"I am at AIPAC so here are my 2 cents.
He gave a carefully crafted campaign stump speech but there were no specifics. It is of the nature of hope and change. It was fairly well received but cannot say the audience was lifted beyond politeness. Lot's of people reacted like you did and I for one clearly remain unconvinced for reasons you mentioned and then some:
1) No specifics
2) No red lines
3) No operational meaning to a hollow threat
4) Still giving diplomacy a chance
5) Let's see what the Iranians will do attitude instead of having working assumptions that should guide policy.
6) He got Israel's back. I do not think so. True that military cooperation is good but at the same time the US is holding Israel on a very short leash more like a suspect than an ally.
7) He sweetened the deal by offering Peres a medal. Nothing but a honey trap.
8) A Churchill like speech it was not.
There is more but this will suffice
One more item: it was a speech of a politician not a statesman.
And another:
"How Much Is A Bluff Worth? Depends On Who Is Bluffing!!!
.---
An interesting take on self-flagellation:
"
The Psychology of Jews Who Embrace Their Enemies
German and Japanese intelligence sources confirmed reports in the German Der Spiegel and Welt am Sonntag that Western intelligence had known for 11 months that at least one of North Korea’s covert nuclear tests in 2010 was carried out on an Iranian radioactive bomb or nuclear warhead.
Those sources report five facts are known for sure:
1. North Korea carried out two covert underground nuclear explosions in mid-April and around May 11 of 2010 equivalent to 50- 200 tonnes of TNT.
2. Two highly lethal heavy hydrogen isotopes, deuterium and tritium, typical of a nuclear fission explosion and producing long-term contamination of the atmosphere, were detected and analyzed by Comprehensive Nuclear-Test-Ban Treaty Organization (CTBOTO) monitoring stations in South Korea, Japan and Russia.
3. The presence of tritium in one of the tests led several intelligence agencies watching North Korea’s nuclear program and its longstanding links with Iran and Syria to examine the possibility that Pyongyang had tested the internal mechanism of a nuclear warhead on Iran’s behalf. This strongly indicated to German and Japanese intelligence that Iran had already developed the nuclear warhead’s outer shell and attained its weaponization.
4. Another possibility examined was that North Korea had tested an Iranian “dirty bomb” – i.e. a conventionally detonated device containing nuclear substances. Tritium would boost its range, force and lethality.
This was one of the conclusions of atmospheric scientist Larsk-Erik De Geer of the Swedish Defense Research Agency in Stockholm, who spent a year studying the data collected by various CTBOTO stations tracking the North Korean explosions.
On February 3, De Greer published some of his findings and conclusions in Nature Magazine. His paper will appear in the April/May issue of the Science and Global Security Journal.
5. The Japanese and German sources found confirmation of their suspicions that North Korea had abetted Iran’s nuclear aspirations in three events:
a) Shortly after the April explosion, a large group of Iranian nuclear scientists and technicians arrived in Pyongyang. They apparently came to take part in setting up the second test in May.
b) In late April, Tehran shipped to Pyongyang a large quantity of uranium enriched to 20+ percent – apparently for use in the May test.
c) Straight after the May test, the Central Bank of Iran transferred $55 million to the account of the North Korean Atomic Energy Commission. The size of the sum suggests that it covered the fee to North Korea not just of one but the two tests – the first a pilot and the second, a full-stage test.
It is not by chance that this incriminating disclosure about Iran’s nuclear achievements sees the light Monday, just hours before US Barack Obama receives Israeli Prime Minister Binyamin Netanyahu in the White house for an argument over an expeditious military action to stop Iran going all the way to a nuclear weapon.
The disclosure invalidates the main point the US President made in his speech Sunday to the pro-Israeli lobby AIPAC convention in Washington that there was still time for diplomatic pressure and sanctions to bring Iran’s leaders to a decision to halt their nuclear momentum before military action was called for, whether by the US or Israel.
It now appears that Western intelligence has known about the North Korean tests for Iran for eleven months. Therefore, it is too late for him to try and persuade the Israeli prime minister that there is still time to spare for cutting short a nuclear Iran.
It was announced in Washington Monday that no joint American-Israeli communiqué would be issued at the end of their talks, meaning they will have agreed to disagree: Obama, to stand by his opposition to military action against Iran; Netanyahu, to decide what Israel must do in the interests of its security.
There is no doubt he would have preferred an American initiative for - or partnership in - an operation for curtailing the Iranian nuclear threat. But that is not part of Obama’s policy.
2) The High Cost of the Fed's Cheap Money
Encouraging consumption at the expense of saving inhibits long-term economic growth.
Michael Goodwin
And another:
"How Much Is A Bluff Worth? Depends On Who Is Bluffing!!!
By:
Howard Galganov
.......
I truly believe that Israel can handle the threat from Iran, along with the enmity of Israel’s other 300 million Arab/Moslem neighbors. But, I doubt very much if Israel can surviveBarack Hussein Obama.
Twice - I’ve heard Obama make a direct reference to BLUFFING.
On July 13, 2011 . . . when castigating Republican House Majority Leader Eric Cantor over Cantor’s reluctance to raise the debt ceiling from 14.3 TRILLION Dollars, Obama said to Cantor:
“DON’T CALL MY BLUFF”.
I actually wrote an editorial about that, because the remark was so bizarre, that it just couldn’t go without mention.
Think about this for a minute - What the hell did Obama mean by “don’t call my bluff”, since I’ve never heard any President ever suggest that any President of the United States would ever bluff?
The comment was so asinine . . . that it goes without any reason or explanation.
On March 2, 2012, just a few days before Obama’s meeting with Israeli Prime Minister Netanyahu and a speech before AIPAC (America Israel Public Affairs Committee) . . . in an interview Obama gave to the Atlantic Magazine, he said concerning Iran:
“I DON’T BLUFF” – Say what? What doesn't Obama bluff about?
And why should anyone on the planet ever think that a US President would be a Bluffer? Was Obama directing his comment to the Iranians, to the Prime Minister of Israel, or to his Jewish American Constituents?
And why would he say such a ridiculous thing, just like he keeps regurgitating his line about dealing with Iran . . . that “everything is on the table”?
How about Obama doing nothing? I’m sure that’s on the table too, along with “don’t call my bluff” and “I don’t bluff”.
Obama then went on in the same article saying that he doesn't telegraph his strategies to the enemy. IS THAT SO?
TRUTH BE TOLD . . . THAT’S EXACTLY WHAT OBAMA DOES:
Just ask all of America's Iraqi enemies if they appreciated Obama SPELLING-OUT the very day he was going to be pulling all of America’s troops out of Iraq?
Or ask the Taliban and Al Qaeda how much they appreciated Obama giving them the American timetable for their pullout of Afghanistan?
Also . . . in that same article, Obama was once again pumping his own testosterone as he talked about how HE took down Osama Bin Laden, as if he actually had anything to do with it, which he didn’t, unless you think that giving the OK to the real warriors to do what should have been done makes Obama some kind of a hero?
And if giving the OK to the SEALS to have Bin Laden killed is somehow Obama’s CROWNING foreign affairs achievement – what does that say about the rest of Obama’s foreign affairs policies that are blowing up all over the place?
SO – KNOWING THIS . . . HOW SECURE SHOULD ISRAEL FEEL WITH OBAMA?
In Sunday’s (March 4, 2012) Obama speech to AIPAC, Obama said that he is Israel’s BEST friend ever, and should be judged not on what he has said, but rather on what he has done.
AND THAT’S OBAMA’S PROBLEM.
Obama has compared the “plight” of Palestinians under Israeli governance to how the Jews were treated during the Holocaust.
Obama has ORDERED Israel to stop building apartments in Jerusalem as if that is the single largest impediment to peace, while making no demands whatsoever on the Palestinians to recognize Israel’s RIGHT to exist as a Jewish State.
Obama has stated that Israel should return to the (indefensible) 1967 borders, which were in fact the unresolved 1948 ARMISTICE BOUNDARIES, which were NEVER recognized as borders by anyone.
What I found really interesting in Obama’s address to AIPAC . . . came not from his empty words, but rather from the reaction of the audience:
1 – The cameras never panned the audience of THOUSANDS to see their reaction, while in the past; the cameras were always showing repeated standing ovations . . . But NOT this time.
2 – The few applause Obama received during his speech were muted in comparison to the applause he received in past AIPAC speeches, especially when you consider the size of this audience.
3 – At the conclusion of Obama’s speech, there wasn’t that usual surge of Jewish Insiders running to shake Obama’s hand, as was normal in the past.
4 - But, what really caught my attention, was the man on stage who after Obama concluded speaking, shook hands with Obama, almost as if it was dutiful, while not making eye contact.
Perhaps even Elitist Liberal Jews who’ve pandered to Obama in the past are finally starting to wake-up."
I truly believe that Israel can handle the threat from Iran, along with the enmity of Israel’s other 300 million Arab/Moslem neighbors. But, I doubt very much if Israel can surviveBarack Hussein Obama.
Twice - I’ve heard Obama make a direct reference to BLUFFING.
On July 13, 2011 . . . when castigating Republican House Majority Leader Eric Cantor over Cantor’s reluctance to raise the debt ceiling from 14.3 TRILLION Dollars, Obama said to Cantor:
“DON’T CALL MY BLUFF”.
I actually wrote an editorial about that, because the remark was so bizarre, that it just couldn’t go without mention.
Think about this for a minute - What the hell did Obama mean by “don’t call my bluff”, since I’ve never heard any President ever suggest that any President of the United States would ever bluff?
The comment was so asinine . . . that it goes without any reason or explanation.
On March 2, 2012, just a few days before Obama’s meeting with Israeli Prime Minister Netanyahu and a speech before AIPAC (America Israel Public Affairs Committee) . . . in an interview Obama gave to the Atlantic Magazine, he said concerning Iran:
“I DON’T BLUFF” – Say what? What doesn't Obama bluff about?
And why should anyone on the planet ever think that a US President would be a Bluffer? Was Obama directing his comment to the Iranians, to the Prime Minister of Israel, or to his Jewish American Constituents?
And why would he say such a ridiculous thing, just like he keeps regurgitating his line about dealing with Iran . . . that “everything is on the table”?
How about Obama doing nothing? I’m sure that’s on the table too, along with “don’t call my bluff” and “I don’t bluff”.
Obama then went on in the same article saying that he doesn't telegraph his strategies to the enemy. IS THAT SO?
TRUTH BE TOLD . . . THAT’S EXACTLY WHAT OBAMA DOES:
Just ask all of America's Iraqi enemies if they appreciated Obama SPELLING-OUT the very day he was going to be pulling all of America’s troops out of Iraq?
Or ask the Taliban and Al Qaeda how much they appreciated Obama giving them the American timetable for their pullout of Afghanistan?
Also . . . in that same article, Obama was once again pumping his own testosterone as he talked about how HE took down Osama Bin Laden, as if he actually had anything to do with it, which he didn’t, unless you think that giving the OK to the real warriors to do what should have been done makes Obama some kind of a hero?
And if giving the OK to the SEALS to have Bin Laden killed is somehow Obama’s CROWNING foreign affairs achievement – what does that say about the rest of Obama’s foreign affairs policies that are blowing up all over the place?
SO – KNOWING THIS . . . HOW SECURE SHOULD ISRAEL FEEL WITH OBAMA?
In Sunday’s (March 4, 2012) Obama speech to AIPAC, Obama said that he is Israel’s BEST friend ever, and should be judged not on what he has said, but rather on what he has done.
AND THAT’S OBAMA’S PROBLEM.
Obama has compared the “plight” of Palestinians under Israeli governance to how the Jews were treated during the Holocaust.
Obama has ORDERED Israel to stop building apartments in Jerusalem as if that is the single largest impediment to peace, while making no demands whatsoever on the Palestinians to recognize Israel’s RIGHT to exist as a Jewish State.
Obama has stated that Israel should return to the (indefensible) 1967 borders, which were in fact the unresolved 1948 ARMISTICE BOUNDARIES, which were NEVER recognized as borders by anyone.
What I found really interesting in Obama’s address to AIPAC . . . came not from his empty words, but rather from the reaction of the audience:
1 – The cameras never panned the audience of THOUSANDS to see their reaction, while in the past; the cameras were always showing repeated standing ovations . . . But NOT this time.
2 – The few applause Obama received during his speech were muted in comparison to the applause he received in past AIPAC speeches, especially when you consider the size of this audience.
3 – At the conclusion of Obama’s speech, there wasn’t that usual surge of Jewish Insiders running to shake Obama’s hand, as was normal in the past.
4 - But, what really caught my attention, was the man on stage who after Obama concluded speaking, shook hands with Obama, almost as if it was dutiful, while not making eye contact.
Perhaps even Elitist Liberal Jews who’ve pandered to Obama in the past are finally starting to wake-up."
Would You Trust Obama to Protect You?
By James LewisIn dealing with Iran, the whole "international community" is going "You first!" Who gets to fight the cobra first? There are no eager volunteers.
For three years Obama has been trying sweet reason on the cobra of Tehran, which is not famously susceptible to it. Obama has been covering his own rear end with millions of goofy American liberals who live in permanent denial. Covert actions like Stuxnet have had some effect, but not enough. Tehran's Armageddon machine is therefore steaming straight to the biggest iceberg in history, and the only hope is that the suicidal ideology they have been preaching for thirty years is a phony front. That is a faint hope indeed, and not one on which to base the survival of a nation.
Various sources now report that Israel's PM Netanyahu is going to ask Obama to swear -- by whatever is holy to him (which isn't much) -- that the United States will take military action if trade sanctions fail.
Trouble is, no sane person in the world can believe Obama's promises. During the Cold War, the United States guaranteed world peace because we made credible promises. The Russians always had much bigger tank divisions. Stalin did not drive his thousands of tanks to the Atlantic Ocean because our promises of nuclear retaliation were believable.
Our credibility is now largely gone. If China invades Taiwan tomorrow, will the United States stick with its longstanding commitment to Taiwan's defense? Nobody knows.
So Bibi can't be serious about getting Obama to swear to attack the mad theocracy if sanctions fail. This has to be a public gambit. It tells Israeli voters that Bibi is going the extra mile for a peaceful resolution. It poses a public question to Obama, who has been sidestepping serious decisions on Iran for three years. And if Obama says "no" to Bibi in public, he will lose some brownie points with American Jews -- those very, very few who still remember history.
Whatever the outcome of the talks, we know ahead of time what Obama will do when bombs go off in the Middle East. He will do whatever serves his own interests, period. That's the only thing he's ever done, and there's no reason to think he will change now.
Which makes the whole Bibi-Barry meeting largely irrelevant. Whatever happens will be determined by facts on the ground. Politicians have become helpless spectators. Thirty years have been wasted in cowardice and hesitation.
Obama has missed the bus.
The Middle East is now out of control. The coming crisis could have been averted by smart statesmanship. The rise of Iran's theocracy is an enormous human failure. It can be pinned largely on the international left, which wants to see nuclear regimes rise to challenge the United States, and on the Democratic Party. Obama is only the most radical leftist so far.
When Middle East goes critical, remember who had a chance to prevent it. The leftist propaganda organs will spin and spin like a top, but the facts are facts. When the Titanic hits that iceberg, denial and spinning will not help Obama and the Democrats
.---
An interesting take on self-flagellation:
"
The Psychology of Jews Who Embrace Their Enemies
“A number of Jews and Israelis embrace criticism coming from anti-Semites and extreme anti-Israelis. They have many precursors in the lengthy history of the Jewish Diaspora.
“This phenomenon reveals great similarity, at the level of human psychology, to the response of children subjected to chronic abuse. Such children tend to blame themselves for their suffering. In their helpless condition, they have two alternatives. They can either acknowledge they are being unfairly victimized and reconcile themselves to being powerless, or they can blame themselves for their predicament. The attraction of the latter – ‘I suffer because I am bad’ – is that it serves the desire of being in control, fantasies that by becoming ‘good’ will elicit a more benign response from their tormentors. Both children and adults invariably seek to avoid hopelessness.”
Kenneth Levin is a psychiatrist, historian and author of several books, among which is The Oslo Syndrome: Delusions of a People under Siege.1 He is a clinical instructor in psychiatry at Harvard Medical School.
Kenneth Levin is a psychiatrist, historian and author of several books, among which is The Oslo Syndrome: Delusions of a People under Siege.1 He is a clinical instructor in psychiatry at Harvard Medical School.
In The Oslo Syndrome, Levin explains the attitude of Israeli self-haters: [There is] “a wish to believe Israel is in control of profoundly stressful circumstances over which, unfortunately, it has no real control. Genuine peace will come to the Middle East when the Arab world, by far the dominant party in the region, perceives such a peace as in its interest. Israeli policies have in fact, very little impact on Arab perceptions in this regard, much less than the dynamics of domestic politics in the Arab states and of inter-Arab rivalries.”
Levin adds now: “Popular hatred for Israel, which is fanned by Arab governments, education systems, media and Muslim clerics, runs deep in Arab opinion. This is not a totally isolated phenomenon, but fits into a much broader framework. Since the earliest days of the existence of the Arab-Muslim world, there has been widespread animosity against both religious and ethnic minorities in the region. It would be a mistake to attribute, for instance, the pressure on Christian minorities exclusively to the rise of Islamic fundamentalism. Popular Muslim-Arab hostility has also led to pressures on non-Arab Muslims such as the Berber populations in North Africa.
“While those Jews and Israelis who embrace anti-Jewish arguments typically do so in the hope of ingratiating themselves with the Jews’ enemies, they will rarely acknowledge this motive. Rather, they typically claim that their position reflects a higher moral or ethical position.
“In the past and present, a common claim by anti-Semites has been that Jews are interested exclusively in their own well-being. This has led many Jews to focus their energies on broader social causes, even as the Jewish community suffered unique disabilities. Jews who take this course typically do not admit they are doing so to avoid being accused of Jewish parochialism. Rather, they claim to be righteously transcending narrow concerns to address more universal needs.
“During World War II, particularly after the Nazi extermination program was revealed in late 1942, many American Jewish leaders sought to raise public awareness of the plight of Europe’s Jews and promote rescue efforts. Yet they also limited their campaign out of fear of arousing public anger over Jewish concern with a Jewish issue, and they often rationalized their doing so as reflecting devotion to the greater patriotic task of winning the war. It was largely non-Jewish voices which insisted the Nazi extermination program was not only a crime against the Jews but a crime against civilization and all of humanity and therefore should be of concern to everyone.”
Levin observes: “In the last sixty years, the American Jewish community at large has energetically embraced support for Israel. This has been made much easier by the fact that the wider American public has traditionally been sympathetic toward the Jewish state.
“On the other hand, Israel has come under much criticism in certain American media, on many American campuses and in several mainstream liberal churches. Those segments of the Jewish community who live and work in environments hostile to Israel, commonly embrace the anti-Israel bias around them. And they often insist they are being virtuous by doing so.
“The psychological dynamics of communities under attack explain why, both abroad and in Israel, the virtual siege placed upon the Jewish state will continue to lead segments of Jewish communities to support the besiegers and to urge Jewish self-reform as the path to winning relief. Yet the path they advocate is no less delusional than that of abused children who blame themselves for the abuse they experience. All too often such children doom themselves psychologically to lives of self-abnegation and misery. In the case of Jews indicting Israel for the hatred directed against it, the misery they cultivate goes far beyond themselves and ultimately, undermines Israel’s very survival.”
---
Dirty bomb dirty secret? (See 1 below.)
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There is and always will be a price to pay because what is cheap often comes at a high price down the road. (See 2 below.)
---
Dick
----------------------------------------------------
1)North Korea tested Iranian warhead or “dirty bomb” in 2010 for $55m
Those sources report five facts are known for sure:
1. North Korea carried out two covert underground nuclear explosions in mid-April and around May 11 of 2010 equivalent to 50- 200 tonnes of TNT.
2. Two highly lethal heavy hydrogen isotopes, deuterium and tritium, typical of a nuclear fission explosion and producing long-term contamination of the atmosphere, were detected and analyzed by Comprehensive Nuclear-Test-Ban Treaty Organization (CTBOTO) monitoring stations in South Korea, Japan and Russia.
3. The presence of tritium in one of the tests led several intelligence agencies watching North Korea’s nuclear program and its longstanding links with Iran and Syria to examine the possibility that Pyongyang had tested the internal mechanism of a nuclear warhead on Iran’s behalf. This strongly indicated to German and Japanese intelligence that Iran had already developed the nuclear warhead’s outer shell and attained its weaponization.
4. Another possibility examined was that North Korea had tested an Iranian “dirty bomb” – i.e. a conventionally detonated device containing nuclear substances. Tritium would boost its range, force and lethality.
This was one of the conclusions of atmospheric scientist Larsk-Erik De Geer of the Swedish Defense Research Agency in Stockholm, who spent a year studying the data collected by various CTBOTO stations tracking the North Korean explosions.
On February 3, De Greer published some of his findings and conclusions in Nature Magazine. His paper will appear in the April/May issue of the Science and Global Security Journal.
5. The Japanese and German sources found confirmation of their suspicions that North Korea had abetted Iran’s nuclear aspirations in three events:
a) Shortly after the April explosion, a large group of Iranian nuclear scientists and technicians arrived in Pyongyang. They apparently came to take part in setting up the second test in May.
b) In late April, Tehran shipped to Pyongyang a large quantity of uranium enriched to 20+ percent – apparently for use in the May test.
c) Straight after the May test, the Central Bank of Iran transferred $55 million to the account of the North Korean Atomic Energy Commission. The size of the sum suggests that it covered the fee to North Korea not just of one but the two tests – the first a pilot and the second, a full-stage test.
It is not by chance that this incriminating disclosure about Iran’s nuclear achievements sees the light Monday, just hours before US Barack Obama receives Israeli Prime Minister Binyamin Netanyahu in the White house for an argument over an expeditious military action to stop Iran going all the way to a nuclear weapon.
The disclosure invalidates the main point the US President made in his speech Sunday to the pro-Israeli lobby AIPAC convention in Washington that there was still time for diplomatic pressure and sanctions to bring Iran’s leaders to a decision to halt their nuclear momentum before military action was called for, whether by the US or Israel.
It now appears that Western intelligence has known about the North Korean tests for Iran for eleven months. Therefore, it is too late for him to try and persuade the Israeli prime minister that there is still time to spare for cutting short a nuclear Iran.
It was announced in Washington Monday that no joint American-Israeli communiqué would be issued at the end of their talks, meaning they will have agreed to disagree: Obama, to stand by his opposition to military action against Iran; Netanyahu, to decide what Israel must do in the interests of its security.
There is no doubt he would have preferred an American initiative for - or partnership in - an operation for curtailing the Iranian nuclear threat. But that is not part of Obama’s policy.
2) The High Cost of the Fed's Cheap Money
Encouraging consumption at the expense of saving inhibits long-term economic growth.
By Andy Laperriere
During the past three years, the Federal Reserve has tripled the size of its balance sheet—in effect printing $2 trillion—something it had never done in its nearly 100-year history. The Fed has lowered short-term interest rates to zero and signaled that it will keep them at that level for years. Inflation-adjusted short-term rates, or real rates, have been in the minus 2% range during the past couple of years for the first time since the 1970s.
The unfortunate fact is, as Milton Friedman famously observed, there is no free lunch. After the Fed's loose monetary policy helped spur the boom-bust in housing, it's remarkable how little attention has been devoted to exploring the costs of Fed policy.
A few critics of quantitative easing (QE) and the zero interest rate (ZIRP) have correctly pointed out that these policies weaken the dollar and thereby reduce the purchasing power of American paychecks. They increase the risk of future inflation, obscure the true cost of the unsustainable fiscal policy the federal government is running, and transfer wealth from savers to debtors.
But QE and ZIRP also reduce long-term economic growth by punishing savers, reducing saving and investment over the long run. They encourage the misallocation of resources that at a minimum is preventing the natural rebalancing of our economy and could sow the seeds of another painful boom-bust.
One intended effect of a loose monetary policy is a weaker dollar, which can help gross domestic product by boosting exports. But a weaker dollar also raises import prices (such as oil prices) for American consumers. For the average American family, this adverse impact has likely outweighed any positive impact from QE and ZIRP.
The cost of a weaker dollar for most people is not offset by temporarily higher stock prices for two reasons. First, most Americans don't own much stock. Second, stock prices are not going to be higher 10 years from now because of the Fed's policies, so the effect is to bring forward equity returns, not increase long-term returns.
Low rates have helped those who have been able to borrow or refinance their debts at lower rates, especially homeowners. But this has come at a high cost to savers. Zero rates are a major problem for any saver, but it is especially difficult for those in or near retirement. Government bonds are investments that now offer return-free risk.
The Fed is hoping the lack of return in certificates of deposit and bonds (or more accurately, negative returns, adjusted for inflation) will prompt investors to take on more risk by investing in stocks, high-yield corporate bonds and other investments. This is pushing people who have a low risk tolerance to take on more risk than may be advisable.
Moreover, QE and ZIRP are specifically designed to discourage saving and encourage people to consume more now to boost near-term gross domestic product. But saving is deferred consumption—people save to earn a return so that they may consume more in the future (say, for retirement or a major purchase). Scores of economists have testified before Congress for decades that Americans don't save enough and that this inhibits long-term economic growth. Prosperity does not come from spending; it comes from work, saving and investment.
Defenders of QE and ZIRP would say that rather than borrowing economic growth from the future, these policies merely smooth the economic cycle and reduce the economic dislocation associated with deep recessions or weak recoveries. Of course, that was the rationale for the exceptionally low rates during the 2002-2004 period, which, like today, were specifically aimed at depressing saving and encouraging consumption. Rather than smooth the economic cycle, that strategy helped create an historic boom-bust.
Some say we must encourage higher consumption because it accounts for more than 70% of GDP, and the recovery is too fragile to risk allowing a rise in the savings rate. But the recession was officially over two years ago. For at least the past decade, monetary policy has consistently punished prudent savers.
Worse, the Fed is promising to keep these policies in place for years to come. When do we ever get to the point where we allow interest rates to return to some kind of natural equilibrium and allow the economy to gradually rebalance in a way that would boost long-term economic growth?
There is no doubt the Fed is doing what it believes is best. But in addition to the risk of inflation inherent in QE and ZIRP, which Chairman Ben Bernanke has said he is 100% confident he can prevent, Fed officials are dismissive of the notion that there are significant costs or trade-offs associated with the policy they are pursuing.
This is disconcerting. Is there really no chance, zero chance, the Fed will be late to pick up signs of inflation? What accounts for such confidence—given that the Fed dismissed criticisms from 2002-2004 that its policies would distort economic decisions and cause hard-to-predict imbalances, that it was oblivious to the housing collapse well into 2007, and that to this day many Fed officials refuse to accept that monetary policy played any role in creating the housing bubble?
During the bubble, Fed officials argued they couldn't spot bubbles in advance, but that an aggressive monetary policy response could limit the downside impact if a bubble were to burst. As it turns out, the dislocation from the housing bust and the financial crisis have been far more costly than almost anyone imagined. Shouldn't that cause policy makers inside and outside of the Fed to ask hard questions as it pursues its unprecedented campaign of quantitative easing and zero rates?
Mr. Laperriere is a senior managing director in the Washington office of ISI Group.
--------------------------------------------------------------------------------------------------------------3)
Israel’s worst frenemy
Last Updated: 4:51 AM, March 4, 2012
Posted: 12:56 AM, March 4, 2012
PrintMichael GoodwinWoe is me. President Obama claims he is the best friend Israel ever had in the White House, yet doesn’t get any respect. This is no Rodney Dangerfield act. He is deadly serious.
“Every single commitment I have made to the state of Israel and its security, I have kept,” he told The Atlantic magazine. “Why is it that despite me never failing to support Israel on every single problem that they’ve had over the last three years, that there are still questions about that?”
The question deserves an honest answer, though the truth is not likely to cut through the fog of presidential self-pity. A man who compares himself to Lincoln, Gandhi, King, Mandela and FDR isn’t the sort to welcome disagreement.
ILLUSTRATION BY LEAH TISCIONE
And that is the heart of his problem. Obama is certain he knows what’s good for Israel. Given his record and the Iranian threat, it’s an impossible sell.
He came into office thinking Israel was the obstacle to Middle East peace; three years later, his policies are producing more signs of war than peace. The Palestinians won’t negotiate for their own state because the president foolishly urged them to make a ban on Israeli settlements a precondition.
He was wrong from the git-go, and still is. But facts don’t stand a chance. As a Democrat who speaks to Obama about the Mideast told me, he has a “stubborn worldview.”
How stubborn will be revealed today and tomorrow during crucial meetings with Israeli leaders. The Iranian march to nukes will top the agenda, but Obama’s view on Iran is typical of how he sees the region and his role in it.
Stripped of nuance, the gist is that Israel and America are oppressors and Muslims are oppressed. He remains obsessed with the idea that all will be well if only we prove to Muslims that we’re not bigots.
The latest example is his apology to Afghans after our soldiers mistakenly burned the Koran. Six soldiers have been murdered in subsequent riots, yet he insists those involved in the burning face military charges.
His approach to Iran is similarly misguided. Despite its thugocracy, he refuses to accept that his policy of engagement has failed. The White House even says it sees Iran as a “rational actor,” and Obama told The Atlantic that military action against Iran could work to its advantage.
“At a time when there is not a lot of sympathy for Iran and its only real ally [Syria] is on the ropes, do we want a distraction in which suddenly Iran can portray itself as a victim?” he asked.
Huh?
This is Obama at his faculty-lounge worst. Trapped by his own prejudices and misreading of history and culture, he continues to suggest that Iran is open to persuasion if he can find the right words. It’s not. It’s an evil regime that tortures its people, kills American soldiers, sponsors terrorism and wants a nuclear bomb to use against Israel and to dominate Arab countries
First, it cannot allow a mortal enemy to get a weapon of mass destruction or the ability to make one. Second, it cannot entrust its survival to a third party, including the United States.
The policy that flows from those principles is obvious. Israel will attack when it feels Iran is close to getting the bomb. And Israel is more likely to reach that conclusion sooner because it doesn’t trust Obama’s resolve or time line.
ILLUSTRATION BY LEAH TISCIONE
For his part, Obama will have to search someplace else for respect. Israel is too busy trying to survive.
2 partie$ vs.the people
My late friend Sidney Zion used to argue that the real political battle isn’t Democrats vs. Republicans but government insiders vs. the public. “Two parties against the people,” Sid often said.
To see an example, look at the battle in Albany over pension reform. Defying mathematics and fairness, legislators from both parties are joined at the hip in selling out taxpayers and pandering to unions. On the reform side are chief executives, led by Gov. Cuomo and Mayor Bloomberg, along with mayors and county leaders, who must balance budgets while providing essential services.
The executive branch wants sensible trims in benefits that would apply to new employees, saving $113 billion over 30 years while leaving New York among the most generous states in the nation. But unions have come to believe they should never hear the word “no,” and their legislative puppets say “Amen.”
The face-off is not partisan; it’s responsibility vs. recklessness. The executive branch is stuck with reality while legislators are focused on the next election, no matter the rising tide of red ink.
Most distressing is that the city and state comptrollers, whose job it is to know better, have joined the spendthrifts. Indeed, John Liu and Tom DiNapoli are abusing their offices to argue there is no fiscal problem that time and tinkering won’t solve.
Their numbers don’t add up, and it gets worse. They support the scandalous practice of the state and local governments borrowing from their pension plans to make pension payments.
That’s not just pushing the problem into the future; it’s running up the tab by adding extra interest.
Two parties against the people. Remember that and you will understand most of what’s wrong in Albany.
Live online & learn
The battle over teacher quality has produced a lot of heat, and now an interesting idea. It comes from reader Terri Kaminetsky, who believes a kind of master class of every major subject should be recorded and put on the Internet for any student or parent to view.
“If a kid in school X has a bad teacher, he can go online and get the lesson,” she writes. “The best teachers in each subject would be available to all the kids. It is so doable and would have the effect of leveling the playing field.”
She adds: “MIT puts classes online for free, so why can’t the NYC public schools? It would put the kids into the driver’s seat; they could go as far educationally as their ambition allowed. Isn’t that what America is all about?”
Kaminetsky is on to something. Technology is a tool that can leap over old problems. Many kids live online, and it makes sense to use that fact to connect them to the best teachers.
Fund-raising an eyebrow or two
He’s No. 1! Obama has set a record by doing 100 fund-raisers already, twice as many as George W. Bush by this time. It means he’s spending less time governing — for which we are grateful.
Occupying ‘Fall’ Street
Here’s good news — if you think banks are evil. Wall Street has shed 4,300 jobs, and more cuts are coming. Yippee. Or maybe not. After all, if the banks disappear, the Occupy Wall Street hooligans won’t have a place to occupy or anybody else to blame for their own problems
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