A little silver-haired lady calls her neighbor and says, "Please come over here and help me. I have a killer jigsaw puzzle, and I can't figure out how to get started."
Her neighbor asks, "What is it supposed to be when it's finished?"
The little silver haired lady says, "According to the picture on the box, it's a rooster."
Her neighbor decides to go over and help with the puzzle.
She lets him in and shows him where she has the puzzle spread all over the table.
He studies the pieces for a moment, then looks at the box, then turns to her and says,
"First of all, no matter what we do, we're not going to be able to assemble these pieces into anything resembling a rooster."
He takes her hand and says, "Secondly, I want you to relax. Let's have a
nice cup of tea, and then," he said with a deep sigh ............
"
Let's put all the Corn Flakes back in the box."
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President Solyndra would have us believe Capitalism is faulty. No doubt it is not a perfect system. However, empirically speaking, it has produced more wealth and improved the standard of living for more peoples than any other system.
The abuses of the system are those made by people and we have laws that, when properly enforced, address them. To believe changing the system and substituting government decision making and solutions is the answer is beyond sane.
Yet, that is what our president would have us believe. His SOTU ideas are the soap he suggests we lather ourselves with because, in the final analysis, they enrich him and those of like mind who seek power over our freedom to live and to pay the consequences of free choice and reap the benefits of those choices.
While railing against the rich, our president and his wife enjoy the riches of his office, have spent more on travel and hiring of various czars and czarinas and staff than any of their predecessors. Nixon dressed White House staff in Imperial Uniforms and that bombed. This president believes in empire building and that does not accord with our republic form of government.
Freedom is the best and only path for our nation's citizens and education is the best antidote to this president's sick ideas. "We have a Republic if we can keep it." was allegedly said by Ben Franklin and of late we have allowed this president to do everything to destroy it and he must be stopped.
These are various other thoughts and comments about SOTU.(See 1, 1a,1b,1c, 1d and 1e below.)
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In typical fashion when Democrat presidents take over their unabridged spending eventually is covered by cuts in defense. This time is no different except the cuts are more draconian and the ultimate cost will be greater both to those who have to fight with inferior equipment and supplies and to the nation whose safety will be threatened. Yes, The Pentagon is not a paragon of virtuous spending and much can be done to save money and get more for the buck spent but this administration is prepared to jump ship.
Many of the plans being implemented were proposed and sought by Sec. Rumsfeld but he was vilified by the media and press folks who were fed information by their Pentagon friends who opposed Rumsfeld's thinking. Now the press and media's voices are quiet. Interesting!!! (See 2 below.)
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Greenspan kept rates low and along with progressives in Congress and, most particularly, Dodd and Barney's efforts helped create the housing boom and subsequent crash.
Bernanke is keeping rates low because of this housing bust so now we are likely to have rampant inflation at some point and it will also drive many small/local banks out of business. Ah, but the administration tells you it does not like big banks but, once again, actions belie their words. (See 3 below.)
There are those who argue gridlock is the basis of our problem and blame Congress for the inability to compromise.
I understand their frustration and certainly Congress is due its share of blame for the mess we are in but I submit compromise is what got us into the mess in the first place. The philosophical differences between progressives and conservatives is as wide as the gulf that exists between Palestinians and Israelis. Believing half a loaf is better than none is not an effective answer. A liberal friend argued that with half a loaf you at least do not starve and I responded if the bread is tainted it can kill.
The point being, progressives believe government is the solution and that has proven a false assumption and every time conservatives become 'progressive light' we simply move down a compromised path which takes us in the wrong direction.
Every time we move further and further away from our Constitution's intent we become a nation our founders would neither recognize nor intended us to be and every time we bash Capitalism and seek to supplant free market solutions we muddy the water and undercut Free Market's self corrective ability and every time we try and free ourselves of the consequences of choices we weaken ourselves as a people and trade freedom for enslavement.
That is not to say every progressive idea is a bad one but the half loaf that embodies the concept that ever bigger government can be successful and deliver on its promises, government dependency is preferable to freedom and religion has no place in family structure, and unbridled deficits and the decline in a nation's currency has no consequences in destroying the very fiber of that nation is a half loaf I rather reject than digest.
Compromise has allowed the progressive pendulum to swing beyond the force of the free market's physical self-correction and it must be stopped. Consequently,if gridlock is the price we must pay it is preferable to the cost of continuing the myth there is a 'free lunch.'
Gingrich rise is due to the fact of his appeal to anger and frustration whereas, Romney has failed in this effort though his credentials are worthier than perceived. Obama's class warfare approach is campaign slick but leadership void.
This is why defeating Obama is essential and why those in Congress who, like Horatio, are defending our Republic's bridge by unyielding to compromise have my support.
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Yeah, what we need is more government and tax deficient aids. (See 4 below.)
5) Elliot Chodoff will discuss the Iranian situation this evening. (See 5 below.)
Dick
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1)Barack Obama is still driving America towards decline
By Nile Gardiner
Two words hardly mentioned in Barack Obama’s 65-minute State of the Union address to Congress: freedom and liberty. President Obama’s fourth and possibly last State of the Union speech was long on big government proposals, but short on the principles that have made America the world’s greatest power. His lecturing tone exuded arrogance, and he failed to present a coherent vision for getting the United States back on its feet after three years of economic decline. It was heavy on class-war rhetoric, punitive taxation, and frequent references to the Left-wing mantra of “fairness”, hardly likely to instil confidence in a battered business community that is the lifeblood of the American economy.
Above all, he remains in denial over the levels of federal debt that threaten the country's long-term prosperity. This was not a speech that was serious about the biggest budget deficits since World War Two. There was no sense at all that America is a superpower on a precipice, sinking in a sea of debt that threatens to undermine America’s power to project global leadership for generations to come. In fact, his interventionist proposals will only make matters worse.
From new federally funded infrastructure projects to increasing regulations on financial institutions, President Obama remains wedded to big government – an approach rejected by a clear majority of Americans, who view it as a millstone around their necks. As Gallup’s polling has found, nearly two thirds of Americans see big government as "the biggest threat" to their country.
This should have been a serious speech addressing the economic problems facing the United States. Instead it was a laundry list of half-baked proposals designed to appease the Left. The president should have been talking about reining in spending, lowering taxes, and fostering greater economic freedom, but he opted for policies that will speed America’s decline, not reverse it.
It is a pity that Mr Obama’s uninspired speechwriters did not spend a bit more time learning from both the policies and the message of a truly visionary president, Ronald Reagan. In the last State of the Union address of his first term in office, in 1984, he had these stirring words for the American people, reminding them that it is freedom and liberty that drive this great country:
As we came to the decade of the eighties, we faced the worst crisis in our postwar history. In the seventies were years of rising problems and falling confidence. There was a feeling government had grown beyond the consent of the governed. Families felt helpless in the face of mounting inflation and the indignity of taxes that reduced reward for hard work, thrift, and risktaking. All this was overlaid by an evergrowing web of rules and regulations.
On the international scene, we had an uncomfortable feeling that we'd lost the respect of friend and foe. Some questioned whether we had the will to defend peace and freedom. But America is too great for small dreams. There was a hunger in the land for a spiritual revival; if you will, a crusade for renewal. The American people said: Let us look to the future with confidence, both at home and abroad. Let us give freedom a chance.
… How can we not believe in the greatness of America? How can we not do what is right and needed to preserve this last best hope of man on Earth? After all our struggles to restore America, to revive confidence in our country, hope for our future, after all our hard-won victories earned through the patience and courage of every citizen, we cannot, must not, and will not turn back. We will finish our job. How could we do less? We're Americans.
I've never felt more strongly that America's best days and democracy's best days lie ahead. We're a powerful force for good. With faith and courage, we can perform great deeds and take freedom's next step… Let us be sure that those who come after will say of us in our time, that in our time we did everything that could be done. We finished the race; we kept them free; we kept the faith.
1a)State of the Union speech is full of soaring rhetoric but skips over some major challenges
By Washington Post Editorial Board
A STATE OF THE UNION address from a president seeking reelection is always an odd event. Especially in the face of a divided Congress, the president’s proclaimed program stands little chance of enactment. The ambitious agenda of years past gives way to the knowledge, born of painful experience, of how difficult that will be to achieve. Meanwhile, the president’s proposals are made in the context of the race about to be joined, stacked up against the pie-in-the-sky promises of his opponents. The subtext is, inevitably, less a blueprint of the year to come than an explanation of why the president deserves reelection and a sneak preview of a second-term agenda.
In that context, President Obama’s speech Tuesday night combined soaring rhetoric with crowd-pleasing, often small-bore proposals. Mr. Obama spoke movingly about the eroding economic security of much of the middle class. Building on themes he sounded a few months ago in Osawatomie, Kan., the president argued against, as he put it, “settl[ing] for a country where a shrinking number of people do really well, while a growing number of Americans barely get by.” To raise this issue is not, as former Massachusetts governor Mitt Romney (R) asserted even before the president’s speech, “divisive rhetoric from a desperate campaigner in chief.”
The president’s biggest new idea was attaching a number to his previously articulated “Buffett Rule” — billionaire Warren Buffett’s position that he should not pay a smaller share of his income in taxes than his secretary’s; she was in attendance in the first lady’s box. Mr. Obama announced that not only billionaires but all those earning $1 million or more a year should pay at least 30 percent of their income in taxes. Think of this as a new version of the alternative minimum tax.
This position sets up a politically useful contrast between Mr. Obama and Mr. Romney. It is not a fleshed-out proposal that the administration expects, for example, to produce as a line item in the forthcoming budget. Administration officials could not tell us how much revenue such a change would produce. But Mr. Obama is right to take on the unlevel and distorting playing field of a code that taxes ordinary earned income at a much higher rate than investment income.
Mr. Obama has said he wants to make the tax code simpler, but his proposals would further complicate it, adding or reshuffling preferences for manufacturing. This kind of picking and choosing between manufacturing and other businesses, or between different kinds of manufacturers (the president said he wants to double the deduction for high-tech manufacturers), or between towns that have lost factories and towns that haven’t, introduces needless complexity into an already unwieldy code. It also relies on a vision of manufacturing as an engine of jobs that may not be realistic in an age of increasingly automated factories.
Once again Mr. Obama slighted the threat that the federal deficit poses to the growth he said he wants. As with last year’s State of the Union speech, when he relegated the debt to a near-aside late in the speech, Mr. Obama did not go beyond a rhetorical nod to the issue. Indeed, in arguing for increased investment in U.S. infrastructure — a worthy idea — Mr. Obama gave up on the traditional approach of paying with an increase in the gasoline tax or similar user fees. Instead, he relied on the dodge of “paying for” those costs by using some of the savings from winding down operations in Iraq and Afghanistan. The administration is right to be frustrated by congressional unwillingness to consider real pay-fors, but wrong to respond with a measure that would just make the deficit worse.
Mr. Obama’s discussion of foreign policy focused on the two achievements likely to be a major focus of his election campaign, the withdrawal of the last troops from Iraq and the killing of Osama bin Laden. He vowed that America would remain (borrowing President Clinton’s phrase) the one “indispensable” nation, even as he cuts a half-trillion dollars from the military budget. The president did not hint at any significant foreign policy initiatives for the coming year; even on Iraq, he failed to discuss future relations with that strategic oil producer, which has headed toward renewed internal conflict since the last U.S. soldiers pulled out.
Indiana Gov. Mitch Daniels, delivering the Republican rebuttal, had the fiscal question right when he said: “If we drift, quarreling and paralyzed, over a Niagara of debt, we will all suffer, regardless of income, race, gender, or other category.” But his eloquence is undercut by his party’s refusal, far more doctrinaire than Mr. Obama’s, to entertain responsible proposals to pay for the nation’s needs.
1b)Obama: Make the Economy Work...for Everybody
Jonathan Cohn
We’ve come to expect grand things from the State of the Union: Major revelations about the president’s agenda, bold policy initiatives, memorable turns of phrase. And sometimes that’s what we get, for better and for worse. In 2009, for example, Obama used his budget speech (the de facto State of the Union) to lay out his ambitious first-year agenda. In 2011, he reacted to his party’s defeat at the polls by calling for bipartisan cooperation and emphasizing deficit reduction.
Obama offered a few new and intriguing policy ideas on Tuesday – among them, a proposal to get more taxes from companies with operations overseas and an initiative to develop partnerships between community colleges and local businesses. He also called for some political reforms, most important among them an end to filibusters of judicial appointees. Mostly, though, he stuck to the proposals and themes he’s put out in the last six months, most memorably in his September address on jobs and his December speech on fairness.
But those happened to be very good speeches – not only because their tough rhetoric but also because of their substance. Together, they sketched out an ambitious vision of government, as an engine of economic growth and protector of opportunity for the lower- and middle-classes. Tonight, Obama was doubling down on those arguments – in no small part because, as policy and politics, they seem to be paying off.
Although the speech began and ended with foreign policy, the heart of it was domestic policy – with a heavy focus on job creation. Unlike in September, when the economy was at its absolute worst, Obama could point to a recent run of (moderately) good news about overall growth and job creation. And he could boast about the results of what has become his administration’s most unambiguous success: The rescue of General Motors and Chrysler, which has been a catalyst for a rebirth of American manufacturing in the Midwest.
Pivoting from that discussion, Obama called for more action to boost American workers and the industries that employ them – whether it was tax changes to deter American companies from relocating overseas or more spending on infrastucture, an idea that both parties once supported. He also renewed his call for investments in clean energy, suggesting (at least implicitly) that with early government support the U.S. could create a manufacturing nucleus – the kind that now exists for computers abroad.
I'm not qualified to judge all of the policies: Some, I know, are better than others. The overall scale of what he outlined on Tuesday was modest. But in principle Obama is absolutely right: "What’s happening in Detroit can happen in other industries."
Later in the speech Obama focused on the theme of “fairness” – and he was not shy about what he meant. He once again decried a system in which Warren Buffett’s secretary – whom the White House cleverly invited to sit with the First Lady – has a higher tax burden, proportionally, than Buffett himself. And for the first time he put a number on his proposed “Buffett tax”: In a reformed tax system, Obama said, nobody making more than a million dollars a year should pay less than 30 percent of his or her income in taxes. (Obama didn't talk much about the Affordable Care Act, Medicare, or the rest of welfare state, but his recent defense of those programs has been loud and firm, so I'm not reading too much into it.)
Thematically and in some cases programmatically, these calls were identical to what Obama said in the jobs speech and in Kansas. But politically that makes a lot of sense, as polls suggest the country is on his side: They like public works, they like spending on education, they like a secure welfare state, and they like higher taxes on the rich.
This speech also adopted the more aggressive tone Obama has maintained since September. Obama's most telling line was "I intend to fight obstruction with action, and I will oppose any effort to return to the very same policies that brought on this economic crisis in the first place." But that approach, too, seems to be popular, if the president's (slowly) rising poll ratings are indicative. And, besides, Obama has tried offering accommodation before: As we saw last year, it didn't get him anywhere.
Of course, that also means his agenda isn't likely to get far in Congress this year. The Republicans who run the House didn't like it before and they won't like it now. Most likely, it will take the election – and the stark choice between Obama and the eventual Republican presidential nominee – to settle the dispute.
But after the election, there will be a chance to govern again. Expiration of the Bush tax cuts and the onset of spending cuts from last summer’s budget deal will force decisions on fiscal policy. With this speech, Obama is not merely trying to win reelection, although he is quite obviously trying to do that. He is also laying the groundwork for those negotiations, should he have a chance, as the president-reelect, to drive them. And if he sounds a lot like he’s sounded for the last few months, that’s only because what he’s been saying seems to be working.
1c)Commentary
A Diminished Obama Strikes a Tepid Tone
Jonathan S. Tobin
President Obama launched his re-election campaign tonight with a State of the Union speech that attempted to conjure up the spirit of an earlier era of national unity even as he sought to focus national resentment on wealthy Americans and his political opponents in Congress.
With no record of accomplishment to his credit, other than the unpopular Obamacare and stimulus, Obama put forward a limited agenda of government intervention in the economy and the tax code in a laundry list of initiatives that did little to break new ground on any issue and was bereft of the passion and vision that drove his 2008 campaign for the presidency. All in all, it was 65 minutes that ought to worry Democrats more than it annoyed Republicans.
The president knows he will get nothing passed this year, and his speech reflected that reality. He began and ended with the killing of Osama bin Laden. In between he spoke of a peace dividend from the end of wars in Iraq and Afghanistan that he would use on building projects and green energy production. He called for a massive bailout of homeowners even as he pandered to public opinion by saying there would be no more bailouts for banks. He vowed to prosecute those responsible for the mortgage crisis and said teenagers would no longer be allowed to drop out of high school, no matter how much trouble they were causing. No mention was made of either Obamacare or the stimulus. Nor did he speak of the Keystone XL pipeline project that he cancelled. He called for lower taxes, less regulation and more exploitation of our natural resources even though he has raised taxes, increased regulation and made it more difficult for the nation to use more of its oil and gas and that of our neighbor Canada.
On foreign affairs, Obama spoke of victory in Iraq and Afghanistan and pretended he had increased Iran’s isolation rather than wasting three years on failed engagement and feckless diplomacy that gave the Islamist regime more time to build a nuclear weapon. He claimed to be Israel’s greatest friend even though he has used his time in office to pick constant fights with the government of the Jewish state. The shout out to wavering liberal Jewish Democrats betrayed an administration clearly worried about November.
The only substantive portion of the speech dealt with his desire to raise taxes on millionaires. Even if he got his way and raised the rates for millionaires to 30 percent it would do little to deal with the deficit or pay for the runaway costs of entitlements. But that isn’t really the point of his advocacy. Obama isn’t interested in raising those taxes to achieve an economic purpose. He has seized on this phony issue in order to exploit it politically this fall. For all of his talk about unity, his decision to let loose the dogs of class warfare rhetoric doesn’t so much seek division as to treat it as his golden ticket to re-election.
While Democrats may have been encouraged in recent weeks by the spectacle of Republican presidential candidates tearing each other apart, often employing the rhetorical devices of the left, they could not have been encouraged by the tepid tone and lack of vision in Obama’s speech. His unwillingness to speak about what he has done and instead concentrate on bashing the rich seemed to be more the strategy of a challenger rather than an incumbent.
His claim that America “is back” was empty braggadocio that makes little sense given the grave state of the economy. Obama’s rally cry about American greatness seemed stuck in nostalgia for a bygone era of massive government spending projects and an economy based in manufacturing rather than information and technology. The result of this empty talk was a speech that struck a sour, flat note just when he needed to inspire.
All of this should cause Democrats to worry just at the moment when they were starting to feel good about 2012. Though the president has many advantages heading into the campaign, including weak potential opponents, his inability to stand on his record and his loss of faith in the grand vision he ran in 2008 foreshadows serious problems later this year.
1d) Obama’s State of the Union Speech: My Response Discovers Some Curious Insights and Strange
By Barry Rubin
In his State of the Union message, President Barack Obama began by wrapping himself in the flag, patriotism, and love of the armed forces while trying to highlight his foreign policy achievements. Among his points:
–“The United States [is] safer and more respected around the world.”
Presumably, a lot of Americans will believe this. The United States may be said to be safer in terms of facing direct terror attacks but that was basically true in 2002. As for “more repected”—a phrase no doubt chosen to seem more statesmanlike than saying “more popular,” that is a joke. If there’s one thing that should be obvious (and this is often revealed even by international public opinion polls) the United States is not more respected at all.
Moreover, while individual Americans may be relatively safe from terrorist attacks in their homes, neighborhoods and workplaces within the territory of the United States—a perception partly reinforced by redefining terrorist attacks as something else—U.S. interests abroad are far less safe.
“For the first time in nine years, there are no Americans fighting in Iraq.”
True, though the remaining forces may have to fight to defend themselves. This withdrawal, of course, was planned by Obama’s predecessor and Iraq is not doing so well today.
“For the first time in two decades, Osama bin Laden is not a threat to this country. Most of al Qaeda’s top lieutenants have been defeated.”
Aside from the lack of grammar here—was Obama trying to avoid saying that these people were killed?—the statement is true. The problem is that Hamas, Hizballah, the Turkish regime, Iran, Syria, and the Muslim Brotherhood add up to a far bigger threat, a problem magnified by Obama refusing to acknowledge they are a threat.
–“The Taliban’s momentum has been broken, and some troops in Afghanistan have begun to come home.”
While the latter point about withdrawal is true, the Taliban is still quite strong. It would be quite possible for the Taliban to return to power within five years.
Then Obama rearranges history—quite obviously though no one in the mass media will point this out:
“Ending the Iraq war has allowed us to strike decisive blows against our enemies. From Pakistan to Yemen, the al Qaeda operatives who remain are scrambling, knowing that they can’t escape the reach of the United States of America.”
In fact, of course, the successes against al-Qaeda were obviously achieved before the withdrawal. Are al-Qaeda operatives trembling in fear before the might of America? Of course not. And in both Pakistan and Yemen (one should add Somalia) they are doing quite well. Obama could have done better by referring to the defeat of al-Qaeda as being part of the American “victory” in Iraq.
“From this position of strength, we’ve begun to wind down the war in Afghanistan. Ten thousand of our troops have come home. Twenty-three thousand more will leave by the end of this summer. This transition to Afghan lead will continue, and we will build an enduring partnership with Afghanistan, so that it is never again a source of attacks against America.”
Again, Obama tells an unnecessary lie. The withdrawal from Iraq is a correct move but hardly puts the United States in a position of strength, especially given Obama’s deep cuts on the military. And of course the end of the war in Afghanistan was planned long before any withdrawal in Iraq; indeed it was basically planned during his predecessor’s term.
As for an “enduring partnership with Afghanistan,” that’s the kind of statement bound to come back to haunt Obama. Afghanistan remains unstable, its government is angry with Obama, and the tide may well turn there after a U.S. withdrawal.
Next, Obama turns to the Arab Spring. He refers to his success in Libya:
“A year ago, Qadhafi was one of the world’s longest-serving dictators – a murderer with American blood on his hands. Today, he is gone.”
True, but what will replace him?
“And in Syria, I have no doubt that the Assad regime will soon discover that the forces of change can’t be reversed, and that human dignity can’t be denied.”
In fact, for two and a half years, Obama strongly backed—in contrast to predecessors—that regime which denied “human dignity.” And he’s doing very little to help that transformation now.
My number-one complaint about Obama—not that there aren’t others but this is in first place—is that he never hints at the dangers in the region precisely because he doesn’t recognize that they exist.
And, in total contrast to his actual policy, he gives lip service to doing something productive:
“While it is ultimately up to the people of the region to decide their fate, we will advocate for those values that have served our own country so well. We will stand against violence and intimidation. We will stand for the rights and dignity of all human beings – men and women; Christians, Muslims, and Jews. We will support policies that lead to strong and stable democracies and open markets, because tyranny is no match for liberty.”
In fact, though, Obama has basically ignored the “violence and intimidation” against Israel; the people of the Gaza Strip; the Turkish people; the Iranian people; the tyranny taking shape in Lebanon; the Christians in Iraq and Syria; and elsewhere.
How can “tyranny” be “no match for liberty” when U.S. policy is largely on the side of tyranny, indeed a tyranny of a worse kind that has previously prevailed in Egypt, the Gaza Strip, Lebanon, and Turkey?
When it comes to U.S. security interests, Obama can only talk about Iran, where he claims success:
“Through the power of our diplomacy, a world that was once divided about how to deal with Iran’s nuclear program now stands as one. The regime is more isolated than ever before; its leaders are faced with crippling sanctions, and as long as they shirk their responsibilities, this pressure will not relent.”
Nice. But Iran is still advancing in its nuclear program and its influence in Lebanon and Iraq increases while Tehran adequately defends its interests in Syria. If the State Department had not restrained Obama, he would also have handed Iran a victory in Bahrain.
On nuclear weapons, Obama repeats the standard line:
“America is determined to prevent Iran from getting a nuclear weapon, and I will take no options off the table to achieve that goal. But a peaceful resolution of this issue is still possible, and far better, and if Iran changes course and meets its obligations, it can rejoin the community of nations.”
And if it doesn’t? Yes, it is quite true that Obama led a move to tougher sanctions on Iran but he did so only by excluding Russia, Turkey, and China from compliance. I would argue that the same result could have been achieved far earlier than Obama did it.
Here is the worst sentence of the speech: “The renewal of American leadership can be felt across the globe.” It is precisely the lack of American leadership that is being felt.
“Our oldest alliances in Europe and Asia are stronger than ever.” Really? The South Koreans would probably agree but generally the alliances are not stronger than ever but about as weak as they have ever been.
“Our ties to the Americas are deeper.” Actually, Latin American leaders are very unhappy, feeling that Obama has coddled the Chavez dictatorship while ignoring them.
“Our iron-clad commitment to Israel’s security has meant the closest military cooperation between our two countries in history.”
This is a carefully constructed sentence which I find makes me even more suspicious about Obama’s commitment toward Israel. Why? Because it is true that the bilateral military cooperation is as good as it has ever been. But all other areas of relations are terrible. This sentence tells me that Obama understands that and wants to accentuate the positive without doing anything to improve the negative. He thinks U.S.-Israel relations are good enough and will not—even if, or especially if, elected to a second term.
Another point to notice is Obama’s failure to mention–much less highlight–the Israel-Palestinian “peace process.” They’ve given up on that one, at least for 2012.
And then he concludes with this statement, remarkable for being so directly opposite to the truth:
“America is back. Anyone who tells you otherwise, anyone who tells you that America is in decline or that our influence has waned, doesn’t know what they’re talking about.”
Wow, first, America is NOT back because Obama has reduced U.S. influence, leverage, and activism. Second, who has done more than Obama to assert that U.S. power is in decline? And, third, this fact is totally obvious to leaders in Latin America, Europe, the Middle East, and Asia. Obama, however, is always one for doubling down on his lies or errors. (You choose the word you prefer.):
“That’s not the message we get from leaders around the world, all of whom are eager to work with us. That’s not how people feel from Tokyo to Berlin; from Capetown to Rio; where opinions of America are higher than they’ve been in years.”
The truth is generally the exact opposite and even in the polls one can see this. Obama can be daring because he knows the media won’t bash him for saying stuff like this.
There’s something else I find fascinating and generally ignored about this speech. All presidents, of course, want to put the accent on the positive. But with Obama I don’t see any real consideration of threats and problems. Yes, he mentions al-Qaida and the Taliban (no longer a problem, he says) and Iran (under control and they will be pressed into making a deal), and democratic transitions (we don’t know what will happen but…).
Nevertheless, America faces no real threats or enemies. revolutionary Islamism doesn’t exist as an issue; Russia poses no problem; Chavez and Castro and various other dictators are vanished; even underdevelopment or instability aren’t mentioned. There is a Pollyanna aspect to Obama arising from his belief that everything would be okay as long as America behaves properly and he is president. In his world there are no real conflicts; few true enemies but only misunderstandings. With Obama the problem is not merely his politics and views but also his total lack of true understanding about international affairs, security issues, and strategy.
Governor Mitch Daniels gave the Republican response and stuck completely to domestic economic issues, which was after all Obama’s main theme. Yet international affairs was the only other theme and if Obama’s critics can’t do a better job of analyzing his claims, responding to his policies, and offering an alternative to his strategies he is more likely to remain president for five more years.
13)A Shrinking Obama
Is that all there is? Watching Obama deliver the State of the Union last night (with precautionary blood pressure medication at my side) I was struck by how diminished the “hope and change” President has become. Long gone is the candidate who told his supporters, “We are the ones we have been waiting for.” Nowhere to be seen was the man who said his election would result in the “earth healing” and the “oceans stopping their rise.” Instead we got an hour of low expectations, distorted facts, divisive class warfare all wrapped up in the hope that the public has collective amnesia about what actually happened in the last three years while Obama was in charge.
Fact checking the speech would take all day. But we made a short video catching Obama on a few of his misstatements. You can watch it here.
My first shoe hit the T.V. set when Obama asserted that our oil imports have fallen under his watch. Indeed they have, but Obama counts on you not knowing why they dropped. Oil imports always drop when the American economy isn’t growing and Obama’s policies have guaranteed slow to no growth. Fewer people employed means less gasoline used. Imports have also dropped because oil industry engineers have developed new drilling techniques that have increased our domestic oil production. Obama has done everything he can to stop that increase in production, including cutting drilling back on federal land and restricting off-shore drilling. The increased production has come on private land by oil companies that Obama regularly demonizes.
Did you notice his intentional distortions on the taxes paid by millionaires compared to average folks? Here is what Obama said: “Now you can call this class warfare all you want. But asking a billionaire to pay at least as much as the secretary in taxes? Most Americans would call that common sense.”
Yes that would be common sense if it were a factual description of reality. Instead it is an intentional effort to deceive. Obama is counting on Americans confusing tax rate with net taxes. Let’s say you are a worker making approximately $50,000 a year. You would be in the 25% tax bracket and you would pay approximately $8,600 in federal taxes. Now let’s say you are a millionaire and almost all of your income comes from dividends and capital gains. For years the U.S. has taxed that kind of investment income at 15% because we want to encourage the investment that creates jobs. So the $1 million in dividends times 15% would be $150,000 in federal taxes.
Yes the millionaire has a lower rate (15%) than the wage earner (25%), but the millionaire pays $150,000 compared to $8,600 for the worker. This is why, in spite all of Obama’s attempts to claim otherwise, the top 1% in America pay into the federal treasury 38% of all taxes collected. The bottom 50% of all Americans pay less than 3% of all taxes collected.
This is what is so disgusting about what Obama is doing. He wants you to be angry at and despise those who have done well in the hope you won’t notice how his policies are leading us down the road to European socialism and national bankruptcy. The man who campaigned in 2008 saying he would bring us together can only remain in power if he deeply divides us by class. Obama is a Hugo Chavez democrat.
Something else was obvious last night too. It was not only what he said but what he left out. There was no direct mention of Obamacare nor of the 3,000-page stimulus bill, both of which are politically toxic. Both issues should be a central part of the eventual GOP presidential nominee’s campaign. There was very little on job creation, and there were zero proposals to get our horrendous debt under control. This man must not be given a second term.
The GOP Response
Indiana Governor Mitch Daniels gave the GOP response. It is a tough job to answer any President’s State of the Union, and Daniels did a reasonably good job, even if his passion seemed in short supply. This sentence jumped out at me: Speaking of the Obama Administration, Daniels said, “The extremism that stifles the development of homegrown energy or cancels a perfectly safe pipeline that would employ tens of thousands, or jacks up consumer utility bills for no improvement in either human health or world temperatures is a pro-poverty policy.”
Eureka! There it is. Obama is a left wing extremist. His policies will promote poverty, not growth. Every conservative in America needs to make that point every day – at work, over the back fence, at church, at school or around the dinner table. The GOP nominee has to drive it home. We can win. We must win!
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2)Slashing America's Defense: A Suicidal Trajectory
Author: Max Boot, Jeane J. Kirkpatrick Senior Fellow for National Security Studies
The U.S. armed forces have spent the past decade fighting two of the largest counterinsurgency campaigns in their history. In Iraq, they have dramatically reduced the threat from al-Qaeda and Moqtada al-Sadr's Mahdist Army, and they are now in the process of doing the same to the Taliban and the Haqqani Network in Afghanistan and Pakistan.
But just as they are drawing down in both Iraq and Afghanistan, they have met an opposing force that might prove more formidable than any of those terrorist groups. These adversaries do not carry guns and do not plant IEDs. They wear green eyeshades and wield complex spreadsheets, and with these tools alone they have the potential to devastate our armed forces—and, if left unchecked, will do more damage to their fighting capacity than the Taliban, al-Qaeda, or any other external foe could inflict.
As the comic strip Pogo famously put it in another context, "We have met the enemy, and he is us."
Shortly before Thanksgiving the congressional "supercommittee" charged with finding $1.2 trillion in budget cuts gave up and admitted failure. Under the terms of the budget deal struck in August 2011 to raise the debt ceiling, there must now be $1.2 tillion in automatic, across-the-board cuts to the federal budget, with half hitting defense and the other half domestic programs. (Social Security and Medicare are exempt.) This draconian "sequester" was supposedly designed to frighten the members of the supercommittee and compel them to find cuts to ensure it did not come to pass. They didn't, and now the sequester will come to pass if there is not a major policy reversal before the beginning of 2013.
This came about during a year in which defense spending had already been substantially reduced, with roughly $450 billion in cutbacks over 10 years. Hundreds of billions more will be gone from Pentagon coffers due to the fact that funding for Overseas Contingency Operations will vanish to nothing as we wind down operations in Iraq and Afghanistan. In all, the defense budget could shrink by 31 percent over the next decade, according to Todd Harrison of the Center for Strategic and Budgetary Assessments. That compares with cuts of 53 percent after the Korean War, 26 percent after the Vietnam War, and 34 percent after the Cold War.
Some might argue (and have argued, and will continue to argue) that there is nothing wrong or damaging to the United States in this, that we always downsize our military after the conclusion of hostilities. But it is beyond bizarre that we are rushing to spend the peace dividend at a time when we are not actually at peace. Hostilities have not yet ended, as our troops are still in combat every day in Afghanistan and continue to conduct military operations against Somali pirates and al-Qaeda terrorists that put them in harm's way on a regular basis. But leave that aside, and simply consider the consequences of past drawdowns.
After the American Revolution, the size of the military plummeted from 35,000 men in 1778 to 10,000 by 1800. As a result, the nascent republic was ill-prepared to put down the Whiskey Rebellion, fight the quasi-war with France, repress the Barbary pirates preying on our shipping, and, most spectacularly, defend the new national capital from British attack in the War of 1812. The burning of the White House stood as a melancholy testimony to the consequences of military unpreparedness.
Yet we made the same mistake after the Civil War, when for a brief moment we deployed the largest military in the world. The federal armed forces fell from more than a million men in 1865 to merely 50,000 in 1870. Luckily we did not face a foreign attack in the postwar decades. But we did face the challenge of Reconstruction. Its failure was made inevitable by the inability (or unwillingness) of Presidents Andrew Johnson and Ulysses S. Grant to station enough federal troops in the South to repress the Ku Klux Klan and to enforce the guarantees of equality contained in the newly enacted 13th, 14th, and 15th Amendments. By 1876, the federal troops were all withdrawn and the era of Jim Crow had begun. The full promise of Reconstruction would not be realized for another century.
If we discount the Indian Wars (the main focus of the U.S. Army from 1865 to 1890), the next major conflicts we faced were the Spanish-American and Philippine Wars. Our Army, which in the late 19th century numbered only 25,000 men—smaller than the New York Police Department today—was unready for both conflicts but did not pay too high a price for its unreadiness because of the poor condition of its enemies (the decrepit Spanish army and the meagerly armed Filipino insurrectos).
The costs of our unreadiness for the Great War were also somewhat masked, this time by the considerable capacity of our allies, Britain and France, whose veteran armies provided on-the-job training, leadership, and support for newly mobilized American doughboys. But after World War I, both Britain and France were so drained by their exertions that they could not effectively police a fragile peace. And neither could we—not when our armed forces were shrinking in number from 2.9 million men in 1918 to 250,000 in 1928. Even if we had wanted to remain committed to European security, we did not have the resources to do the job. Our abdication of leadership made a second world war more likely and, when it came, practically guaranteed that we and our allies would lose the early battles. Both the Nazis and the Japanese might have been deterred from aggression if they had had to face large numbers of forward-deployed American forces. But they did not, and so they were led to believe that launching wars of conquest could pay off.
With the lessons of the 1920s and 1930s fresh in their minds, American statesmen in the late 1940s were determined to maintain a presence in Europe. But they also responded to the war-weariness of the country by demobilizing so rapidly that the ranks of the armed forces shrank from a wartime high of 12 million men to just 1.4 million by 1950. Not coincidentally, that was the year that Kim Il-sung chose to launch an invasion of South Korea, confident that the American armed forces would not stand in his way. He was almost right. The terrible experience of Task Force Smith, the first American Army unit thrown against the North Korean juggernaut, still makes for sad and sobering reading: The task force was made up of soldiers who did not have enough training or even ammunition, and they were brushed aside with heavy losses by the invaders. Eventually the U.S. recovered half the peninsula, but only at the cost of 36,000 dead Americans—a toll that might have been avoided or at least lessened if we had kept a substantial force in South Korea in the first place to deter Communist aggression.
The decline in the size of the armed forces after the Korean War buildup was less drastic than after World War II (we went from 3.6 million men in 1952 to 2.5 million in 1959), but the Army still lost almost half its active-duty strength in the 1950s. President Dwight D. Eisenhower was enamored of a New Look strategy that sought to minimize conventional forces in favor of nuclear forces. This was the era of the "pentomic army" equipped with weapons such as the Davy Crockett nuclear launcher. That may have sufficed to deter a Red Army invasion of Western Europe, but it did nothing to prevent the Soviet Union and Red China from pursuing proxy wars against the United States, most successfully in Vietnam. This was not a conflict we were well prepared for, and we paid a high price for unpreparedness—the U.S. consistently lost ground to the Viet Cong and the North Vietnamese Army from 1964 to 1968. By the time the U.S. troops staged a post–Tet resurgence under the leadership of Gen. Creighton Abrams, public support for the conflict had evaporated.
The 1970s saw yet another massive drawdown with the military falling from 3.5 million strong in 1969 to 2 million in 1979. Along the way the draft ended and the era of the all-volunteer forces began. Drug use, racial tensions, insubordination, even "fragging" (soldiers attacking their officers) were hallmarks of this era, which culminated in a hollow army that could not deter the Soviet Union from invading Afghanistan or rescue the American hostages in Iran.
The Reagan defense buildup of the 1980s, which actually began under Carter, rescued the military from the doldrums of the 1970s and created the force that won the Gulf War in such spectacular and unexpected fashion. This military also helped apply the pressure needed for the final collapse of the Soviet Union.
But then after Desert Storm and the end of the Cold War, the George H.W. Bush and Clinton administrations rushed to spend the "peace dividend." The military shrank from 2.1 million active-duty personnel in 1989 to 1.3 million in 1999. The Army was particularly hard hit: It shrank from 769,000 to 479,000 soldiers.
The "end of history" reverie ended in 2001, but, even after 9/11, the Army was too small to fight in both Iraq and Afghanistan. We are still paying a price for not sending enough troops to pacify both countries after we toppled their previous regimes. Partly this was a matter of miscalculation on the part of Bush administration officials who thought that American troops would do more harm than good. But that calculation itself was driven by the paucity of available troops.
After our early failures in Iraq, President Bush belatedly expanded the size of the Army and Marine Corps—although not enough to make up for the post–Cold War cuts. (The Army today has 200,000 fewer active-duty troops than in 1991.) Emergency appropriations also provided hundreds of billions of dollars to fund the wars, enabling the purchase of thousands of new armored vehicles, unmanned aircraft, and other important enablers. But there was never enough money to make up for the procurement holiday of the 1990s.
We are still suffering the consequences of the post–Cold War drawdown. The Navy, down from 546 ships in 1990 to 284 today (the lowest level since 1930), is finding it hard to fight Somali pirates, police the Persian Gulf, and deter Chinese expansion in the Western Pacific. The Army and Marine Corps are forced to maintain a punishing operational tempo that drives out too many bright young officers and non-commissioned officers. The Air Force, which has been reduced from 82 fighter squadrons in 1990 to 39 today, has to fly decades-old aircraft until they collapse. The average age of our tanker aircraft is 47 years, of strategic bombers 34 years, and some older fighter aircraft are literally falling out of the sky.
The bipartisan Quadrennial Defense Review Independent Panel led by Stephen Hadley and William Perry found last year "a growing gap between our interests and our military capability to protect those interests in the face of a complex and challenging security environment." The panel further noted:
There is increased operational tempo for a force that is much smaller than it was during the years of the Cold War. In addition, the age of major military systems has increased within all the services, and that age has been magnified by wear and tear through intensified use….The Department of Defense now faces the urgent need to recapitalize large parts of the force. Although this is a long-standing problem, we believe the Department needs to come to grips with this requirement. The general trend has been to replace more with fewer more-capable systems. We are concerned that, beyond a certain point, quality cannot substitute for quantity.
The Hadley-Perry commission recommended that "as the force modernizes, we will need to replace inventory on at least a one-for-one basis, with an upward adjustment in the number of naval vessels and certain air and space assets." It also recommended maintaining the size of our current ground forces because "the increased capability of our ground forces has not reduced the need for boots on the ground in combat zones."
Both of those recommendations are absolutely on the mark. And both are increasingly difficult to carry out given the magnitude of defense cuts already agreed upon. They will become an utter impossibility if sequestration occurs.
According to the majority staff of the House Armed Services Committee, this is what could happen after sequestration: the Army fall from 569,000 active-duty soldiers today to 426,000; the Marine Corps from 202,000 to 145,000; the Navy from 284 ships to 238; the Air Force from 1,990 fighter aircraft to 1,512 and from 135 bombers to 101. Even if the full impact of sequestration is not felt, the consequences for our military readiness will still be dire.
Those who argue in favor of cuts point out that defense spending has doubled in real terms since 9/11. That is true, but much of the spending has gone to current operations, personnel costs, ballooning health-care costs, and other necessities. It has not been used to recapitalize our aging inventory of weapons systems or to expand a ground force cut by a third since the Cold War.
Instead, even as we continue to fight in Afghanistan and Iraq, the Defense Department has been eliminating or reducing one system after another. Before his retirement last summer, Defense Secretary Robert Gates cancelled or capped 30 procurement programs that, if taken to completion, would have cost more than $300 billion. The cancellations included the Army's Future Combat System, the Marines' Expeditionary Fighting Vehicle, the VH-71 presidential helicopter, the Navy's CG(X) next-generation cruiser, the Air Force's F-22 fighter and C-17 cargo plane, and the Airborne Laser. Other programs, such as the Navy's new aircraft carrier, were delayed, while the number of F-35 fighters, Littoral Combat Ships, and other systems planned to be purchased was reduced.
It's not only weapons systems we're losing. It's personnel. Gates closed headquarters, eliminated general-officer slots, and even shut down the whole U.S. Joint Forces Command. He announced that he was whittling down Army and Marine end-strength by 47,000 personnel, reversing the increase in the size of the ground force that he had pushed through to deal with the wars in Afghanistan and Iraq. Further cuts in end-strength are undoubtedly coming as a result of greater budget cuts, thus throwing out of work—at a time of already high unemployment—tens of thousands of men and women who have signed up to serve their country.
That may make sense if you assume we will have no need for large numbers of ground combat forces in the future, but as Gates himself said earlier this year: "When it comes to predicting the nature and location of our next military engagements, since Vietnam, our record has been perfect. We have never once gotten it right, from the Mayaguez to Grenada, Panama, Somalia, the Balkans, Haiti, Kuwait, Iraq, and more—we had no idea a year before any of these missions that we would be so engaged." Because the world is such an uncertain, dangerous place, we need the deterrence and flexibility provided by a large ground force. But maintaining soldiers in an all-volunteer force is expensive, and it is almost a certainty that they will be sacrificed to achieve arbitrary budget targets.
What strategy are we following here? Is there any strategy at all? None is apparent from the outside—or, from what people at the Pentagon tell me, from the inside. It has been said that this is a budget in search of a strategy, but we will be hard put to it to achieve all, or even most, of our strategic objectives with a third less resources.
The Hadley-Perry commission identified four enduring security interests for the United States: "The defense of the American homeland; assured access to the sea, air, space, and cyberspace; the preservation of a favorable balance of power across Eurasia that prevents authoritarian domination of that region; providing for the global common good through such actions as humanitarian aid, development assistance, and disaster relief." None of those interests will change, no matter what budget decisions are made in Washington; all that will change will be our ability to defend those interests.
Certainly there has not been—nor is there likely to be—a decreased demand for the armed forces. They are constantly having new missions thrown their way, from defending our nation's computer networks to deposing a dictator in Libya and providing relief to Japanese tsunami survivors. Those who call for austerity in our defense budget do not suggest which missions, which specific operations, they will willingly forego. And when they do, the suggestions are usually insufficient to achieve serious savings.
I am not by any stretch of the imagination claiming that every penny of defense spending is sacrosanct. It is impossible to deny that there is waste, fraud, and abuse in the defense budget. The problem is that there is no line item for waste, fraud, and abuse, and hence no way to pare only wasteful spending. Indeed it is hard to agree about what constitutes wasteful spending, because every defense program has its passionate defenders, especially on Capitol Hill, and it is possible to make compelling arguments in favor of them all.
At the end of the day, less money results in less capability. And less capability is something we cannot afford at a time when we face a rising China, a nuclear North Korea, an Iran on the verge of going nuclear, a Pakistan threatened as never before by jihadists, and numerous terrorist groups, ranging from the Afghan and Pakistani Taliban to the Shabab in Somalia and al-Qaeda in the Arabian Peninsula. These groups threaten not only vital U.S. interests abroad but also increasingly the American homeland itself, as evidenced by AQAP's attempt to mail parcel bombs to the U.S. and by the Pakistani Taliban's sponsorship of an attempt to set off a car bomb in Times Square.
China presents a particularly worrisome long-term problem. It is in the midst of a rapid defense buildup which has allowed it to field a stealth fighter, an aircraft carrier, diesel submarines, cyberweapons, "carrier-killer" and satellite-killer ballistic missiles, and numerous other missiles. Even as things stand, China is increasingly able to contest the U.S. Navy's freedom of movement in the Western Pacific. As long ago as 2008, Rand predicted that by 2020 the U.S. would not be able to defend Taiwan from a Chinese attack, and that was before the surprise unveiling of China's J-20 Stealth fighter or its new aircraft carrier. The timeline for American dominance being threatened is shortening. The safety of U.S. bases in Okinawa, Guam, and elsewhere in the region can no longer be assured, creating the potential for a 21st-century Pearl Harbor. That trend will be exacerbated—leading to a potentially dangerous shift in the balance of power—unless we build up our shrinking fleet. But given the budget cuts being discussed, we will have trouble maintaining the current size of our fleet, much less expanding it.
We have already cancelled the F-22 and cut back the procurement of the F-35. Is the F-35 to be cancelled altogether or cut back to such an extent that we will have no answer to the fifth-generation fighters emanating from Russia and China? If that were to come to pass, it would signal the death knell for American power in the Pacific. If our power wanes, our allies will have to do what they need to do to ensure their own security. It's easy to imagine, under such a scenario, states such as Japan, South Korea, and Taiwan acquiring their own nuclear weapons, thus setting off a dangerous and destabilizing nuclear arms race with China.
Even given the dire consequences, it might still make sense to cut the defense budget—if it were bankrupting us and undermining our economic well-being, which is the foundation of our national security. But that's not the case. Defense spending, including supplemental appropriations, is less than 5 percent of gross domestic product and less than 20 percent of the federal budget. Both figures are lower than the historic norm. That means our armed forces are much less costly in relative terms than they were throughout much of the 20th century. Even at roughly $550 billion, our core defense budget is eminently affordable. It is, in fact, a bargain, considering the historic consequences of letting our guard down.
The United States' armed forces have been the greatest force for good the world has seen during the past century. They defeated Nazism and Japanese imperialism, deterred and defeated Communism, and stopped numerous lesser evils—from Slobodan Milosevic's ethnic cleansing to the oppression perpetrated by Saddam Hussein in Iraq and the Taliban in Afghanistan. Imagine a world in which America is not the leading military power. It would be a brutal, Hobbesian place in which aggressors rule and the rule of law is trampled on. And yet Congress will be helping to usher in such a New World Disorder if it continues to slash defense spending at the currently contemplated rate—just as previous Congresses did with previous rounds of "postwar" budget cuts going back to the dawn of the Republic.
But there is nothing inevitable about the outcome. The first tranche of sequestration cuts is not scheduled to take effect until the 2013 fiscal year. That means Congress has most of 2012 to find an alternative. Unfortunately, President Obama has threatened to veto any bill that tries to exempt the defense budget from sequestration. But that should not prevent pro-defense Democrats and Republicans from pushing such a bill anyway. If even one year of sequestration were to occur, major weapons systems (which will be costly and difficult to restart) might be cancelled—and great numbers of veterans (whose experience would be lost forever) might be layed off.
In the long run, the question of whether or not—and to what extent—we will cut defense will be decided in the 2012 elections. Obama appears sanguine about the impact of defense cuts, but his Republican challengers are not. Mitt Romney has promised to protect the defense budget and expand naval shipbuilding. Rick Perry has called on Leon Panetta to resign rather than accept massive cuts. Even Newt Gingrich, who has been critical of wasteful Pentagon spending, has said that sequestration would be "totally destructive" and "very dangerous to the survival of the country."
It is commonly said that every election is a turning point in our history. In many cases that's nothing more than partisan hype. In the case of the 2012 election, it's true: The future of the U.S. armed forces, and of American power in general, could depend greatly on the outcome.
Max Boot is the Jeane J. Kirkpatrick Senior Fellow in National Security Studies at the Council on Foreign Relations. He is completing a history of guerrilla warfare and terrorism. This article is adapted from testimony he delivered to the House Armed Services Committee on September 13, 2011.
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3)Fed to Keep Rates ‘Exceptionally Low’ at Least Through Late 2014
By Forrest Jones
The Federal Reserve has downgraded its outlook for economic growth this year but is slightly more optimistic about the unemployment rate.
The Federal Reserve also says it plans to keep interest rates “exceptionally low” until at least late 2014, longer than previously forecast, while it expects unemployment will stay high and inflation will remain “subdued.”
The central bank said in a statement after a two-day policy meeting that the economy is expanding moderately, despite some slowing in global growth. It held off on any further bond-buying programs to try to increase growth.
The Fed expects the economy to grow between 2.2 percent and 2.7 percent this year. That's down from November's forecast of between 2.5 percent and 2.9 percent, the Associated Press reported. But it sees unemployment falling as low as 8.2 percent, an improvement from November's bottom rate of 8.5 percent.
The Fed also offered a firmer target for inflation — 2 percent — in a statement of its long-term policy goals.
The Fed on Wednesday also held its key benchmark lending target, the federal-funds rate, at 0.25 percent, citing a "depressed" housing market and high unemployment as reasons for brushing inflationary fears aside and opting for loose policies to keep consumer prices and unemployment rates at more dynamic levels.
The monetary authority said economic conditions meriting loose monetary policies should stick around through late 2014, longer than a previous forecast for 2013, as more than two years of economic growth haven't pushed the unemployment rate below 8.5 percent.
Some Fed officials have said further easing might be needed to revive the housing market and lower the jobless rate.
The central bank has kept its key rate at a record low near zero for about three years. Its new time frame suggests the rate will stay there for roughly an additional three years.
"While indicators point to some further improvement in overall labor market conditions, the unemployment rate remains elevated," the Fed said in a statement. "Household spending has continued to advance, but growth in business fixed investment has slowed, and the housing sector remains depressed. Inflation has been subdued in recent months, and longer-term inflation expectations have remained stable," the statement said.
"In particular, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions — including low rates of resource utilization and a subdued outlook for inflation over the medium run — are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014."
In 2011, the Fed said the economy wouldn't heat up enough to require interest-rate hikes or other tightening measures through 2013, although a weak economy has prompted Fed officials to extend that forecast for another year.
The Fed, meanwhile, said it would continue its policy of selling short-term Treasurys while stocking up on longer-term such instruments with the aim of keeping long-term borrowing costs low.
The Fed didn't say if it planned a third round of quantitative easing, where the central bank buys assets from banks in an effort to flood the economy with liquidity to steer the country away from deflation, but said it would keep an eye on the economy and react as necessary should the need arise.
"The Committee will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate to promote a stronger economic recovery in a context of price stability."
The Fed has rolled out two rounds of quantitative easing so far, snapping up more than $2 trillion in assets like Treasurys or mortgage-backed securities with the aim of stimulating the economy.
Loose monetary policies, such as interest-rate cuts or measures aimed to boost liquidity, are used to steer an economy away from crippling deflation but threaten to increase inflationary pressures as a side effect.
"We have seen slightly better performance in the labor market, consumer sentiment has improved, industrial production has been relatively strong. There are some positive signs, no doubt," Bernanke told reporters at a press conference.
However, potholes remain, Bernanke added.
"At the same we have had mixed results in some other areas such as retail sales, and we continue to see headwinds emanating from Europe coming from the slowing global economy and some other factors as well."
While hoping for the best, the Fed will remain alert for the worst, and that means it won't rule out further easing at this time should inflation rates veer away from target or if unemployment rates rise beyond comfort zones.
"I don't think we are ready to declare that we have entered a newer and stronger phase at this point," Bernanke said.
"We are prepared to take further steps in that direction if we see that the recovery is faltering or if inflation is not moving towards target. It's an option that's certainly on the table. I think it would be premature to say definitively one way or the other but we continue to look at that option and if conditions warrant we will certainly consider using it."
The Federal Reserve adheres to a dual mandate of keeping both inflation and unemployment rates at optimal levels.
Analysts say the Federal Reserve's language suggested that while inflation remains within comfort zones, unemployment rates remain a little too high, while the slowdown in business investment won't t help the U.S. central bank live up to its mandates.
"I think what they are seeing is that the rate of growth is not sufficient to bring down the unemployment rate," says Brian Dolan, chief strategist at FOREX.com in Bedminster, New Jersey, according to Reuters.
Currently, unemployment rates stand at 8.5 percent although they spent a good chunk of 2011 hovering above 9 percent and are still well above pre-recession levels, approaching twice as high in some instances.
Inflation rates were unchanged in December when compared with November and up 3 percent on year.
"Rates are not going to go up anytime soon," says Diane Swonk, chief economist at Mesirow Financial Inc. in Chicago, according to Bloomberg.
"They don’t see a lot of inflation out there."
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4)Race Matters
WASHINGTON -- The Department of Education has acknowledged using flawed data in a study on the impact of race on student loan repayment rates, having omitted black students from its calculation. The analysis was conducted during the debate over gainful employment regulations, in response to complaints that the rules would hurt colleges that enroll relatively high percentages of minority students.
Department officials disclosed the error in a December court filing, which is part of the ongoing legal challenge to gainful employment by the Association of Private Sector Colleges and Universities, the primary for-profit trade group. That lawsuit appears to have led to the mistake’s discovery.
The Obama administration designed the federal rules in an attempt to ensure that most programs at for-profit colleges and certificate and vocational programs at nonprofit institutions prepare students for "gainful employment." For programs to be eligible for federal financial aid, they must adhere to benchmarks related to student loan repayment and debt-to-income ratios.
The original analysis was included in the introduction section of the final rules, which were issued last June. It asserted that the “percentage of the students that are members of a minority group explains 1 percent of the total variance in repayment rates” at for-profit institutions. The low figure, the department concluded at the time, meant the racial composition of students was not a statistically significant contributor to how an institution stacks up on loan repayments. The percentage of lower-income students an institution enrolled was a better measure.
But by failing to count black students, the study understated the impact of race: the actual variance is 20 percent over all, the department said in the December filing.
Eduardo Ochoa, the department’s assistant secretary for postsecondary education, described the mistake in that filing, but said accurate figures would have had no impact on the final regulations.
Eduardo Ochoa, the department’s assistant secretary for postsecondary education, described the mistake in that filing, but said accurate figures would have had no impact on the final regulations.
A subsequently corrected analysis “does not justify altering the regulations,” Ochoa said, because “factors other than student demographics account for the success or failure of institutional repayment rates.”
The for-profit association, however, said in a January court filing that the mistake is fundamental and validates concerns aired by scores of public commenters that for-profits were unfairly targeted by gainful employment regulations.
“The department’s error demolishes its decision to reject commenters’ concerns about the relationship between its regulations and race and educational opportunity,” the association said. “This error, by itself, requires that the regulations be vacated.”
Monday's Federal Register contained the department’s correction, which noted that the final regulations remain unchanged.
"We've known for a long time that race and poverty are linked," Justin Hamilton, a department spokesman, said in a written statement. "But the data shows that demography is not destiny and can't be used as a reliable indicator for predicting loan defaults, most especially at for-profit colleges."
The publicly acknowledged mistake is certain to fuel claims by for-profits and their advocates here that the sector is being picked on by lawmakers and politically motivated regulators. They point to what they see as a pattern of flawed data or other information being used by the department, the U.S. Senate Committee on Health, Education, Labor, & Pensions and, perhaps most notably, the Government Accountability Office.
Critics of for-profits, however, say the industry has pored over language in federal documents to look for procedural mistakes in an effort to undermine legitimate concerns about their practices.
Last April, the Education Department said it had made an error in tabulating draft loan default rates that reflected poorly on for-profits, having improperly included loans that defaulted up to three months after the three-year period that was being measured.
Ochoa, in his statement, said Pell recipient rates remain more significant in the corrected analysis. Pell rates explain 23 percent of the variance while minority enrollment accounts for 20 percent, he said.
However, the association said in its filing that the department’s revised figures show that race is a significant predictor of loan repayment rates. “The public policy consequences of the department’s error are clear -- schools that enroll a higher percentage of minority students are more likely to fail the department’s repayment test.”
4a)36 Obama aides owe $833,000 in back taxes
How embarrassing this must be for President Obama, whose major speech theme so far this campaign season has been that every single American, no matter how rich, should pay their "fair share" of taxes.
Because how unfair -- indeed, un-American -- it is for an office worker like, say, Warren Buffet's secretary to dutifully pay her taxes, while some well-to-do people with better educations and higher incomes end up paying a much smaller tax rate.
Or, worse, skipping their taxes altogether.
A new report just out from the Internal Revenue Service reveals that 36 of President Obama's executive office staff owe the country $833,970 in back taxes. These people working for Mr. Fair Share apparently haven't paid any share, let alone their fair share.
Previous reports have shown how well-paid Obama's White House staff is, with 457 aides pulling down more than $37 million last year. That's up seven workers and nearly $4 million from the Bush administration's last year.
Nearly one-third of Obama's aides make more than $100,000 with 21 being paid the top White House salary of $172,200, each.
The IRS' 2010 delinquent tax revelations come as part of a required annual agency report on federal employees' tax compliance. Turns out, an awful lot of folks being paid by taxpayers are not paying their own income taxes.
The report finds that thousands of federal employees owe the country more than $3.4 billion in back taxes. That's up 3% in the past year.
That scale of delinquency could annoy voters, hard-pressed by their own costs, fears and stubbornly high unemployment despite Joe Biden's many promises.
The tax offenders include employees of the U.S. Senate who help write the laws imposed on everyone else. They owe $2.1 million. Workers in the House of Representatives owe $8.5 million, Department of Education employees owe $4.3 million and over at Homeland Security, 4,697 workers owe about $37 million. Active duty military members owe more than $100 million.
The Treasury Department, where Obama nominee Tim Geithner had to pay up $42,000 in his own back taxes before being confirmed as secretary, has 1,181 other employees with delinquent taxes totaling $9.3 million.
As usual, the Postal Service, with more than 600,000 workers, has the most offenders (25,640), who also owe the most -- almost $270 million. Veterans Affairs has 11,659 workers owing the IRS $151 million while the Energy Department that was so quick to dish out more than $500 million to the Solyndra folks has 322 employees owing $5 million.
The country's chief law enforcement agency, the Department of Justice, has 2,069 employees who are nearly $17 million behind in taxes. Like Operation Fast and Furious, Attorney General Eric Holder has apparently missed them too.
As with ordinary people, the IRS attempts to negotiate back-tax payment plans with all delinquents, whose names cannot be released. But according to current federal law, the only federal employees who can be fired for not paying taxes are IRS workers.
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5) IRAN PREPARING NOW FOR ARMAGEDDON
Select fighters being described as 'Soldiers of Imam Mahdi.'
By Reza Kahlili
Iran’s supreme leader, Ayatollah Ali Khamenei, has held several secret meetings with his economic and military advisers in recent days to prepare for the possibility of war with the United States.
Sources report the preparations are to include the execution of those Iranians who oppose the regime.
Khamenei has been heard to say that the coming of the last Islamic Messiah, the Shiites’ 12th Imam Mahdi, is near and that specific actions need to be taken to protect the Islamic regime for upcoming events.
Mahdi, according to Shiite belief, will reappear at the time of Armageddon.
Selected forces within the Revolutionary Guards and Basij reportedly have been trained under a task force called “Soldiers of Imam Mahdi” and they will bear the responsibility of security and protecting the regime against uprisings. Many in the Guards and Basij have been told that the 12th Imam is on earth, facilitated the victory of Hezbollah over Israel in the 2006 war and soon will announce publicly his presence after the needed environment is created.
According to SepahOnline, sources within the Vali’eh Amr, the revolutionary forces in charge of the supreme leader’s protection, report that Khamenei held several meetings in recent days at which the leader instructed his advisers to tighten the grip on anyone who opposes or might oppose the regime in case of war.
These actions include investigations of every person or group that was pro-regime but now hold opinions contrary to regime policies. Also being created is a list, to be presented to Khamenei, to decide the fate of any opponents.
It also was decided that those political prisoners who will not repent will be executed, the sources said.
This action also was taken by the founder of the Islamic regime in 1988, Ayatollah Ruhollah Khomeini.
In the book, “A Time to Betray,” it is documented when Khomeini announced the campaign, he said, “If the person at any stage or at any time maintains his (or her) support for the opposing groups, the sentence is execution. Annihilate the enemies of Islam immediately.”
The fatwa led to the execution of thousands of innocent men and women of all ages in a very short period.
The list of actions by Khamenei includes investigation of private business owners. If records show that at any time in the past they have not supported the Islamic regime, their businesses and belongings could be confiscated.
Journalists, writers and publishers who are deemed to be against the regime would be arrested and punished. Even high religious authorities who do not fully support Khamenei will be put under surveillance and dealt with if they become outspoken about the direction of the country.
Several journalists already have been arrested in the past week. In a recent speech, Khamenei hinted of a warlike environment and warned those clerics who might doubt his direction of the country that their survival is tied to the survival of the Islamic regime. Many Iranians who resent the regime resent the religion it promotes, so even opposition clerics might not fare well should the regime fall.
The plan by the leader calls for total control of Tehran, the capital where the presence of the Basij and Hezbollah militias would be quite visible so that no one would dare to challenge the regime.
This news comes in light of the formation of the “Removal Committee,” which secretly would eliminate all deemed as opponents, even within the military and the government.
Khamenei’s extraordinary measures are based either on an understanding that war could be imminent or that the regime has decided to announce it has nuclear capability and is getting ready for a possible reaction from Israel or America.
Ayatollah Mesbah Yazdi, an influential cleric and a radical Twelver, previously had stated that Khamenei ascends to the sky every year to take direction from Imam Mahdi, and sources close to the cleric have disclosed that Khamenei has been ordered by Imam Mahdi to continue with the nuclear program despite worldwide objection as it will facilitate his coming.
Last March, a Iranian secret documentary, “The Coming Is Upon Us,” was revealed to depict Khamenei as the mythical figure who creates the environment for the reappearance of Mahdi by leading Iran to destroy Israel.
Reza Kahlili is a pseudonym for an ex-CIA spy who requires anonymity for safety reasons. He is a senior fellow with EMPact America and the author of “A Time to Betray,” a book about his double life as a CIA agent in Iran’s Revolutionary Guards. “A Time to Betray” was the winner of the 2010 National Best Book Award, and the 2011 International Best Book Award.
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5) IRAN PREPARING NOW FOR ARMAGEDDON
Select fighters being described as 'Soldiers of Imam Mahdi.'
By Reza Kahlili
Iran’s supreme leader, Ayatollah Ali Khamenei, has held several secret meetings with his economic and military advisers in recent days to prepare for the possibility of war with the United States.
Sources report the preparations are to include the execution of those Iranians who oppose the regime.
Khamenei has been heard to say that the coming of the last Islamic Messiah, the Shiites’ 12th Imam Mahdi, is near and that specific actions need to be taken to protect the Islamic regime for upcoming events.
Mahdi, according to Shiite belief, will reappear at the time of Armageddon.
Selected forces within the Revolutionary Guards and Basij reportedly have been trained under a task force called “Soldiers of Imam Mahdi” and they will bear the responsibility of security and protecting the regime against uprisings. Many in the Guards and Basij have been told that the 12th Imam is on earth, facilitated the victory of Hezbollah over Israel in the 2006 war and soon will announce publicly his presence after the needed environment is created.
According to SepahOnline, sources within the Vali’eh Amr, the revolutionary forces in charge of the supreme leader’s protection, report that Khamenei held several meetings in recent days at which the leader instructed his advisers to tighten the grip on anyone who opposes or might oppose the regime in case of war.
These actions include investigations of every person or group that was pro-regime but now hold opinions contrary to regime policies. Also being created is a list, to be presented to Khamenei, to decide the fate of any opponents.
It also was decided that those political prisoners who will not repent will be executed, the sources said.
This action also was taken by the founder of the Islamic regime in 1988, Ayatollah Ruhollah Khomeini.
In the book, “A Time to Betray,” it is documented when Khomeini announced the campaign, he said, “If the person at any stage or at any time maintains his (or her) support for the opposing groups, the sentence is execution. Annihilate the enemies of Islam immediately.”
The fatwa led to the execution of thousands of innocent men and women of all ages in a very short period.
The list of actions by Khamenei includes investigation of private business owners. If records show that at any time in the past they have not supported the Islamic regime, their businesses and belongings could be confiscated.
Journalists, writers and publishers who are deemed to be against the regime would be arrested and punished. Even high religious authorities who do not fully support Khamenei will be put under surveillance and dealt with if they become outspoken about the direction of the country.
Several journalists already have been arrested in the past week. In a recent speech, Khamenei hinted of a warlike environment and warned those clerics who might doubt his direction of the country that their survival is tied to the survival of the Islamic regime. Many Iranians who resent the regime resent the religion it promotes, so even opposition clerics might not fare well should the regime fall.
The plan by the leader calls for total control of Tehran, the capital where the presence of the Basij and Hezbollah militias would be quite visible so that no one would dare to challenge the regime.
This news comes in light of the formation of the “Removal Committee,” which secretly would eliminate all deemed as opponents, even within the military and the government.
Khamenei’s extraordinary measures are based either on an understanding that war could be imminent or that the regime has decided to announce it has nuclear capability and is getting ready for a possible reaction from Israel or America.
Ayatollah Mesbah Yazdi, an influential cleric and a radical Twelver, previously had stated that Khamenei ascends to the sky every year to take direction from Imam Mahdi, and sources close to the cleric have disclosed that Khamenei has been ordered by Imam Mahdi to continue with the nuclear program despite worldwide objection as it will facilitate his coming.
Last March, a Iranian secret documentary, “The Coming Is Upon Us,” was revealed to depict Khamenei as the mythical figure who creates the environment for the reappearance of Mahdi by leading Iran to destroy Israel.
Reza Kahlili is a pseudonym for an ex-CIA spy who requires anonymity for safety reasons. He is a senior fellow with EMPact America and the author of “A Time to Betray,” a book about his double life as a CIA agent in Iran’s Revolutionary Guards. “A Time to Betray” was the winner of the 2010 National Best Book Award, and the 2011 International Best Book Award.
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