Middle East and Other Musings: President Snide and A Review of Zingales' Book!

This is why Obama must go. I want my granddaughter, Dagny, to have a future.

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Sabato is one of the best. (See 1 below.)
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Strassel on Romney"s VP selection. (See 2 below.)
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Avi reports on a Mexican Drug Cartel. (See 3 below.)
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Politics is a dirty business. It frequently involves laundering money. That said, the campaign Obama and his thugs are running is the lowest, dirtiest of all. He always was President Snide in my view. Perhaps more will now truly see his 'dark' side. (See 4 below.)

Stop and think about this: NBC, CBS, ABC, CNBC, MSNBC, New York Times, Washington Post and Los Angeles Post versus FOX and America!
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As promised, a review of the first half of Luigi Zingales'; "A Capitalism for the People."

"Comments in parenthesis are my own."

Zingales begins by explaining why American Capitalism was exceptional. He writes:

a) It was developed at a time when American GDP was minuscule.

b) It was untouched by foreign influence.

c) It was based on a Protestant ethic.

He then proceeds to explain why exceptional American Capitalism is in danger.

The lack of competition and distortion created by government subsidies has helped create the declining real income of Middle Class America.

Early American Capitalism was based on hard work, not luck. The fundamental role of any economic system should be assigning responsibility and reward - even the most primitive.

Meritocracy, which is intrinsically related to free markets, is a difficult principle to sustain because in a democracy rewards are based on merit and often go to the few. Therefore, why should the minority agree to disproportionality for the minority. (This is what Obama plays off in his divide and conquer efforts to raise jealousy and his crap about being for the middle class which his own inept and failed policies have helped shrink.)

America was founded on equality of opportunities not of outcomes. That is antithetical to the Left and Progressive philosophy which preaches fairness etc. However, when fairness of the rules grows questionable and benefits distributed too unequally the consensus for a free market meritocracy can collapse. (This is where American Capitalism has begun to head and to look like thus, making it easier for the demagogues like Obama to make inroads with their own misguided, sadistic rhetoric.)

Zingales suggests globalization is the main culprit in causing wage inequality because it increases competition and the return on being the best. Consequently higher rewards accrue to fewer benefactors.

As benefits of a meritocracy become less widespread political support for capitalism weakens. However, what undermines Capitalism most is the perception the rules do not apply equally to everybody - the system is rigged. But, here again another problem arises because people do not understand both how it is rigged nor how to fix it. Those who call for the rejection of the entire system make it more difficult to 'change.' In order to restore 'fairness' we need to understand what went wrong in the first place. ( Obama's call for change, in essence, is to replace Capitalism
not restore it and to do so through populist wealth redistribution. Destroying incentive is not the answer.)

Yes, competition brings income inequality but it also gives customers freedom to choose and offers more choices.

The purpose of the early antitrust laws was to prevent excessive consolidation depriving consumers of the benefit of innovation. But there are always trade offs and thus misguided enforcement may help to keep an industry competitive, but it also squelches economies of scale and massive government intrusion into the private sector can, and has, become exploited for political reasons.

In a competitive market there is less room for cronyism. Free and competitive markets are creators of wealth but for it to work the playing field must be kept level and open to new entrants.

Finance is essential for injecting competition but what has happened is the financial sector has gained disproportionate strength and political influence. As government grew government became more powerful. Thus, government has become a magnet because it is now capable of dispensing enormous rewards. Naturally, corporations - financial and otherwise - covet government rewards and far too many have set about receiving them by dispensing their own goodies to politicians and thus gain status and clout.

Consequently we have outsmarted ourselves by allowing some corporate entities to become so large politicians and government bureaucrats now argue they must be propped up because they are too big to fail and if allowed to do so would wreck the nation economically.

Through amoebic growth in lobbying efforts we have become the bail out nation. "The bigger the government, the larger the pie, and thus the larger incentive for business to grab a slice."

Zingales suggests the rate of return on political investment is simply the other side of taxpayer impotence.

The term private-public partnership theoretically captures the best of both world as you combine the efficiency of the private sector with the social goals of the public sector. What has evolved is the worst of both not the best and Fannie and Freddie Mae, Zingales cites, are two examples.

Zingales lays the 'bail out doctrine' at the feet of former Secretary Robert Rubin who, after leaving government, enriched himself by joining Citigroup which he argued, while in government, needed bail out assistance. Then Zingales explains what he terms the 'Greenspan Put.' In essence,
Greenspan's policies, sent a clear and unmistakable message that financial institutions could take inordinate risks because the government would not let them fail. Thus we have the makings of the economic disaster which we are now trying to dig out from under.

A bail out nation lives on lobbying and this is why so much money is spent on it but the overall free market system is worse for the result. Zingales, tongue in cheek, proffers 'a nation that protects wild animals from the corruption of free food should also protect businesses from the corruption of handouts and subsidies!'

Zingales then goes on to attack the elite and intellectuals for their failings and participation in 'group think' because of the rewards they receive.

He explains how those in academia purloin themselves with arguments that are biased and favor their receiving recognition and status.

He makes the case that a divide between the intellectual elite and the people fuels the most virulent form of populism. It engenders the perception of corruption and breeds the consequent resentment against Washington which can then be explored. When the intellectual elite cannot be trusted anti-intellectualism prevails and the political debate deteriorates. ( I would also add that as our education system produces more incapable of reasoning the attraction of demagogue rhetoric , aka that of the Obama's, increases and this is where we are at as the presidential campaign sinks to new lows.)

The solution, Zingales suggests, is to understand the potential biases and return to a system of checks and balances with a high degree of popular control because that is the best way to prohibit a meritocratic system from deteriorating into an oligarchy.

Populism is now afoot and in Zingales' view, it is because of globalization, a telecom revolution and widening income gap.

The current Populist threat, however, is a two headed sword. It tends to emphasize redistribution and egalitarianism which impedes a meritocracy by destroying incentive and diminishing economic growth. On the other hand a Populist revolt can provide the resources to fight crony capitalism. Zingales believes it is possible to build a Populist agenda that reflects and supports free markets.

The second part of his book, which I have yet to read, is devoted to his solutions that we enable us to recapture the genius of American prosperity.
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Have a great weekend.
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Dick
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1)Sabato and Kondik: The Dates That Will Decide November

The fall debates won't matter much. But the unemployment rate will be announced on Friday, Nov. 2, four days before the election.

By LARRY J. SABATO AND KYLE KONDIK

The general election battle for president is about to enter its fourth month, having begun on April 10 with Rick Santorum's departure from the Republican primary race. But after hundreds of millions of dollars in ads, and nearly as many supposedly "game-changing" gaffes, the polls have hardly moved: President Barack Obama has a narrow but tenuous lead on Gov. Mitt Romney.

From here on out, what factors will tip it one way or the other?

• Conventions: The Democratic Convention will be held on Sept. 3 through Sept. 6 in Charlotte, N.C. It is largely unimportant. Mr. Obama is a known commodity and his support has little room to grow. His approval numbers are already in the high 40s in most polls, and his ceiling is surely the 53% of the vote he secured in 2008.

It could lift the campaign with all walks of voters, not just those in one state or demographic.

Is Mitt Romney the GOP's future, or is he the GOP's past? That's one way to look at his upcoming choice of a running mate.

As Mr. Romney gears up for that announcement, the political world is tripping through the usual speculation about which veep candidate offers Mr. Romney the biggest Electoral College bang. Can Rob Portman deliver Ohio? Can Marco Rubio help with Florida? Would Bobby Jindal stir the minority vote? Might not Kelly Ayotte tap those younger voters, and women?

Blah, blah, blah. As Mr. Romney is fond of saying, this election is big—very big—and will come down to a "fundamental choice." The Republican means that in the sense of his own philosophical differences with Barack Obama. But that "choice" might just as easily be a reference to today's two wings of the GOP—the old political operators, and the new aggressive reformers.

Republicans were thrown out of Congress in 2006 for a reason: They'd lost their reform spirit. They twiddled their thumbs on big issues, ran from the entitlement problem, spent, earmarked and were wrapped in scandals. They became more obsessed with power than with solving problems.

The tea party sprang to life as a reaction to Obama overreach. Yet it was equally a response to a wayward GOP. The grass roots gave a voice to a new generation of reformers and rewarded at the polls Republicans who had the courage to join in that movement.

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Editorial board member Joe Rago on why Paul Ryan would make a good VP pick. Photo: Getty Images.

The electorate today draws a very clear distinction between the old and the new. Certain political names are now touchstones for reform. In the Senate, they are the likes of Tom Coburn or Jim DeMint or Marco Rubio. In the House, it is Paul Ryan or Jeff Flake or Mike Pence. In the states, it is Govs. Chris Christie, Scott Walker, Bobby Jindal, Nikki Haley.

These Republicans can be relied on to oppose failed liberal ideas. But their real accomplishment—and what has propelled them to such standing, and inspired voters—has been their willingness to oppose the (still numerous) laggards and cravens in their own party.

Think Mr. Rubio, chastising primary opponent Charlie Crist for running from Social Security reform. Think Mr. Ryan, shaming his party's spenders into adopting his fiscally sound budget. Think Mr. Coburn, calling out Republicans for earmarks. In many voters' minds, these names offer hope that there are still political figures who think big and act seriously.

This is of deep importance to Mr. Romney, whose biggest problem is that he remains undefined. He's given the public an excellent summary of everything his administration will not be: It will not have ObamaCare, it will not give out Solyndra-like loans, it will not raise taxes. As for what a Romney presidency will be, that remains somewhat of a mystery.

The Obama administration is working hard to answer that unknown, painting Mr. Romney as an out-of-touch capitalist. And Mr. Romney brings enough history to give voters their own doubts. They've heard about his Massachusetts health-care plan. They know he's flipped on some issues. They've seen his reluctance to engage on some key debates—say, countering the Obama class-warfare charge. All this makes them wonder if he isn't just another same-same Republican: risk-averse, establishment.

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AFP/Getty Images

Top (from left): Tim Pawlenty, Bobby Jindal, Paul Ryan. Middle: Bob McDonnell, Chris Christie, Kelly Ayotte. Bottom: Rob Portman, John Thune, Marco Rubio.

To the Romney team's credit, nearly all the candidates who are today seriously mentioned on the veep shortlist pass the basic test: They are not obvious liabilities. Each one is a solid and serious figure in his own way, with real accomplishments, and should not prove a drag on the ticket. And none screams "Luddite Republican."

But the Romney opportunity here is to use his veep pick to add to his campaign, to define it and inspire it. By picking one of the party's new-generation stars—Mr. Ryan, Mr. Rubio, Mr. Christie—Mr. Romney would firmly place himself in the camp of the forward-looking reformers. He would reassure voters that he is not just voicing platitudes about fiscal responsibility, entitlement reform or tax overhaul—but that he is committed to them.

It would help emphasize Mr. Romney's contrast with Mr. Obama. It would blunt the left's argument that Mr. Romney wants a return to the Bush years, since the Ryans and Rubios of the world were themselves critics of that time. It could lift the campaign with all walks of voters, not just those in one state or demographic.

The GOP veepstakes have hit such a pitch that Mr. Romney may now face some backlash in not choosing a reformer. The weak-kneed in his party—the unreformed—have taken to warning him off choosing a star reformer. They fear the party would have to talk about real issues and that stresses their safety-first brains. Should Mr. Romney now go vanilla, he risks looking like he took their advice and is unwilling to step into the ring.

The GOP has for some time been on two different paths. Mr. Romney's choice of a running mate will not be his only opportunity to show which road he is himself on. But it will be a big one.

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3)Of Horses and Narco-Kingdoms

By Avi Jorisch

Following a two-year investigation, federal prosecutors have submitted a mindboggling 30,000 pages of documentation and 2,000 recorded phone calls that paint an extensive picture of how one of Mexico's most powerful drug-trafficking organizations raises, moves and eventually washes its illicit funds.

The indictment, issued by the Northern District of Texas, charges fifteen people with laundering millions of dollars in drug profits on a sleepy Oklahoma ranch on behalf of the Los Zetas cartel, the most powerful syndicate in Mexico today. In a trial scheduled for October in Austin, Texas, the IRS and other federal authorities will present findings based on thousands of financial records and recorded conversations and dozens of witness interviews that provide information on how the Zetas conduct their business.

The case became public in June when federal agents carried out a sweep of seven locations in several states and seized 200 boxes of evidence. Eight suspects have been arrested, and an additional seven remain at large. It is widely believed that some of the defendants will take plea bargains after providing federal authorities with intelligence. The most notable figure incarcerated is Jose Trevino Morales, the brother of two high-ranking Zetas,Miguel Angel Trevino Morales and Oscar Omar Trevino Morales.

U.S. authorities consider the Zetas to be the "most technologically advanced, sophisticated and dangerous cartel operating in Mexico." The Zetas origins date back to 1999, when members of Mexico's Grupo Aeromóvil de Fuerzas Especiales (GAFE), an elite special forces unit, were incubated by the Gulf Cartel, the oldest organized crime organization in Mexico. In 2010, following hostilities between the two groups, the Zetas broke away and founded their own well-armed syndicate based in Nuevo Lareda, directly across from Laredo, Texas. Analysts believe that the Zetas, who control 11 Mexican states, are Mexico's largest drug cartel geographically, and that they have now superseded their chief rival, the Sinaloa cartel. They are best known for brutality, assassinations, extortion, kidnapping, beheadings, indiscriminate killings and torture.

The Zetas, with a leading role in narco-trafficking, have mastered the money-laundering cycle. Like other crime syndicates, they are involved in bulk cash smuggling, the black market peso exchange and trade-based money-laundering. For the last decade, they have also laundered money through the horse-racing industry.

Over a two-year period, the Zetas reportedly spent some $1 million per month on the purchase of quarter horses, which specialize in racing short distances. Hundreds of horses were purchased on behalf of the Zetas in Oklahoma, New Mexico and California. Some were paid for directly from narcotics proceeds, in large wads of cash, while others were bought using wire transfers from legitimate businessmen in Mexico to auction houses in the Southwest, and shortly thereafter, were sold back to the Zetas. Ownership of horses who won races was transferred at low prices, allowing individuals affiliated with the group to show apparent legitimate profits from minimal investments.

Many of the horses had colorful names, like Number One Cartel, while Tempting Dash and Mr. Piloto did particularly well for the Trevino bothers. Mr. Piloto won the All American Futurity race in 2010, netting an account controlled by the Zetas with $968,440. In 2009, Tempting Dash not only set a track record during the Texas Classic Futurity, but also netted more than $600,000.

The federal indictment, which reads like a pulp fiction novel, describes in movie-like detail how leading members of the Zetas clean their money. According to court documents, Miguel Trevino boasted that using the horse-racing industry was an "easy way" to launder money. More generally, Assistant U.S. Attorney Doug Gardnerclaims that that the Trevino brothers move $25 million monthly in drug proceeds between the United States and Mexico.

The indictment also records a wealth of other information on Zetas operations, including secret meetings of the three brothers across the border in Mexico; horses taken back and forth between the United States and Mexico; bribes of up to $10,000 to race gatekeepers to fix races; and bulk cash smuggled in hidden car compartments into Mexico, where only pristine bills were laundered in casas de cambio (exchange houses) and "dirty bills" with any kind of markings were used to bribe Mexican officials. Perhaps the most interesting information sheds light on how the Zetas abuse the banking sector to move their money. The affidavit records how two accounts at Bank of America dating back to 2009 were exploited by the Trevino brothers for transactions in excess of $1.5 million. A check drawn on the American Express Bank International was also cited. While neither bank is accused of any wrongdoing by federal authorities, the Zetas churned money through banking sector and to many shady characters in order to obfuscate the money trail and make it difficult for banking and law enforcement officials to follow the money.

Federal and local law enforcement authorities should study this and similar cases carefully, both to gather intelligence on the ways seasoned drug-trafficking organizations are now moving their illicit commodities and to consider creative steps to curb their activity. It is no secret that narco-traffickers launder money through cash-intensive businesses, money service bureaus, banks and legitimate businesses. Following the money often leads directly to the power brokers that if found and eventually prosecuted can do massive damage to a crime syndicate's operations.

As policymakers consider the most effective way to fight drugs and money laundering, it will be crucial to destroy the infrastructure with which illicit actors launder their money and move their contraband. It is time to hit drug-trafficking organizations where it hurts most—their pocketbook.

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4)Obama’s Filthiest Lie Ever

BY DOUG PATTON

Obama Lies SC Obamas Filthiest Lie Ever?

If the Obama re-election campaign has not yet made you feel like you want to take a shower, then you are either not paying attention or you have an incredible tolerance for lies. Make no mistake; Obama, the Democrats in Congress, and the party’s celebrity-funded Super PACs will do whatever is necessary to hold on to the power they feel slipping through their fingers. And that includes outright lies.

Not mistakes. Not distortions. Not factual errors. Not mendacities. Lies!

Democrat Leader Harry Reid took to the floor of the Senate and lied through his smirking teeth about Republican presidential candidate Mitt Romney. “The word it out that he hasn’t paid taxes in a decade,” Reid said in that smarmy voice of his. He offered no proof of this scurrilous allegation, and when challenged on it, he simply shrugged and said someone told him

The latest filth to come oozing out of the president’s re-election mud hole is a television commercial being run by Priorities USA Action, the pro-Obama super PAC run by former administration mouthpiece Bill Burton and defended by another former administration mouthpiece, Robert Gibbs, who now works for the campaign (but they don’t coordinate, because that would be wrong).

The ad is running in Iowa, Ohio, Virginia, Pennsylvania, and Florida, as well as on the Internet. It depicts former steelworker Joe Soptic earnestly speaking into the camera about how he lost his job after GST Steel closed its doors in 2001. Bain Capital, the private equity firm formerly run by Romney, was part of a group that had taken over the Kansas City area steel company. Soptic blames Romney not only for the loss of his job but also the loss of his wife, who subsequently died of cancer.

“When Mitt Romney and Bain closed the plant,” Soptic tells us, “I lost my health care, and my family lost their health care. And a short time after that my wife became ill. I don’t know how long she was sick, and I think maybe she didn’t say anything because she knew that we couldn’t afford the insurance, and then one day she became ill and I took her up to the Jackson County Hospital and admitted her for pneumonia, and that’s when they found the cancer, and by then it was stage four. It was…there was nothing they could do for her, and she passed away in 22 days. I do not think Mitt Romney realizes what he’s done to anyone, and furthermore I do not think Mitt Romney is concerned.”

The Washington Post gave the ad four Pinocchios, the same rating they gave Reid’s comments on the Senate floor. It seems the Obama slime machine conveniently overlooked a few little factoids: 1) of the $75 million put into the original 1993 deal by several investors, Bain Capital put in a mere $8 million; 2) Romney left Bain Capital in 1999, a full two years before the GST plant was closed; 3) Mrs. Soptic had health insurance through her own employer after her husband lost his job; and 4) she did not die until 2006, five years after the closure of GST Steel.

In the midst of all the lies being told by Barack Obama and his minions, here is the unvarnished truth about health care. If you remember nothing else, remember this. No employer or insurance company can tell you that you cannot have a medical procedure. They may not cover it, and that may be a hardship. You might have to mortgage your home or take on some other form of financial burden. You might have to turn to a charity or work out some sort of payment plan. But in the United States of America, no one can dictate that you cannot have health care.

However, when the federal government takes over our health care system — and that is the ultimate goal of Obamacare — they will be the only game in town. No competition and therefore no place else to turn. They will send you home with an aspirin and an excuse: you’re too old; you’re too sick; you’re too whatever. It happens everywhere government-run health care is the law of the land.

It is not the Mitt Romneys of the world who kill sick people. It is the Barack Obamas. Don’t buy their lies.

Middle East and Other Musings

Thursday, August 9, 2012

President Snide and A Review of Zingales' Book!

The fall debates won't matter much. But the unemployment rate will be announced on Friday, Nov. 2, four days before the election.

By LARRY J. SABATO AND KYLE KONDIK

Related Video

It could lift the campaign with all walks of voters, not just those in one state or demographic.

Related Video

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