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Response to my two story outhouse from a long time friend and fellow memo reader. (See 1 below.)
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Obama has worked hard at trying to make friends among our enemies. I would grade his success less than F.
However, in one regard he deserves an A plus having succeeded in making an enemy of a former friend. That friend's name is 'profit.'
Profit, if you have forgotten, is the by product of successful Capitalism.
Capitalism, Yankee ingenuity, weat labor geography and natural resources made our nation the envy of the world.
Now that is something that truly needs changing because by sticking out we attract jealous detractors like a magnet and Obama wants America to be loved but neither respected nor feared.
Obama's plan for our nation is 'affirmative destruction.' (See 2 and 2a below.)
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Just because the author wrote it does not make it so of course but his logic and statistics are quite compelling. (See 3 below.)
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The old game of stealing elections is being resurrected. As a result of fraud the biggest joke in recent politics, Al Franken, was elected to the Senate and that is no joke.(See 4 below.)
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Finding politicians with backbone is like looking for a needle in a haystack. They generally live a life of compromise, walk a narrow line between conflicting interests in order to retain their seats.
Every once in a while a watershed election comes along and sweeps some wimps out and perhaps 2010 will be such an election. (See 5 below.)
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Obama backs off a bit but really no one should expect a change in his general attitude. Obama simply needed to give Mitchell some breathing room and to calm discontent among his Liberal Jewish supporters.
In the end Obama is unlikely to trust Netanyahu or Netanyahu, Obama. Too much bad blood caused by Obama's bullying tactics. One has the right to question whether our black president, having sat and listened for 20 years to biased tripe from the likes of Minister Wright and other radical associates, also had his heart and thinking blackened.
Meanwhile, should Abbas continue to insist America stick it to Israel that will also prove a no-starter.(See 6 and 6a below.)
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Ken Blackwell poses an interesting thought but I cannot buy his analogy because Israel is not at war with Iran and has only been attacked by its surrogates in the past.
My heart may be with Blackwell but not my head.(See 7 below.)
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Ibrahim's thoughts suggest killing radical Islamist leaders is a positive but does not produce the significant results as many think.
Since the White House no longer thinks in terms of radical Islamism, it might revoke Ibrahim's status as a guest lecturer at the National Intelligence Defense College.
Can't allow a radical lecturer to be stirring up trouble among our 'friends' who seek to destroy our culture. (See 8 below.)
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In a discussion with my youngest daughter and her husband last night at dinner we explored "The Fair Tax" concept.
Year ago I wrote something for my immediate family entitled "Street Person." I discussed my views on a variety of topics and made some predictions. I have lived to see most of my predictions and concerns come to pass. In this treatise I discussed the critical need to change our tax policies and suggested a "Flat Tax" approach.
Whether we turn to a "Flat Tax" or "Fair Tax" method to raise revenue is not as important as they need to change the way we raise taxes so that we capture the sub-terranean non-payers as well as encourage capital to return to this nation and with it the greater probability of reviving our economy and re-employing our citizens.
Congress will resist because changing the tax approach would basically mean politicians would lose control over dispensing favors to vested interests who then contribute to their campaigns. The concept of doing what is best for the nation went out with the 16th Amendment - thanks President Wilson.
Once we improve the revenue stream we still are left with the problem of what to do about unbridled spending. That is the other side of the coin that must be addressed and that too means getting rid of a lot of deadwood in Congress. That is what Tea Drinkers are all about and that is not racist. In fact not to make a change is actually racist because our tax system is divisive, anti-Capitalistic and creates dependency. (See 9 and 9a below.)
Stop and think :
Obama said he would raise taxes on the wealthiest and spare those making
$250,000 - proved wrong.
He said the health care bill would improve health and lower costs - proved wrong.
He now is contemplating raising taxes through a VAT System which is retrogressive taxation and helped to cripple European economies. Obama's deficit spending is getting ready to crush our economy and has definitely impacted our recovery. Again another 'lie.'
Finally, Obama sings the virtues of the private sector and Capitalism but steadfastly pursues bringing more of our economy under the government's stifling umbrella. More messiah double talk.
This is why I assert Obama is knowingly engaged in 'affirmative destruction.'
It is as if Obama wants to bring America to its economic knees so we can share the poverty his brand of artful Socialism will breed. And for all these reasons and the many others I have discuss I deem him to be an unmitigated disaster for our nation and it is little wonder so many Americans are up in arms.
If being against Obama and all that he stands for and wishes to impose on our nation is seditious then I am glad to be counted among those so branded.
PJ is correct - we need less A thinking! So lets hear it from PJ O'Rourke. (See 10 below.)
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Dick
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1) I used to think that I could become rich by inventing a "bureaucratic laxative." With all of the crap flowing out of Washington these days, I'm afraid someone beat me to it.
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2)Washington Possessed
By David Malpass
My Nov. 10, 2008 column warned big government was walking away as the knockout winner over the private sector in the financial crisis. But it's going much further than I'd feared. The federal government has accelerated its takeover of the economy, adding a mega-trillion-dollar health care entitlement, despite the damage to health care and the national debt this will cause. Washington is frenetically cutting unfunded checks. Capital is being channeled away from small businesses toward big government. Looming on the horizon is the bailout of state and local governments, which will concentrate more and more of the nation's debt onto the diminishing base of federal taxpayers.
Washington's excess spending is now running $1.5 trillion annually, and both the Treasury and the Federal Reserve are relying heavily on short-term credits for funding. The marketable national debt has ballooned to more than $8 trillion, but wait ... the Obama Administration has budgeted an increase to $20 trillion over the next few years, bringing it to more than 90% of GDP. Even that huge sum--$100,000 for every working-age American--doesn't include the rapidly escalating debts of Fannie Mae ( FNM - news - people ) and Freddie Mac ( FRE - news - people ) or the government's unfunded liabilities for Social Security and Medicare. And to keep the debt estimate down the budgeteers are making wishful assumptions that millions of high-paying jobs will reappear and health care reform will pay for itself.
Every month Congress adds more federal powers and debt, voting as if its allegiance were to Washington, city of cranes, instead of to the voters and taxpayers. The financial services reform bill does little to reopen lending to small businesses but adds huge new federal powers, including the imposition of corporate taxes, to create a giant new bailout fund (think Son of Tarp). And the President's ten-year $45 trillion spending budget makes crystal clear Washington's hunger for a value-added tax. After the health care law it's the next huge step in Washington's expansion.
Given temporarily low federal borrowing costs, the government can concentrate the nation's debt onto federal taxpayers without properly recording the cost. This process is stimulative in the short run--more debt for less cost--but is clearly dangerous in the longer term. The government is not only choosing health care treatments and mortgage clauses but also has taken responsibility for allocating credit throughout the economy--this state versus that state, this industry versus that one.
Delaying the day of reckoning, the Fed has committed its institutional credibility to monetary supercharging, as it did in 2003. By arbitrarily pegging the interest rate near zero for big banks and the Treasury, we're living in a surreal framework in which the more federal debt, the better for GDP. Except that there are three huge losers: savers earning 0%, small businesses not hooked into zero-rate loans and future taxpayers saddled with the debt when interest rates zoom.
How badly this ends depends on whether government spending can be controlled. If we knew today that Congress, New York or California would roll back spending, we might be cautiously optimistic. However, when governments negotiate budgets the taxpayer usually takes a backseat. More likely is the Greek model, in which government spending cuts generate such massive public protests that the politicians engaged in the negotiation concede, providing little true reform. Like as not, our large, cheaply financed federal government will be generous to cash-strapped state and local governments. The defense is that it's the taxpayers' money, and the debt won't have to be paid for years. Live a little.
Longer term, the critical question is what the interest rate will be to finance the new mountain of federal debt. Will the $20 trillion in national debt be financed at today's 4% rate or will it require 7%? It matters a lot to the budget and financial markets.
In the near term the financing rate depends on the Fed (though it denies that it controls bond yields). Over the next few years, however, the financing rate will depend on the market's perception of the U.S.' ability to pay all the debt on time and with dollars that still have value.
It's not a hopeless situation. Whether through luck or foresight, federal employees now have personal retirement accounts rather than the unfunded pensions common in states and municipalities. The result is that Washington won't have to fight the divisive employee pension battles that are crushing state and local budgets.
Can the American people retake Washington, imposing the checks and balances needed to cut government spending quickly enough to avoid crisis? Maybe. Constitutional restraints on federal expansionism are making a comeback, but it's going to be a long, hard fight.
David Malpass, global economist, president of Encima Global LLC; Paul Johnson, eminent British historian and author; Amity Shlaes, senior fellow in economic history at the Council on Foreign Relations; and Lee Kuan Yew, minister mentor of Singapore.
2a)CMS Actuary Finds ObamaCare Bends Cost Curve Up
By Philip Klein
The chief actuary for the Centers for Medicare and Medicaid Services, a division of the Department of Health and Human Services, has released a report showing that the new national health care law will increase health care spending in the United States beyond already unsustainable levels.
During the health care debate, President Obama argued that we couldn’t afford not to pass his brand of health care reform.
"Make no mistake: The cost of our health care is a threat to our economy," Obama told the American Medical Association last June. "It's an escalating burden on our families and businesses. It's a ticking time bomb for the federal budget. And it is unsustainable for the United States of America."
But for all the talk over the past year about “bending the cost curve down,” CMS, the agency that is tasked with tracking national health care expenditures, has now projected that the new law will actually bend the cost curve in the opposite direction. That is, up.
Not surprisingly, CMS notes that, “Numerous studies have demonstrated that individuals and families with health insurance use more health services than otherwise-similar persons without insurance.” Thus, expanding coverage will mean greater usage of health care services.
In that same AMA speech, Obama said more specifically, "If we fail to act, one out of every five dollars we earn will be spent on health care within a decade."
But according to CMS, after the passage of ObamaCare, health care spending will eat more than one out of five dollars in the economy. Specifically, by 2019, health care spending is now projected to represent 21 percent of GDP, as opposed to an estimated 20.8 percent had the new law not passed. In dollar terms, that translates into $311 billion more in spending over the next decade. I’ve created the graph below to demonstrate this.
Liberals could respond to this report by arguing that covering 34 million additional people – as CMS projects -- justifies an increase in spending that is modest relative to the more than $35 trillion we’re projected to spend on health care over the next decade. But as demonstrated by Obama’s statements above, of which I could have found numerous others, the law was sold to the American people on the basis of the fact that it would substantially reduce costs that were crippling our economy.
In the rest of the 38-page report, actuary Richard Foster confirms many of the arguments conservatives have been making throughout the health care process. For instance:
-- By delaying the major spending provisions until 2014, Democrats hid the true 10-year cost of their legislation: “Because of these transition effects and the fact that most of the coverage provisions would be in effect for only 6 of the 10 years of the budget period, the cost estimates shown in this memorandum do not represent a full 10-year cost for the new legislation,” CMS says.
-- Medicare cuts are unlikely to materialize: The CMS report cautions that “it is important to note that the estimated savings shown in this memorandum for one category of Medicare provisions may be unrealistic.” The reason is that if the proposed cuts to payments to hospitals, nursing facilities, and home health agencies go into effect, “roughly 15 percent of Part A providers would become unprofitable within the 10-year projection period...” The only way to resolve this problem would be to prevent the cuts, which in turn would eat up some of the projected savings from the legislation.
-- You can’t double count the Medicare savings: While in theory Medicare Part A cuts would extend solvency of the program by 12 years, the actuary writes, “In practice the improved (Medicare hospital insurance) financing cannot be simultaneously used to finance other Federal outlays (such as the coverage expansions) and to extend the trust fund, despite the appearance of this result from the respective accounting conventions.”
-- The CLASS Act is a ponzi scheme: One of the most under-reported aspects of the new health care legislation was that it creates a smaller new entitlement within the massive entitlement – a program pushed by Ted Kennedy that would allow individuals to purchase long-term care insurance through the government. But the program begins collecting premiums before paying out benefits, making it produce surpluses in the early years that Democrats claimed as deficit savings. However, CMS notes that, “After 2015, as benefits are paid, the net savings from this program will decline; in 2025 and later, projected benefits exceed premium revenues, resulting in a net Federal costs in the longer term.”
The report goes on to say that the CLASS program is likely to be used by those with more health problems, meaning it faces “a significant risk of failure as a result of adverse selection of participants.”
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3)Is the US Facing a Cash Crunch?
By Gordon T. Long
The US cash-management challenge is significant, and any surprises or further delays in economic rebound will likely trigger serious market reactions.
The US government is caught in a cash vise and is being squeezed between too slow a rebound in tax revenues and the limitations on how quickly it can realistically take its funding requirements to the US Treasury auction. The US Treasury was saved in March by what the government reports as “proprietary receipts.” Those receipts require an explanation that isn’t well publicized since it begs the question of what happens next month without the $117 billion journal entry.
The March cash management numbers from the US Treasury’s Financial Management Service are alarming and in my estimation have become perilous. The economy is simply taking much too long to recover, which is affecting urgently required tax receipts.
If the US Treasury issues even higher debt supply to the market too fast, it threatens driving up interest rates prematurely and thereby elevating already strained government financing costs despite already increased supply. Since the US government has steadily reduced maturity duration over the last few years to obfuscate a growing debt problem, the issue is compounded by the rapidly increasing levels of rollover funding now additionally being required.
It’s a tricky balance between gauging how fast tax receipts will return and what supply the monthly Treasury auction is able to absorb. Cash flow is the primary reason small businesses fail unexpectedly. This is also why sovereign governments fail abruptly.
We witnessed in Greece what happens when investors get nervous. Yields not only spike but typically move to even higher levels than most originally thought possible.
US Treasury Cash Requirements
On April 14 the Financial Management Service, a bureau of the US Department of the Treasury, released its Monthly Treasury Statement for March 2010. I was waiting for it because of what I saw in February: The gap between receipts and outlays was widening disturbingly.
I knew the US Treasury was going to have to pull a rabbit out of a hat, or we might see a similar scare in the US Treasury auction, with a spike in treasury yields that occurred in Greece. What was reported was a mystery and for those that read Extend & Pretend: Gaming the US Tax Payer, I’ll call this Suspicious Clue #8.
The report shows US Treasury receipts were down disturbingly and almost all government outlays were up. I personally have had Profit & Loss responsibility on numerous occasions during my career and I would have been apprehensive facing the auditors or board of directors with such a blatant example of mismanagement. Absolutely no cuts in expenses, with falling revenues, all made to marginally appear better than the February report by a single line item called “other.” Executives get fired for such a report but governments just carry on until the inevitable crisis event finally occurs. Then the traditional blame game begins, blame is assigned and belated and poorly formulated policy responses are enacted.So what is this “other”? When you examine the Outlay Ledger of the Department of the Treasury for March 2010 (below), you see it to be a one-time item classified as a negative outlay. For the non accountants, this is a government receipt that is placed in the outlays as a negative amount, thereby showing government outlays to be smaller than they otherwise would have been. Though this is acceptable accounting, it would lead to the wrong conclusions, unless you read the details buried in the back pages. This “other” is referred to as a “Proprietary Receipt from the Public.”
An IRS document explains just what that means in an accounting context (source: 04-13-10 The Incredible Shrinking Deficit Salon.com):
Proprietary Receipts from the Public are collections from outside the Government that are deposited in receipt accounts that arise as a result of the Government’s business-type or market-oriented activities. Among these are interest received, proceeds from the sale of property and products, charges for non-regulatory services, and rents and royalties.
This is a $117.3 billion amount! The total 2010 US tax receipts for US corporations is only budgeted to be $157 billion!
My investigations suggest that it’s likely TARP (Troubled Asset Relief Program) money being returned to the US Treasury, along with a slowdown in TARP issuance versus budget. Assuming this is the case, and not simply an aircraft carrier or two we’ve sold and are now leasing back like California is doing with all state-owned buildings, we still have a major problem. What happens next month? The TARP fund returns will stop or we will run out of aircraft carriers. Is unemployment going to surge or are corporate tax receipts going to expand by over $117 billion next month?
Timothy Geithner and the US Treasury somehow dodged the bullet because of “other” this month. How does it look for next month for cash management? Let’s consider tax receipts to see if there is a possible rabbit in the hat there.
Tax Receipts
You personally met your April 15 tax filing deadline and you likely took some consolation in your tax frustrations by knowing you weren’t alone. The quiet truth is you’re becoming more alone each year if you haven’t understood the new realities of the US tax game. Forty-seven percent of Americans (source: Nearly Half of US Households Escape Fed Income Tax -- AP) and two-thirds of US corporations (source: 04-11-04 Most US Firms Paid No Income Taxes in '90s -- Boston Globe) will pay no taxes in 2010. Where do you fit? These are pretty startling revelations to most of us and don’t bode well to fixing the monthly Treasury cash requirements quickly, especially with unemployment still stubbornly elevated.
Personal Income Tax
About 47 percent will pay no federal income taxes at all for 2009. Either their incomes were too low, or they qualified for enough credits, deductions and exemptions to eliminate their liability. That's according to projections by the Tax Policy Center, a Washington research organization.
In recent years, credits for low- and middle-income families have grown so much that a family of four making as much as $50,000 will owe no federal income tax for 2009, as long as there are two children younger than 17, according to a separate analysis by the consulting firm Deloitte Tax.
Tax cuts enacted in the past decade have been generous to wealthy taxpayers, too, making them a target for President Barack Obama and Democrats in Congress. Less noticed were tax cuts for low- and middle-income families, which were expanded when Obama signed the massive economic recovery package last year.
The result is a tax system that exempts almost half the country from paying for programs that benefit everyone, including national defense, public safety, infrastructure and education. It is a system in which the top 10 percent of earners -- households making an average of $366,400 in 2006 -- paid about 73 percent of the income taxes collected by the federal government.
Example
The family was entitled to a standard deduction of $11,400 and four personal exemptions of $3,650 apiece, leaving a taxable income of $24,000. The federal income tax on $24,000 is $2,769. With two children younger than 17, the family qualified for two $1,000 child tax credits. Its Making Work Pay credit was $800 because the parents were married filing jointly. The $2,800 in credits exceeds the $2,769 in taxes, so the family makes a $31 profit from the federal income tax. That ought to take the sting out of April 15.
With the government presently talking about once again extending unemployment benefits, it appears we have more downside than upside on the income tax revenue receipt line item going forward.
Corporate Tax
The Center for American Progress reported in 2004, while fighting President George W Bush’s further cuts in corporate taxation:
The news that more than 60 percent of US corporations failed to pay any federal taxes from 1996 through 2000 when corporate profits were soaring and that corporate tax receipts had fallen to just 7.4 percent of overall federal tax revenue in 2003 -- the lowest since 1983 and the second-lowest rate since 1934 -- is an outrage. But it should come as no surprise to anyone who has been paying attention to national tax policy over the past few years. The General Accounting Office (GAO) report also found that an astonishing 94 percent of corporations reported tax liability of less than 5 percent of their total income during the same time period.
The last special General Accounting Office (GAO) study concerning corporate taxation was in 2004 and it showed:
The corporate income tax rate is ostensibly 35 percent, but companies are able to reduce their effective burden by claiming various deductions and credits. US companies paid an average of $11.88 (1.19 percent) in corporate taxes for every $1,000 in gross receipts, the study said.
Foreign-owned companies fared better in some respects than their US-based competitors. The report found that 71 percent of foreign-controlled corporations paid no taxes on their US income, while 89 percent had liabilities of less than 5 percent of their income.
The GAO didn't attempt to determine why so many companies were able to avoid paying taxes. It said possible explanations included legitimate deductions for current-year operating losses, losses carried forward from previous years, and sufficient credits to offset any tax liabilities. In addition, it said improper pricing of transactions between US and foreign operations could contribute to tax avoidance.
The percentage of federal tax collections paid by corporations has tumbled from a high of 39.8 percent in 1943 to a low of 7.4 percent last year. It ranged from 10 percent to 11 percent in 1996-2000, the period studied by the GAO. (Boston Globe 04-11-04)
In 2005 the GAO issued another report. The Washington Post’s analysis in "Many Firms Didn’t Pay Taxes" highlighted:
About two-thirds of corporations operating in the United States did not pay taxes annually from 1998 to 2005. In 2005, after collectively making $2.5 trillion in sales, corporations gave a variety of reasons on their tax returns to account for the absence of taxable revenue. The most frequently listed included the cost of producing their goods, salary expenses and interest payments on their debt, the report said. The GAO did not analyze whether the firms had profits that should have been taxed.
Sen. Byron L. Dorgan (D-N.D.) called the findings "a shocking indictment of the current tax system."
"It's shameful that so many corporations make big profits and pay nothing to support our country," he said. "The tax system that allows this wholesale tax avoidance is an embarrassment and unfair to hardworking Americans who pay their fair share of taxes. We need to plug these tax loopholes and put these corporations back on the tax rolls."
Eric Toder, a senior fellow at the Urban Institute, said the vast majority of corporations are small businesses and start-ups that have adopted a corporate structure that allows them to lower their tax bills.
"I'm not trying to imply that there aren't tax-compliance issues among small corporations," he said. "But when you are talking about businesses that size, I would suspect the norm would be to not pay taxes, and there's nothing nefarious about that." Toder had not yet seen the GAO study.
A greater proportion of large corporations pay taxes, according to the GAO. In 2005, about 28 percent of large corporations paid no taxes. Of the 1.3 million corporations included in the study, 998 were categorized as "large."
Dorgan and Sen. Carl M. Levin (D-Mich.) requested the report out of concern that some corporations were using "transfer pricing" to reduce their tax bills. The practice allows multi-national companies to transfer goods and assets between internal divisions so they can record income in a jurisdiction with low tax rates.
The GAO said data on transfer pricing were scarce. Instead, it compared the percentages of foreign- and U.S.-controlled corporations that are paying taxes.
In general, the GAO found that slightly more foreign firms paid no taxes. From 1998 to 2005, 68 percent of foreign-controlled corporations sent nothing to the Internal Revenue Service, compared with 66 percent of U.S. companies. The report noted in an opening paragraph, however, that the GAO did not study whether the foreign companies were using transfer pricing.
Still, Levin said: "This report makes clear that too many corporations are using tax trickery to send their profits overseas and avoid paying their fair share in the United States."
It’s only become worse, with President George W. Bush tax cuts and corporate-friendly tax policy. President Barack Obama has been too preoccupied with spending to consider revenue receipts as a priority.
Additionally, offshore tax accounting is completely un-policed and highly secretive with approximately 30 countries serving as tax havens to help corporations avoid taxes. The addition of $605 trillion derivatives market now makes it almost impossible to police global corporations from tax avoidance.
When we compare corporate tax receipts to Nominal GDP we see huge disparities that are now built into the US Corporate Taxation policy. When GDP was growing, US Taxation wasn’t. The effective rates after loopholes and offshore accounting created the following results.
A Horrific Chart
This alarming chart suggests one or more of three possibilities:
1. There’s no relationship between corporate taxes and GDP.
2. Corporate pretax profits have seen near exponential growth over the last 30 years without being reflected in US taxes receipts.
3. Pretax corporate profits have become more and more an offshore phenomenon.
In an analysis of taxes paid by 275 of the largest U.S. corporations, the liberal watchdog group Citizens for Tax Justice found that effective corporate tax rates have fallen by 20 percent since 2001, even as pretax profits jumped 26 percent. Between 2001 and 2003, the 275 companies paid taxes totaling 18.4 percent on their total profits, about half the 35 percent corporate income tax rate. Of the 275, 82 either paid no taxes or received large refunds in at least one of the past three years. (The Washington Post 12-26-04)
Investors are operating under the notion that an improvement in the economy and employment will alleviate the pressures on the Treasury auction. This notion I believe is misplaced. Though I’m skeptical about significant improvements in either the economy or employment, this view is moot in comparison to what will actually be required to make a material difference to tax receipts. The problems described above are intractable without major congressional policy initiatives. Congress is presently doing nothing to address them. In fact they’re headed in absolutely the opposite direction.
Corporate and personal taxes aren’t going to materially fix the US cash crunch short-term.
So the question is even more difficult to answer. Where will tax receipts come from to keep the US Treasury from being forced to place accelerating supply on the monthly Treasury auction?
Debt Issuance
I know many of you are saying we’ll just be forced to place more supply on the Treasury auction and accept higher rates. As I mentioned earlier, the US has already moved down the duration curve steadily over the last few years to make increasing debt levels less onerous. It obviously comes with huge risk, considering interest rates are at all-time historic lows.
If we were forced to refinance the national debt at 5.5% versus the present average maturity of just over 2%, we’d have a serious problem. We need to place corporate tax receipts versus interest payment rate charges in perspective.
This is too far out to be critical to our monthly cash management concerns, but is still a major strategic consideration affecting short-term US Treasury auction options. Closer in however, the US Treasury is obviously caught in a vise about not pushing rates up any faster than absolutely necessary for concern that in the not-too-distant future the very existence of the US and its ability to service its debt may be at stake.
Conclusion
The US cash-management challenge is significant. Taking out this month’s “plug” number, any surprises or further delays in economic rebound will likely trigger serious market reactions.
"This story is not going to stop at the end of the year. There is inertia in the deterioration of credit metrics."
-- Moody’s Investor Services
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4)Wisconsin and the Voter Fraud Agenda: Democrats are pushing to weaken ballot security at the state and national level. Have they forgotten the 2000 election?.e By John Fund
An attempt to hijack the state's election laws and open the door for voter fraud failed at the last minute this week in Wisconsin's legislature. But threats to ballot integrity continue in other states, and Congress may rush to pass ill-conceived legislation this year that would only sow confusion and increase the potential for chaos on a national level.
Wisconsin's story shows how high the stakes are. Late in March, a 72-page bill was suddenly introduced and rushed forward with only abbreviated hearings. The bill would have given "nationally recognized" community organizing groups access to the state driver's license database to encourage voter turnout. After the infamous registration scandals involving Acorn in 2008, this was clearly a strange priority. Requests for an absentee ballot in a single election would also become permanent (without requiring a legitimate reason, such as infirmity), and the ballots would be automatically mailed out in future elections.
Coercion and chicanery are made much easier by the excessive use of absentee ballots. Most of the elections thrown out by courts—Miami, Florida's mayoral election in 1998, the East Chicago, Indiana's mayor's race in 2005—involved fraudulent absentee votes.
Voters in Sturtevant, Wis., on primary election day, 2008.
.Three decades ago absentee and early ballots were only 5% of all votes cast nationwide. In 2008, they exceeded 25%. Wisconsin's bill would also have allowed voters to register on the Internet without supplying a signature—thus removing a valuable protection against identity theft and election fraud.
Wisconsin Attorney General J.B. Van Hollen, a Republican, blasted the bill, saying it would "make election fraud more likely" and "jeopardize the orderly administration of election laws." In the end, Democratic Senate Majority Leader Russ Decker admitted the bill was being rushed through too quickly and adjourned the session without brining it up for a vote.
Democratic leaders also worried that a popular amendment to require photo ID at the polls would have been attached to their measure. Democratic Gov. Jim Doyle has vetoed three previous photo ID laws, even though Democrats such as state Sen. Tim Carpenter of Milwaukee supported them saying he's seen "eye opening" public support for the idea.
That backing is based on real evidence. In 2004, John Kerry won Wisconsin over George W. Bush by 11,380 votes out of 2.5 million cast. After allegations of fraud surfaced, the Milwaukee police department's Special Investigative Unit conducted a probe. Its February 2008 report found that from 4,600 to 5,300 more votes were counted in Milwaukee than the number of voters recorded as having cast ballots. Absentee ballots were cast by people living elsewhere; ineligible felons not only voted but worked at the polls; transient college students cast improper votes; and homeless voters possibly voted more than once.
Much of the problem resulted from Wisconsin's same-day voter law, which allows anyone to show up at the polls, register and then cast a ballot. ID requirements are minimal. The report found that in 2004 a total of 1,305 "same day" voters were invalid.
The report was largely ignored, and just before the 2008 election the police department's Special Investigative Unit was ordered by superiors not to send anyone to polling places on Election Day.
In January of this year, Assistant District Attorney Bruce Landgraf, the city prosecutor overseeing election issues, complained that the Milwaukee Police Department was stalling its investigation of voter fraud in the 2008 election. "Sadly, [the prosecution of] several probable cases of genuine voter fraud were harmed by that delay," he wrote in an email to a city elections official that was revealed by the Milwaukee Journal-Sentinel. A spokesman for the Police Department responded that "we have investigated every case that has been forwarded to us."
Wisconsin's bitter partisanship on election issues isn't found everywhere. In neighboring Minnesota, the Democratic legislature and GOP Gov. Tim Pawlenty cooperated this year in passing reforms to address problems from the controversial 2008 recount that handed Democrat Al Franken a U.S. Senate seat.
The legislature approved several reforms proposed by the Center for the American Experiment, a local think tank. They included clarifying what ballots should be included in recounts (to keep the issue out of the courts) and moving towards centralizing absentee ballot counting.
Sadly, it looks as if Congress could follow Wisconsin's example instead. The Milwaukee Police Department's report on the 2004 election concluded "the one thing that could eliminate a large percentage of the fraud" would be to end same-day registration. Today, eight other states have some form of Election Day voter registration: Idaho, Iowa, Maine, Minnesota, Montana, New Hampshire, North Carolina and Wyoming. Montana began Election Day voter registration in 2006, North Carolina in 2007, and Iowa in 2008.
But Wisconsin Sen. Russ Feingold, a Democrat, has introduced federal legislation to mandate same-day registration in every state, claiming the system has worked well in his state. Sen. Chuck Schumer of New York is readying a bill to override the election laws of all 50 states and require universal voter registration—which would automatically register anyone on key government lists. This is a move guaranteed to create duplicate registrations, register some illegal aliens, and sow confusion.
We are in danger of forgetting the lessons of the 2000 recount debacle in Florida. Election laws should be clear, simple, applied equally, and balance ease of voting with the need for ballot integrity. A unanimous Supreme Court warned about the danger of loose election laws when it vacated a Ninth Circuit opinion, which had enjoined the use of Arizona's new voter ID law on the grounds it would disenfranchise voters.
The court made the obvious point that "disenfranchisement" is a two-way street. Fraud, it noted in Gonzales v. Arizona (2006), "drives honest citizens out of the democratic process. . . . [V]oters who fear their legitimate votes will be outweighed by fraudulent ones will feel disenfranchised."
What almost happened in Wisconsin this month—and could happen in Washington later this year—would increase chances of future Florida-style meltdowns and further undermine confidence in our election system.
Mr. Fund is a WSJ.com columnist and author of "Stealing Elections: How Voter Fraud Threatens Our Democracy" (Encounter, 2008).
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5)The GOP Needs Candidates with Backbone
By Karen Karacsony
While recently attending a candidate forum, I heard a prominent Republican candidate answer a question about gay marriage with the declaration, "I don't think the government should have anything to do with marriage."
Huh?
Fellow Republicans, let us be clear: The government has a whole lot to do with marriage. After all, we do not purchase marriage licenses at our local 7-11, but instead receive them from a government office -- and only after governmental officials have received the proper fees and documentation to certify the marriage. In fact, if we were to view a California License and Certificate of Marriage, we would see the uppercase words STATE OF CALIFORNIA at the top of document, followed later by the words (again in uppercase) AUTHORIZATION AND LICENSE IS HEREBY GIVEN TO ANY PERSON DULY AUTHORIZED BY THE LAWS OF THE STATE OF CALIFORNIA. Surely, we can agree that the issuing of marriage licenses is as much a governmental function as the issuing of California driver's licenses.
Did the aforementioned candidate, a former California legislator, not know that marriage and government intersect at some point? I doubt it. Why then, did he answer the way he did? I believe that the reason can be narrowed down to one of two options: Either he is undecided on the issue, or he is hiding something. Neither option attracts voters.
If a candidate is undecided on an issue that has been a news item for more than ten years and that has been the basis for two statewide propositions and several high-profile court cases, then the voter views the candidate as indecisive. And indecisive is not what a voter seeks when selecting his representatives. After all, voters send their representatives to Sacramento to weigh carefully California's issues and then to vote on them. They do not send representatives to Sacramento (or to Washington, D.C., as the case may be) to engage in "cafeteria legislating," whereby they pick and choose the legislation they will vote on. The voter understands that bills are placed before legislators and that decisions must be made. Hence, indecisive candidates repel rather than attract votes.
Let us examine the second possibility: The candidate has made a decision regarding gay marriage but hesitates to declare publicly what his decision is. This too drives away voters. After all, good citizens view the act of voting as a solemn obligation -- as a privilege that our Founding Fathers fought very hard to obtain. Consequently, they do not wish to cast their votes for "strangers hiding dark secrets." Instead, voters prefer candidates who state their positions and then vote accordingly.
Now, some may argue that Democrat candidates are often duplicitous in their campaigning -- if not downright misleading. This may be true, but let us never forget that Democrat candidates have a weapon in their arsenal that conservative candidates lack -- namely, Democrat candidates may "buy votes." That is, Democrat candidates can campaign on promises of exorbitant unemployment benefits, free health care, complimentary school lunches, free college education, etc. Such promises are too tempting to pass up for those voters seeking cradle-to-grave security. And to top it off, socialist-type promises allure the votes of Utopian-minded independents. With such a steady stream of votes, Democrat candidates may run sloppier campaigns than GOP candidates -- without repelling needed voters.
So what are we Republicans to do? I believe that we are to be a party of courage and conviction rather than a party of wimps. Let us examine issues, take stands on them, and then have the courage to announce what it is we believe. Let's stop beating around the bush, playing politics as usual, and grow a backbone. Will we lose voters for the stands we take? In some cases, yes. But ultimately, we will gain voters and members to our party because we will be viewed less as the party of fuzzy nondescripts and more as the party of fearless leaders who have the resolve to make decisions and the decency to tell potential voters what it is we've decided.
The GOP can go the way of the dodo bird in California, or it can save itself from certain extinction (as a viable party, that is). But it can do so only if it stands proudly and puts forth conservative candidates who have the courage of Cato and the virtue of Cicero. The Republican Party has a lot to offer to California. Let's realize it and proudly stand before the electorate, bravely declaring our stands on issues and the rationale behind them.
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6) US compromise on Jerusalem - but no breakthrough on talks
Peace talks still face Abbas' "no" Washington sources report that the US Middle East peace envoy George Mitchell presented Israeli prime minister Binyamin Netanyahu Friday, April 23, with a compromise by the Obama administration on Jerusalem.
Instead of a freeze on all Israeli construction in East Jerusalem, Israel is now asked to quietly suspend all building licenses and other permits for just four weeks, to give Mitchell a chance to persuade the Palestinian leader Mahmoud Abbas to accept US-moderated proximity talks.
The White House came forward with this concession, those sources said, to help clear the air in the president's relations with the Israeli prime minister.
Yet Mitchell ends another mission to Jerusalem and Ramallah Sunday, April 25, without breaking new ground. Washington and Jerusalem sources report, notwithstanding the Israel government spokesman's denial, the prime minister did in fact submit to Abbas a secret offer to agree on temporary borders for a Palestinian state on 60 percent of the West Bank. Hoping the offer would go far toward melting the Palestinian leader's resistance to negotiations, Mitchell returned to the Middle East for yet another bid to get them moving.
Abbas, as previously reported, turned the offer down because it came directly from the prime minister - not through the Americans and minus US guarantees. He appealed directly to President Barack Obama to "impose" a solution on the Middle east conflict.
Speaking to members of his Fatah party, he said: “Mr President and members of the American administration, since you believe in this [an independent Palestinian state], it is your duty to take steps toward a solution and to impose this solution."
The flood of pro-Israeli rhetoric from administration officials in the last few days and its willingness to yield partially on Jerusalem is not taken by most American Jewish leaders as a true change of Barack Obama's Middle East policy but rather a PR campaign. Saturday night, April 24, some of them warned that the White House feels the need to ease the crisis marring the atmosphere in its relations with Jerusalem and American Jews without, however, revising its fundamental Middle East policy, which is intrinsically detrimental to Israel.
Some high-placed official sources are also critical of Netanyahu's approach to America's drive for peace talks with the Palestinians. They complain the Israel prime minister insists that every issue is cleared with him in person and holds his closest aides, including his national security adviser Uzi Arad, back from efforts to seek out common ground with their American counterparts.
US officials are aware that defense minister Ehud Barak, who arrives in Washington Sunday for eight days of talks with top American officials, will not be speaking for the prime minister and has not been authorized by him to hold discussions with the Obama administration.
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6a)Israel's Right to Exist as a Jewish Homeland
By Salomon Benzimra
The U.S. regularly reiterates its support of Israel's security, but it says nothing about Israel's legal rights. These legal rights originated at the San Remo Conference, and the Resolution passed on April 25, 1920 is enshrined in international law. The commemoration of the ninetieth anniversary of this event will certainly open a new vista on the Middle East conflict.
Our calendars are strewn with special dates that link us to the past. In March we celebrated the two hundredth anniversary of Chopin's birth. Every Fourth of July, we celebrate Independence Day. Remembrance days are important, whether they pay homage to greatness or they unite people in national pride.
But there have been momentous events in recent history that remain unnoticed, if not entirely forgotten. One such event redrew the map of one of the most politically contentious regions of the planet, it shook the preexisting world order, it proclaimed the rebirth of a nation, and it marked the end of the longest foreign occupation in history. Yet few people have ever heard of it.
That event took place ninety years ago in the wake of World War One at the Italian resort town of San Remo. On April 25, 1920, after two days of intense discussions, prime ministers and high ranking diplomats of the victorious Allied powers signed the San Remo Resolution and sealed the destiny of the former Turkish possessions in the Middle East.
The Middle East has been a locus of legal misrepresentations and a cauldron of violence ever since, in part because this landmark Resolution, which initiated further agreements enshrined in international law, has seldom been publicized. An uninformed public allowed often poorly informed politicians to concoct implausible -- dare I say unlawful? -- peace plans, the failure of which is too obvious to ignore.
So on April 25, 2010, we should commemorate the ninetieth anniversary of the San Remo Conference and make the public aware of the crucial decisions that were made then and the effect these decisions should now have on the lands and peoples concerned.
In San Remo -- and for the first time in 1,800 years, since Roman times -- the geographical region known as "Palestine" acquired a legal identity. Even though the boundaries of Palestine were not precisely defined in San Remo, the prevailing idea was to draw them as close as possible to the historical boundaries of the ancient Jewish kingdoms of Israel and Judah. In that regard, the expression "from Dan to Beersheba" was introduced by Lloyd George, the British Prime Minister at the time, and it often appeared in subsequent documents.
By referring specifically to the Balfour Declaration of November 1917 -- which was essentially an expression of British foreign policy -- and by reproducing its wording literally, the San Remo Resolution entrenched the provisions of the Balfour Declaration in international law. Thus, the reconstitution of the Jewish National Home in Palestine received international recognition.
The legal title to Palestine was officially transferred from the League of Nations -- when Turkey was dispossessed of its rights to the region at the Paris Peace Conference a year earlier -- to the Jewish people, who became the national beneficiary under a mandate awarded to Britain, thereby designated as the trustee.
The transfer of title and the sovereignty of the Jewish people in Palestine remain binding in international law to this day. Similarly, equivalent national rights were conferred to the Arabs in both Syria/Lebanon and present-day Iraq under two other transitional mandates awarded to France and Britain, respectively. It should therefore be apparent that the legitimacy of the present Arab states of Syria, Lebanon, and Iraq derives from the same international law which reconstituted the Jewish nation in Palestine.
Besides fulfilling the national aspirations of the Jewish people (Zionism), the San Remo Conference also marked the end of the longest colonization in history. Whereas European powers extended their colonization in Africa, Asia, and the Americas for a period not exceeding four hundred years, Palestine has been occupied and colonized by a succession of foreign powers for about 1,900 years (Romans, Byzantines, Sassanid Persians, Arabs, Crusaders, Mameluks, and Ottoman Turks). This early episode of liberation, which preceded the global decolonization process by more than thirty years, should be welcome by all progressive minds.
The commemoration of the San Remo Conference on its ninetieth anniversary is a different kind of remembrance in that it primarily serves an educational purpose. In fact, the European Coalition for Israel, a non-Jewish European organization based in Brussels, is planning to do exactly that in San Remo on April 24-25, in a two-day official gathering at the very place where the event took place in 1920.
By bringing the San Remo Conference to the fore, the public will be better-informed, opinions will be more solidly founded, and decision-makers might revisit their geopolitical plans.
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7)Pakistani centrifuges launched Iran's nuclear program 24 years ago
Ex-foreign minister, Ali Akbar Velayati, revealed for the first time he brought Iran's first centrifuges for uranium enrichment as far back as 1986, escorting them on the flight from Pakistan aboard the private plane of the Ayatollah Ruhollah Khomeini, founder of the Islamic Revolution or Iran.
His disclosure was carried by the semi-official weekly Panjereh Saturday, April 24, according to Iranian sources. Velayati, today one of supreme leader Ayatollah Ali Khamenei's most influential advisers, is in charge of Tehran's nuclear diplomacy and the backroom planning of its tactics for resisting international pressure against its program.
The Panjereh report may therefore be assumed to have an ulterior motive - probably to make trouble between the United States and Pakistan while at the same time showing how the West was too feeble to stall Iran's nuclear program - not just in recent years but for almost a quarter of a century.
Intelligence and counter-terror sources disclose the centrifuges he brought in came with the first Pakistani technical specifications for building a bomb and missiles for their delivery. Velayati did not admit this. Neither did he disclose how much Iran paid for the prize. Sources estimate that around $30 million was handed over to Abdul Qadeer Khan, father of the Pakistani nuclear bomb. A.Q Khan also ran a global nuclear black market in conjunction with the Islamabad government, which was then headed by Gen. Zi ul-Haq, Pakistan's first military ruler.
There are other omissions in the long Velayati interview, such as where Khomeinei's aircraft landed to pick up the centrifuges, which he claims were loaded aboard the Iran-bound flight without the knowledge of the government in Islamabad. He also denies he ever met A.Q. Khan.
The key element of his account is the delivery date of Iran's first centrifuges.
It has always been conventionally assumed that Iran decided to go nuclear after it was defeated by Saddam Hussein's Iraqi forces in 1988. Khomeini's abject capitulation to the ceasefire terms dictated by Iraq was thought to have persuaded him that possession of an atomic bomb would save Iran from these humiliations in the future. However Velayati's new disclosure dispels that assumption, predating the covert creation of Iran's nuclear program by two years when Iraqi missiles were still blasting Iran and leaving whole cities, including districts of Tehran, in ruins.
Setting his Islamic Republic on the road to a nuclear bomb did not deter revolutionary leader Khomeini from maintaining that the Islamic faith bans the use of nuclear arms or any other weapons of mass destruction.
This double standard still governs Iran today. Supreme ruler Khamenei and president Mahmoud Ahmadinejad, consistently argue that nuclear weapons are un-Islamic, while pushing forward their covert plans for a nuclear bomb full tilt.
As for Velayati's colorful past, intelligence sources report he has avoided foreign travel for some years because his name appears on several wanted lists as a mastermind of terror. Argentina, for instance, has a warrant out for his arrest as a suspect in engineering the 1992 bombing of the Israeli embassy in Buenos Aires, the first Middle East terrorist outrage in Latin America, in which 29 people were killed and more than 250 injured.
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7)Truman Was Right; Netanyahu Would Be Right
By Ken Blackwell
President Obama's new Nuclear Posture Review has succeeded mightily in muddying the clear waters. He says that we will not use nuclear weapons against a non-nuclear power. Except Iran. Except North Korea. If we are attacked with biological or chemical weapons, we will not retaliate with nuclear weapons. Is this a green light for another attack on the homeland? And what are the former captive nations of Europe supposed to think? Does any NATO member -- like Poland, like Estonia -- sleep more soundly with this ringing declaration of confusion, this uncertain trumpet?
When he was in Japan last fall, Mr. Obama pointedly avoided saying that the U.S. use of nuclear weapons to end the carnage of World War II was justified. The American left -- Barack Obama's base -- has been indicting Harry Truman for decades for dropping atomic bombs on Hiroshima and Nagasaki in August 1945.
Truman faced the horrible prospect of losing 600,000 American lives in an invasion of the Japanese home islands. He also had to consider the real danger of millions Japanese civilian deaths in the combat and from mass suicides. The leftist Truman-haters also never consider the 10,000 allied POWs dying weekly in Japanese captivity.
When Mr. Obama bowed low before Emperor Akihito, it was a tacit apology for all of that. Japan in 1945 was a non-nuclear power. The new Nuclear Posture Review is Obama's elliptical way of saying that Harry Truman was wrong.
Now we come to the mortal peril of Israel. Barack Obama is the most anti-Israel president in U.S. history. He has been willing to excoriate Benjamin Netanyahu's shaky coalition government over Jews building apartments in East Jerusalem while cooing to despots in Riyadh and Cairo. Nobel Peace Prize Winner Elie Wiesel, a liberal supporter of Barack Obama, is in anguish. "Jerusalem is Jewish history," he said in a full-page ad, an open letter to the president. "Jerusalem," this Holocaust survivor said, "is the heart of our heart."
Martin Peretz of the New Republic, another liberal Obama-backer, noted that Obama's stiff-arming of Israel has served only to stiffen Palestinian intransigence. The PLO "quickly surmised that Obama was in their corner and would not push them much. Their surmise turned out to be correct." Former New York Mayor Ed Koch is distraught. He endorsed Barack Obama for president, but now cries: "I weep as I witness outrageous verbal attacks on Israel ... that are being orchestrated by President Obama."
Add to this dangerous mix Mr. Obama's cool and detached analysis of sanctions against an Iranian regime hell-bent on acquiring nuclear weapons. "Sometimes they work, sometimes they don't." Actually, most of the time, they don't work. And they are especially doomed to fail when those who are supposed to be "crippled" and "bitten" by the "tough and smart" sanctions know that there is no muscle behind the bluster. Even the Chairman of the Joint Chiefs of Staff -- Mr. Obama's top military man -- knows that his administration has no clue what to do about Iran.
Mahmoud Admadinejad, the mouthpiece for the Iranian mullahs, repeatedly says he envisions a world without Israel, a world without the U.S. And he responds to Obama's neutering Nuclear Policy Review with withering scorn. He celebrates Iran's unimpeded advance toward nuclear weaponry with open taunting of the toothless U.S. policy.
I believe Truman was justified in that hardest of all presidential decisions. Tens of millions of Americans and Japanese are alive today because Truman had the determination and grit to make that awful decision.
As justified as we were then, Israel would be even more justified in using tactical nuclear weapons now to eliminate the Iranian nuclear threat to the world. Japan in 1945 presented no existential threat to the U.S. Iran is just such a threat -- to Israel, to NATO, and to us.
When the Israelis struck Saddam Hussein's nuclear Osirak plant in 1981, the world howled. Even our U.S. State Department -- under Alexander Haig -- condemned the raid. The anti-Israel majority at the U.N. threatened sanctions against the Jewish state. President Reagan effectively sidetracked sanctions then.
But if Israel had not acted swiftly and effectively against Saddam Hussein then, the United States would not have been able to eject him from Kuwait a decade later with so little loss of American life. Saddam would have become the dominant power in the Mideast. That he did not rain nuclear missiles on Israel in 1991 is wholly attributable to the Israelis' brave and skillful raid of 1981.
Mr. Obama's feckless policies are giving the Israelis no choice. He wasted fifteen months in fruitless overtures to the Iranian terror leaders. He advanced toward them with an open hand; they spit in his open hand. Bullying democratic Israel and coddling terror states is no policy.
April is the month when millions of Jews and their righteous Gentile friends around the world reflect on what it means to be a stateless, powerless, hunted people. Jews remember the Holocaust and say "Never Again." Whether the United States under Barack Obama is with them or not, Israel has a right to act to make sure: Never Again.
Ken Blackwell is a senior fellow at the Family Research Council. He serves on the board of directors of the Club for Growth, National Taxpayers Union, and National Rifle Association.
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8)Defeating Radical Islam: The Herculean Strategy
By Raymond Ibrahim
Will the recent killings of al-Qaeda leaders Abu Omar al-Baghdadi and Abu Ayub al-Masri have any tangible effects on the "war on terror"? Vice President Joe Biden — who referred to the slayings as "devastating blows to Al Qaeda in Iraq" — certainly seems to think so.
The situation is reminiscent of when al-Qaeda leader Abu Laith al-Libi was killed in early 2008. Then, Congressman Peter Hoekstra issued a statement saying al-Libi's death "clearly will have an impact on the radical jihadist movement."
And who could forget all the hubbub surrounding the killing of that notorious decapitator, Abu Musab al-Zarqawi. Then, almost every major politician, including President Bush and Iraq's Prime Minister Maliki exulted.
It is, of course, a good thing to eliminate terrorists. But will the deaths of individual Islamist leaders — including Ayman al-Zawahiri or Osama bin Laden himself — eliminate the ideology that creates them in the first place?
History provides an answer:
Consider the progress of the Muslim Brotherhood, the world's largest and oldest Islamist organization. Founded in 1928 in Egypt by Tariq Ramadan's grandfather, Hasan al-Banna, it originally boasted only six members. In the following decades, in part thanks to the radical writings of Sayyid Qutb — whom al-Qaeda quotes liberally in their many writings — the Brotherhood, though constantly clashing with Egypt's government, grew steadily.
As leaders, both Banna and Qutb were eventually targeted and killed by the Egyptian regime. Yet the Brotherhood continued thriving underground. Then, to the world's surprise, the partially-banned, constantly-suppressed Brotherhood managed to win 88 out of 454 seats in Egypt's 2005 parliamentary elections — making them the largest opposition bloc in the government.
After two of its most prominent leaders were killed, after thousands of its members have been harassed, jailed, or otherwise eliminated, today the Brotherhood is stronger and more influential and secure than at any other time in its history.
Palestinian Hamas, itself an offshoot of the Brotherhood, furnishes another example. Founded in 1987 by Sheikh Ahmed Yassin, Hamas has since been labeled a terrorist organization by several governments, including the United States, most notably for its suicide operations against Israel. Yassin was eventually assassinated in March 2004.
The result? Far from fizzling away, Hamas, like the Brotherhood, went on to win a major landslide election in the January 2006 Palestinian parliamentary elections, establishing it even more than previously.
Then, of course, there is the Ayatollah Khomeini — the original poster-boy for radical Islam. Overthrowing Iran's secular government in 1979, Khomeini transformed Iran into a theocratic state — precisely what all Islamists yearn to see for the rest of the world. From precipitating the American hostage crisis to issuing a fatwa condemning a novelist to death to taunting the U.S. —which he dubbed "the Great Satan" — for one decade, Khomeini was the West's bane.
Today, over 20 years after his death, not much has changed in Iran: Sharia law still governs; Sharia-endorsed enmity towards the West still thrives. In fact, the only real difference is that Iran's nuclear aspirations are nearly fulfilled.
There are numerous other historical examples, both past and present, where popular Islamist leaders were either killed (or died naturally), only for their Islamist movements to grow and consolidate more power.
Ayman al-Zawahiri summarizes this phenomenon well. Asked once in an interview about the status of bin Laden and the Taliban's Mullah Omar, he confidently replied:
Jihad in the path of Allah is greater than any individual or organization. It is a struggle between Truth and Falsehood, until Allah Almighty inherits the earth and those who live in it. Mullah Muhammad Omar and Sheikh Osama bin Laden — may Allah protect them from all evil — are merely two soldiers of Islam in the journey of jihad, while the struggle between Truth [Islam] and Falsehood [non-Islam] transcends time (The Al Qaeda Reader, p.182).
In short, Islamists — whether Khomeini, Banna, Qutb, Yassin, bin Laden, Zawahiri, al-Baghdadi, or al-Masri — are not the cause of hostilities; they are symptoms of a much greater cause — the "struggle between Truth and Falsehood [that] transcends time." Individually killing them off — which is nice — only temporarily treats the symptom; it does not permanently eliminate the cause that motivates them.
Thus the West would do well to take a lesson from Hercules' legendary encounter with the multi-headed Hydra-monster. Every time the mythical strongman lopped off one of its serpentine heads, two new ones grew in its stead. To slay the beast once and for all, Hercules had to cauterize the stumps with fire, thereby preventing any more heads from sprouting out.
Similarly, while the West continues to lop off Islamist "monster-heads" — most recently, al-Baghdadi and al-Masri — to achieve true and lasting victory, the fascist ideologies that generate these monster-heads must first be cauterized.
In the meantime, believing that the deaths of individual terrorist leaders (whom are seen as martyrs living in eternal bliss) will somehow hamper the progress of radical Islam is no less erroneous than thinking the deaths of American leaders will hamper the American way of life.
Raymond Ibrahim is associate director of the Middle East Forum, author of The Al Qaeda Reader, and guest lecturer at the National Defense Intelligence College.
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9) EurObama:President follows Europe into places Europeans no longer want to go
By MATT WELCH
With the stunning emergence of the consumption-based Value Added Tax (VAT) as a legitimate public policy option, the Obama administration has now all but made it official: There is no European economic idea too extreme for 21st century America. Even if the Europeans themselves are largely headed in the opposite direction.
VAT, first rolled out in 1950s France, is a sales tax on everything that every person or entity buys within a country, with exceptions or reductions carved out for things like food, newspapers, or various links along the industrial supply chain.
Compared to the H&R Block subsidy program that is the US tax code, the VAT is a straightforward way for governments to skim 20% or so off the top of every transaction. By penalizing consumption and not earnings, it encourages savings and resists gaming by well-connected special interests. In an ideal world, you could enact a VAT while slashing America’s corporate income tax rate, which is the globe’s second-highest.
But as the last 18 months of federal misgovernance has aptly demonstrated, we do not live in anything like an ideal world.
The only reason VAT is even on the table right now is that bureaucrats like VAT enthusiast Nancy Pelosi have an appetite for spending that far outpaces Americans’ willingness to cough up their hard-earned dough. Every statehouse and city council across the land is literally out of money, and turning to the only people who can print the stuff: Washington.
The federal government spent $3.5 trillion last year while taking in just $2.1 trillion, producing a deficit-to-Gross Domestic Product ratio of 10%, a level not seen since World War II. By contrast, the European Union requires member countries to keep deficits at 3% of GDP. If America was in Europe, we’d be Greece.
What’s worse for us is that we’ve pretty much given up trying to address the root problem, which is the decade long spending binge initiated by George W. Bush and then tripled down on by Barack Obama. The VAT isn’t a way to streamline a complicated tax code; it’s a new spigot to flood money into the pockets of teachers who can’t be fired, and securities regulators who can’t get enough porn.
The grand irony here is that the very continent we’re scrambling to emulate has been moving aggressively in the opposite direction on taxes and economic policy.
While the US keeps corporate taxes frozen near 40%, EU countries have slashed them down to an average of around 25%. Top marginal income tax rates, which in the US are 35%, are under 25% all across the former East Bloc
As the share of government spending in health care has been steadily increasing in the US, it has been inching downward in Europe. While first Bush and then Obama pushed through massive new public entitlements, governments from Stockholm to Rome have been grappling with real private reform.
Though conservatives especially like to sneer at the democratic socialism of Old Europe, it is precisely those cheese-eaters in France and Vikings up north who have been leading the world in privatization these last two decades, selling off everything from airports to sewage companies.
It was hardly an accident that, in the midst of Washington’s partial nationalization of Detroit automakers, Swedish Enterprise Minister Maud Olofsson announced “The Swedish state is not prepared to own car factories.” With this week’s news that General Motors is “paying back” one set of Troubled Asset Relief Program loans from another pile of TARP money, we can see why Europeans have a lot to teach us about separation of industry and state.
Where Republicans look across the Atlantic and see soft socialists worth avoiding, Democrats see enlightened progressives worth emulating. And it does not matter how little reality conforms to either fantasy.
So now the federal government is pushing to ape Germany and France in paying individuals far-above-market prices for selling their excess solar or wind power back to the electricity grid. The only problem? Those countries are running, not walking, away from those unaffordable programs.
The same dynamic is at play with labor relations. President Obama is on record pushing organized labor’s dream policy of “card check,” which would drastically bump up private sector unionism after decades of steady decline, and he has gone so far as appoint to his bipartisan “deficit commission” the notorious labor honcho Andy Stern.
Meanwhile Germany, which has the tightest labor-management-government relations in the EU, has been aggressively loosening, not tightening, workplace rules.
The fact that America’s most influential public-sector union leader is within a thousand miles of a deficit commission, let alone one that is floating the idea of an American VAT, tells you all you need to know about the relationship between any new consumption tax and fiscal responsibility. Which is to say, there isn’t any.
The solution to unsustainable budget deficits and precarious debt levels remains the same as when Barack Obama took office: Stop spending so much damned money. Until government gets serious about that, trial balloons for gobbling ever-more tax money deserve nothing more than a good swat.
And we’ll be left with a massive exodus of business geniuses to that bastion of capitalism — France.
Matt Welch is Editor in Chief of Reason.
9a)Tea Partiers Racist? Not So Fast
By Cathy Young
Ever since the "Tea Parties" gained national attention, the debate has raged on whether they are a grass-roots protest movement in the proud tradition of American dissent, or a hysterical mob driven by fear, intolerance and selfishness. Recently, two much-discussed surveys -- a CBS/New York Times poll and a multi-state University of Washington poll -- have been bandied about as proof that the leftist caricatures of the Tea Partiers as mean-spirited rich white bigots are accurate. Yet a look at the data suggests that this interpretation is highly skewed by political bias.
In a Salon.com article titled "The Tea Partiers' racial paranoia," editor Joan Walsh notes that in the University of Washington poll, only 35% of pro-Tea Party whites regarded blacks as "hard-working," 45% as "intelligent," and 41% as "trustworthy." Walsh scoffs, "And Tea Party supporters don't like it when anyone notices the racists in their midst?"
Not so fast. The respondents in the UW poll were asked to rate on a 1-7 scale how intelligent, hardworking, and trustworthy they perceived "almost all" blacks (and, in separate questions, whites, Latinos, and Asians) to be. Whether the findings expose Tea Party bigotry hinges on two things: how the "Tea Partiers'" opinions of blacks compare to their views of other groups, and how their answers compare to those of other, non-Tea-Partying Americans.
The UW researchers' initial analysis compared only whites who were strongly pro-Tea Party and strongly anti-Tea Party, concluding that the latter held a much more positive view of blacks. These data are no longer on the UW website; instead, there are tables for other race-related questions (such as "Over the past few years blacks have gotten less than they deserve"), with separate results for whites who were either neutral toward the Tea Party movement or had never heard of it, as well as for all whites.
But what about the racial stereotyping items? The lead investigator, political science professor Christopher Parker, graciously provided me with the fuller data -- which strongly contradict the notion of the Tea Parties as a unique hotbed of racism.
Thus, while only 35% of strong Tea Party supporters rated blacks as hardworking, only 49% described whites as such. While the gap is evident, these responses are close to those for all whites (blacks are rated as "hardworking" by 40%, whites by 52%). While whites who are strongly anti-Tea Party seem free of bias on this item -- blacks and whites are rated as "hardworking" by 55% and 56%, respectively - this is not true for intelligence and trustworthiness. Whites in every group are less likely to rate blacks than whites as "intelligent" by similar margins: 14 points for Tea Party supporters (45% vs. 59%), 13 points for all whites (49% vs. 62%), 10 points for Tea Party opponents (59% vs. 69%). On "trustworthy," the gap is smaller in the pro-Tea Party group (41% vs. 49%) than in the anti-Tea Party group (57% vs. 72%). One could write headlines about the "racial paranoia" of white liberals who consider blacks less trustworthy than whites!
The endurance of racial stereotypes in this day and age is disturbing; but Tea Party supporters differ little in this regard from mainstream Americans. (It is also worth noting that, as in many other surveys, Asian-Americans in the UW poll are rated much more positively than whites.)
Compared to middle-of-the-road whites, Tea Party supporters show far more agreement with the statement that blacks should work their way up "without special favors" the way other minorities such as Italians and Jews did, or that blacks would be as well off as whites if they worked harder. The standard left-of-center view, shared by the UW researchers, is that such attitudes represent a subtler form of racism, or "racial resentment." In some cases, that is surely true. Yet these sentiments may also reflect a genuinely race-neutral belief in self-reliance and self-help -- or the view, shared by many black commentators, that the black community's problems are partly rooted in damaging behavioral and cultural patterns.
John McWhorter, a noted black scholar and author whose works include the 2000 book, Losing the Race: Self-Sabotage in Black America, says that "the idea that 'racism' is behind the Tea Partiers is based on a lazy and vain extension of the term 'racism' to meaning 'that which many black people would not approve of.'" According to McWhorter, "The position that the government does too much to help black people is not necessarily one based in inherent bias against people with black skin -- it can be argued as a reasonable proposition based on the spotty record of social programs since the 1960s."
The other charge against Tea Partiers is that they are not "the people" but the privileged defending their privilege. Walsh gleefully points out that in the Times/CBS poll, 12% of Tea Party sympathizers had an annual income over $250,000 -- forgetting to mention that so did 11% of all Americans. Washington Post columnist E.J. Dionne asserts that "Tea Party enthusiasts ... side with the better-off against the poor": 73% of them, versus 38% of all Americans, say that "providing government benefits to poor people encourages them to remain poor." (Of course, they couldn't possibly be sincere in the belief that poor people are often harmed more than helped by government programs.)
What, then, do the new polls tell us about the Tea Partiers -- or, at least, Tea Party sympathizers? (In the Times/CBS poll, only one in five self-identified Tea Party supporters reported actual involvement in Tea Party activities.) They are mostly white and more likely to be male (59%); three-quarters are 45 and older, compared to half of all Americans. They are more religious than average, though not dramatically so: 39% are evangelical Christians and 38% attend church every week, while the figures for all Americans are 28% and 27%.
Not surprisingly, the Tea Partiers are disproportionately Republican and right-wing: 39% consider themselves "very conservative" and 34% "somewhat conservative" (compared to 12% and 24%, respectively, of the general population). Their conservatism, moreover, tends to be more authoritarian than libertarian: In the UW poll, pro-Tea Party respondents are much more likely than others to agree that the government should be able to detain suspects indefinitely without trial and to tap phones if there is a threat of terrorism.
In other words, the Tea Party movement is mainly conservative -- which is hardly the stuff of headlines. That does not make it a haven for racists.
While the Tea Parties raise important questions about the growth of government, they certainly have their darker side: too often, they promote the politics of personal attack and demonization, of hyperbole and hysteria (though they are no more guilty of this than were Bush-era protesters on the left). Yet to respond with more hyperbole, demonization and hysteria directed at the Tea Partiers themselves will not address the problems but only compound the damage.
Cathy Young writes a weekly column for RealClearPolitics and is also a contributing editor at Reason magazine.
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10 )A Plague of ‘A’ Students : Why it’s so irksome being governed by the Obami.
BY P. J. O'Rourke
Barack Obama is more irritating than the other nuisances on the left. Nancy Pelosi needs a session on the ducking stool, of course. But everyone with an ugly divorce has had a Nancy. She’s vexatious and expensive to get rid of, but it’s not like we give a damn about her. Harry Reid is going house-to-house selling nothing anybody wants. Slam the door on him and the neighbor’s Rottweiler will do the rest. And Barney Frank is self-punishing. Imagine being trapped inside Barney Frank.
The secret to the Obama annoyance is snotty lecturing. His tone of voice sends us back to the worst place in college. We sit once more packed into the vast, dreary confines of a freshman survey course—“Rocks for Jocks,” “Nuts and Sluts,” “Darkness at Noon.” At the lectern is a twerp of a grad student—the prototypical A student—insecure, overbearing, full of himself and contempt for his students. All we want is an easy three credits to fulfill a curriculum requirement in science, social science, or fine arts. We’ve got a mimeographed copy of last year’s final with multiple choice answers already written on our wrists. The grad student could skip his classes, the way we intend to, but there the s.o.b. is, taking attendance. (How else to explain this year’s census?)
America has made the mistake of letting the A student run things. It was A students who briefly took over the business world during the period of derivatives, credit swaps, and collateralized debt obligations. We’re still reeling from the effects. This is why good businessmen have always adhered to the maxim: “A students work for B students.” Or, as a businessman friend of mine put it, “B students work for C students—A students teach.”
It was a bunch of A students at the Defense Department who planned the syllabus for the Iraq war, and to hell with what happened to the Iraqi Class of ’03 after they’d graduated from Shock and Awe.
The U.S. tax code was written by A students. Every April 15 we have to pay somebody who got an A in accounting to keep ourselves from being sent to jail.
Now there’s health care reform—just the kind of thing that would earn an A on a term paper from that twerp of a grad student who teaches Econ 101.
Why are A students so hateful? I’m sure up at Harvard, over at the New York Times, and inside the White House they think we just envy their smarts. Maybe we are resentful clods gawking with bitter incomprehension at the intellectual magnificence of our betters. If so, why are our betters spending so much time nervously insisting that they’re smarter than Sarah Palin and the Tea Party movement? They are. You can look it up (if you have a fancy education the way our betters do and know what the unabridged Oxford English Dictionary is). “Smart” has its root in the Old English word for being a pain. The adjective has eight other principal definitions ranging from “brisk” to “fashionable” to “neat.” Only two definitions indicate cleverness—smart as in “clever in talk” and smart as in “clever in looking after one’s own interests.” Don’t get smart with me.
The other objection to A students is what it takes to become one—toad-eating. A students must do what teachers and textbooks want and do it the way teachers and texts want it done. Neatness counts! A students are very busy.
Such brisk apple-polishing happens to be an all-too-good preparation for politics. This is because a student’s success at education and a politician’s success at politics are measured mostly by input rather than outcome. Yes, one got elected. Yes, the other became class valedictorian. But to what end? It can take decades to measure the outcome of an education. Did the A student at architecture school become a respected partner at Skidmore, Owings and Merrill, or did he become Albert Speer? Likewise with politics. Did Woodrow Wilson’s meddling in Europe wreak havoc upon the globe? We wouldn’t know for 20 years. Did Franklin Roosevelt’s New Deal totally destroy the fabric of American society? We’re not absolutely certain even now. Meanwhile Woodrow Wilson, FDR, the class valedictorian, and Albert Speer were inputting like crazy.
The C student starts a restaurant. The A student writes restaurant reviews. The input-worshipping universe of the New York Times is like New York itself—thousands of restaurant reviews and no place we can afford to eat.
Let us allow that some intelligence is involved in screwing up Wall Street, Washington, and the world. A students and Type-A politicians do discover an occasional new element—Obscurantium—or pass an occasional piece of landmark legislation (of which the health care reform bill is not one). Smart people have their uses, but our country doesn’t belong to them. As the not-too-smart Woody Guthrie said, “This land was made for you and me.” The smart set stayed in fashionable Europe, where everything was nice and neat and people were clever about looking after their own interests and didn’t need to come to America. The Mayflower was full of C students. Their idea was that, given freedom, responsibility, rule of law and some elbow room, the average, the middling, and the mediocre could create the richest, most powerful country ever.
Thus in America nobody loves a smart-ass. What’s interesting about Obama is that he didn’t start out being one. Lips (and academic records) are sealed at Occidental College and Columbia, but Obama doesn’t seem to have been an A student as an undergraduate. He learned to “make it or fake it” at Harvard Law where he graduated magna cum laude. Worse than an A student is somebody pretending to be one, witness Al Gore.
However, perhaps I should hold my tongue and temper my ire. I have just received my junior high school daughter’s report card. She’s an A student. I questioned her, and it turns out so is every one of her girlfriends including the numbskull jock and the complete feather-brain who’s besotted with Justin Bieber.
I can’t imagine what kind of input my daughter’s school is measuring (although I assume my daughter delivers it via Twitter). But when input is valued enough, America turns into that blissful land of social justice so desired by Nancy Pelosi, Harry Reid, and Barney Frank—outcomes are equal at last. I’m old-fashioned in my criticism of Barack Obama. He graduated from Harvard Law in the 1990s, barely yesterday. I’d forgotten the wonderful progressiveness of the American educational system. We’re all A students now.
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