Pipes and Inbar on Obama and Kerry respectively. (See 1 and 1a below.)
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Sowell sips a long over due and refreshing cup of tea but offers warnings. (See 2 below.)
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One size fits all government possibly works for small nations with an homogeneous population but in the era of the I Pad it is up against a very strong and overwhelming challenge. (See 3 below.)
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Meygn Kelly is bright and certainly beautiful but she dropped the ball in her interview last night with a Professor who was intimately involved in structuring Obamacare .
The professor stated Obamacare was premised on the fact that over time the cost of Obamacare policies would be vastly more competitive than the inflationary history of existing health care policies.
Meygn did not ask for proof but accepted his premise and failed to challenge him in other economic areas where we are constantly experiencing inflation.
In other words, should we allow government bureaucrats to design policies to take over farming in view of the fact that food costs continue to creep upward etc.?
The premise behind Obamacare is wealth transference under the guise of fairness.
A radical friend of mine wrote a LTE yesterday taking Capitalism to task because a local grocer, who has served our community for many years, may close because his rent is being raised and another regional food chain would like to relocate. My friend pointed out Capitalism is harsh and customers who benefit from Capitalism are showing little compassion and display little regard or feelings and he implies survival of the fittest is what drives Capitalism and Capitalists.
Yes, Capitalism is harsh and favors those who are more productive and provide goods and services at lower costs. Those who cannot measure up to competitive forces can always try their hand in Russia and/or Cuba where freedom abounds or they can hang around and wait for Obama and his philosophical train to wreck American Capitalism which has produced more for more than any other system.
Churchill was correct when he noted Democracy and Capitalism are not perfect but they beat anything else man has devised. and even maybe God was right when , if he did create nature, he used the principles of Capitalism and survival of the fittist and not blessings of Socialism and/or Communism!
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I served on the board of an educational institution for a brief time with Herb London. I am re-posting his comments. (See 4 below.)
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From time to time I mention the pension liability problem. This article sets it out in more detail and ties in with something Herb London mentions in his re-posted article(See 4 below.) (See 5 below.)
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Anyone who goes to the trouble of reading my memos know I have been highly critical of Obama and distrustful of his abilities from the git go.
True I also post articles of others that mostly support my views but I do post articles that either challenge my thoughts or veer from what I believe is the best road when I find ones that are truly credible.
Recently, I posted several that suggest it is inevitable Iran will achieve nuclear status and the real issue will be how the world, and most particularly America, manages this fait accompli.
I know change is inevitable even when status quo, for the time being, may the better option. I know discontent with established order is a powerful motivator.
Perhaps Obama is smarter than I give him credit and his path the more rational because dialogue with one's enemy brings hope that something good can result whereas lack of contact means the door remains closed.
That said, when I look at Obama's personal handling of critical matters, when I look at his obvious lying and disingenuous statements, when I look at his disengagement from clear executive responsibilities, when I look at his miscalculations, both domestic and foreign, when I look at his utter contempt for those with differing views and his empirical way of conducting himself, I draw little comfort from his engagement with Iran.
If negotiations with Iran are, at the very least, logical I would feel far more comfortable if Obama and Kerry and their appointed minions were not sitting at the table. I would be far more confident if a Reagan and Schultz team were negotiating for me or Bolton or many others who are Yankee Tough! (See 6 below.)
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Dick
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1)Obama Turns on Israel
by Daniel Pipes
National Review Online, The Corner
National Review Online, The Corner
Barack Obama's March 2013 trip to Israel had a too-good-to-be-true feel about it. While barely pressuring on Israel, he instructed Palestinians not to set preconditions for negotiations andadmonished them to "recognize that Israel will be a Jewish state." It felt out of character, suggesting a price to be paid later.
Well, that price has now, eight months later, been revealed and it has two components. If I might paraphrase the U.S. position: "First, sit by quietly as we reach an accord with Tehran that freezes but does not dismantle its nuclear buildup. Second, stop the illegitimate residential construction on the West Bank or the Palestinian Authority will, with American acquiescence, start a third intifada."
Israeli responses to the two demands have been stark, blunt unlike anything in memory. Prime Minister Binyamin Netanyahu blasted the prospective Iran deal as a "monumental mistake" and after meeting with Secretary of State John Kerry warned:
I reminded him that he said that no deal is better than a bad deal. And the deal that is being discussed in Geneva right now is a bad deal. It's a very bad deal. Iran is not required to take apart even one centrifuge. But the international community is relieving sanctions on Iran for the first time after many years. Iran gets everything that it wanted at this stage and pays nothing. And this is when Iran is under severe pressure. I urge Secretary Kerry not to rush to sign, to wait, to reconsider, to get a good deal. But this is a bad deal, a very, very, bad deal. It's the deal of a century for Iran; it's a very dangerous and bad deal for peace and the international community.
Economy and Commerce Minister Naftali Bennett was even more direct, even raising the prospect of an Iranian nuclear bomb destroying New York City:
These critical days in November will be remembered for years to come. The Free World stands before a fork in the road with a clear choice: Either stand strong and insist Iran dismantles its nuclear-weapons program, or surrender, cave in and allow Iran to retain its 18,500 centrifuges. Years from now, when an Islamic terrorist blows up a suitcase in New York, or when Iran launches a nuclear missile at Rome or Tel Aviv, it will have happened only because a Bad Deal was made during these defining moments.Like in a boxing match, Iran's regime is currently on the floor. The count is just seconds away from 10. Now is the time to step up the pressure and force Iran to dismantle its nuclear program. Not to let it up. It would be dangerous to lift the sanctions and accept a deal which allows Iran to retain its entire uranium-production line. It would be dangerous because Iran would, a year, two or three from now, just turn everything back on and obtain a nuclear weapon before the world can do anything to stop it. It is not enough to shut off the centrifuges. They need to be completely dismantled. We call upon the West to avoid signing a Bad Deal.
Israel's responsibility is to ensure the security of its citizens and that is exactly what we will do. We will never outsource our security.
On the Palestinian issue, Defense Minister Moshe Ya'alon took the lead:
There is no need to fear threats of whether there will or won't be a third intifada. We have been in an open and ongoing conflict [with the Palestinians], which as far as the Palestinians are concerned does not end in 1967 lines. There is Sheikh Munis, [their name for] Tel Aviv, Majdal, [their name for] Ashkelon. We got out of the Gaza Strip and they continue to attack us. They raise their youth to believe that Haifa and Acre are Palestinian ports and more. There is no sign of compromise here. … We will have to be smart, and not fear threats of whether there will or won't be a third intifada.
I wrote before the last presidential election that "Israel's troubles will really begin" should Obama win second term. At Obama's second inauguration, I predicted that he, "freed from re-election constraints, can finally express his early anti-Zionist views after a decade of political positioning. Watch for a markedly worse tone from the second Obama administration toward the third Netanyahu government."
That moment is now upon us.
Mr. Pipes (DanielPipes.org) is president of the Middle East Forum. © 2013 by Daniel Pipes.
1a) Kerry: Stay home
By Efraim Inbar
Israel Hayom
Israel Hayom
US Secretary of State John Kerry warned of a return to Palestinian violence and Israel's isolation if the faltering peace talks between Israel and the Palestinians ultimately fail. This is a typical leftist Pavlovian response to the impasse in Israeli-Palestinian negotiations that is now over a decade old. Such thinking primarily reflects the frustration that the optimistic evaluations that the conflict can be ended quickly remain unfulfilled. Unfortunately, Kerry's remarks tell the Palestinians to hold on to their maximalist positions. This reflects an inability to grasp the intricacies of protracted intractable ethnic conflict and a misguided American policy.
There is definitely a possibility that the Palestinians, in particular the radical forces, will recur to violence. In reality these forces try to kill Israelis all the time, and a dearth of terrorist attacks in recent years can only be attributed to the work of the Israeli security forces. Yet the likelihood of massive organized violence by the Palestinian Authority (PA) is small. Rocking the boat endangers too many vested interests of the Palestinian ruling class. The PA leadership has probably registered the heavy price paid by the Palestinians during their terrorist campaign at the beginning of the twenty-first century, as a result of Israeli countermeasures.
Moreover, even if the Palestinians miscalculate once again and go for a "third Intifada," Israel's capability to contain terrorism and other modes of civilian struggle is high. The Israeli army can be trusted to meet all challenges successfully. Most important, a large majority of Israelis believe that the Palestinian demands, such as Jerusalem and the "Right of Return," are the real obstacles to peace. This large consensus about Palestinian intransigence allows for significant social mobilization and resilience in protracted conflict. Israelis will go once more to war with a feeling of "Ein Breira" (no choice) and are likely to win that engagement as well.
Large parts of the hypocritical world may indeed see Israel as the culprit for the failure of the negotiations and for a new round of Israeli-Palestinian violence. But such negative attitudes do not necessarily lead to international isolation. Public statements and the voting record of states at the UN – an ineffective, morally bankrupt organization – are not indicative of the true nature of interstate relations.
National interests dictate state actions, and in most cases bilateral relations with Israel are hardly affected by the ups and downs in the peace talks with the Palestinians. For example, the rising powers India and China have expanded their bilateral ties with Jerusalem because it is in their interest to engage a successful state such as Israel. Nowadays, when the Iranian threat dominates the region, Arab Sunni states such as Egypt, Jordan, and Saudi Arabia, who are exasperated with American behavior, are in the same strategic boat as Israel. Generally, the Middle East – especially today, while in the throes of a colossal political, social, and economic crisis – is hardly paying attention to the Palestinian issue. In the Caucasus and in Central Asia, Muslim Azerbaijan, Kazakhstan, and Uzbekistan are friendly to Israel.
Moreover, isolation of Israel is unlikely because of the large existing reservoirs of support for Israel in many quarters. Canada and Australia are ruled by governments most responsive to Israeli concerns. Even in Western Europe, concerns about Muslim immigration and foreign aid place the Palestinians in a problematic spot. Above all, two-thirds of Americans have consistently favored Israel over the past two decades, which translates into Congressional support. The US is Israel's most important ally and even the Obama administration has maintained the strong support and cooperation in the military sphere.
But the prism of the Obama administration on the Middle East and global affairs is fundamentally flawed. An American foreign policy that supports the Muslim Brotherhood, estranges its traditional Arab allies such as Egypt and Saudi Arabia, allows Iran to get closer to the bomb, sees in Turkey's Erdoğan a great friend of the West, and insists that the Israeli-Palestinian conflict can be ended in nine months is dangerous and does more damage that good. Similar complaints about poor US political judgment are abundantly voiced by America's friends in Asian and Eastern European capitals.
It is the enemies of the US who rejoice in President Barack Obama's foreign policy, and who relish in America's perceived decline in world affairs.
Ironically, at this historic juncture, even an isolationist America would be a better alternative for those that want the good guys to win. Therefore, dear President Obama, please do us a favor: save some money and keep Kerry at home.
Prof. Efraim Inbar, director of the Begin-Sadat Center for Strategic Studies, is a professor of political studies at Bar-Ilan University and a fellow at the Middle East Forum.
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2) Tea Party at the Crossroads
What the Tea Party was attempting was conservative, but it was also insurgent -- if not radical -- in the sense of opposing the root assumptions behind the dominant political trends of our times. Since those trends have included the erosion, if not the dismantling, of the Constitutional safeguards of American freedom, what the Tea Party was attempting was long overdue.
ObamaCare epitomized those trends, since its fundamental premise was that the federal government had the right to order individual Americans to buy what the government wanted them to buy, whether they wanted to or not, based on the assumption that Washington elites know what is good for us better than we know ourselves.
The Tea Party's principles were clear. But their tactics can only be judged by the consequences.
Since the Tea Party sees itself as the conservative wing of the Republican Party, its supporters might want to consider what was said by an iconic conservative figure of the past, Edmund Burke: "Preserving my principles unshaken, I reserve my activity for rational endeavours."
Fundamentally, "rational" means the ability to make a ratio -- that is, to weigh one thing against another. Burke makes a key distinction between believing in a principle and weighing the likely consequences of taking a particular action to advance that principle.
There is no question that the principles of anyone who believes in the freedom of American citizens from arbitrary government dictates like ObamaCare -- unauthorized by anything in the Constitution and forbidden by the 10th Amendment -- must oppose this quantum leap forward in the expansion of the power of government.
There is nothing ambiguous about the principle. The only question is about the tactics, the Tea Party's attempt to defund ObamaCare. The principle would justify repealing ObamaCare. So the only reason for the Tea Partyers' limiting themselves to trying to defund this year was a recognition that repealing it was not within their power.
The only question then is: was defunding ObamaCare within their power? Most people outside the Tea Party recognized that defunding ObamaCare was also beyond their power -- and events confirmed that.
It was virtually inconceivable from the outset that the Tea Party could force the Democrats who controlled the Senate to pass the defunding bill, even if the Tea Party had the complete support of all Republican Senators -- much less pass it with a majority large enough to override President Obama's certain veto.
Therefore was the Tea Party-led attempt to defund ObamaCare something that met Burke's standard of a "rational endeavour"?
With the chances of making a dent in ObamaCare by trying to defund it being virtually zero, and the Republican Party's chances of gaining power in either the 2014 or 2016 elections being reduced by the public's backlash against that futile attempt, there was virtually nothing to gain politically and much to lose.
However difficult it might be to repeal ObamaCare after it gets up and running, the odds against repeal, after the 2014 and 2016 elections, are certainly no worse than the odds against defunding it in 2013. Winning those elections would improve the odds.
If the Tea Party made a tactical mistake, that is not necessarily fatal in politics. People can even learn from their mistakes -- but only if they admit to themselves that they were mistaken. Whether the Tea Party can do that may determine not only its fate but the fate of an America that still needs the principles that brought Tea Party members together in the first place.
Copyright 2013, Creators Syndicate Inc.
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3) A One-Size-Fits-All Government Cannot Survive in the iPad Era
Washington’s political class fundamentally misunderstands the role of politics and government in American society. They act as if government is the central force in American life and that its decisions guide the course of the nation. In historical reality, societal trends embrace new technology and the deep currents of public opinion lead the way. Government follows along a decade or two behind.
A quick review of our nation’s history shows that the first 200 years were characterized by changing technology and expectations moving us to a more centralized nation.
In the transportation realm, we moved from horses to canals to railroads during the 19th century. Then things really took off in the 20th century with the introduction of cars and planes.
Communications saw a similar pattern. When the country was founded, the fastest way to send a message was to find the fastest horse. Then, during the 1840s, the amazing technological breakthrough of the telegraph allowed people to communicate almost instantly. It’s hard for us today to appreciate the significance of that change and before people got used to it, the telephone changed everything once again.
By the 1960s and ’70s, centralization of communications was as powerful as it has ever been. There were just three national television networks, and they attracted 90 percent of the TV audience. Those same networks provided news for radio as well. In print, the Associated Press and United Press International provided just about all the national and international news read by the American public.
The trend towards centralization was everywhere. Rather than small businesses serving a local community, big corporations made their appearance. Oil, steel and railroad companies operated on a scale never before seen. The Sears catalog became a fixture in millions of homes and trains delivered the exact same products on the exact same terms to millions of distant households.
Government, of course, played a role in all of this. Sometimes it helped move things forward, and sometimes it was an obstacle to progress. But government never drove the process. Society changed and government adapted.
As society became more centralized, so did the government. Politicians were happy to ride the wave of societal trends as it brought them more power and money.
But the trends changed starting in the 1970s with the launch of cable television networks. That gave individuals more choices in the 1980s, and the Internet expanded those choices in the 1990s. Now we’ve reached a level of personalization powered by more than 100 million smartphones. The culture of individual choice and customization is so strong that no two of these smartphones are alike. We have different apps, music and more.
Over the past 30 years, as society has moved away from centralization, the political class has resisted. Government has grown ever more centralized. In fact, the federal government today directly controls a far larger chunk of the nation’s economy than it did just a generation or two ago.
That disconnect exists partly because politics and government always lag behind. It’s also partly because politicians are not thrilled with riding the new wave that disperses power away from the political class.
The disconnect cannot continue. Sooner or later, the politicians will concede and the government will catch up.
Simply put, a one-size-fits-all central government cannot survive in the iPad era.
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4)The World I've Known Has Come To An End
By Herb London - London Center for Policy Research
Cincinnati is not alone.
Across the nation, cities and states are finding funding for basic services being crowded out of their budgets by the rising cost of retirees' pensions and healthcare.
The Cincinnati initiative would have turned the public pension system into a 401(k) style-plan and require the city to pay off its unfunded liabilities in 10 years.
It failed 78 percent to 22 percent, an example of the opposition that cities face when trying to tackle the politically sensitive issue of funding retirees' benefits.
More and more cities, counties, and even some states will face the harsh reality of having to fix their pension systems or deal with a Detroit-style bankruptcy.
"This is happening in too many cities and towns across America, where social services, because they can be cut, are cut. Because pensions and bonds constitutionally cannot be cut, they're the protected class," Wall Street financial analyst Meredith Whitney told CNBC.
"I think you're going to see a real issue of neighbor against neighbor on these very issues," said Whitney, who recently co-founded Kenbelle Capital LP, a New York hedge fund.
Whitney argues in her recently released book, "Fate of the States: The New Geography of American Prosperity," that cities and states which delay addressing the crisis will witness a continued decline in growth.
A study by the Pew Center earlier this year looked at 61 cities — those with populations over 500,000 plus the largest city in each state — and found a total gap of $217 billion between pension and retiree healthcare obligations and the funding saved to pay those costs.
According to Pew, those cities had a total pension liability of $385 billion, with 74 percent funded, leaving a $99 billion shortfall.
The situation regarding retiree healthcare benefits in those cities is far worse, with a total of $126.2 billion of liabilities that are only 6 percent funded.
But here’s the real rub: experts are warning that many pension systems, those claiming they are well funded and those who say they aren’t, have all been using rosy projections about future investment returns.
In a recent editorial in Barron’s, Thomas Donlan writes that pension funds have “hidden the results with dubious financial reporting.”
He cites as just one example Detroit, which claimed as late as 2011 that their pension funds were 80 percent fully funded. New auditors found a $3.5 billion shortfall, a hole that pushed the city into bankruptcy.
Detroit, he says, was using the standard 8 percent return on assets, widely used by other funds. Donlan argues that is foolhardy to claim an 8 percent rate of return.
Consider that since January 1, 2001, the Dow Jones has appreciated, on average, a paltry 2.2 percent, with the S&P growing just 1.36 percent.
Instead, Donlan suggests pension funds use a 4 percent rate, the blended rate for no-risk Treasuries or a 5.5 percent rate, consistent with current corporate bond payouts. But if pension funds were to be honest and use such numbers, real unfunded liabilities would jump by a third or more.
The Pew Charitable Trusts study further identified nine cities that underperformed on two pension indicators, levels of funding along with the annual contribution percentage: Charleston; Chicago; Fargo, N.D.; Jackson, Miss.; Little Rock; New Orleans; Omaha; Philadelphia, and Portland.
Equally startling, Pew found numerous cities were woefully unprepared to finance healthcare benefit obligations.
"Only Los Angeles, Calif., and Denver, Colo., had even half of the money needed to fulfill their promises to employees. Thirty-three cities had set aside nothing to pay for this bill coming due," the research noted. Cincinnati was not among the cities ranked.
Many localities are seeing their operating budgets squeezed to pay for pension and healthcare retirement benefits.
The country's 250 largest cities saw spending for pensions increase to 10 percent of their general budgets in 2012, an increase of 7.75 percent since 2007, according to The Wall Street Journal.
The situation is no better for the states, which are also facing high burdens associated with worker's retirement costs.
The Chicago Sun-Times reported that an analysis of pension reform scenarios under consideration by the Illinois legislature "make clear that no matter what legislators do, including major pension cutting, a significant portion of the state's budget for the next 20 to 25 years will go toward paying pension bills, consuming 16 to 24 percent of the state’s general revenue fund annually."
Reform: No Easy Solutions
Steven Stanek of the Heartland Institute says there are no easy solutions when you get into situations that are as bad as states like Illinois, which has saved just 43 cents to cover every dollar of what it needs to pay 350,000 retirees and 500,000 current workers who are counting on pension checks.
"Enacting reform is made even harder because all policy is politics ultimately," Stanek tells Newsmax.
Stanek said that while rankings may differ depending on who is doing the number crunching and which data they survey, some states are present on all rankings.
"I would say from what I have seen the worst are Illinois, California, West Virginia, Oklahoma, New Hampshire, Louisiana, Alaska, Connecticut — all make the list," said Stanek.
A September report by the think tank State Budget Solutions said that state public employee retirement promises are underfunded by $4.1 trillion nationally. In addition, the report concluded that when combined, state public pension plans are just 39 percent funded.
The study found the five most poorly funded states are Illinois (24%), Connecticut (25%), Kentucky (27%), and Kansas (29%), along with Mississippi, New Hampshire, and Alaska tied at 30% funded.
State Budget Solution's Cory Eucalitto said in the report that for years the methodology used to rate public pension systems in the states has been too generous, allowing states to spin a rosier picture than reality truly reflected.
The generosity of the standards resulted in decisions this year by the Governmental Accounting Standards Board and by Moody's Investors Services to change the way they calculate state burdens.
"GASB and Moody's have joined a chorus of financial economists and other observers warning that pension funding practices are dangerous for both taxpayers and public employees alike," he writes.
Pension reform not only is causing a strain on local governments, but also on long-held political alliances.
California: The Future Has Arrived
Reform efforts advocated by Democratic mayors in Chicago and Detroit have both been vocally opposed by teacher and labor unions. The fissures have also arisen in San Francisco, where pension reform was one of several issues which resulted in Bay Area Transit Authority (BART) workers striking.
San Jose Mayor Chuck Reed announced in early October he would support a ballot measure for November 2014 that would amend California's Constitution to allow local governments to reduce pension expenses associated with their current employees. The proposal would not affect retiree benefits, but could allow modifications to future beneficiary plans.
With other cities in the state laboring under the weighty costs of pension obligations and retiree benefits, San Bernardino Mayor Pat Morris and Santa Ana Mayor Miguel Pulido joined Reed in submitting the ballot initiative to the state Attorney General.
"Typically, reform is being led by Democratic mayors. It's being resisted by leaders of public employee unions, who are also Democrats. California state legislators tend to side with the unions over the mayors, preferring the status quo — and the campaign contributions from unions — to an intramural fight," says Carl Cannon of RealClearPolitics.
Richard Dreyfuss, senior fellow at the Manhattan Institute, suggests several reforms are needed to avoid going off the fiscal cliff, including issuing new bonds to refinance existing liabilities.
Dreyfuss also advocates for comprehensive reform that will combine a transition to defined-contribution plans, such as a 401(k), with reforms to how pensions are funded. He believes the new pension plans should be funded as they are earned, to avoid burdening future employees and beneficiaries.
Dreyfuss is clear in stating that any reform is going to be politically unpalatable.
"The necessity for real reform is problematic for policymakers, who must deal with a workforce resistant to the loss of guaranteed monthly pension benefits; and for political constituencies, including government workers and their allies, whose support for defined-benefit pensions in the public sector stems as much from ideology as from financial self-interest," he wrote.
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4)The World I've Known Has Come To An End
By Herb London - London Center for Policy Research
There was a time not so long ago when I could select my own doctor. There was a time when I could choose my health insurance company. There was a time when everyone believed Marxism was a failure, an idea relegated to the ash heap of history. There was a time when class warfare occurred in other places far away, but Americans believed in opportunity, not sponging from others.
Was that really not so long ago? It is true President Obama said he would transform America. He has lived up to his promise. Our Constitution has been twisted into an unrecognizable document. Washington has become a lawless town where criminals are heroes and heroes are ignored. Peace through strength – the bipartisan belief that military preparedness preserves order – has been converted into peace through prayer. If you hope for the best, it just might occur.
Although racial profiling has been lambasted, its opponents base racial fairness on a race based test, i.e. the number of arrests must be equal to the number of a racial group in a given community. If crime is committed by a racial group that is disproportionate to its number in the population, that’s too bad.
Common sense is on vacation. People who have violated the law and sing misogynistic lyrics are rewarded as millionaires in the rap world. Teachers who engage youthful students in sexual escapades cannot be fired. The aggregate pension liability for retired police officers and firefighters in New York City is more than the salaries of active employees. Laws that Congress passes for the rest of America do not necessarily apply to it. And a congressman tells us that the Tea Party, based on a grassroots effort to limit the expansion of government, is equivalent to the KKK and if you have the temerity to disagree with him, you are a racist.
Four Americans killed in Benghazi defending the ambassador and the embassy are ignored by the Secretary of State who said, “What difference does it make.” American students are more likely to know the winner on “American Idol” than the authors of the Federalist Papers.
Sophistry is the language of politics and television news. “Fairness” is taking from some and giving to others. Taxes are referred to as “investments.” Adversaries are enemies and enemies are friends. Islam is a religion of peace. The use of poison gas is a red line – oh, I meant a dotted line. The IRS is an “independent agency.” A deadline was established for the introduction of Obamacare, but it wasn’t meant as a “deadline.” The president asserted and reasserted that “If you like your doctor or healthcare plan, you can keep it.” Lies are merely “misinterpretations.”
When there is so little to rely on, the basis for civilizational stability is undone. I observe tweeters on the street who communicate in 140 characters and cannot express a thoughtful opinion. Is it any wonder? Technology has given us many new opportunities, but these opportunities are saddled with toxins. So what if I can find out what you are having for dinner or who you are dating. Does it make a difference? All we have are distractions from what really matters.
What does matter are the interests of the nation. To my astonishment, the president has given Russia a veto over American foreign policy and the State Department has channeled foreign policy decisions through the United Nations, an organization reflexively opposed to American interests.
In surveying this landscape I realize that I am an alien in a foreign land. I don’t speak the language of puerile adolescents that dominate the media. I remain a patriot, albeit patriotism itself is an antediluvian idea. And I regard government’s coercive effort to redistribute wealth as theft. My world is at an end. There won’t be a funeral for the deceased nation, but there will be a lamentation. This is it.
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5)Coming Pension Meltdown: The 10 Most Troubled City System
By Jennifer G. Hickey
Voters in Cincinnati last week soundly defeated a ballot initiative which would have overhauled the pension system for public workers, leaving the city without a plan to deal with $872 million in unfunded liabilities.
Cincinnati is not alone.
Across the nation, cities and states are finding funding for basic services being crowded out of their budgets by the rising cost of retirees' pensions and healthcare.
The Cincinnati initiative would have turned the public pension system into a 401(k) style-plan and require the city to pay off its unfunded liabilities in 10 years.
It failed 78 percent to 22 percent, an example of the opposition that cities face when trying to tackle the politically sensitive issue of funding retirees' benefits.
More and more cities, counties, and even some states will face the harsh reality of having to fix their pension systems or deal with a Detroit-style bankruptcy.
"This is happening in too many cities and towns across America, where social services, because they can be cut, are cut. Because pensions and bonds constitutionally cannot be cut, they're the protected class," Wall Street financial analyst Meredith Whitney told CNBC.
"I think you're going to see a real issue of neighbor against neighbor on these very issues," said Whitney, who recently co-founded Kenbelle Capital LP, a New York hedge fund.
Whitney argues in her recently released book, "Fate of the States: The New Geography of American Prosperity," that cities and states which delay addressing the crisis will witness a continued decline in growth.
A study by the Pew Center earlier this year looked at 61 cities — those with populations over 500,000 plus the largest city in each state — and found a total gap of $217 billion between pension and retiree healthcare obligations and the funding saved to pay those costs.
According to Pew, those cities had a total pension liability of $385 billion, with 74 percent funded, leaving a $99 billion shortfall.
The situation regarding retiree healthcare benefits in those cities is far worse, with a total of $126.2 billion of liabilities that are only 6 percent funded.
But here’s the real rub: experts are warning that many pension systems, those claiming they are well funded and those who say they aren’t, have all been using rosy projections about future investment returns.
In a recent editorial in Barron’s, Thomas Donlan writes that pension funds have “hidden the results with dubious financial reporting.”
He cites as just one example Detroit, which claimed as late as 2011 that their pension funds were 80 percent fully funded. New auditors found a $3.5 billion shortfall, a hole that pushed the city into bankruptcy.
Detroit, he says, was using the standard 8 percent return on assets, widely used by other funds. Donlan argues that is foolhardy to claim an 8 percent rate of return.
Consider that since January 1, 2001, the Dow Jones has appreciated, on average, a paltry 2.2 percent, with the S&P growing just 1.36 percent.
Instead, Donlan suggests pension funds use a 4 percent rate, the blended rate for no-risk Treasuries or a 5.5 percent rate, consistent with current corporate bond payouts. But if pension funds were to be honest and use such numbers, real unfunded liabilities would jump by a third or more.
| City | Total Liability | % Funded |
| Charleston, W. Va. | $270 million | 24 |
| Omaha, Neb. | $1.43 billion | 43 |
| Portland, Ore. | $5.46 billion | 50 |
| Chicago, Ill. | 24.97 billion | 52 |
| Little Rock, Ark. | $498 million | 59 |
| Wilmington, Del. | $364 million | 59 |
| Boston, Mass. | $2.54 billion | 60 |
| Atlanta, Ga. | $3.17 billion | 60 |
| Manchester, N.H. | $436 million | 60 |
| New Orleans, La. | $1.99 billion | 61 |
The Pew Charitable Trusts study further identified nine cities that underperformed on two pension indicators, levels of funding along with the annual contribution percentage: Charleston; Chicago; Fargo, N.D.; Jackson, Miss.; Little Rock; New Orleans; Omaha; Philadelphia, and Portland.
Equally startling, Pew found numerous cities were woefully unprepared to finance healthcare benefit obligations.
"Only Los Angeles, Calif., and Denver, Colo., had even half of the money needed to fulfill their promises to employees. Thirty-three cities had set aside nothing to pay for this bill coming due," the research noted. Cincinnati was not among the cities ranked.
Many localities are seeing their operating budgets squeezed to pay for pension and healthcare retirement benefits.
The country's 250 largest cities saw spending for pensions increase to 10 percent of their general budgets in 2012, an increase of 7.75 percent since 2007, according to The Wall Street Journal.
The situation is no better for the states, which are also facing high burdens associated with worker's retirement costs.
The Chicago Sun-Times reported that an analysis of pension reform scenarios under consideration by the Illinois legislature "make clear that no matter what legislators do, including major pension cutting, a significant portion of the state's budget for the next 20 to 25 years will go toward paying pension bills, consuming 16 to 24 percent of the state’s general revenue fund annually."
Reform: No Easy Solutions
Steven Stanek of the Heartland Institute says there are no easy solutions when you get into situations that are as bad as states like Illinois, which has saved just 43 cents to cover every dollar of what it needs to pay 350,000 retirees and 500,000 current workers who are counting on pension checks.
"Enacting reform is made even harder because all policy is politics ultimately," Stanek tells Newsmax.
Stanek said that while rankings may differ depending on who is doing the number crunching and which data they survey, some states are present on all rankings.
"I would say from what I have seen the worst are Illinois, California, West Virginia, Oklahoma, New Hampshire, Louisiana, Alaska, Connecticut — all make the list," said Stanek.
A September report by the think tank State Budget Solutions said that state public employee retirement promises are underfunded by $4.1 trillion nationally. In addition, the report concluded that when combined, state public pension plans are just 39 percent funded.
The study found the five most poorly funded states are Illinois (24%), Connecticut (25%), Kentucky (27%), and Kansas (29%), along with Mississippi, New Hampshire, and Alaska tied at 30% funded.
State Budget Solution's Cory Eucalitto said in the report that for years the methodology used to rate public pension systems in the states has been too generous, allowing states to spin a rosier picture than reality truly reflected.
The generosity of the standards resulted in decisions this year by the Governmental Accounting Standards Board and by Moody's Investors Services to change the way they calculate state burdens.
"GASB and Moody's have joined a chorus of financial economists and other observers warning that pension funding practices are dangerous for both taxpayers and public employees alike," he writes.
Pension reform not only is causing a strain on local governments, but also on long-held political alliances.
California: The Future Has Arrived
Reform efforts advocated by Democratic mayors in Chicago and Detroit have both been vocally opposed by teacher and labor unions. The fissures have also arisen in San Francisco, where pension reform was one of several issues which resulted in Bay Area Transit Authority (BART) workers striking.
San Jose Mayor Chuck Reed announced in early October he would support a ballot measure for November 2014 that would amend California's Constitution to allow local governments to reduce pension expenses associated with their current employees. The proposal would not affect retiree benefits, but could allow modifications to future beneficiary plans.
With other cities in the state laboring under the weighty costs of pension obligations and retiree benefits, San Bernardino Mayor Pat Morris and Santa Ana Mayor Miguel Pulido joined Reed in submitting the ballot initiative to the state Attorney General.
"Typically, reform is being led by Democratic mayors. It's being resisted by leaders of public employee unions, who are also Democrats. California state legislators tend to side with the unions over the mayors, preferring the status quo — and the campaign contributions from unions — to an intramural fight," says Carl Cannon of RealClearPolitics.
Richard Dreyfuss, senior fellow at the Manhattan Institute, suggests several reforms are needed to avoid going off the fiscal cliff, including issuing new bonds to refinance existing liabilities.
Dreyfuss also advocates for comprehensive reform that will combine a transition to defined-contribution plans, such as a 401(k), with reforms to how pensions are funded. He believes the new pension plans should be funded as they are earned, to avoid burdening future employees and beneficiaries.
Dreyfuss is clear in stating that any reform is going to be politically unpalatable.
"The necessity for real reform is problematic for policymakers, who must deal with a workforce resistant to the loss of guaranteed monthly pension benefits; and for political constituencies, including government workers and their allies, whose support for defined-benefit pensions in the public sector stems as much from ideology as from financial self-interest," he wrote.
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6)
Stephens: Axis of Fantasy vs. Axis of Reality
France, Israel and Saudi Arabia confront an administration conducting a make-believe foreign policy.
By Bret Stepehns
When the history of the Obama administration's foreign policy is written 20 or so years from now, the career of Wendy Sherman, our chief nuclear negotiator with Iran, will be instructive.
In 1988, the former social worker ran the Washington office of the Dukakis campaign and worked at the Democratic National Committee. That was the year the Massachusetts governorcarried 111 electoral votes to George H.W. Bush's 426. In the mid-1990s, Ms. Sherman was briefly the CEO of something called the Fannie Mae Foundation, supposedly a charity that was shut down a decade later for what the Washington Post WPO -1.05%called "using tax-exempt contributions to advance corporate interests."
From there it was on to the State Department, where she served as a point person in nuclear negotiations with North Korea and met with Kim Jong Il himself. The late dictator, she testified, was "witty and humorous," "a conceptual thinker," "a quick problem-solver," "smart, engaged, knowledgeable, self-confident." Also a movie buff who loved Michael Jordan highlight videos. A regular guy!
Benjamin Netanyahu with America's top diplomat.Reuters
Later Ms. Sherman was to be found working for her former boss as the No. 2 at the Albright-Stonebridge Group before taking the No. 3 spot at the State Department. Ethics scolds might describe the arc of her career as a revolving door between misspending taxpayer dollars in government and mooching off them in the private sector. But it's mainly an example of failing up—the Washingtonian phenomenon of promotion to ever-higher positions of authority and prestige irrespective of past performance.
This administration in particular is stuffed with fail-uppers—the president, the vice president, the secretary of state and the national security adviser, to name a few—and every now and then it shows. Like, for instance, when people for whom the test of real-world results has never meant very much meet people for whom that test means everything.
That's my read on last weekend's scuttled effort in Geneva to strike a nuclear bargain with Iran. The talks unexpectedly fell apart at the last minute when French Foreign Minister Laurent Fabius publicly objected to what he called a "sucker's deal," meaning the U.S. was prepared to begin lifting sanctions on Iran in exchange for tentative Iranian promises that they would slow their multiple nuclear programs.
Not stop or suspend them, mind you, much less dismantle them, but merely reduce their pace from run to jog when they're on Mile 23 of their nuclear marathon. It says something about the administration that they so wanted a deal that they would have been prepared to take this one. This is how people for whom consequences are abstractions operate. It's what happens when the line between politics as a game of perception and policy as the pursuit of national objectives dissolves.
The French are not such people, believe it or not, at least when it comes to foreign policy. Speculation about why Mr. Fabius torpedoed the deal has focused on the pique French President François Hollande felt at getting stiffed by the U.S. on his Mali intervention and later in the aborted attack on Syria. (Foreign ministry officials in Paris are still infuriated by a Susan Rice tirade in December, when she called a French proposal to intervene in Mali "crap.")
But the French also understand that the sole reason Iran has a nuclear program is to build a nuclear weapon. They are not nonchalant about it. The secular republic has always been realistic about the threat posed by theocratic Iran. And they have come to care about nonproliferation too, in part because they belong to what is still a small club of nuclear states. Membership has its privileges.
This now puts the French at the head of a de facto Axis of Reality, the other prominent members of which are Saudi Arabia and Israel. In this Axis, strategy is not a game of World of Warcraft conducted via avatars in a virtual reality. "We are not blind, and I don't think we're stupid," a defensive John Kerry said over the weekend on "Meet the Press," sounding uncomfortably like Otto West (Kevin Kline) from "A Fish Called Wanda." When you've reached the "don't call me stupid" stage of diplomacy, it means the rest of the world has your number.
Now the question is whether the French were staking out a position at Geneva or simply demanding to be heard. If it's the latter, the episode will be forgotten and Jerusalem and Riyadh will have to reach their own conclusions about how to operate in a post-American Middle East. If it's the former, Paris has a chance to fulfill two cherished roles at once: as the de facto shaper of European policy on the global stage, and as an obstacle to Washington's presumptions to speak for the West.
A decade ago, Robert Kagan argued that the U.S. operated in a Hobbesian world of power politics while Europe inhabited the Kantian (and somewhat make-believe) world of right. That was after 9/11, when fecklessness was not an option for the U.S.
Under Mr. Obama, there's been a role reversal. The tragedy for France and its fellow members of its Axis is that they may lack the power to master a reality they perceive so much more clearly than the Wendy Shermans of the world, still failing up..
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