Friday, January 13, 2012

The First Lady Rolls Up Her Sleeves and The Appearance of Savings!

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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A conservative looks at the Republican candidates and sets forth an interesting - actually a penetrating analysis -analysis. (See  1 below.)
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William Sullivan takes issue with Ms. Obama and finds her an angry person.

Then The First lady in her own words defending her husband and the Administration as she takes a more active role in his re-election You decide. (See 2 and 2a below.)

One of biggest casualties of The First Lady and those surrounding her husband is the former Chief of Staff, Bill Dailey. I happen to know Jonathan Alter and personally I do not care for him but he does have inside connections and often writes with authority. (See 2b below.)
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I was recently asked by a perceptive friend if I thought the Administration was serious regarding its Hormuz statements. My response was that 'PNF/F' understands an unanswered challenge by Iran could prove a death knell to his campaign for re-election. Whereas, a response on his part to any closing of Hormuz by Iran would be seen as 'macho' and could be positive for his re-election.

I am not suggesting the Administration will maneuver Iran and/or force Iran's hand. Iran may miscalculate and think we are bluffing and I believe, if they do, we will prove them wrong. 

This is why I do expect an "October Surprise" of some sort. (See 3 below.)
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How are the talks between the PLO and Israel going? Re-read Abram's analysis in a previous memo. (See 4 below.)
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Francis Fukuyama is always worth listening to. (See 5 below.)
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'PNF/F' intends to run a 'populist campaign' but also knows he must create the appearance of executive leadership bent on saving money all the while increasing our debt by a trillion new big ones. (See 6 bleow.)
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A Yale professor and son of a friend writes about how private equity works. (See 7 below.) 

It should be obvious to anyone that those who take companies private and try to rescue them from the consequences of their former management's failures do so to make money by improving the company's prospects so they can return them to public status. This entails high risk, failure and reward. 

My former firm helped finance many such ventures and, did in fact, saved some former companies, helped strengthen them and returned them to better health, and in may cases, actually created new ones. Consequently, jobs were lost and created in the process and many investors made and lost millions.  Risk taking is what helped build our nation and, yes,  is often driven by 'motivated and creative greed ' which is not bad despite Hollywood's  negative portrayal. 

I submit though  'greed' has an evil connotation in reality it does not always signify cupidity and/or avarice. All too frequently the word has been mistakenly applied to many positive financial situations.  Often poor management uses it against those seeking to take over their company for the purpose of saving it,when in fact , management is only interested in saving their own 'cushy' jobs. 

In the current world of  visceral politics  the words 'vulture, greed. opportunism' are being used to paint Romney as a modern day Scrooge.  There is no accurate way anyone can actually determine the true number of jobs lost and/or saved  by Bain Capital because that would involve a monumental audit which still may not prove legitimate.  Suffice it to say, failing organizations  generally  tend to have a bloated labor force .  Our government being example one, the Post Office another!   

Trimming costs is critical to survival but restructuring does not end there.  Resurrecting a failing company  must entail an exhaustive study and re-ordering of priorities and, in some instances, comes too late.  Eastman Kodak could well be an example as well as Polaroid.

Romney has spent a good bit of his life in the business sector and did save the Olympics and  helped it turn a profit.  That is a fact that should be noted. (See 7a and 7b below.) below.)
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Politics generally boils down to who has the most chips.  (See 8 below.)
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Dick
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1).....interesting candidates analysis
By Jay Taylor, Vice President of Political Strategy – Liberty Alliance, LLC

We post many articles on ConservativeByte that are critical of candidates who drift away from core conservative values. Some readers are disappointed when we don’t present their favorite candidate in a completely positive light. Unlike the mainstream media however, we are obligated to be fair and objective. Personally, I want to see the most conservative candidate win the nomination. However, I will support whoever wins the nomination. Let me explain why you should as well.

As everyone can observe, the primary process is getting nasty. Keep in mind that this process was designed to give us the best candidate. Candidates have to fight and prove they are the best. At the end of the day however, we will have a nominee that not every conservative can agree to support. This brings me to a very important goal that all conservatives must seek to achieve: We must unite and support the Republican nominee no matter what!


I made a simple list of each candidate’s strengths and weaknesses to see if there was anyone I could rule out. I found one word for their strengths and one word for their weaknesses to make it easy. I discovered that any of them, even with their weaknesses, would be far better than Obama. I know this isn’t perfect, but let me know what you think:

You can see where a candidate’s weakness could hinder them in a campaign against Obama. However, their strength is certainly better than Obama.

Newt Gingrich always has an intelligent argument and is quick-witted. Unfortunately, he has a past full of baggage that keeps conservatives from getting completely behind him.

Mitt Romney has real experience as a governor, businessman, and former Presidential candidate. Unfortunately, he has a bit of a populist leaning on his political philosophy.

Ron Paul is a staunch constitutionalist, but has an isolationist philosophy that is way over the top.

Michelle Bachmann is a leader of the TEA party, but can come across as petty and harsh—especially in the debates.

Rick Perry has real executive experience as a Governor, but lost several supporters when he could not successfully explain his position on immigration.

Rick Santorum holds to conservative values more tenaciously than any other candidate, but his youthful appearance has doomed him to not be taken seriously.

Jon Huntsman has a history of being able to work with Democrats to get things done, but this means that he is a centrist and this is also a serious weakness.

Sadly, I’ve heard people say that they won’t support this candidate or that candidate it they are nominated. I really find this disheartening. I am afraid for our country that some of you won’t come together to defeat Obama. Our country is teetering on the edge of losing everything that our founding fathers and veterans have fought to achieve. I hope these conservatives will overcome their pride and stubbornness to stop this communist in the White House. We currently have a radical un-American President who did not answer any questions about his radical past and his questionable associations. So, it’s only logical to make sure our candidate is completely vetted. No candidate is going to be perfect, but we need to know each of his or her weaknesses. We must measure them with our own values as well as how well they will match up against Obama. Once we get a nominee, we must create a united front. United we stand, divided we fall.
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2)A Portrait of the First Lady as an Angry Young Woman
By William Sullivan


Michelle Obama has recently taken issue with her critics for allegedly perpetuating the idea that she is an "angry black woman." "That's an image people have tried to paint of me, since, you know, Barack announced, that I'm some angry black woman," she told CBS.
"Who can write about how I feel?" she went on. "Who? What third person can tell me how I feel, or anyone, for that matter?"

One does not have to take a leap of faith to believe Mrs. Obama to be an "angry black woman." It is nothing more than a logical conclusion given the evidence she has provided.
"For the first time in my adult life, I'm proud of my country."

These are the words of Michelle Obama in 2008, said in response America's energetic reception of Barack Obama. And clearly, they are the words of an angry person. A person who is so undeniably resentful of this nation that has provided her with a path to education and affluence that she can boast only having become proud of it when her husband was considered for the presidency and a fundamental change to its character was embraced.

This resentment stems, at least in part, from her early days of adulthood at Princeton. While there, she produced a thesis that offers little more than derision for the prevalence of "white culture" in American academia and a lamentation that blacks who attend universities (particularly prestigious ones, like Princeton) come to identify more with the "White community" than the "Black community." In a time in history when America sought to destroy once and for all the racial divisions lingering from our roots dating back to the European aristocracies, Michelle Obama harbored too much resentment and anger to commit to the abolition of these dividing lines. Instead, she insisted that measures and studies should be undertaken to "improve the overall quality of college education for Blacks," a suggestion requiring that it be obligatory that the "Black" and "White" communities remain entirely separate notions.

So apparent is her anger and resentment for "White" America that Lee Cary pointed out in an American Thinker article from 2008: "While Barack is the softer, social justice side of black liberation theology," [which his mentor Jeremiah Wright has studied diligently] "Michelle is the harder, anti-white supremacy side."

After all, how could she make the statement that she had never in her adult life been proud of America unless this were so? As Mr. Cary points out, in her "adult life," the Berlin Wall fell, liberating East Germany and signaling the end of Soviet Union's existence, which was undoubtedly among the most oppressive and murderous regimes the world has known. Also in her "adult life," America had liberated Kuwait from the genocidal machinations of Saddam Hussein, protecting Kurdish Muslim sects from annihilation. To not have taken pride in these events as a younger woman, Cary argues, can only result from believing that the fall of the Soviet Union was merely the victory of one "racist system that has long exploited non-white, Third World countries" over another. And it would have required a belief that the liberation of Kuwait was only the result of "white supremacist" politicians' exercise of oil-sequestering and greed, not an example of America's positive role in world affairs.

But perhaps the most convincing reason for her racially motivated anger toward America is found in her thesis. She lambasts the Princeton alumni for pursuing traditionally "White" endeavors, and thereby losing identification with the "Black" community. By virtue of the condescension in this suggestion, coupled with her saying that she has never in her adult life been proud of America, it suggests that she is proud only "because she, a black woman, earned a degree generally reserved for whites" -- not because America provided her the avenue to her world-class education.

I cannot say that I will ever understand the plight of African-Americans in this country. I have never lived it. But I can say this: we should be better, as a nation, than harboring resentment and anger at a racially determined "community," as it is clear that Michelle Obama has done in her "adult life."

And I can say that it is possible. Having enjoyed a multicultural background demanding the integration of two previously exclusive cultures, the members of each of my parents' families have, at one time uncomfortably, had to come to terms with a new and different path for our family' future. And through time and mutual inclusion, I recall my paternal grandmother, born in England, and my maternal grandmother, born in Mexico, thoroughly enjoying one another's company in their final years. Race, culture, background -- none of that mattered to nearly the extent that Michelle Obama focuses on them in her Princeton thesis. And if we can relinquish any lingering resentment, and if we resolve to look upon one another as Americans rather than members of racial communities as she has insisted upon, it will be a step forward for all Americans.
Mrs. Obama, your image as an "angry black woman" is not an image we've painted of you. This is an image you've masterfully painted for us all.


2a)Michelle Obama sees Barack's 'wonderful progress' in jeopardy
By Andrew Malcolm

According to a new book, Michelle Obama is seeking to play a more active role on the policy side of her husband's White House.

According to her recent schedule, she's certainly playing a more active role in the fundraising part of her husband's political life. Wednesday she was in Virginia and did two poilitical fundraisers, while her husband was in Chicago doing three political fundraisers.

We pay so much attention to what comes off those teleprompters into the president's mouth, we thought we'd take a look at what his wife in saying at these financial collections. Scroll down for her complete remarks in Richmond.

According to Mrs. Obama, way too many Americans are still suffering economically. This isn't because of anything her husband did or failed to do in the last 1,086 days that they've inhabited the White House. In fact, she maintains, things would have been much worse without the many changes her husband's administration has implemented.

"Fortunately," she says, "over the past three years, we’ve worked very hard to dig ourselves out of this mess. Your President has worked very hard. And there’s been a lot of wonderful progress made."

Much of the progress is due to her husband, she says, whose initiatives like consumer protection save seniors from being tricked into hidden credit card fees or mortgages they can't really afford.

Her husband "believes that when you’ve worked hard and you’ve saved and you’ve followed the rules, you shouldn’t lose it all to someone who’s looking to make some easy money. That’s not right. That’s not fair. And your President, all of us, we are working hard to do something about that."

Like the historic health legislation, Obamacare. "It’s wonderful," Mrs. Obama says before warning, "But now, there are some folks actually talking about repealing this reform -- repealing it. And today, we need to ask ourselves, are we going to stand by and let that happen?"

Her husband, the product of a single mother, may not be good at remembering names, she says. But when it comes to the stories of all the suffering people, he has "a mind like a steel trap."

"Barack knows what it means when a family struggles. He knows what it means when someone doesn’t have a chance to fulfill their potential. Those are the experiences that have made him the man -- but more importantly, the President -- he is today. And we are blessed to have him."

Michelle Obama says she can "hear the passion and determination in his voice. You won’t believe what folks are going through -- that’s what he tells me. He says, Michelle, it’s not right. And we’ve got to fix it. We have way too much work to do."

She says she can hear her husband's determination even at the end of another long day of travel around the country. Like Wednesday when he flew all the way to Chicago to speak to people who could only afford to pay $35,800 per couple for dinner with him.

But all of his administration's progress is somehow threatened. "You know that we stand at a fundamental crossroads for our country," the first lady tells her audience, who each paid $500 for the experience.

"Will we allow everything we’ve fought for to just slip away?"

Change is hard, she admits. Real change comes slowly, certainly not within one presidential term. So to continue her husband's work she needs them to register friends, family and neighbors and organize for the reelection this fall.

"There's a lot at stake,"" she says.

Mrs. Obama's full speech is just below.

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Michelle Obama campaign fundraiser speech, as provided by the White House

MRS. OBAMA: Thank you all so much. Richmond, it’s good to be here! (Applause.) You all, thank you. You all rest yourselves because I want you all ready to work. So I don’t want you to run your energy out clapping and standing up. (Laughter.) But thank you all so much. It is such a pleasure to be here. This is my first official event campaigning of the year. (Applause.) Yes! It’s a great way to kick it off.

And I want to start by thanking your former governor, Tim Kaine, for that very kind introduction, but more importantly for his outstanding leadership. One of my favorite people. He’s got good judgment, too, because his wife Anne is amazing. Love her to death. So let’s give them both another round of applause. (Applause.)

I also want to thank Congressman Scott, who is here, Mayor Jones, also, for their dedicated service. (Applause.) Thank you all for joining us here today.

And I want to recognize all of the Richmond Women for Obama who are here -- (applause) -- along with the Host Committee that I know have worked very hard to make this event such a success.

And finally, I want to thank all of you for joining us here today, this afternoon. It is afternoon, right? See, when I do this -- is it morning, it’s afternoon?

And I know that all you are here for a couple of reasons. And it’s not just because there’s a good luncheon, and you’re not just here to see me. Right? (Laughter.) There’s a reason why all of us are here, why all of you are here today.

You’re here because you know that we stand at a fundamental crossroads for our country. You’re here because you know that in less than a year from now, we’re going to make a choice that will impact our lives for decades to come. And you’re here because you know that that choice won’t just affect all of us, but it’s going to affect our children and our grandchildren and the world that we leave for them long after we’re gone.

And that is why I’m here today as well. You see, as First Lady, I have the privilege of traveling all across the country, meeting folks from all different backgrounds and hearing what’s going on in their lives. And every day, I hear about folks’ struggles -— the bills they’re trying to pay, the businesses they’re trying to keep afloat.

I hear about how they’re taking the extra shift, or working the extra job. How so many people are saving and sacrificing, never spending a dime on themselves because they desperately want something better for their kids.

And make no mistake about it, these struggles are not new. For decades now, middle-class folks have been squeezed from all sides. The cost for things like gas and groceries, tuition, have been steadily rising, but people’s paychecks just haven’t kept up.

So when this economy fell apart, the crisis hit, for far too many families, the bottom just fell out.

Now, fortunately, over the past three years, we’ve worked very hard to dig ourselves out of this mess. Your President has worked very hard. And there’s been a lot of wonderful progress made. (Applause.)

We have had 22 straight months

See, these are basic American values. They’re the values that so many of us were raised with, including myself.

As you know, my father was a blue-collar worker at the city water plant. My family lived in a little bitty apartment on the South Side of Chicago. And my parents, neither of them were able to go to school -- to college, that is. But they worked very hard, and they saved, and they sacrificed, because they wanted something better for me and my brother.

And more than anything else, that is what’s at stake -- that fundamental promise that no matter who you are or how you started out, that if you work hard, you can build a decent life for yourself and an even better life for your kids.

And on just about every issue -- from health care to education to the economy -- that is the choice we face.

For example, when you hear talk about tax cuts for middle-class families, or unemployment insurance for folks out of work, understand that that’s about whether people can heat their homes. That’s about whether folks can put a hot meal on their table or put gas in their car so that they can look for work. It’s about whether folks can afford to own a home, send their kids to college, retire with dignity and security.

This talk about whether people will have more money in their pockets, which means more money in the economy, which means more jobs. That’s what’s at stake here. That is the choice that we face.

And just think for a minute about what this administration has done to stand up for American consumers. I’m talking about families getting hit with those hidden credit card fees. I’m talking about our students drowning in debt, our seniors losing their home and their savings because they’ve been tricked into loans they couldn’t afford.

That’s why my husband created a new consumer watchdog with just one simple mission -- and that is to protect folks from exactly these kinds of abuses. (Applause.) Because he believes that when you’ve worked hard and you’ve saved and you’ve followed the rules, you shouldn’t lose it all to someone who’s looking to make some easy money. That’s not right. That’s not fair. (Applause.) And your President, all of us, we are working hard to do something about that.

And what about all that we’ve done together for our small businesses? These are the companies that create two-thirds of all new jobs each year. That’s two-thirds. I’m talking about that mom who opens up the dry-cleaning store on the corner to provide for her kids, or that family that’s been running the neighborhood diner for generations, or the veteran who launches a startup and pursues that American Dream he fought so hard for.

See, these are the folks who work themselves to the bone during the day, then they head home, pore over the books late into the night, determined to make the numbers add up.

For these folks, the small business tax cuts this administration has passed, for these folks it means the difference between hiring new employees in those businesses or handing out pink slips; between keeping the doors open or closing up shop for good. That is the choice that we face.

And how about the very first bill my husband signed into law, the very first bill, the Lilly Ledbetter Fair Pay Act to help women get equal pay for equal work? (Applause.)

He did this because he knows what it means when women aren’t treated fairly in the workplace. He watched his own grandmother -- woman with a high school education -- work her way up from being a vice president at a little community bank. She worked hard and she was good at her job. But like so many women, she hit a glass ceiling, and she watched men no more qualified than she, men she had actually trained, be promoted up that ladder ahead of her.

So believe me, for Barack, this issue isn’t abstract. This isn’t some hypothetical situation. And he signed this bill because he knows that closing that pay gap can mean the difference between women losing $50, $100, $500 for each paycheck, or having that money in their pockets for gas or groceries, school clothes for their kids.

He did it because when nearly two-thirds of women are breadwinners or co-breadwinners, your President knows that women’s success in this economy is the key to families’ success in this economy. (Applause.)

And he did it because, as he put it, we believe that here in America, there should be no second-class citizens in our workplaces. That is what’s at stake.

And let’s just talk for a minute about health care. Last year, we made history together by finally passing health reform. (Applause.) It’s wonderful. But now, there are some folks actually talking about repealing this reform -- repealing it. And today, we need to ask ourselves, are we going to stand by and let that happen?

Are we going to let insurance companies refuse to cover things like cancer screenings and prenatal care that don’t just save money, but save lives? Or will we stand up for our lives and for the lives of the people that we love?

Are we going to go back to the days when insurance companies could deny our children coverage because they have preexisting conditions like cancer or diabetes, even asthma? Or will we stand up and say that in this country, no one -- no one should ever have to choose between going bankrupt or watching their child suffer because they can’t afford a doctor. (Applause.)

And when our children get older and graduate from school, we know how hard it is for them to find jobs, and jobs that provide insurance. That’s why, as part of health reform, our children can now stay on their parents’ insurance until they’re 26 years old. (Applause.) And so today, that’s how about 2.5 million of our young people are getting their coverage. So will we take that insurance away from those kids? Or will we say that we don’t want our sons and daughters going without health care when they’re just starting out, just trying to build their own families and build their own careers? Because that is the choice that we face. That is the choice.

And think again for a moment about what’s been done on education. Think about all those investments to raise standards and reform our public schools. We all know this is about improving the circumstances for millions of children in this country -- kids we know who are sitting in crumbling classrooms, kids with so much promise, kids who could be anything they wanted if we just gave them the chance. That’s what this is about.

And think about how this President has tripled investments for job training at community colleges. This is about hundreds of thousands of hardworking folks who are determined to get the skills they need for a better job and for better wages. I mean, these are the folks who are doing it all. They’re doing what they’re supposed to do. They’re working full-time, they’re raising their kids, but they’re still finding time to go to night classes and study late into the evening because they desperately want to do something better for their families.

Make no mistake -- this investment in our students and our workers will determine nothing less than the future of our economy. I mean, this kind of stuff will determine whether we’re prepared to make the discoveries and to build the industries that will let us compete with any country anywhere in the world. And that’s what’s at stake.

And let’s not forget what it meant when my husband appointed those two brilliant Supreme Court justices, and for the first time in history, our daughters —- and our sons —- (applause) -- watched three women take their seat on our nation’s highest court. Let’s not forget the impact their decisions will have on our lives for decades to come -- on our privacy and security, on whether we can speak freely, worship openly, and love whomever we choose. That’s what’s at stake. That is the choice we’re facing. (Applause.)

And finally, let’s not forget all this administration has done to keep our country safe and restore our standing in the world. Thanks to our brave men and women in uniform, we finally brought to justice the man behind the 9/11 attacks and so many other horrific acts of terror. (Applause.) Yes, my husband ended the war in Iraq and brought our troops home for the holidays. (Applause.)

And as Tim said, we are working hard to give our veterans and their families the education, the employment and the benefits they’ve earned. (Applause.) And because my husband ended “don’t ask, don’t tell,” our troops will never again have to lie about who they are to serve the country they love. (Applause.) That is what’s at stake. That is what’s at stake.

So Richmond, make no mistake about it. Whether it’s health care or the economy, whether it’s education or foreign policy, the choice we make will determine nothing less than who we are as a country, but, more importantly, who do we want to be. Who are we?

Will we be a country where opportunity is limited to the few at the top? Or will we be a place where if you work hard, you can get ahead, no matter who you are or how you started out? Who are we?

Will we tell folks who’ve done everything right, but are still struggling just a little to get by, tough luck, you’re on your own? Who are we? Or will we honor the fundamental American belief that this country is strongest when we’re all better off? Who are we? (Applause.)

Will we continue all the change we’ve begun and the progress we’ve made? Or will we allow everything we’ve fought for to just slip away? That is the choice we face. Those are the stakes.

And believe me, Barack knows this. He understands these issues, because he’s lived them. He was raised by a single mother who struggled to put herself through school, pay the bills. And when she needed help his grandmother stepped up -- getting up every morning, getting on that bus, going to that job at the bank, even though she was passed over for all those promotions. She never complained. She just kept showing up and doing her best. Sounds familiar, right?

So Barack knows what it means when a family struggles. He knows what it means when someone doesn’t have a chance to fulfill their potential. Those are the experiences that have made him the man -- but more importantly, the President -- he is today. And we are blessed to have him. (Applause.)

And that is what I hear in his voice when he returns home after a long day traveling around the country and he tells me about the people he’s met. That’s what I see in those quiet moments late at night after the girls have gone to bed and he’s poring over the letters people have sent him -- the letter from the woman dying of cancer whose insurance company won’t cover her care; the letter from the father struggling to pay the bills for his family; the letter from the young person, too many young people with so much promise but so few opportunities.

And I hear the passion and determination in his voice. You won’t believe what folks are going through -- that’s what he tells me. He says, Michelle, it’s not right. And we’ve got to fix it. We have way too much work to do.

See, what I’m trying to remind people about my husband is that when it comes to the people he meets, Barack has a memory like a steel trap. He might not remember your name, but if he has had just a few minutes and a decent conversation with you, he will never forget your story. It becomes imprinted on his heart.

And that is what he carries with him every single day. It is our collection of struggles and hopes and dreams. And that is where your President gets his passion. That is where your President gets his toughness and his fight.

And that’s why even in some of the hardest moments, when it seems like all is lost and we’re sweating it and we’re sweating him, Barack Obama never loses sight of the end goal. (Applause.) He never -- never lets himself get distracted by the chatter and the noise.

See, your President just keeps moving forward, because so importantly he has a vision for this country. And it’s a vision that we all share. This is our vision. This is the country we want to live in. But I have said this before and I will say it again: He cannot do this alone. Never could. He needs your help.

He needs you to make those phone calls. He needs you to get up, be ready to work, get those voters registered. He needs you to take those “I’m in” cards, which I hope you have. Use them. Sign yourself up. Sign your friends, sign your neighbors, your colleagues up. Convince them to join in giving just a little part of your life and their lives each week to this campaign, because we all know that this isn’t just about one extraordinary man -- never was. Though I’ll admit, I’m a little biased. (Laughter.) I think he’s wonderful.

But this is really about us -- about all of us -- about all of us coming together for the values we believe in and for the country that we want to be. Now, again, I’m not going to kid you, this journey is going to be long and it is going to be hard. And there will be plenty of twists and turns along the way -- always love drama.

But the truth is, that is how change always happens in this country. The reality is that change is slow, real change, and it never happens all at once. But if we keep showing up, if we keep fighting the good fight doing what we know is right, then we eventually get there. We always do. We always do -- maybe not in our lifetimes, but maybe in our children’s lifetimes, our grandchildren’s lifetimes, because in the end, that’s what this is all about.

In the end, we’re not fighting these battles for ourselves. We’re fighting these battles for our sons and our daughters. We’re fighting these battles for our grandsons and our granddaughters. We’re fighting for the world we want to leave for them. It’s about our children. (Applause.)

And I’m in this fight not just as a mother who wants to leave a legacy for my children. I’m in this as a citizen who knows what we can do together to change this country for the better. See, because if I’m honest, the truth is no matter what happens, my girls will be okay. See, my girls are blessed. They will still have plenty of advantages and opportunities in their lives, and that’s probably true for many of your kids as well, right?

But I think the last few years have shown us the truth of what Barack has always said, that if any child in this country is left behind, then that matters to all of us, even if she is not our daughter, even if he is not our son. If any family in this country struggles, then we cannot be fully content with our own family’s good fortune. That is not who we are. (Applause.)

In the end, we cannot separate our own story from the broader American story, because we know that in the end this country, in this country of America we rise and fall together. And we know that if we make the right choices, if we have the right priorities, we can ensure that everyone gets a fair shake and everyone has a chance to get ahead. That’s what’s at stake. So Richmond, it is time for us to get moving. It is time for us to get to work.

So I have one last question to ask you all -- you’ve been listening so politely. (Laughter.) Are you in?

AUDIENCE: Yes! (Applause.)

MRS. OBAMA: See, because I’m in. I am in. I need to hear that. Are you in?

AUDIENCE: Yes! (Applause.)

MRS. OBAMA: Tell me: I am in!

AUDIENCE: I am in! (Applause.)

MRS. OBAMA: So I hope you all are fired up. I hope you all are ready to go. We need each and every one of you. You need to reach out. You need to talk to people. You can influence your neighbors, get this done. There’s a lot at stake.

God bless you all. I will be working right alongside of you. Thank you all. God bless. (Applause.)




2b)How Bill Daley Died a Death of a Thousand Cuts: Jonathan Alter
By Jonathan Alter



Jonathan Alter was a senior editor, media critic and columnist for Newsweek, where he worked for 28 years and covered five administrations and seven presidential campaigns.
More about Jonathan Alter

The resignation of William M. Daley as President Barack Obama’s White House chief of staff brings to mind the words of David Wilhelm when he left his post as chairman of the Democratic National Committee in 1994: “I’m going back to Chicago where they stab you in the front.”

Obama was reportedly stunned that Daley quit after only a year in the post, but he shouldn’t have been. The affable Chicago banker had already experienced Washington’s classic death of a thousand cuts.

Some background: The youngest and smartest son of the late Mayor Richard J. Daley was never part of the Obama inner circle. After I broke the story in late 2006 that Daley would offer an early and important endorsement of the freshman Illinois senator, a Chicago source informed me that Daley had no particular love for Obama. He backed Obama over Hillary Clinton in part to stay on the right side of Chicago’s blacks in anticipation of a now-abandoned plan to run for governor of Illinois.

In the summer of 2007, when Obama trailed Clinton by more than 20 points in most polls, Daley, by then co-chairman of the Obama campaign, essentially gave up on his candidate, telling friends that Obama had impressed everyone with his fundraising and set himself up nicely for the future but wasn’t going to make it in 2008. Obama loyalists, remembering that Daley had stopped fighting for Al Gore in the 2000 election aftermath against George W. Bush and Jim Baker when he was Gore’s campaign chairman, took note. There was no serious effort to bring him into the Obama administration in 2009.
Ambassador to Business

When Rahm Emanuel left as White House chief of staff in the fall of 2010 to run for mayor of Chicago, he pushed the president hard to hire Daley as his replacement. Emanuel argued that his friend and fellow Chicagoan would help repair the White House’s relationship with the business community (a task Emanuel didn’t think Valerie Jarrett was handling well enough) and was the best man for Job One -- getting Obama re-elected.

Before Obama finally settled on Daley, senior adviser Pete Rouse served as interim chief of staff for a few months. Rouse, who has enjoyed Obama’s confidence since he served as his chief of staff in the Senate, is unassuming, unambitious and beloved within the White House. He was, and remains, the man to see on all personnel matters, which meant Daley had little ability to hire or fire. Even before Rouse’s duties were formally expanded (and Daley’s curtailed) late last year, his close relationship with the president and the White House staff was a source of frustration to Daley.

It was hard for Daley to relish being in charge when the president’s three closest aides -- Rouse, Jarrett and David Plouffe (Obama’s 2008 campaign manager) -- were close to free agents.
Morale under Daley sunk, as the White House became less freewheeling and more corporate and secretive. Two upper echelon aides who had once chafed under Emanuel told me they were nostalgic for him because at least he could make things happen in the government.

All of this -- plus Daley’s genuine desire to spend more time with his new wife -- could have been survived were it not for unhappiness with the chief of staff on Capitol Hill.

It had been more than a decade since Daley was in the Washington scrum as President Bill Clinton’s commerce secretary, and his skills were rusty. The failure to complete a “grand bargain” on the deficit with Republicans wasn’t his fault, but didn’t reflect well on him either. His good working relationship with House Speaker John Boehner yielded nothing.

Democratic lawmakers, already annoyed at not getting more face time with the president, whispered loudly that the Obama White House was much worse than the Clinton White House at taking care of their needs. They laid this at Daley’s feet.

A Fatal Interview

Soon articles appeared that reflected grumbling from unnamed sources in Congress, some of them on the staff of the Democratic leadership. But the most damaging story came from Daley’s own mouth. I’d argue that the effective end of his tenure came on Oct. 28, 2011, when Politico published an interview with him by Roger Simon, a former Chicago Sun-Times columnist who had known him for decades.

After telling Simon that the first three years of the Obama presidency had been “ungodly” and “brutal,” he said something that was simultaneously true and unforgivable within the Democratic Party:

“On the domestic side, both Democrats and Republicans have really made it very difficult for the president to be anything like a chief executive.”

In Washington, careers can end over nothing more than a sentence fragment. By saying “both Democrats and Republicans,” Daley spread the blame for obstructionism, enraging congressional Democrats, who in a couple of cases had to be soothed by the president himself. Senate Majority Leader Harry Reid was particularly angry. Jack Lew, the budget director, will succeed Daley and has much better relations with Democrats on the Hill and with the White House staff.

Still, Obama wasn’t lying when he said that he values the counsel of Daley, who deserves some credit for helping him survive the roughest year of his presidency so far. But Daley’s tenure and retreat may best be remembered as the moment when Washington truly displaced Chicago as the most brutal political town in the country.

(Jonathan Alter is a Bloomberg View columnist and the author of “The Promise: President Obama, Year One.” The opinions expressed are his own.)
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3)US stations two aircraft carriers opposite Iran, 15,000 troops in Kuwait


US President Barack Obama is busy aligning Middle East allies with the next US steps on Iran. Contributing to the mounting sense in Washington of an approaching US-Iranian confrontation, the Pentagon is substantially building up its combat power around Iran, stationing nearly 15,000 troops in Kuwait - two Army infantry brigades and a helicopter unit – and keeping two aircraft carriers the region. The USS Carl Vinson, the USS John Stennis which was to have returned to home base and their strike groups will stay in the Arabian Sea.

Iran is caught up in the same pre-war swirl of activity. Parliament Speaker Ali Larijani spent two days in Ankara this week. But Turkish leaders failed in their bid to sell their good offices as brokers for averting the expected collision between Tehran and the West. Before flying out of Ankara Friday, Jan. 13, Larijani commented: "We have different ways of doing things."

Iranian sources quote the Iranian official as telling his hosts that his country is prepared to take on any military aggressors. One of the responses weighed in Tehran to meet the rising military pressure might be an open declaration of Iran as a nuclear power. By accepting a visit by IAEA inspectors on Jan. 28 - to investigate charges that Iran is running a clandestine nuclear bomb program - Tehran may be moving toward that irreversible admission - or possibly its first nuclear test.

Iran may soon publicize its attainment of a nuclear weapon, a step still being debated intensely at the highest levels of the Islamic regime in Tehran. Supreme Leader Ayatollah Ali Khamenei, who will make the ultimate decision, is very much in favor of facing the world as a nuclear-armed Islamic Republic. He calculates that this fait accompli has a good change of warding off a Western and/or Israeli military attack.

Thursday night, Jan. 12, President Obama put in a call to Israeli Prime Minister Benjamin Netanyahu to discuss coordinating US and Israeli moves for a military operation against Iran, which many US media believe to be imminent.

The New York Times wrote Friday under the caption: Dangerous Tension with Iran, "Many officials, experts and commentators increasingly expect some kind of military confrontation."

Obama had similar conversations with other Middle East leaders this week. The and Saudi and Qatari foreign ministers, Prince Saud al-Faisal and Sheikh Hamad al-Thani, spent two days on Jan. 10-11 in Washington talking to the US president. The contents of their talks were kept under tight wraps. Friday, British premier David Cameron suddenly turned up in Riyadh for talks with Saudi King Abdullah and Crown Prince Nayef.

Discussions on military preparations centering on Iran inevitably concern the need for urgent action to halt the unending carnage in Syria, Iran's close ally.

Thursday, the Russian National Security Adviser Nikolai Patrushev, one of Prime Minister Vladimir Putin's closest advisers, said ominously: "We are receiving information that NATO members and some Persian Gulf States working under the 'Libyan scenario' intend to move from indirect intervention in Syria to direct military intervention."

Moscow has consistently spoken out against any foreign intervention in the Syrian conflict – or even tough UN sanctions.

Russia's NATO ambassador Dmitry Rogozin has suggested more than once that the West would use a military adventure in Syria as the jumping-off point for an attack on Iran.

Another sign that Syria is under the military eye of the West came from an indiscreet comment Israel's Chief of Staff Lt. Gen. Benny Gantz made Tuesday, Jan. 10 in a briefing to a Knesset panel. Israel, he said, is preparing to absorb members of Bashar Assad's Alawite sect after his downfall.

Though he later detracted his words, it is thought the general's comment suggested Israeli preparations to establish a buffer zone on the Syrian side of the Golan border to shelter Alawites fleeing the vengeance of their compatriots.

Turkey too has gone back to talking about setting up in northern Syria a Turkish buffer zone for refugees and anti-Assad dissidents.

Further fueling the war scare, two helmeted bombers on a motorbike assassinated the Iranian nuclear scientist Mostafa Ahmadi-Roshan, deputy director of the Natanz uranium enrichment center, in central Tehran Wednesday. Friday, Ayatollah Khamenei accused the United States and Israel of a CIA-Mossad master plan, which Iranian sources claimed bore the title "Red Windows" and focused on training Iranian dissidents for hit and sabotage operations in Iran.
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4)The Palestinians have agreed to give up a total of 2 per cent of the West
Bank in land swaps with Israel
By Nasouh Nazzal

Ramallah: The Palestinians have agreed to give up a total of 2 per cent of
the West Bank in land swaps with Israel, but Israelis demand 6-9 per cent of
the West Bank excluding the occupied East Jerusalem. Speaking to Gulf News,
Tayseer Khaled, a member of the Executive Committee of the Palestinian
Liberation Organization (PLO) said that the idea of the land swap is an
extremely controversial issue from the Palestinian perspective.

“Many factions and political parties within the Palestinian political
spectrum strictly oppose this offer,” he said. However, landswaps should not
be discussed until a comprehensive agreement between the two sides is
reached first, he said.

“Addressing the idea of the land swap makes it more possible for Israeli
colonies to remain the way they are. This is a major negotiating mistake
committed by the Palestinians,” he said.

Khaled explained that during the last Amman meeting, the Israeli response to
the Palestinian proposal on the borders and security arrangements was that
discussion over borders of a future Palestinian state should be postponed
until all the other issues including Jerusalem, water, and even border
crossings are completely resolved.

“The Israeli response has tackled all the core issues of the
Palestinian-Israeli conflict, with a postponement to the issue of the
borders,” he said.

“The Palestinian negotiators should have withdrawn and walked away from such
useless meetings,” he stressed.

However, Khaled welcomed an official EU document which criticized Israel’s
policies in the West Bank and announced that the EU will pursue
infrastructural projects for the Palestinian communities in the Zone C even
without Israeli cooperation.

“This is a fair, positive, and constructive position for the EU and the
Palestinian leadership warmly welcomes it,” he said.

Khaled added that the Palestinians, the Mideast Quartet, the donors and the
EU should not adhere to the Israeli policies in the Zone C which constitutes
62 per cent of the West Bank size and falls entirely under full Israeli
control, where the Palestinians are not allowed to conduct any kind of
projects in it.

“It is time for the Palestinian National Authority (PNA) to conduct many
projects in the areas of the Zone C and to chase Israel for any reaction it
commits against the PNA,” he said.

“We should not listen to Israel and stick to its policies in the Zone C
which the PNA should immediately announce as first class developing areas
which enjoy the highest priority,” he said.

“We are then ready to wage a popular and political confrontation against
Israel. We will take the issue of the Zone C areas to the UN and the
international community,” he said.

“We hope that the scheduled visit of King Abdullah II of Jordan to the US on
Tuesday will play a role in clarifying the Palestinian position,” he said.
“We also hope that the visit will reduce the US pressure on the Palestinian
leadership,” he added.
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5)The Drive for Dignity
It's hard power that often makes the headlines. But never underestimate the strength of the simple desire for respect.

BY FRANCIS FUKUYAMA

The legend now has it that the Arab Spring was kicked off in early 2011 when a Tunisian vegetable seller, Mohamed Bouazizi, had his fruit cart confiscated by the police. Slapped and insulted by a policewoman, he went to complain but was repeatedly ignored. His despairing response -- to set himself on fire -- struck an enormous chord across the Arab world.
.
What was it about this act that provoked such a response? The basic issue was one of dignity, or the lack thereof, the feeling of worth or self-esteem that all of us seek. But dignity is not felt unless it is recognized by other people; it is an inherently social and, indeed, political phenomenon. The Tunisian police were treating Bouazizi as a nonperson, someone not worthy of the basic courtesy of a reply or explanation when the government took away his modest means of livelihood. It was what Ralph Ellison described as the situation of a black man in early 20th-century America, an Invisible Man not seen as a full human being by white people.

Authoritarian regimes have many failings. Like those in the Arab world now under siege, they can be corrupt, manipulative, and economically stagnant. All of these are causes for popular complaint. But their greatest weakness is moral: They do not recognize the basic dignity of their citizens and therefore can and do treat ordinary people with at best indifference and at worst with contempt. The Chinese government has been successful in giving its people jobs and security, but officials there no less than in the Arab world fail to respect people's basic dignity. Every passing week sees land confiscated from villages by a corrupt developer in cahoots with a local party official, and no one can do anything but lash out through violent protest.

In the Anglo-Saxon world, there is a tendency to see politics as a contest of economic interests and to define rights in utilitarian terms. But dignity is the basis for politics everywhere: Equal pay for equal work, one of the great banners of feminism, is less about incomes and more about income as a marker for the respect that society pays for one's labor. There are no interests that gays could not protect through civil unions, but same-sex marriage has become an issue in American politics because it signifies recognition of the equal dignity of gay and heterosexual unions.

One can understand the rights enumerated in the U.S. Constitution, as well as those in the basic laws of other liberal democracies, as mechanisms for formally recognizing the rights, and therefore the dignity, of the citizens to whom they are granted. Whatever one might ultimately think of the sexual-assault charges brought against Dominique Strauss-Kahn by Nafissatou Diallo, the New York City police were not free to ignore them just because he was a high-status IMF director and French presidential candidate, and she a humble hotel maid from Guinea. Many of the big political fights in American history have centered on dignity issues, i.e., who lives outside that charmed circle of human beings deserving to have their rights recognized, whether propertyless males, women, or racial minorities.

German philosopher Georg W.F. Hegel argued that the whole of human history can be seen as a prolonged "struggle for recognition" and that the modern liberal democratic order represents the triumph of the principle of equal recognition over the relationship of lordship and bondage. The problem of contemporary politics is that people often do not seek recognition simply for their dignity as abstract and equal human beings; they also seek recognition for the groups of which they are members, as Ukrainians or Kurds or gays or Native Americans. Identity politics is the politics of recognition, whether rooted in religion, gender, race, or ethnicity.

So too with the Arab Spring. It was not just abstract human dignity that authoritarian Arab regimes insulted; they also denigrated the rights of Muslims to have their religious identity recognized by the political system. Many Egyptian Islamists bear great resentments against liberal elites in their own societies who look down on them as uneducated and superstitious. The desire for recognition does not simply work to overthrow tyranny in the name of universal liberal rights; it can power assertions of a dominant identity, something I once labeled megalothymia.

The desire for recognition is thus a two-edged sword. It underlies the anger that powers social mobilization and revolt against abusive government, but it often becomes attached to ascriptive identities that undermine the universality of rights. Now that three dictatorships have fallen in the Arab world, with a fourth and fifth possibly on their way, this is the struggle that will play itself out.
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6)Obama to Propose Merging Agencies
By LAURA MECKLER

President Barack Obama will propose merging six agencies that focus on trade and commerce into one new department, a government official said Friday, an effort to make it easier for businesses that often get lost in a maze of bureaucracy.

The change would affect the Commerce Department as well as five smaller agencies. The president, who can't make the change on his own, will ask Congress for fast-track authority to undertake the reorganization. Under the Obama plan, he could propose mergers that would be guaranteed an up-or-down vote from Congress within 90 days.

Consolidation plans have been promoted by outside experts in the past, aimed at making the government work better. But the plan also holds political advantages in an election year, showing that the president is focused on jobs.

Mr. Obama is planning to make the announcement Friday morning.

The plans would affect the Commerce Department's core business and trade functions, the Small Business Administration, the Office of the U.S. Trade Representative, the Export-Import Bank, the Overseas Private Investment Corporation and the Trade and Development Agency.

He first proposed the consolidation in his State of the Union speech nearly a year ago, but the plan ran into several hurdles. Among them are sticky questions about where to put the Census Bureau and the National Oceanic and Atmospheric Administration, both of which reside in the Commerce Department but aren't related to business or trade. The NOAA, which houses the National Weather Service and performs other functions, is particularly tricky because there is resistance internally to moving it to the Interior Department, which would be a natural alternate home.

It was unclear how Mr. Obama would handle those points.

Officials came close to proposing this idea months ago but held up in part because the Senate hadn't yet confirmed John Bryson as the new Commerce secretary. He has since been confirmed.

It is unclear whether Congress will give him the authority he seeks. Many lawmakers will likely be reluctant to give up the power to shape the look of the new organization. Under this plan, members of Congress couldn't amend whatever Mr. Obama proposes. Further, reorganizations are tricky in Congress because they shift which committee has oversight over which agency and challenge various lawmakers' prerogatives.

The government official said 1,000 to 2,000 jobs would be eliminated through attrition and estimated the merger would save $3 billion over 10 years by getting rid of duplicative costs and programs.
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7) How Private Equity Works

By JONATHAN MACEY

Mitt Romney's candidacy is subjecting the entire private-equity industry—where Mr. Romney spent most of his business career—to vicious attacks by journalists and several of his rivals for the Republican presidential nomination.

Newt Gingrich's political action committee is sponsoring a film called "When Mitt Romney Came to Town" that accuses Mr. Romney and his former company, Bain Capital, of taking over companies, looting them, and then tossing their workers out on the street. Jon Huntsman's attacks on his rival include the description of private equity as a business that "breaks down businesses [and] destroys jobs, as opposed to creating jobs and opportunity, leveraging up, spinning off, [and] enriching shareholders."

This is anticapitalist claptrap. Private-equity firms make significant investments in companies, mainly U.S. companies. Most of their investments are in companies that underperform industry peers. Frequently these firms are on the brink of failure.

Because private-equity firms are, by definition, equity investors, they make money only if they improve the performance of their companies. Private equity is last in line to be paid in case of insolvency. Private-equity firms don't make a profit unless their companies can meet their obligations to workers and other creditors.

The companies in which private-equity investors are able to turn a profit generally grow, rather than shrink. This is because the preferred "exit strategy" by which private-equity firms profit is to take the private companies in which they invest and enable them to go public and sell shares that will help the company grow even stronger. As for turnaround success stories, Continental Airlines, Orbitz and Snapple have all benefitted at some time from private-equity investment.

Or take Hertz. Ford sold Hertz to private-equity investors in 2009 for $14 billion. These investors were able to take the company public less than a year later at an equity valuation of $17 billion. The Hertz success story is consistent with the empirical data that indicate companies owned by private-equity firms typically outperform similar companies that do not have a private-equity investor (as measured by profitability, innovation and the returns to investors in initial public offerings).

Private-equity firms not only help corporate performance, but in the long run they lead to more employment and higher wages as well. The alternative to the leaner, smaller firms created by private equity are bankrupt firms that do not employ anybody. And private-equity firms tend to use more incentive-based pay than other firms. A 2008 Government Accountability Office (GAO) report shows that the companies in which private-equity firms invested had low employment growth relative to their peers, and their employment growth rose after they were acquired by a private-equity firm.

These sorts of facts are an inconvenience for some. One U.S. business publication recently announced that "The U.S. Cannot Have a Private Equity President." The article by Forbes.com writer Robert Lenzner goes on to say that there was only one transaction in which Bain paid a significant dividend, so Mr. Lenzner could make the case that the private-equity industry is one of "company stripping, the ruthless way for a raider to exploit a weakened prey for its own profit," and he could add that "slightly more than a handful" of the deals that Romney did "went bankrupt."

By law, a company cannot pay a dividend unless it is solvent. It also is illegal for a director to authorize a dividend that would render a company insolvent. Corporate boards as a matter of standard practice are extremely careful about paying dividends. This is especially true for companies with board members who are sophisticated and wealthy private-equity investors, because they face personal liability for authorizing the payment of dividends by an insolvent company.

The Forbes article also goes on to assert, in the same vein as many other attackers, that "the nature of private equity is to be ruthless and only care about using as much borrowed money as possible in order to gin up the potential return on equity."

Such an accusation fundamentally mischaracterizes the relationship between debt and equity. Equity investors do not get paid until the creditors do. Moreover, unless those lending money to the portfolio companies of private-equity firms are abjectly incompetent, they will not lend to companies that are not highly likely, if not virtually certain, to be able to repay it. In fact, the leverage ratios—meaning the amount of debt that a company has in proportion to its equity—of private-equity firms declined dramatically during the financial crisis, and they are only now rebounding.

At the height of the financial crisis in 2008, the GAO's private-equity report observed that academic research "generally suggests that recent private equity LBOs [leveraged buyouts] have had a positive impact on the financial performance of the acquired companies." The same GAO report noted that in the 2004-2008 period it studied, none of the 500 complaints received by the Securities and Exchange Commission's Division of Investment Management involved private-equity fund investors. The GAO also noted that institutional investor associations and bar associations reported that "fraud has not been a significant issue with private equity firms."

Unlike some other investors who trade in debt and derivatives, private-equity firms make money by investing in businesses that make things and provide services. This industry should be applauded, not attacked.

Assaults on the private-equity industry really are attacks on economic freedom, because the private-equity process is nothing more and nothing less than free-market capitalism at work. Shame on all the people, particularly those who claim to be friendly to capitalism, who attack Mitt Romney because of his association with the U.S. private-equity industry.

Mr. Macey is a professor of corporate law, corporate finance and securities law at Yale Law School.





7a)PepsiCo Board Stands by Nooyi

After a Strategic Review, Marketing Dollars Will Shift Back to Soda

A strategic review at PepsiCo Inc. is more likely to result in a renewed marketing push for its core soft drinks business—and sharp cost reductions to pay for it—rather than a rebuke of CEO Indra Nooyi or any drastic move such as a Kraft-style breakup.
WSJ's Mike Esterl reports Pepsico's board of directors, after a strategy review, has voiced support for CEO Indra Nooyi and will shift marketing dollars to the company's soda products. REUTERS/Mike Segar/Files
PepsiCo will announce the results of the monthslong review in early February. In an interview, James Schiro, one of PepsiCo's independent directors, speaking on behalf of the board, said Mrs. Nooyi enjoys the board's backing. "The board supports Indra and the management team, and its ability to execute its strategy and vision to create shareholder value," he said.
That kind of support is harder to find on Wall Street. Investor frustration has been raising the pressure on Mrs. Nooyi, who faces calls from some shareholders to split up the snacks and beverages company, which boasts annual sales of more than $60 billion.
While PepsiCo has 19 brands that bring in retail sales of at least $1 billion—including its namesake cola, Tropicana orange juice, Lay's potato chips and Quaker oatmeal—soda sales have been sluggish, profits have missed targets and the stock is down 1% over Mrs. Nooyi's five-year tenure.
A breakup of the company appears unlikely, although the board has looked at the idea.
A more likely palliative would be for PepsiCo to slash hundreds of millions of dollars in costs, including the elimination of thousands of jobs, and increase the marketing budget for its flagging North American beverages by around 20% this year, to pump life back into brands such as Pepsi after being heavily outspent by Coke in recent years.
In November directors and management extended a review of the business plan for 2012 "and beyond'' after initially promising to update investors on its outlook by early December. The review is "rigorous'' and several options are being considered, according to people familiar with the matter.
PepsiCo lowered its profit outlook twice last year, blaming higher commodity costs and a difficult consumer environment.
Critics also accused management—and Mrs. Nooyi in particular—of focusing too much in recent years on developing nutritious products at the expense of its large soda business, which has been losing market share to rival Coca-Cola Co. Pepsi not only trails Coke, the biggest-selling soda, but recently was surpassed also by Diet Coke in the U.S.
Meanwhile, Mrs. Nooyi, who became chief executive officer in October 2006, has pushed to more than double PepsiCo's revenue from "good for you'' products, such as yogurts and Sabra hummus, to $30 billion by 2020.
Bloomberg News
Indra Nooyi has dismissed talk that she paid too little attention to the company's soda business
"The results of the company have got investors really scratching their heads about whether [Mrs. Nooyi's] vision has helped the company,'' said Ali Dibadj, an analyst at Sanford Bernstein. "You can't take your eye off the ball, which it seems like management has done.''
While PepsiCo's share price has lost ground over the past five year, shares in Coca-Cola, which sells only beverages, have soared 51% over the same period, to $67.57.
PepsiCo declined to make Mrs. Nooyi or other executives available for interviews, citing the ongoing business review. In a statement, PepsiCo said its board "has been fully engaged'' in the business review and management is "committed to maximizing shareholder value.''
Mrs. Nooyi, 56, has dismissed talk that she paid too little attention to the company's soda business. She also contends that healthier products from fruit, grain and dairy ensure long-term growth as more consumers shy away from sugary drinks and salty snacks. Last year, PepsiCo completed the acquisition of Russian dairy and fruit-juice maker OAO Wimm-Bill-Dann in a roughly $5 billion deal.
Some impatient investors want PepsiCo to pull "a Kraft,'' that is, split up. Last year, Kraft Foods Inc. said it would split into two separate entities, a world-wide snacks business and a North American grocery business.
Proponents of a PepsiCo breakup argue the beverage business is dragging down its better-performing snacks business.
Wall Street number-crunchers have estimated PepsiCo's share price should be closer to $75, not the current $64.62, based on sum-of-the-parts valuations.
"I'd like for them to say, 'We're going to break up the company,' because I think the stock would go up 20%,'' said Walter Todd, chief investment officer at Greenwood Capital LLC in Greenwood, S.C. He said the firm owns about $4 million in PepsiCo shares.
Mrs. Nooyi publicly has argued that PepsiCo's businesses are complementary and that it benefits from scale when it develops new products and delivers them to store shelves around the world.
Many in the industry also believe PepsiCo's beverage business would be left dangerously exposed as a stand-alone company and unable to compete against Coke, the world's largest beverage company.
"Having snacks and beverages together is not the problem,'' said John Faucher, an analyst at J.P. Morgan.
Mr. Faucher and others say the Purchase, N.Y., company needs to ramp up marketing investments in its beverage business. Many on Wall Street expect PepsiCo to increase marketing outlays by $400 million to $500 million this year, with most of it aimed at North American beverages.
PepsiCo is expected to partly offset that investment by culling personnel. As part of that plan, executives have weighed consolidating several regional offices of its U.S. beverage business, according to people familiar with the matter.
Those and other changes could results in the layoff of about 4,000 of its 300,000 employees world-wide.
Dara Mohsenian, an analyst at Morgan Stanley, expects PepsiCo to announce $300 million to $500 million in cuts. But he also expects earnings-per-share growth of only around 3.5% in 2012.
That is below management's most recent guidance that annual profits will grow at a high-single-digit percentage, and far removed from the double-digit earnings growth it promised a couple of years ago.
PepsiCo began pumping money back into Pepsi-Cola last year, launching its first new TV advertising campaign for the flagship soda in three years and plowing $60 million into sponsoring "The X Factor.'' Next month Pepsi-Cola will appear in its first Super Bowl ad since 2009.
Last September it said that Frito-Lay North America snacks chief Al Carey was taking the helm of Americas beverages, succeeding Eric Foss and Massimo d'Amore, who had co-run the $20 billion division. It also named John Compton, head of its Americas-wide food division, to oversee a "Power of One'' council to better integrate the beverage and snacks businesses.
Some investors say they believe PepsiCo is well positioned to thrive on the strength of its major brands, which also include Mtn Dew soda, Gatorade sports drinks and Doritos chips.
"To me, PepsiCo is just like a beach ball being pushed underwater,'' said Donald Yacktman, chief investment officer at Yacktman Asset Management in Austin, Texas, adding PepsiCo's current business model is "excellent.''
Mr. Yacktman said his firm holds about $1.4 billion in PepsiCo shares, or about a tenth of its investment portfolio, and is a long-term investor.

7b)Appetite for (Creative?) Destruction
Private-equity firms have been called barbarians, locusts, flippers and asset-strippers. They also have been praised for improving weak businesses and delivering impressive returns to their investors, which include retiree pension funds.
These dueling images of the industry have come into stark relief, as the merits of private-equity investing have emerged as a hot-button issue in the presidential campaign. Some candidates have accused Republican presidential hopeful Mitt Romney of destroying jobs and companies at private-equity firm Bain Capital, which he helped found and later left in 1999.
Gloucester Engineering
A mechanic at Gloucester Engineering, which benefitted from turnaround efforts by private-equity firm Blue Wolf Capital Partners.
Industry participants—and some critics—say there is truth to both perspectives.

Private equity specializes in leveraged buyouts, or deals funded by debt that is loaded on to the target company's balance sheet. The acquired companies often are restructured to reduce costs, improve efficiency and repay the debt, before being sold or listed on the public markets.

A few recent deals show how leveraged-buyout barons can fund innovation and growth, create jobs and sometimes rebuild companies in challenging industries. Other times, private-equity deals result in onerous debt loads, losses and deep layoffs.

In early 2010, Gloucester Engineering Co., which manufactures machines that make thin plastics like those used in trash bags, was saddled with debt and hurtling toward bankruptcy. The Massachusetts company's management informed union officials it planned layoffs and needed concessions from remaining workers. Word of the company's distress reached customers, who began canceling orders.
A union representative, Mike Vartabedian, knew a lawyer who put him in touch with Blue Wolf Capital Partners, a New York private-equity firm with a reputation for teaming up with labor in its investments. He asked Blue Wolf to step in.
Blue Wolf, which manages a $118 million fund, invested in Gloucester just as it went into Chapter 11 bankruptcy protection, and bought the entire company when it re-emerged from bankruptcy in late 2010. "If we could fix the operational issues, there was no reason we couldn't see this grow," said Blue Wolf managing partner Adam Blumenthal.

Blue Wolf brought in a new management team, installed a computer system that helped better manage inventory and estimate job costs, and built up a business to service Gloucester equipment around the world. It also struck a deal with union workers that Mr. Vartabedian says kept pay and pensions unchanged but mandated employees perform a wider range of tasks than their previous job descriptions allowed.
"The one goal we had was to make the company successful," said Joe Orlando, who took on multiple roles, including maintenance and truck driving under the new union agreement. "There were a lot of people that live in Gloucester and wanted to keep the jobs here."
Gloucester now employs about 100 workers, up from 30 at the time of the bankruptcy. Mr. Blumenthal said he expects substantial job growth over the next several years.
Other deals aren't as satisfying to all parties.
When KKR & Co. and TPG Holdings purchased TXU Corp., Texas' largest power generator, in a $45 billion leveraged buyout in 2007—then the largest ever such deal—the private-equity firms left the utility with $35 billion in debt, up from $11 billion before the takeover.

All that debt has put pressure on the utility, since renamed Energy Future Holdings. At the same time, a plunge in natural-gas prices has eaten into revenues by reducing prices the utility charges for its power. Today, Energy Future's debt trades at less than 50 cents on the dollar, suggesting that investors anticipate a default.
Despite the difficulties, Energy Future has added jobs by adding three new coal units since the buyout, expanding its employee base by 25% to about 9,400, the company says.
One problem with assessing buyouts is that it is hard to tell what a company's fate would have been had a buyout not taken place. It is especially tough because buyout specialists often target troubled industries.
Getty Images
Customers at a going-out-of-business sale at a Miami Linens 'N Things in 2008. Apollo Global Management and other leveraged-buyout specialists failed to improve operations quickly enough to turn the company around.
In 2006, Apollo Global Management and other leveraged-buyout specialists purchased Linens 'N Things for $1.3 billion. They used $260 million of cash and added more than $1 billion of debt to the already-struggling company.
Apollo and the other buyers failed to improve operations quickly enough to turn the company around. The economic downturn compounded the problems, as did all the debt the firms piled onto the retailer.

In 2008, New Jersey-based Linens 'N Things filed for bankruptcy protection. Apollo, the other buyout firms and the firms' investors, together lost the $260 million they had invested.
The failure didn't hurt Apollo very much: Apollo had invested just 2% of its most-recent buyout fund in Linens 'N Things. The fund delivered profits topping the stock market's gains between its launch in 2001 and September of last year, according to the most recent data shared with investors.

As for the retailer, it closed 120 stores and let go 2,500 full-time and part-time employees. The company was liquidated and the estate sold the Linens 'N Things name. The price: $1 million.
A spokesman for Apollo declined to comment.
It is also true that much of the debate over private equity is based on methods that are increasingly not practical, in part due to pressures from the 2008 financial crisis.
Unable to take on as much inexpensive debt as they did in previous years, some private-equity firms have been using less debt and searching for ways to expand companies, rather than strip and sell their assets.
But less debt can mean lower returns, which isn't great news for private-equity's investors, including public pension funds and university endowments. Data show the industry's performance has been declining, although it still has been beating the broad stock market.
As for jobs, there is no doubt that many buyouts result in job losses, as private-equity firms often try to streamline operations and trim expenses. What is less clear is whether, over time, those jobs are regained and new ones added as some companies emerge stronger.
A recent study found that initial job losses often are later recovered, with net job loss at private-equity-owned companies about 1% more than comparable companies.
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8)The GOP: Back in the Money Game
The Republican National Committee under chairman Reince Priebus is once again raising substantial sums, especially from big donors.
By Kim Strassel


As the GOP presidential field battles over the morality of capitalism, the candidates might be grateful that at least one Republican isn't ashamed to be hauling in the cash. Reince Priebus may not have worked at Bain, but he knows the value of a buck.

One year into his chairmanship of the Republican National Committee, Mr. Priebus will soon be announcing the fruits of his 2011 labors, and the news is that the GOP is (finally) back in the money game. The party may not have a nominee, but what it does have is an organization that looks ever more able to support one.

A source confides that the RNC landed $27 million in the fourth quarter, bringing its year-end fund-raising total to a sizable $87 million. Nearly $12 million was collected in December alone, the largest monthly sum in a non-election year since the early George W. Bush days. This also marks four out of the past five months that the RNC has beat its Democratic counterpart—despite President Obama's formidable fund-raising powers.

These numbers are noteworthy in the absolute; they are striking in the relative. Two years ago, the RNC was the political equivalent of vaudeville, its chairman, Michael Steele, more interested in center stage than the fundamentals of fund raising and organizing. In a year that should have created a tea party-fueled slam dunk, the RNC alienated top donors, frittered away crucial dollars, and spread itself too thin to deliver on prime opportunities.

The Republican House victory in 2010 was despite the party, not because of it. And the RNC's lack of money and focus helped lose several crucial Senate seats, the ramifications of which go beyond 2012. Even if Republicans retake the Senate this fall, they will be less able to reverse the Obama agenda than they would have been with a stellar 2010. If the midterms proved anything, it was that no number of Super PACS can replace a well-moneyed, well-organized party machine. And the GOP didn't have one.

Nor was Mr. Priebus viewed as an obvious savior. The former Wisconsin Republican Party chairman was criticized as too young, too untested, too mild-mannered. It took an acrimonious contest and an unprecedented seven ballots for Mr. Priebus to cobble together enough committee-member votes to get the RNC job. He walked into headquarters facing $24 million in debt and was told the group didn't even have enough money to cover the postage for an initial fund-raising effort.

Republicans who know the Wisconsinite say his response was to spend a year sweating the boring stuff. He's cut expenses and staff, getting fund-raising costs below the 50% mark (down from 62%). He's been putting new focus on voter registration and turnout operations. He does TV and speeches, though he picks his spots. Mostly, he's to be found personally coaxing back those crucial, big-dollar donors.

Of all the numbers the RNC is releasing, it is this one that has GOP operatives the happiest. In 2009, Mr. Steele raised $3 million from "major donors" (those giving $15,000 or more). The RNC will be announcing that in 2011 it raised $24 million from this crowd—an all-time record for the party in a non-election year. By the end of 2010, a big midterm election year, the RNC counted 100 donors who had given $15,000 or more. A year later, that number sits at 943.

These figures suggest Republicans are regaining confidence in the RNC, and with that, a new enthusiasm for committing money to beat Mr. Obama. Heads of Super PACs report similar findings. Donors, they say, are less insistent than in 2010 on supporting only purist, tea-party candidates. The past two years have been sobering, and they are increasingly focused on the end prize of the White House and the Senate. They are writing checks, and big ones.

On that point, the conventional wisdom was always that Super PACs had benefited from the RNC's crisis. In truth, the donors who quit giving money to the RNC weren't instead writing checks to Super PACs; they weren't giving money, period. Both the party and outside groups are today registering a wave of dollars, and the Super PACs are only too happy to once again have an RNC able to lead.

The Republicans will need every penny. The president's perch gives him a fund-raising advantage, and the White House is using the "broken" (Mr. Obama's words) campaign-finance system to its full advantage. Kick in several hundred million from the unions, and mix in the Democratic National Committee and the Democrats' own Super PACs, and the left will come into this race plenty flush.

Mr. Priebus's hardest work is still ahead—in matching that Democratic momentum, and in proving he can run a ground game in November. Much, too, is going to depend on whether this Republican primary scrap produces a nominee able to further harness voter energy and money. The nominee will at least have something to work with in the RNC. Considering recent history, that's no small thing.
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