Tuesday, August 9, 2011

Political Digest for August 9, 2011

For those who want further information about the topics covered in this blog, I recommend the following sites. I will add to this as I find additional good sources.

LtCol Alan West on Treasury Secretary Tim Gaithner
“When you open that refrigerator door, the light doesn’t go on.”

Our Economic and Governmental System
Rough language, but painfully true. ~Bob.

Important: In this grave crisis, the world's leaders are terrifyingly out of their depth
He must have read my book. The Euro model is failing rapidly. Imagine you and ten friends deciding to pool income and debts, but each still decides how much to spend on himself. That is the disaster of the eurozone. ~Bob. Excerpt: Certain years have gone down in history as great global turning points, after which nothing was remotely the same: 1914, 1929, 1939, 1989. Now it looks horribly plausible that 2011 will join their number. The very grave financial crisis that has hung over Europe ever since the banking collapse of three years ago has taken a sinister turn, with the most dreadful and sobering consequences for those of us who live in European democracies. The events of the past few days have been momentous: the eurozone sovereign debt crisis has escaped from the peripheries and spread to Italy and Spain; parts of the European banking system have frozen up; US Treasuries have been stripped of their AAA rating, which may be the beginning of a process that leads to the loss of the dollar’s vital status as the world’s reserve currency. There have been warnings that we may be in for a repeat of the calamitous events of 2008. The truth, however, is that the situation is potentially much bleaker even than in those desperate days after the closure of Lehman Brothers. Back then, policy-makers had at their disposal a whole range of powerful tools to remedy the situation which are simply not available today.

Kerry blames Tea Party for downgrade, says Senate GOP willing to raise taxes
This is the guy who slandered his comrades in arms for committing atrocities, though none of the claims were ever proven and some of those he had testify were proven liars. This against an enemy who regularly slaughter civilians, including children, to create terror. So if he told me to have a nice day, I’d call the weather bureau to check. ~Bob. Excerpt: Sen. John Kerry (D-Mass.) on Sunday blamed the Tea Party for causing Standard & Poor’s to lower the nation’s credit rating. Kerry argued that Republicans in the Senate were willing to raise tax revenues as part of a long-term deal to reduce the federal deficit, making reference to the Senate’s Gang of Six plan, which attracted bipartisan support.

Kerry’s Absurdities
Excerpt: Senator John Kerry (D-MA) thinks the ideas of the Tea Party are “absurd.” The media should not be covering the Tea Party philosophy of reduced spending and debt and a balanced budget. In 1997, Kerry himself sponsored an amendment to balance the then-current budget. He didn’t think that was absurd. What is absurd is that no one is more to blame for the government’s long-time spending binge than Senator John Kerry himself. As the nation’s credit rating is downgraded, and our federal debt exceeds the entire output of the U.S. economy, Kerry on Meet the Press Aug. 7 called for more spending for infrastructure and other programs as if they would add naught to the nation’s deficit. Except for the move toward fiscal sanity and budget balancing 14 years ago, Kerry wants the media to steer clear of the wild ideas of the Tea Partiers’ financial conservatism. He wants the news media to continue to support the fiscal insanity of the liberal Democrats. He “doesn’t want any real reporting on actual accountability for our economic problems,” as the Pajamas Media Tattler reported Aug. 5. Those problems started with the Community Investment Act, managed through the Democrats’ control of the failed Fannie Mae and Freddie Mac., and then on to ObamaCare, the stimulus spending package, and the Dodd-Frank super-regulatory law.

Most post offices targeted for closure are in GOP districts
This may be because they are closing rural offices, and Democrat districts tend to be in cities with lots of union, government employee and welfare voters. ~Bob. Excerpt: A large majority of post offices that have been targeted for closure are in Republican districts. More than 2,500 of these post offices are in GOP districts while about 1,000 are in districts represented by Democrats, according to a review by The Hill. There were fewer than 100 stores where the district could not be determined because the zip code is represented by lawmakers in both parties.

Economists skeptical Obama's veterans jobs plan will cut unemployment rate
Excerpt: President Obama’s push to boost job prospects for veterans certainly looks to be well-intentioned, economists say, but does not appear broad enough to attack the deeper problems in the job market. On Friday, the president proposed expanding or rolling out new tax incentives for companies that hire veterans, and called on businesses to employ or train 100,000 veterans or their spouses over the next two-plus years. But economists of all stripes are far from certain that jobs proposals aimed at veterans or other targeted groups will put much of a dent in the unemployment rate, which the Labor Department said Friday stood at 9.1 percent in July.

Saudi Arabia calls for Syrian reforms
Excerpt: Saudi Arabia's king has condemned a brutal crackdown on protests in Syria, recalling the country's ambassador to Damascus and calling on the Syrian government to implement political reforms. "What is happening in Syria is not acceptable for Saudi Arabia," King Abdullah said in a written statement on Monday. "Syria should think wisely before it's too late and issue and enact reforms that are not merely promises but actual reforms," he said. "Either it chooses wisdom on its own or it will be pulled down into the depths of turmoil and loss." (Saudi Arabia, bastion of free expression, that “loaned” a division of armored infantry to Bahrain to put down rioting a few months ago (and is still there?). Things in Syria must be a lot worse than we’re hearing. Ron P.)

Mystery pro-Romney donor revealed as former executive at private equity firm
Excerpt: The mystery donor whose $1 million contribution set off a furor over secrecy in politics has been identified as a longtime supporter of Republican presidential candidate Mitt Romney. Edward Conard, a former executive at Bain Capital, a private equity firm that Romney helped found, gave the contribution to a pro-Romney super-PAC called Restore Our Future through a shell corporation, W Spann LLC.

Worth Reading: Two Weekend Op-Eds Exemplify the Delusions of the Left and the Insights of Conservatives
This “tale of two editorials” draws quite a contrast. Ron P. Excerpt: An intriguing op-ed by Drew Westen, a leftist professor of psychology at Emory University, appears in today’s New York Times. What is surprising about Professor Westen’s article is that many of his observations make points that conservatives have said about President Barack Obama for quite some time. Take this paragraph, for example, in which Westen asks why Obama seems to “take both sides of every issue, encouraging voters to project whatever they want on him”: The most charitable explanation is that he and his advisers have succumbed to a view of electoral success to which many Democrats succumb — that “centrist” voters like “centrist” politicians. Unfortunately, reality is more complicated. Centrist voters prefer honest politicians who help them solve their problems. A second possibility is that he is simply not up to the task by virtue of his lack of experience and a character defect that might not have been so debilitating at some other time in history. Those of us who were bewitched by his eloquence on the campaign trail chose to ignore some disquieting aspects of his biography: that he had accomplished very little before he ran for president, having never run a business or a state; that he had a singularly unremarkable career as a law professor, publishing nothing in 12 years at the University of Chicago other than an autobiography; and that, before joining the United States Senate, he had voted “present” (instead of “yea” or “nay”) 130 times, sometimes dodging difficult issues. … The result was that the stupid American people — “stupid” is how I argue Westen feels about the people — thought that “Ronald Reagan was right, that government is the problem.” They thought this because Obama did not explain why we had to engage in deficit spending, and why we had to have universal health care. In other words, it was not Obama’s policies that were at fault, but only his failure to communicate.

Important: Every Single One: The Politicized Hiring of Eric Holder’s Voting Section
Sickening, but hardly surprising. ~Bob. Excerpt: For nearly a year, the Civil Rights Division rebuffed Pajamas Media’s Freedom of Information Act request for the resumes of attorneys hired into the Division during the tenure of Eric Holder. PJM was finally forced to file a federal lawsuit earlier this year. Only then did Justice relent and turn over the documents. The result leaves little wonder why PJM’s request was met with such intense resistance. The Department’s political leadership clearly recognized that the resumes of these new attorneys would expose the hypocrisy of the Obama administration’s polemical attacks on the Bush administration for supposedly engaging in “politicized hiring” — and that everyone would see just how militantly partisan the Obama Civil Rights Division truly is. Holder’s year-long delay before producing these documents — particularly when compared to the almost-instantaneous turnaround by the Bush administration of a virtually identical request by the Boston Globe back in 2006 — also shows how deep politics now runs in the Department. (…) This is the first in a series of articles by Pajamas Media about the Civil Rights Division’s hiring practices since President Obama took office.

Worth Reading: Where have all the liberals gone?
Excerpt: What happens when people who completely dominate the conversation have nothing to say? What happens when the people who talk the most and are listened to the most about our nation's most serious problems do not have a plausible solution to any of them? What I think happens is the current state of affairs. Let me explain. Sometime in the mid-1970s, near the end of the Vietnam War, liberalism in America died an intellectual death. Since that time, virtually every new idea - whether good or bad - about how to solve our most important economic problems has come from the right. Virtually nothing has come from the left. Do you doubt that? Okay, it's test time. Tell me what the liberal answer is to the problem of our failing public schools. ...tick, tick, tick ... I'm waiting ... tick, tick, tick ... Give up? What about the liberal solution to the failed War on Poverty? ... pause ... pause ... pause ... No luck there either? Okay, let's take what President Obama says is the biggest domestic problem we face. What is the liberal solution to the huge unfunded liabilities in Social Security and Medicare? ... Can't think of one? What about solving the problem of unfunded pensions and post-retirement health care benefits for state and local workers? ... Not even a vague suggestion or two? Wow. We seem to be really striking out. Well, can you tell me what a liberal income tax code would look like? Zip. How about a liberal international economic system? Nada. Note: I'm not asking if you have a liberal acquaintance who has an opinion or two on these matters. I'm asking if you can produce a solution that would be generally recognized as the liberal solution. … Let me clarify where I’m coming from. These “conservative ideas” are not self-evidently “conservative.” Sweden has a full-blown school voucher system, but most Americans probably think of Sweden as “socialist.” Thirty countries in the world have either partially or completely privatized their social security systems with private retirement accounts. Yet you would probably call most of these countries “welfare states.”

S&P downgrades US mortgage giants Fannie Mae, Freddie Mac
Excerpt: The fallout from the nation's credit downgrade continued Monday, as Standard & Poor's announced government-sponsored housing giants Fannie Mae and Freddie Mac were also getting their top rating slashed. The two government-sponsored enterprises saw their credit rating from S&P fall from AAA to AA+ after the rater dropped the nation's rating to the same level on Friday. Fannie and Freddie back roughly 90 percent of all new mortgages created in the United States.

A Detailed Look at Workforce Skill Shortages
Excerpt: As the United States continues to fight its way out of the Great Recession, more attention has been directed to the question of why is has taken so long for workers to find re-employment. In economist parlance, this is primarily a question of “structural unemployment.” This describes the type of unemployment that results from a mismatch of worker skills and the skills demanded by employers. As of April 2011, there were 13.2 million unemployed workers and 2.9 million unfilled job openings. In other words, April’s bulky 8.7% unemployment rate could have been lowered one percentage point (to 7.7%) if just half of the advertised job vacancies were filled by unemployed workers. Obviously, it is not realistic for every position to be filled immediately—it takes time for employers to find the right workers, and vice versa. But the odd pairing of high unemployment and high job vacancies illustrates a structural employment issue, which may have worsened in recent years.

Stimulus Optimists vs. Economic Reality
Excerpt: With the economy once again teetering on the edge of recession, policy makers will inevitably propose another round of stimulus spending. You can bet on it—just as you can bet that any such spending won't help the economy. From the beginning, the Obama administration has misdiagnosed the problem and implemented policies that are indefensible. Consider the problem of economic stabilization. In the old days, U.S. recessions were short and recoveries sharp: Between World War II and 1990, the average rate of growth in gross domestic product (GDP) in the five quarters after a recession was 6.8%. For the stimulus optimist, the temptation of moving some of that blockbuster growth into the recession is certainly overwhelming. But getting the timing right is a daunting—or even impossible—task. It's hard enough to call the onset of the recession correctly and arrange the spending so that it happens at precisely the right moment. But the successful policy maker must also remove the stimulus at a moment of unusually high growth. If not, the drag from disappearing stimulus could easily push the economy back into recession.

The Great Frack Attack: The War on Natural Gas
Excerpt: The development and growth of the Marcellus Shale natural gas industry is a major boom for Pennsylvania’s economy. The industry has directly and indirectly created tens of thousands of new jobs, with tens of thousands more to come if natural gas is allowed to continue in a safe and responsible manner; paid out billions in royalty and lease payment to landowners; and contributed hundreds of millions of dollars to state and local government tax coffers. Yet the development of this economic opportunity has become extremely controversial, with many politicians and advocates calling for new taxes and fees on gas drillers and even an outright ban on all drilling in the commonwealth. Much attention has been paid to the efforts of gas companies to influence the political debate through campaign contributions and lobbying efforts. But antidrilling activists—while claiming gas companies use their vast financial resources to weaken regulatory structures and silence poorly funded environmental groups— influence politicians through their own lobbying efforts and by spreading myths about drilling. Among the myths alleged about “Big Gas” is that drillers are flocking to Pennsylvania’s rich Marcellus Shale reserves, engaging in dangerous and highly polluting drilling activities, and shirking responsibility for damages while successfully avoiding paying taxes. These intentional distortions of reality have both misinformed the public understanding in Pennsylvania and the policy debate in Harrisburg. So who is behind the attack on natural gas? Why are they doing it? And how much are they spending on their efforts to hinder or prevent the extraction of natural gas in Pennsylvania? This policy brief identifies some of the top foes or obstructionists of an industry that has brought tens of thousands of jobs to the Commonwealth of Pennsylvania.

Despite the fact that S&P truly is blameless (as explained below) and only told the truth when it issued the downgrade, all of the mainstream press reports that I have read, including in the Wall Street Journal, are blaming Standard & Poor. Even the foreign press is blaming them. Instead of blaming the government for irresponsibly borrowing so much money no one could ever pay it back. After all, telling the truth -- that the US debt is too high to ever pay down and that so far (it is more money than exists on the planet!), no one seems willing to even try -- can erode stock trader confidence. Yes, the truth hurts and could prevent your buying the Brooklyn Bridge on the NYSE. This is bad?? For whom? Lying and pretending that our bonds are as solid as the Rock of Gibraltar will only hurt investors in the long run, and that includes retired elderly mutual fund holders. Apparently, the mainstream press (including the "conservative" press) wants hapless investors to be blindsided some day by a disastrous default that will leave them holding the bag. The Ruling Class is so used to "free money" they can't imagine living without it. --Don Hank. Excerpt: Let’s start with whose fault it is not: S&P. To recap: S&P warned early in the year that there was a risk of a downgrade. S&P, when the debate was entered in May, said that they needed to see $4 trillion in actual deficit reduction and that this was a “down payment” on the problem, not the entire solution (they’re right, incidentally.) S&P then re-iterated the warning when the debate got contentious. That’s (at least) three separate warnings that were intentionally ignored. S&P was not ambiguous nor did they blindside anyone. They told the government exactly what they needed to see and when in order to avoid the downgrade. They’re blameless. So who’s to blame?

29% Say Tea Party Members Are Terrorists, 55% Disagree
One hopes the members of the 29% have a close encounter with a real al Qaeda Jihadist so they will understand the difference between peaceful protest in a democracy and real terrorism. Only way to educate them. ~Bob. Excerpt: Several prominent Democrats and their media friends have charged the Tea Party with being economic terrorists during the congressional budget debates, but most voters don’t see it that way. Fifty-five percent (55%) of Likely U.S. Voters, in fact, say members of the Tea Party are not economic terrorists. A new Rasmussen Reports national telephone survey finds that just 29% believe Tea Party members have been terrorists during the budget debates, while another 16% are undecided.

Excerpt: It seems to me that, on any reasonable assessment, the gulf between the parties on fiscal policy is becoming more difficult to bridge, not less. Pessimism on that score seems entirely justified, so it’s hard to argue with S&P on at least that specific point. I do think the outlook for fundamental fiscal agreement before the 2012 election is bleak. After that, things could change dramatically for the better, or not. In any case, whether S&P is being fair or unfair to move at this juncture, the political standoff we’re in is, sadly, necessary right now, despite its costs. Americans are in the midst of a great debate on the future of our society. Everyone seems to agree that the outcome of the next election will have a decisive impact on what kind of country we are–or become. Will we retain our distinctively American characteristics, or move irrevocably toward the European model? A “grand bargain” on taxes and entitlements right now, would push us another big step down the European path. Like as not, it would simply set a precedent for ever more such “compromises” as the baby boomers continued to retire. By the time the entitlement crisis was fully “fixed” we’d be taxed at Scandinavian levels. At any rate, in the context of President Obama’s broader transformative efforts, it’s impossible to trust that a “grand bargain” would do anything other than enable the president’s ambitious plans, which are in no way agreed upon yet by the public at large.

Excerpt: Given that over the last quarter we’ve been running between 750,000 to 950,000 jobs per month short of that goal, what are your plans to boost the employment rate? You’ve announced you’re going on a Midwest bus tour beginning the week of August 15 to focus on job creation. How many jobs do you expect your bus tour to create? Isn’t it reasonable for Americans to conclude that your jobs-creation program consists primarily of borrowing money, deficit spending, and giving speeches? (There is no job creation plan. There is a vote-buying plan to reelect Obama and other statist progressives. ~Bob.)

Making Hay in Iowa
Excerpt: This year, the Ames contest of most consequence is between the tortoise and the hare -- between former Minnesota Gov. Tim Pawlenty and current Minnesota Rep. Michele Bachmann. He would be much easier to elect than to nominate; regarding her, reverse that. If Pawlenty's methodical long-march-through-the-cornfields strategy pays off in Ames -- that is, if he gets perhaps 4,000 votes -- he can partially upend the national media narrative that has cast him as already a spent force. His understanding of the stakes is apparent in the fact that he is investing $1 million in the Ames event -- about one-fourth of the $4.2 million he raised in the second quarter. Pawlenty emphasizes, as tortoises will, the long run. His campaign believes Bachmann is potentially a flash in the pan whose campaign is brittle because of her propensity to say peculiar things (e.g., about Concord, N.H., the Founders and slavery, John Wayne). Pawlenty's problem is the short run -- between now and Saturday.

The Taliban and the "Innocent Civilians" Continue to Express Their Gratitude for COIN in Afghanistan!
Excerpt: Monday morning quarterbacking combat from the operational vantage point continues to be the preferred parlor game for those without prior service or specific experience in combat operations - anywhere, or anytime. There have been many stories and even more commentators questioning everything from the mission to the load plan for the CH 47 (presumably) that crashed this past weekend. These stories and commentary are all based on partial explanations from military sources who are balancing a nation's "need to know" with operational security issues and are all, generally, pointed in the wrong direction. It has been typical for folks, again, without any specific experience, to lash out at lower level command whenever troops are killed and in the most aggravating and consistent way, refusing to question the legitimacy of decisions from the upper echelon command structure that placed them in a position to be killed to begin with. There should be a general desire to safeguard and secure our troops and their commanders and a corresponding groundswell of pressure placed on upper echelon military officers and politicians here at home. But for some perverse reason, the reverse seems to be true. Whether a single Chopper used to deliver the thirty eight who perished was a wrong choice is something that the local command is currently dealing with. There are, however a myriad of reasons why this decision was made and none of us may ever know the reasons why, nor do we have a "need to know". What is far more important is why this specific mission may have been launched to begin with. A report just out by Stratfor has a lot to say about what might have been the impetus for a mission to begin with; from the story

The REAL Problem With The Downgrade
Excerpt: I've not heard this yet in the MSM, and it's a serious miscalculation. Note that since the "downgrade" rumors started the ten year treasury yield has dove. You'd think it would do the opposite. You'd be wrong. The issue with the downgrade is not the fundamental risk of holding Treasuries. The difference between "AAA" and "AA+" is nearly immaterial. Rather, the problem is the capital calls it may generate within the banks and the impairment against the ability to raise capital from stock price declines. We're now back to stock prices last seen in October - in less than two weeks.

It's the Spending
Excerpt: On Friday evening, Standard & Poor's (S&P) downgraded the U.S. credit rating from AAA to AA+. As we and other conservatives warned, the spending reductions in the deal negotiated by President Obama to raise the debt ceiling were inadequate, and S&P reacted as we predicted but sooner. Neither Moody's nor Fitch, two other rating agencies, have downgraded federal debt yet, but they are not providing much rosier outlooks. Decades of over-spending and over-borrowing by the federal government have damaged America's creditworthiness. Congress after Congress, President after President, the federal government spent every penny it took in—and borrowed over $14 trillion on top of that—to try to keep happy the voters to whom the government made promises it could not afford. The government kept shifting the burden of paying the bills forward onto future generations.

Obamacare violations of personal liberty
Excerpt: Who can forget that rare moment of honesty during the campaign to pass Obamacare when Nancy Pelosi said “We have to pass the bill in order for you to find out what’s in it”? Now we have it and almost daily there are new revelations about the staggering extent to which our private lives and individual freedoms have been stomped on.

A Battle Royale Over Credibility
Excerpt: The Treasury Department and the Federal Reserve have already revealed what their strategy toward Standard & Poor's will be now that the agency has stripped the U.S. government of its AAA rating: to destroy S&P's credibility. They can make a pretty good case. It’s not just that S&P revealed its ratings process to be corrupt and deeply flawed during the subprime mortgage bubble, as it gave inflated AAA ratings to bad securities in order to satisfy its investment banking clients, according to the Financial Crisis Inquiry Commission report. It's also that the ratings agency appeared to go well beyond its ambit this time by taking it upon itself to assess, as it said in its report Friday, the "effectiveness, stability, and predictability of American policymaking and political institutions." (…) The problem with this line of attack is that S&P is not the first ratings agency to downgrade U.S. debt. It was preceded by a much smaller but arguably more credible agency, Egan-Jones Ratings Co., which on July 16 also reduced the U.S. credit rating to AA+, although it did not include a "negative” outlook. In an interview on Sunday, the managing director of Egan-Jones, Sean Egan, said that his own decision was driven by the worrisome size of America's debt to GDP ratio, nearly 100 percent by his estimate, and by the inability of policy-makers in Washington to come to any kind of intellectual understanding about the economic causes of America's debt crisis. (Attacking the messenger’s credibility is a standard leftist tactic used thousands of times before, often successfully (just look at the treatment of AGW skeptics, for example). It’s rather like saying a doctor had a low class standing at his graduation after he diagnoses you with a life-threatening disease. The reason denial won’t work this time is that the disease is visible to anyone who bothers to look. Of course, some won’t bother to look, and a few more will look but fail to see or won’t believe what they see. The battle against government’s living on credit has been going on since at least the early 70s; it won’t stop until no one is willing to loan them any more money. Then they’ll sell a few things. And then, the war will begin. And, it will all be someone else’s fault. Ron P.)

Life after D-Day
Excerpt: There is a lot of anger at the moment in the US over the embarrassment of the downgrade, as well as shock. I’m most amused by the shock, to tell the truth. S&P didn’t say anything yesterday that was not common knowledge and common sense. If you had to rate a potential investment that had an income of, say, $22,000 a year but had costs of $37,000 per year, a standing debt of $143,000, and contracted future debt that exceeded $1 million, would you give that investment a gold-plated AAA rating and buy their bonds at the lowest interest rate possible, or at all? Of course not, but that’s exactly the fiscal situation of the US, at a 100,000,000:1 scale. The anger is mainly misdirected. The media wants to blame the Tea Party, but the Tea Party wants to solve the actual problem — overspending and overcommitment to entitlement programs. The Tea Party wants to blame the Obama administration, and it deserves some blame for refusing to address the real structural problems of the US fiscal condition. But that fiscal structure far predates Barack Obama, both as President and as human being, and Congresses and White Houses of both parties have done little to address the real problems in Medicare, Medicaid, and Social Security.

Officer Henwood: A dedicated cop, Marine
Excerpt: His family wished he lived closer to them in Texas. His brother suggested he seek safer work in federal law enforcement instead of riding the street in a patrol car. But Jeremy Henwood loved San Diego, and he loved police work. And sometimes what you love can kill you. Henwood, 36, died early Sunday, hours after being shot in what police are calling an “assassination” while he sat in his patrol car at an intersection in City Heights. … That impression was based in part on the places Henwood had already been, specifically the Middle East, as a Marine. Henwood did three tours there, two in Iraq and one in Afghanistan. His last deployment ended earlier this year. “People recognized his leadership traits,” Jarvis said. “Even among his peers, they could see it in the way he carried himself.” Henwood was in the Marines for about 15 years, first in active duty and then in the reserves. On his last deployment, he was a captain with Combat Logistics Battalion 2, based at Camp Lejeune, N.C. The battalion moved supplies and personnel around Helmand province in Afghanistan.

S&P Executive Cites Obama's Characterization of U.S. Political System as 'Dysfunctional’
Excerpt: John Chambers, managing director of Standard & Poor’s, says politics played a part in S&P’s decision to lower the nation’s credit rating for the first time in U.S. history. “Although the political settings in the United States are still strong, they are not as strong as we had thought previously compared to some other highly rated governments,” Chambers told Fox & Friends on Monday. “There really is, well, as President Obama -- who characterized the political system as ‘dysfunctional’ -- I think that’s a good word. We got to a position where we were within ten hours of having a major cash flow problem. This is not what happens in other countries.” As for Democrats’ accusations that the tea party bears responsibility for the downgrade, Chambers said there is “lots of blame to go around.”

White House denial
Excerpt: The White House narrative on how the country lost its triple-A rating and began a descent toward Third World status goes something like this: Standard & Poors woke up Friday morning and out of the blue decided to downgrade Uncle Sam’s debt despite the administration’s best efforts to show the wrong-headedness of the S&P analysis. Don't buy it. Yes, last Friday saw lots of meetings in Washington with Treasury Secretary Tim Geithner & Co. haranguing S&P executives with phony evidence that they’re getting a handle on the nation’s $14 trillion and rising debt, and the rotten economy that has squeezed tax revenues. But the fact remains, federal debt is set to grow for the foreseeable future, even with the spending cuts imposed in the recent debt-ceiling deal.

America’s road to discredit
Excerpt: America is supposed to be the world’s economic and financial leader. How much more will we discredit ourselves before President Obama does his job: lead us out of a historic crisis that is gnawing through our growth, instead of digging us deeper? The "discredit" is literal. Standard & Poor’s on Friday slashed its rating on America's debt from AAA to AA+. The analysts noted that government debt (up 48 percent in three years) is jumping from 74 percent of GDP now to 85 percent in a decade, and maybe higher, to 101 percent. And S&P doesn’t see the current crew in Washington as able to change this course. Its analysts note that any progress -- “especially on entitlements” and taxes -- will be “contentious and fitful.” Hard to disagree. But the downgrade was still a shock -- the unthinkable happened. American bonds are -- were? -- the gold standard. Bankers “know” that Treasury securities are “risk-free” -- and measure other assets, from Brazilian bonds to Swedish stocks, in relation to this guide.

Exploration Raises Tensions in South China Sea
Excerpt: After appearing to make progress in cooling tensions over the South China Sea in recent weeks, Southeast Asia and China face the potential for more trouble ahead as oil and gas companies expand their exploration work in the contested waters. An aerial view shows the Pagasa (Hope) Island, part of the disputed Spratly group of islands, in the South China Sea located off the coast of western Philippines. In the latest move, an energy company controlled by Philex Mining Corp. of the Philippines plans to drill at least two wells and conduct more seismic surveys starting next year in a natural-gas prospect in the Reed Bank, one of the most-disputed areas in the South China Sea near the Philippines, Philex's chairman said Tuesday. That move comes after the Philex-controlled exploration company, London-listed Forum Energy PLC, wrapped up an earlier round of seismic surveying earlier in the year in the region, which has already been the subject of numerous dust-ups in the past. Other companies, including China National Offshore Oil Corp., or Cnooc, and Vietnam's state-run Vietnam Oil and Gas Group, or Petrovietnam, are also ramping up surveying efforts in the South China Sea. “There should be more exploration in the area," said Philex Chairman Manuel Pangilinan, whose Philex group owns 65% of Forum Energy, and who envisions spending as much as $86 million in the area between now and 2013. "Obviously, the issue will be a political one," he said in Manila. "My only request to the claimants, and this is the ideal situation, is allow us to do our work.” There was no immediate response to the plan from China, which also claims parts of the Reed Bank and which has opposed exploration there before. In one incident this year, Philippines authorities dispatched two military aircraft to the area after a Philippines oil-exploration vessel said it was being intimidated by Chinese patrol boats, though China has said it wasn't intruding. (The current Chinese dynasty, as I said in my book, Collapse, seeks to dominate Asia. ~Bob.)

White House Insider: "Everyone Stunned At How Little Barack Obama Understands"
I think a primary challenge is wishful thinking, as Democrats know that would surely elect a Republican. ~Bob. Excerpt: A quick update following the almost-concluded debt ceiling negotiations paints a fascinating picture of Democrats and Republicans agreeing on one thing – the leadership fiasco that is President Obama. Democrats are so upset in fact, serious whispers of a primary challenger to Obama are now quickly spreading within the party.

George Will Confronts MSNBC Analyst for Comparing Tea Party to Terrorists
Excerpt: We already brought you one clip of George Will form the ABC roundtable show “This Week,” in which he heavily criticized S&P and their downgrade of the U.S. That was a good clip. But there’s another clip from that program featuring Will that might cause some Tea Party conservatives to leap out of their seats and shout a hearty, Sunday-morning, “Hallelujah!” Steve Rattner is a regular guest analyst on MSNBC’s “Morning Joe” and a former Obama adviser. Recently he labeled the Tea Party “economic terrorist” for not — in his estimation — playing fair during the debt ceiling negotiations. According to him, it was “unreasonable” for Tea Party congressman not to consider any tax increases, and it was wrong for them to threaten not to raise the debt limit unless such increases were taken off the table.

The 10 states that will decide the presidency
Excerpt: New Gallup numbers tracking President Obama’s job approval rating in each of the 50 states makes clear that the 2012 election will almost certainly come down to ten swing states. In each of those ten states — Iowa, Pennsylvania, Florida, North Carolina, Virginia, New Mexico, Ohio, Nevada, Arizona and Colorado — the President’s approval rating is somewhere between 44 percent and 49 percent.

Spokesman of "moderate" and "largely secular" Muslim Brotherhood wants Mubarak's hand amputated for theft according to Sharia
Excerpt: According to the Qur'an itself: "As for the thief, both male and female, cut off their hands. It is the reward of their own deeds, an exemplary punishment from Allah. Allah is Mighty, Wise" (5:38). The spokesman for the Brotherhood, a group called "largely secular" by Obama's director of national intelligence, acknowledges they are Allah's own words, saying "there is no argument." But the spin is on, as Mahmoud Ghuzlan promises exceptions -- a moderate implementation, if you will, of a cruel and unusual punishment. The supposed room for exceptions should be no reassurance, but another demonstration of how Sharia is simply bad government. If exceptions are made, the law is not being applied, but its letter remains unchanged, and in this case, intolerable. Ghuzlan himself is talking out of both sides of this mouth in his attempts to reassure, saying there is no arguing with Allah's word, but then promising laxity in enforcing it. If a law can be selectively not applied, the government is corrupt, or there is something wrong with the law. In practice, those with money, power, and influence on their side will be better able to wiggle out of punishments, leaving the poor, marginalized, or unpopular to bear the brunt of what remains in any case a barbaric practice.

India: Muslims strip and beat convert to Christianity, disrupt prayer meeting and threaten to burn down her home
Excerpt: Apostasy is forbidden under Islamic law. According to Muhammad's own command, the penalty is death. That is why one observes violent responses against ex-Muslims and the denial of their freedom of conscience in areas geographically far removed from one another. "Muslim Extremists in India Attack, Threaten Christian Women," from Compass Direct News, August 6 (thanks to Weasel Zippers): NEW DELHI – Four months after a recent convert to Christianity from Islam in eastern India’s West Bengal state was stripped and beaten, about 50 Muslim extremists yesterday disrupted a prayer meeting held in her home, threatening to burn it down if she did not return to Islam, area Christians said.

Downgrade Looms for France
Sacré bleu ~Bob. Excerpt: With the US AAA rating gone, how long can France hold its AAA rating? I suspect not long. So where will that leave the ECB attempting to put a circle around Italy? Will Germany have to backstop all of Europe? Those are the new key questions and notice how the key question list keeps growing larger in size and significance.

Fast and Furious Official No Longer Going to Mexico as Attaché; Mexican Govt. Asks for Transcripts of His Testimony
Excerpt: William Newell, who headed ATF’s Phoenix Division during the controversial operation dubbed Fast and Furious, won’t be going to Mexico as ATF’s attaché after all.
The agency has decided to nix that assignment before he even heads south. Instead, he’s been named special assistant to the ATF Assistant Director for the Office of Management in Washington. The reassignment comes at a time the Mexican Justice Department known as the PGR is reportedly conducting a criminal probe into the Fast and Furious Operation. It has also requested transcripts of Newell’s recent testimony before the House Committee on Oversight and Government Reform, according to two people familiar with the situation.

I have yet to see any problem, however complicated, which, when you looked at it in the right way, did not become still more complicated. – Poul Anderson

Mexican villagers attack alleged crooks, killing 6
Excerpt: Dozens of armed villagers surrounded the home of a suspected crime gang in southern Mexico, setting off a gunbattle that killed a child, a woman and four men, authorities said Saturday. The confrontation took place after a town assembly decided to arm 90 villagers and send them to threaten the group allegedly behind cattle thefts, rapes and murders, Oaxaca state's public security chief said in a statement. The people in the house responded by opening fire first, security chief Marco Tulio Lopez said. "When the suspected thieves saw the (villagers), the criminals shot at them, and the people responded because they were armed," he added. (Seems to work in Mexico. The victims don’t want to hear about the tough upbringing of the perps and that they were misunderstood, underserved, and disadvantaged and their classrooms were too large. They just killed them. End of problem! –TC)

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