Thursday, September 16, 2010

Islam Worming Its Way Into Our Soft Underbelly.

As soon as he figures out how to walk through that gate holding an umbrella, he'll take care of the economy, health care, Wall Street, Iraq, Afghanistan, unemployment and a few things more. But first things first.
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Good old boy Golf shirt!
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George Will explains why FDR and Obama's government is not your friend. (See 1 below.)
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Who is next in China's leadership. (See 2 below.)
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If you are a Democrat you might take a look in the mirror and ask whether you can identify with your Party. You might not like what you see. (See 3 below.)
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Israel being allowed to purchase F -35's. This will significantly increase Israel's capability and will reduce the cost of America's planes because it lengthens U.S. production lines. (See 4 below.) ---
Rep.Joe Wilson told Obama "you lie." Turns out Wilson was correct but, of course, Wilson was badgered by the press and media and apologized for his correct but rude remarks.

The president has been making a lot of speeches lately and continues to shave the truth. Since the news keeps getting more 'taxing' it is getting harder and harder for Obama to keep snowing the audience by torturing the truth. (See 5 below.)
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Fortune Magazine invited Rove to chat with some business leaders and concluded Rove is actually not bearish enough in predicting the fortunes of Democrats. (See 6 below.)
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Even Arkansas may be going "R" and that is not "R" for Razorback. (See 6a below.)
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Bill Kristol dopes Tuesday's results. (See 6 b below.)
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Herb Keinon reveals the skinny on the meetings between Netanyahu and Abbbas. (See 7 below.)
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Apparently we remain the only birthright nation in the world. (See 8 below.)
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Islam seeks to worm its way into our society through our education system, libraries and media outlets. See: http://www.youtube.com/watch?v=Z7-I9Qp3d4Y&feature=player_embedded

The purpose is not to teach the greatness of our Constitution but to convert and weaken.

The Pope is in England alerting the world to the fact that we have rejected God and have embraced new idols , ie. rock music, technical gadgets etc. as we become a godless world all in the name of PC.
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Dick
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1)Trifle with the government? Just ask Jacob Maged
By George F. Will


The crime scene at 138 Griffith St. has changed in 76 years. Today it is a barber shop. In 1934, it was a tailoring and cleaning establishment owned and run by Jacob Maged, 49.

With his responsibilities as a father of four, Maged should have shunned a life of crime. Instead, he advertised his criminal activity with a placard in his shop window, promising to press men's suits for 35 cents. This he did, even though President Franklin Roosevelt's New Dealers, who knew an amazing number of things -- his economic aides were not called a "Brains Trust" for nothing -- knew that the proper price for pressing a man's suit was 40 cents.

The National Recovery Administration was an administrative mechanism for the National Industrial Recovery Act of 1933, which envisioned regulating the economy back to health by using, among other things, codes of fair competition. The theory was that by promoting the cartelization of labor by encouraging unions, and the cartelization of industries by codes that would inhibit competition, prices would be propped up and prosperity would return.

Soon there were more than 500 NRA codes covering the manufacture of products from lightning rods to dog leashes to women's corsets. Amity Shlaes, in "The Forgotten Man," her history of the New Deal, reports that the NRA "generated more paper than the entire legislative output of the federal government since 1789." Businesses were asked to display the Blue Eagle, an emblem signifying participation in the NRA. Gen. Hugh "Iron Pants" Johnson, an admirer of Mussolini who headed the NRA, declared, "May God have mercy on the man or group of men who attempt to trifle with this bird."

Maged trifled by his 5-cent violation of New Jersey's "tailors' code," written in conjunction with the NRA. On April 20, 1934, he was fined $100 -- serious money when the average family income was about $1,500 -- and sentenced to 30 days in jail. The New York Times reported that Maged "was only vaguely aware of the existence of a code." Not that such ignorance was forgivable. It is every citizen's duty to stay up late at night, if necessary, reading the fine print about the government's multiplying mandates.


"In court yesterday," the Times reported, "he stood as if in a trance when sentence was pronounced. He hoped that it was a joke." Maged was an immigrant from Poland, which in the Cold War would become familiar with the concept of "economic crimes" and the use of criminal law for the "re-education" of deviationists.

Actually, his sentence was a judicial jest. After Maged spent three days in jail, the judge canceled the rest of his sentence, remitted the fine and, according to the Times, "gave him a little lecture on the importance of cooperation as opposed to individualism." The judge emphasized that people "should uphold the president . . . and General Johnson" in their struggle against -- among other miscreants -- "price cutters." Then, like a feudal lord granting a dispensation to a serf, the judge promised to have Maged "measure me for a new suit."

Maged, suitably broken to the saddle of government, removed from his shop window the placard advertising 35-cent pressings and replaced it with a Blue Eagle. "Maged," reported the Times, "if not quite so ruggedly individualistic as formerly, was a free man once more." So that is freedom -- embracing, under coercion, a government propaganda symbol.

Today, as 76 years ago, economic recovery is much on the mind of the government, which is busy as a beaver -- sending another $26 billion to public employees, proposing an additional $50 billion for "infrastructure" -- as it orchestrates Recovery Summer to an appropriate climax. But at least today's government is agnostic about the proper price for cleaning a suit.

In 1937, FDR asked in his second inaugural address for "unimagined power" to enforce "proper subordination" of private interests to public authority. The biggest industrial collapse in American history occurred eight years after the stock market crash of 1929, and nearly five years into the New Deal, in . . . 1937.

Maged died here of cancer on March 31, 1939. He was 54. He remains a cautionary example of the wages of sin, understood by the progressives of his day as insubordination toward government that knows everything. The NRA lives on, sort of, in this Milton Friedman observation: Pick at random any three letters from the alphabet, put them in any order, and you will have an acronym designating a federal agency we can do without.
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2) Looking to 2012: China's Next Generation of Leaders



The Chinese have a bit of a challenge on their hands. One could reason that as the world's most populous country, China would also have the highest number of individuals living in poverty. However, I was shocked to learn that the number is over 600 million. Talk about a mess. If you do any sort of business, or just have a general interest in the Far East, I recommend you get a heads up on the leadership changes we'll see in the next year.

Today I'm including an article and a video from STRATFOR, a global intelligence company. I watched the video first - it's an overview of China's new leadership and what that means for the next generation. If you want more analysis (which I definitely did), read the article below too. You'll learn about the deep structural reforms that may be required to prevent China's economy from overheating, as well as the rising influence of the military and how the new leaders will address the flaws in China's economic model.

Be sure to check out the graphic of the leadership hierarchy, which you'll find in the article. It's just the sort of information STRATFOR provides that you won't find that anywhere else.

By John Mauldin


STRATFOR:

In 2012, the Communist Party of China’s (CPC) leaders will retire and a new generation — the so-called fifth generation — will take the helm. The transition will affect the CPC’s most powerful decision-making organs, determining the makeup of the 18th CPC Central Committee, the Political Bureau (Politburo) of the Central Committee, and most important, the nine-member Politburo Standing Committee that is the core of political power in China.

While there is considerable uncertainty over the handoff, given China’s lack of clear, institutionalized procedures for succession and the immense challenges facing the regime, there is little reason to anticipate a succession crisis. But the sweeping personnel change comes at a critical juncture in China’s modern history, with the economic model that has enabled decades of rapid growth having become unsustainable, social unrest rising, and international resistance to China’s policies increasing. At the same time, the characteristics of the fifth generation leaders suggest a cautious and balanced civilian leadership paired with an increasingly influential and nationalist military. This will lead to frictions over policy even as both groups remain firmly committed to perpetuating the regime.

The Chinese leadership that emerges from 2012 will likely be unwilling or unable to decisively carry out deep structural reforms, obsessively focused on maintaining internal stability, and more aggressive in pursuing the core strategic interests it sees as essential to this stability.

Just as China’s civilian leadership will change, China’s military will see a sweeping change in leadership in 2012. The military’s influence over China’s politics and policies has grown over the past decade, as the country has striven to professionalize and modernize its forces and expand its capabilities in response to deepening international involvement and challenges to its internal stability. The fifth generation military leaders are the first to have come out of the military modernization process, and to have had their careers shaped by the priorities of a China that has become a global economic power. They will take office at a time when the military’s budget, stature and influence over politics is growing, and when it has come to see its role as extending beyond that of a guarantor of national security to becoming a guide for the country as it moves forward and up the ranks of international power.

Civilian Leadership

Power transitions in the People’s Republic of China have always been fraught with uncertainty because the state does not have clear and fixed institutional procedures for the transfer of power between leaders and generations. The state’s founding leader, Mao Zedong, did not establish a formal process before he died, giving rise to a power struggle. Mao’s eventual successor, Deng Xiaoping, was also a strong leader whose personal power could override rules and institutions. But Deng’s retirement also failed to set a firm succession precedent. He saw two of his chosen successors lose out amid factional struggles, and Deng maintained extensive influence well after formally retiring and passing power to Jiang Zemin and naming Jiang’s successor, current President Hu Jintao.

Even though China does not have any fixed rules on power transfers, a series of precedents and informal rules have been observed. Recent years have seen a move toward the solidification of these rules. Deng set a pattern in motion that smoothed the 2002 presidential transition from Jiang to Hu despite behind-the-scenes factional tensions. As mentioned, Deng had also appointed Hu to be Jiang’s successor. This lent Hu some of Deng’s great authority, thus establishing an air of inevitability and deterring potential power grabs. This leap-frog pattern was reinforced when Jiang put Vice President Xi Jinping in line to succeed Hu in 2012. The coming transfer will test whether the trend toward stable power transitions can hold.


Characteristics of the Fifth Generation

While all countries experience leadership changes that can be described as generational in one sense or another, modern Chinese history has been so eventful as to have created generations that, as a group, share distinct characteristics and are markedly different from their forebearers in their historical, educational and career experiences. Deng created the concept of the “generational” framework by dubbing himself the core second-generation leader after Mao, and events and patterns in leadership promotion and retirement reinforced the framework. The most defining factor of a Chinese leadership generation is its historical background. The first generation defined itself by the formation of the Communist Party and the Long March of exile in the 1930s, the second generation in the war against the Japanese (World War II), and the third during civil war and the founding of the state in 1949. The fourth generation came of age during the Great Leap Forward in the late 1950s, Mao’s first attempt to transform the entire Chinese economy.

The fifth generation is the first group of leaders that cannot — or can only barely — remember a time before the foundation of the People’s Republic. These leaders’ formative experiences were shaped during the Cultural Revolution (1967-77), a period of deep social and political upheaval in which the Mao government empowered hard-liners to purge their political opponents in the bureaucracy and Communist Party. Schools and universities were closed in 1966 and youths were sent down to rural areas to do manual labor, including many fifth-generation leaders such as likely future President Xi Jinping. Some young people were able to return to college after 1970, where they could only study Marxism-Leninism and CPC ideology, while others sought formal education when schools were reopened after the Cultural Revolution. Very few trained abroad, so they did not become attuned to foreign attitudes and perceptions in their formative days (whereas the previous generation had sent some young leaders to study in the Soviet Union). Characteristically, given the fuller educational opportunities that arose in the late 1970s, the upcoming leaders have backgrounds in a wide range of studies. Many were trained as lawyers, economists and social scientists, as opposed to the engineers and natural scientists who have dominated the previous generations of leadership.


In 2012, only Vice President Xi Jinping and Vice Premier Li Keqiang will remain on the Politburo Standing Committee, the core decision-making body in China. Seven new members will join, assuming the number of total members remains at nine, which has been the case since 2002. All seven will hail from the broader Politburo and were born after October 1944, in accordance with an unwritten rule established under Deng requiring Chinese leaders to retire at age 70 (it was lowered to 68 in 1997). The retiring leaders will make every effort to strike a deal preventing the balance of power within the Politburo and the Politburo Standing Committee from tipping against them and their faction.

At present, China’s leaders divide roughly into two factions broadly defined as the populists and the elitists.

The populists are associated with Hu Jintao and the China Communist Youth League (CCYL) and are more accurately referred to as the “league faction” (in Chinese, the “tuanpai”). In the 1980s Hu led the league, which comprises his political base. The CCYL is a massive organization that prepares future members of the CPC. It is structured with a central leadership and provincial and local branches based in the country’s schools, workplaces, and social organizations. In keeping with the CCYL’s rigid hierarchy and doctrinal training, the policies of Hu’s “CCYL clique” focus on centralizing and consolidating power, maintaining social stability, and seeking to redistribute wealth to alleviate income disparities, regional differences, and social ills. The clique has grown increasingly powerful under Hu’s patronage. He has promoted people from CCYL backgrounds, some of whom he worked with during his term as a high-level leader in the group in the early 1980s, and has increased the number of CCYL-affiliated leaders in China’s provincial governments. Several top candidates for the Politburo Standing Committee in 2012 are part of this group, including Li Keqiang and Li Yuanchao, followed by Liu Yandong, Zhang Baoshun, Yuan Chunqing, Liu Qibao and Wang Yang.

The elitists are leaders associated with former President Jiang Zemin and his Shanghai clique. Their policies aim to maintain China’s rapid economic growth, with the coastal provinces unabashedly leading the way. They also promote economic restructuring to improve China’s international competitiveness and reduce inefficiencies, even at the risk of painful changes for some regions or sectors of society. The infamous “princelings” — or the sons, grandsons and relatives of the CPC’s founding fathers and previous leaders who have risen up the ranks of China’s system through these familial connections — are often associated with the elitists. The princelings are criticized for benefiting from nepotism, and some have suffered from low support in internal party elections. Still, they have name recognition from their proud Communist family histories, the finest educations and career experiences and access to personal networks set up by their fathers. The Shanghai clique and princelings are joined by economic reformists of various stripes who come from different backgrounds, mostly in the state apparatus such as the central or provincial bureaucracy and ministries, who often are technocrats and specialists. Prominent members of this faction eligible for the 2012 Politburo Standing Committee include Wang Qishan, Zhang Dejiang, Bo Xilai, Yu Zhengsheng and Zhang Gaoli.

The struggle between the populist and elitist factions is a subset of the deeper struggle in Chinese history between centralist and regionalist impulses. Because of China’s vast and diverse geography, China historically has required a strong central government, usually located on the North China Plain, to maintain political unity. But this cyclical unity tends to break down over time as different regions pursue their own interests and form relationships with the outside world that become more vital to them than unity with the rest of China. The tension between centralist and regionalist tendencies has given rise to the ancient struggle between the north (Beijing) and the south (Shanghai), the difficulties that successive Chinese regimes have had in subordinating the far south (i.e. Guangdong and the Pearl River Delta), and modern Beijing’s anxiety over the perceived threat of separatism from Taiwan, Xinjiang and Tibet. In this context, the struggle between the two dominant political factions appears as the 21st century political manifestation of the irresolvable struggle between the political center in Beijing and the other regions, whose economic vibrancy leads them to pursue their own ends. While Hu Jintao and his allies emphasize central control and redistributing regional wealth to create a more unified China, the followers of Jiang tend to emphasize the need to let China’s most competitive regions grow and prosper, often in cooperation with international partners, without being restrained by the center or weighed down by the less dynamic regions.

Factional Balance

The politicians almost certain to join the Politburo Standing Committee in 2012 appear to represent a balance between factional tendencies. The top two, Xi Jinping and Li Keqiang, are the youngest members of the current Politburo Standing Committee and are all but certain to become president and premier, respectively. Xi is a princeling — son of Xi Zhongxun, an early Communist revolutionary and deputy prime minister — and his leadership in Fujian, Zhejiang and Shanghai exemplifies the ability of coastal manufacturing provinces to enhance an official’s career. But Xi is also popular with the public, widely admired for his hardships as a rural worker during the Cultural Revolution. He is the best example of bridging both major factions — promoting economic reforms but seen as having the people’s best interests at heart. Li was trained as an economist under a prestigious teacher at Beijing University, received a law degree, and is a former top secretary of the CCYL and stalwart of Hu’s faction. Economics is his specialty, not in itself but as a means to social harmony. For example, he is famous for promoting further revitalization of northeastern China’s industrial rust belt of factories that have fallen into disrepair. Li also has held leadership positions in provinces like Henan, an agricultural province, and Liaoning, a heavy-industrial province, affording him a view of starkly different aspects of the national economy.

After Xi and Li, the most likely contenders for seats on the Politburo Standing Committee are Li Yuanchao, director of the CPC’s powerful organization department (CCYL clique), Wang Yang (CCYL), member of the CPC’s Politburo, Liu Yunshan (CCYL), director of the CPC’s propaganda department, and Vice Premier Wang Qishan (princeling/Jiang’s Shanghai clique). The next most likely candidates include Vice Premier Zhang Dejiang (Jiang’s Shanghai clique), Chongqing Party Secretary Bo Xilai (princeling), Tianjin Party Secretary Zhang Gaoli (Jiang’s Shanghai clique) and CPC General Office Director Ling Jihua (secretary to Hu Jintao, CCYL clique). It is impossible to predict exactly who will be appointed to the Politburo Standing Committee. The lineup is the result of intense negotiation between the current committee members, with the retiring members (everyone except Xi Jinping and Li Keqiang) wielding the most influence. Currently, of the nine Politburo Standing Committee members, as many as six are Jiang Zemin proteges, and they will push for their followers to prevent Hu from taking control of the committee.



It accordingly seems possible that the 2012 Politburo Standing Committee balance will lean slightly in favor of Jiang’s Shanghai clique and the princelings, given that Xi Jinping will hold the top seat, but that by numbers the factions will be evenly balanced. Like his predecessors, Xi will have to spend his early years as president attempting to consolidate power so he can put his followers in positions of influence and begin to shape the succeeding generation of leaders for the benefit of himself and his circle. An even balance, if it is reached, may not persist through the entire 10 years of the Xi and Li administration: the CCYL clique looks extremely well-situated for the 2017 reshuffle, at which point many of Jiang’s proteges will be too old to sit on the Politburo Standing Committee while a number of rising stars in the CCYL currently serving as provincial chiefs will be well-placed for promotion.

There is a remote possibility that the number of seats on the Politburo Standing Committee could be cut from nine to seven, the number of posts before 2002. This would likely result in a stricter enforcement of age limits in determining which leaders to promote, perhaps setting the cutoff age at 66 or 67 (instead of 68). Stricter age criteria could eliminate three contenders from Jiang’s Shanghai clique (Zhang Gaoli, Zhang Dejiang, and Shanghai Party Secretary Yu Zhengsheng) and one from Hu’s clique (Politburo member Liu Yandong). This would leave Bo Xilai (a highly popular princeling with unorthodox policies, but like Xi Jinping known to straddle the factional divide) and CPC General Office Director Ling Jihua (secretary to Hu Jintao, CCYL clique) as the most likely final additions to the Politburo Standing Committee. The overall balance in this scenario of slightly younger age requirements would then lean in favor of Hu’s clique.


Collective Rule

The factions are not so antagonistic that an intense power struggle is likely to rip them apart. Instead, they can be expected to exercise power by forging compromises. Leaders are chosen by their superiors through a process of careful negotiation to prevent an imbalance of one faction over another that could lead to purges or counterpurges. That balance looks as if it will roughly be maintained in the configuration of leaders in 2012. In terms of policymaking, powerful leaders will continue to debate deep policy disagreements behind closed doors. Through a process of intense negotiation, they will try to arrive at a party line and maintain it uniformly in public. Stark disagreements and fierce debates will echo through the statements of minor officials and academics, and in public discussions, newspaper editorials, and other venues, however. In extreme situations, these policy battles could lead to the ousting of officials who end up on the wrong side. But the highest party leaders will not contradict each other openly on matters of great significance unless a dire breakdown has occurred, as happened with fallen Shanghai Party Secretary Chen Liangyu.

That the fifth generation leadership appears in agreement on the state’s broadest economic and political goals, even if they differ on the means of achieving those goals, will be conducive to maintaining the factional balance. First, there is general agreement on the need to continue with China’s internationally oriented economic and structural reforms. These leaders spent the prime of their lives in the midst of China’s rapid economic transformation from a poor and isolated pariah state into an international industrial and commercial giant, and were the first to experience the benefits of this transformation. They also know that the CPC’s legitimacy has come to rest, in great part, on its ability to deliver greater economic opportunity and prosperity to the country — and that the greatest risk to the regime would likely come in the form of a shrinking or dislocated economy that causes massive unemployment. Therefore, for the most part they remain dedicated to continuing with market-oriented reform. They will do so gradually and carefully, however, and will not seek to intensify reformist efforts to the point of dramatically increasing the risk of social disruption. Needless to say, while the elitists can be energetic in their pursuit of economic liberalization, the populists tend to be more suspicious and more willing to re-centralize controls to avoid undesirable political side effects, even at the expense of long-term risks to the economy.

More fundamentally, all fifth generation leaders are committed to maintaining CPC rule. The chaos of the Cultural Revolution impressed upon the fifth generation a sense of the extreme dangers of China’s having allowed an autocratic ruler to dominate the decision-making process and intra-party struggle to run rampant. Subsequent events have reinforced the fear of internal divisions: the protest and military crackdown at Tiananmen Square in 1989, the threat of alternative movements exemplified by the Falun Gong protest in 1999, the general rise in social unrest throughout the economic boom of the 1990s and 2000s. More recent challenges have reinforced this, such as natural disasters like the Sichuan earthquake in 2008, ethnic violence and riots in Tibet in 2008 and Xinjiang in 2009, and the pressures of economic volatility since the global economic crisis of 2008. These events have underscored the need to maintain unity and stability in the Party ranks and in Chinese society, by force when necessary. So while the fifth generation is likely to agree on the need to continue with economic reform and perhaps even limited political reform, it will do so only insofar as it can without destabilizing socio-political order. It will delay, soften, undermine, or reverse reform to ensure stability. Once again, the difference between the factions lies in judging how best to preserve and bolster the regime.

Regionalism

Beyond the apparent balance of forces in the central party and government organs, there remains the tug-of-war between the central government in Beijing and the 33 provincial governments (not to mention Taiwan) — a reflection of the timeless struggle in China between center and periphery. If China is to be struck by deep destabilization under the watch of the fifth generation leaders (which is by no means impossible, especially given the economic troubles facing them), the odds are this would occur along regional lines. Stark differences have emerged, as China’s coastal manufacturing provinces have surged ahead while provinces in the interior, west and northeast have lagged. The CPC’s solution to this problem generally has been to redistribute wealth from the booming coast to the interior in hopes that subsidizing the less developed regions eventually will nurture economic development. In some instances, such as in Shaanxi or Sichuan provinces, urbanization and development have indeed accelerated in recent years. But overall, the interior remains weak and dependent on subsidies from Beijing.

The problem for China’s leadership is that the coastal provinces’ export-led model of growth that has worked well over the past three decades has begun to peak, and China’s annual double-digit growth rates are expected to slow due to weakening external demand, rising labor and material costs and other factors. The result will be louder demands from poor provinces and tighter fists in rich provinces — exposing and deepening competition, and in some cases leading to animosity between the regions.

More so than any previous generation, the fifth generation has extensive cross-regional career experience. This is because climbing to the top of Party and government has increasingly required that many of these leaders first serve in central organizations in Beijing and then do a stint (or more) as governor or Party secretary of one of the provinces (the more far-flung, the better), before returning to a higher central Party or government position in Beijing. Hu Jintao followed such a path, as have many of the aforementioned candidates for the Politburo Standing Committee. Moreover, it has become increasingly common to put officials in charge of a region other than the one from which they originally hailed to reduce regionalism and regional biases. This practice has precedent in China’s imperial history, when it was used to prevent the rise of mini-fiefdoms and the devolution of power. More of the likely members of the 2012 Politburo Standing Committee than ever before have experience as provincial chiefs. This means that when these leaders take over top national positions, they theoretically will have a better grasp of the realities facing the provinces they rule, and will be less likely to be beholden to a single regional constituency or support base. This could somewhat mitigate the central government’s difficulty in dealing with profound divergences of interest between the central and provincial governments.

But regional differences are grounded in fundamental, geographical and ethnic realities, and have become increasingly aggravated by the disproportionate benefits of China’s economic success. Temporary changes of position across the country have not prevented China’s leaders from forming lasting bonds with certain provinces to the neglect of others; and many politicians still have experience exclusively with the regional level of government, and none with the central. The patron-client system, by which Chinese officials give their loyalty to superiors in exchange for political perks or monetary rewards, remains ineradicable. Massive personal networks extend across party and government bureaus, from the center to the regions. Few central leaders remain impervious to the pull of these regional networks, and none can remain in power long if his or her regional power base or bases have been cut. The tension between the center and provinces will remain one of the greatest sources of stress on the central leadership as it negotiates national policy.

As with any novice political leadership, the fifth generation leaders will take office with little experience of what it means to be fully in charge of a nation. Provincial leadership experience has provided good preparation, but the individual members have yet to show signs of particularly strong national leadership capabilities. The public sees only a few of the upcoming members of the Politburo Standing Committee as successfully having taken charge during events of major importance (for instance, Xi Jinping’s response to Tropical Storm Bilis, Wang Qishan’s handling of the SARS epidemic and the Beijing Olympics); only one has military experience (Xi, and it is slight); and only a few of the others have shown independence or forcefulness in their leadership style (namely Wang Qishan and Bo Xilai). Because current Politburo Standing Committee members or previous leaders (like former President Jiang Zemin) will choose the future committee members after painstaking negotiations, this might preserve the balance of power between the cliques. It might also result in a “compromise” leadership — effectively one that would strive for a middle-of-the-road approach, even at the cost of achieving mediocre results. A collective leadership of these members, precariously balanced, runs the risk of falling into divisions when resolute and sustained effort is necessary, as is likely given the economic, social and foreign policy challenges that it will likely face during its tenure.

This by no means is to say the fifth generation is destined to be weak. Chinese leaders have a time-tested strategy of remaining reserved for as long as possible and not revealing their full strength until necessary. And China’s centralist political system generally entails quick implementation once the top leadership has made up its mind on a policy. Still, judging by available criteria, the fifth generation leaders are likely to be reactive, like the current administration. Where they are proactive, it will be on decisions pertaining to domestic security and social stability.

Military Leadership

The Rise of the People’s Liberation Army

After Deng’s economic reforms, the Chinese military began to use its influence to get into industry and business. Over time, this evolved into a major role for the military on the local and provincial level. Military commands supplemented their government budget allocations with the proceeds from their business empires. Ultimately, the central government and Party leadership became concerned that the situation could degenerate into regional warlordism of the sort that has prevailed at various times in Chinese history — with military-political-business alliances developing more loyalty to their interests and foreign partners than to Beijing. Thus when Jiang launched full-scale reforms of the military in the 1990s, he called for restructuring and modernization (including cutting China’s bloated ground forces and boosting the other branches of service) and simultaneously ordered the military to stop dabbling in business. Though the commanders only begrudgingly complied at first, the military-controlled businesses eventually were liquidated and their assets sold (either at a bargain price to family members and cronies or at an inflated price to local governments). To replace this loss of revenue and redesign the military, the central government began increasing budgetary allocations focusing on acquiring new equipment, higher technology, and training and organization to promote professionalism. The modernization drive eventually gave the military a new sense of purpose and power and brought a greater role to the PLA Navy (PLAN), the PLA Air Force (PLAAF), and the Second Artillery Corps (the strategic missile corps).

The military’s influence appears highly likely to continue rising in the coming years for the following reasons:

•Maintaining internal stability in China has resulted in several high-profile cases in which the armed forces played a critical role. Natural disasters such as massive flooding (1998, 2010) and earthquakes (especially in Sichuan in 2008) have required the military to provide relief and assistance, giving rise to more attention on military planning and thereby improving the military’s propaganda efforts and public image and prestige. Because China is prone to natural disasters and its environmental difficulties have worsened as its massive population and economy have put greater pressure on the landscape, the military is expected to continue playing a greater role in disaster relief, including by offering to help abroad. At the same time, the rising frequency of social unrest, including riots and ethnic violence in regions like Xinjiang and Tibet, has led to military involvement in such matters. As the trend of rising social unrest looks to continue in the coming years, so the military will be called upon to restore order, especially through the elite People’s Armed Police, which falls under the joint control of the Central Military Commission and State Council.
•As China’s economy has become the second largest in the world, its international dependencies have increased. China depends on stable and secure supply lines to maintain imports of energy, raw materials, and components and exports of components and finished goods. Most of these commodities and merchandise are traded over sea, often through choke-points such as the straits of Hormuz and Malacca, making them vulnerable to interference from piracy, terrorism, conflicts between foreign states, or interdiction by navies hostile to China (i.e., the United States, India or Japan). Therefore it needs the PLAN to expand its capabilities and reach so as to secure these vital supplies — otherwise the economy would be exposed to potential shocks that could translate into social and political disturbances. This policy has also led the PLA to take a more active role in U.N. peacekeeping efforts and other international operations, expand integrated training and ties with foreign militaries, and build a hospital ship to begin military-led diplomacy.
•Competition with foreign states is intensifying as China has become more powerful economically and internationally conspicuous. In addition to building capabilities to assert its sovereignty over Taiwan, China has become more aggressive in defending its sovereignty and territorial claims in its neighboring seas — especially in the South China Sea, which Beijing elevated in 2010 to a “core” national interest (along with sovereignty over Taiwan and Tibet) and also in the East China Sea. This assertiveness has led to rising tension with neighbors that have competing claims on potentially resource-rich territory in the seas, including Vietnam, the Philippines, Indonesia, Malaysia, Brunei and Japan. Moreover, Beijing’s newfound assertiveness has collided with U.S. moves to bulk up its alliances and partnerships in the region, which Beijing sees as a strategy aimed at constraining China’s rise.
•China’s military modernization remains a primary national policy focus. Military modernization includes acquiring and developing advanced weaponry, improving information technology and communications, heightening capabilities on sea and in the air, and developing capabilities in new theaters such as cyberwarfare and outer space. It also entails improving Chinese forces’ mobility, rapid reaction, special operations forces and ability to conduct combined operations between different military services.
•The PLA has become more vocal, making statements and issuing editorials in forums like the PLA Daily and, for the most part, receiving positive public responses. In many cases, military officers have voiced a nationalistic point of view shared by large portions of the public (though one prominent military officer, Liu Yazhou, a princeling and commissar at National Defense University, has used his standing to call for China to pursue Western-style democratic political reforms). Military officials can strike a more nationalist pose where politicians would have trouble due to consideration for foreign relations and the concern that nationalism is becoming an insuppressible force of its own.
Of course, a more influential military does not mean one that believes it is all-powerful. China will still try to avoid direct confrontation with the United States and its allies and maintain relations internationally given its national economic strategy and the fact that its military has not yet attained the same degree of sophistication and capability as its chief competitors. But the military’s growing influence is likely to encourage a more assertive China, especially in the face of heightened internal and external threats.


The Central Military Commission

The Central Military Commission (CMC) is the state’s most powerful military body, comprising the top ten military chiefs, and chaired by the country’s civilian leader. This means the CMC has unfettered access to the top Chinese leader, and can influence him through a more direct channel than through its small representation on the Politburo Standing Committee. Thus the CMC is not only the core decision-making body of the Chinese military, it is also the chief conduit through which the military can influence the civilian leadership.




Promotions for China’s top military leaders are based on the officer’s age, his current official position — for instance, whether he sits on the CMC or in the CPC Central Committee — and his personal connections. Officers born after 1944 will be too old for promotion since they will be 68 in 2012, past the de facto cutoff age after which an officer is no longer eligible for promotion to the CMC. Those officers meeting the age requirement and holding positions on the CMC, the CPC Central Committee, or a command position in one of China’s military services or its seven regional military commands (or the parallel posts for political commissars) may be eligible for promotion.

China’s paramount leader serves simultaneously as the president of the state, the general-secretary of the Party, and the chairman of the military commission, as Hu does. The top leader does not always hold all three positions, however: Jiang held onto his chair on the CMC for two years after his term as president ended in 2002. Since Hu did not become CMC chairman until 2004, it is not unlikely that he will maintain his chair until 2014, two years after he gives up his presidency and leadership of the party. But this is a reasonable assumption, not a settled fact, and some doubt Hu’s strength in resolving such questions in his favor.

Interestingly, Hu has not yet appointed Vice President Xi Jinping to be his successor on the CMC, sparking rumors over the past year about whether Hu is reluctant to give Xi the vice chairmanship or whether Xi’s position could be at risk. But Hu will almost certainly dub Xi his successor as chairman of the CMC soon, probably in October. Given the possibility that Hu could retain his CMC chairmanship till 2014, Xi’s influence over the military could remain subordinate to Hu’s until then, raising uncertainties about how Hu and Xi will interact with each other and with the military during this time. Otherwise, Xi will be expected to take over the top military post along with the top Party and state posts in 2012.

Old and New Trends

Of the leading military figures, there are several observable trends. Regional favoritism in recruitment and promotion remains a powerful force, and regions that have had the greatest representation on the CMC in the past will retain their prominent place: Shandong, Hebei, Henan, Shaanxi and Liaoning provinces, respectively, appear likely to remain the top regions represented by the new leadership, according to research by Cheng Li, a prominent Chinese scholar. These provinces are core to the CPC’s support base. There is considerably less representation in the upper officer corps from Shanghai, Guangdong, Sichuan, or the western regions, all of which are known for regionalism and are more likely to stand at variance with Beijing. (This is not to say that other provinces, Sichuan for instance, do not produce a large number of soldiers.)

One group of leaders, the princelings, are likely to take a much greater role in the CMC in 2012 than in the current CMC, in great part because these are the children or relatives of Communist Party revolutionary heroes and elites and were born during the 1940s-50s. Examples include the current naval commander and CMC member Wu Shengli, political commissar of the Second Artillery Corps Zhang Haiyang, and two deputy chiefs of the general staff, Ma Xiaotian and Zhang Qinsheng. In politics, the princelings are not necessarily a coherent faction with agreed-upon policy leanings. Though princeling loyalties are reinforced by familial ties and inherited from fathers, grandfathers and other relatives, they share similar elite backgrounds, their careers have benefited from these privileges, and they are viewed and treated as a single group by everyone else. In the military, the princelings are more likely to form a unified group capable of a coherent viewpoint, since the military is more rigidly hierarchical and personal ties are based on staunch loyalty. The strong princeling presence could constitute an interest group within the military leadership capable of pressing more forcefully for its interests than it would otherwise be able to do.

A marked difference in the upcoming CMC is the rising role of the PLAN, PLAAF and Second Artillery Corps, as against the traditionally dominant army. This development was made possible by the enlargement of the CMC in 2004, elevating the commanders of each of these non-army services to the CMC, and it is expected to hold in 2012. The army will remain the most influential service across the entire fifth generation military leadership, with the navy, air force, and missile corps following close behind. But crucially, in the 2012 CMC the army’s representation could decline relative to the other branches of service, since of the three members of the current CMC eligible to stay only one comes from the army (General Armaments Department Director Chang Wangquan) and many of the next-highest candidates also hail from other services. After all, missile capabilities and sea and air power are increasingly important as China focuses on the ability to secure its international supply chains and prevent greater foreign powers (namely the United States) from approaching too closely areas of strategic concern. The greater standing of the PLAN, PLAAF, and Second Artillery Corps is already showing signs of solidifying, since officers from these services used not to be guaranteed representation on the CMC but now appear to have a permanent place.

There is also a slight possibility that the two individuals chosen to be the CMC vice chairmen could both come from a background in military operations. Typically the two vice chairmen — the most powerful military leaders — are divided between one officer centered on military operations and another centered on political affairs. This ensures a civilian check on military leadership, with the political commissar supervising the military in normal times, and the military commander having ultimate authority during times of war. However, given the candidates available for the position, the precedent could be broken and the positions filled with officers who both come from a military operational background. Such a configuration in the CMC could result in higher emphasis on the capability and effectiveness of military rather than political solutions to problems and a CMC prone to bridle under CPC orders. But having two military affairs specialists in the vice chairmen seats is a slim possibility, and personnel are available from political offices to fill one of the vice chairmanships, thus preserving the traditional balance and CPC guidance over military affairs.

Civilian Leadership Maintained

The rising current of military power in the Chinese system could manifest in any number of ways. Sources tell STRATFOR that military officers who retire sooner than civilian leaders may start to take up civilian positions in the ministries or elsewhere in the state bureaucracy. Nevertheless, the overall arc of recent Chinese history has reinforced the model of civilian leadership over the military. The Communist Party retains control of the CMC, the central and provincial bureaucracies, the state-owned corporations and banks, mass organizations, and most of the media. Moreover, there does not appear to be a single military strongman who could lead a significant challenge to civilian leadership. So while the military’s sway is undoubtedly rising, and the upcoming civilian leadership could get caught in stalemate over policy, the military is not in a position to seize power. Rather, it is maneuvering to gain more influence within the system, adding another element of intrigue to the already tense bargaining structure that defines elite politics in China. But despite possible military-civilian frictions, the PLA will seek to preserve the regime, and to manage or suppress internal or external forces that could jeopardize that goal.
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3)Can Democrats Save Their Party?
By George Scaggs

It is time to make an honest assessment. Democrat voters who are not down with the whole radical Socialist thing need to take a good look in the mirror and ask themselves if their party of choice still truly represents them.


Though they may instinctively interpret this message as critical, it is intended as a rallying cry for some of my fellow countrymen. There are fine, upstanding, productive citizens among Democratic ranks. As most of us do, I count a number of them among my friends and family members.


Though few are willing to acknowledge it, I sense that they want nothing to do with the loss of freedom and prosperity that comes hand in hand with the radicalism coming out of today's Democratic Party.


Don't get me wrong -- as a staunch conservative, I maintain that support for the Democratic Party is a non-starter, but the realities of our two-party system necessarily dictate that we all have some interest in the matter. The truth is we need two healthy, honest, and competent political parties working in the best interests of America.


The health of the Democratic Party requires a cleansing. It will depend on a rejection of much of what it currently stands for, and particularly the means by which it achieves its objectives. The sooner Democrats get on with it, the sooner we'll all be better off -- particularly them.


Here's a news flash: those of us on the right have been there and done that. Contrary to popular belief, the tsunami of discontent which has come to be known as the "Tea Party" movement is largely a product of this exercise.


We were disenchanted with government at large, Republicans as well as Democrats, before Mr. Obama happened along. Either mistakenly thinking he had a mandate for his radical transformation of America or perhaps determined to implement it anyway, Obama immediately upped the ante, walking right into a buzz-saw of public opinion, thus propelling the people's rebellion into orbit.


Plenty of Americans were duped by the "hope and change" message, but nobody more so than run-of-the-mill Democrats. To be sure, Democratic candidates running campaigns which are largely cloaked in "moderate" terms is nothing new, but few ever imagined how far afield Obama and company would stray from reasonable governance.


Besides opposing Washington's intrusive agenda and the crushing debt it is amassing, an increasing number of Americans feel outright betrayed by their government, particularly at the federal level. Witness the massive number of independent voters who, after rejecting the GOP in 2006 and 2008, have shifted to the right.


It is no wonder. After Obama has been in the White House for twenty months and Democrats in control of Congress for the past four years, unable to genuinely defend their policies or their lackluster performance, party hard-liners persist in pointing the finger of blame.


It's outrageous enough to continue blaming G.W. Bush for everything that goes wrong, but Democratic leaders, including Obama, have not stopped there. They have made vilifying people their stock and trade.


Hurling mindless invective at decent citizens who merely oppose you has taken a considerable toll on the party. The political problem with portraying a demon around every corner is that you eventually end up offending huge swaths of the nation's populace.


The whole façade has come crashing down. Hardcore Democratic leaders and their supporters know they are at odds with the mood of the country. Their increasingly nasty and childish behavior speaks volumes.


At long last, the mask is off. No doubt, the era of Obama has created an unprecedented backlash in the present, but it has done more than that: it has fully exposed the extreme left's political agenda once and for all.


The left's dramatic overreaching will prove to be a long-term game-changer. It is unlikely that the electorate will soon again be as apathetic, uninformed, and disengaged as they have been in recent decades. The trend could serve to haunt the Democratic Party for years to come.


The intoxication of seemingly absolute power, of strictly one-party rule, may have been a thrilling high in the short-term, but the hangover will be proportionately painful. A monumental backlash has Democrats standing on the precipice of an electoral disaster of epic proportions. Without serious reform, they could be relegated to a minority status that could take decades to overcome.


The party has been hijacked by a collection of radicals including avowed Socialists, Marxists, anarchists, Mao-worshipers, and fans of Castro and Chávez -- all of whom have been provided a seat at the table by the current regime in Washington.


The rejection of these extremists is an American thing more than it is a Republican-versus-Democrat thing. This is the ongoing struggle of freedom versus tyranny at work, a clash between citizens and a government which seeks to increasingly control them.


Democrats have paid a tremendous price to achieve electoral victory. Unfortunately, so has much of the nation. Having welcomed into their tent an endless array of radicals and malcontents who represent every failed ideology and kooky leftist cause under the sun, the party is now discovering that the collective weight is practically unbearable.


The results are horrifying. Look around our nation at the unending urban blight in cities like Detroit, or the potential bankruptcy facing states like California, New York, and Illinois.


Look at the failed public school systems and the denial of concerned parents' choice over how and where their child is educated.


Consider the stripping of our morality that the party endorses -- the horror of taking 1.8 million unborn lives a year and the emotional scars that come along with them, young teens being spirited away by school officials to have an abortion without the consent of their parents, a system of indoctrination that wants to introduce your grade-schooler to homosexuality.


Now Democrats find themselves in league with those who believe that we have no right to our borders, that America, your state, and even you have no right to sovereignty at all. Of course, we are obligated to provide services for all the resulting illegal aliens even though our infrastructure is being stressed to the point of breaking.


The party's border policies result in rampant crime, sedition, and terrorism in the forms of Central American gangs, foreign nationals, Mexican drug cartels, and Islamic fanatics. By assuaging the demands of the Muslim political community, Shariah Law is being openly practiced in pockets of America, and we are under constant threat of attack on our own soil.


In the streets, Democrats are increasingly supported by a host of nefarious characters including criminal enterprises such as ACORN, union thugs who physically assault the weak and elderly among us, and a wide assortment of vandals who delight in destroying public property.


If all of this suits the average registered Democrat, by all means, they have the right to keep electing the same kind of leaders. Otherwise, there is much work to be done. To start, they would be well-served to consider whether or not they can continue to afford Mr. Obama.


George Scaggs is a writer, commentator, voice actor, and audio-video producer.
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4)Next Generation F-35. Ministers okay a deal Photo: AFP


Ministerial committee led by Netanyahu, Barak authorizes purchase of most advanced fighter jet in world at cost of NIS 10 billion. First F-35 plane to 'make aliyah' in 2015
By Attila Somfalvi




The US State Department on Thursday justified selling arms to Israel and Saudi Arabia after a ministerial committee headed by Prime Minister Benjamin Netanyahu and Defense Minister Ehud Barak authorized the purchase of 20 F-35 stealth fighter jets.



"Procuring the most advanced fighter jet in the world is a significant step towards bolstering the State of Israel's military capability," said Netanyahu.



Later Thursday, US State Department spokesman PJ Crowley said that selling American-made military equipment to Israel and Saudi Arabia was a "national interest".




Crowley refused to confirm reports of a $60 billion arms deal to the Saudi government, but justified selling arms to US allies in the Middle East in order to strengthen them before Iran.




Israel's decision to purchase the fighter jets for about NIS 10 billion ($2.66 billion) was preceded by a series of long discussions. Chief of Staff Gabi Ashkenazi and Air Force Commander Ido Nehushtan participated in Thursday's meeting.



The plane is slated to become operational by 2015, but Israeli pilots will be able to train on them much prior to this in the US.



The F-35 fighter is considered the most advanced fighter jet today.




The main hurdle to signing the deal was its steep price as well as the costs associated with integrating Israeli systems on it. Finance Minister Yuval Steinitz demanded that an additional discussion be held on the matter, but the decision was ultimately made by the ministerial committee.



After receiving the go ahead for acquiring the fighter jets, Defense Minister Barak expressed his hopes that the F-35 will help Israeli maintain its aerial superiority and technological advantage in the region, perhaps even in a face off with Iran.
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5)On Obamacare, Wilson was rude but right
By Nolan Finley


It was a year ago this month that President Barack Obama stood before a joint session of Congress to confront accusations that his health care overhaul would be a national disaster, raising costs for everyone and putting Medicare at risk.

"Bogus claims," said the president.

"You lie!" shouted Rep. Joe Wilson, R-S.C., from the gallery, in a break from decorum that was roundly and rightly chastised.

A year later, we know that Wilson was pretty much right -- Obama did trash the truth to make his health care train wreck seem as if it sprung from the Big Rock Candy Mountain. The president, who told Congress and the American people his bill would, "slow the growth of health care costs for our families, our businesses, and our government," now admits this isn't true.

"As a consequence of us getting 30 million additional people health care, at the margins that's going to increase our costs -- we knew that," Obama said last week.

Of course he knew, but he wasn't saying so as he lobbied for the bill's passage. In his 2009 speech, Obama assured Americans the expense of extending coverage to the uninsured would be covered through cost cutting reforms.

In the six months since the president signed the bill, not one significant cost-cutting reform has been adopted. Congress, as predicted, avoided cutting Medicare reimbursement rates, a key component of Obama's projected savings.

Instead of declining, Medicare costs are expected to continue to rise at an average rate of 6.3 percent over the next decade.

And the pain to consumers is already being felt. Next week, the first mandates of Obamacare kick in, and will add 1 percent to 9 percent to insurance premiums.

Those requirements, including the creation of high-risk insurance pools and allowing "children" to stay on their parent's plans until age 26, will boost health expenditures by $10.2 billion over the next 2 1/2 years, according to the Centers for Medicare and Medicaid Services. Consumers will pay every dime.

Much of Obama's 2009 speech was aimed at reassuring seniors that Medicare as they knew it would not change, except to become more efficient. But the bill is now expected to drive at least 50 percent of seniors out of Medicare Advantage plans, raising their out-of-pocket costs.

At the other end of the age spectrum, the low-premium, high-deductible catastrophic polices favored by students and young adults are also at risk because of the bill's mandates.

So much for Obama's promise that, "Nothing in our plan requires you to change what you have."

As for Obama's assurance that he wouldn't put private insurers out of business, his Health and Human Services secretary, Kathleen Sebelius, this week contradicted that claim in warning insurance companies not to blame rate hikes on Obamacare lest they be cut off from government payments. In other words, toe the administration's propaganda line or risk going to the gulag. Even free speech is sacrificed to keep the Big Lie of Obamacare from exposure.

Nearly all of the promises the president made in advance of Obamacare's passage are unraveling.

There's no reason to trust that any of the benefits touted by Obama will materialize, or not to fear that all of the doomsday scenarios -- from rationing to the collapse of the private medical system -- won't.

Joe Wilson, you were rude. But you were right
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6)Rove's election predictions: not bearish enough on Dems

Before Tea Partier Christine O'Donnell's stunning victory in Delaware, Karl Rove laid out a case for how the GOP could take back the House but not the Senate. Four polls suggest he's being too modest.
By Daryl G. Jones, contributor

Last week we hosted a call for our clients with Karl Rove, former Deputy Chief of Staff at the White House, to discuss whether the midterm elections could be a major stock market catalyst. Our basic premise heading into the discussion was that if the Republicans gain enough seats, it would be a strong repudiation of the Obama administration's economic policies and, potentially, lead to an extension of the Bush tax cuts, both of which would be positive for the stock market in the short term.

The discussion with Mr. Rove gave us an opportunity to pick the brain of one of the most successful political strategists of the modern era. Whether you like his politics or not, Rove has won many elections. In fact, of the more than 40 races that he has been the primary strategist for, he has won more than 80% of them. A key takeaway from our discussion with him was that trends matter in elections, and they are difficult to overcome in a short period of time. Further, the direction of these trends is a leading indicator for the next electoral data point. (Sound a bit like the stock market?)

While polls on an individual basis can be wrong, in aggregate they typically provide compelling insight into the electoral landscape. Currently, Hedgeye, the research firm I work for, is focused on four specific polls whose trends make us believe that we may not be bearish enough on the prospects for Democrats in the midterm elections. (And new polls are now confirming the same things.)

Poll 1: Presidential Job Approval

This poll is the best proxy for how the President has been doing, and while his approval may not be a function specifically of his policy (i.e. the economy, which he can't control), it is a reflection of how he is being perceived. The Real Clear Politics poll aggregate currently shows President Obama with a -2.5 spread on approval, which is the difference between Approve (46.6) and Disapprove (49.1). While this isn't quite the lowest rating of his Presidency, it is right near the bottom. More importantly, he started his Presidency with a +44.2 spread and the trend since his election has been straight down.

The key implication of a negative approval rating for President Obama heading into the midterms is that Democratic candidates will try to distance themselves from him, and in doing so won't be able to use the natural fundraising and bully pulpit abilities that come along with the President campaigning on your behalf.

Poll 2: Generic Congressional Ballot

The Generic Congressional Ballot measures which party those polled would vote for if the choices were generic. According to the Real Clear Politics poll aggregate, the Republicans have +7.8 advantage over the Democrats in this poll based on spread of 48.1 to 40.3. This is noteworthy given that in Obama's first week in office this same measure had the Republicans at 34 and the Democrats at 48 for a +14 point Democratic advantage. This is an amazing reversal for the Republicans as we've seen an almost 22 point swing in preferences in less than two years.

Poll 3: Approval of Congress

As we've been writing for months to our clients, the anti-Washington sentiment is as high as it has ever been in this country. The best measure for this is approval for Congress. Currently, and once again according to the Real Clear Politics poll aggregate, almost 72% of those polled disapprove of Congress, while only 23% approve. This is a clear and strong statement against incumbency and since the Democrats currently control the Presidency, the Senate, and the House, they are overwhelmingly viewed as the incumbents.

Poll 4: Voting Enthusiasm

One of the best polls we've seen for evaluating voter enthusiasm is the Gallup Poll that measures "thought given to the election". In the most recent results from this poll on September 2nd 2010, 54% of Republicans indicated they had given some thought to the election, compared to only 30% of Democrats and 32% of Independents. This is in stark contrast to the results of this poll during the last midterm, which showed Republicans slightly lower at 53%, but the Democrats at 52%. Amazingly, the current spread between Republicans and Democrats on this measure is 24 points, which is the widest Gallup has ever measured in this poll.

While some Republican Party officials have recently been talking down their chances in the midterms, the numbers in the polls outlined above and in the table below suggest just the opposite. In aggregate, Republicans are motivated, are being clearly favored by those intending to vote, and do not have the disadvantage of having the unpopular President belong to their party. Moreover, these measures have all been trending in the favor of the Republicans for the last two years and will, absent an October surprise, likely continue to do so through the midterms.

There is a consensus view, which was shared by Mr. Rove in our discussions, that the Republicans will take back the House of Representatives and likely not wrest control of the Senate. The question in our minds after reviewing the data and trends is: are we bearish enough on the Democrats heading into the midterms? We think not. The real October surprise could be a larger than expected victory in the House and a Republican majority in the Senate.

Hedgeye Midterm Trend Analysis

Poll Type (1) January 26, 2009 September 14th, 2010 Difference
Generic Congressional +14 Democrats +8 Republicans +22 swing for Republicans
Obama Approval +43.3 more approve than disapprove -2.5 +45.8 swing away from Obama
Congressional Job Approval 70.7 Disapprove 72.0 disapprove +1.3 increase in disapproval
Voting Enthusiasm (2) +1 advantage for Republicans +24 advantage for Republicans +23 increase for Republicans

(1) All polls are based on Real Clear Politics aggregates, except for Voting Enthusiasm which is based solely on a Gallup Poll.

(2) Dates for Voting enthusiasm are the last midterm elections and September 2, 2010.

-- Daryl G. Jones is the Managing Director of Risk Management at Hedgeye, a research firm based in New Haven, Conn.


6a) Suddenly in Arkansas, ‘R’ is golden
By John Brummett

It appears Arkansas may have had the big one, by which I mean a political earthquake reconfiguring our landscape.

When I got into political reporting in the 1970s, people got elected in Arkansas merely because they were Democrats. Republicans ran for office without daring to reveal their lethal party affiliation.

Contrast that with two polls conducted several days ago for Roby Brock’s Talk Business and Hendrix College in Conway, neither any remote kind of Republican sympathizer.

One of these polls was conducted by automatic phone calls one night. The other was conducted by the same process the next night. The same political races were surveyed each night.

The only difference was that one of the polls listed the candidate choices along with the candidates’ party affiliations while the other listed these same candidate choices but only by the candidates’ names and not with their party affiliations.

This was the utterly remarkable finding: Republicans performed 20 to 30 points better when they were identified as Republicans than when they weren’t. They led widely when identified as Republicans. They trailed by margins ranging from slim to significant when not.

To best assess the raw advantage or disadvantage of party labels, these back-to-back polls deliberately surveyed minor state constitutional offices for which voter awareness tends to be superficial.

These are the kinds offices occupied by people who won them only because they had identifiable names, like Charlie Daniels or Bryant, be it Kelly, Winston or even L.J.

It appears something is even stronger afoot than being fortuitously mistaken for a country fiddler or some other fellow with the last name of Bryant.

That would be the suddenly golden “R.”

For secretary of state, state Rep. Mark Martin led Pulaski County Clerk Pat O’Brien by 18 points when Martin was identified as Republican and O’Brien as Democrat. Without the party identification, O’Brien turned around and led Martin by 10 points.

For lieutenant governor, pizza guy Mark Darr led state Sen. Shane Broadway by 17 points when Darr was identified as Republican and Broadway as Democrat. Without the party identification, Broadway led by 3 points.

For land commissioner, John Thurston led L.J. Bryant by 25 points when Thurston was identified as Republican and Bryant as Democrat. Without the party identification, Bryant led by 6 points.

It would stand to reason, though these findings don’t support it, that Mark Martin would be an overpowering winner for secretary of state both on account of his being the Republican and on account of his having the same name as a famous race car driver from Batesville.

But that the name Mark Martin doesn’t seem to do him any good, while being Republican does him a world of good — well, there’ll always be something about Arkansas politics that makes absolutely no sense.

My explanation, advanced previously in this space, is that Democrats were artificially sustained beyond the Reagan Revolution in Arkansas by inertia and the uncommon skill and popularity of such Democrats as Clinton, Bumpers, Pryor and Beebe.

But now all of that has been changed by the deficit-explosion and health care reform law of a Democratic president inherently unpopular in the state for some reason or reasons, Barack Obama, as abetted by a Democratic House speaker, Nancy Pelosi, also uncommonly unpopular here.

A leading Republican predicted the other day that Republicans will come to the next session of the Arkansas General Assembly with 40 of the 100 House seats and 12 to 15 of the 35 Senate seats.

More significant, he said, was that this new landscape would allow Republicans to go into communities and recruit prominent and conservative-minded persons to run for legislative seats as Republicans whereas, in the past, these courted ones demurred only because local political viability was more readily available on the Democratic ticket.

That is to say this may not be an anomaly, but a permanent new Arkansas.
John Brummett is a columnist for the Arkansas News Bureau in Little Rock.

6b) A Good Primary Season for the GOP
Christine O'Donnell is the exception that proves the rule.
BY William Kristol


The seven-month primary season, which began on Feb. 2 in Illinois, is over. Republicans and conservatives should be pleased by the results.


1. Voters flocked to participate in GOP primaries. National Republican turnout in 2010 has comfortably exceeded Democratic primary turnout. This is as good an indicator as the generic congressional ballot polls as to where the voters are going: They're going to vote for Republicans this November.

Incidentally, as Michael Barone has consistently pointed out after earlier primary nights this year, the difference can't simply be explained by the greater number of competitive Republican primaries. For example, last night in MA 10, a Democratic open seat, there were competitive races in both parties (the Democratic primary was actually the more competitive one). About 51,000 people voted in the GOP primary compared to about 56,000 in the Democratic. Given the historical tendency of many Republican-inclined voters to register as independents in Massachusetts and therefore not to show up for primaries, one has to think the GOP candidate in MA 10, starting from an almost even playing field in primary turnout, has a 50-50 chance this November. And MA 10 is down around #60 in the rankings of most likely GOP pickups.



2. Christine O'Donnell is the exception to the rule that Republicans have, on the whole, nominated strong, electable and conservative candidates in key Senate, gubernatorial, and House races. GOP House nominees in particular seem very formidable—lots of young, impressive, and well-qualified non-career politicians who are well-positioned to maximize gains from the wave that will sweep in a lot of them in any case this November. Republican candidates for governor are running good races in tough states like CA and IL and OR, and Scott Walker, who won last night in Wisconsin, should have a very good shot there. And for what it's worth, I suspect Rick Scott will turn out to be a better nominee than Bill McCollum would have been in Florida, and I wouldn't be surprised if Carl Paladino could cause trouble for Andrew Cuomo in New York.

In the Senate, Christine O'Donnell will almost certainly lose a seat that could have been won (cf. Oliver North taking the Republican nomination in Virginia in 1994 and losing that winnable seat—Republicans still won the Senate). Sharron Angle is the other somewhat problematic GOP Senate nominee who might give away a likely pickup, though I suspect she wins. But from Ron Johnson (WI) to Carly Fiorina (CA) to Dino Rossi (WA) to Linda McMahon (CT) to John Raese (WV), the GOP has ended up with good candidates with a reasonable chance to upset Democratic incumbents or quasi-incumbents (Blumenthal in CT, Manchin in WV) in states where the Democrats would have been expected to be shoo-ins a few months ago.

3. Tea Party activism, enthusiasm and, yes, rebelliousness have been, on net, a very good thing for the GOP. Now in politics as in life, there can be, on occasions, too much of a good thing. Thus Delaware. But it's still much, much better to be the party to which independents and new voters are flocking, and in which activists are energized, than not. And it's better for the GOP, as the out party, that the anti-establishment and anti-incumbent wave is still building (which it clearly is) rather than ebbing. A year ago, the liberal media hoped tea partiers were going to generate suicidal third-party challenges, scare off independents from the Republicans, and generally destroy the Republican party. It turns out they've probably cost the GOP one Senate seat on the way to a huge off-year election victory. It's a small price to pay.
------------------------------------------------------------------------------------7) Sides speak more with US than with each other
By HERB KEINON


SHARM E-SHEIKH – “In the end,” US Mideast envoy George Mitchell said Tuesday in a press conference here following a number of meetings, all the sensitive issues between Israel and the Palestinians “must be resolved by the parties themselves.”

That’s in the end.

In the meantime, however, the “direct talks” between Israel and the Palestinians are taking more the form of negotiations between each side and the Americans, with both the Palestinians and Israel trying to convince the US of the reasonableness of their respective positions.

This is something that became evident looking at the slate of meetings held in Sharm on Tuesday.

Prime Minister Binyamin Netanyahu started the day with a meeting with the host of the discussions, Egyptian President Hosni Mubarak. Palestinian Authority President Mahmoud Abbas also had a bilateral with Mubarak.


Netanyahu then met with US Secretary of State Hillary Clinton, and Abbas did the same.

Those meetings were followed by a three-way meeting that included Netanyahu, Clinton and Abbas. Then there was a four-way lunch – Mubarak, Clinton, Netanyahu, Abbas. And then, finally, there was a meeting between Netanyahu and his top negotiator, Yitzchak Molcho, with Abbas and his top man, Saeb Erekat, and of course Clinton and Mitchell.

What was sorely absent from that rich menu of talks was a private meeting between Abbas and Netanyahu. That meeting might take place Wednesday in Jerusalem, but then again it might not.

Netanyahu and Abbas will definitely be meeting in the capital, but what has not yet been decided 24 hours before that meeting was scheduled to take place was whether Clinton would once again be sitting between them.

Two rounds into the long awaited direct talks, and the dialogue seems more between the sides and Washington, then between the two sides themselves. The Palestinians are trying to convince the US of the utter necessity of an extension of the settlement construction moratorium, while Israel is trying to convince the US of the need for the Palestinians to upfront recognition of Israel as the nation state of the Jewish people.

And the US, at last in its public statements, is trying to keep both sides happy, or – at least – both sides equally unhappy. The intensive negotiations conducted with the US over this matter led Mitchell to say that the US believes it would be best for the moratorium to continue, but also that Abbas should take steps (perhaps recognition of Israel as a Jewish state?) that would make extending the moratorium politically easier for Netanyahu.

“Our position on settlements is well known and remains unchanged,” Mitchell said. “As President Obama said just recently, we think it makes sense to extend the moratorium; especially given that the talks are moving in a constructive direction. We know that this is a politically sensitive issue in Israel. And we have also called on President Abbas to take steps that help encourage and facilitate this process.”

Mitchell was careful in his comment not to stray at all from comments Obama, Clinton or he himself has made in the past about the current diplomatic process. He charted no new ground in his briefing.

What he did do, however, was say for the first time that the parties have “begun a serious discussion on core issues,” adding that the “work is well underway” on achieving a “framework agreement for permanent status” within a year.

Although unwilling to be more specific about those issues, he said “several” were discussed “in a very serious, detailed, and extensive discussion.”

And if the discussion regarding the moratorium is any indication, these core issues were also discussed with the US very much in the middle – each side trying to persuade the US, so the US will pressure the other party.
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8) HERE ARE ALL THE DEVELOPED NATIONS OF THE WORLD THAT OFFER BIRTHRIGHT CITIZENSHIP TO THE BABIES OF TOURISTS AND ILLEGAL ALIENS: United States


Every other modern Developed nation in the world has gotten rid of birthright citizenship policies.

Yet, most of U.S. news media and politicians the last two weeks have ridiculed the comments by some other politicians that it is time for the U.S. to put an end to birthright citizenship for tourists and illegal aliens. The U.S. stands alone.

There used to be all kinds of Developed countries that gave away their citizenship as freely as we do in the U.S. But one by one they all have recognized the folly of that policy.

SOME MODERN COUNTRIES THAT RECENTLY ENDED THEIR BIRTHRIGHT CITIZENSHIP POLICY:

Canada was the last non-U.S. holdout. Illegal aliens stopped getting citizenship for their babies in 2009.

Australia’s birthright citizenship requirements are much more stringent than those of H.R. 1868 and took effect in 2007.

New Zealand repealed in 2006

Ireland repealed in 2005

France repealed in 1993

India repealed in 1987

United Kingdom repealed in 1983

Portugal repealed in 1981

Only the U.S. values its citizenship so lowly as to distribute it promiscuously to the off-spring of foreign citizens visiting Disney World on tourist visas and to foreign citizens who have violated their promises on their visitor, work and student visas to stay illegally in the country, as well as to those who sneak across our borders.
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