Saturday, January 07, 2012

Comedians for Obama

President Obama may not know it, but he has a nice advantage in the world of late-night TV. A new study by The Center for Media and Public Affairs at George Mason University says that in 2011, late-night comedians mocked Republicans three times more than they did Democrats. The biggest ideological difference was between David Letterman and Jay Leno. Letterman told 77 jokes at the expense of Obama, while Leno told 156 -- about 100 percent more.

The Republican presidential candidates got whacked across the board in late-night precincts. Herman Cain was mocked 191 times, Rick Perry 186, Michele Bachmann 128, and Newt Gingrich 110.

Interestingly, Mitt Romney was only singled out for teasing 79 times, perhaps signifying a certain blandness on the part of the governor.

The George Mason survey doesn't count the GOP mocking by Jon Stewart and Stephen Colbert, possibly because researchers would have collapsed trying to chronicle that. The fact is that every late-night comedian is liberal, and so are most of their writers. Leno is the most neutral; Letterman, Stewart, Colbert and Jimmy Fallon are the furthest left.

The question is: How much will this matter in the 2012 election? Tough to answer, but one thing is certain: The late-night shows are not as well watched as they used to be.

However, popular culture does have an effect on the distracted voter: those people who do not pay much attention to the news. They often pick up the political narrative from entertainment programs and stuff they read on the Internet. There is no question that Obama's rock-star status in 2008 was largely defined by Oprah and other entertainers. And that stodgy old John McCain did not exactly dominate the rundown on "Entertainment Tonight."

If Romney is the Republican nominee, boring jokes will rule the day. If a committed conservative like Rick Santorum were to run, the writers would go wild. I can see a Santorum impersonator on "Saturday Night Live" wearing a sleeveless sweater and a "Re-elect John Adams" button. Huey Lewis once sang, "It's hip to be square." Not on late-night TV, it isn't.

Americans should expect the media to back Obama again, although the enthusiasm couldn't possibly match that of 2008. We live in sobering times, and even though many believe it's all George W. Bush's fault, that punch line is not working anymore. There will be a new narrative, and it most likely will involve highlighting the dumbness of the GOP guy, not the accomplishments of the president.

In the end, the election will not be decided on late-night TV. Republicans already have lost there. Luckily for them, the Electoral College is a daytime operation.



Obama Unemployment Magic Trick: Indefinitely Detain 4 Million People from Workforce

Lying with statistics

Although there’s little doubt that job creation is speeding up in the private sector, unemployment is not going down as widely touted by the Bureau of Labor Statistics (BLS). In fact, it’s likely unchanged since the beginning of the recession because the government is deliberately undercounting the workforce to make unemployment appear to go down.

Missing in the latest labor report are at least 1.2 million job seekers who have been added to the civilian population over the last year but not to the work force, thereby artificially deflating the unemployment rate.

BLS is undercounting the workforce by lowering the Labor Force Participation rates

They are missing in part because the BLS no longer counts people who have been unemployed for so long that they have stopped looking for work. Since 1994 the BLS has discontinued the practice of counting the “long-term discouraged workers” from the workforce. If a worker stops looking for work after a period of time, they are no longer counted in the workforce. That means that government has created a system whereby the longer a jobs recession continues, the less reliable the unemployment numbers become- to the advantage of the government.

In December of 2010 there were just shy of 239 million workers in the civilian pool available to the work force. In the last year, that number has risen by 1.6 million to 240.5 million people. At the same time, the officially-counted workforce as used by the BLS has risen by only 274,000 workers. At a participation rate of 64 percent, that number should be closer to 1.1 million workers. Indeed, over the last year, the participation rate has also dropped from 64.3 percent to 64 percent. In other words, fewer people from the available population are counted as available to the workforce, thereby decreasing unemployment numbers.

In making an apples-to-apples comparison with a year ago, the country should have about 1.2 million more workers in the workforce than the BLS currently calculates. If one accounts for those extra workers, top line unemployment is at 9 percent. But that’s not the end of the deception.

Since the beginning of the recession labor participation rates have gone down from an average of 65.8 percent since 1980 as calculated by Zero Hedge to 64 percent, a rate not seen since the early 1980s. Indeed the persistency of this jobs recession is shown in the precipitous decline in the labor participation rates regardless of where the official unemployment rate has stood.

Just using the average participation rate of 65.8 percent since 1980 supplied by Zero Hedge, there are 4.4 million workers missing from the work force. Zero Hedge predicts that if the BLS keeps dropping the workforce number at the current rate, unemployment will hit zero just prior to the general election no matter how many jobs Obama “saves”.

It won't surprise anyone that as of December, the real implied unemployment rate was 11.4% - basically where it has been ever since 2009 - and at 2.9% delta to reported, represents the widest divergence to reported data since the early 1980s. And because we know this will be the next question, extending this lunacy, America will officially have no unemployed, when the Labor Force Participation rate hits 58.5%, which should be just before the presidential election.

If you can give Obama a Nobel Peace Prize for a non-existent peace, you should also consider an Oscar award for a movie yet to made.

If there were a remake of Dr. Strangelove today, there’d be no better subject than the Obama administration’s deconstructionist assault on truth. The sad thing is that so many people are willing accomplices in that assault.

For this administration, lying is a state of mind; supplying guns to drug traffickers is a noble act; killing healthcare is “saving” healthcare; ignoring entitlement reform is “preserving” entitlements; ignoring laws on immigration, recess appointments, detention of Americans, wiretaps, declarations of war, are all the constitutional prerogatives of the great constitutional law-giver and professor-in-chief, Dr. Strangelove or; How I Learned to Stop Worrying and Love Obama.

It would be hilarious, except it’s not a Hollywood movie. Obama’s made it the truth. Or whatever truth means now.



Why the Doctor Won’t See You

Are you having difficulty finding a doctor who will see you? If you are, brace yourself. Things are about to get a whole lot worse.

Right now, the biggest problems are in Massachusetts. If you live in Boston and are trying to see a new family doctor, get prepared to wait more than two months before you ever get a foot in the door. For the state as a whole, the average wait to see a new family doctor is one month. More than half of all family doctors and more than half of all internists are not accepting new patients at all.

What if you live in another state? Just wait two more years. In Massachusetts people are lined up waiting to see doctors because of the health reform championed by the former governor (RomneyCare). And as Barack Obama has said on more than one occasion, RomneyCare is the model for ObamaCare.

Why? In both the Massachusetts health plan and the new health care law the mistake is the same: insuring the uninsured, but doing nothing to enable the medical community to deliver more care. Massachusetts succeeded in cutting the number of uninsured in half — a worthy accomplishment. But the state did nothing to expand the number of doctors, nurses or paramedical personnel. The result: a major increase in the demand for care, but no change in supply.

I learned what this means in human terms a while back from a Boston cab driver. She was on MassHealth (Medicaid) and her biggest problem, she told me, was getting care. "I went down a list of 20 doctors before I found one who would see me," she said. "Twenty doctors?" I responded incredulously. "Were you going through the Yellow Pages?" "No," she said, "I was going down the list MassHealth gave me."

In Massachusetts, this is what the advocates of health reform call "universal coverage."

Bad as all this is, it is actually rather mild compared to what is about to happen in other states. In Massachusetts, less than 10 percent of the population was uninsured before the reform set in. In Texas, by contrast, one in every four people is currently uninsured. Insure half of those and the demand for Texas doctors is going to soar.

Estimates are that ObamaCare will succeed in insuring 32 million otherwise uninsured people. If economic studies are correct, once these folks are insured, they will try to double their consumption of health care. On top of that, ObamaCare does something that Massachusetts did not do. It will force the vast majority of people who already have insurance to switch to more generous coverage. For example, everyone will have to be covered for a long list of preventive care and diagnostic screenings, with no copay and no deductible. Once people have this extra coverage, they will be inclined to take advantage of it.

Get prepared, then, for a huge increase in the demand for care. The result will be growing waiting lines — at the doctors’ offices, at hospital emergency rooms, at the health clinics, etc.

In the early stages of Massachusetts' health reform, Governor Romney told me what he expected to happen. Instead of uninsured patients going to hospital emergency rooms to get expensive care in inappropriate settings (all paid for by the rest of us), he said, insured patients will be getting less expensive care in the offices of primary care doctors.

Ah, but the best laid plans …. Turns out that more people are currently seeking care in hospital emergency rooms and at publicly funded community health centers than there were before the reform! As one academic study concluded, in Massachusetts you have the same people seeking the same care at the same places you had before. Health reform has mainly meant shuffling money around from one bureaucracy to another.

When health care is rationed by waiting, who gets care and who doesn’t? Here is the real surprise. Just as ObamaCare intends to do, Massachusetts set up health insurance exchanges where the uninsured could obtain insurance, in most cases with generous government subsidies. Yet the newly insured are the patients having the greatest difficulty obtaining access to care. According to one report:

* Only 56 percent of family doctors accept patients enrolled in Commonwealth Care (subsidized insurance sold in the "exchange").

* Only 44 percent accept patients in Commonwealth Choice (unsubsidized insurance sold in the "exchange").

* The fraction of internists who accept Commonwealth Care and Commonwealth Choice is 43 percent and 35 percent, respectively.

In Massachusetts this is called "access to care."



Crony Capitalism is Failing; Let's Try the Real Thing

The past four years have seen governments throughout the West turn to a ghoulish corporatism, in which selected private companies are bailed out with public money. Understandably, people from across the political spectrum have reacted angrily. The Tea Partiers and the Occupiers are both protesting against the same thing, viz the rescue of large banks by taxpayers.

But whereas the Occupiers, in a slightly inchoate way, believe they are complaining about capitalism, free marketeers point out that, in a capitalist system, bad banks would have been allowed to collapse, their assets sold to more efficient competitors. Bondholders, shareholders and some depositors would have lost money, but taxpayers wouldn't have contributed a penny.

When we make that argument in full – as I did in a direct exchange with some Occupy LSX types recently (see here) – the typical response is 'Yeah, well that might be your theoretical capitalism, but we're dealing with the one that actually exists'.

This is a reasonable objection. We capitalists mustn't become like those student Trotskyists who were forever insisting that the USSR wasn't really communist, and that proper socialism had never been tried.

What, then, is genuine capitalism? Where can you find it? What changes do we need to make to the present system to get there? I was planning to write a lengthy blog about it, but then I discovered that Jesse Norman, the cerebral MP for Hereford, had got there first. His paper, The Case for Real Capitalism, is worth reading in full. Having worked in the City before becoming a philosophy don, he understands in practice as well as in theory where the system has gone wrong. And he proposes concrete steps to put it right, to make shareholders think of themselves as owners rather than investors, to incentivise saving and boost competition.

Above all, Jesse grasps that freedom is more than just an absence of rules: that it also implies responsibility and (in the absence of external restraints) self-control. Herein lies the difference between what Milton called 'liberty' and what he called 'licence'. Jesse's paper is consciously conservative, yet underlines once more that, in practical terms, the differences between conservatives and libertarians can be deferred until the grave.




IA: Couple wins lawsuit over names on birth certificate: "An Iowa judge has ordered the Department of Public Health to issue a new birth certificate listing both members of a same-sex marriage as legal parents of a 2-year-old girl, The Des Moines Register reports. ... The couple sued the state when the department refused to list both names on the birth certificate of their daughter, Mackenzie, who was conceived through use of an anonymous sperm donor."

Santorum's big-government conservatism: "There is no doubt that Santorum is deeply conservative on social issues. ... At the same time, on economic and size-of-government issues, Santorum's record is much weaker. In fact, Eric Erickson of Red State refers to Santorum as a 'pro-life statist.'"

US Navy rescues Iranian fishing boat from pirates: "The political tensions between the U.S. and Iran over transit in and around the Persian Gulf gave way Friday to photos of rescued Iranian fisherman happily wearing American Navy ball caps. The fishermen were rescued by a U.S. Navy destroyer Thursday, more than 40 days after their boat was commandeered by suspected Somali pirates in the northern Arabian Sea. The rescue came just days after Tehran warned the U.S. to keep its warships out of the Persian Gulf _ an irony not lost on U.S. officials who trumpeted the news on Friday. "We think it's very doubtful that the Iranians or the pirates were aware of recent events of the last couple days," Rear Adm. Craig S. Faller, commander of the U.S. Navy Carrier Strike Group involved in the rescue, told reporters by phone Friday. "Once we released them (the fishermen) today they went on their way very happily, I might add, waving to us wearing USS Kidd Navy ball caps."



List of backup or "mirror" sites here or here -- for readers in China or for everyone when blogspot is "down" or failing to update. Email me here (Hotmail address). My Home Pages are here (Academic) or here (Pictorial) or here (Personal)


The Big Lie of the late 20th century was that Nazism was Rightist. It was in fact typical of the Leftism of its day. It was only to the Right of Stalin's Communism. The very word "Nazi" is a German abbreviation for "National Socialist" (Nationalsozialist) and the full name of Hitler's political party (translated) was "The National Socialist German Workers' Party" (In German: Nationalsozialistische Deutsche Arbeiterpartei)


Friday, January 06, 2012

Norman Lear's Left-wing paranoia about 'The Right'

The usual Leftist projection. It tells us more about the Left than it does about the Right. They imagine that conservatives are like them

(Norman Milton Lear (born July 27, 1922) is an American television writer and producer who produced such 1970s sitcoms as All in the Family, Sanford and Son, One Day at a Time, The Jeffersons, Good Times and Maude. As a political activist, he founded the civil liberties advocacy organization People For the American Way in 1981 -- Wikipedia.

The quote below is an excerpt from what Lear said a few weeks ago at the 30th anniversary of PFAW)

They're coming for your children! They're coming for the womenfolk! Then they're coming after you! Norman Lear, the famous television show producer, offered this hysterically paranoid assessment of the allegedly growing and presumably insidious power of "the right":
"I want to suggest that we lefties start laying claim to what we see as 'sacred' and serve it up proudly to the religious right -- to the James Dobson, Rush Limbaugh, Glenn Beck, Karl Rove ... hatemongers, sheathed in sanctity, and to the Koch brothers, the types that fund them and use them so effectively for their own political power-grabbing purposes. Over the past several decades, the power-grabbing right has built a powerful infrastructure -- radio and TV stations and networks. They've built think tanks, colleges and law schools."

How accurate is Lear's assessment of the supposed power and influence of the right? Is the right steadily forming a formidable alliance of academics, media outlets, websites, etc., that serve as a fourth column for the "right wing"? Even if this were true, what about the power of the left?

Let's look at the mainscream media. In "Left Turn: How Liberal Media Bias Distorts the American Mind," UCLA economist and political science professor Dr. Tim Groseclose uses three different methods to determine the SQ -- or slant quotient -- of the major media outlets. Of the 20 most prominent news outlets, including The Wall Street Journal, "Good Morning America" and Time magazine, he found only two that leaned to the right: The Washington Times and Fox News.

True, the network evening news shows no longer hold the market share of years past, but nearly 25 million Americans still turn to Diane Sawyer, Brian Williams and Scott Pelley each night. That means eight times as many viewers watch ABC/NBC/CBS as watch "The O'Reilly Factor," the top-rated cable news/talk program.

When people like Lear speak of the growing power of the right-wing cabal, they believe Fox leads the charge. And Bill O'Reilly is clearly the face of the Fox News network. But as hated as O'Reilly is by the left, how legitimate is their description of O'Reilly as a right-wing ideologue?

O'Reilly is not even a Republican. He is registered as an independent and opposes the death penalty. He supported -- at least initially -- the Senate's so-called "amnesty bill." His opposition to ObamaCare is based on cost rather than the Constitution. He believes that in "a system where everybody is guaranteed the same health care ... whether you have a lot of money or no money, you're gonna get the same health care. Now, in theory, that sounds good ... but in practice, we got a $14 trillion debt that we can't pay off, and this is gonna add to it, big-time." He wondered how a man can raise a family of four on minimum wage. In a recent interview with former President Bill Clinton, O'Reilly said, "I think I am paying my fair share (of taxes). Now, I didn't mind paying what you had me at. I didn't mind paying you that." Somewhere, anti-tax crusader Grover Norquist is having heartburn.

Now let's look at academia. Given the dominance of left-wingers in academia, that Lear can even say this with a straight face is astonishing. Let's look at who is teaching our college-level students. The American Enterprise Institute's magazine examined the political registrations of professors at 20 colleges and universities, representing a cross section of higher education -- public and private, big and small, in the North, South, East and West. The study divided the registrations into those belonging to a "party of the left" -- Democrats, Greens or some other liberal political party -- or a "party of the right" -- either Republican or Libertarian. Overwhelmingly, by a more than 13-1 margin, the profs were registered with a party of the left. Many departments had no professors from a right-wing party.

Let's look at Hollywood. Ben Shapiro, a recent Harvard Law School grad, wrote a book called "Primetime Propaganda: The True Hollywood Story of How the Left Took Over Your TV." He interviewed, on the record, over 100 industry bigwigs, including David Shore ("House"), Fred Silverman (former CBS programming vice president, ABC Entertainment president, and NBC president and CEO), Marta Kauffman ("Friends"), Larry Gelbart ("M-A-S-H") and Mark Burnett ("Survivor"). When asked whether there is a prevailing pro-left ideology, if not a left-wing agenda, several major players admitted that of course Hollywood leans left. Others bluntly bragged about their bias against conservatives and the extent of the left-wing messages inserted into their comedies and dramas.

Given the left's dominance in the major media, academia and Hollywood, it is beyond insulting to hear influential Hollywood lefties like Mr. Lear whine about the supposed power of the right. Makes them sound like a, well, "Meathead."



Democrats Are Terrified of Voter ID

The most consequential election in our lifetime is still 11 months away, but it's clear from the Obama administration's order halting South Carolina's new photo ID law that the Democrats have already brought a gun to the knife fight.

How else to describe this naked assault on the right of a state to create minimal requirements to curb voter fraud?

On Dec. 23, Assistant Attorney General Thomas E. Perez sent a letter ordering South Carolina to stop enforcing its photo ID law. Perez, who heads the Civil Rights division that booted charges against the New Black Panther Party for intimidating voters in Philadelphia in 2008, alleged that South Carolina's law would disenfranchise thousands of minority voters.

South Carolina Attorney General Alan Wilson rejected Perez's math and explained on Fox News why the law is necessary. The state Department of Motor Vehicles audited a state Election Commission report that said 239,333 people were registered to vote but had no photo ID. The DMV found that 37,000 were deceased, more than 90,000 had moved to other states, and others had names not matched to IDs. That left only 27,000 people registered without a photo ID but who could vote by signing an affidavit as to their identity.

Wilson told me by phone on Thursday that he would file a challenge to the order in federal district court in January. Asked whether he felt South Carolina was being singled out, he declined to speculate on motives. However, citing the National Labor Relations Board's orders to invalidate the voter-approved union card check amendment and to stop a new Boeing plant, and the Justice Department's suit to halt the immigration law, he said, "there certainly is a pattern of the federal government overreaching into South Carolina."

Leading Democrats loudly equate recently enacted photo ID legislation as updated versions of Jim Crow laws that once robbed people of their constitutional right to vote simply because of their race. But photo ID laws and other voter integrity measures cover everyone. Like other states, South Carolina provides photo IDs if a person cannot afford one....

In 2008, the U.S. Supreme Court upheld Indiana's 2005 photo ID law, which the Democratic Party and several interest groups had challenged as a "severe burden." But, as American Civil Rights Union attorney Peter Ferrara noted in the ACRU's friend of the court brief:

"No one has been denied the right to vote by the Indiana Voter ID Law. The record clearly establishes without challenge that 99% of the Voting Age Population in Indiana already has the required ID, in the form of driver's licenses, passports, or other identification. Of the remaining 1%, senior citizens and the disabled are automatically eligible to vote by absentee ballot, and such absentee voting is exempt from the Voter ID Law."

Does that sound "severe" to you? As Ferrara notes, "the slight burden of additional paperwork for a fraction of 1%, to show who they are and thereby prove their eligibility to vote, cannot come close to outweighing the interests of all legitimate legal voters in maintaining their effective vote."

The Obama Administration is playing the same race card that Democrats have played for decades. But this is not about race; it's about whether legitimately cast votes will be wiped out by illegally cast votes.

Since the GOP took a majority of governorships and legislatures in 2010 and continued enacting voting safeguards, you can feel the panic in Democratic strongholds. The stakes are enormous, and the Obama Administration is quite aware of the danger posed by an aroused electorate on a level playing field.

With the economy in a ditch, their only hope of stemming the conservative tide might be to rig the returns, especially where political machines still prevail.

More here


The Regulatory Pendulum Has Swung Too Far

The political dispute is not whether to regulate, but how much.

We need some regulation. Even the most bombastic conservatives recognize this. So everyone also should recognize that when President Obama says the GOP favors "dirtier air [and] dirtier water," he is committing the fallacy of the false alternative. The political dispute is not whether to regulate, but how much.

Everyone also can agree that if an environmental rule can prevent 1 million birth defects at a cost of only one dollar, then the regulation merits adoption - and if a regulation would prevent only one birth defect at a cost of $100 trillion, then it does not. In the real world regulations fall within narrower parameters. And nobody knows for certain precisely how much misery a proposed regulation might prevent, or how much it might cost. Hence the bickering.

Take the EPA's new rules on power-plant emissions. Emission controls are desirable as a general rule, since emissions are what economists call negative externalities: costs of production that are shifted to non-producers, usually without their consent. (Not all externalities are created equal. The aroma of a neighbor's grill is not nearly as annoying as the whine from his leafblower.)

The EPA says its new rules will cost about $10.6 billion by 2016 - but will save anywhere from $59 billion to $140 billion in health costs, forestall up to 17,000 premature deaths, and prevent up to 130,000 cases of childhood asthma per year. A big net win.

But Susan Dudley, who runs the Regulatory Studies Center at George Washington University, says the new rules will cost almost $11 billion per year. Industry sources estimate the real cost could be more than 10 times that much. And the Manhattan Institute's Diana Furchtgott-Roth notes that the EPA's estimates about asthma benefits seem, well, rather optimistic. In recent decades asthma has become more common even while air quality has improved. The Centers for Disease Control says "the causes of asthma remain unclear." If the CDC is right, then the EPA is just guessing.

Naturally, liberals glom onto the EPA's rosy figures while conservatives seize on the gloomier numbers from skeptics. People tend to reach conclusions first, then seek out supporting evidence and dismiss evidence to the contrary.

Whatever the merits of the new power-plant rules, though, it's clear that the Current Occupant, as they used to call George W., has commenced an era of great new regulatory zeal:

* The Obama administration is finalizing an average of 84 "economically significant" rules (those costing $100 million or more) per year, compared to 62 for Bush and 56 for Bill Clinton.

* In May the EPA tailored new rules for greenhouse-gas emissions that, absent the tailoring, would have affected 6 million factories, landfills, and other sources - and required the EPA, by its own estimates, to increase its workforce from 17,000 employees to 230,000. The New York Times calls such tailoring "contentious."

* The Department of Labor is considering whether to require disabled individuals to make up at least 7 percent of the workforce of every federal contractor - not only in the aggregate, but within "each job group." According to one summary, contractors would be required to collect and report data on "referrals from applicable employment service delivery systems . . . the `applicant ratio' of known applicants with disabilities to total applicants . . . the `hiring ratio,' . . . the `job fill ratio' . . . . training programs and promotional opportunities for which applicants and employees with a disability were considered . . . a statement of the reason as well as a description of any accommodation considered when it rejects an individual with disability for employment, promotion, or training. . . . a record describing any accommodation that makes possible the selection of an individual with a disability for hire, promotion, or training," etc.

Compliance cost for all of this? God only knows. Yet rules such as those pale in comparison to the gargantuan compliance burdens imposed by Sarbanes-Oxley and (soon) Obamacare.

* Last summer the FDA carried out an armed raid on Amish farmers in Pennsylvania who were selling raw milk to eager customers.

* The Consumer Product Safety Commission may soon require expensive new flesh-sensing technology on all table saws. (This is being pushed by SawStop, the maker of the technology, which stands to benefit handsomely.)

* Last year the CPSC recalled a half-million drop-side cribs because of "31 . . . incidents. In six of those incidents children were entrapped between the drop side and crib mattress. Three children suffered from bruises as a result of the entrapment."

You could argue that when regulators recall a half-million cribs because of three bruises - instead of, say, sending crib owners a letter about potential bruising hazards - the pendulum has swung too far. If you do, however, be prepared: You may be accused of wanting more dead babies by those who delight in the fallacy of the false alternative.




Kodak dead? "Eastman Kodak is preparing a Chapter 11 bankruptcy protection filing in case it is unable to sell its digital patents to raise capital, The Wall Street Journal reported on Wednesday. The once-iconic photographic film pioneer is in talks with potential lenders to secure about $1 billion in debtor-in possession financing to sustain Kodak through bankruptcy proceedings, the Journal reported, citing unidentified sources. The Chapter 11 filing could come as soon as this month or early February, the newspaper said. Kodak shares fell about 28% to 47 cents on the New York Stock Exchange following the online report, which dampened investors' hopes that the company could arrange a quick sale of its patents or a financing lifeline to keep it afloat."

EU agrees to Iranian oil embargo: "European governments have agreed in principle to ban imports of Iranian oil, EU diplomats said yesterday, dealing a blow to Tehran months before an Iranian election. The prospective embargo by the European Union, along with tough U.S. financial measures signed into law by President Barack Obama on New Year's Eve, form a concerted Western campaign to hold back Iran's nuclear program."

Israel, US to stage major military drill: "The Israeli military is gearing up together with U.S. forces for a major missile defense exercise, the Israeli military announced Thursday, as tension between Iran and the international community escalates. The drill is called 'Austere Challenge 12' and is designed to improve defense systems and cooperation between the U.S. and Israeli forces. It follows a 10-day Iranian naval exercise near the strategic Strait of Hormuz."

Obama's tyrannical abuse of power: "Standing behind a podium on a stage just outside Cleveland, President Barack Obama delivered a speech yesterday that will reverberate throughout history. ... [I]t was at that moment on a Wednesday afternoon in Ohio that the President announced his plans to act in total and utter disregard of the U.S. Constitution with his illegal appointment of Richard Cordray to serve as director of the Consumer Financial Protection Bureau (CFPB). It's an astonishingly reckless exercise of executive authority."



List of backup or "mirror" sites here or here -- for readers in China or for everyone when blogspot is "down" or failing to update. Email me here (Hotmail address). My Home Pages are here (Academic) or here (Pictorial) or here (Personal)


The Big Lie of the late 20th century was that Nazism was Rightist. It was in fact typical of the Leftism of its day. It was only to the Right of Stalin's Communism. The very word "Nazi" is a German abbreviation for "National Socialist" (Nationalsozialist) and the full name of Hitler's political party (translated) was "The National Socialist German Workers' Party" (In German: Nationalsozialistische Deutsche Arbeiterpartei)


Thursday, January 05, 2012

The West should hand Iran's leadership a chalice of poison

It would be a mistake to relieve the economic and military pressure on Tehran

Tensions in the Strait of Hormuz are at a more than 20-year high after Iranian authorities threatened to close the 34-mile-wide channel through which more than one-third of the world's oil tanker traffic passes. The threats come against the backdrop of renewed international discussion of sanctions in the wake of an International Atomic Energy Agency report cataloguing Iranian efforts to develop nuclear weapon technology.

Many academics and retired diplomats call for renewed diplomacy and less coercion. A letter sent last month to the White House by the former British, French and Italian ambassadors to Iran declared that while sanctions have a place, winning Iranian concessions ''requires the renewal of effective negotiations''.

Amin Saikal, a professor at the Australian National University, suggested this week that Western concerns about Iran's nuclear intentions were misplaced, and argued that, regardless, the West had no choice but to negotiate. ''Neither sanctions nor military operations can really work,'' he declared. He is wrong.
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To relieve economic and military pressure on Iran would be counterproductive. So long as Iran does not attain nuclear weapons, its threats to close the Strait of Hormuz remain simple bluster. If Iran is allowed to develop nuclear weapons, all bets are off. Tehran's ability to amplify its leverage over the international economy would increase exponentially.

Make no mistake: Iran cannot close the Strait of Hormuz for more than a day. When its navy mined the Persian Gulf in 1988, damaging a US vessel, president Ronald Reagan responded with Operation Praying Mantis, decimating the Iranian navy, a bloody nose that led Tehran to respect international waters for more than two decades.

Nor can Iran itself afford a closure of the strait. Not only does it need to export oil itself through the waterway, but, because of decades of financial mismanagement, it also depends on the strait for the import of refined gasolineeum products.

Without imported gasoline to fuel its car and factories, Iran's economy would grind to a halt. To close the strait even for a day would do far more economic damage to Iran than it would to Australia, east Asia or the West.

The leadership in Tehran knows better than anyone that every time Iran has experienced a fuel shortage, protesters have poured into the streets.

Despite bluster that sanctions have had no effect, Iranian behaviour suggests the opposite. Both the March 2007 Iranian attack on British sailors in the waters between Iraq and Iran, and the November 2011 attack on the British embassy in Tehran, came two days after the British government lent its support to new sanctions. Both attacks were overreactions that belied Tehran's insistence that sanctions are meaningless.

Even Iranian parliamentarians do not buy their government's rhetoric. Last month, 30 representatives called for a closed session of the parliament in order to dispense with polemic and to discuss sanctions truthfully. Abolghasem Mozaffari, the head of the Revolutionary Guards' economic wing, confessed that ''the sanctions have not been without impact''.

Iran's current provocations may have more to do with its own desperation than any real grievance. After the US Congress imposed unilateral sanctions on Iran last month, Iran's currency lost nearly half its value. Unemployment and inflation are both in double digits.

To keep afloat, Iran needs high oil prices. Simply threatening tanker traffic drives up the price of oil, adding hundreds of millions of dollars to Iran's coffers. The irony of such a psychological strategy, however, is that the spike in oil prices mitigates any increase that would result from military strikes.

Nor are military strikes as difficult as some believe. While Saikal argues that ''most Iranian nuclear installations are buried deep underground'', itself an admission that they have no civilian purpose, pilots point out that they need only destroy entrances to such facilities rather than blast the underground centrifuges, reactors and potential assembly plants and storage depots.

While no Australian, American, or European wants to pay more at the gasoline pump, the status quo is unsustainable. Should the Islamic Republic develop nuclear weapons, Tehran will have a free hand to lash out indiscriminately, feeling secure behind its own nuclear deterrent. A limited conflict in the Persian Gulf might add $20 to the price of oil for a month, but a nuclear Iran could permanently add $100 a barrel.

History can be a guide. Twice, in the Islamic Republic's history, revolutionary authorities have sworn no surrender. In 1979, they said they would not release their American hostages until Washington met revolutionary leader Ayatollah Khomeini's demands. Then, they said they would accept no end to the Iran-Iraq war until Saddam Hussein was in Iranian hands. In both cases, however, isolation and sanctions took their toll.

When Khomeini announced a ceasefire with Iraq, he likened it to drinking a chalice of poison but said the cost of continuing to fight gave him no choice.

When it comes to Tehran's nuclear program and its Hormuz threats, it is time to hand Iranian leaders such a chalice, not to relieve the pressure.



Norway killer Breivik is 'not psychotic', say experts

That has also been my view throughout -- JR

Experts monitoring the Norwegian killer, Anders Behring Breivik, say they believe he is not psychotic, contradicting court-appointed psychiatrists. A team of experts reached the conclusion after monitoring Breivik in prison, said the public prosecutor who submitted their report to the court.

Breivik admits to twin attacks on 22 July 2011, which killed 77 people.

The original psychiatric analysis said he was insane. The two court-appointed psychiatrists reached this conclusion after interviewing him on 13 occasions. Their report said 32 year-old Breivik lived in his "own delusional universe where all his thoughts and acts are guided by his delusions".

The expert team of four psychiatrists assessing Breivik in prison disagreed with several of the original conclusions. According to the report submitted by the Public Prosecutor, Svein Holden, they do not believe Breivik is psychotic or schizophrenic and do not think he needs drugs. In addition they do not regard him as being at high risk of committing suicide.

Breivik is due to go on trial on terrorism charges on 16 April, regardless of whether or not he is regarded as sane. As things stand, a guilty verdict would see him placed in psychiatric care rather than in prison. The court is expected to decide within the next few weeks whether or not to order a new psychiatric evaluation. Mr Holden said he would not be calling for a new assessment, despite the conclusions in the latest report.



One Percent or 33: America's Real Inequality Problem

33% is the percent of children living with one parent rather than two and it is they who have least chance of "making it". Although carefully ignored below, a large number of them are black and blacks tend to have inborn limitations (low IQ etc.) that are beyond remedy. And many poor whites will be in the same boat

The American economy remains sluggish and, from all over the political spectrum, particularly the left, people have turned their attention to inequality. But if the Occupiers were right about one thing, it was that there is a growing inequality in American life. Scott Winship, relying on the findings of the Pew Charitable Trust's Economic Mobility Project as evaluated by his colleagues at the centerleft Brookings Institution, shows that though the gains have not been as startling in the last few decades as they were for Americans 40 years back, what has been evident is indeed "pervasive economic mobility." Pervasive indeed, from downward mobility from the top and middle to upward mobility from the middle. The exception, he notes, is "upward mobility from the bottom."

Mitch Pearlstein, who worked in the Department of Education under Reagan and Bush I, and then founded the Center of the American Experiment in Minneapolis, also sees this as a growing problem. His new book, From Family Fragmentation to America's Decline, laments this inability of many to climb their way up from the bottom rungs of society. But rather than fixating on the one percent, he focuses on the 33 percent. This is the percent of children living with one parent rather than two. These children, victims of what many call "family fragmentation," start out with tremendous social and educational deficits that are hard to narrow, nevermind close. These are most often the children for whom upward mobility has stalled. Their economic well-being has led to decline in American competitiveness and also the deeper cleavages of inequality that have been so widely noted.

This territory is not new. In his first chapter, "From Moynihan to 'My Goodness," Pearlstein traces the findings of social scientists on the effects of divorce, single-parenthood, and particularly the absence of fathers from the period of Daniel Patrick Moynihan's famous (or infamous, from contemporary leftist viewpoints) 1965 report on the status of black families. While Moynihan was careful to ascribe the then-current break down of the black family to factors like slavery, racism, and other economic factors, he was nonetheless demonized for racism in raising the topic. While other social scientists working from the 1960s to the 1980s vindicated everything Moynihan had said, it was not politically correct to say any of it, considering the opposition from multiculturalists and, of course, feminists themselves who seemed to believe not only that women, but also children, needed men like fish needed bicycles. Charles Murray's 1984 Losing Ground had the temerity to suggest that much of the welfare state apparatus assembled since the 1960s had not only not helped family life, but incentivized divorce and single parenthood, creating the same problems among whites that Moynihan had identified among blacks. The ice was finally broken when established liberal figures like Bill Moyers and then William Galston began to publicize the realities of family breakdown.

Discouraging Trends

Now it is virtually certain from a social science perspective that married fathers and mothers living together have a much greater impact on children's future economic well-being than simply being additional "income inputs." Pearlstein's chapters on the effects of family fragmentation on "every conceivable measure" and on education are sobering in their completeness. Divorce and single-parenthood are seen as risk factors for poverty as well as the health, safety, and educational well-being of children across the board. He verifies this not only from studies in the U.S. but across cultures. What is particularly depressing about American family life is that American children born to two married parents are more likely to experience family breakdown (or "fragmentation" as the current euphemism has it) than Swedish children born to cohabiting parents. (Pearlstein is careful to note that this is a comparative measure— other data show that the effects of having married parents are far greater than simply legal for children. Being married is still better for kids than cohabiting.)

Like Moynihan before him, Pearlstein is careful to say not all poverty, health, and educational failure are caused by family fragmentation, but "a great deal of it is." Given the data I cited above about the pervasive upward mobility at least from the middle classes, Pearlstein's findings do not paint a pretty picture of America's future. All the data, particularly from the National Marriage Project's comprehensive 2010 study of Americans and marriage, show that the "unMarriage Culture," as Kay Hymowitz styles it, has become endemic among the broad middle classes as well. Pearlstein's data shows that the effects of family fragmentation are not limited to those in poverty, but affect kids of all classes who experience them. Pearlstein is at pains to make clear that he is not pointing fingers at anyone, nor is he denying that many children in single-parent or divorced homes are doing well. But all the best available data show that children in these situations are at much greater risk of educational failure and corresponding economic weakness as adults.

In a high-tech information age, the path to upward mobility is dependent on a high level of education both social and intellectual. Those who are left behind in these areas will have an increasingly difficult time not only with upward mobility but making it in general. In the groundbreaking 2008 Marriage and Caste in America, the aforementioned Kay Hymowitz described the "self-perpetuating single-mother proletariat" that had come into existence and paralleled the self-perpetuating cycle of university educated mothers who raise children who go to college, get married, and then have children. Pearlstein only adds to the case by noting that while many believe that the offshoring of jobs has been only to evade higher labor and regulatory costs, many high tech jobs are now being moved abroad because there aren't enough Americans with enough education to handle them. This labor deficit means weakening American competitiveness is likely to worsen down the road.

What are the solutions to all this? Or, more realistically, what can even help? Pearlstein's final two chapters on ways to strengthen education and marriage are very tentative. While he has no doubt that public education can be improved, there is a certain skepticism about the broad-based reforms which have been made over the last hundred years in education. Pearlstein thinks private religious schools are so successful because they are able to teach the unity of intellectual and moral virtue. Public schools that have succeeded are similarly "paternalistic" in that they teach reading, writing, and arithmetic, but also middle-class values like diligence, thrift, politeness, and a strong work ethic. Due to constraints imposed by teachers unions and bureaucratic red-tape, such public schools are rare and difficult to duplicate when found.

Concerning marriage, we have even less data since government encouragement of a marriage culture only began about 15 years ago. The results have not been encouraging. Pearlstein doesn't think there is no place for government in encouraging married parenthood, but his book points again and again to the root problem: our culture. Despite the widespread impression that American Christianity is largely judgmental, Pearlstein contends that "religious institutions need to be more assertive in this realm, while being no less supportive of those in need." Parents won't get married or stay married to "save the economy" or "lessen inequality," but they will for deeper reasons that will have the same result.




Romney tough on illegals: "In the one-page flyer that is expected to be mailed out statewide, Romney details his plans to stop illegal immigration, according to Ryan Williams, a spokesperson for the Romney campaign. "The mailer talks about putting an end to magnets or benefits that illegal immigrants have, ensuring a tamper-proof system that allows employers to check the status of their employees and creating a strong border fence," Williams said. Time and time again, Williams said that voters have brought attention to the very serious problem of illegal immigration in the United State. "The Obama administration is opposed to common sense immigration laws," Williams said. "With Romney's plan there would be no magnets, no jobs, no holes in the borders."

AZ: Candidate asked to prove English language skills: "This year, Alejandrina Cabrera put city officials of San Luis, Arizona in the hot seat. Twice, Cabrera and the group she heads, For a San Luis with a Future, launched unsuccessful recall drives against the mayor. Now, Cabrera, who is vying for a seat on the City Council, finds herself in the hot seat. Last week, the council approved a motion asking for verification that Cabrera meets a state law requiring any person holding office in the state, county or city to speak, write and read English."

Obamacare already sending costs through the roof: "There may never have been a law more misnamed than the Affordable Care Act. President Obama's health overhaul law already is driving up health insurance costs for businesses and consumers and will inflict even higher costs on American taxpayers in the years ahead. Obama repeatedly promised the American people he would cut a typical family's premium $2,500 a year before the end of his first term. But costs are rising now even faster than before the law was enacted in March 2010."



List of backup or "mirror" sites here or here -- for readers in China or for everyone when blogspot is "down" or failing to update. Email me here (Hotmail address). My Home Pages are here (Academic) or here (Pictorial) or here (Personal)


The Big Lie of the late 20th century was that Nazism was Rightist. It was in fact typical of the Leftism of its day. It was only to the Right of Stalin's Communism. The very word "Nazi" is a German abbreviation for "National Socialist" (Nationalsozialist) and the full name of Hitler's political party (translated) was "The National Socialist German Workers' Party" (In German: Nationalsozialistische Deutsche Arbeiterpartei)


Wednesday, January 04, 2012

Will the economic world end in 2012?

I agree with Martin Hutchinson (below) that the present financial situation in Europe, the UK and the USA is headed for disaster but I have a somewhat different view of what governments will do about it. All three are already hurtling down the path of Weimar Germany, with big money-printing operations happening sporadically. There will be a lot more of that -- as it is the only way all the debts can be paid. The debts will be paid with freshly-created money.

Because the supply of goods and services will remain fairly constant while the amount of money representing those goods and services expands greatly, each dollar will soon buy a lot less and could easily drop to the point where it needs a hundred dollars to buy what one dollar now buys. All savings will buy so little that they become virtually worthless. So our "betters" will rob everybody's savings to pay for their extravagance

So if savers get a knockout blow, what will happen to others? Holders of blue-chip company shares will be OK; Real Estate owners will probably gain; debtors will be laughing; Gold bugs will finally have their day and China will be right royally stiffed. They hold trillions of U.S. dollars which are set to lose most of their value. They might even drop a big one on San Francisco "accidentally" to show their displeasure.

I'm glad I live in Australia, which has very little Federal debt and a good relationship with China -- JR

According to the Mayan calendar, the Great Cycle will end on December 21, 2012, at which point the current Fourth World founded on August 11, 3114 BC will come to an end, leading us into a Fifth World of greater enlightenment. Economically, this is beginning to seem like a remarkably accurate prediction. There are a number of signs in today’s market that a world-changing crisis is approaching, after which our economic environment will never be the same.

The approach of a market apocalypse can be gauged by considering the relative valuations the market is currently putting on assets. Considered rationally, the most attractive asset today should be equity participations in the world’s fastest growing economy, China – yet Chinese equities are at 33-month lows, and many small Chinese companies are trading on earnings multiples not seen since the Great Depression. Considered rationally, among the least attractive assets today should be the long-term debt of two countries with unsustainable budget deficits and governments that have made very little effort to close them – yet British and U.S. government bonds are trading at yields close to all-time historic lows and far below the rates of inflation in their respective countries.

Extreme market irrationality of this kind is a pretty good warning signal of coming market collapse. Just as the Emperor’s Palace grounds being worth more than the state of California signaled the end of Japan’s real estate bubble in 1989, so current valuations of British and U.S. government debt signal that we are very close to a massive reversal, in which probably for several decades it becomes impossible for those governments to sell new debt except at very high cost. Bank balance sheets worldwide, which have loaded up on government debt because of the foolish Basel banking regulations and the attractiveness of “gapping” income between short-term and long-term rates, will collapse into insolvency. The early part of this collapse will be marked by a rapid reversal of “mark-to-market” regulations, so that banks are not forced to mark down their debt holdings to deflated market prices, but even if this accounting chicanery works in the short run, it will prove no solution in the long run, as short term rates rise above the meager long term yields on their government bond portfolios.

The First Pennsylvania Bank failed in 1980 through precisely this problem, at a time when there was thought to be no risk whatever of a U.S. government default or delay in payment. Adding the default possibility into the equation will simply make the problem all the more insoluble. Banks will attempt to hedge themselves through interest rate swaps and credit default swaps, but that will only cause a collapse in swap markets as well; the depth of those markets will prove completely inadequate to solve their problems. Naturally as in 2008 there will be a few sharp operators, like John Paulson and Goldman Sachs in that year, who make money out of the collapse, but their ability to do so will merely worsen the burden on the rest of the system and the costs of any attempted rescues.

There is thus considerable danger, probably in the latter half of 2012 as the Mayans predicted, of a banking system collapse dwarfing that of 2008. Value distortions such as those prevalent currently are necessarily of short duration. The eurozone problem seems certain either to find a solution or to cause a major upheaval in 2012, with the balance of probability being on the latter outcome. In the United States also, 2012 seems the period of maximum near-term danger for the budgetary problem; solutions are impossible in an election year and exacerbation of the problem by foolish handouts only too likely. Maybe the U.S. budget mess can avoid collapsing before 2013, but any market shock, for example from Europe, is likely to push it over the edge. Japan, too, is nearing the point at which its government debt to GDP ratio moves above the level at which it is unsustainable; again a market shock in 2012 could push it over the edge. To use a chemical analogy, the market solution is super-saturated, and any tiny crystal dropped into it will cause precipitation. A trivial event, such as a repetition of May 2010’s stock market “flash crash,” could be the trigger for a market collapse.

Given the extent to which banks have loaded up on “risk-free” government debt, a collapse of the government debt market will cause a collapse of the banking system. I have written before how the world economy would work rather better if government debt were not considered the universal risk-free investment, and were instead considered the doubtfully solid security it actually is. However there is no question that the transition, with the collapse of global government debt markets and banking systems, will be extremely painful. Since government debt market collapse will cause banking system collapse, there will be no rescue available.

Central banks worldwide will of course attempt to alleviate (or rather, postpone) the problem, by an endless array of gimcrack money-printing schemes. Since their credibility, already dented, will be at an all-time low as evidence of world systemic collapse emerges, they will doubtless attempt to devise money-printing schemes with a populist appeal. Thus Ben Bernanke, whose 2002 “thought experiment” of dropping $100 bills from helicopters was intended as a snobbish academic joke against the bourgeoisie, will end up doing just this. TV cameras will be lined up, the world’s financial bloggers will be prepared, and a Bernanke-bearing helicopter will appear hovering over some carefully chosen demographically balanced slum, dropping roll after roll of greenbacks to a Secret Service-prescreened crowd of adoring populace. Of course the real money will still zip by wire transfer to the vaults of the nation’s largest banks and embezzling government securities dealers, but the production values of a benign Bernanke rewarding a faithful underclass will be thought well worth creating.

It won’t work. Far from obeying Walter Bagehot’s famous advice for a financial crisis, of lending freely against top quality security at very high rates, Bernanke and his chums will as in 2008 throw money around like confetti, taking little account of the quality of the security nominally tendered, and lending it at rates that allow the banks to make yet more illicit billions by on-lending their subsidized finance. The European Central Bank’s handout last week, where it lent $600 billion of 3-year money to the banks at 1%, in the hope that they would re-lend it to tottering Eurozone governments at a spread of some 500-600 basis points, is typical of current central bank thinking.

Lend money to the banking system by all means, if you think there is a liquidity problem, and lend it for 3 years if you want to stabilize their financial position. However the money should be lent at a stiff interest rate of around 7%. At that rate, only those banks that really needed the money would have borrowed it, so the bailout would have been limited to $100 billion or so. The remainder of the rescue of banks’ balance sheets would have been achieved by them rushing to sell all their assets that yielded less than 7%. This would notably not include consumer loans and productive small-business loans, which generally yield considerably more than 7%, but it would include all the miscellaneous government junk with which the banks had been playing “gapping” games, hoping to borrow at short term rates and lend at long-term rates, capturing the spread between short-term and long-term interest rates. With their marginal funding cost 7% for 3 years, this would no longer be profitable.

Of course, many Eurozone banks, a simple lot, have not incorporated marginal pricing into their Treasury operations, so will happily borrow at 7% and lend through a different department at 3%, puzzling why their profits are less than they were. But frankly, a little Darwinian selection against stupidity in the European banking system would do no harm at all!

The chance of a system-destroying financial breakdown in 2012 is thus substantial, and December 21 is as good a day as any other on which it might occur. With government credit and banks both collapsing, the old financial world as we have known it since the Bank of England’s foundation in 1694 would indeed have ended. The good news is that this would not shove us back to 1694’s living standards. As for my Great-Aunt Nan, who put her savings in British government War Loan when she retired in 1947 and found inflation and interest rate rises eroded more than 90% of their value before she died in 1974, the disappearance of government bonds, bank stocks and many bank deposits from our assets would cause great hardship. However the central function of banks as a payment mechanism would not disappear and commercial, manufacturing and service-providing activity would continue.

The disruption would be huge, but human civilization would carry on, even the affluent Western civilization many of us have grown used to. It would not be necessary to invest our assets in gold, canned goods and a shotgun; those of us with our savings in non-financial sector stocks would find their long-term value would recover, after what would doubtless be the mother of all stock market crashes.

There would be a Fifth World for us as the Mayans predicted. In it we will finally have achieved enlightenment – about the folly of fiat money, over-powerful central banks and “risk-free” government paper. Achieving this enlightenment will be painful, but it will be worth it!



The Federal Reserve's Covert Bailout of Europe

America's central bank, the Federal Reserve, is engaged in a bailout of European banks. Surprisingly, its operation is largely unnoticed here.

The Fed is using what is termed a "temporary U.S. dollar liquidity swap arrangement" with the European Central Bank (ECB). There are similar arrangements with the central banks of Canada, England, Switzerland and Japan. Simply put, the Fed trades or "swaps" dollars for euros. The Fed is compensated by payment of an interest rate (currently 50 basis points, or one-half of 1%) above the overnight index swap rate. The ECB, which guarantees to return the dollars at an exchange rate fixed at the time the original swap is made, then lends the dollars to European banks of its choosing.

Why are the Fed and the ECB doing this? The Fed could, after all, lend directly to U.S. branches of foreign banks. It did a great deal of lending to foreign banks under various special credit facilities in the aftermath of Lehman's collapse in the fall of 2008. Or, the ECB could lend euros to banks and they could purchase dollars in foreign-exchange markets. The world is, after all, awash in dollars.

The two central banks are engaging in this roundabout procedure because each needs a fig leaf. The Fed was embarrassed by the revelations of its prior largess with foreign banks. It does not want the debt of foreign banks on its books. A currency swap with the ECB is not technically a loan.

The ECB is entangled in an even bigger legal and political mess. What the heads of many European governments want is for the ECB to bail them out. The central bank and some European governments say that it cannot constitutionally do that. The ECB would also prefer not to create boatloads of new euros, since it wants to keep its reputation as an inflation-fighter intact. To mitigate its euro lending, it borrows dollars to lend them to its banks. That keeps the supply of new euros down. This lending replaces dollar funding from U.S. banks and money-market institutions that are curtailing their lending to European banks — which need the dollars to finance trade, among other activities. Meanwhile, European governments pressure the banks to purchase still more sovereign debt.

The Fed's support is in addition to the ECB's €489 billion ($638 billion) low-interest loans to 523 euro-zone banks last week. And if 2008 is any guide, the dollar swaps will again balloon to supplement the ECB's euro lending.

This Byzantine financial arrangement could hardly be better designed to confuse observers, and it has largely succeeded on this side of the Atlantic, where press coverage has been light. Reporting in Europe is on the mark. On Dec. 21 the Frankfurter Allgemeine Zeitung noted on its website that European banks took three-month credits worth $33 billion, which was financed by a swap between the ECB and the Fed. When it first came out in 2009 that the Greek government was much more heavily indebted than previously known, currency swaps reportedly arranged by Goldman Sachs were one subterfuge employed to hide its debts.

The Fed had more than $600 billion of currency swaps on its books in the fall of 2008. Those draws were largely paid down by January 2010. As recently as a few weeks ago, the amount under the swap renewal agreement announced last summer was $2.4 billion. For the week ending Dec. 14, however, the amount jumped to $54 billion. For the week ending Dec. 21, the total went up by a little more than $8 billion. The aforementioned $33 billion three-month loan was not picked up because it was only booked by the ECB on Dec. 22, falling outside the Fed's reporting week. Notably, the Bank of Japan drew almost $5 billion in the most recent week. Could a bailout of Japanese banks be afoot? (All data come from the Federal Reserve Board H.4.1. release, the New York Fed's Swap Operations report, and the ECB website.)

No matter the legalistic interpretation, the Fed is, working through the ECB, bailing out European banks and, indirectly, spendthrift European governments. It is difficult to count the number of things wrong with this arrangement.

First, the Fed has no authority for a bailout of Europe. My source for that judgment? Fed Chairman Ben Bernanke met with Republican senators on Dec. 14 to brief them on the European situation. After the meeting, Sen. Lindsey Graham told reporters that Mr. Bernanke himself said the Fed did not have "the intention or the authority" to bail out Europe. The week Mr. Bernanke promised no bailout, however, the size of the swap lines to the ECB ballooned by around $52 billion.

Second, these Federal Reserve swap arrangements foster the moral hazards and distortions that government credit allocation entails. Allowing the ECB to do the initial credit allocation — to favored banks and then, some hope, through further lending to spendthrift EU governments — does not make the problem better.

Third, the nontransparency of the swap arrangements is troublesome in a democracy. To his credit, Mr. Bernanke has promised more openness and better communication of the Fed's monetary policy goals. The swap arrangements are at odds with his promise. It is time for the Fed chairman to provide an honest accounting to Congress of what is going on.




Pentagon: US Navy will remain in Persian Gulf: "The Pentagon on Tuesday answered an Iranian warning to keep U.S. aircraft carriers out of the Persian Gulf by declaring that American warships will continue regularly scheduled deployments to the strategic waterway. George Little, the Pentagon press secretary, said the Navy operates in the Gulf in accordance with international law and to maintain 'a constant state of high vigilance' to ensure the flow of sea commerce"

We are all evil un-American terrorists now: "According to government officials, you may be a terrorist if you: are a Tea Party activist, an Occupy activist, store seven days of food, have missing fingers, buy flashlights, pay cash at hotels, are a Ron Paul supporter, are a libertarian, believe in conspiracies, own precious metals, guns and ammo. It's getting very difficult to keep up with."

Obama has learned nothing from mortgage meltdown mess: "Just days before Christmas, the Obama administration gave Bank of America a big lump of coal, levying a hefty $335 million dollar fine on the company for discriminating against minorities in its lending practices. Supposedly Countrywide, a mortgage company bought by Bank of America in 2008, had not given out enough low interest rate loans to minorities from 2004 to 2008. What the large fine reveals is that President Obama hasn’t learned anything from the recent financial crisis."



List of backup or "mirror" sites here or here -- for readers in China or for everyone when blogspot is "down" or failing to update. Email me here (Hotmail address). My Home Pages are here (Academic) or here (Pictorial) or here (Personal)


The Big Lie of the late 20th century was that Nazism was Rightist. It was in fact typical of the Leftism of its day. It was only to the Right of Stalin's Communism. The very word "Nazi" is a German abbreviation for "National Socialist" (Nationalsozialist) and the full name of Hitler's political party (translated) was "The National Socialist German Workers' Party" (In German: Nationalsozialistische Deutsche Arbeiterpartei)


Tuesday, January 03, 2012

Time for Reagan's American Optimism

Terry Paulson

Happy New Year! Welcome to one of the most critical years in America's history. The economy continues to limp along. Many citizens are unemployed or underemployed; even more are at the end of their financial rope. Polls indicate that both the president and congress have lost the trust of most Americans. Many are equally frustrated with the slate of Republican candidates who are emerging in the primaries. But in 2012, we will elect a president to lead us into an uncertain future fraught with both challenges and opportunities. Will the coming years be the new "good old days" for America or is America destined for decline?

While President Obama and his potential challengers try to convince us to put our confidence in them, it may be time to take inspiration from one of America's most beloved presidents.

On a recent trip to the Reagan Presidential Library I was struck over and over again by the confidence President Ronald Reagan had in Americans--in American workers, leaders, entrepreneurs, investors, the young and the old. Quote after quote leaped off the walls and from the video clips. Any candidate today would do well to embrace and adopt his unflappable American optimism.

Though adapted from many disconnected quotes, here is a New Year's letter true to his words that he might write to us today...

My Fellow Americans,

Freedom is never more than one generation away from extinction. We didn’t pass it to our children in the bloodstream. It must be fought for, protected, and handed on for them to do the same, or one day you will spend your sunset years telling your children and your children’s children what it was once like in the United States when you were free.

Once again America faces difficult times and an important election. May I remind you that “status quo" is Latin for “the mess we are in.” A recession is when your neighbor loses his job. A depression is when you lose yours. Recovery is when President Obama loses his.

Now, I’m not taking your time to ask you to trust me or any leader. Instead, I ask you to trust yourself. That is what America is all about. It’s the power of millions of people like you who will determine what will make America great again.

For the solutions America seeks must be equitable, with no one group singled out to pay a higher price. All must contribute to the turnaround, but don't fear. You still have every right to dream heroic dreams. Those who say that you’re in a time when there are no heroes, they just don’t know where to look. They’re the individuals and families whose taxes support the government and those whose voluntary gifts support church, charity, culture, art and education. Their patriotism is deep, and their values sustain our national life.

They say the world has become too complex for simple answers. They are wrong. There are no easy answers, but there are simple answers. You must have the courage to do what you know is morally right. You have a rendezvous with destiny. In 2012, you will make a choice that will preserve for your children this, the last best hope of man on earth, or you will sentence them to take the first step into a thousand years of darkness.

But who among you would trade America’s future for that of any other country in the world? And who could possibly have so little faith in the American people that they would trade your tomorrow’s for your yesterdays?

When I was your president, I appealed to your best hopes, not your worst fears, to your confidence not your doubts. I implore you not to put your confidence in big government or any leader; have confidence in yourself. That's what has always made America strong, and, God willing, you will do so again.

Humbly Yours,

Ronald Reagan



Ron Paul, Reagan, and Republican Youth

Star Parker

In the twenty plus years that I have worked as a conservative activist, I’ve spoken on almost 200 university campuses. Usually these are talks to campus Republican and conservative groups.

Over time I have observed changes in attitude among many young Republicans and I believe the shifts in attitude I see help explain the rise of Ron Paul.

When I first started lecturing early in the 1990’s, leading heroes of Republican youth were Ronald Reagan and William F. Buckley, Jr.

Individual freedom, respect for constitutional limitations on government, and traditional values was the message. There was a sense of purpose. America as a “shining city on a hill,” quoted so often by Reagan, taken from the Puritan pilgrim John Winthrop, captured the picture.

Now, increasing numbers of my campus hosts ask that I not talk about “values.” Leave out the stuff about marriage, family, and abortion, please, and just talk about the economy.

The materialism and moral relativism that created our left wing culture is now infecting our youth on the right. Young Republicans may be pushing back on government, but too often now their motivation is like their left wing contemporaries. A sense of entitlement and an interest in claiming rights with little interest in corresponding personal responsibilities.

David Yepsen, who directs the Paul Simon Public Policy Institute at Southern Illinois University Carbondale, recently described Ron Paul's success as a "resurgence of the libertarian and isolationist wings of the Republican Party," resulting from "hard times and unpopular wars."

But overlooked is the important role of youth. Of registered Republicans and Republican-leaning Independents that support Paul, 67 percent are under 34, compared to 37 percent of Romney’s and 20 percent of Gingrich’s support.

This youthful surge has helped Paul’s very successful fundraising, heavily driven by small contributions on the internet. Compared to Republicans who have raised the most funds, 48 percent of Paul’s is from small donors, compared to 10 percent of Romney’s and 4 percent of Rick Perry’s.

And youth have been critical in Paul’s on the ground organization. I watched this play out when Paul won the straw poll at the Values Voters Summit in Washington where I spoke last October.

Busloads of youthful Paul supporters arrived only to hear his speech and to pay and register so that they could vote. They put him over the top.

They have little interest in a Reagan-like “shining city on a hill” message, or talk about a threatening “evil empire” abroad. To the contrary, they are excited by the “leave me alone” candidate who thinks the rest of the world is not our business. Apparently they share Paul’s indifference to the looming threat of a nuclear Iran or the almost complete absence of the freedom they think is so important in most Islamic nations.

Chicago Sun Times columnist Steve Huntley reports one estimate of over 200,000 persecuted Coptic Christians leaving Egypt by year end. He reports a dramatic drop in the presence of Christians throughout the Middle East (the Christian population of Bethlehem is now a third of what it was 35 years ago).

The only exception is Israel, where the Christian population has more than quadrupled since 1948. But Ron Paul sees no distinction between Israel and its neighbors nor does he think Americans should care.

Self centered materialism that leads our youth to support such indifference to global realities is also driving collapse of the American family.

Census Bureau statistics show that today 20 percent of America’s population between ages 18 and 29 is married. This compared to 59 percent fifty years ago.

In his farewell speech, Reagan issued a warning to the nation: “…are we doing a good enough job teaching our children what America is and what she represents in the long history of the world?”

I doubt that Ron Paul’s vision of America is what Reagan had in mind.



Ominous parallels between Obama, Roosevelt grow

By Walter Williams

People are beginning to compare Barack Obama's administration to the failed administration of Jimmy Carter, but a better comparison is to the Roosevelt administration of the 1930s and '40s.

Let's look at it with the help of a publication from the Mackinac Center for Public Policy and the Foundation for Economic Education titled "Great Myths of the Great Depression," by Lawrence Reed.

During the first year of President Franklin D. Roosevelt's New Deal, he called for increasing federal spending to $10 billion while revenues were only $3 billion.

Between 1933 and 1936, government expenditures rose by more than 83 percent. Federal debt skyrocketed by 73 percent. Roosevelt signed off on legislation that raised the top income tax rate to 79 percent and then later to 90 percent.

Hillsdale College economics historian and professor Burt Folsom -- author of "New Deal or Raw Deal?" -- notes that in 1941, Roosevelt even proposed a 99.5 percent marginal tax rate on all incomes more than $100,000. When a top adviser questioned the idea, Roosevelt replied, "Why not?"

Roosevelt had other ideas for the economy, including the National Recovery Act. Reed says:

"The economic impact of the NRA was immediate and powerful. In the five months leading up to the act's passage, signs of recovery were evident: Factory employment and payrolls had increased by 23 and 35 percent, respectively.

"Then came the NRA, shortening hours of work, raising wages arbitrarily and imposing other new costs on enterprise. In the six months after the law took effect, industrial production dropped 25 percent."

Blacks were especially hard hit by the NRA. Black spokesmen and the black press often referred to the NRA as the "Negro Run Around," Negroes Rarely Allowed," "Negroes Ruined Again," "Negroes Robbed Again," "No Roosevelt Again" and the "Negro Removal Act."

Fortunately, the courts ruled the NRA unconstitutional. As a result, unemployment fell to 14 percent in 1936 and lower by 1937.

Roosevelt had more plans for the economy, namely the National Labor Relations Act, better known as the "Wagner Act." This was a payoff to labor unions, and with these new powers, labor unions went on a militant organizing frenzy that included threats, boycotts, strikes, seizures of plants, widespread violence and other acts that pushed productivity down sharply and unemployment up dramatically.

In 1938, Roosevelt's New Deal produced the nation's first depression within a depression. The stock market crashed again, losing nearly 50 percent of its value between August 1937 and March 1938, and unemployment climbed back to 20 percent.

Columnist Walter Lippmann wrote in March 1938 that "with almost no important exception every measure [Roosevelt] has been interested in for the past five months has been to reduce or discourage the production of wealth."

Roosevelt's agenda was not without its international admirers. The chief Nazi newspaper, Volkischer Beobachter, repeatedly praised "Roosevelt's adoption of National Socialist strains of thought in his economic and social policies," and "the development toward an authoritarian state" based on the "demand that collective good be put before individual self-interest."

Roosevelt himself called Benito Mussolini "admirable" and professed that he was "deeply impressed by what he [had] accomplished."

FDR's very own Treasury secretary, Henry Morgenthau, saw the folly of the New Deal, writing: "We have tried spending money. We are spending more than we have ever spent before and it does not work. ... We have never made good on our promises. ... I say after eight years of this administration we have just as much unemployment as when we started ... and an enormous debt to boot!"

The bottom line is that Roosevelt's New Deal policies turned what would have been a three- or four-year sharp downturn into a 16-year affair.

The 1930s depression was caused by and aggravated by acts of government, and so was the current financial mess that we're in. Do we want to repeat history by listening to those who created the calamity? That's like calling on an arsonist to help put out a fire.



A book for our times

One small American town offers lessons that the whole of America needs at the moment.

REVIEW of "The JOB Messiahs" a history of the Port of Coos Bay in Oregon

There has been a lot of space dedicated on this blog documenting the failed economic development efforts in Coos County paid for at taxpayer expense and much of that directed specifically at the Port of Coos Bay but it seems I have barely scratched the surface of a decades long system that plunders state and federal treasuries all in the name of government sponsored economic development.

Local author, Wim de Vriend has compiled a long history that proves Einstein’s oft quoted axiom, “You can’t solve a problem with the same thinking that created it.”

The JOB Messiahs, How government destroys our prosperity and our freedoms to “create jobs” is a twenty year effort by the author to chronicling from the 1970s when the Port of Coos Bay decided to become an economic development agency and the series of follies that followed: “…the Crosline Ferry, the unused T-Dock, money losing fish plants in Charleston, an obnoxious fish-waste plant that went broke, the unused barge-slip on the North Spit, and many more.”

It belies the local myth that “if you build it, they will come”, so commonly employed by the economic development crowd. De Vriend’s effort is a vivid reminder of the past promotional schemes, eerily similar to those we see today, like a coal export terminal in the eighties promising JOBS, JOBS, JOBS, and proudly trumpeted by the local press.

He makes the compelling argument that the Port policies thwart small business development, the real engine behind job creation. The title of his book describes people known as Industrial Recruiters, or as Economic Development Specialists, or maybe, he adds with a wink, “the Executive Director of the Oregon International Port of Coos Bay.” So why call them JOB-Messiahs? “. . . because small towns hungry for JOBS see them as saviors, and they are delighted to play the part. But they are no saviors, and what few JOBS they cause to appear are not worth the expense.”


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List of backup or "mirror" sites here or here -- for readers in China or for everyone when blogspot is "down" or failing to update. Email me here (Hotmail address). My Home Pages are here (Academic) or here (Pictorial) or here (Personal)


The Big Lie of the late 20th century was that Nazism was Rightist. It was in fact typical of the Leftism of its day. It was only to the Right of Stalin's Communism. The very word "Nazi" is a German abbreviation for "National Socialist" (Nationalsozialist) and the full name of Hitler's political party (translated) was "The National Socialist German Workers' Party" (In German: Nationalsozialistische Deutsche Arbeiterpartei)


Monday, January 02, 2012

Obama’s Osawatomie speech is a gift to the American People

In a recent blog, investment strategist Ed Yardeni ( referred to Gallup Poll results finding that a landslide of the U.S. public (64%) regards big government as the country's biggest threat, not big business (26%) or big labor (8%).

The results of the poll are all the more dramatic considering that today 48% of Democrats are worried about the harmful consequences of big government, a number that was 32% just two years ago.

Having presented Gallup's findings, Yardeni turned to the speech President Obama gave December 6th in Osawatomie, Kansas, and found its purpose as "channeling" Teddy Roosevelt (TR), who gave his "New Nationalism" speech in the same town.

In its totality, the Osawatomie speech represents a hugely important gift to the American people for the following reasons.

First, together with Obama's record, which includes his big, corrupt, government-as-usual stimulus bill and his '60s-welfare-style, no real reform healthcare law, the speech reminds the public of the enormous disconnect between same old worn out politics President Obama and the illusion of "post everything" candidate Obama of limitless hope and change.

Yes, the speech shows Obama for the big government liberal he is at heart, even as Main Street Americans have plain had it with being told the best of all possible governmental worlds has them playing the role of sheep to their elitist shepherd betters.

To be precise, the American people are damn sick and tired of being told to subjugate themselves to the alleged deep learning and far sighted wisdom of people such as those who freed banks to become subsidized casinos and encouraged mortgage markets to become venues for social experimentation, a corrupt, bi-partisan mob that includes the likes of Bill Clinton, Alan Greenspan, George Bush, Barney Frank, Chris Dodd, Ben Bernanke, Timothy Geithner, and (how could I neglect him and his superbly elitist credentials?) Jon Corzine, one-time CEO of Goldman Sachs, U.S. Senator, New Jersey governor, and, until recently, honcho of MF Global.

Second, in its vagueness and childishly silly contradictions, the speech informs every open-minded citizen that despite the nation's crying out for real solutions to real problems, Obama intends to run his re-election campaign with the same shameless vacuity he exhibited in '08.

This arrogance despite the reality that the public is in no mood to suffer the kind of insulting generalities Demagogue Obama dumped on the people of Osawatomie.

In no mood to hear old, rotten, insufferably reeking political garbage whereby a president pompously pronounces that "We should be known for creating and selling products all around the world that are stamped with the proud words: Made in America" without admitting he has done absolutely nothing to reform the nation's trade policies.

In no mood to hear a president running for re-election complain that "We should be a country where everyone has a chance to go to college [without incurring] $100,000 of debt" and yet fail to be honest about the perniciously ironic truth that for decades big government involvement has caused college costs to significantly outpace inflation even as it has promoted the lie that every student is better off going to college.

Yes, as the Gallup poll shows, the county is in no mood to hear that the way to fix its problems is to further fatten the repulsively obese, wasteful sow that is Washington.

That's why the speech in Osawatomie in which Barack Obama reveals himself as in love with her every insatiable whim ("Let's hire 15,000 additional IRS agents to enforce Obamacare!") was the best present he could give the nation as it closes out yet another agonizing year.



Camel noses in tents

Walter E. Williams

National Transportation Safety Board Chairwoman Deborah Hersman has called for states to mandate a total ban on cellphone usage while driving. She has also encouraged electronics manufacturers -- via recommendations to the CTIA-The Wireless Association and the Consumer Electronics Association -- to develop features that "disable the functions of portable electronic devices within reach of the driver when a vehicle is in motion." That means she wants to be able to turn off your cellphone while you're driving.

With very little evidence, the National Highway Transportation Safety Administration claims that there were some 3,092 roadway fatalities last year that involved distracted drivers. Americans ought to totally reject Hersman's agenda. It's the camel's nose into the tent. Down the road, we might expect mandates against talking to passengers while driving or putting on lipstick. They may even mandate the shutdown of drive-in restaurants as a contributory factor to driver distraction through eating while driving. You say, "Come on, Williams, you're paranoid. There are already laws against distracted driving, and it would never come to that!" Let's look at some other camels' noses into tents.

During the legislative debate before enactment of the 16th Amendment, Republican President William Taft and congressional supporters argued that only the rich would ever pay federal income taxes. In fact, in 1913, only one-half of 1 percent of income earners were affected. Those earning $250,000 a year in today's dollars paid 1 percent, and those earning $6 million in today's dollars paid 7 percent. The 16th Amendment never would have been enacted had Americans not been duped into believing that only the rich would pay income taxes. It was simply a lie to exploit American gullibility and envy.

The fact of the matter is that the founders of our nation so feared the imposition of direct taxes, such as an income tax, that Article 1, Section 9 of the Constitution says, "No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or Enumeration herein before directed to be taken." It was not until the Abraham Lincoln administration that an income tax was imposed on Americans. Its stated purpose was to finance the war, but it took until 1872 for it to be repealed. During the Grover Cleveland administration, Congress enacted the Income Tax Act of 1894. The U.S. Supreme Court ruled it unconstitutional in 1895. It took the 16th Amendment (1913) to make permanent what the founders feared.

Another camel's nose in the tent lie that's threatening the economic collapse of our country is the Medicare lie. At its beginning, in 1966, Medicare cost $3 billion. The House Ways and Means Committee, along with President Lyndon Johnson, estimated that Medicare would cost an inflation-adjusted $12 billion by 1990. In 1990, Medicare topped $107 billion. That's nine times Congress' prediction. Today's Medicare tab comes to $523 billion and shows no signs of leveling off. The 2009 Medicare trustees report put the unfunded Medicare liability at $89 trillion. The 1966 Medicare cost estimate was simply a congressional and White House lie to get the American people to buy into their agenda. But not to worry; the real Medicare crisis won't hit the nation until today's beneficiaries and political supporters are dead. It's today's children who'll bear the burden of our profligacy.

But back to the proposed cellphone ban. NTSB Chairwoman Hersman said: "It's going to be very unpopular with some people. We're not here to win a popularity contest. We're here to do the right thing." C.S. Lewis warned us about people like Hersman, saying: "Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience."



Downsizing and Weakening the U.S. Military

Unless you follow writers such as Bill Gertz and others, you probably don’t have much of a feel for just how extensive the downsizing of the U.S. military, especially the Air Force, has been over the past twelve years. Yes, that includes the entire Bush II administration. It’s not just the personnel numbers involved, it’s also the reduction/delay/cancellation of procurement contracts, closing of bases and shipyards, awarding contracts to overseas suppliers rather than domestic manufacturers, et cetera, so on and so forth.

Also part of the scheme are practices such as the directed persecution of American combatants, as is exemplified by the prosecution of the Marines involved in the Haditha killings and the Lt. Pantano witch hunt. When all was said and done, charges against the Lieutenant were dropped after the long-sought physical evidence was finally unearthed and examined. But there’s no need to go to that much trouble to kill esprit de corps and combat effectiveness. Just RIF some officers close to the 20-year mark and screw them out of retirement and medical benefits. That’s how you fill officer ranks in the future.

From the Wall Street Journal:

Forced terminations with no pensions or benefits is no way to reward airmen after years of faithful service

During the holiday season, Americans especially remember our servicemen and women deployed to faraway lands, serving in harm’s way. We send packages abroad, light candles in their honor, and donate toys for military tots. However, what really matters is how we treat them when they come home. Sadly, we don’t always treat them well.

A case in point: This holiday season, the Air Force has “separated” (that is, fired) 157 officers on the eve of their retirement, including pilots flying dangerous missions, to avoid paying their pensions. According to Department of Defense Instructions, those within six years of their 20-year retirement (with no disciplinary blemishes on their record) have the option to remain in service. Nevertheless, the Air Force is committing terminations of airmen a few years away from retirement en masse, citing budget constraints.

Maj. Kale Mosley is one example. He is an Air Force Academy graduate and a pilot who has flown more than 250 combat missions. He deployed to Libya this summer with 30 hours notice. When he returned, the military immediately sent him to Iraq. Just as he was boarding the plane for Iraq, the Air Force gave him his walking papers, effective Nov. 30. Maj. Mosley will not receive a pension or long-term health-care benefits for his family. He is the father of a toddler and a newborn.



The Supreme Court's judgment isn't final

by Jeff Jacoby

NEWT GINGRICH'S PRESIDENTIAL AMBITIONS may be heading for the exits -- opinion polls suggest that the former House speaker's hour has come and gone -- but his critique of judicial supremacy deserves to taken seriously no matter what happens in Iowa or New Hampshire.

Contrary to popular belief, their judgments were never meant to be revered "almost as if God has spoken."

In a 54-page position paper, Gingrich challenges the widely held belief that the Supreme Court is the final authority on the meaning of the Constitution. Though nothing in the Constitution says so, there is now an entrenched presumption that once the court has decided a constitutional question, no power on earth short of a constitutional amendment -- or a later reversal by the court itself -- can alter that decision.

Thus, when House Minority Leader Nancy Pelosi was asked for her reaction to the Supreme Court's notorious eminent-domain ruling in Kelo v. New London, she replied as though a new tablet had been handed down from Sinai: "It is a decision of the Supreme Court. If Congress wants to change it, it will require legislation of a level of a constitutional amendment. So this is almost as if God has spoken."

But judges are not divine and their opinions are not holy writ. As every American schoolchild learns, the judiciary is intended to be a co-equal branch of government, not a paramount one. If the Supreme Court wrongly decides a constitutional case, nothing obliges Congress or the president -- or the states or the people, for that matter -- to simply bow and accept it.

Naturally this isn't something the courts have been eager to concede. Judges are no more immune to the lure of power than anybody else, and their assertion of judicial supremacy -- plus what Gingrich calls "the passive acquiescence of the executive and legislative branches" -- has won them an extraordinary degree of clout and authority. That aggrandizement, in turn, they have attempted to cast as historically unassailable. In Cooper v. Aaron, the 1958 Little Rock desegregation case, all nine justices famously declared "that the federal judiciary is supreme in the exposition of the law of the Constitution" -- a principle, they asserted, that has "been respected by this court and the country as a permanent and indispensable feature of our constitutional system."

That wasn't really true. In the words of Larry Kramer, dean of Stanford's Law School (and a former clerk for Justice William Brennan, one of the court's liberal lions), "The justices in Cooper were not reporting a fact so much as trying to manufacture one." It worked. In recent decades, the claim of judicial supremacy has clearly prevailed. Look at the way it's taken for granted, for example, that whatever the Supreme Court decides next spring about the constitutionality of the ObamaCare insurance mandate will settle the issue once and for all.

"To consider the judges as the ultimate arbiters of all constitutional questions," wrote Thomas Jefferson in 1820, is "a very dangerous doctrine indeed."

Gingrich argues that this is unhealthy, and that the elected branches have an obligation to check and balance the judiciary. "The courts have become grotesquely dictatorial, far too powerful and, I think, frankly arrogant," he said in Iowa last month. From the unhinged reaction his words provoked -- "this attempt to turn the courts into his personal lightning rod of crazy is simply Gingrich proving yet again that he needs to be boss of everything," railed Dahlia Lithwick in Slate -- you'd think he had declared war on the heart and soul of American democracy.

But the heart and soul of American democracy is that power derives from the consent of the governed, and that no branch of government -- executive, legislative, or judicial -- rules by unchallenged fiat. Gingrich is far from the first to say so.

"To consider the judges as the ultimate arbiters of all constitutional questions," wrote Thomas Jefferson in 1820, is "a very dangerous doctrine indeed, and one which would place us under the despotism of an oligarchy." Abraham Lincoln -- revolted by the Supreme Court's ruling in Dred Scott that blacks "had no rights a white man was bound to respect" -- rejected the claim that the justices' word was final. "If the policy of the government upon vital questions affecting the whole people is to be irrevocably fixed by decisions of the Supreme Court the instant they are made," he warned in his first inaugural address, "the people will have ceased to be their own rulers."

Not all of Gingrich's proposals for reining in the courts, such as summoning judges before congressional committees to explain their rulings, may be wise or useful. But his larger point is legitimate and important. Judicial supremacy is eroding America's democratic values. For the sake of our system of self-government, the balance of federal power needs to be restored.




Abolish driving licences now!: "The various States of Mexico found that bribery was impossible to avoid when attempting to gain a licence. So, to varying degrees, they changed their issuance system, some deciding simply not to have them any more. So, of course, death rates from car accidents went up, didn't they? Erm, actually, no, they didn't."

So what’s wrong with that?: "Reporters who express shock with Ron Paul’s positions should realize that in a democracy innumerable matters are up for debate, including the right to an abortion, to assisted suicide, minimum wage laws, undeclared wars in Libya or elsewhere. Ron Paul, just as any other candidate, may be open to criticism for the side he takes on any of these issues but it is a complete misunderstanding of the nature of political debate to consider simply holding views with which others disagree as something objectionable."

There is a new lot of postings by Chris Brand just up -- on his usual vastly "incorrect" themes of race, genes, IQ etc.



List of backup or "mirror" sites here or here -- for readers in China or for everyone when blogspot is "down" or failing to update. Email me here (Hotmail address). My Home Pages are here (Academic) or here (Pictorial) or here (Personal)


The Big Lie of the late 20th century was that Nazism was Rightist. It was in fact typical of the Leftism of its day. It was only to the Right of Stalin's Communism. The very word "Nazi" is a German abbreviation for "National Socialist" (Nationalsozialist) and the full name of Hitler's political party (translated) was "The National Socialist German Workers' Party" (In German: Nationalsozialistische Deutsche Arbeiterpartei)