Tuesday, November 30, 2010

Political Digest for November 30, 2010

I post articles because I think they are of interest. Doing so doesn’t mean that I necessarily agree (or disagree) with every—or any—opinion in the posted article. Help your friends and relatives stay informed by passing the digest on.

Obama announces 2-year pay freeze for federal workers
Excerpt: Bowing to growing budget concerns and months of Republican political pressure on federal pay and benefits, President Obama today announced he would stop pay increases for most of the two million people who work for the federal government. The freeze applies to all Executive Branch workers -- including civilian employees of the Defense Department, but does not apply to military personnel, government contractors, postal workers, members of Congress, Congressional staffers, and federal court judges and workers.

Excerpt: Congressman Paul Ryan (R-WI) and Alice Rivlin, former director of the Congressional Budget Office (CBO), have proposed an entitlement spending reform plan that is striking both for its boldness and its left-right-coming-together origins. There are a number of interesting parts, but I want to focus on the three most important: Medicare would, for the first time, be transformed into rational insurance. Beginning in 2013, all enrollees would be protected by a $6,000 cap on out-of-pocket expenses; in return they would pay for more small expenses on their own. After a decade, people newly eligible for Medicare would receive a voucher to purchase private insurance instead. The value of the voucher would grow at the rate of growth of GDP plus 1% (note: for the past four decades, health care spending per capita nationwide has been growing at about GDP growth plus 2%). Medicaid would be turned into annual block grants to the states. The value of the block grants would also grow at GDP growth plus 1%. Bottom line verdict: This is a good proposal that deserves serious attention.

The World from The Hill: Cao vows push for Vietnam sanctions in his final weeks
Excerpt: Capitol Hill's first ethnic Vietnamese lawmaker is spending his final weeks in the House pushing for sanctions against human-rights violators in his home country. Rep. Anh "Joseph" Cao (R-La.) introduced two bills on Nov. 18. The Vietnam Democracy Promotion Act of 2010 provides aid money to promote freedom in the communist nation as well as education and refugee resettlement programs. It also imposes conditions on aid to Hanoi and requires annual progress reports. Cao's other bill, the Vietnam Human Rights Sanctions Act, would impose financial sanctions on, and deny visas to, Vietnamese officials guilty of human-rights abuses.

Higher Taxes Won't Reduce the Deficit
Excerpt: The claim here, echoed by endless purveyors of conventional wisdom in Washington, is that these added revenues—potentially a half-trillion dollars a year—will be used to reduce the $8 trillion to $10 trillion deficits in the coming decade. If history is any guide, however, that won't happen. Instead, Congress will simply spend the money. In the late 1980s, one of us, Richard Vedder, and Lowell Gallaway of Ohio University co-authored a often-cited research paper for the congressional Joint Economic Committee (known as the $1.58 study) that found that every new dollar of new taxes led to more than one dollar of new spending by Congress. Subsequent revisions of the study over the next decade found similar results. We've updated the research. Using standard statistical analyses that introduce variables to control for business-cycle fluctuations, wars and inflation, we found that over the entire post World War II era through 2009 each dollar of new tax revenue was associated with $1.17 of new spending. Politicians spend the money as fast as it comes in—and a little bit more.

The 'Build America' Debt Bomb
Excerpt: The Obama administration responded with a new kind of taxable bond that offered a 35% federal subsidy on the interest rate. Washington designed the subsidy to appeal to investors such as pension funds and overseas buyers who don't buy traditional municipal bonds because they can't take advantage of their tax-free status. The federal subsidy allowed states and cities to offer these investors an attractive return. The catch: Congress authorized the program only through 2010, to allay concerns that BABs would become a permanent bailout. States and cities jumped deeply into this new market. California alone has issued some $21 billion in BABs, mostly as a substitute for its general obligation debt to support everything from school construction to sewer projects. New Jersey has used up to $500 million to recapitalize its depleted transportation trust fund. Columbus, Ohio, issued $131 million in BABs to start construction of a downtown convention hotel. And in Dallas, Texas, when no private operator would finance a new convention hotel, the city went ahead with a government-subsidized hotel, courtesy of $388 million in BABs….. One sure signal has been the sharp rise in the cost for investors to insure against default. In June, the price of a contract protecting an investor from a default by Illinois on its bonds rose to a record high of $309,100 on $10 million of debt over five years, according to CMA Datavision. The national average for states is $190,000 per $10 million in debt. At that point, Illinois surpassed California as the worst credit risk among U.S. states.

For Tottering States, Bankruptcy Could Be the Answer
Excerpt: The federal government still seems a long way from the disaster Bowles envisions. But some state governments aren't. California Gov. Arnold Schwarzenegger came to Washington earlier this year to get $7 billion for his state government, which resorted to paying off vendors with scrip and delaying state income tax refunds. Illinois seems to be in even worse shape. A recent credit rating showed it weaker than Iceland and only slightly stronger than Iraq. It's no mystery why these state governments -- and those of New York and New Jersey, as well -- are in such bad fiscal shape. These are the parts of America where the public employee unions have been calling the shots, insisting on expanded payrolls, ever higher pay, hugely generous fringe benefits and utterly unsustainable pension promises. The prospect is that the bond market will quit financing California and Illinois long before the federal government. It may already be happening. Earlier this month, California could sell only $6 billion of $10 billion revenue anticipation notes it put on the market. Individual investors have been selling off state and local municipal bonds this month. Meredith Whitney, the financial expert who first spotted Citigroup's overexposure to mortgage-backed securities, is now predicting a sell-off in the municipal bond market.

Excerpt: The worst idea is a proposed national sales tax, which is a disguised VAT (value added tax) on top of everything we already pay in federal taxes. Here are three of the biggest reasons the national retail sales tax is the worst idea on the table. First, we have a spending problem in Washington, D.C., not a revenue problem. The Commission claims their goal is to reduce the deficits by $4 trillion over the next decade. The task force says its plan would save $6 trillion by 2020. It’s sort of like dueling promises that would never happen, because when has a proposed cut in Washington D.C. ever produced the intended savings over 10 years? Never! Even worse is reason number two: In every country that has established a VAT with the promise of reducing its national debt, the VAT has eventually gone up or expanded on top of the existing tax structure. After discovering many of the tax grenades in the recently passed health care deform bill, which is already driving costs up and access down, it would be real easy for an overzealous bureaucrat to insert the language in the legislation “national retail and wholesale” tax.

Obama Should Cut The Corporate Tax Rate
No time for this—they are too busy trying to figure out why American jobs are going overseas where taxes are lower. It’s a puzzle. ~Bob. Excerpt: A dramatic cut in the corporate tax rate could be the best tonic for the ailing economy. As is now well known, next to Japan, the U.S. imposes the highest corporate tax rate of any industrialized country at nearly 40 percent (combining the federal and state rates). Perhaps an explanation why both economies are in the doldrums lies in a 2008 report by economists at the Organization for Economic Cooperation and Development (OECD), who measured the relationship between different taxes and economic growth. They determined that the corporate income tax is the most harmful tax for long-term economic growth. High personal income taxes were found to be the second-most harmful tax for long-term growth, which would argue for not allowing the Bush cuts to expire on the "rich" as Obama proposes. The least harmful taxes for growth, according to OECD economists, are consumption taxes and property taxes.

Obama a one Term President? Don’t bet the farm just yet.
The Week, an excellent and I find unbiased news magazine which I subscribe to, reports that polls suggest that if the election were held now, it would be a dead heat between Obama and either Mitt Romney or Mike Huckabee. (He beats Sarah Palin by eight points.) But before you write BO off, they report that in 1994, after the big Republican mid-term win, polls showed Bob Dole leading Bill Clinton by 10 points. We all know how that worked out.

Paradoxes of the Present Age, Profound and Trivial
Excerpt: The Korean mess reminds us again of who was and who was not in the ill-famed “axis of evil” as articulated in January 2002. Germany, Japan, and Vietnam were not, all once bitter foes of the United States. The former two were defeated and their hostility ended in reformed, postwar democratic governments. The latter won a political victory over the United States, and the question whether there would be a South Vietnam analogous to an independent South Korea was answered in the negative. By the same token, the triad of evil all had ongoing but unresolved wars with the United States. Saddam Hussein at the time had lost the Gulf War but survived, and that fact in turn had led to an unending no-fly zone war. (Note that today Iraq would not be in the axis, given that Saddam is no more). An armistice in 1953 did not settle the question of whether an aggressive communist North Korea would leave South Korea alone. And our war that had de facto started with Iran in 1979, and which waxed and waned over the next thirty years through terrorist surrogates and American counter-measures, continues today.

Stalin’s world is still with us
The joys of a centrally-planned economy. ~Bob. Excerpt: More than five million people starved to death or died of hunger-related disease in the Soviet Union in the early 1930s, 3.3 million of them in Ukraine, of which about three million would have survived had Stalin simply ceased requisitions and exports for a few months and granted people access to grain stores. These events remain at the centre of East European politics to this day. Each November, Ukrainians commemorate the victims of 1933. But Viktor Yanukovich, the current Ukrainian President, denies the special suffering of the Ukrainian people – a nod to Russia’s official historical narrative, which seeks to blur the particular evils of collectivization into a tragedy so vague it has no clear perpetrators or victims.

N Korea deploys missiles near South border: reports
Excerpt: Naval war games are underway today off the west coast of South Korea. The exercise includes the use of the nuclear-powered aircraft carrier USS George Washington. North Korea has warned that such games risk pushing the peninsula to the brink of war. According to South Korea's Yonhap News Agency, North Korea has deployed SA-2 surface-to-air missiles near the border. The report suggested that the missiles appear to be in place to target the South's jets flying close to the frontier. These Soviet-designed missiles have a range of between 8 and 30 kilometres. Though the report is new, the missiles are said to have been in place for days. (If these ground-to-air missiles were in place days ago, they were likely there when the NKs shelled the island. These idiots appear to want a war. Why? Do they think they can win? Or even survive? Ron P. They don’t want a war. They want to push us to the brink so we buy them off again. ~Bob.)

The Sixty Years' War
Excerpt: On November 12, North Korean scientists took Stanford professor Siegfried Hecker and two colleagues to the Yongbyon nuclear complex. The North Koreans led the Americans to a building that Hecker, former head of the Los Alamos nuclear laboratories, had visited in February 2008. The structure had been transformed into a “stunning” uranium enrichment facility, Hecker would later write. That revelation brings to an end the long-running debate inside the U.S. intelligence community over whether the Democratic People’s Republic of Korea has an active uranium enrichment program. North Korea acknowledged that it had such an effort back in 2002. But the North Koreans later claimed their admission was a misunderstanding. And in the years since, the intelligence community has had little knowledge of the North Korean nuclear program—it is, after all, the most secretive project of the world’s most secretive regime. There was no fresh intelligence to cast doubt on the program’s continued existence, because there was little new information about the program at all.

Wikileaks Confirm Our Analysis of U.S. Policy and Middle East Politics
Please forgive me for saying this, but what really amazed me in reading the Wikileaks was how thoroughly they proved points I’ve been making for years. I wouldn’t have had the nerve to say that except that readers have been telling me the same thing. 1. Iran steadily smuggled arms to Hizballah using various means including in ambulances and medical vehicles during the 2006 war. This violates the laws of war. At times, the media has condemned Israel for attacking ambulances though it showed Hamas was also using such vehicles for military and arms-smuggling operations. Moreover, the postwar UN force proved consistently ineffective in stopping smuggling while the U.S. government did not denounce Iran, Syria, and Hizballah for breaking the ceasefire arrangements. 2. Israeli leaders have repeatedly made clear in diplomatic discussions their acceptance of a two-state solution but warned that the Palestinian leadership sought Israel’s destruction. 3. Arab states have constantly been warning the United States about the threat from Iran as their highest priority, even urging the United States to attack Iran itself.

Two Cheers for Wikileaks
Collateral benefits instead of collateral damage. ~Bob. Excerpt: After all, only the leak of U.S. secret documents is forcing--finally!--the mass media to recognize that its entire model of the Middle East has been wrong. For years, we have been told that the region revolves around the Arab-Israeli conflict. And that was to some extent true up through the end of the 1980s. But now the Middle East revolves around the battle between Islamists and nationalists, and especially between the Iran-led bloc (Iran, Syria, Hizballah, Hamas, Iraqi insurgents, the government that rules Turkey) and most of the other countries. Here's how the New York Times put it in an article: "The cables reveal how Iran’s ascent has unified Israel and many longtime Arab adversaries — notably the Saudis — in a common cause. Publicly, these Arab states held their tongues, for fear of a domestic uproar and the retributions of a powerful neighbor. Privately, they clamored for strong action — by someone else.

Wikileaks: Old Gray Lady Invoke's The Harlot's Prerogative - James Delingpole
Excerpt: “The documents appear to have been acquired illegally and contain all manner of private information and statements that were never intended for the public eye, so they won’t be posted here.” Andrew Revkin, Environment Editor, New York Times Nov 20, 2009. “The articles published today and in coming days are based on thousands of United States embassy cables, the daily reports from the field intended for the eyes of senior policy makers in Washington. The New York Times and a number of publications in Europe were given access to the material several weeks ago and agreed to begin publication of articles based on the cables online on Sunday. The Times believes that the documents serve an important public interest, illuminating the goals, successes, compromises and frustrations of American diplomacy in a way that other accounts cannot match.” New York Times editorial 29/11/2010. Can you spot the difference between these two statements of high moral principle? Scott at the Powerline blog can.

Gates Seeking to Contain Military Health Costs
With a fiscal collapse looming, everything will be on the table. ~Bob. Excerpt: Francis Brady enjoys a six-figure salary and generous benefits at the consulting firm Booz Allen Hamilton, but as a retired Marine lieutenant colonel he and his family remain on the military’s bountiful lifetime health insurance, Tricare, with fees of only $460 a year. He calls the benefit “phenomenal.” “It is so cheap compared to what Booz Allen has,” Colonel Brady said in a recent interview, acknowledging that premiums called for by private employers can run many times greater. Of nearly 4.5 million military retirees and their families, about three-quarters are estimated to have access to health insurance through a civilian employer or group. But more than two million of them stay on Tricare. As the costs of private health care continue to climb, their numbers are only expected to grow.

The news isn’t all bad: Iranian nuclear scientist killed, another injured in Tehran bombings
Excerpt: A prominent Iranian nuclear scientist was killed Monday and a second was seriously wounded in nearly simultaneous car bomb attacks in the Iranian capital, the semiofficial Fars news agency reported. The explosions, which took place near Shahid Beheshti University, are the latest in a string of recent assassination attempts in which five doctors and professors have been killed in Tehran.

Iran accuses Israel, West in scientist slaying
Excerpts: Assailants on motorcycles attached bombs to the cars of two nuclear scientists as they were driving to work in Tehran Monday, killing one and wounding the other, state media and officials said. Iran's nuclear chief, Ali Akbar Salehi, said the man killed was involved in a major project at the country's chief nuclear agency, though he did not give specifics. Some Iranian media reported that the wounded scientist was a laser expert at Iran's Defense Ministry and one of the country's few top specialists in nuclear isotope separation. State TV swiftly blamed Israel for the attacks. At least two other Iranian nuclear scientists have been killed in recent years in what Iran has alleged is part of a covert attempt by the West to damage its controversial nuclear program. (It’s good to see somebody has finally gotten it together enough to take action. As crazy as the North Koreans are, I fear the Iranians are worse. I suspect their first test of a nuke wouldn’t be in a cave but in a western city. Ron P.)

Officials: Afghan border police officer shoots and kills 6 U.S. soldiers
Excerpt: An Afghan border police officer opened fire on American soldiers and killed six of them in eastern Afghanistan on Monday, in one of the deadliest incidents of its kind, according to Afghan and NATO officials.

Kenya Leader: "Homosexuals 'should be arrested."
Excerpt: Kenya's prime minister has said that homosexuals should be arrested, according to reports. "We will not tolerate such behaviors in the country," the BBC quoted Raila Odinga as saying. "The constitution is very clear on this issue and men or women found engaging in homosexuality will not be spared." Africa Review reported that Odinga told a rally in Nairobi on Sunday that "if found the homosexuals should be arrested and taken to relevant authorities." The website said that Odinga added it was "madness" for two men to fall in love with each other when a recent census showed there were "plenty of women" in the country.

Gaddafi Hits Out At Eu As Talks Open - Demands 5 Million Euros To Help Stem Flow Of Immigrants Flooding Into Tripoli
Excerpt: Libyan leader Muammar Gaddafi declared open an Africa-EU summit today, saying the partnership between the two continents had failed and slamming bodies like the World Trade Organisation as “terrorists”. “We have failed in our economic partnership with Europe,” Gaddafi told leaders of 80 nations gathered for the two-day summit, which faces fractious issues such as trade and migration. Opening the first talks in three years between the two continents’ leaders, Gaddafi reopened old wounds between former colonial powers and nations marking half a century of independence, saying accords struck in 2007 “had no effect, they remained on paper.” “We want win-win relations based on mutual interest and not on exploitation,” Gaddafi said. Gaddafi also reiterated a request to the European Union for “at least” five billion euros to stem the flow of millions of migrants flooding into a Tripoli bottleneck.

Secret Cables, The State Department and the Danger of Wikileaks
Excerpt: The greatest danger of episodes like this is not the “damage” that might be done to foreign policy—which is minimal, since everybody knows that friendly governments gossip about one another, have occasional spats, and negotiate on many fronts—but to free and unfettered communication on matters of war and peace, life and death. If an ambassador or military officer knows that his honest answers to questions from superiors will soon be in the public domain, he will begin to furnish dishonest answers—or no answers at all. How any news organization can conclude that this is in the public interest is beyond me.

Me Being President
Excerpt: "The notion that somehow me saying maybe you should be taxed more like your secretary when you're pulling home a billion dollars...I don't think is me being extremist or me being antibusiness," Obama explained. Most readers with even a minimal sensitivity to the language will detect that something has gone awry here. Those who possess a decent high school education should be able to tell you why.

Excerpt: Given the opportunity to do another 9/11, our merciless enemy would do it today, tomorrow, and every day thereafter. I don't know why they hate us, and I don't care. We have a saying in the Marine Corps that there is "no better friend, no worse enemy, than a U.S. Marine." We always hope for the first, friendship, but are certainly more than ready for the second. If it's death they want, it's death they will get, and the Marines will continue showing them the way to hell if that's what will make them happy.

Ah, if China’s bubble bursts, and they can’t buy American debt, what happens here? ~Bob. Excerpt: Mark Hart, an American hedge fund manager who has made millions predicting the crises in US sub-prime market and European debt, has launched a fund to bet on the imminent implosion of China. Mr Hart, who runs Corriente Advisors from Fort Worth Texas, has told potential investors in a presentation that China is in the "late stages of an enormous credit bubble". When this bursts, the financier said he expects an "economic fall-out" that will be as "extraordinary as China's economic out-performance over the last decade". Asking for a minimum $1m (£640,000) stake, Corriente said it will use sovereign and corporate credit default swaps, interest rate and foreign exchange options to cash-in on the collapse.

Thousands of Ranches Abandoned in Northern Mexico Due to Violence
Has to spread to the US. ~Bob. Excerpt: Thousands of ranches have been abandoned in the northeastern Mexican state of Tamaulipas by owners who do not want to end up like Alejo Garza, a rancher who died defending his property from a drug cartel. Garza, considered by a hero by many in the region, refused to hand over his property to a drug cartel, which gave him 24 hours to leave his property. The 77-year-old rancher barricaded himself inside his house and took on 30 cartel gunmen, killing four of them and seriously wounding two others before being slain.

Good cartoon

Wireless network excludes DHS
Excerpt: Federal law enforcement officers from different agencies soon will be able to talk to each other on their own radios in the Washington area - but the Department of Homeland Security will not be a part of the new system. The Justice Department this month is rolling out a new state-of-the-art interoperable tactical communications system in the national capital region. Called IWN, for Integrated Wireless Network, the new system addresses long-standing problems with existing legacy radio systems highlighted by communications failures on Sept. 11 and during Hurricane Katrina.

WikiLeaks exposé: Iran used ambulances to run arms into Lebanon during 2006 war
No surprise here. Just confirms that Iran and Hezbollah are scum. Dangerous scum, whose actions defame Islam. ~Bob. Excerpt: Iran used the neutrality of the Iranian Red Crescent to smuggle agents and weapons into Lebanon during Israel's 2006 with Hezbollah, U.S. diplomatic cables released by WikiLeaks revealed on Sunday. According to an Iranian sources mentioned in the cables, which were made available by the U.K. newspaper the Guardian, the IRC provided a cover for Iranian Revolutionary Guards members. "The only true Iranian Red Crescent officers dispatched to Lebanon were the doctors and drivers. Shipments of medical supplies served also to facilitate weapons shipments," the Guardian quotes the source as saying.

The Kingston Brio
Excerpt: A Republican Appropriator bids to change Congress's culture of spending.  House Republicans are choosing their committee chairmen in the next week or so, and one of the biggest decisions will be who runs the Appropriations panel that dictates federal spending. Georgia Republican Jack Kingston is only fifth in line by seniority, but he is making an impressive case that he understands the need to rethink how Congress spends money. Mr. Kingston's two main competitors for the job are promising that they've got tea party religion, but their records belie the claim. Californian Jerry Lewis is a former Appropriations Chairman whose tenure coincided with the record for the number of earmarks in 2005 and 2006. He fought every reform attempted by younger Republicans and presided over the favor-factory mentality that corrupted Members like Duke Cunningham. Mr. Lewis would need a special term limit waiver to lead the committee again, and if he gets the job we'll know Speaker-presumptive John Boehner has been cowed by the Old Bulls.

The one sure way to conciliate a tiger is to allow oneself to be devoured. - Konrad Adenauer

Nice response to “I’m Tired” via e-mail
Dear Sir, Thank you for your words and for your courage. I've received this particular blog post via email a few times, and I just couldn't agree more. I also thank you for your time serving in the military. I am honored to have a family full of those who have served, and I know the sacrifice it takes to do so. I don't have much to say in response to your post, except that I' not particularly psyched up about reading it or anything like those on your website. I am encouraged to know that there is someone who sees through all of this, as my family and I do as well, but at the exact same time, I'm discouraged that this amount of ignorance can exist in one place at one time. My husband and I are starting a family, and we have spent much time in thought about doing so, given the state of this nation. In the end, we decided to go ahead and start with the hope that we will be able to produce more people who can speak out against this tolerant nation by instilling them with our values and praying that they continue forward with those into the world. I hope you continue to produce informational posts such as this one that enlighten those who may not have taken a step back and seen the writing on the wall from this. I, unfortunately, have been one to watch Michael Moore, speak out against Bush and vote for Obama. I wish every day since finally seeing what is really going on that I had not. When I first received your blog post in an email, I was seeing through a glass darkly. It was a tool that helped me finally see what was actually happening with our government. I will be praying for you, as I see you are going through a difficult time with your health. Again, thank you for all of your courage and unwillingness to water down your faith. Sincerely, --A.A.

As we used to say in the Corps, you have to be shitting me. Sorry for the language, but this is not believable, with the birthrate in most of the civilized world below replacement levels. ~Bob. Excerpt: During remarks that she made for the 15th Anniversary of the International Conference on Population and Development, U.S. Secretary of State Hillary Clinton announced the launch of a new program that according to Clinton will now become the centerpiece of U.S. foreign policy. This new program is known as the Global Health Initiative, and it is being incredibly well-funded at a time when the U.S. government is drowning in debt. According to Clinton, 63 billion dollars will be spent by the U.S. to prevent pregnancies and to improve “family planning” services around the globe over the next six years. In other words, the new centerpiece of U.S. foreign policy is all about eugenics and population control.

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