hopes in Washington or European capitals, Israelis and Palestinians don't expect a breakthrough. Instead, they're focused on three elections: America's, the definite one; the Palestinian Authority's, scheduled for May 4; and Israel's, which Mr. Netanyahu may call later this year.

For Mr. Netanyahu, the question is whether the re-election of Barack Obama would harm his own chances. The ability to get along with Washington is a key asset in Israeli politics, and Israelis would worry about four more years of U.S.-Israeli tension. It is universally understood that Mr. Netanyahu and Mr. Obama don't get along. That might lead the Israeli prime minister to try for elections in the fall, before our own—though a decision on whether to bomb Iran's nuclear sites could also affect that timing.

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Associated Press

From left to right: Hosni Mubarak, Israeli Prime Minister Benjamin Netanyahu, President Barack Obama, Palestinian President Mahmoud Abbas and Jordan's King Abdullah II during Middle East peace talks in Washington in September 2010.

In any event, no major concessions to the Palestinians are now in the cards. Why should Mr. Netanyahu risk destroying his coalition in a possible election year, when previous Israeli offers—especially in 2000 and 2008—were refused, and when he believes the White House doesn't have his back? And why take such risks when Mr. Abbas seems on the verge of inviting Hamas into the Palestine Liberation Organization, which would bring negotiations to a screeching halt anyway?

So for 2012, Mr. Netanyahu will maneuver with the Palestinians, calculate the timing of his own elections, hope a new face wins in Washington—and make one big decision: whether to hit Iran.

For Mr. Abbas, the possible Israeli elections are of little interest. He must have scant hope they will produce a more conciliatory government, for the right looks far stronger than the left. He knows the rise of Islamist parties in the "Arab Spring" has made most Israelis even more worried about any concessions that might affect their security.

Mr. Abbas, who turns 77 in March, doesn't really want Palestinian elections in 2012, but his options are poor. His United Nations efforts are now dead, for he has failed in the Security Council and backed off after his "victory" of gaining membership in Unesco served only to bankrupt that organization when the U.S. ended its funding.

He cannot find serious negotiations with Israel terribly appealing, for he knows that Hamas and other groups would quickly call every compromise an act of treason. So instead of turning back to the Israelis or the U.N., he is negotiating with Hamas, whom he hates, knowing full well that any agreement may lead to elections that Hamas might win. Logic suggests he will happily see the deal with Hamas break down (as the "Mecca Agreement" between Fatah and Hamas did in 2007) so he can postpone the May 4 elections yet again.

A year of on-again, off-again negotiations with Hamas and with the Israelis must seem far more attractive to Mr. Abbas than elections that could boot him from office and, if Hamas wins, leave as his legacy another disastrous defeat of his Fatah party by Islamist forces. Better to delay, hang on, and see if perhaps the Israelis' fears are right—that a re-elected President Obama emerges as the champion of the Palestinian cause.

And what of Mr. Obama in this election year? He'll spend 2012 trumpeting his "unshakable" commitment to Israeli security but wondering if Mr. Netanyahu will actually hit Iran during the presidential campaign. If so, the electorate is likely to think that a tough and justifiable move, and Mr. Obama would be forced to back it and help Israel cope with the consequences. It might even help the president get re-elected if he ends up using force to keep the Strait of Hormuz open and Israel safe.

But both recent two-term presidents, Bill Clinton and George W. Bush, dove into Middle East peacemaking in their second terms. That cheers up Mr. Abbas and gives Mr. Netanyahu nightmares. If Mr. Obama loses to a Republican, by contrast, Israelis and Palestinians will sit back in 2013 and wait for some sense of direction from Washington.

Thus the 2012 "peace process" won't revolve around any negotiating table in Amman. That's why when Americans pass through the Middle East, they're never asked "Will there be a peace deal this year?" Instead the questions are "Who will win?" "What will Obama do in a second term?" and, without fail, "What are you going to do about Iran?"

Mr. Abrams, a senior fellow at the Council on Foreign Relations, handled Middle East affairs at the National Security Council from 2001 to 2009.