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Politics & Religion
Re: Politically (In)correct
on: March 01, 2009, 09:49:38 AM
Makes me wonder what exactly was told to the campus police.
Politics, Religion, Science, Culture and Humanities
Politics & Religion
Re: Politically (In)correct
on: March 01, 2009, 09:32:57 AM
Great Orwell's ghost!
Politics, Religion, Science, Culture and Humanities
Politics & Religion
Re: Legal Issues created by the War with Islamic Fascism
on: February 28, 2009, 05:47:01 PM
Quote from: Crafty_Dog on February 28, 2009, 09:23:46 AM
Ah yes, the joys of "gassing" or "correctional cocktails".
Politics, Religion, Science, Culture and Humanities
Politics & Religion
Re: Political Economics
on: February 27, 2009, 11:01:05 PM
Canada is less socialist than us. I weep for my country.
Politics, Religion, Science, Culture and Humanities
Politics & Religion
Re: Our Troops in Action
on: February 27, 2009, 06:40:36 PM
I am humbled and awed and immensely thankful that this nation still produces men like this.
Politics, Religion, Science, Culture and Humanities
Politics & Religion
Obama Declares War!
on: February 27, 2009, 05:19:52 PM
Obama Declares War on Investors, Entrepreneurs, Businesses, and More
Let me be very clear on the economics of President Obamas State of the Union speech and his budget. He is declaring war on investors, entrepreneurs, small businesses, large corporations, and private-equity and venture-capital funds. That is the meaning of his anti-growth tax-hike proposals, which make absolutely no sense at all -- either for this recession or from the standpoint of expanding our economys long-run potential to grow.
Raising the marginal tax rate on successful earners, capital, dividends, and all the private funds is a function of Obamas left-wing social vision, and a repudiation of his economic-recovery statements. Ditto for his sweeping government-planning-and-spending program, which will wind up raising federal outlays as a share of GDP to at least 30 percent, if not more, over the next 10 years.
This is nearly double the government-spending low-point reached during the late 1990s by the Gingrich Congress and the Clinton administration. While not quite as high as spending levels in Western Europe, we regrettably will be gaining on this statist-planning approach.
Study after study over the past several decades has shown how countries that spend more produce less, while nations that tax less produce more. Obama is doing it wrong on both counts.
And as far as middle-class tax cuts are concerned, Obamas cap-and-trade program will be a huge across-the-board tax increase on blue-collar workers, including unionized workers. Industrial production is plunging, but new carbon taxes will prevent production from ever recovering. While the country wants more fuel and power, cap-and-trade will deliver less.
The tax hikes will generate lower growth and fewer revenues. Yes, the economy will recover. But Obamas rosy scenario of 4 percent recovery growth in the out years of his budget is not likely to occur. The combination of easy money from the Fed and below-potential economic growth is a prescription for stagflation. Thats one of the messages of the falling stock market.
Essentially, the Obama economic policies represent a major Democratic party relapse into Great Society social spending and taxing. It is a return to the LBJ/Nixon era, and a move away from the Reagan/Clinton period. House Republicans, fortunately, are 90 days sober, as they are putting up a valiant fight to stop the big-government onslaught and move the GOP back to first principles.
Noteworthy up here on Wall Street, a great many Obama supporters -- especially hedge-fund types who voted for change -- are becoming disillusioned with the performances of Obama and Treasury man Geithner. There is a growing sense of buyers remorse. Well then, do conservatives dare say: We told you so?
Politics, Religion, Science, Culture and Humanities
Science, Culture, & Humanities
Re: Race, religion, ethnic origin
on: February 27, 2009, 03:54:56 PM
- Pajamas Media -
No Country for Black Men
Posted By Travis Rowley On February 27, 2009 @ 12:30 am In . Column2 02, . Positioning, Politics, Race Issues, US News | 44 Comments
The Coen Brothers 2007 film [1] No Country for Old Men revolves around the tale of several young men engaged in a violent race for a satchel of cash. Tommy Lee Jones plays an aging sheriff investigating the depressing trail of bloodshed, markings that inform the old man that the customs and morals that guided his generation have decayed even faster than he has. Jones ends up as a depiction of the anguish experienced by people left without a country they can call home.
Democrats remain on their quest to offer similar anguish to African-Americans, as liberals now embark on their fifth decade aimed at stripping these reliable party constituents of American nationalism.
Liberal mouthpieces have long emphasized a shameful American history, one marked by slavery and segregation. And they insist that, even today, a majority of Americans hold contempt for dark-skinned people. Something is clearly wrong when the governments most effective affirmative-action program is the preference people of color receive when entering not college, but the criminal-justice system, proclaims one prominent progressive text titled [2] A Covenant with Black America which goes on to say that there is a multi-headed, multi-tentacled monster out there devouring blacks who live in certain neighborhoods.
Such rhetoric has caused many African-Americans to experience feelings of anti-Americanism and national detachment. Blacks now see mirages of racism everywhere, albeit disguised by code words and institutional racism. The outrage last year over Barack Obama being referred to as articulate provided a powerful example of this paranoia.
Anger and hatred typically accompany blacks racial anxiety. Before the start of a game last year, the NBAs [3] Josh Howard said to a live camera, The Star-Spangled Banner is going on. I dont celebrate this [expletive]. Im black. Denver Nuggets guard [4] Mahmoud Abdul-Rauf refused to even stand for the national anthem, stating that the American flag was a symbol of oppression and that the United States had a long history of tyranny.
In Democratic circles, this is known as patriotism.
These are not so much black sentiments as they are liberal. But many blacks now subscribe to the anti-American wing of contemporary liberalism.
Last year Michelle Obama said that America was just downright mean and admitted, For the first time in my adult lifetime, I am really proud of my country. And any Google search of Jeremiah Wright provides a score of videos showing Barack Obamas longtime pastor condemning America for practicing state terrorism and for inventing the HIV virus as a means of genocide against people of color. We find him referring to the United States as the U.S. of KKK A. and thundering, Not God Bless America. Goddamn America!
His all-black congregation cheers.
To be without a home is to live with pain. But this has been the Democratic scheme for decades to promote government intrusion by convincing minorities that most Americans, especially Republicans, reject them. Republicans are racist and against affirmative action. Democrats care and will give you stuff.
The misinformation campaign has succeeded. Many black Americans now view racial solidarity as more important than black individualism. Each year a handful of notorious black leaders convene the State of the Black Union, calling all brothers to recognize the uniformed plight that all African-Americans endure. Liberals stripped blacks of their country. So they concocted a new one the Black Union.
Because racial camaraderie has resulted in more than 90% of blacks predictably voting for Democrats, the advice to be more inclusive is oft delivered to the GOP. Replicate the way in which Democrats pander to minorities in order to attract blacks to the Republican Party.
But safeguarding the feelings of minorities by adhering to liberals politically correct pap is precisely the cause of blacks adoption of big-government, anti-American liberalism. Do Republicans really want to be associated with such a philosophy?
The advice is backwards. Blacks are the ones to make concessions. They must abandon their liberalism before the party of conservatism can consider their membership. A simple matter of principle.
Yet, in order to convince Republicans to alter their strategy, Los Angeles-based writer Chaise Nunnally recently [5] referenced the Don Imus controversy in which Imus referred to the Rutgers womens basketball team as nappy-headed hoes. Even though Nunnally found the opinions expressed by conservatives involved in the debate legitimate and defensible, he thought they also struck the wrong note in communicating with the black community on a racially sensitive topic.
Nunnallys counsel was to be more racially symbolic, recommending Republicans find a more race-sensitive tack to woo black voters. Join the left in their truth-stifling political correctness in order to trick blacks into voting for you.
Thats how much liberals respect minorities.
Republicans would be better off listening to black conservative columnist Thomas Sowell, who recently reminded his readers, Most Americans principles are closer to those of the Republicans than to those of the Democrats. [Republicans] won big when they stood for something and told the people what that something was. Ronald Reagan was the classic example. But another example would be the stunning Republican victories in the 1994 Congressional elections. Articulating the message of Newt Gingrichs contract for America was a key to that historic victory.
Republicans win when they underline conservatism, not when they dilute their principles by pandering to special interests. They should leave such prostitution to the Democrats.
For black Americans addicted to Democrats coddling sense of self-pity and collectivism, they will find no such slavery within the Republican Party. Only when blacks finally recognize the big-government whip held in Democratic hands can the party of Lincoln help them regain their independence, sustain their dignity, strengthen their families, and recapture their country.
Article printed from Pajamas Media:
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URLs in this post:
[1] No Country for Old Men:
[2] A Covenant with Black America:
[3] Josh Howard:
[4] Mahmoud Abdul-Rauf:
[5] referenced:
Politics, Religion, Science, Culture and Humanities
Politics & Religion
Re: Political Economics
on: February 27, 2009, 03:11:03 PM
**Not a coincidence. Glad Scott Grannis and I are in agreement!**
Friday, February 27, 2009
No one can prove that the crash in global equity markets has anything to do with Obama becoming president, but there are reasons to think so.
Obama is seeking to implement virtually overnight a blueprint for an unprecedent expansion of government's size and power, and huge new tax burdens and deficits will be required to fund this. He justifies it all with the unproven and logic-lacking theory that more government spending and intervention can expand the economy. He is rushing to implement a massive shift in the way we use energy by putting in place a politically motivated tax on the cheapest energy available, based on an increasingly smaller "consensus" among scientists that reducing carbon emissions will "save the planet."
In short, Obama is taking monumental risks, not only with his own presidency, but with the future of our country, and ultimately with the well-being of the entire world. He wasn't kidding when he said he was audacious. But it's increasingly looking like his audacity is spinning out of control. In my view, that's what is worrying equity markets all over the world. This is far more serious than the subprime lending and related financial crisis, which is well on its way to getting fixed.
Politics, Religion, Science, Culture and Humanities
Politics & Religion
Re: Iran
on: February 26, 2009, 11:23:22 PM
Quote from: Crafty_Dog on February 26, 2009, 11:01:56 PM
Agree the Israeli are awesome, but the logistics of hitting Iran are a b*tch.
**It's difficult, to be sure, but not impossible.**
Distance makes fuel a serious issue, even flying over Iraq. Do you think His Glibness will let them fly over Iraq?!?
**What is he going to do? Scramble fighters to shoot down the IAF?**
**The IAF recently defeated Syria's air defenses and cratered certain buildings, didn't they?**
And WHERE to hit? With WHAT? The sites are quite numerous, many locations not known, and most of them are hardened, and as Stratfor knows, plenty of them are now protected by Russian AA.
**I don't think Israel can wipe out the nuclear program, however they can delay/expose it.**
The only technically feasible option which occurs to me is missile launches from Israeli subs-- and that opens the gates to hell itself.
I don't think Israel will go nuclear first.
Politics, Religion, Science, Culture and Humanities
Politics & Religion
Re: Political Economics
on: February 26, 2009, 10:58:29 PM
As the epic scale of spending sinks in, I expect a serious drop in the market tomorrow.
Thanks Obots!
Politics, Religion, Science, Culture and Humanities
Politics & Religion
Re: Iran
on: February 26, 2009, 10:39:30 PM
It's my opinion that Israel has SpecOps forces that are or can rapidly be deployed for direct action missions. I'm betting the IAF can evade/avoid detection enroute to hitting Iran.
Politics, Religion, Science, Culture and Humanities
Politics & Religion
Re: Iran
on: February 26, 2009, 09:39:11 PM
The Iran-Israel nuclear endgame is now much closer
Feb. 26, 2009
In recent days, four key developments have clicked in to edge Iran and Israel much closer to a military denouement with profound consequences for American oil that the nation is not prepared to meet.
What has happened?
First, Iran has proven it can successfully launch a satellite into outer space as it did on February 2. Teheran claimed, to the incredulity of Western governments, that the satellite was to monitor earthquakes and enhance communications. Few believe that, especially since America's own space program continuously launches unpublished military satellite missions. Teheran plans three more satellites this year, creating an easily weaponized space net that worries American military planners.
Second, the International Atomic Energy Agency last week admitted that it had underestimated Iran's nuclear stockpile by about one-third. The watchdog group now confirms Iran possesses 2,227 lbs. of nuclear material, sufficient to create at least one nuclear bomb. That stockpile includes 1,010 kilograms of low-enriched uranium hexafluoride, or approximately 700 kilograms containing the vital uranium 235 isotope, the stuff needed to weaponize.
Third, Iran has ramped up its enrichment program with thousands of new homegrown, highly advanced centrifuges. As The Cutting Edge News reported in April 2008, Iran wants 6,000 centrifuges to speed the enrichment of weapons-grade material. The number of working centrifuges now exceeds 5,400, including 164 new ones believed to be the faster and more efficient IR-2 and IR-3 models made in Iran. These new Iranian centrifuges are at least as sophisticated as its recently imported P-2 models.
American policymakers are now convinced that Iran, despite all protests and charades, is in a mad dash to create a deliverable nuclear weapon. The Obama administration has almost openly abandoned the assertions of the CIA's much-questioned 2008 National Intelligence Estimate that concluded Iran was not pursuing nuclear weaponry for the simple reason that its atomic program and military programs were housed in separate buildings.
Fourth, Binyamin Netanyahu has just become prime minister of Israel. He is determined to take action before - not after - Iran achieves its nuclear potential. This creates a volatile, hair-trigger situation that could explode at any moment. Hence, the endgame is now vastly closer than it was in mid-January, when many believed Israel might take action during the lame-duck interregnum.
Israeli countermeasures to date have included a massive international covert program of equipment sabotage, assassination of key nuclear personnel and a vibrant diplomatic offensive. But all these efforts combined amount to nothing more than delaying tactics, as Iran is irrevocably determined to achieve a nuclear weapon as fast as possible. Many believe such a weapon will be used to fulfill its prediction that Israel will soon be wiped off the map.
THE CONSEQUENCES for this confrontation are apocalyptic because Iran's full partner in this enterprise is Russia. The Russian company Atomstroiexport has provided most if not all of the nuclear material for the 1,000 megawatt Bushehr reactor, along with thousands of technicians to service and operate it.
Following its invasion of Georgia, Moscow forged ahead with final delivery plans for the S-300 advanced air defense system which can track scores of IAF airborne intruders simultaneously, whether low-level drones or high-altitude missiles, and shoot them down. But the S-300, the linchpin of Iran's defense against Israel, will not be fully operational for several months, creating a narrow window for Israel to act. Indeed, Russia has just announced a pause in missile deliveries for the system in fear that it will accelerate an Israeli response.
Iran, of course, has repeatedly threatened to counter any such attack by closing the Strait of Hormuz, as well as launching missiles against the Ras Tanura Gulf oil terminal and bombarding the indispensable Saudi oil facility at Abqaiq which is responsible for some 65 percent of Saudi production. Any one of these military options, let alone all three, would immediately shut off 40% of all seaborne oil, 18% of global oil, and some 20% of America's daily consumption.
America's oil vulnerability has been back-burnered due to the economic crisis and the plunge in gasoline prices. However, the price of gasoline will not mitigate an interruption of oil flow. The price of oil does not impact its ability to flow through blocked or destroyed facilities. Indeed, an interruption would not restore prices to those of last summer - which Russian and Saudi oil officials say is needed - but probably zoom the pump cost to $20 per gallon.
American oil vulnerability in recent months has escalated precisely because of oil's precipitous drop to $35 to $40 a barrel. At that price, America's number one supplier, Canada, which supplies some 2 million out of 20 million barrels of oil a day, cannot afford to produce. Canadian oil sand petroleum is not viable below $70 a barrel. Much of Canada's supply has already been cancelled or indefinitely postponed. America's strategic petroleum reserve can only keep that country moving for approximately 57 days.
THE OBAMA ADMINISTRATION, like the Bush administration before it, has developed no plan or contingency legislation for an oil interruption, such as a surge in retrofitting America's 250 million gas guzzling cars and trucks - each with a 10-year life - or a stimulus of the alternate fuel production needed to rapidly get off oil. Ironically, Iran has undertaken such a crash program converting some 20% of its gasoline fleet yearly to compressed natural gas (CNG) as a countermeasure to Western nuclear sanctions against the Teheran regime that could completely block the flow of gasoline to Iran. Iran has no refining capability.
The question of when and how this endgame will play out is not known by anyone. Israeli leaders wish to avoid military preemption at all costs if possible. But many feel the military moment must come; and when that moment does come, it will be swift, highly technologic and in the twinkling of an eye. But as one informed official quipped, "Those who know, don't talk. Those who talk, don't know."
The writer is The New York Times best-selling investigative author of IBM and the Holocaust, Internal Combustion and the just released The Plan: How to Save America When the Oil Stops - or the Day Before (Dialog Press).
This article can also be read at
Politics, Religion, Science, Culture and Humanities
Politics & Religion
Funny, this IS the Hillary I always knew....
on: February 26, 2009, 09:26:48 PM
Jewish Leaders Blast Clinton Over Israel Criticism
Zuckerman, Lawmakers, Local Jews Say Secretary Of State Not The Hillary Clinton They Used To Know
Hillary Pressuring Israel To Speed Up Aid To Gaza
Marcia Kramer
Transition To A New Government
In a swift about face from her views as New York's senator, Secretary of State Hillary Clinton is now hammering Israel over its treatment of Palestinians in Gaza.
As First Lady, Clinton raised eyebrows when she kissed Suha Arafat.
Since she was then seeking a Senate seat the resulting brouhaha caused her to "re-think" her positions.
"I'm a very strong supporter of Israel," Clinton said back in February 2000.
On Thursday, as Secretary of State she had yet another about face in the form of angry messages demanding Israel speed up aid to Gaza. Jewish leaders are furious.
"I am very surprised, frankly, at this statement from the United States government and from the secretary of state," said Mortimer Zuckerman, publisher of the New York Daily News and member of the NYC Jewish Community Relations Council.
"I liked her a lot more as a senator from New York," Assemblyman Dov Hikind, D-Brooklyn, said. "Now, I wonder as I used to wonder who the real Hillary Clinton is."
Clinton's decision to hammer Israel comes as the Clintons and President Barack Obama are planning to give the Palestinians $900 million toward the rebuilding of Gaza in the wake of the Israeli offensive that was sparked by Hamas rocket fire.
"We are working across the government to see what our approach will be," Clinton said.
"I don't believe that we should be in a position at this point to do anything to strengthen Hamas," Zuckerman said. "We surely know what Hamas stands for as I say they are the forward battalions of Iran."
For some, Clinton's change of position is upsetting.
"I feel it's unfortunate that they don't continue the policy of the Bush administration, which was much more pro-Israel," said Akiva Homnick of Jerusalem.
"I happen to have a lot of family who live in Israel and I feel, personally, when you are dealing with people who are very strong against you, you have to stand up to them," said Tami Davudoff of Kew Gardens.
"Hillary had Mrs. Arafat here and she invited Mrs. Arafat for lunch when she was the first lady," added Babak Chafe of Great Neck. "She is pro-Palestinian 100 percent, really. Of course, we always knew it."
"The easy way to make a peace agreement is to pressure Israel because you can't pressure the Arabs," said Solomon Loewi of Monsey, N.Y.
All this could lead to a chilly reception when Mrs. Clinton arrives in the Middle East next week.
The new U.S. envoy to the Middle East, George Mitchell, arrived in Israel on Thursday with a mission to inject new life into peace talks between Israel and the Palestinians.
Politics, Religion, Science, Culture and Humanities
Politics & Religion
Re: Iran
on: February 26, 2009, 07:56:26 PM
Israel can find a way, or what's left of Israel can exercise the "Sampson option".
Politics, Religion, Science, Culture and Humanities
Politics & Religion
Re: Intel Matters
on: February 26, 2009, 07:43:36 PM
Two nations that may not survive Barry-O's presidency:
1. Israel
2. Taiwan
Politics, Religion, Science, Culture and Humanities
Politics & Religion
Re: North Korea
on: February 26, 2009, 07:41:28 PM
Does the Empty-suit have the huevos? I guess we'll find out.
Politics, Religion, Science, Culture and Humanities
Politics & Religion
We're on the brink of disaster
on: February 26, 2009, 01:05:51 PM
We're on the brink of disaster
Violent protests and riots are breaking out everywhere as economies collapse and governments fail. War is bound to follow.
By Michael Klare
Editor's note: This article has also appeared on TomDispatch.com.
Feb. 26, 2009 |
The global economic meltdown has already caused bank failures, bankruptcies, plant closings and foreclosures and will, in the coming year, leave many tens of millions unemployed across the planet. But another perilous consequence of the crash of 2008 has only recently made its appearance: increased civil unrest and ethnic strife. Someday, perhaps, war may follow.
As people lose confidence in the ability of markets and governments to solve the global crisis, they are likely to erupt into violent protests or to assault others they deem responsible for their plight, including government officials, plant managers, landlords, immigrants and ethnic minorities. (The list could, in the future, prove long and unnerving.) If the present economic disaster turns into what President Obama has referred to as a "lost decade," the result could be a global landscape filled with economically fueled upheavals.
Indeed, if you want to be grimly impressed, hang a world map on your wall and start inserting red pins where violent episodes have already occurred. Athens (Greece), Longnan (China), Port-au-Prince (Haiti), Riga (Latvia), Santa Cruz (Bolivia), Sofia (Bulgaria), Vilnius (Lithuania) and Vladivostok (Russia) would be a start. Many other cities from Reykjavik, Paris, Rome and Zaragoza to Moscow and Dublin have witnessed huge protests over rising unemployment and falling wages that remained orderly thanks in part to the presence of vast numbers of riot police. If you inserted orange pins at these locations -- none as yet in the United States -- your map would already look aflame with activity. And if you're a gambling man or woman, it's a safe bet that this map will soon be far better populated with red and orange pins.
For the most part, such upheavals, even when violent, are likely to remain localized in nature, and disorganized enough that government forces will be able to bring them under control within days or weeks, even if -- as with Athens for six days last December -- urban paralysis sets in due to rioting, tear gas and police cordons. That, at least, has been the case so far. It is entirely possible, however, that, as the economic crisis worsens, some of these incidents will metastasize into far more intense and long-lasting events: armed rebellions, military takeovers, civil conflicts, even economically fueled wars between states.
Every outbreak of violence has its own distinctive origins and characteristics. All, however, are driven by a similar combination of anxiety about the future and lack of confidence in the ability of established institutions to deal with the problems at hand. And just as the economic crisis has proven global in ways not seen before, so local incidents -- especially given the almost instantaneous nature of modern communications -- have a potential to spark others in far-off places, linked only in a virtual sense.
A global pandemic of economically driven violence
The riots that erupted in the spring of 2008 in response to rising food prices suggested the speed with which economically related violence can spread. It is unlikely that Western news sources captured all such incidents, but among those recorded in the New York Times and the Wall Street Journal were riots in Cameroon, Egypt, Ethiopia, Haiti, India, Indonesia, Ivory Coast and Senegal.
In Haiti, for example, thousands of protesters stormed the presidential palace in Port-au-Prince and demanded food handouts, only to be repelled by government troops and U.N. peacekeepers. Other countries, including Pakistan and Thailand, quickly sought to deter such assaults by deploying troops at farms and warehouses throughout the country.
The riots only abated at summer's end when falling energy costs brought food prices crashing down as well. (The cost of food is now closely tied to the price of oil and natural gas because petrochemicals are so widely and heavily used in the cultivation of grains.) Ominously, however, this is sure to prove but a temporary respite, given the epic droughts now gripping breadbasket regions of the United States, Argentina, Australia, China, the Middle East and Africa. Look for the prices of wheat, soybeans and possibly rice to rise in the coming months -- just when billions of people in the developing world are sure to see their already marginal incomes plunging due to the global economic collapse.
Food riots were but one form of economic violence that made its bloody appearance in 2008. As economic conditions worsened, protests against rising unemployment, government ineptitude and the unaddressed needs of the poor erupted as well. In India, for example, violent protests threatened stability in many key areas. Although usually described as ethnic, religious or caste disputes, these outbursts were typically driven by economic anxiety and a pervasive feeling that someone else's group was faring better than yours -- and at your expense.
In April, for example, six days of intense rioting in Indian-controlled Kashmir were largely blamed on religious animosity between the majority Muslim population and the Hindu-dominated Indian government; equally important, however, was a deep resentment over what many Kashmiri Muslims experienced as discrimination in jobs, housing and land use. Then, in May, thousands of nomadic shepherds known as Gujjars shut down roads and trains leading to the city of Agra, home of the Taj Mahal, in a drive to be awarded special economic rights; more than 30 people were killed when the police fired into crowds. In October, economically related violence erupted in Assam in the country's far northeast, where impoverished locals are resisting an influx of even poorer, mostly illegal immigrants from nearby Bangladesh.
Economically driven clashes also erupted across much of eastern China in 2008. Such events, labeled "mass incidents" by Chinese authorities, usually involve protests by workers over sudden plant shutdowns, lost pay or illegal land seizures. More often than not, protesters demanded compensation from company managers or government authorities, only to be greeted by club-wielding police.
Needless to say, the leaders of China's Communist Party have been reluctant to acknowledge such incidents. This January, however, the magazine Liaowang (Outlook Weekly) reported that layoffs and wage disputes had triggered a sharp increase in such "mass incidents," particularly along the country's eastern seaboard, where much of its manufacturing capacity is located.
By December, the epicenter of such sporadic incidents of violence had moved from the developing world to Western Europe and the former Soviet Union. Here, the protests have largely been driven by fears of prolonged unemployment, disgust at government malfeasance and ineptitude, and a sense that "the system," however defined, is incapable of satisfying the future aspirations of large groups of citizens.
One of the earliest of this new wave of upheavals occurred in Athens on Dec. 6, 2008, after police shot and killed a 15-year-old schoolboy during an altercation in a crowded downtown neighborhood. As news of the killing spread throughout the city, hundreds of students and young people surged into the city center and engaged in pitched battles with riot police, throwing stones and firebombs. Although government officials later apologized for the killing and charged the police officer involved with manslaughter, riots broke out repeatedly in the following days in Athens and other Greek cities. Angry youths attacked the police -- widely viewed as agents of the establishment -- as well as luxury shops and hotels, some of which were set on fire. By one estimate, the six days of riots caused $1.3 billion in damage to businesses at the height of the Christmas shopping season.
Russia also experienced a spate of violent protests in December, triggered by the imposition of high tariffs on imported automobiles. Instituted by Prime Minister Vladimir Putin to protect an endangered domestic auto industry (whose sales were expected to shrink by up to 50 percent in 2009), the tariffs were a blow to merchants in the Far Eastern port of Vladivostok who benefited from a nationwide commerce in used Japanese vehicles. When local police refused to crack down on anti-tariff protests, the authorities were evidently worried enough to fly in units of special forces from Moscow, 3,700 miles away.
In January, incidents of this sort seemed to be spreading through Eastern Europe. Between Jan. 13 and Jan. 16, anti-government protests involving violent clashes with the police erupted in the Latvian capital of Riga, the Bulgarian capital of Sofia, and the Lithuanian capital of Vilnius. It is already essentially impossible to keep track of all such episodes, suggesting that we are on the verge of a global pandemic of economically driven violence.
A perfect recipe for instability
While most such incidents are triggered by an immediate event -- a tariff, the closure of a local factory, the announcement of government austerity measures -- there are systemic factors at work as well. While economists now agree that we are in the midst of a recession deeper than any since the Great Depression of the 1930s, they generally assume that this downturn -- like all others since World War II -- will be followed in a year, or two, or three, by the beginning of a typical recovery.
There are good reasons to suspect that this might not be the case -- that poorer countries (along with many people in the richer countries) will have to wait far longer for such a recovery, or may see none at all. Even in the United States, 54 percent of Americans now believe that "the worst" is "yet to come" and only 7 percent that the economy has "turned the corner," according to a recent Ipsos/McClatchy poll; fully a quarter think the crisis will last more than four years. Whether in the U.S., Russia, China or Bangladesh, it is this underlying anxiety -- this suspicion that things are far worse than just about anyone is saying -- that is helping to fuel the global epidemic of violence.
The World Bank's most recent status report, Global Economic Prospects 2009, fulfills those anxieties in two ways. It refuses to state the worst, even while managing to hint, in terms too clear to be ignored, at the prospect of a long-term, or even permanent, decline in economic conditions for many in the world. Nominally upbeat -- as are so many media pundits -- regarding the likelihood of an economic recovery in the not-too-distant future, the report remains full of warnings about the potential for lasting damage in the developing world if things don't go exactly right.
Two worries, in particular, dominate Global Economic Prospects 2009: that banks and corporations in the wealthier countries will cease making investments in the developing world, choking off whatever growth possibilities remain; and that food costs will rise uncomfortably, while the use of farmlands for increased biofuels production will result in diminished food availability to hundreds of millions.
Despite its Pollyanna-ish passages on an economic rebound, the report does not mince words when discussing what the almost certain coming decline in First World investment in Third World countries would mean:
"Should credit markets fail to respond to the robust policy interventions taken so far, the consequences for developing countries could be very serious. Such a scenario would be characterized by ... substantial disruption and turmoil, including bank failures and currency crises, in a wide range of developing countries. Sharply negative growth in a number of developing countries and all of the attendant repercussions, including increased poverty and unemployment, would be inevitable."
In the fall of 2008, when the report was written, this was considered a "worst-case scenario." Since then, the situation has obviously worsened radically, with financial analysts reporting a virtual freeze in worldwide investment. Equally troubling, newly industrialized countries that rely on exporting manufactured goods to richer countries for much of their national income have reported stomach-wrenching plunges in sales, producing massive plant closings and layoffs.
The World Bank's 2008 survey also contains troubling data about the future availability of food. Although insisting that the planet is capable of producing enough foodstuffs to meet the needs of a growing world population, its analysts were far less confident that sufficient food would be available at prices people could afford, especially once hydrocarbon prices begin to rise again. With ever more farmland being set aside for biofuels production and efforts to increase crop yields through the use of "miracle seeds" losing steam, the Bank's analysts balanced their generally hopeful outlook with a caveat: "If biofuels-related demand for crops is much stronger or productivity performance disappoints, future food supplies may be much more expensive than in the past."
Combine these two World Bank findings -- zero economic growth in the developing world and rising food prices -- and you have a perfect recipe for unrelenting civil unrest and violence. The eruptions seen in 2008 and early 2009 will then be mere harbingers of a grim future in which, in a given week, any number of cities reel from riots and civil disturbances that could spread like multiple brush fires in a drought.
Mapping a world at the brink
Survey the present world, and it's all too easy to spot a plethora of potential sites for such multiple eruptions -- or far worse. Take China. So far, the authorities have managed to control individual "mass incidents," preventing them from coalescing into something larger. But in a country with a more than 2,000-year history of vast millenarian uprisings, the risk of such escalation has to be on the minds of every Chinese leader.
On Feb. 2, a top Chinese party official, Chen Xiwen, announced that, in the last few months of 2008 alone, a staggering 20 million migrant workers, who left rural areas for the country's booming cities in recent years, had lost their jobs. Worse yet, they had little prospect of regaining them in 2009. If many of these workers return to the countryside, they may find nothing there either, not even land to work.
Under such circumstances, and with further millions likely to be shut out of coastal factories in the coming year, the prospect of mass unrest is high. No wonder the government announced a $585 billion stimulus plan aimed at generating rural employment and, at the same time, called on security forces to exercise discipline and restraint when dealing with protesters. Many analysts now believe that, as exports continue to dry up, rising unemployment could lead to nationwide strikes and protests that might overwhelm ordinary police capabilities and require full-scale intervention by the military (as occurred in Beijing during the Tiananmen Square demonstrations of 1989).
Or take many of the Third World petro-states that experienced heady boosts in income when oil prices were high, allowing governments to buy off dissident groups or finance powerful internal security forces. With oil prices plunging from $147 per barrel of crude oil to less than $40, such countries, from Angola to shaky Iraq, now face severe instability.
Nigeria is a typical case in point: When oil prices were high, the central government in Abuja raked in billions every year, enough to enrich elites in key parts of the country and subsidize a large military establishment; now that prices are low, the government will have a hard time satisfying all these previously well-fed competing obligations, which means the risk of internal disequilibrium will escalate. An insurgency in the oil-producing Niger Delta region, fueled by popular discontent with the failure of oil wealth to trickle down from the capital, is already gaining momentum and is likely to grow stronger as government revenues shrivel; other regions, equally disadvantaged by national revenue-sharing policies, will be open to disruptions of all sorts, including heightened levels of internecine warfare.
Bolivia is another energy producer that seems poised at the brink of an escalation in economic violence. One of the poorest countries in the Western Hemisphere, it harbors substantial oil and natural gas reserves in its eastern, lowland regions. A majority of the population -- many of Indian descent -- supports President Evo Morales, who seeks to exercise strong state control over the reserves and use the proceeds to uplift the nation's poor. But a majority of those in the eastern part of the country, largely controlled by a European-descended elite, resent central government interference and seek to control the reserves themselves. Their efforts to achieve greater autonomy have led to repeated clashes with government troops and, in deteriorating times, could set the stage for a full-scale civil war.
Given a global situation in which one startling, often unexpected development follows another, prediction is perilous. At a popular level, however, the basic picture is clear enough: Continued economic decline combined with a pervasive sense that existing systems and institutions are incapable of setting things right is already producing a potentially lethal brew of anxiety, fear and rage. Popular explosions of one sort or another are inevitable.
Some sense of this new reality appears to have percolated up to the highest reaches of the U.S. intelligence community. In testimony before the Senate Select Committee on Intelligence on Feb. 12, Adm. Dennis C. Blair, the new director of national intelligence, declared, "The primary near-term security concern of the United States is the global economic crisis and its geopolitical implications ... Statistical modeling shows that economic crises increase the risk of regime-threatening instability if they persist over a one to two year period" -- certain to be the case in the present situation.
Blair did not specify which countries he had in mind when he spoke of "regime-threatening instability" -- a new term in the American intelligence lexicon, at least when associated with economic crises -- but it is clear from his testimony that U.S. officials are closely watching dozens of shaky nations in Africa, the Middle East, Latin America and Central Asia.
Now go back to that map on your wall with all those red and orange pins in it and proceed to color in appropriate countries in various shades of red and orange to indicate recent striking declines in gross national product and rises in unemployment rates. Without 16 intelligence agencies under you, you'll still have a pretty good idea of the places that Blair and his associates are eyeing in terms of instability as the future darkens on a planet at the brink.
-- By Michael Klare
Politics, Religion, Science, Culture and Humanities
Politics & Religion
Re: Political Economics
on: February 26, 2009, 11:40:40 AM
The 2% Illusion
Take everything they earn, and it still won't be enough.
President Obama has laid out the most ambitious and expensive domestic agenda since LBJ, and now all he has to do is figure out how to pay for it. On Tuesday, he left the impression that we need merely end "tax breaks for the wealthiest 2% of Americans," and he promised that households earning less than $250,000 won't see their taxes increased by "one single dime."
This is going to be some trick. Even the most basic inspection of the IRS income tax statistics shows that raising taxes on the salaries, dividends and capital gains of those making more than $250,000 can't possibly raise enough revenue to fund Mr. Obama's new spending ambitions.
Consider the IRS data for 2006, the most recent year that such tax data are available and a good year for the economy and "the wealthiest 2%." Roughly 3.8 million filers had adjusted gross incomes above $200,000 in 2006. (That's about 7% of all returns; the data aren't broken down at the $250,000 point.) These people paid about $522 billion in income taxes, or roughly 62% of all federal individual income receipts. The richest 1% -- about 1.65 million filers making above $388,806 -- paid some $408 billion, or 39.9% of all income tax revenues, while earning about 22% of all reported U.S. income.
Note that federal income taxes are already "progressive" with a 35% top marginal rate, and that Mr. Obama is (so far) proposing to raise it only to 39.6%, plus another two percentage points in hidden deduction phase-outs. He'd also raise capital gains and dividend rates, but those both yield far less revenue than the income tax. These combined increases won't come close to raising the hundreds of billions of dollars in revenue that Mr. Obama is going to need.
But let's not stop at a 42% top rate; as a thought experiment, let's go all the way. A tax policy that confiscated 100% of the taxable income of everyone in America earning over $500,000 in 2006 would only have given Congress an extra $1.3 trillion in revenue. That's less than half the 2006 federal budget of $2.7 trillion and looks tiny compared to the more than $4 trillion Congress will spend in fiscal 2010. Even taking every taxable "dime" of everyone earning more than $75,000 in 2006 would have barely yielded enough to cover that $4 trillion.
Fast forward to this year (and 2010) when the Wall Street meltdown and recession are going to mean far few taxpayers earning more than $500,000. Profits are plunging, businesses are cutting or eliminating dividends, hedge funds are rolling up, and, most of all, capital nationwide is on strike. Raising taxes now will thus yield far less revenue than it would have in 2006.
Mr. Obama is of course counting on an economic recovery. And he's also assuming along with the new liberal economic consensus that taxes don't matter to growth or job creation. The truth, though, is that they do. Small- and medium-sized businesses are the nation's primary employers, and lower individual tax rates have induced thousands of them to shift from filing under the corporate tax system to the individual system, often as limited liability companies or Subchapter S corporations. The Tax Foundation calculates that merely restoring the higher, Clinton-era tax rates on the top two brackets would hit 45% to 55% of small-business income, depending on how inclusively "small business" is defined. These owners will find a way to declare less taxable income.
The bottom line is that Mr. Obama is selling the country on a 2% illusion. Unwinding the U.S. commitment in Iraq and allowing the Bush tax cuts to expire can't possibly pay for his agenda. Taxes on the not-so-rich will need to rise as well.
On that point, by the way, it's unclear why Mr. Obama thinks his climate-change scheme won't hit all Americans with higher taxes. Selling the right to emit greenhouse gases amounts to a steep new tax on most types of energy and, therefore, on all Americans who use energy. There's a reason that Charlie Rangel's Ways and Means panel, which writes tax law, is holding hearings this week on cap-and-trade regulation.
Mr. Obama is very good at portraying his agenda as nothing more than center-left pragmatism. But pragmatists don't ignore the data. And the reality is that the only way to pay for Mr. Obama's ambitions is to reach ever deeper into the pockets of the American middle class.
Politics, Religion, Science, Culture and Humanities
Politics & Religion
Re: We the Well-armed People
on: February 26, 2009, 09:32:20 AM
Maybe Mexico should consider securing it's border with the US?
Politics, Religion, Science, Culture and Humanities
Politics & Religion
The next shoe to drop?
on: February 25, 2009, 08:25:03 PM
World GDP: $ 70,650,000,000,000
From the Wired article posted above:
The CDS and CDO markets grew together, feeding on each other. At the end of 2001, there was $920 billion in credit default swaps outstanding. By the end of 2007, that number had skyrocketed to more than
$62 trillion
. The CDO market, which stood at $275 billion in 2000, grew to $4.7 trillion by 2006.
Banks in Europe and the US face a new wave of losses linked to contracts issued to insure against companies going bust and defaulting on their loans, City analysts have warned.
After the billions lost over the US subprime market and leveraged loans, investment banks such as Morgan Stanley, Deutsche Bank, Barclays, UBS and RBS face losses on credit default swaps (CDS) contracts that allow an investor to be repaid if a company loan or a bond defaults.
CDS contracts became a favourite tool of speculators, mostly hedge funds, which bought the contracts without having any link to the original lending. They bought the contract to trade or in the expectation the company would in fact default, meaning they could claim back the full value of a loan they never made.
The CDS market exploded to be worth as much as $50tn, many times the size of the underlying assets. Each loan could have thousands of protection contracts, even if there were only a few lenders. Hedge funds accounted for about 60% of CDS trading, according to ratings agency Fitch.
But now that a rising number of companies are going bust, the issuers of the contracts could face significant losses, analysts say. US carmaker General Motors, which is seeking government aid, was the company that had most protection bought and sold on it by the end of 2006, according to Fitch.
Investment banks were attracted by the method as they didn't have to report any issuance data to any regulator and could issue as many contracts as they wanted.
At present, nobody knows which banks have issued which contracts. The uncertainty and the deepening recession have sent the cost of insurance protection to record highs this week. The itraxx index, which tracks the senior debt of 25 European financial institutions, closed at 165 basis points today, near its record yesterday of 166 points, according to financial information provider Markit.
CDS contracts have also gained on growing uncertainty over eastern European banks and after Citigroup asked the US government for aid.
The banks say they are protected as they have daily updates on the collateral needed for their CDS contracts.
German CDS debt spreads hit record as economy crumbles
The cost of bankruptcy protection on German debt has reached an all-time high on spill-over from the financial crisis in Eastern Europe and mounting concerns about the stability of Germany's banking system.
Credit default swaps measuring risk on five-year sovereign debt touched 90 basis points on Tuesday and looks poised to rise above French debt for the first time.
The spike follows a warning by Deutsche Bank that Germanys economy will contract by 5pc this year as industrial exports collapse at the fastest pace since the Great Depression.
Norbert Walter, the banks chief economist, said there was a risk of an even deeper slump if the economy fails to stabilize by the summer. A bigger contraction cant be ruled out, he said.
The state governments of Hamburg and Schleswig-Holstein agreed on 3bn (£2.7bn) cash rescue on Tuesday for Landesbank HSH Nordbank, the worlds top source of finance for shipping, raising the public stake to 80pc. The bank has already drawn on a 10bn guarantee from the governments bail-out fund Soffin. HSH lost 2.8bn last year, mostly on credit instruments and fall-out from the Lehman debacle.
Of course these costs will weigh on the budget. We had no choice, said Peter Harry Carstensen, the premier of Schleswig Holstein. He denied press reports that his own state was facing bankruptcy.
There are eleven state-owned Landesbanken in Germany and most are in trouble. While their mission is to boost regional industry and finance the family Mittelstand firms, they strayed disastrously into almost every form of leveraged excess through off-books `conduits, many based in Dublin.
The entire Landesbanken system is rotten, said Hans Redeker, currency chief at BNP Paribas.Credit will collapse if they are allowed to fail so they have to be recapitalized. But it is not just the banks in trouble: Germanys entire export structure has been hit drastically.
German CDS spreads are going massively higher. German bank exposure to Eastern Europe, although less than Austria, is still very high. The markets have started to price in a de facto bail-out of Eastern Europe and they think that Germany that will have to pay the bill, he said.
The rating agency Standard & Poors said in a report on Tuesday that the region was shuddering to a halt, with a number of countries were crumbling under the weight of high foreign currency debt. It is unclear whether they can roll over debts as Western banks retreat to their home market.
S&P said foreign debt is 115pc of GDP in Estonia, 103pc in Bulgaria, 93pc in Hungary, all far above danger level. All the ingredients of a major crisis are in place, said Jean-Michel Six, the groups Europe economist.
Politics, Religion, Science, Culture and Humanities
Politics & Religion
The Super Expressway to Serfdom !
on: February 25, 2009, 03:30:45 PM
Obama seeks $634B over 10 years for health care
By RICARDO ALONSO-ZALDIVAR, Associated Press Writer 2 mins ago
WASHINGTON President Barack Obama wants a significant "down payment" for overhauling the health care system: $634 billion over 10 years. A senior administration official says Obama's budget calls for financing the overhaul by trimming Medicare spending and limiting tax deductions for upper-income earners. The official spoke on condition of anonymity because the budget won't be released until Thursday.
About 48 million Americans are uninsured, according to recent estimates. The cost of guaranteeing coverage for all could easily exceed $1 trillion over 10 years.
Obama has asked Congress for health reform this year, but senior members of both political parties say they are concerned about the cost.
Politics, Religion, Science, Culture and Humanities
Politics & Religion
Re: Israel, and its neighbors
on: February 25, 2009, 02:14:42 PM
I'm sure Obama will make sure all the funds are used in a responsible manner, just like the rest of the US taxpayer's money he's spending.
Politics, Religion, Science, Culture and Humanities
Politics & Religion
Rachel, has Obama sold Israel out yet?
on: February 25, 2009, 01:57:52 PM
Hamas 'happy' with Obama's $900 million pledge
Funds earmarked for U.N. agency that openly employs terrorists
Posted: February 24, 2009
11:16 pm Eastern
By Aaron Klein
© 2009 WorldNetDaily
Fawzi Barhoum
TEL AVIV, Israel Hamas is "very happy" with a pledge this week from the Obama administration to provide $900 million in aid for rebuilding the Hamas-controlled Gaza Strip, a spokesman from the Islamist organization told WND.
"We are very happy with this decision," said Hamas spokesman Fawzi Barhoum, speaking by cell phone from Gaza. "In the first place, this money will go toward reconstructing efforts."
Barhoum said he expects the money to be tightly controlled. He said the funds are likely to be delineated to the Palestinian Authority and to the United Nations Relief and Work Agency, or UNWRA, which administers aid to millions of Palestinian "refugees" in the Gaza Strip and West Bank.
Hamas has a close relationship with UNWRA; the agency openly employs a large number of Hamas members, including some of the group's most senior terrorists.
The U.S. aid has not yet been officially approved by Congress. The package is expected to be formally announced by Secretary of State Hillary Clinton when she attends an international Gaza donors conference in Egypt next week. A U.S. official reported the money will not reach Hamas but will go instead to nongovernmental organizations, most notably UNWRA. Still, the terrorist organization controls the Gaza Strip. Any reconstruction efforts in the territory are likely to bolster Hamas.
Hamas, UNWRA closely linked
From 1990 until today, teachers affiliated with the Islamic Bloc, which is formally associated with Hamas, have won elections as representatives of the teachers' section of the UNRWA union. By 2003, they held all seats and fully constituted the executive committee of this section of the union. The publication of UNWRA school books in Gaza is coordinated with Hamas.
Saeed Siam, Hamas former interior minister and one of the leaders of the group's so-called military wing, taught in UNRWA schools from 1980 to 2003 and served as a representative to the UNWRA union. He was killed during an Israeli air strike last month.
Sheik Ahmed Yassin, the man who founded Hamas and has been immortalized by it, worked as a UNRWA teacher from 1967 to 1994.
On July 6, 2001, Hamas convened a conference in the UNRWA school in the Jabalya refugee camp in Gaza, with students, teachers and school administrators in attendance. Yassin presented his ideology, and then an official named Saheil Alhinadi, who represented the teaching sector of UNRWA, praised students who had recently carried out suicide attacks against Israel, declaring "the road to Palestine passes through the blood of the fallen, and these fallen have written history with parts of their flesh and their bodies."
A 2002 report from the Intelligence and Terrorism Center at Israel's Center for Special Studies, a think tank associated with Israeli intelligence, documented how a number of wanted terrorists were found hiding inside schools run by UNRWA.
"A large number of youth clubs operated by UNRWA in the refugee camps were discovered to be meeting places for terrorists," said the report.
Muhammad Ali Hassan, a Hamas terrorist arrested in February 2002, confessed he had carried out a sniper shooting from the school run by UNRWA in the al-Ayn refugee camp near Nablus, or biblical Shechem. He also reportedly told his interrogators that bombs intended for terrorist attacks were being manufactured inside the school's facilities.
Nidal Abd al-Fattah Abdallah Nazzal, a Hamas activist from Kalkilya, was arrested in August 2002. He had been employed as an ambulance driver by UNRWA. He confessed during his interrogation that he had transported weapons and explosives in an UNRWA ambulance to terrorists.
Additional information about arrests of UNRWA employees by Israel came in 2003 from the U.S. General Accounting Office, which was charged with conducting an investigation of UNRWA operations. The office found that in three instances Israeli military courts convicted UNRWA employees of involvement with explosives.
More recently, in the time leading up to and since the Hamas takeover of Gaza in the summer of 2007, there has been concern in Jerusalem about UNRWA camps being used for the manufacture, storage, and launching of rockets and mortars into Israel. Also, camp residents have been suspected of active involvement in launching missiles and infiltrating shooters and suicide bombers into Israel.
Politics, Religion, Science, Culture and Humanities
Politics & Religion
Re: Political Rants
on: February 25, 2009, 01:15:11 PM
"Americans can always be counted on to do the right thing...after they have exhausted all other possibilities."
-- Winston Churchill
Politics, Religion, Science, Culture and Humanities
Politics & Religion
Re: Political Rants
on: February 25, 2009, 12:41:52 PM
Everyone but the kool-aid drinkers see it. This is why the market continues to spiral downward.
Politics, Religion, Science, Culture and Humanities
Science, Culture, & Humanities
Re: Libertarian Issues
on: February 25, 2009, 12:26:13 PM
Funny enough, I believe in small gov't and free markets.
Politics, Religion, Science, Culture and Humanities
Politics & Religion
Re: Political Economics
on: February 24, 2009, 11:54:52 PM
Enter Li, a star mathematician who grew up in rural China in the 1960s. He excelled in school and eventually got a master's degree in economics from Nankai University before leaving the country to get an MBA from Laval University in Quebec. That was followed by two more degrees: a master's in actuarial science and a PhD in statistics, both from Ontario's University of Waterloo. In 1997 he landed at Canadian Imperial Bank of Commerce, where his financial career began in earnest; he later moved to Barclays Capital and by 2004 was charged with rebuilding its quantitative analytics team.
Li's trajectory is typical of the quant era, which began in the mid-1980s. Academia could never compete with the enormous salaries that banks and hedge funds were offering. At the same time, legions of math and physics PhDs were required to create, price, and arbitrage Wall Street's ever more complex investment structures.
In 2000, while working at JPMorgan Chase, Li published a paper in The Journal of Fixed Income titled "On Default Correlation: A Copula Function Approach." (In statistics, a copula is used to couple the behavior of two or more variables.) Using some relatively simple mathby Wall Street standards, anywayLi came up with an ingenious way to model default correlation without even looking at historical default data. Instead, he used market data about the prices of instruments known as credit default swaps.
If you're an investor, you have a choice these days: You can either lend directly to borrowers or sell investors credit default swaps, insurance against those same borrowers defaulting. Either way, you get a regular income streaminterest payments or insurance paymentsand either way, if the borrower defaults, you lose a lot of money. The returns on both strategies are nearly identical, but because an unlimited number of credit default swaps can be sold against each borrower, the supply of swaps isn't constrained the way the supply of bonds is, so the CDS market managed to grow extremely rapidly. Though credit default swaps were relatively new when Li's paper came out, they soon became a bigger and more liquid market than the bonds on which they were based.
When the price of a credit default swap goes up, that indicates that default risk has risen. Li's breakthrough was that instead of waiting to assemble enough historical data about actual defaults, which are rare in the real world, he used historical prices from the CDS market. It's hard to build a historical model to predict Alice's or Britney's behavior, but anybody could see whether the price of credit default swaps on Britney tended to move in the same direction as that on Alice. If it did, then there was a strong correlation between Alice's and Britney's default risks, as priced by the market. Li wrote a model that used price rather than real-world default data as a shortcut (making an implicit assumption that financial markets in general, and CDS markets in particular, can price default risk correctly).
It was a brilliant simplification of an intractable problem. And Li didn't just radically dumb down the difficulty of working out correlations; he decided not to even bother trying to map and calculate all the nearly infinite relationships between the various loans that made up a pool. What happens when the number of pool members increases or when you mix negative correlations with positive ones? Never mind all that, he said. The only thing that matters is the final correlation numberone clean, simple, all-sufficient figure that sums up everything.
The effect on the securitization market was electric. Armed with Li's formula, Wall Street's quants saw a new world of possibilities. And the first thing they did was start creating a huge number of brand-new triple-A securities. Using Li's copula approach meant that ratings agencies like Moody'sor anybody wanting to model the risk of a trancheno longer needed to puzzle over the underlying securities. All they needed was that correlation number, and out would come a rating telling them how safe or risky the tranche was.
As a result, just about anything could be bundled and turned into a triple-A bondcorporate bonds, bank loans, mortgage-backed securities, whatever you liked. The consequent pools were often known as collateralized debt obligations, or CDOs. You could tranche that pool and create a triple-A security even if none of the components were themselves triple-A. You could even take lower-rated tranches of other CDOs, put them in a pool, and tranche theman instrument known as a CDO-squared, which at that point was so far removed from any actual underlying bond or loan or mortgage that no one really had a clue what it included. But it didn't matter. All you needed was Li's copula function.
The CDS and CDO markets grew together, feeding on each other. At the end of 2001, there was $920 billion in credit default swaps outstanding. By the end of 2007, that number had skyrocketed to more than $62 trillion. The CDO market, which stood at $275 billion in 2000, grew to $4.7 trillion by 2006.
At the heart of it all was Li's formula. When you talk to market participants, they use words like beautiful, simple, and, most commonly, tractable. It could be applied anywhere, for anything, and was quickly adopted not only by banks packaging new bonds but also by traders and hedge funds dreaming up complex trades between those bonds.
"The corporate CDO world relied almost exclusively on this copula-based correlation model," says Darrell Duffie, a Stanford University finance professor who served on Moody's Academic Advisory Research Committee. The Gaussian copula soon became such a universally accepted part of the world's financial vocabulary that brokers started quoting prices for bond tranches based on their correlations. "Correlation trading has spread through the psyche of the financial markets like a highly infectious thought virus," wrote derivatives guru Janet Tavakoli in 2006.
The damage was foreseeable and, in fact, foreseen. In 1998, before Li had even invented his copula function, Paul Wilmott wrote that "the correlations between financial quantities are notoriously unstable." Wilmott, a quantitative-finance consultant and lecturer, argued that no theory should be built on such unpredictable parameters. And he wasn't alone. During the boom years, everybody could reel off reasons why the Gaussian copula function wasn't perfect. Li's approach made no allowance for unpredictability: It assumed that correlation was a constant rather than something mercurial. Investment banks would regularly phone Stanford's Duffie and ask him to come in and talk to them about exactly what Li's copula was. Every time, he would warn them that it was not suitable for use in risk management or valuation.
David X. Li
Illustration: David A. Johnson In hindsight, ignoring those warnings looks foolhardy. But at the time, it was easy. Banks dismissed them, partly because the managers empowered to apply the brakes didn't understand the arguments between various arms of the quant universe. Besides, they were making too much money to stop.
In finance, you can never reduce risk outright; you can only try to set up a market in which people who don't want risk sell it to those who do. But in the CDO market, people used the Gaussian copula model to convince themselves they didn't have any risk at all, when in fact they just didn't have any risk 99 percent of the time. The other 1 percent of the time they blew up. Those explosions may have been rare, but they could destroy all previous gains, and then some.
Li's copula function was used to price hundreds of billions of dollars' worth of CDOs filled with mortgages. And because the copula function used CDS prices to calculate correlation, it was forced to confine itself to looking at the period of time when those credit default swaps had been in existence: less than a decade, a period when house prices soared. Naturally, default correlations were very low in those years. But when the mortgage boom ended abruptly and home values started falling across the country, correlations soared.
Bankers securitizing mortgages knew that their models were highly sensitive to house-price appreciation. If it ever turned negative on a national scale, a lot of bonds that had been rated triple-A, or risk-free, by copula-powered computer models would blow up. But no one was willing to stop the creation of CDOs, and the big investment banks happily kept on building more, drawing their correlation data from a period when real estate only went up.
"Everyone was pinning their hopes on house prices continuing to rise," says Kai Gilkes of the credit research firm CreditSights, who spent 10 years working at ratings agencies. "When they stopped rising, pretty much everyone was caught on the wrong side, because the sensitivity to house prices was huge. And there was just no getting around it. Why didn't rating agencies build in some cushion for this sensitivity to a house-price-depreciation scenario? Because if they had, they would have never rated a single mortgage-backed CDO."
Bankers should have noted that very small changes in their underlying assumptions could result in very large changes in the correlation number. They also should have noticed that the results they were seeing were much less volatile than they should have beenwhich implied that the risk was being moved elsewhere. Where had the risk gone?
They didn't know, or didn't ask. One reason was that the outputs came from "black box" computer models and were hard to subject to a commonsense smell test. Another was that the quants, who should have been more aware of the copula's weaknesses, weren't the ones making the big asset-allocation decisions. Their managers, who made the actual calls, lacked the math skills to understand what the models were doing or how they worked. They could, however, understand something as simple as a single correlation number. That was the problem.
"The relationship between two assets can never be captured by a single scalar quantity," Wilmott says. For instance, consider the share prices of two sneaker manufacturers: When the market for sneakers is growing, both companies do well and the correlation between them is high. But when one company gets a lot of celebrity endorsements and starts stealing market share from the other, the stock prices diverge and the correlation between them turns negative. And when the nation morphs into a land of flip-flop-wearing couch potatoes, both companies decline and the correlation becomes positive again. It's impossible to sum up such a history in one correlation number, but CDOs were invariably sold on the premise that correlation was more of a constant than a variable.
No one knew all of this better than David X. Li: "Very few people understand the essence of the model," he told The Wall Street Journal way back in fall 2005.
"Li can't be blamed," says Gilkes of CreditSights. After all, he just invented the model. Instead, we should blame the bankers who misinterpreted it. And even then, the real danger was created not because any given trader adopted it but because every trader did. In financial markets, everybody doing the same thing is the classic recipe for a bubble and inevitable bust.
Nassim Nicholas Taleb, hedge fund manager and author of The Black Swan, is particularly harsh when it comes to the copula. "People got very excited about the Gaussian copula because of its mathematical elegance, but the thing never worked," he says. "Co-association between securities is not measurable using correlation," because past history can never prepare you for that one day when everything goes south. "Anything that relies on correlation is charlatanism."
Li has been notably absent from the current debate over the causes of the crash. In fact, he is no longer even in the US. Last year, he moved to Beijing to head up the risk-management department of China International Capital Corporation. In a recent conversation, he seemed reluctant to discuss his paper and said he couldn't talk without permission from the PR department. In response to a subsequent request, CICC's press office sent an email saying that Li was no longer doing the kind of work he did in his previous job and, therefore, would not be speaking to the media.
In the world of finance, too many quants see only the numbers before them and forget about the concrete reality the figures are supposed to represent. They think they can model just a few years' worth of data and come up with probabilities for things that may happen only once every 10,000 years. Then people invest on the basis of those probabilities, without stopping to wonder whether the numbers make any sense at all.
As Li himself said of his own model: "The most dangerous part is when people believe everything coming out of it."
Felix Salmon (
) writes the Market Movers financial blog at Portfolio.com.
Politics, Religion, Science, Culture and Humanities
Politics & Religion
Re: Political Economics
on: February 24, 2009, 11:54:02 PM
Tech Biz : IT
Recipe for Disaster: The Formula That Killed Wall Street
By Felix Salmon 02.23.09
In the mid-'80s, Wall Street turned to the quantsbrainy financial engineersto invent new ways to boost profits. Their methods for minting money worked brilliantly... until one of them devastated the global economy.
Photo: Jim Krantz/Gallery Stock
Road Map for Financial Recovery: Radical Transparency Now! A year ago, it was hardly unthinkable that a math wizard like David X. Li might someday earn a Nobel Prize. After all, financial economistseven Wall Street quantshave received the Nobel in economics before, and Li's work on measuring risk has had more impact, more quickly, than previous Nobel Prize-winning contributions to the field. Today, though, as dazed bankers, politicians, regulators, and investors survey the wreckage of the biggest financial meltdown since the Great Depression, Li is probably thankful he still has a job in finance at all. Not that his achievement should be dismissed. He took a notoriously tough nutdetermining correlation, or how seemingly disparate events are relatedand cracked it wide open with a simple and elegant mathematical formula, one that would become ubiquitous in finance worldwide.
For five years, Li's formula, known as a Gaussian copula function, looked like an unambiguously positive breakthrough, a piece of financial technology that allowed hugely complex risks to be modeled with more ease and accuracy than ever before. With his brilliant spark of mathematical legerdemain, Li made it possible for traders to sell vast quantities of new securities, expanding financial markets to unimaginable levels.
His method was adopted by everybody from bond investors and Wall Street banks to ratings agencies and regulators. And it became so deeply entrenchedand was making people so much moneythat warnings about its limitations were largely ignored.
Then the model fell apart. Cracks started appearing early on, when financial markets began behaving in ways that users of Li's formula hadn't expected. The cracks became full-fledged canyons in 2008when ruptures in the financial system's foundation swallowed up trillions of dollars and put the survival of the global banking system in serious peril.
David X. Li, it's safe to say, won't be getting that Nobel anytime soon. One result of the collapse has been the end of financial economics as something to be celebrated rather than feared. And Li's Gaussian copula formula will go down in history as instrumental in causing the unfathomable losses that brought the world financial system to its knees.
How could one formula pack such a devastating punch? The answer lies in the bond market, the multitrillion-dollar system that allows pension funds, insurance companies, and hedge funds to lend trillions of dollars to companies, countries, and home buyers.
A bond, of course, is just an IOU, a promise to pay back money with interest by certain dates. If a companysay, IBMborrows money by issuing a bond, investors will look very closely over its accounts to make sure it has the wherewithal to repay them. The higher the perceived riskand there's always some riskthe higher the interest rate the bond must carry.
Bond investors are very comfortable with the concept of probability. If there's a 1 percent chance of default but they get an extra two percentage points in interest, they're ahead of the game overalllike a casino, which is happy to lose big sums every so often in return for profits most of the time.
Bond investors also invest in pools of hundreds or even thousands of mortgages. The potential sums involved are staggering: Americans now owe more than $11 trillion on their homes. But mortgage pools are messier than most bonds. There's no guaranteed interest rate, since the amount of money homeowners collectively pay back every month is a function of how many have refinanced and how many have defaulted. There's certainly no fixed maturity date: Money shows up in irregular chunks as people pay down their mortgages at unpredictable timesfor instance, when they decide to sell their house. And most problematic, there's no easy way to assign a single probability to the chance of default.
Wall Street solved many of these problems through a process called tranching, which divides a pool and allows for the creation of safe bonds with a risk-free triple-A credit rating. Investors in the first tranche, or slice, are first in line to be paid off. Those next in line might get only a double-A credit rating on their tranche of bonds but will be able to charge a higher interest rate for bearing the slightly higher chance of default. And so on.
"...correlation is charlatanism"
Photo: AP photo/Richard Drew The reason that ratings agencies and investors felt so safe with the triple-A tranches was that they believed there was no way hundreds of homeowners would all default on their loans at the same time. One person might lose his job, another might fall ill. But those are individual calamities that don't affect the mortgage pool much as a whole: Everybody else is still making their payments on time.
But not all calamities are individual, and tranching still hadn't solved all the problems of mortgage-pool risk. Some things, like falling house prices, affect a large number of people at once. If home values in your neighborhood decline and you lose some of your equity, there's a good chance your neighbors will lose theirs as well. If, as a result, you default on your mortgage, there's a higher probability they will default, too. That's called correlationthe degree to which one variable moves in line with anotherand measuring it is an important part of determining how risky mortgage bonds are.
Investors like risk, as long as they can price it. What they hate is uncertaintynot knowing how big the risk is. As a result, bond investors and mortgage lenders desperately want to be able to measure, model, and price correlation. Before quantitative models came along, the only time investors were comfortable putting their money in mortgage pools was when there was no risk whatsoeverin other words, when the bonds were guaranteed implicitly by the federal government through Fannie Mae or Freddie Mac.
Yet during the '90s, as global markets expanded, there were trillions of new dollars waiting to be put to use lending to borrowers around the worldnot just mortgage seekers but also corporations and car buyers and anybody running a balance on their credit cardif only investors could put a number on the correlations between them. The problem is excruciatingly hard, especially when you're talking about thousands of moving parts. Whoever solved it would earn the eternal gratitude of Wall Street and quite possibly the attention of the Nobel committee as well.
To understand the mathematics of correlation better, consider something simple, like a kid in an elementary school: Let's call her Alice. The probability that her parents will get divorced this year is about 5 percent, the risk of her getting head lice is about 5 percent, the chance of her seeing a teacher slip on a banana peel is about 5 percent, and the likelihood of her winning the class spelling bee is about 5 percent. If investors were trading securities based on the chances of those things happening only to Alice, they would all trade at more or less the same price.
But something important happens when we start looking at two kids rather than onenot just Alice but also the girl she sits next to, Britney. If Britney's parents get divorced, what are the chances that Alice's parents will get divorced, too? Still about 5 percent: The correlation there is close to zero. But if Britney gets head lice, the chance that Alice will get head lice is much higher, about 50 percentwhich means the correlation is probably up in the 0.5 range. If Britney sees a teacher slip on a banana peel, what is the chance that Alice will see it, too? Very high indeed, since they sit next to each other: It could be as much as 95 percent, which means the correlation is close to 1. And if Britney wins the class spelling bee, the chance of Alice winning it is zero, which means the correlation is negative: -1.
If investors were trading securities based on the chances of these things happening to both Alice and Britney, the prices would be all over the place, because the correlations vary so much.
But it's a very inexact science. Just measuring those initial 5 percent probabilities involves collecting lots of disparate data points and subjecting them to all manner of statistical and error analysis. Trying to assess the conditional probabilitiesthe chance that Alice will get head lice if Britney gets head liceis an order of magnitude harder, since those data points are much rarer. As a result of the scarcity of historical data, the errors there are likely to be much greater.
In the world of mortgages, it's harder still. What is the chance that any given home will decline in value? You can look at the past history of housing prices to give you an idea, but surely the nation's macroeconomic situation also plays an important role. And what is the chance that if a home in one state falls in value, a similar home in another state will fall in value as well?
Here's what killed your 401(k) David X. Li's Gaussian copula function as first published in 2000. Investors exploited it as a quickand fatally flawedway to assess risk. A shorter version appears on this month's cover of Wired.
Specifically, this is a joint default probabilitythe likelihood that any two members of the pool (A and B) will both default. It's what investors are looking for, and the rest of the formula provides the answer. Survival times
The amount of time between now and when A and B can be expected to default. Li took the idea from a concept in actuarial science that charts what happens to someone's life expectancy when their spouse dies.
A dangerously precise concept, since it leaves no room for error. Clean equations help both quants and their managers forget that the real world contains a surprising amount of uncertainty, fuzziness, and precariousness.
This couples (hence the Latinate term copula) the individual probabilities associated with A and B to come up with a single number. Errors here massively increase the risk of the whole equation blowing up.
Distribution functions
The probabilities of how long A and B are likely to survive. Since these are not certainties, they can be dangerous: Small miscalculations may leave you facing much more risk than the formula indicates.
The all-powerful correlation parameter, which reduces correlation to a single constantsomething that should be highly improbable, if not impossible. This is the magic number that made Li's copula function irresistible.
Politics, Religion, Science, Culture and Humanities
Politics & Religion
Re: Homeland Security
on: February 24, 2009, 10:49:01 PM
Monday, February 23, 2009
Who Do You Believe?
Way back when, the intelligence community operated under a simple rule. Disagreements over analysis were worked out in private and when the community spoke, it was with one voice.
Ah, for the good old days. Unfortunately, in today's "leak culture," analysts--and the agencies that employ them--are anxious to air their assessments, even if they highlight divisions within the community.
Consider yesterday's revelations from the FBI and the Department of Homeland Security. In the matter of a few hours, both organizations offered highly conflicting views on domestic terror threats. After reading their respective opinions on these matters, members of Congress (and the public) have every right to be confused.
The dust-up began when FBI Director Robert Mueller, speaking to the Council on Foreign Relations in Washington, warned that terrorists "with large agendas and little money" can use rudimentary weapons to launch Mumbai-style attacks in the United States. As the Washington Post reports:
Mueller said that the bureau is expanding its focus beyond al-Qaeda and into splinter groups, radicals who try to enter the country through the visa waiver program and "home-grown terrorists."
"The universe of crime and terrorism stretches out infinitely before us, and we too are working to find what we believe to be out there but cannot always see," Mueller said.
One particular concern, the FBI director said, springs from the country's background as a "nation of immigrants." Federal officials worry about pockets of possible radicals among melting-pot communities in the United States such as Seattle, San Diego, Miami or New York.
A Joint Terrorism Task Force led by the FBI, for instance, continues to investigate a group in Minneapolis after one young man last fall flew to Somalia and became what authorities believe to be the first U.S. citizen to carry out a suicide bombing. As many as a half-dozen other youths from that community in Minnesota have vanished, alarming their parents and raising concerns among law enforcement officials that a dangerous recruiting network has operated under the radar.
But later in the day, a spokesman for the Department of Homeland Security downplayed the domestic terror threat:
"We are not immune to an attack from a home-grown terrorist, but the probabilities and sustainability of such an act are very low," said DHS spokesman Michael Keegan.
Keegan said the American immigrant story is one reason the United States is less vulnerable to home-grown terrorism than other countries.
"People come to the United States to be part of something special, to practice their beliefs without worries of persecutions based on their religious faith, political views or personal life styles," he said. "When you give citizens the opportunity to live in an environment that promotes personal growth and happiness, you're essentially promoting the wellness and safety of an entire nation rather than a community of homegrown terrorist cells."
Mr. Keegan will get brownie points for political correctness, but there is a certain fallacy in both his logic and his assumptions. True, the overwhelming majority of immigrants in this country are law-abiding and hard-working, but there are radicalized elements within that broad community, particularly among Muslims.
We assume that Keegan is familiar with the Fort Dix 6. That terror plot, aimed at killing soldiers at the New Jersey army post, involved recent emigres from various Islamic countries. And the Fort Dix conspiracy isn't the only foiled terror attack that originated among Muslim immigrants or their offspring.
So, does that automatically disqualify the comments of Mr. Keegan and the assessments of his department? Not necessarily. DHS has its own analytic resources, though they pale in comparison to those of the FBI. While that doesn't give the bureau a monopoly on the truth, the comments of the FBI Director should carry more weight than a p.r. flack from DHS.
Normally, we're not fans of Congressional hearings, but this public disagreement practically begs one. The chairman of the House and Senate intelligence committees should summon Mr. Mueller, DHS Secretary Janet Napolitano and their top analysts for a closed door review of the intelligence.
Disagreements within the intelligence community are hardly new and they can actually prove beneficial, forcing agencies to develop a consensus on critical topics. But issuing such divergent opinions--only hours apart--does little to inspire confidence. On matters as important as domestic terror threat assessments, we need more convergence and less conflict.
Politics, Religion, Science, Culture and Humanities
Politics & Religion
Re: Political Economics
on: February 24, 2009, 09:01:12 PM
Why Scott Grannis is wrong:
NOTE: Scott Grannis lives in a house that overlooks a beach. I live in an apartment that overlooks urban decay. My best chance for a decent retirement probably hinges on getting a job driving someone like Scott Grannis around.
Approximately 74.9 percent of the U.S. families surveyed in 2004 had credit cards, and 58 percent of those families carried a balance. In 2001, 76.2 percent of families had creditcards, and 55 percent of those families carried a balance. (Source: Federal Reserve Bulletin, February 2006.)
Total U.S. consumer debt (which includes credit card debt and noncredit-card debt but not mortgage debt) reached $2.55 trillion at the end of 2007, up from $2.42 trillion at the end of 2006. (Source: Federal Reserve)
After an almost unbroken streak of increases, total U.S. consumer revolving debt fell $973.5 billion in November 2008. About 98 percent of that debt was credit card debt. (Source: Federal Reserve)
43 out 50 states are running budget deficits. 43 out of 57 doesn't sound near as bad though, right Barry?
**These assclowns are in charge**
What if They Held Breakout Sessions and Everyone Broke Out?
By Dana Milbank
Tuesday, February 24, 2009; A03
Holding a "fiscal responsibility summit" at the White House in the middle of a government spending spree is a bit like having an Alcoholics Anonymous meeting at a frat house on homecoming weekend.
This could explain the sparse attendance at yesterday's session. Economic Recovery Advisory Board Chairman Paul Volcker, penciled in to lead the session on taxes, didn't come. Veterans Affairs Secretary Eric Shinseki, listed as a moderator of the health-care panel, was also missing, as was Deputy Defense Secretary William Lynn, who had been tapped as a leader of the procurement session. Another mysterious absence: CIA Director Leon Panetta, the Clinton budget director, who was expected to lead the budget panel.
"It is wonderful to see the speaker here," President Obama said at the start of his remarks. True: House Speaker Nancy Pelosi (D-Calif.) was in the first row, having walked in 10 minutes after the program began.
"And," the president continued, "we've got, uh, our representative -- I don't see Harry here." Also true: Senate Majority Leader Harry Reid (D-Nev.) had another engagement, across town at the Newseum.
The attendance list distributed by the White House came with excuses helpfully printed after the names. Senate Minority Leader Mitch McConnell (R-Ky.): "Will not join breakout sessions." Senate Minority Whip Jon Kyl (R-Ariz.): "Arriving at 2:30," 90 minutes late. Pelosi: "Will not join breakout sessions."
The president, assembling the summiteers in the East Room, gave them their orders: "I want you to question each other, challenge each other," he said. "I look forward to hearing the results when you report back."
The participants then filed out into the main foyer of the White House for juice, coffee and piano music. Sen. John Cornyn (Tex.), a member of the Republican leadership, was seen fleeing before the breakout sessions began.
The lawmakers got right to work. In the health-care session, Sen. Arlen Specter (R-Pa.) said he had considered giving up martinis to improve his health but "I was elated when I found it didn't make any difference." Alcohol was also a topic in the budget session, where Rep. David Obey (D-Wis.) proposed that the president solve the problem by locking everybody in a room with three bottles of gin.
When Obama announced the summit last month, it had the sound of something big. But the administration didn't settle on a date until recently, and some participants didn't receive invitations until Friday. According to one report, not denied by the White House, Obama dropped plans to announce a new Social Security task force at the gathering.
There were signs yesterday of the hasty arrangements. In the tax-reform session, Rep. David Price (D-N.C.) arrived to discover that his name tag identified him as Rep. Tom Price (R-Ga.). White House Chief of Staff Rahm Emanuel, listed as one of the moderators of the procurement panel, arrived just 10 minutes before the end.
"Oh, nice of you to join us," said Rep. Darrell Issa (R-Calif.). Emanuel said nothing.
But Emanuel didn't need to say anything. The summit was about symbolism -- conveying the sense that Obama, at a time of fiscal profligacy, cares about fiscal restraint -- and by that measure, it succeeded admirably.
"Today, I'm pledging to cut the deficit we inherited by half by the end of my first term in office," the president told the attendees. This remarkable feat would be made possible only by the fact that the current year's deficit was an eye-popping $1.3 trillion and rising when Obama took over; even half that amount would still be a record.
After two hours away from the cameras in their breakout sessions, the summit-goers rejoined Obama. To nobody's surprise, they announced no major breakthroughs. But, with television cameras rolling, they gave Obama something almost as valuable: lavish praise for the summit. It was "very, very productive" (Rep. Steny Hoyer, D-Md.), "a terrific start in the White House" (Sen. Kent Conrad, D-N.D.), and "all of us are enormously grateful" (Sen. Max Baucus, D-Mont.). Sen. Tom Carper (D-Del.) likened Obama's outreach to the biblical "Parable of the Sower."
Even Republicans gushed. "It's a great opportunity, I think, for us to really come together on some of these very, very big issues," said Rep. Eric Cantor (Va.), the No. 2 House Republican.
A couple of Republicans in the audience needled Obama, but the president, from the stage, easily put down their challenges.
"Your helicopter is now going to cost as much as Air Force One," Sen. John McCain (R-Ariz.) chided.
"The helicopter I have now seems perfectly adequate to me," Obama answered, to laughter. "Of course, I've never had a helicopter before."
Rep. Joe Barton (R-Tex.) complained that Pelosi had shut Republicans out from legislative talks. "This is a good first step," he said of the summit. "But if this is all we do, it's a sterile step."
"The minority has to be constructive," Obama told the congressman, and not "just want to blow the thing up."
For all the no-shows and the lack of planning, the summit had, in the end, provided something of value: a rare, public back-and-forth between the president, lawmakers and interest groups. No doubt some of the no-shows will wish they had been there -- and, luckily, they may get a second chance.
"We've scheduled a health-care summit next week," the president told the summiteers. "Not that I've got summititis here."
CBO: Obama stimulus harmful over long haul
Stephen Dinan (Contact)
Wednesday, February 4, 2009
President Obama's economic recovery package will actually hurt the economy more in the long run than if he were to do nothing, the nonpartisan Congressional Budget Office said Wednesday.
CBO, the official scorekeepers for legislation, said the House and Senate bills will help in the short term but result in so much government debt that within a few years they would crowd out private investment, actually leading to a lower Gross Domestic Product over the next 10 years than if the government had done nothing.
Politics, Religion, Science, Culture and Humanities
Politics & Religion
Re: Political Economics
on: February 24, 2009, 08:49:13 AM
California: A Casualty of the Left
By Dennis Prager
FrontPageMagazine.com | Tuesday, February 24, 2009
Virtually throughout its history, and certainly in the 20th century, California has been known as the place to go for dynamism and growth. It did not become the richest, most populous, and most productive state solely because of its weather and natural resources.
So it takes a lot to turn California around from growth to contraction, from people moving into the state to a net exodus from the state, from business moving into California to businesses leaving California.
It takes some doing.
And the Left has done it.
Californias Democratic legislature has been more or less able to do whatever it wants with California. The Wall Street Journal has described the result:
The Golden State -- which a decade ago was the booming technology capital of the world -- has been done in by two decades of chronic overspending, overregulating and a hyperprogressive tax code.
One might argue thats this is a politically biased assessment. So here are some facts, not assessments:
Californias state expenditures grew from $104 billion in 2003 to $145 billion in 2008.
California has the worst credit rating in the nation.
California has the fourth highest unemployment rate in the nation, 9.3 percent -- higher even than the car manufacturing state of Michigan.
California has the second highest home foreclosure rate.
Californias tax-paying middle class is leaving the state. Californias net loss last year in state-to-state migration exceeded every other state's. New York, another Left-run state, was second.
Since 2000, Californias job growth rate -- which in the late 1970s was many times higher than the national average -- has lagged behind the national average by almost 20 percent.
California has lost 25 percent of its industrial work force since 2001.
Joel Kotkin, one of the leading observers of urban America, the presidential fellow in urban futures at Chapman University, recently wrote an essay on California, Sundown for California. He begins with these words:
Twenty-five years ago, along with another young journalist, I co-authored a book called California, Inc. about our adopted home state. The book described Californias rise to economic, political, and cultural ascendancy...But today our Golden State appears headed, if not for imminent disaster, then toward an unanticipated, maddening, and largely unnecessary mediocrity.
That is what left-wing policies have done to California. In Kotkins words, the state legislature decided to spend its money on public employees and impose ever more regulatory burdens on business.
Last week, Intel, the worlds largest maker of computer chips, announced that it would invest $7 billion to expand its facilities. Where? In Arizona, Oregon, and New Mexico. But not in California, the state in which Intel is headquartered.
The Left is bringing the greatest state to its knees.
What generations created, the Left destroys. There are few productive and noble institutions in America that the Left has not hurt or attempted to hurt. But while the Left destroys a great deal, it constructs almost nothing (outside of government agencies, laws, and lawsuits).
Take the Boy Scouts. For generations, the Boy Scouts, founded and preserved by Americans of all political as well as ethnic backgrounds, has helped millions of American boys become good, productive men. The Left throughout America -- its politicians, its media, its stars, its academics -- have ganged up to deprive the Boy Scouts of oxygen. Everywhere possible, the Boy Scouts are vilified and deprived of places to meet.
But while the Left works to destroy the Boy Scouts -- unless the Boy Scouts adopt the Lefts views on openly gay scouts and scout leaders -- the Left has created nothing comparable to the Boy Scouts. The Left tries to destroy one of the greatest institutions ever made for boys, but it has built nothing for boys. There is no ACLU version of the Boy Scouts; there is only the ACLU versus the Boy Scouts.
The same holds true for the greatest character-building institution in American life: Judeo-Christian religions. Once again, the Left knows how to destroy. Everywhere possible the Left works to inhibit religious institutions and values -- from substituting Happy Holidays for Merry Christmas to removing the tiny cross from the Los Angeles County Seal to arguing that religious people must not bring their values into the political arena.
And, then there is education. Until the Left took over American public education in the second half of the 20th century, it was generally excellent -- look at the high level of eighth-grade exams from early in the 20th century and you will weep. The more money the Left has gotten for education -- America now spends more per student than any country in the world -- the worse the academic results. And the Left has removed God and dress codes from schools -- with socially disastrous results.
Of course, it is not entirely accurate to say that the Left builds nothing. It has built vast government bureaucracies, MTV, and post-1960s Hollywood, for example. But these are, to say the least, not positive achievements.
In his column this week, Thomas Friedman describes General Motors Corp., as a giant wealth-destruction machine. That perfectly describes the Left many times over. It is both a wealth-destruction machine and an ennobling-institution destruction machine.
Dennis Prager hosts a nationally syndicated radio talk show based in Los Angeles. He is the author of four books, most recently "Happiness is a Serious Problem" (HarperCollins). His website is
. To find out more about Dennis Prager, visit the Creators Syndicate Web page at
Politics, Religion, Science, Culture and Humanities
Politics & Religion
Re: Political Economics
on: February 24, 2009, 08:47:43 AM
Politics, Religion, Science, Culture and Humanities
Politics & Religion
Re: Homeland Security
on: February 24, 2009, 08:01:28 AM
FBI Director Warns of Terror Attacks on U.S. Cities
By Carrie Johnson
Washington Post Staff Writer
Monday, February 23, 2009; 3:19 PM
FBI Director Robert S. Mueller III today warned that extremists "with large agendas and little money can use rudimentary weapons" to sow terror, raising the specter that recent attacks in Mumbai that killed 170 people last year could embolden terrorists seeking to attack U.S. cities.
At a speech to the Council on Foreign Relations in Washington, Mueller said that the bureau is expanding its focus beyond al-Qaeda and into splinter groups, radicals who try to enter the country through the visa waiver program and "home-grown terrorists."
"The universe of crime and terrorism stretches out infinitely before us, and we too are working to find what we believe to be out there but cannot always see," Mueller said.
One particular concern, the FBI director said, springs from the country's background as a "nation of immigrants." Federal officials worry about pockets of possible radicals among melting-pot communities in the United States such as Seattle, San Diego, Miami or New York.
A Joint Terrorism Task Force led by the FBI, for instance, continues to investigate a group in Minneapolis after one young man last fall flew to Somalia and became what authorities believe to be the first U.S. citizen to carry out a suicide bombing. As many as a half-dozen other youths from that community in Minnesota have vanished, alarming their parents and raising concerns among law enforcement officials that a dangerous recruiting network has operated under the radar.
"The prospect of young men, indoctrinated and radicalized in their own communities . . . is a perversion of the immigrant story," Mueller said.
For the first time, Mueller also disclosed details about FBI efforts to assist Indian authorities probing a November siege by conspirators with ties to a terrorist group in Pakistan. FBI Special Agent Steve Merrill, a legal attache posted to the bureau's office in New Delhi, had been preparing to play cricket for the American team competing at the Maharajah's annual tournament, the FBI director recalled.
Instead Merrill detoured to Mumbai, where he helped to rescue Americans trapped in the burning Taj Hotel and coordinated the arrival of the bureau's rapid deployment team.
Analysts and agents from the FBI ultimately conducted 60 interviews including one of the lone surviving attacker, Ajmal Amir Kasab. Forensics experts pulled fingerprints from improvised explosive devices and recovered data from damaged cellphones, once "literally wiring a smashed phone back together," Mueller said.
Politics, Religion, Science, Culture and Humanities
Politics & Religion
Obama's Stunted Stimulus
on: February 24, 2009, 12:16:17 AM
Obama's Stunted Stimulus
By Robert J. Samuelson
Monday, February 23, 2009; A19
Judged by his own standards, President Obama's $787 billion economic stimulus program is deeply disappointing. For weeks, Obama has described the economy in grim terms. "This is not your ordinary run-of-the-mill recession," he said at his Feb. 9 news conference. It's "the worst economic crisis since the Great Depression." Given these dire warnings, you'd expect the stimulus package to focus almost exclusively on reviving the economy. It doesn't, and for that, Obama bears much of the blame.
The case for a huge stimulus -- which I support -- is to prevent a devastating downward economic spiral. Spending is tumbling worldwide. In the fourth quarter of 2008, the U.S. economy contracted at a nearly 4 percent annual rate. In Japan, the economy fell at a nearly 13 percent rate; in Europe, the rate was about 6 percent. These are gruesome declines. If the economic outlook is as bleak as Obama says, there's no reason to dilute the upfront power of the stimulus. But that's what he's done.
His politics compromise the program's economics. Look at the numbers. The Congressional Budget Office (CBO) estimates that about $200 billion will be spent in 2011 or later -- after it would do the most good. For starters, there's $8 billion for high-speed rail. "Everyone is saying this is [for] high-speed rail between Los Angeles and Las Vegas -- I don't know," says Ray Scheppach, executive director of the National Governors Association. Whatever's done, the design and construction will occupy many years. It's not a quick stimulus.
Then there's $20.8 billion for improved health information technology -- more electronic records and the like. Probably most people regard this as desirable, but here, too, changes occur slowly. The CBO expects only 3 percent of the money ($595 million) to be spent in fiscal 2009 and 2010. The peak year of projected spending is 2014 at $14.2 billion.
Big projects take time. They're included in the stimulus because Obama and Democratic congressional leaders are using the legislation to advance many political priorities instead of just spurring the economy. At his news conference, Obama argued (inaccurately) that the two goals don't conflict. Consider, he said, the retrofitting of federal buildings to make them more energy efficient. "We're creating jobs immediately," he said.
Yes -- but not many. The stimulus package includes $5.5 billion for overhauling federal buildings. The CBO estimates that only 23 percent of that would be spent in 2009 and 2010.
Worse, the economic impact of the stimulus is already smaller than advertised. The package includes an obscure tax provision: a "patch" for the alternative minimum tax (AMT). This protects many middle-class Americans against higher taxes and, on paper, adds $85 billion of "stimulus" in 2009 and 2010. One problem: "It's not stimulus," says Len Burman of the nonpartisan Tax Policy Center. Congress was "going to do it anyway. They do it every year." Strip out the AMT patch, and the stimulus drops to about $700 billion, with almost 30 percent spent after 2010.
The purpose of the stimulus is to keep declines in one part of the economy from dragging down other sectors. The next big vulnerable sector seems to be state and local governments. Weakening tax payments create massive budget shortfalls. From now until the end of fiscal 2011, these may total $350 billion, says the Center on Budget and Policy Priorities (CBPP), a liberal advocacy group. Required to balance their budgets, states face huge pressures to cut spending and jobs or to raise taxes. All would worsen the recession and deepen pessimism.
Yet, the stimulus package offers only modest relief. Using funds from the stimulus, states might offset 40 percent of their looming deficits, says the CBPP's Nicholas Johnson. The effect on localities would probably be less. Congress might have done more by providing large, temporary block grants to states and localities and letting them decide how to spend the money. Instead, the stimulus provides most funds through specific programs. There's $90 billion more for Medicaid, $12 billion for special education, $2.8 billion for various policing programs. More power is being centralized in Washington.
No one knows the economic effects of all this; estimates vary. But Obama's political strategy stunts the impact from what it might have been. By using the stimulus for unrelated policy goals, spending will be delayed and diluted. There's another downside: "Temporary" spending increases for specific programs, as opposed to block grants, will be harder to undo, worsening the long-term budget outlook.
Politics cannot be removed from the political process. But here, partisan politics ran roughshod over pragmatic economic policy. Token concessions (including the AMT provision) to some Republicans weakened the package. Obama is gambling that his flawed stimulus will seem to work well enough that he'll receive credit for restarting the economy -- and not be blamed for engineering a colossal waste.
Politics, Religion, Science, Culture and Humanities
Science, Culture, & Humanities
Re: Race, religion, ethnic origin
on: February 23, 2009, 11:57:37 PM
Heather Mac Donald
Nation of Cowards?
So says Eric Holder, but whats really cowardly is racial dishonesty.
19 February 2009
Attorney General Eric Holder, a Clinton administration retread, wants to revive Bill Clintons National Conversation on Race. (Whats next? Hillarycare?) Holder recently told his Justice Department employees that the United States was a nation of cowards for not talking more about race. It is an issue we have never been at ease with and, given our nations history, this is in some ways understandable, Holder said. If we are to make progress in this area, we must feel comfortable enough with one another and tolerant enough of each other to have frank conversations about the racial matters that continue to divide us.
Is he nuts? Leave aside for a moment Holders purely decorative call for a frank conversation about race. The Clinton-era Conversation also purported to be frank, and we know what that meant: a one-sided litany of white injustices. Please raise your hand if you havent heard the following bromides about the racial matters that continue to divide us more times than you can count: Police stop and arrest blacks at disproportionate rates because of racism; blacks are disproportionately in prison because of racism; blacks are failing in school because of racist inequities in school funding; the black poverty rate is the highest in the country because of racism; blacks were given mortgages that they couldnt afford because of racism. I will stop there.
Not only do colleges, law schools, almost all of the nations elite public and private high schools, and the mainstream media, among others, have conversations about . . . racial matters; they never stop talking about them. Any student who graduates from a moderately selective college without hearing that its black students are victims of institutional racismnotwithstanding the fact that the vast majority of black students there will have been deliberately admitted with radically lower SAT scores than their white and Asian comradeshas been in a coma throughout his time there.
Education bureaucrats maintain an incessant harangue on white racism because they see the writing on the wall: most students are indifferent to race and just want to get along. If left to themselves, they would go about their business perfectly happily and color-blindly, and the race industry would wither on the vine. Thus the institutional imperative to remind black students constantly about their victimization and the white students about their guilt. Last month, the elite Phillips Academy at Andover proudly announced a student presentation on White Privilege: A History and Its Role in Education. Would the student have come up with such a topic on her own without the schools educators deliberately immersing her in such trivial matters? Of course not.
But if Attorney General Holder is really sincere about wanting a frank conversation about race, he should put the following items on the agenda:
The American electorate. The country just elected its first black president. And it actually didnt talk a lot about Barack Obamas race during the election, thank heavens, because most Americans were more interested in the candidates ideas than in his skin color. There were undoubtedly hundreds of thousands of people who wouldnt vote for Obama because of his race. I would guess that their average age was 75. There is no question that a great many geriatric Americans continue to harbor the rankest racism for blacks, but guess what? Theyre not going to be around for much longer. Young people growing up in the last 30 years live on a different planet when it comes to racial attitudesuntil the educrats start playing with their minds.
We might also talk about those legions of older, black Americans who have held on to their love of country and belief in its ideals, despite having been subjected to America at its worst. I have had the privilege to speak to many such individuals for my work, and they have broken my heart with their dignity and nobility. Rather than reflexively consulting professional race activists for insights into race in America, the media and politicians might for once seek some voices that contradict the mandatory angry black male trope.
Crime. Holder told his Justice Department employees that they had a special responsibility to advance racial understanding, according to the Associated Press. Uh-oh. Before and during Holders first stint at Justice, when he served as Clintons deputy attorney general, the departments civil rights division specialized in slapping onerous federal consent decrees on police departments. Its assumption was that racial disparities in cops stop-and-arrest rates reflected police racism, not racial disparities in crime rates.
Before Holder and his attorneys revive that practice, they should study certain facts that remain taboo in the mainstream media. For instance, the homicide rate for black men between the ages of 18 and 24 is well over ten times that of whites. And disparities in other violent-crime rates are just as startling. In New York City, one of the nations safest large cities, 83 percent of all gun assailants were black during the first six months of 2008, according to victims and witnesses, though blacks make up only 24 percent of the citys population. Add Hispanic perps, and you account for 98 percent of all shootings in New York City. The face of violent crime in cities is almost exclusively black or brown. That explains why someone might feel a sense of trepidation when approached by a group of black youths. Thats not racism; its the reality of crime. And its that reality that determines whom the police stop, frisk, and arrest.
Education. Commentators on NPRs black show, News and Notes, recently groused about the lack of black policy experts on the Sunday talk shows but ignored the possibility that the education gap might have something to do with it. Blacks, they said, need to be twice as qualified as whites to get a job. Lets look at the evidence. The black high school drop-out rate approaches 50 percent. On the 2006 SAT, the average score in the critical-reading section was 434 for blacks, 527 for whites, and 510 for Asians; in the math section, 429 for blacks, 536 for whites, and 587 for Asians; and in the writing section, 428 for blacks, 519 for whites, and 512 for Asians. Americas lousy showing in international math, science, and reading tests compared with Japan and Western Europe is influenced in large part by the low scores of blacks and Hispanics. If blacks and Hispanics performed at the level that whites do, the U.S. would lead all industrialized nations in reading and would lead Europe in math and science, according to a study published in the Phi Delta Kappan in 2005.
Likewise, after their first year of legal education, 51 percent of blacks labor in the bottom tenth of their class; two-thirds reside in the bottom fifth. Blacks are four times as likely as whites to fail the bar exam on the first try. Until such achievement disparities are eliminated, any allegations of racial discrimination in the absence of proportional numbers of black policy wonksor law partners, chemists, engineers, or investment bankersis absurd, especially when the nations elite institutions are doing everything they can to recruit black students, professors, and employees. Perhaps Holder could confront the stigma against academic achievement among many black youth, who deride studying and staying out of trouble as acting white.
The family. Closing the educational achievement gap will be difficult as long as the black illegitimacy rate is nearly 71 percent, compared with a white rate of 26 percent. Taxpayers foot the bill for this family breakdownwhen fatherless children who never learned self-control and self-discipline disrupt classrooms and prevent other children from learning, and when the same fatherless children get sucked up into gang life and fail to connect with the world of work and responsibility. Many poor single mothers work heroically to raise law-abiding sons, but the odds are against them.
When communities resist an influx of Section 8 housing-voucher holders from the inner city, say, they are reacting overwhelmingly to behavior. Skin color is a proxy for that behavior. If inner-city blacks behaved like Asianscramming as much knowledge into their kids as they can possibly fit into their skullsthe lingering wariness towards lower-income blacks that many Americans unquestionably harbor would disappear. Are there irredeemable racists among Americans? To be sure. They come in all colors, and we should deplore all of them. But the issue of race in the United States is more complex than polite company is usually allowed to express. If Eric Holder wants to crank up our racial preoccupations even further, let him at least do so with a full airing of the facts.
Heather Mac Donald is a contributing editor of City Journal and the John M. Olin Fellow at the Manhattan Institute.
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Meltdown on MSNBC: The Leg Tingle Is Gone?
on: February 23, 2009, 11:50:32 PM
Monday, February 23, 2009
Meltdown on MSNBC: The Leg Tingle Is Gone?
I can hardly believe what I'm watching on MSNBC right now. Chris Matthews is almost critical no, not even almost, he's flat-out critical of President Obama on the economic front. He mentions an earlier conversation with CNBC's manic stock analyst Jim Cramer and a University of Maryland professor (Peter Morici?) knocking Obama for several economic decisions that the stimulus bill needed more real infrastructure and less pork, that the housing bill isn't inspiring confidence and doesn't look like it will work, and that no one has faith in Tim Geithner's solution for the banks.
Howard Fineman of Newsweek says Obama has been "grim and a little distant at the same time . . . Tim Geithner hasn't inspired any confidence anywhere, as far as I can tell."
Matthews: "He seems like Barney Fife to me."
Eugene Robinson: "I actually referred to him as Doogie Howser, Treasury Secretary, and I think it's a little unfair." Much laughter ensues.
More Fineman: "Despite his high approval rating and obvious intellect and goodwill, he hasn't quite yet seemed to convey the sense that he knows the way forward and that he can get us there . . . I thought the first fifteen minutes of this show were devastating. Not that Jim Cramer is the only person they have to convince, but they have to convince people that they know what they're doing, that they're not just feeling their way forward." Robinson points out that they are feeling their way forward.
Matthews: "I thought 8,000 was the floor, and it looks like 6,000 is the floor. People are angry, I'm getting angry."
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Re: Media Issues
on: February 23, 2009, 11:41:39 PM
Cry for the impact that "soak the rich" has on the non-rich as money flees overseas. Look at California today and telll me it's working well with horrific levels of taxation and goverment overspending. Think this will somehow turn out different when tried on a national level?
The Obama-Kool Aid will be getting very bitter, very soon.
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Re: Media Issues
on: February 23, 2009, 07:59:58 PM
Really? Compare TARP vs. the Porklus and Barry-O's "Soak the rich" class warfare.
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Re: Political Economics
on: February 23, 2009, 07:00:01 PM
Obama's deficit goals count on rosy assumptions
Feb 23, 6:27 PM (ET)
By JIM KUHNHENN
WASHINGTON (AP) - President Barack Obama's ambitious goal of cutting the federal deficit in half relies on a perfect - some might say improbable - convergence of factors: a recovered economy, a tax boost for the rich and success in easing foreign entanglements.
In calling for a deficit of about $530 billion in four years, Obama has established a marker by which to measure his first-term performance as president. The dollar figure could be his albatross or his badge of success.
"This will not be easy," Obama said Monday as he kicked off a fiscal summit at the White House. "It will require us to make difficult decisions and face challenges we've long neglected."
For Obama, the challenge is clear: He will have to increase spending on health care and energy if he wants to accomplish the policy overhaul he promised during his campaign, yet he also needs to cut spending elsewhere and increase revenue to meet his deficit goal.
All this, even as he employs accounting practices he says will more honestly depict the size of the federal budget.
For him to succeed, the economy will have to meet current forecasts that it will begin to turn around gradually during the second half of the year. Even so, Obama might still have to seek billions more to help rescue the beleaguered financial sector.
Administration officials say Obama will also achieve budget reductions through lower spending on the war in Iraq. However, it is unclear how much of those savings he will then devote to Afghanistan, where he already has agreed to boost troop strength.
Further budget assistance would come from increases in taxes for wealthier Americans. Administration officials have said Obama will meet his campaign pledge to end President George W. Bush's tax cuts for people who make more than $250,000. Those tax cuts are to expire at the end of 2010.
Obama plans other tax cuts for most Americans, but any tax hike is likely to meet stiff resistance from congressional Republicans. And if the economy has not improved, there will be pressure on him not to raise taxes on any segment of the population, no matter how rich.
Such a discussion about taxes would be especially charged in the middle of the 2010 midterm elections.
What's more, banks are paying dividends on the assets that the government purchased in its rescue effort. The government could see a return on its investment in later years if banks can buy those assets back. The government experienced a similar increase in spending in the 1990s when the Resolution Trust Corp. bailed out the savings and loan industry. Eventually the government got its money back and more, contributing to the low deficits of the era.
"A lot of things have to go right between now and then," Mark Zandi, chief economist for Moody's Economy.com, said in an interview before he addressed the White House summit. "The policy response to the crisis has to work for the budget to stick to the script."
Administration aides say they inherited a budget deficit of $1.3 trillion and project the deficit to grow to $1.5 trillion by Sept. 30, the end of the current fiscal year. But much of that is emergency spending designed to contain the economic crisis and assist banking institutions. Once that spending stops, the deficit will shrink on its own.
In fact, if the $787 billion economic stimulus package recently signed into law and the government's other billions spent on mortgages and banks amounted to the only additional spending undertaken between now and 2013, the deficit would be likely to dip in four years to a sum lower than Obama's goal.
"So the question is really can they do that (reduce the deficit) as well as implement the agenda that he was elected on," said William Gale, director of economic studies at the Brookings Institution.
Obama's target would place the deficit at about 3 percent of gross domestic product. The GDP is a measure of a country's economic activity and many economists say deficits during a stable economy should amount to no more than 2 to 2.5 percent. At $1.5 trillion, the deficit would hit a whopping 10.6 percent of GDP this year.
Obama's 3 percent goal would still only lower deficits to ranges similar to those under Bush. Zandi said the key is whether the deficits are on a falling path
The president is also counting on achieving his deficit target by reducing wasteful programs - a perennially elusive aim of many an administration. For instance, he said he wants to halt federal support for huge agriculture companies that don't need the help. He also would end tax breaks for companies shipping jobs abroad. Yet, such companies have staunch defenders in Congress who have fought off similar efforts in the past.
Obama also said Monday he would return to the pay-as-you-go rule the government used in the 1990s to help control federal deficits. Back then, the law required that any tax cut or increase in federal benefits like Medicare had to be paid for with a tax increase or spending reduction elsewhere in the budget.
Obama's embrace of that rule will take effect after enactment of the recent stimulus package.
The stimulus law includes language preventing the alternative minimum tax from raising levies on millions of middle-class families this year. If the pay-as-you-go rules were applied to that tax provision, it would have forced Obama and Congress to find $70 billion in savings to pay for it - an exercise none of them would have enjoyed.
Associated Press Writer Alan Fram contributed to this article.
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Re: Political Economics
on: February 23, 2009, 05:30:42 PM
6000 by July.
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Re: Media Issues
on: February 23, 2009, 05:28:16 PM
Quote from: SB_Mig on February 23, 2009, 01:51:50 PM
Companies need to man up and tell NAN and others to shove it. Don't hire him. Don't fall for his IMHO empty boycott threats.
There are plenty of other spokespeople of all backgrounds to whom African Americans will listen.
People are over the likes of Sharpton and Jackson, as well as their counterparts. Unfortunately, no one has thought up a good way of making their ridiculous "messages" obsolete and exposing them for the self-aggrandizing frauds that they are.
Gee, our President could. Oh wait, he's busy running the economy into the ground right now. Oh, yeah and he's a product of the Jackson-Sharpton-Wright school of "Hate Whitey".
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Re: Iran
on: February 23, 2009, 12:11:09 AM
Sunday, February 01, 2009
Advance the Clock
Just five days ago, we noted the apparent inevitability of an Israeli strike against Iran's nuclear facilities. Comparing that possibility to the famous "Doomsday Clock" (made famous by the Bulletin of the Atomic Scientists), we calculated that, if an Israeli attack is depicted in those terms, then the "strike clock" now reads two minutes until midnight.
And it may be time to advance the hands yet again. Benjamin Netanyahu, the man who will most likely be the next Prime Minister of Israel, has reiterated his determination to halt Tehran's nuclear ambitions. In a TV interview just weeks before the Israeli election, Mr. Netanyahu stated flatly that "Iran will not be armed with a nuclear weapon."
In an interview with Israel's Channel 2 TV, Netanyahu said if elected prime minister his first mission will be to thwart the Iranian nuclear threat. Netanyahu, the current opposition leader and head of the hardline Likud party, called Iran the greatest danger to Israel and to all humanity.
When asked if stopping Iran's nuclear ambitions included a military strike, he replied: "It includes everything that is necessary to make this statement come true."
Mr. Netanyahu's remarks were part of an interview with all three candidates for Prime Minister. Opinion polls show Netanyahu with a lead over Ehud Barak's Labor Party, and and Kadima's Tipi Livni, just nine days before the election.
The interview format was odd, at least by American standards. While the candidates were together in a Channel 2 studio, they did not debate each other. Instead, they responded to questions from You Tube users. Netanyahu was the only candidate asked about the Iranian threat; Mr. Barak (the current Defense Minister) and Ms. Livni, the Foreign Minister, were asked about how they would respond to the Hamas rocket threat.
Netanyahu's comments were the latest indication that the next Israeli government will deal decisively with Iran. Last week, the respected International Institute for Strategic Studies predicted that Tehran will have enough fissile material for at least one nuclear weapon by the end of 2009.
While that doesn't mean that Iran will have a ready-made bomb within twelve months, it is a reminder that Tehran is approaching the point of no return. As their stockpile of enriched uranium continues to grow, the Iranians will be able to create a small nuclear arsenal, even if Israel strikes key nuclear sites. Timing for the attack is also being influenced by Tehran's pending acquisition of the S-300 air defense system. When the S-300 achieves operational capability--probably later this year--Israeli operational planning will become much more complicated.
The third factor is the recent change in the White House, and Israeli perceptions that Barack Obama will be more conciliatory toward Iran. So far, the new president has done little to dissuade that notion. There are unconfirmed reports that the administration is crafting a new letter to the Iranian leadership, and just lask week, Mr. Obama said he wanted a "comprehensive approach" toward Iran, with diplomacy (presumably) taking the lead.
It's little wonder that Israel feels increasingly isolated, and believes it has no choice but to deal with Iran on its own. Mr. Netanyahu's remarks don't guarantee an Israeli attack, but prospects for that option have certainly increased, given the likelihood that Likud will win next week's election.
We'd say President Obama's "comprehensive solution" will soon be overcome by events. The strike clock now reads 90 seconds to midnight--and ticking.
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Re: Two miles from the US
on: February 22, 2009, 07:49:39 PM
Quote from: Crafty_Dog on February 22, 2009, 07:41:26 PM
When Mexico collapses, will this be happening on the streets of cities in the Southwest?
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Re: Political Economics
on: February 22, 2009, 07:25:56 PM
Put me down for 200 points at a minimum. Fraaaaaaaaak.....
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Wow, the markets will love this!
on: February 22, 2009, 06:24:23 PM
Obama's First Budget Seeks To Trim Deficit
Plan Would Cut War Spending, Increase Taxes on the Wealthy
By Lori Montgomery and Ceci Connolly
Washington Post Staff Writers
Sunday, February 22, 2009; A01
President Obama is putting the finishing touches on an ambitious first budget that seeks to cut the federal deficit in half over the next four years, primarily by raising taxes on businesses and the wealthy and by slashing spending on the wars in Iraq and Afghanistan, administration officials said.
In addition to tackling a deficit swollen by the $787 billion stimulus package and other efforts to ease the nation's economic crisis, the budget blueprint will press aggressively for progress on the domestic agenda Obama outlined during the presidential campaign. This would include key changes to environmental policies and a major expansion of health coverage that he hopes to enact later this year.
A summary of Obama's budget request for the fiscal year that begins in October will be delivered to Congress on Thursday, with the complete, multi-hundred-page document to follow in April. But Obama plans to unveil his goals for scaling back record deficits and rebuilding the nation's costly and inefficient health care system tomorrow, when he addresses lawmakers and budget experts at a White House summit on restoring "fiscal responsibility" to Washington.
Yesterday in his weekly radio and Internet address, Obama said he is determined to "get exploding deficits under control" and said his budget request is "sober in its assessments, honest in its accounting, and lays out in detail my strategy for investing in what we need, cutting what we don't, and restoring fiscal discipline."
Reducing the deficit, he said, is critical: "We can't generate sustained growth without getting our deficits under control."
Obama faces the long-term challenge of retirement and health programs that threaten to bankrupt the government years down the road, as well as the more immediate problem of deficits bloated by spending on the economy and financial system bailouts. His budget proposal takes aim at the short-term problem, administration officials said, but also would begin to address the nation's chronic budget imbalance by squeezing savings from federal health programs for the elderly and the poor.
Even before Congress approved the stimulus package this month, congressional budget analysts forecast that this year's deficit would approach $1.2 trillion -- 8.3 percent of the overall economy, the highest since World War II. With the stimulus and other expenses, some analysts say, the annual gap between federal spending and income could reach $2 trillion when the fiscal year ends in September.
Obama proposes to dramatically reduce those numbers, said White House budget director Peter Orszag: "We will cut the deficit in half by the end of the president's first term." The plan would keep the deficit hovering near $1 trillion in 2010 and 2011, but shows it dropping to $533 billion by 2013, he said -- still high but a more manageable 3 percent of the economy.
To get there, Obama proposes to cut spending and raise taxes. The savings would come primarily from "winding down the war" in Iraq, a senior administration official said. The budget assumes continued spending on "overseas military contingency operations" throughout Obama's presidency, the official said, but that number is lower than the nearly $190 billion budgeted for Iraq and Afghanistan last year.
Obama also seeks to increase tax collections, mainly by making good on his promise to eliminate some of the temporary tax cuts enacted in 2001 and 2003. While the budget would keep the breaks that benefit middle-income families, it would eliminate them for wealthy taxpayers, defined as families earning more than $250,000 a year. Those tax breaks would be permitted to expire on schedule in 2011. That means the top tax rate would rise from 35 percent to 39.6 percent, the tax on capital gains would jump to 20 percent from 15 percent for wealthy filers and the tax on estates worth more than $3.5 million would be maintained at the current rate of 45 percent.
Obama also proposes "a fairly aggressive effort on tax enforcement" that would target corporate loopholes, the official said. And Obama's budget seeks to tax the earnings of hedge fund managers as normal income rather than at the lower 15 percent capital gains rate.
Overall, tax collections under the plan would rise from about 16 percent of the economy this year to 19 percent in 2013, while federal spending would drop from about 26 percent of the economy, another post-World War II high, to 22 percent.
Republicans, who are already painting Obama as a profligate spender, are laying plans to attack him on taxes as well. Even some nonpartisan observers question the wisdom of announcing a plan to raise taxes in the midst of a recession. But senior White House adviser David Axelrod said in an interview that the proposals reflect the ideas that won the election.
"This is consistent with what the president talked about throughout the campaign," and "restores some balance to the tax code in a way that protects the middle class," Axelrod said. "Most Americans will come out very well here."
The budget also puts in place the building blocks of what administration officials say will be a broad restructuring of the U.S. health system, an effort aimed at covering some of the estimated 46 million Americans who lack insurance while controlling costs and improving quality.
"The budget will kick off or facilitate a focus on getting health care done this year," the senior official said, adding that the White House is planning a health care summit. The event has been delayed by former senator Thomas A. Daschle's decision to withdraw from consideration as health secretary because of tax problems, a move that left Obama without a key member of his health team.
Administration officials and outside experts say the most likely path to revamping the health system is to begin with Medicare, the federal program for retirees and people with disabilities, and Medicaid, which serves the poor. Together, the two programs cover about 100 million people at a cost of $561 billion in 2007. Making policy changes in those programs -- such as rewarding physicians who computerize their medical records or paying doctors for results rather than procedures -- could improve care while generating long-term savings, experts say.
Obama's budget request would create "running room for health reform," the official said, by reducing spending on some health programs so the administration would have money to devote to initiatives to expand coverage. The biggest target is bonus payments to insurance companies that run managed-care programs under Medicare, known as Medicare Advantage.
The Bush-era program has attracted nearly a quarter of Medicare beneficiaries to private health insurance plans that cover a package of services such as doctor visits, prescription drugs and eyeglasses. But the government pays the plans 13 to 17 percent more than it pays for traditional fee-for-service coverage, according to the Medicare Payment Advisory Commission, which advises Congress on Medicare financing issues.
Officials also are debating whether to permit people as young as 55 to purchase coverage through Medicare. That age group is particularly vulnerable in today's weakened economy, as many have lost jobs or seen insurance premiums rise rapidly. The cost would depend on whether recipients received a discount or were required to pay the full price.
In addition to the substantive proposals, Obama's team boasts of improving the budget process itself. For years, budget analysts complained that former president George W. Bush tried to make his deficits look smaller by excluding cost estimates for the war in Iraq and domestic disasters, minimizing the cost of payments to Medicare doctors and assuming that millions more families would pay the costly alternative minimum tax. Obama has banned those techniques, the senior official said.
Staff writer Shailagh Murray contributed to this report.
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Re: Big Picture WW3: Who, when, where, why
on: February 22, 2009, 05:37:58 PM
February 21, 2009, 7:00 a.m.
From Islamabad to Bradford
Degrees of accommodation.
By Mark Steyn
It is hard to understand this deal, said Richard Holbrooke, President Obamas special envoy. And, if the special envoy of the so-called smartest and most impressive administration in living memory cant understand it, what chance do the rest of us have?
Nevertheless, lets try. In the Swat Valley, where a young Winston Churchill once served with the Malakand Field Force battling Muslim insurgents, his successors have concluded the game isnt worth the candle. In return for a temporary ceasefire, the Pakistani government agreed to let the local franchise of the Taliban impose its industrial strength version of sharia across the whole of Malakand Region. If region sounds a bit of an imprecise term, Malakand has over five million people, all of whom are now living under a murderous theocracy. Still, peace rallies have broken out all over the Swat Valley, and, at a Swat peace rally, it helps to stand well back: As one headline put it, Journalist Killed While Covering Peace Rally.
But dont worry about Pakistani nukes falling into the hands of extremists: The Swat Valley is a good hundred miles from the nations capital, Islamabad or about as far as Northern Vermont is from Southern Vermont. And, of course, Islamabad is safely under the control of the famously moderate Ali Zardari. A few days before the Swat deal, Mr. Zardari marked the dawn of the Obama era by releasing from house arrest A. Q. Khan, the celebrated scientist and one-stop shop for all your Islamic nuclear needs, for whose generosity North Korea and Iran are especially grateful.
From Islamabad, let us zip a world away to London. Actually, its nearer than you think. The flight routes between Pakistan and the United Kingdom are some of the busiest in the world. Can you get a direct flight from your local airport to, say, Bradford?
Bradford, Yorkshire. There are four flights a week from Islamabad to Bradford, a town where 75 percent of Pakistani Britons are married to their first cousins. But dont worry, in the country as a whole, only 57 percent of Pakistani Britons are married to first cousins.
Among that growing population of Yorkshire Pakistanis is a fellow called Lord Ahmed, a Muslim member of Parliament. He was in the news the other day for threatening (as the columnist Melanie Phillips put it) to bring a force of 10,000 Muslims to lay siege to the House of Lords if it went ahead with an event at which the Dutch parliamentarian Geert Wilders would have introduced a screening of his controversial film Fitna. Britains Home Secretary, Jacqui Smith, reacted to this by declaring Minheer Wilders persona non grata and having him arrested at Heathrow and returned to the Netherlands.
The Home Secretary is best known for an inspired change of terminology: Last year she announced that henceforth Muslim terrorism (an unhelpful phrase) would be reclassified as anti-Islamic activity. Seriously. The logic being that Muslims blowing stuff up tends not to do much for Islams reputation i.e., its an anti-Islamic activity in the same sense that Pearl Harbor was an anti-Japanese activity.
Anyway, Geert Wilderss short film is basically a compilation video of footage from various recent Muslim terrorist atrocities whoops, sorry, anti-Islamic activities accompanied by the relevant chapter and verse from the Koran. Jacqui Smith banned the filmmaker on public order grounds in other words, the governments fear that Lord Ahmed meant what he said about a 10,000-strong mob besieging the Palace of Westminster. You might conceivably get the impression from Wilderss movie that many Muslims are irrational and violent types its best to steer well clear of. But, if you didnt, Jacqui Smith pretty much confirmed it: We cant have chaps walking around saying Muslims are violent because theyll go bananas and smash the place up.
So, confronted by blackmail, the British government caved. So did the Pakistani government in Swat. But, in fairness to Islamabad, they waited until the shooting was well underway before throwing in the towel. In London, you no longer have to go that far. You just give the impression your more excitable chums might not be able to restrain themselves. Nice little G7 advanced western democracy you got here. Shame if anything were to happen to it. Twenty years ago this month, Margaret Thatchers Conservative ministry defended the right of a left-wing author Salman Rushdie to publish a book in the face of Muslim riots and the Ayatollah Khomeinis attempted mob hit. Two decades on, a supposedly progressive government surrenders to the mob before its even taken to the streets.
In his first TV interview as president, Barack Obama told viewers of al-Arabiya TV that he wanted to restore the same respect and partnership that America had with the Muslim world as recently as 20 or 30 years ago. Im not sure quite what golden age hes looking back to there the Beirut barracks slaughter? the embassy hostages? but the point is, its very hard to turn back the clock. Because the facts on the ground change, and change remorselessly. Even in 30 years. Between 1970 and 2000, the developed world declined from just under 30 percent of the global population to just over 20 percent, while the Muslim world increased from 15 percent to 20 percent. And in 2030, it wont even be possible to re-take that survey, because by that point half the developed world will itself be Muslim: In Bradford as in London, Amsterdam, Brussels, and almost every other western European city from Malmo to Marseilles the principal population growth comes from Islam. Thirty years ago, in the Obama golden age, a British documentary-maker was so horrified by the honor killing of a teenage member of the House of Saud at the behest of her father, the kings brother, that he made a famous TV film about it, Death Of A Princess. The furious Saudis threatened a trade boycott with Britain over this unwanted exposure. Today, we have honor killings not just in Saudi Arabia and Pakistan, but in Germany, Scandinavia, Britain, Toronto, Dallas, and Buffalo. And they barely raise an eyebrow.
Along with the demographic growth has come radicalization: Its not just that there are more Muslims, but that, within that growing population, moderate Islam is on the decline in Singapore, in the Balkans, in northern England and radicalized, Arabized, Wahhabized Islam is on the rise. So we have degrees of accommodation: surrender in Islamabad, appeasement in London, acceptance in Toronto and Buffalo.
According to ABC News, a team of UCLA professors have used biogeographic theories to locate Osama bin Ladens hideout as one of three possible houses in the small town of Parachinar, and have suggested to the Pentagon they keep an eye on these buildings. But the problem isnt confined to three buildings. It ripples ever outwards, to the new hardcore sharia state in Malakand, up the road to nuclear Islamabad, over to Bradford on that jet-speed conveyor-belt of child brides, down to the House of Lords and beyond.
Meanwhile, President Obama has removed Winston Churchills bust from the Oval Office and returned it to the British. Given what Sir Winston had to say about Islam in his book on the Sudanese campaign, the bust will almost certainly be arrested at Heathrow and deported as a threat to public order.
Mark Steyn, a National Review columnist, is author of America Alone.
© 2009 Mark Steyn
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Politics, Religion, Science, Culture and Humanities
Politics & Religion
Re: Homeland Security
on: February 22, 2009, 04:50:35 PM
Saturday, February 21, 2009
Coming to America, Redux
Last month, during the transition between the Bush and Obama Administrations, there was a major homeland security "war game." For two-and-a half hours on a day in mid-January, senior federal officials reacted to a series of simulated, terrorist bombings across the country, responding to medical needs, managing the investigative process and ensuring that protective forces were deployed.
The exercise was unique for a couple of reasons. First, the Bush team allowed their Obama counterparts to "sit in" on the exercise and ask questions, giving them a foundation for their own drills and policies in the future. Secondly, the war game scenario was based on a familiar threat, one that remains at the forefront of homeland security concerns. According to Jake Tapper of ABC News (one of the few journalists to write about the event), the half-day exercise condensed two days of IED attacks, targeting economic and transportation centers across America.
Obviously, there's no potential shortage of threats for a homeland security exercise, from a nuclear blast in a U.S. city, to a sudden anthrax epidemic unleashed by terrorists. That's why the IED focus is particularly illustrative. Almost almost eight years of combat in Afghanistan--and nearly six years into the Iraq mission--security officials are acutely familiar with the threat from improvised explosive devices, and they remain concerned about similar attacks here in the homeland.
We're written about the IED threat in the past, most recently in 2007 after a "mass graduation" of Al Qaida suicide bombers at a training camp in Afghanistan. More than 300 terrorists participated in the ceremony, which was recorded by a Pakistani journalist. The tape included warnings in English that some of the bombers were destined for targets in the west.
Fortunately, those attacks failed to pan out. Many of the suicide bombers were probably diverted to Iraq, Pakistan and Afghanistan, where they were killed by allied forces. Others were rolled up by domestic security operations between Pakistan's tribal regions and their intended targets.
But those measures aren't 100% effective. Sooner or later, a suicide bomber or IED cell will slip through and launch a bloody campaign on American soil. And, in many respects, the domestic end represents the weakest link in the security chain. Our nation is filled with thousands of potential targets, including shopping malls; "big box" retailers, transit stations, schools, community centers, hotels, churches, hospitals and other locations were Americans gather, work or shop in large numbers.
Protecting all of these facilities is virtually impossible. But it's more disconcerting that security many of these stores (and other public facilities) ranges from lax to virtually non-existent. Admittedly, members of the general populace aren't privy to all protection measures--nor should they be. But anyone familiar with basics of physical security can get a general grasp of the plan at their local mall, "box" retailer or other public place.
Many of these institutions have invested heavily in security cameras that cover the interior and exterior of the building. There's also (typically) a uniformed security staff and a few undercover store detectives as well. But these precautions are aimed more at shoplifting than the terrorist threat.
Clearly, no one expects the security staff of a store or public building to stop a terrorist attack by themselves. That's where local, state and even federal authorities come in. But getting them to respond quickly can be problematic; potential terror targets are sometimes located on the edge of town, or in high-traffic areas.
A determined psychopath or a team of terrorists can inflict a lot of damage before the local SWAT team arrives. That was painfully evident when a lone gunman, with a history of mental problems, opened fire in an Omaha mall two years ago. Police officers responded in less than 10 minutes but by that time, the gunman had killed eight people, including himself. A few months earlier, an 18-year-old man shot and killed five individuals at a Salt Lake City Mall. Only the quick actions an armed, off-duty police kept the carnage from being much worse.
According to a RAND Corporation study (released before the Omaha massacre), shopping malls and big box outlets could reduce their vulnerability to such attacks by implementing a series of security measures. The cost? Between $500,000 and $2 million per location.
That may seem like a relatively small price to pay, but no one's rushing to add new layers of security. The commercial real estate and retail sectors are hurting in the economic slowdown; mall owners and their tenants would balk at the cost of new security measures, which would further impact their bottom line.
But defeating domestic terror requires more than effective physical security at the site of a potential attack. It requires planning and coordination with local law enforcement, and periodic response drills. Unfortunately, such exercises occur infrequently; there's the matter of cost, and no one wants to really highlight the fact that a local store, mall, school or hospital could be a terror target.
And, as The Wall Street Journal observed in 2005, there's the matter of national priorities and leadership. During the first half of the decade, Israel suffered though the latest--and bloodiest-- Palestinian intifada; more than 1,000 civilians died at the hands of terrorists, mostly through suicide bombings.
When diplomatic overtures failed to produce any results, the Israeli government took more tangible steps. Palestinians suspected of supporting the terror campaign were locked up; the leaders of bomb cells were targeted for assassinations. Physical barriers between Israeli and Palestinian population centers made it much for difficult for terrorists to reach their targets.
Those measures reduced the number of bombings--and civilian casualties--by more than 90%. As you might expect, the Israel anti-terror campaign was widely criticized by law and human rights advocates. But the crack-down achieved its desired results.
Here in the U.S., we haven't faced the threat endured by Israelis. But suicide bombings are IED attacks in the homeland are not a matter of "if," but "when." It's no surprise that such threats formed the scenario for last month's homeland security drill. Experts believe that type is almost inevitable in the coming years.
At some point, the Obama Administration must tell the public how it will deal with such threats, and prevent them in the future. Hopefully, the Obama team will realize that the bomber threat requires more than a "law enforcement" response--before that first explosive device goes off.
Politics, Religion, Science, Culture and Humanities
Politics & Religion
Re: Afghanistan-Pakistan
on: February 22, 2009, 12:23:25 PM
I had no idea either. Interesting.
Politics, Religion, Science, Culture and Humanities
Science, Culture, & Humanities
Re: Race, religion, ethnic origin
on: February 22, 2009, 08:06:50 AM
First, WTF is the flag of the republic of new Africa?
Second, what's the number of black people murdered by white supremacists in 2008? How does that compare to the number of black people murdered by black people in 2008?
Politics, Religion, Science, Culture and Humanities
Politics & Religion
Re: Afghanistan-Pakistan
on: February 22, 2009, 08:00:21 AM
Keep in mind that the crusades only kicked off after about 300 years of jihad being waged against europe.
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