Politics, Religion, Science, Culture and Humanities / Politics & Religion / A great Obama speech!
on: June 24, 2010, 12:48:12 AM
The President: Good evening. As we speak, our nation faces a multitude of challenges. At home, our top priority is to recover and rebuild from a recession. Abroad, our brave men and women in uniform are taking the fight to al Qaeda wherever it exists. Tonight, I want to speak with you about a battle we're waging against an enemy that is assaulting the very homes our citizens live in.
In September 2008, Fannie Mae and Freddie Mac imploded when their losses became unsustainable. In part because so many of our financial institutions relied on mortgage-backed securities based on bad loans, a housing crisis exploded into a financial crisis. And Americans continue to suffer from the effects. Unlike a hurricane or oil spill, where the damage is obvious to the eye, the damage wrought by Fannie and Freddie is much more insidious. As president, I have many smart people in my administration. But you do not need a Nobel Prize to know the problem here.
Fannie and Freddie bought mortgages offered by banks, which it then resold as mortgaged-backed securities. Banks liked this, because it meant more money to lend. In the name of enabling ever more Americans to own their homes, and encouraged by Congress, Fannie and Freddie expanded into ever more risky mortgages. In the end, these two companies helped send billions in loans to Americans who lacked the means to pay them back—while spreading risk throughout our financial system.
"I have met with moms and dads who bought modest houses that were within their means—and now find their tax dollars going to bail out neighbors who bought bigger houses not within their means."
.Think of these bad loans as a nasty leak polluting our financial system. While most other large financial firms either have failed or are now recovering, the damage caused by Fannie and Freddie continues largely unabated. The Congressional Budget Office says that plugging these bad loans has already cost taxpayers $145.9 billion, making them the single largest bailout of all.
Make no mistake: We will fight Fannie and Freddie with everything we have got for as long as it takes. We will make these two government-created companies pay for the damage they have caused. In fact, we are going to make Fannie and Freddie pay with their lives. Tonight I'd like to lay out our battle plan going forward:
First, the cleanup. For more than three decades there's been a culture of corruption in the regulatory oversight of these companies. I inherited a situation in which these firms lobbied and captured their regulators. Fannie and Freddie's privileged place in the market was sustained because they were a source of riches for Washington's Republican and Democratic establishments. Even today we see this oily alliance at work in the recent decision by Congress to exempt Fannie and Freddie from their financial reform bill.
Tonight I promise you: We will do whatever it takes, for as long as it takes, to change this.
One of the lessons we've learned from Fannie and Freddie is that you cannot combine private profit with taxpayers bearing risk. For decades we've propped up Fannie and Freddie's near monopoly. And for decades we have failed to face up to the fact that homeownership is not the best path for everyone. Time and again, reform has been blocked by former congressmen of both parties whom these companies hired to spread the money around and persuade Congress to back off.
So the second thing I will do is meet with the chairmen of Fannie Mae and Freddie Mac. And I will tell them the day of reckoning has come. We are going to break up Fannie and Freddie and end the privileges they enjoy from the government.
.You know, for generations, Americans have scrimped and saved to provide a better life for their families. That is now in jeopardy. I have met with moms and dads who bought modest houses that were within their means—and now find their tax dollars going to bail out neighbors who bought bigger houses not within their means. I have stood with retirees whose pensions have been devastated. And I have sat in the living rooms of families who now face foreclosure on homes they were falsely assured they could afford.
The sadness and the anger they feel is not just about the money they've lost. It's about a wrenching anxiety that their way of life may be lost. I am a prayerful man. But I do not believe that the American people should have to pray that their own government isn't undermining their homes, their savings, and the lives they have built for their families.
The financial crisis was not caused by Fannie and Freddie alone. But fixing them is essential. To this important task, we bring hope, which comes from the confidence that free men and women in a free economy will in the end make better decisions than any government. And tonight we revive that hope by delivering change to two of the fattest cats Washington has ever known.
Thank you, and may God bless America.
Write to MainStreet@wsj.com
Politics, Religion, Science, Culture and Humanities / Politics & Religion / WSJ: Taranto
on: June 24, 2010, 12:42:55 AM
By JAMES TARANTO
"South Carolina Republicans Buck Biases in Runoff Election," reads a Los Angeles Times headline over an Associated Press dispatch:
In a break from the state's racist legacy, South Carolina Republicans overwhelmingly chose Nikki Haley, an Indian American woman, to run for governor and convincingly nominated Tim Scott, who could become the former Confederate stronghold's first black GOP congressman in more than a century.
Six-term Republican Rep. Bob Inglis lost to prosecutor Trey Gowdy, making him the fifth House or Senate incumbent to stumble this year.
There's actually nothing in the story to justify the Times headline writer's claim that Palmetto State Republicans had "biases" to "buck" in order to nominate Haley and Scott, but unbucked biases are not exactly uncommon on major newspaper staffs.
The AP's characterization of the results as "a break from the state's racist legacy" is fair enough. As Commentary's John Steele Gordon points out, the First District, which Scott is almost certain to represent (John McCain outpolled Barack Obama there, 56% to 42%), includes Charleston, which "was the cradle of the Confederacy . . . where Confederate troops fired on Fort Sumter in April 1861."
South Carolina also gave us Strom Thurmond, the 1948 "Dixiecrat" segregationist candidate for president and later a long-serving U.S. senator--and the father of the man Tim Scott beat in yesterday's runoff. It wasn't even close: Scott won with more than 68% of the vote, to just under 32% for Paul Thurmond. (In fairness to the Thurmonds, it should be noted that by the 1980s Sen. Thurmond was supporting civil-rights legislation and that Paul was born in 1976, long after Thurmond père's segregationist heyday. Paul Thurmond is 34; his father, who died in 2003, would be 107.)
Nikki Haley (née Nimrata Nikki Kaur Randhawa) was expected to win easily, having fallen barely 1% short of a majority in the initial voting two weeks ago. The runoff gave her 65% to Rep. Gresham Barrett's 35%. She is favored in November, and victory would make her the second Indian-American governor, after Louisiana's Bobby (né Piyush) Jindal.
Perhaps significantly, both Haley and Jindal are converts to Christianity; she was raised Sikh and he Hindu. So while the South Carolina results refute the notion that Southerners or Republicans are racially or ethnically bigoted, they do not speak to the question of whether the electorate is open to candidates with unusual religious affiliations--although when one Republican state senator denounced Haley as a "raghead" (an invidious reference to the Sikh turban, which she does not wear) it does not seem to have influenced many voters.
Scott and Haley are both favorites of the tea-party movement, rendering sillier than ever liberal Democrats' insistence that the movement is racist. As Wayne Washington of the State, a newspaper based in South Carolina's capital, wrote in May:
In addition to increasing diversity among Republican officeholders, Haley's ascension would be a counterpoint to criticism of the Tea Party as fringe elements whose unacknowledged rallying point is anger that a black man, Barack Obama, serves as president.
Liberals might bash the Tea Party as home to nativists and racists. Confederate flags might fly at Tea Party rallies. But one of the Tea Party's darlings, an Asian-American female, would have become governor with the active and enthusiastic support of Tea Party activists.
"I think you have to wait and see if either one of the two [Haley and Scott] is elected," Carol Fowler, chairwoman of the S.C. Democratic Party, said of Scott and Haley. "Then, you'd have to see if a diverse group of voters voted for them."
The Palmetto State returns are also good news for Sarah Palin, who endorsed both Scott and Haley and who is turning out to be quite a GOP kingmaker. In electoral terms, the former governor of Alaska looks much more formidable today than the president of the United States--and if you don't believe us, ask Jon Corzine, Martha Coakley and Arlen Specter.
Politics, Religion, Science, Culture and Humanities / Politics & Religion / WSJ Editorial
on: June 24, 2010, 12:33:55 AM
President Obama explained his decision to dismiss General Stanley McChrystal yesterday by noting that he had a duty "to ensure that no diversion complicates the vital mission" that American forces are carrying out in Afghanistan. Fair enough. We don't begrudge the President's right to make that call, and no one is better qualified than General David Petraeus to replace his former deputy and run a counterinsurgency.
The larger questions now are whether the President can exert as much policy discipline over his civilian subordinates as he has on the military—and whether he's willing to make a political investment in the war commensurate with the military sacrifice.
Mr. Obama seemed to acknowledge the first point in his remarks yesterday, saying that he had warned his national security team that, when it comes to war strategy, "I won't tolerate division." We hope that message got through to Vice President Joe Biden, whose opposition to the strategy has been leaked around the world and back, and who was recently quoted by Newsweek's Jonathan Alter as saying that "in July 2011, you're going to see a whole lot of people moving out [of Afghanistan], bet on it."
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Gen. David Petraeus
.Defense Secretary Robert Gates flatly contradicted the Veep on Fox News Sunday, insisting "that absolutely has not been decided," and that the July 2011 date was only a "starting point" for withdrawal, contingent on local conditions.
The President ought to put this debate to rest, rather than trying to appease his liberal base by promising withdrawal while winking and nodding to our partners in Afghanistan that the deadline is effectively meaningless.
So far, his ambiguity has fueled the very infighting that led to General McChrystal's dismissal, persuaded our NATO partners to prepare their own exit strategies, and convinced Afghan President Hamid Karzai that he can't count on America's long-term support. The damage isn't merely the deadline but the sense projected by Mr. Biden that the U.S. will leave the Afghans in the lurch again, much as we did at the end of the Cold War.
A Critical Moment in Afghan War Effort
Obama Turns to Petraeus
Swift Decision to Dismiss McChrystal
New General Is a Politician
Vote: Do you agree with the decision? Photos: McChrystal's career
Photos: Who's in Charge? A History of Tension
Latest updates on Washington Wire
.In naming General Petraeus, the President made an astute political and military choice. But there is also a hint here of a last stand, with the General again being put in the unenviable position of having to turn the tide of a failing war. The General might have been too deferential to make this point himself, but we hope he asked the President in return to give him all the support he needs to succeed.
The President could help on this score by deploying a civilian team to Afghanistan that gets along with their U.S. military counterparts and Afghanistan's leaders. We like Senator John McCain's suggestion to replace U.S. Ambassador Karl Eikenberry—whose relationship with Mr. Karzai is as poisonous as his dealings were with General McChrystal—with former U.S. Ambassador to Iraq Ryan Crocker. Mr. Crocker, who also previously served as a highly effective U.S. ambassador to Pakistan, understands there is no diplomatic mileage to be gained by undercutting the very government the U.S. is seeking to shore up.
General Petraeus also needs a replacement at Central Command (his nominal superior) who won't undermine his efforts. That is precisely the situation General Petraeus faced when he served in Iraq under then-Centcom Commander William Fallon, until Admiral Fallon was pushed out. We're partial to General James Mattis, who previously ran the Marine component of Central Command, served tours in Iraq and Afghanistan, and helped write the Army's counterinsurgency manual with General Petraeus.
Above all, Mr. Obama has to give General Petraeus more political backing and personal attention to the war than he has so far provided. It's remarkable that it took the firing of General McChrystal to hear again from Mr. Obama, for the first time in months, why he is committed to the war. Mr. Obama said yesterday that no one individual is indispensable in war, but if any single person is, it is a President. Mr. Obama too often gives the impression of a leader asking, "Won't someone rid me of this damn war?"
In choosing to throw a Hail Mary pass to General Petraeus, the President has chosen a commander who understands counterinsurgency, who helped to design the current Afghan strategy, and who knows how to lead and motivate soldiers. He—and they—need a Commander in Chief willing to show equal commitment and staying power.
Politics, Religion, Science, Culture and Humanities / Politics & Religion / WSJ: PAS in Indonesia
on: June 24, 2010, 12:21:00 AM
By JAMES HOOKWAY
KUALA LUMPUR, Malaysia—A political party once bent on turning Malaysia into an Islamic state is for the first time preparing to put up non-Muslim candidates for election, in a bid to grab the political center in this divided country.
Some other Islamic-based political parties around the world have tried to make themselves more accessible to mainstream voters in recent years. Islam-based political parties in Indonesia have attempted to dig themselves a foothold in that country's young democracy. Turkey's Justice and Development Party has built a mass support-base that has twice elected Prime Minister Recep Tayyip Erdogan.
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Agence France-Presse/Getty Images
Malaysia is 40% non-Muslim, including Hindus, above, and Christians.
.Now, frustrated with Malaysia's entrenched race-based government and worried about the stability of its opposition partners as speculation grows that the government may call early elections, the Pan-Malaysian Islamic Party is reaching out to its non-Muslims, who make up around 40% of Malaysia's 28 million people.
It's a big change for the party, best known by its Malay acronym PAS. Many of its top leaders prefer long billowing robes and turbans to the western-style businesses suits favored by top government officials. The party's founding objective was to create an Islamic state in Malaysia, a major exporter and resources powerhouse that has long been regarded in the Muslim world as a home to a modern, moderate form of Islam.
As PAS softens its old, hard-line edges, some non-Muslims are taking notice.
Alex Ong, an investment banker for 20 years who now works for an organization helping migrant workers, set up PAS's non-Muslim "supporters' club" in 2004. The 51-year-old Baptist says the party represents Malaysia's best chance of breaking its race-based political system and eliminating graft from a country that's ranked worse than South Africa, Jordan and Uruguay by Berlin-based watchdog Transparency International.
"PAS is the most misunderstood political party in Malaysia," says Mr. Ong. He says the party's turban-wearing leaders aren't really focused on turning Malaysia into an Islamic state, and notes that the PAS hierarchy has no problem with him eating pork or drinking alcohol.
Instead, Mr. Ong says, "we want to encourage Islamic values to help strengthen the state and push for a moral renewal."
.Some PAS members, however, are cautious of alienating their predominantly ethnic Malay support base, and suggest overtures to non-Muslims could be easily reversed.
Many urban non-Muslim voters, too, are wary of PAS and its mostly rural roots, especially as the country has taken a steadily more Islamic direction in recent years. This year for the first time, three Muslim women were caned for engaging in extramarital sex, while the government is appealing a court ruling allowing Christians to use the word "Allah" as a translation for "God" in Malay-language publications.
But some political analysts say PAS's outreach to non-Muslims could help alter the political landscape in this ethnically diverse, resource-rich nation.
Since independence from Britain in 1957, Malaysia has been governed by the National Front, an amalgamation of ethnic Malay, Chinese and Indian-based parties whose affirmative-action policies have impeded economic growth in recent years, economists say, undermining Malaysia's role as a development model for the Muslim world.
A growing number of voters have turned to a PAS-backed opposition alliance, which broke the National Front's two-thirds majority in Parliament in 2008 for the first time in decades and has since won eight of 11 special elections. Prime Minister Najib Razak has to call a new election by the middle of 2013, but could choose to call it sooner.
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Alex Ong, founding secretary-general of the Pan-Malaysia Islamic Party's supporters club.JPG no credit
PAS supporter Alex Ong
.PAS's move to bring in non-Muslim candidates, announced at its annual conference on June 11, appears designed to expand the party's electability. To that end, its leaders discuss defeating corruption as frequently as they talk about strengthening traditional Muslim values. Nasaruddin Mat Isa, PAS's vice-president, says the party expects to field its first non-Muslim candidate "soon."
Some analysts say PAS has little choice but to aggressively expand its appeal. The country's main opposition leader, Anwar Ibrahim of the multiracial People's Justice Party, is on trial for the second time in a decade for allegedly sodomizing a male aide. Mr. Anwar denies doing anything wrong, saying the allegation is a conspiracy to derail his career. The trial could drag on for months, and a conviction will deprive Malaysia's fragile opposition alliance of its most charismatic leader and leave PAS positioned to fill the void by reaching into center ground occupied by Mr. Anwar. If PAS doesn't take the initiative, it risks leaving the National Front in power for years to come.
At the same time, Mr. Najib appears to be gaining in popularity among voters, and on June 10 made a play for more ethnic Chinese and Indian support by unveiling plans to strip away decades of affirmative-action policies that favor Malaysia's ethnic Malays, who are Muslim by law.
"PAS is trying to show non-Muslims that they can engage with them, and they are being quite bold in this," says Bridget Welsh, a political science professor and Malaysia expert at Singapore Management University. "There's no question PAS now has national aspirations."
Politics, Religion, Science, Culture and Humanities / Politics & Religion / WSJ
on: June 24, 2010, 12:15:17 AM
There's never a good time for an American administration to air its dirty laundry in public, but the departure of Gen. Stanley McChrystal amid a flurry of sniping and backbiting comes at a particularly inauspicious moment.
The Afghanistan war effort Gen. McChrystal had been leading—and the strategy he personally devised for it—are entering a crucial few months that may well determine their success or failure. Before being dismissed Wednesday for intemperate remarks about civilian officials, Gen. McChrystal had put in place what most analysts consider the most comprehensive plan of coordinated military action and economic development in eight years of warfare. The troops he persuaded President Barack Obama to dispatch to execute that plan are still arriving.
A rising number of insurgent leaders have been killed or detained recently, and, with U.S. help, the size of Afghan security forces has been ramped up about 30% in the last year, but in recent days, implementation of the strategy, as well as political support for it, have started to look considerably more shaky. A military push into the city of Marjah hasn't been the success hoped for, and a larger operation in the major city of Kandahar has been put off.
Afghan President Hamid Karzai, after briefly reassuring American officials of his reliability, has lately rekindled doubts by firing two cabinet ministers highly regarded in Washington. Allied support is fading; two allied nations plan to pull out next year, and only about a third of the Western military trainers once thought necessary to upgrade Afghanistan's security forces are on the job. American troops in the field have begun to openly question rules of engagement that require a high degree of caution in launching military attacks to avoid civilian casualties.
.All that raises questions about how secure Afghanistan will look when parliamentary elections, crucial to broadening the Afghan government's grip, are held in September. Soon after that, allies will reassess their commitment to the war. A bigger political test comes in December when Mr. Obama reviews progress on the ground in anticipation of a July 2011 start to an American drawdown.
Now the troubled war effort proceeds minus Gen. McChrystal, its main architect and the one commander President Karzai appears to really trust.
.During a video conference Tuesday night with Mr. Obama, the Afghan leader told the U.S. president that he had full confidence in Gen. McChrystal, said the Afghan president's spokesman, Waheed Omar. Firing him would disrupt the war effort at a critical moment, Mr. Karzai argued, with troops poised to begin a major effort to secure Kandahar and its Taliban-infested surroundings.
"The president believes that we are in a very sensitive juncture in the partnership, in the war on terror and in the process of bringing peace and stability to Afghanistan, and any gap in this process will not be helpful," the spokesman told reporters in Kabul.
The new commander Mr. Obama named, Gen. David Petraeus, shares Gen. McChrystal's philosophy of counter-insurgency operations, which stresses dispersing troops and civilian aid to secure selected areas and winning residents' loyalty through intense, on-the-ground cooperation with local leaders. Indeed, Gen. Petraeus essentially was the originator of the approach when he was head of American forces in Iraq.
Gen. Petraeus, currently commander of U.S. forces across the Middle East, has a much more solid relationship with President Obama and civilian leaders in the administration.
But he doesn't have Gen. McChrystal's knowledge of Afghanistan or the same trust of leaders there and in Pakistan, an important ally in the fight against the Taliban.
Anthony Cordesman, a veteran military analyst and sometime-adviser to Gen. McChrystal, offers this summary: "Is it winnable? Yes. Are we going to win? That's not a question anyone can answer. This is a war with so much uncertainty."
One immediate risk is that the military command team in Afghanistan could fracture. After arriving a year ago, Gen. McChrystal reshaped the allied command in his image, creating an unusual operation filled with handpicked loyalists.
Military headquarters and the U.S. embassy in Kabul have been filled in the past two days with talk that a departure of Gen. McChrystal could prompt an exodus of other top officers. Speculation Wednesday was that Gen. Petraeus would bring in his own aides.
Gen. McChrystal last fall sold President Obama on a counter-insurgency strategy that called for defeating the Afghan Taliban by sending troops to selected districts, ridding those of insurgents, and working with Afghan forces and international aid officials to hold the areas.
As important as the military effort was a push to use economic aid and Western development advice to build local governments that would win the hearts and minds of the locals.
But agreement on the plan came only after weeks of divisive administration debate. In giving Gen. McChrystal 30,000 of the 40,000 troops he sought to execute the strategy, Mr. Obama insisted on two conditions.
First, administration aides say, he told the general not to use the troops to take any cities or regions he wasn't confident they could then hold. And second, the president said there would be the December 2010 review of progress, and a decision in July 2011 about when and how to begin drawing down American troops.
The contingent of 30,000 additional troops isn't likely to be deployed in full before the end of September, coalition officials say. This means the coalition will be fighting at full strength only 10 months before the deadline for deciding on a drawdown plan—a timetable many military commanders see as severely handicapping their chances of rolling back the Taliban.
Military Fatalities in Afghanistan
.Troops Deployed in Afghanistan
..Meanwhile, progress on the ground is slower than Gen. McChrystal's team anticipated. That's especially clear in Marjah, where the general sent American forces to drive out the Taliban and establish a kind of showcase of counter-insurgency strategy.
Instead, after besting the Taliban in February and early March, Afghan and allied forces failed to set up a functioning government in Marjah quickly. The result has been a population that remains wary of the coalition forces and the Afghan authorities they back. That, in turn, has allowed the Taliban to make a resurgence, and Marjah today is contested turf.
.Track the deaths of U.S. and allied forces' troops in Afghanistan and Iraq.
.Violence is up nearly 100% this year across Afghanistan, according to internal figures from the North Atlantic Treaty Organization, whose countries provide the allied forces.
Some of that is due the increased number of soldiers; the more fighters brought in, the more fighting there will be, say coalition officials. But they also say it indicates the Taliban aren't backing down but looking to push back. June has been the deadliest month yet, by an Associated Press count, with 76 Western troops killed, including 46 Americans.
In Kandahar province, most troops for the surge have yet to arrive, and the military piece of the offensive has been delayed until September. For now, U.S. and Afghan officials are focusing on the softer parts of the campaign. They're mapping out how to build government offices in surrounding districts, boost the number of police in the city and set up fruit and other farming projects.
Sensing the need to show progress soon, senior military officers have begun to talk less of Marjah and Kandahar and more about a pair of districts in the southern province of Helmand, called Nawa and Garmsir, that were taken last summer in operations designed before Gen. McChrystal assumed command.
Meantime, a drive Gen. McChrystal implemented to minimize Afghan civilian casualties—a strategy based on the belief that a softer, gentler approach would dent the insurgency's appeal to the averge Afghan—has run into internal resistance.
.There is growing frustration among front-line troops, who blame spiking casualties on increasingly restrictive rules of engagement. Platoon and company commanders in the southern provinces of Kandahar and Helmand openly speak of having to fight with one hand tied behind their back.
Use of indirect fire such as mortars requires so many layers of approval that, by the time it's secured, the intended targets are often long gone. Helicopter gunships are usually not allowed to shoot if the pilots don't see their targets holding weapons—even if these men had been spotted firing at American infantry just seconds earlier.
The result, troops complain, is that the U.S. has surrendered much of its technological advantage over the Taliban, who can trump coalition forces in an equal fight because of superior knowledge of the terrain and ability to blend in with civilians.
For all the military uncertainty, the key to the war effort this summer may lie more in how well the civilian side of Gen. McChrystal's formula works out. Progress in establishing a coherent rule of law continues to be hampered by the low pay offered Afghan civil servants and judges, for example.
A sense of pervasive government corruption persists, and analysts fear that will continue to be the case until Western nations figure out how to write foreign-aid contracts that make sure money goes to projects and Afghan citizens instead of corrupt political figures.
One sign of how broad that problem remains: A new report from the Center for Strategic and International Studies estimates that up to 40% of all foreign aid "goes to corruption, security and overhead."
Write to Gerald F. Seib at firstname.lastname@example.org
and Matthew Rosenberg at email@example.com
Politics, Religion, Science, Culture and Humanities / Politics & Religion / The Collapse of the West
on: June 23, 2010, 10:14:09 AM
The collapse of the West, with Islam at the gate
Internecine civil wars are underway almost everywhere within the West, and most
virulently in the United States of America. They are not yet kinetic wars, but wars
of grinding prepositioning, the kind which lead to foregone conclusions without a
shot being fired. They are wars of survival, nonetheless, because the basic
architecture for national strength is being altered incrementally or dramatically.
And in many cases consciously.
Almost all of the strategic restructuring of states is occurring in large part as a
result of an accumulation of wealth; an accumulation and value of which is seen as
permanent. This has resulted in the hubris — expressed by those who did not earn it
— of triumph in the Cold War. This is a Western phenomenon because the widespread
growth of wealth, the creation of freedoms classically associated with democracy,
resulted — as it must inevitably result — in complacencies which in turn led to a
"vote too far": the extension of the democratic franchise to those who do not help
in the creation of wealth.
Once the voting franchise of the West reached the point where those who sought
benefits outweighed those who created benefits, the tipping point was reached. The
situation of de facto "class warfare" thus emerges automatically under such
circumstances, and the envy of those who take against those who provide erupts into
"rights" and "entitlement". By deifying "democracy" above justice, the enfranchised
non-producers could always outvote the producers. We are at this point. The result
can only be collapse, or restructuring around a Cæsar or a Bonaparte until,
eventually, a productive hierarchy reappears, usually after considerable pain.
Virtually every conscious step of the Administration of President Barack Obama and
the overwhelming Democratic Party majority in Congress has been to increase the size
and role of government in the economy and society, and to decrease, limit, and
control the position of private enterprise and capital formation. Given that this
progressively contracts and ultimately eliminates production, and reduces the
inherent asset base of the country — its raw materials and productive intellect — to
a null value, the tradable value of the U.S. currency will inevitably decline. We
cannot be swayed by the enormous wealth of the North American continent. Almost all
areas have an inherent wealth of some kind, but assets left idle in the ground or
infertile in the brain define countries which fail, or are not victorious in their
quest for unbridled sovereignty.
Thus, a decline in currency value is exacerbated, or accelerated, by the increasing
supply of money, inextricably depreciating its value, particularly at a time of
decreasing productivity in vital perishable and nonperishable output.
The U.S. Obama Administration has focused entirely on an agenda of expanding
government — the seizure of the envied (and often ephemeral) "wealth" of the
producers — without addressing the process of facilitating the production of
and goods. Even the USSR and the People's Republic of China, during their communist
periods, focused — albeit badly — on the production of goods and services, when they
realized that the "wealth" to be "redistributed" existed only as the result of
production and innovation. The U.S., meanwhile, heavily as a result of policies of
the former Clinton Administration, has "outsourced" production, and the State — that
is, the Government — cannot easily, in the U.S., become the producer.
President Obama has addressed the U.S.' economic crisis by expanding government, and
government-related, employment in nonproductive sectors, while at the same time
blaming and punishing the private sector for all of the U.S. ills. Empowered by the
extended franchise, this was the politics of envy now becoming enabled. Moreover,
the populist, short-term response to the major oil-spill in the Gulf of Mexico was
clearly geared toward (a) transforming a crisis into an opportunity to pursue a
green energy agenda by highlighting the evils of the fossil fuels on which the U.S.
remains dependent; (b) ensuring that the President was not blamed for the poor
crisis response; and (c) ensuring that the Democratic Party did not suffer from the
crisis in the November 2010 mid-term Congressional elections.
The result of all the Obama initiatives has been to expand government and reduce or
absolutely control and tax the private sector, even though, without the private
sector, the U.S. has no viable export or self-sustaining capability. The net effect
has been to mirror — and overtake — the situation in which, for example, Germany
found itself a decade ago: without the ability to retain capital investment or
attract new capital investment. And in order to restrain capital flight from the
U.S., the Obama Administration seeks to further control worldwide earnings of U.S.
corporations and citizens. For other reasons, the U.S., believing that it still
dominates the technology arena, has imposed greater and greater restrictions on
international exports of technology through its ITAR (International Traffic in Arms
Regulations) and the Foreign Corrupt Practices Act.
All of this conspires to limit investment in U.S. manufacturing and restrict foreign
interest in U.S. exports because the regulations are being enforced merely for
political punitive reasons. The U.S. is making itself increasingly unappealing to
foreign investors and has, as this writer has noted, made the appeal of the U.S.
dollar as the global reserve currency evaporate, saved, for the moment, only by the
lack of a ready alternative. That situation will change within a very few years.
Thus, the U.S. has, in the space of a couple of years: (i) so dramatically inflated
money supply that the value of the dollar
is only shored up by the lack of international alternative currencies to act as
reserve trading currencies; (ii) so dramatically inflated public debt, without
stimulating economic growth, that U.S. economic performance will continue to decline
on a national and a per capita basis while competitive economies, such as the PRC
and Russia, will grow, reducing strategic differentials; (iii) severely punished the
private sector, thereby reducing the opportunities and incentives for strategic
capital formation, and in particular punishing the industrial production and energy
sectors, almost ensuring major dislocation to the delivery of U.S. basic needs in
the near-term; and (iv) so blatantly reduced its strategic capabilities through all
of these actions and in its diplomatic and military posture as to guarantee a
reduction in U.S. strategic credibility. Concurrent with all of this is an
increasingly punitive taxation framework.
The near-term impact will include rising domestic energy prices, possibly even
before the November 2010 mid-term Congressional elections, which could result in the
Democratic Party losing its substantial majority in both Houses. Even on this
matter, Democratic Party ideologues have attempted to suggest that this is exactly
what the country needs: expensive energy in order to facilitate change to "green"
solutions. This defies the historical reality that preeminent powers must always
have vast energy surpluses and use.
So much damage has been done to the U.S. strategic posture in just two years
(although building on a base of inefficiencies which have been growing since the end
of the Cold War), in many respects equal to the 1917 Russian Revolution (but without
the bloodshed), that it is difficult to forecast whether — because of a changing
global environment — the U.S. can, within a decade or two, recover its strategic
authority and leadership. Domestically, the massively statist and interventionist
approaches of the Obama Administration have polarized the country, and the response
will be reactive rather than innovative, inducing a period of isolation and
nationalism, but with grave difficulty in rebuilding confidence from the
Artificial, wealth-induced complacency following the end of the Cold War led to fury
when economic collapse inevitably occurred in 2010, leading to draconian restraint
in public spending in many societies, but particularly Greece and Spain. It is said
that tourists are warned not to feed bears in Yellowstone National Park, in the
U.S., because the bears do not understand when the tourists have run out of food.
State-fed populations in Europe, the U.S., and Australia (see below) equally do not
understand when the free ride is over, and work must recommence.
Germany, France, and the United Kingdom have begun the arduous path back to
recovery, but the euro may, as a currency, have been irrevocably damaged, and the
European Union itself may have spent the term of its virility. Clearly, the
wealth-induced complacency, which had the compounding effect of allowing a decline
in a sense of national survival and national identity among the European Union (EU)
component states, has led now to a revived — but as yet unrealized — sense of
nationalism. This is beginning to lead to the recognition of the cohesive national
efficiency required for survival and competitiveness. It can be said that the EU
destroyed nationalism, without replacing it with any mechanism to create a new sense
of social cohesion, thus removing Europe's capability for economic competitiveness,
self defense, or ability to define a new culture (and identity) to replace the
national identities. Had the British Labour Party Government of outgoing Prime
Minister Gordon Brown persisted in office with his slavishly doctrinaire governance
— and demonstrably unworkable socialism, led by a privileged élite of Labour
mandarins wallowing at the trough — it is possible that an economic recovery
in the UK would have been problematic. It may still be problematic. And in this,
Brown was a prototype Obama, with his rank sense of entitlement. Even now, the
British political psyche is fractured along geographic lines, and, wealth-induced,
considers itself effectively "post-industrial", and therefore beyond the need for a
manufacturing (or even agricultural base). Thus, even though the UK is now far more
dependent on a maritime trade base than at any time in its history, it is incapable
of defending or projecting that maritime base; neither does it have the wherewithal
The Australian Government of Prime Minister Kevin Rudd has — like the Obama
Administration in the U.S. and the Brown Administration in the UK — demonstrated its
absolute lack of experience in management, economics, or real-life work skills. A
decision by Prime Minister Rudd to impose a new "super tax" of some 40 percent on
resource companies — miners, who produce most of Australia's export wealth —
suddenly highlighted the reality that the mining companies did not need to put their
investment into Australian projects.
It also highlighted the fact that foreign investors did not need to invest in
Australia, and that capital could move — as it always does — away from draconian tax
regimes. As Chilean Mines Minister Laurence Goldborne said in June 2010: "Just
because you have resources doesn't guarantee investment." This is something which
the governments of most African states know.
In Australia, the realization of the over-reaching greed — and envy-inspired
approach of of the proposed new tax laws — in turn led much of the ruling Australian
Labor Party (ALP) and the profoundly leftist Australian media to begin their drift
away from Rudd, leaving him with the prospect that he could either be abandoned as
party leader before the late-2010 general elections, or be faced with the prospect
of becoming Australia's first one-term Prime Minister. The question remains,
however, as to whether the markets will still be there when the ruin of trust in
Australian export and investment reliability is addressed by a future government.
The People's Republic of China (PRC), Australia's major export client state, and
Russia are now developing vast iron ore reserves on their mutual border, possibly —
in the near future — obviating the need for much of what Australia exports.
In the meantime, both Kevin Rudd and the opposition Liberal Party have essentially
embraced the move by Australia to see itself as a pseudo-post-industrial society,
gradually eroding the independent and innovative manufacturing sector which had been
a hallmark of Australian economic growth. A pseudo-post-industrial society is one
which believes that it can live solely on the intrinsic value of its currency,
without the necessity to sustain a balanced agricultural and industrial base to
preserve sovereign independence. A true post-industrial society — something thus far
a utopian dream — can produce all of its food and goods with a minute fraction of
its population, which would largely be left to address intellectual pursuits.
Australia, thus, faces a major challenge to its comfort, wealth, and security when
value perceptions, investment, and clients evaporate. We see, then, in the very
deliberate acts of envy and entitlement politics, the seeds of national collapse in
Australia, the U.S., and Western Europe.
Some of the Western powers have slumped before, and recovered. The United States has
yet to demonstrate this resilience. Other Western societies have slumped, and have
yet been protected by a strong regional system so that their societies could prosper
under foreign protection. The Netherlands, Spain, and Portugal, for example,
retained stable and individual prosperous societies and yet never recovered their
strategic leadership, relying, instead, on the power of their region for economic
and security protection. States which remain dependent on others for their
protection never fully regain their wealth and freedom.
States such as New Zealand depend on their greater neighbors for protection. But
wither New Zealand if Australia fails? Wither the Netherlands today if the European
Union fails? And wither the United States if its fortunes erode? Re-birth is, as
Britain has found through history, as did Rome, more arduous than that first, pure
flush of strategic victory.
The West is at its watershed, not because of a threat from a less-productive
society. The collapse of the West is not because Islam is at the gates. Islam is at
the gates because of the collapse of the West. http://www.worldtribune.com/worldtri...0560_06_22.asp
Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Russia-- Europe
on: June 22, 2010, 06:55:26 PM
GERMANY AND RUSSIA MOVE CLOSER
By George Friedman
German Foreign Minister Guido Westerwelle will brief French and Polish officials on
a joint proposal for Russian-European "cooperation on security," according to a
statement from Westerwelle's spokesman on Monday. The proposal emerged out of talks
between German Chancellor Angela Merkel and Russian President Dmitri Medvedev
earlier in June and is based on a draft Russia drew up in 2008. Russian Foreign
Minister Sergei Lavrov will be present at the meeting. Peschke said, "We want to
further elaborate and discuss it within the triangle [i.e., France, Germany and
Poland] in the presence of the Russian foreign minister."
On the surface, the proposal developed by Merkel and Medvedev appears primarily
structural. It raises security discussions about specific trouble spots to the
ministerial level rather than the ambassadorial level, with a committee being formed
consisting of EU foreign policy chief Catherine Ashton and Russia's foreign
All of this seems rather mild until we consider three things. First, proposals for
deepening the relationship between Russia and the European Union have been on the
table for several years without much progress. Second, the Germans have taken this
initiative at a time when German foreign policy is in a state of flux. And third,
the decision to take this deal to France and Poland indicates that the Germans are
extremely sensitive to the geopolitical issues involved, which are significant and
Reconsidering Basic Strategy
The economic crisis in Europe has caused the Germans, among others, to reconsider
their basic strategy. Ever since World War II, the Germans have pursued two national
imperatives. The first was to maintain close relations with the French -- along with
the rest of Europe -- to eliminate the threat of war. Germany had fought three wars
with France since 1870, and its primary goal was not fighting another one. Its
second goal was prosperity. Germany's memory of the Great Depression plus its desire
to avoid militarism made it obsessed with economic development and creating a
society focused on prosperity. It saw the creation of an integrated economic
structure in Europe as achieving both ends, tying Germany into an unbreakable
relationship with France and at the same time creating a trading bloc that would
Events since the financial crisis of 2008 have shaken German confidence in the
European Union as an instrument of prosperity, however. Until 2008, Europe had
undergone an extraordinary period of prosperity, in which West Germany could
simultaneously integrate with East Germany and maintain its long-term economic
growth. The European Union appeared to be a miraculous machine that automatically
generated prosperity and political stability alongside it.
After 2008, this perception changed, and the sense of insecurity accelerated with
the current crisis in Greece and among the Mediterranean members of the European
Union. The Germans found themselves underwriting what they regarded as Greek
profligacy to protect the euro and the European economy. This not only generated
significant opposition among the German public, it raised questions in the German
government. The purpose of the European Union was to ensure German prosperity. If
the future of Europe was Germany shoring up Europe -- in other words, transferring
wealth from Germany to Europe -- then the rationale for European integration became
The Germans were certainly not prepared to abandon European integration, which had
given Germany 65 years of peace. At the same time, the Germans were prepared to
consider adjustments to the framework in which Europe was operating, particular from
an economic standpoint. A Europe in which German prosperity is at risk from the
budgeting practices of Greece needed adjustment.
The Pull of Russia
In looking at their real economic interests, the Germans were inevitably drawn to
their relationship with Russia. Russia supplies Germany with nearly 40 percent of
the natural gas Germany uses. Without Russian energy, Germany's economy is in
trouble. At the same time, Russia needs technology and expertise to develop its
economy away from being simply an exporter of primary commodities. Moreover, the
Germans already have thousands of enterprises that have invested in Russia. Finally,
in the long run, Germany's population is declining below the level needed to
maintain its economy. It does not want to increase immigration into Germany because
of fears of social instability. Russia's population is also falling, but it still
has surplus population relative to its economic needs and will continue to have one
for quite a while. German investment in Russia allows Germany to get the labor it
needs without resorting to immigration by moving production facilities east to
The Germans have been developing economic relations with Russia since before the
Soviet collapse, but the Greek crisis forced them to reconsider their relationship
with Russia. If the European Union was becoming a trap in which Germany was going to
consistently subsidize the rest of Europe, and a self-contained economy is
impossible, then another strategy would be needed. This consisted of two parts. The
first was insisting on a restructuring of the European Union to protect Germany from
the domestic policies of other countries. Second, if Europe was heading toward a
long period of stagnation, then Germany, heavily dependent on exports and needing
labor, needed to find an additional partner -- if not a new one.
At the same time, a German-Russian alignment is a security issue as well as an
economic issue. Between 1871 and 1941 there was a three-player game in continental
Europe -- France, Germany and Russia. The three shifted alliances with each other,
with each shift increasing the chance of war. In 1871, Prussia was allied with
Russia when it attacked France. In 1914, The French and Russians were allied against
Germany. In 1940, Germany was allied with Russia when it attacked France. The
three-player game played itself out in various ways with a constant outcome: war.
The last thing Berlin wants is to return to that dynamic. Instead, its hope is to
integrate Russia into the European security system, or at least give it a sufficient
stake in the European economic system that Russia does not seek to challenge the
European security system. This immediately affects French relations with Russia. For
Paris, partnership with Germany is the foundation of France's security policy and
economy. If Germany moves into a close security and economic relationship with
Russia, France must calculate the effect this will have on France. There has never
been a time when a tripartite alliance of France, Germany and Russia has worked
because it has always left France as the junior partner. Therefore, it is vital for
the Germans to present this not as a three-way relationship but as the inclusion of
Russia into Europe, and to focus on security measures rather than economic measures.
Nevertheless, the Germans have to be enormously careful in managing their
relationship with France.
Even more delicate is the question of Poland. Poland is caught between Russia and
Germany. Its history has been that of division between these two countries or
conquest by one. This is a burning issue in the Polish psyche. A closer relationship
between Germany and Russia inevitably will generate primordial fears of disaster in
Therefore, Wednesday's meeting with the so-called triangular group is essential.
Both the French and the Poles, and the Poles with great intensity, must understand
what is happening. The issue is partly the extent to which this affects German
commitments to the European Union, and the other part -- crucial to Poland --is what
this does to Germany's NATO commitments.
The NATO Angle
It is noteworthy the Russians emphasized that what is happening poses no threat to
NATO. Russia is trying to calm not only Poland, but also the United States. The
problem, however, is this: If Germany and Europe have a security relationship that
requires prior consultation and cooperation, then Russia inevitably has a hand in
NATO. If the Russians oppose a NATO action, Germany and other European states will
be faced with a choice between Russia and NATO.
To put it more bluntly, if Germany enters into a cooperative security arrangement
with Russia (forgetting the rest of Europe for the moment), then how does it handle
its relationship with the United States when the Russians and Americans are at
loggerheads in countries like Georgia? The Germans and Russians both view the United
States as constantly and inconveniently pressuring them both to take risks in areas
where they feel they have no interest. NATO may not be functional in any real sense,
but U.S. pressure is ever-present. The Germans and Russians acting together would be
in a better position to deflect this pressure than standing alone.
Intriguingly, part of the German-Russian talks relate to a specific security matter
-- the issue of Moldova and Transdniestria. Moldova is a region between Romania and
Ukraine (which adjoins Russia and has re-entered the Russian sphere of influence)
that at various times has been part of both. It became independent after the
collapse of communism, but Moldova's eastern region, Transdniestria, broke away from
Moldova under Russian sponsorship. Following a change in government in 2009, Moldova
sees itself as pro-Western while Transdniestria is pro-Russian. The Russians have
supported Transdniestria's status as a breakaway area (and have troops stationed
there), while Moldova has insisted on its return.
The memorandum between Merkel and Medvedev specifically pointed to the impact a
joint security relationship might have on this dispute. The kind of solution that
may be considered is unclear, but if the issue goes forward, the outcome will give
the first indication of what a German-Russian security relationship will look like.
The Poles will be particularly interested, as any effort in Moldova will
automatically impact both Romania and Ukraine -- two states key to determining
Russian strength in the region. Whatever way the solution tilts will define the
power relationship among the three.
It should be remembered that the Germans are proposing a Russian security
relationship with Europe, not a Russian security relationship with Germany alone. At
the same time, it should be remembered that it is the Germans taking the initiative
to open the talks by unilaterally negotiating with the Russians and taking their
agreements to other European countries. It is also important to note that they have
not taken this to all the European countries but to France and Poland first -- with
French President Nicolas Sarkozy voicing his initial approval on June 19 -- and
equally important, that they have not publicly brought it to the United States. Nor
is it clear what the Germans might do if the French and Poles reject the
relationship, which is not inconceivable.
The Germans do not want to lose the European concept. At the same time, they are
trying to redefine it more to their advantage. From the German point of view,
bringing Russia into the relationship would help achieve this. But the Germans still
have to explain what their relationship is with the rest of Europe, particularly
their financial obligation to troubled economies in the eurozone. They also have to
define their relationship to NATO, and more important, to the United States.
Like any country, Germany can have many things, but it can't have everything. The
idea that it will meld the European Union, NATO and Russia into one system of
relationships without alienating at least some of their partners -- some intensely
-- is naive. The Germans are not naive. They know that the Poles will be terrified
and the French uneasy. The southern Europeans will feel increasingly abandoned as
Germany focuses on the North European Plain. And the United States, watching Germany
and Russia draw closer, will be seeing an alliance of enormous weight developing
that might threaten its global interests.
With this proposal, the Germans are looking to change the game significantly. They
are moving slowly and with plenty of room for retreat, but they are moving. It will
be interesting to hear what the Poles and French say on Wednesday. Their public
support should not be taken for anything more than not wanting to alienate the
Germans or Russians until they have talked to the Americans. It will also be
interesting to see what the Obama administration has to say about this.
This report may be forwarded or republished on your website with attribution towww.stratfor.com
Copyright 2010 Stratfor.
Politics, Religion, Science, Culture and Humanities / Politics & Religion / Setting up observation posts
on: June 22, 2010, 06:27:43 PM
Mexican Gangs Maintain Permanent Lookout Bases in Hills of Arizona
By Adam Housley
Published June 22, 2010
Mexican drug cartels have set up shop on American soil, maintaining lookout bases in strategic locations in the hills of southern Arizona from which their scouts can monitor every move made by law enforcement officials, federal agents tell Fox News.
The scouts are supplied by drivers who bring them food, water, batteries for radios -- all the items they need to stay in the wilderness for a long time.
Click here for more on this story from Adam Housley.
“To say that this area is out of control is an understatement," said an agent who patrols the area and asked not to be named. "We (federal border agents), as well as the Pima County Sheriff Office and the Bureau of Land Management, can attest to that.”
Much of the drug traffic originates in the Menagers Dam area, the Vekol Valley, Stanfield and around the Tohono O’odham Indian Reservation. It even follows a natural gas pipeline that runs from Mexico into Arizona.
In these areas, which are south and west of Tucson, sources said there are “cartel scouts galore” watching the movements of federal, state and local law enforcement, from the border all the way up to Interstate 8.
“Every night we’re getting beaten like a pinata at a birthday party by drug, alien smugglers," a second federal agent told Fox News by e-mail. "The danger is out there, with all the weapons being found coming northbound…. someone needs to know about this!”
The agents blame part of their plight on new policies from Washington, claiming it has put a majority of the U.S. agents on the border itself. One agent compared it to a short-yardage defense in football, explaining that once the smugglers and drug-runners break through the front line, they're home free.
“We are unable to work any traffic, because they have us forward deployed," the agent said. "We are unable to work the traffic coming out of the mountains. That traffic usually carries weapons and dope, too, again always using stolen vehicles.”
The Department of Homeland Security denies it has ordered any major change in operations or any sort of change in forward deployment.
“The Department of Homeland Security has dedicated unprecedented manpower, technology and infrastructure resources to the Southwest border over the course of the past 16 months," DHS spokesman Matt Chandler said. "Deployment of CBP/Border Patrol and ICE personnel to various locations throughout the Southwest border is based on actionable intelligence and operational need, not which elected official can yell the loudest.”
While agents in the area agree that southwest Arizona has been a trouble spot for more than a decade, many believe Washington and politicians “who come here for one-day visit” aren’t seeing the big picture.
They say the area has never been controlled and has suddenly gotten worse, with the cartels maintaining a strong presence on U.S. soil. More than ever, agents on the front lines are wearing tactical gear, including helmets, to protect themselves.
“More than 4,000 of these agents are deployed in Arizona," Chandler says. "The strategy to secure our nation’s borders is based on a 'defense in depth' philosophy, including the use of interior checkpoints, like the one on FR 85 outside Ajo, to interdict threats attempting to move from the border into the interior of our nation.”
Without placing direct fault on anyone, multiple agents told Fox that the situation is more dangerous for them than ever now that the cartels have such a strong position on the American side of the border.
They say morale is down among many who patrol the desolate area, and they worry that the situation won't change until an agent gets killed.
Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Iran
on: June 20, 2010, 07:28:23 AM
IRAN'S NEXT MOVE
A senior Iranian official Thursday warned that Tehran would not tolerate the
inspection of vessels belonging to the Islamic republic in open seas under the
pretext of implementing the latest round of sanctions imposed on Iran by the U.N.
Security Council (UNSC). Kazem Jalali, rapporteur of Parliament's Foreign Policy and
National Security Committee, said one such response would be Iranian countermeasures
in the strategic Strait of Hormuz. This statement from the lawmaker is the latest in
a series of similar statements from senior Iranian civil and military officials in
Iran making good on this threat hinges on a number of prerequisites. First, a
country must actually move to exercise the option of boarding an Iranian ship. If
that were to happen, the question then would be: Will Iran actually go as far as
retaliating in the Strait of Hormuz? After all, such an action carries the huge risk
of a countermove from the United States, which cannot allow Iran to tamper with the
free flow of oil through the strait.
At this point, it is unclear how Tehran will respond to one of its ships being
searched. What is certain is that this latest round of sanctions has created a
crisis for the Iranian leadership both on the foreign policy front and domestically,
where an intra-elite struggle has been publicly playing out for a year. Our readers
will recall that STRATFOR's view prior to the June 9 approval of the sanctions was
that the United States was not in a position to impose sanctions with enough teeth
to force Iran to change its behavior.
That view still stands because the latest round of sanctions are not strong enough
to trigger a capitulation on the part of the Iranians. But they have enough bite to
prevent Iran from doing business as usual, especially with the European Union and
the United States piling on additional unilateral sanctions. Perhaps the most
significant development is the Russian alignment with the United States, which made
the fourth round of sanctions possible.
"The latest round of sanctions has created a crisis for the Iranian leadership both
domestically and on the foreign policy front."
Russia is no longer protecting Iran in the UNSC. Furthermore, imposing sanctions on
Iran after it signed a uranium swap deal has been a major loss for Tehran. It has
created a very embarrassing situation for Iranian President Mahmoud Ahmadinejad at
home, where he has no shortage of opponents -- even among his own ultraconservative
camp. The U.S. move to allow the May 17 Turkish-Brazilian-Iranian uranium swap
agreement to go through, followed quickly by a move toward sanctions suggests that
Washington tried to exploit the intra-elite rift to its advantage and undermine the
position of relative strength that Tehran had been enjoying up to that point. The
U.S. move has not only exacerbated tensions between the warring factions in the
Iranian political establishment, it has also forced Iranian foreign policy
decision-makers to go back to the drawing board and re-evaluate Iran's strategy
vis-a-vis the United States.
Despite saying earlier this week that his country is ready to negotiate, there is no
way Ahmadinejad can come to the negotiating table just as the United States has
gained an upper hand in the bargaining process. He cannot be seen as caving in to
the pressure of the American-led UNSC sanctions. As it is, the Iranian president has
to deal with the domestic uproar that he is leading the Islamic republic to ruin,
which makes efforts to regain his position among the warring factions and formulate
a response to get the Islamic republic back in the driver's seat even more
While it has a number of cards to play, (e.g., Iraq, Lebanon, and Afghanistan),
precisely how Iran will respond remains as opaque as the infighting within the
regime. But the next move has to come from Iran. This new situation has led STRATFOR
to engage in its own process of reassessing the situation on the Iranian domestic
and foreign policy fronts.
Copyright 2010 Stratfor.
Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Afghanistan-Pakistan
on: June 18, 2010, 08:49:26 PM
We need to get seriously outside the box.
The following is offered in a brainstorming way only-- there may be some serious flaws in it, but at the moment it is what occurs to me.
a) I would consider ignoring the Darcy line and cut a deal with the Pashtuns to give them a Pashtunistan in return for giving up the AQ in their territory. This would freak the Paks and I would green light the Indians while taking out Pak's nuke program.
b) I would consider fg with the Russians and freeing the Germans from dependance on Russki gas AND provide an alternate source of money for the rest of Afg by building/threaten/offer to build a natural gas pipeline for central Asian gas through Pashtunistan and the remains of Pakistan to the Indian Ocean that gives it access to the market other than Russia. Without this gas, Russia will not be able to export to and control Europe, especially Germany and Afgans, Pashtuns, and Paks have an alternate source to making money.
Again, these ideas may be crazy, but maybe there is some value to extract.
Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Immigration issues
on: June 18, 2010, 11:26:37 AM
Excellent post CCP. That seems sound to me!
BD, you further the conversation with your distinction of methods of interpretation. If I may paraphrase, we have the strict/plain meaning of the words of the Constitution (or a statute) and we have legislative intent as discerned from the legislative history. Although you describe well the limitations and challenges in discerning legislative intent, ultimately I am not persuaded by your argument. As is the case with any legislation we simply do our best to discern the intent of those making the law. A committee report gets more weight than an isolated congressman flapping his gums. James Madison gets more weight than some back bencher at a State convention. Given the role of the two Senators cited by GM, it seems to by that be standard legal analysis, their words, particularly in the absence of words/writing to contrary meaning, should be given considerable weight.
Politics, Religion, Science, Culture and Humanities / Politics & Religion / Ralph Peters
on: June 15, 2010, 04:07:04 PM
The trillion-dollar Afghan battlefield
By RALPH PETERS
Posted: 12:10 AM, June 15, 2010
Afghanistan just got its worst news since the Soviet invasion three decades ago: American geologists have charted as much as a trillion dollars' worth of mineral deposits in that tormented landscape.
Up to now, Afghanistan's internal factions and neighbors have been fighting over worthless dirt, Allah and opium. Assigning the battlefield a trillion-dollar value is not a prescription for reconciliation. Expect "The Beverly Hillbillies" scripted by Satan.
Even were Afghanistan at peace, its endemic corruption would generate a grabocracy -- a Nigeria, not a Norway. Throw in inherited hatreds and the appetites of its neighbors, and Afghanistan may end up more like eastern Congo, a playground for state-sanctioned murderers and looters.
Beyond reportedly vast deposits of rare minerals (lithium, etc.) essential to popular technologies, there's copper, cobalt, iron and gold in them thar hills. Afghanistan never before offered so much to fight over.
Instead of making life easier for our troops, the finds will make it harder to disengage. Washington will succumb to arguments that we need to preserve access to these strategic resources, even though it's far cheaper to buy them than to prolong a military protectorate. (US firms won't get the good contracts, anyway.)
We already provide strategic security for Chinese mining interests in Afghanistan -- having been chumped by the Karzai government out of the gate. Now the Chinese will arrive in hordes, bribing and smiling.
The Russians will also take a renewed interest. And the Iranians have already crept into western Afghanistan (where key deposits are located). The potential for violence spilling across more borders -- including into unstable Central Asia -- will be enormous.
But the gravest danger of an all-out shootin' war comes from Pakistan and India. Until the revelation of these finds, Islamabad (which continues to support the Afghan Taliban) just wanted strategic depth in the event of a war with New Delhi, while India had engaged in Afganistan just to frustrate Pakistan.
Now Pakistan, a country in which the powerful have already stolen all there is to steal, will develop delusions of grandeur about controlling Afghanistan's subsurface wealth. And India's swelling economy will develop a sudden hunger for Afghan minerals.
China will side with Pakistan, exploiting Islamabad as a proxy. Iran may line up with China and Pakistan, as well. Pakistan will turn up the heat in Kashmir. The "Great Game" of yore is about to become Monopoly played with corpses.
Afghanistan's one hope was that, eventually, outsiders would leave it alone. That hope's gone now. Development of a full-blown mining industry will take decades, but that just means decades of violent competition.
Back in the happy-face United States, optimists insist that these Afghan finds will fund good government, security and development. Ain't gonna happen. A country living on aid and opium won't go Harvard Business School when megawealth floods in (the opium trade won't disappear, either). And the environmental damage will put BP to shame.
Meanwhile, we can't manage the war we've got. The CIA, at least, keeps killing al Qaeda terrorists across the border in Pakistan. But our troops, in the words of one fighter on the ground, just "patrol, patrol and patrol, making themselves IED magnets."
Afghan National Army training is showing progress, but President Hamid Karzai just dumped his two most pro-American ministers, and our ballyhooed Kandahar offensive -- delayed yet again -- has begun to seem like "Brigadoon" with body armor.
It's high time to ask ourselves the basic question about Afghanistan that we've avoided since we made the decision to stay: What do we get out of it?
"Chinese access to strategic minerals" is not an adequate answer.
Politics, Religion, Science, Culture and Humanities / Politics & Religion / Stratfor: Why now?
on: June 15, 2010, 02:34:21 PM
U.S. Geological Survey
Workers taking part in a 2006 U.S. Geological Survey mission in AfghanistanSummary
In a June 13 story, The New York Times revived interest in Afghanistan’s potential mineral wealth, which has long been suspected. The country’s mountainous terrain indicates the likelihood of such deposits, and in 2007 the U.S. Geological Survey published a study reporting much of what is being said in the media today. But the challenges of extracting the minerals and bringing them to market in an economical and competitive way remain extraordinarily daunting.
The potential for mineral extraction in Afghanistan has generated immense press in the last few days, following a June 13 New York Times story on an estimated $1 trillion in mineral deposits believed to exist in the country and a June 12 statement by U.S. Central Command chief Gen. David Petraeus characterizing Afghanistan (with caveats, of course) as having “stunning potential” economically.
Yet much of what is being discussed dates back to two studies done in 2006-07 by the U.S. Geological Survey in conjunction with the U.S. Agency for International Development and Afghan geologists. The results of these studies were published in 2007 by the U.S. government, and their findings have now reportedly been verified by a small, Pentagon-led team, which will release its report at a conference in Kabul scheduled for July 20, according to a spokesperson for the French Foreign Ministry. There also is increasing talk of lithium deposits in particular, one of the reasons behind the current coverage. Statements regarding Afghanistan’s potential mineral wealth have been made in the recent past, with Afghan President Hamid Karzai using the $1 trillion figure at least as early as February of this year and Petraeus using it when discussing the matter in December 2009.
U.S. Geological Survey
A map from the 2006 U.S. Geological Survey mission in Afghanistan, including GPS and magnetic base station locations
(click here to enlarge image)
The China Metallurgical Group has already committed $3 billion up front and $400 million thereafter to secure the rights to the Aynak copper mining district in Logar province. Verification drillings were done last year, and a temporary camp is now being prepared, though a massive railway, power plant and smelting facility remain to be built. The Hajigak iron-ore deposit also was examined in an area about 100 kilometers west of Kabul, in Bamyan province, but the Chinese pulled out of the bidding, which was later canceled following a corruption scandal involving the Chinese company and the Afghan Ministry of Mines during the Aynak bidding process. The Chinese experience shows that what little progress is being made in terms of foreign investment in Afghan mining projects is already slowed by problems relating to poor infrastructure, awkward logistics, security threats, and corrupt or opaque negotiations.
The potential presence of large mineral deposits in Afghanistan has never been in doubt — the country’s mountainous terrain indicates the likelihood of such deposits. The challenge is extracting the minerals and bringing them to market in an economical and competitive way, and this challenge remains extraordinarily daunting. Afghanistan is an underdeveloped country with extremely poor infrastructure, including no rail connection to the outside world (though one is under construction to Masar-i-Sharif in the north). Though the nature of a mineral deposit and the economics of its exploitation can vary considerably — even within a single country — pulling ore out of the ground and moving it a great distance is a logistically intensive proposition, even with relatively developed road and rail networks.
Technically, developing sufficient infrastructure in Afghanistan is possible, but the cost of doing so is almost certain to drive the costs of mineral investment, extraction and transportation far above what can be recouped on the global market.
STRATFOR has been focusing and continues to focus on how these reports came about just in the past week. There is clearly a media blitz now under way, and it is important to understand why. Over the next few years there will be little meaningful impact on the ground in Afghanistan in terms of investing in and developing the country’s minerals. The key question at this point is how Washington will play this mineral-wealth story to serve its interests in the region, especially as the United States struggles to break a stalemate in southwestern Afghanistan and force the Taliban to the negotiating table. But local mistrust of U.S. intentions may counter any potential benefit of playing up Afghanistan’s economic potential.
Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Israel, and its neighbors
on: June 14, 2010, 11:20:23 AM
"726,000 Palestinians left Israeli-controlled territory between 1947 and 1949." Crafty, do you think nearly three quarters of a million people wanted to leave their home voluntarily?"
Mostly they left because they were told to get out of the way while the Jews were being wiped out.
"As for the question, "How do christians and jews and other minorities get treated in the muslim world? Better or worse than what Israel does?"
The answer is probably worse, but is that relevant? I mean to what standard should Israel be held? To the lowest or highest? For us
to say that we treated blacks in America better than some other countries, or for South African whites to say they treated blacks in South Africa better than most does not make it right. Israel is a democracy, a thriving, modern, educated country; they are held to a higher moral standard than some backward Middle Eastern or African country or two bit dictatorship. I like to think in most of the industrialized educated world, before the law, people should be treated equally."
Forgive me, but this is specious drivel. The hatred of the Jews in this part of the world has been going on a long, long time and well pre-dates the existence of Israel itself. In this context Israel's achievements in protection of rights under law is nothing less than remarkable. In the context of http://www.youtube.com/watch?v=WmnpMXOpaM4&NR
what you seek is Israel's suicide.
I'm signing off from responding to you on this.
Politics, Religion, Science, Culture and Humanities / Politics & Religion / WSJ
on: June 14, 2010, 08:23:04 AM
For 97 years the 12 regional banks of the Federal Reserve system have operated relatively free of political interference from Washington. The looming financial reform bill threatens that independence, not least through an effort to impose new presidential appointees at the regional banks.
The biggest underreported threat comes from Subtitle I, Section 1801 of the House financial reform bill titled "Inclusion of Minorities and Women; Diversity in Agency Workforce." Sponsored by California Democrat Maxine Waters, the provision requires each federal financial agency, the Fed Board of Governors and the 12 regional Fed banks to "establish an Office of Minority and Women Inclusion."
So what else is new, you say? Don't the feds already dictate racial and gender hiring? Yes, they do, through the Equal Employment Opportunity Commission and assorted other federal laws. As a matter of racial and gender diversity, the Waters provision is at best redundant.
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.But Ms. Waters and the House are hunting bigger game—to wit, the political allocation of credit. They want to put a network of operatives at the highest level of government who are responsible for making sure that regulators put the hiring of, and lending to, minorities at the top of their priority list. The House provision makes that very clear by making each diversity officer a Presidential appointee who must be confirmed by the Senate. The post, says the bill, will be "comparable to that of other senior level staff."
The law says this diversity czar will "ensure equal employment opportunity and the racial, ethnic and gender diversity" of the work force and senior management of these institutions. More ominously, this creature of Congress and the White House will also be charged with "increas[ing] the participation of minority-owned and women-owned businesses in the programs and contracts" of each agency and conducting "an assessment" of stated inclusion goals.
Mull over that one for a minute. Having recently lived through a financial mania and panic caused in part by political pressure for "affordable housing," Congress will now order regulators to allocate credit by race and gender. Isn't the point of this financial reform supposed to be to make regulators better judges of systemic risks, which means focusing on financial safety and soundness? If the Waters provision passes, federal regulators will have to put racial and gender lending at the top of their watch list when they do their checks on the banks and hedge funds they are regulating.
This is especially pernicious at the Fed regional banks, which have long operated independently of political intrusion. Federal Reserve bank presidents aren't appointed by the President precisely to avoid Treasury and White House control. They are appointed by their regional bank boards.
However, in another threat to Fed independence, the Senate bill departs from that tradition by making the president of the New York Fed a Presidential appointee. Blame for this Congressional intrusion goes to Treasury Secretary Tim Geithner and former Goldman Sachs executive Stephen Friedman for orchestrating the selection of former Goldman economist William Dudley as Mr. Geithner's replacement at the New York Fed.
Mr. Friedman chaired the search committee to replace Mr. Geithner even as he increased his ownership of Goldman shares. Though this violated Fed rules, Fed Vice Chairman Donald Kohn and the Board of Governors gave Mr. Friedman a conflict-of-interest waiver. Congress has now seized on this to justify putting the New York Fed chief on a Washington political leash.
The Waters provision will also give Congress and the White House a new and powerful lever to influence the operation of the 12 regional Fed banks. Accusations of racial or gender indifference, much less outright bias, are politically deadly. With the threat of such an accusation in their holster, the Waters czars will have enormous clout to influence Fed governance and regulatory decisions, perhaps including monetary policy.
Fed regional presidents are often the main proponents of tight monetary policy. The presence of a diversity czar is one way Congress and the White House can intimidate these regional presidents to go along with the policies they favor. No Fed bank president will want to take the risk of being hauled before Congress to answer a report that the banks under his jurisdiction aren't racially or gender sensitive enough in their lending.
This political sway is already clear from how meekly the Fed as an institution is bowing to the Waters provision. The Senate bill doesn't have the same provision, so it could be removed in the House-Senate conference that begins this week. But we're told that Fed officials in Washington have told the regional banks to keep quiet because it can't be stopped and Ms. Waters and the House might punish them if they try. In other words, the political intimidation is already obvious even before the provision becomes law.
The public debate over Fed independence has focused on Congressional demands for an audit, but that's benign compared to the threat of political appointees sitting on the senior staff of the regional banks and Board of Governors. While masquerading as reform, the Waters and New York Fed provisions are the most brazen attempt to hijack central bank policy since its founding nearly a century ago.
The law will make it harder for regulators to do what ought to be their main job, which is making sure that they don't again let a credit mania run out of control. It's one more way in which this much vaunted reform will make the financial system even more politicized, and thus more vulnerable to another panic.
Politics, Religion, Science, Culture and Humanities / Politics & Religion / Pelosi: "You'll have to pass the bill to find out what's in it."
on: June 14, 2010, 08:03:11 AM
How the New Wealth Taxes Will Hit You
By LAURA SAUNDERS
The health-care bill that Congress passed in March contained two surprising new taxes to help pay for the changes: an extra 0.9% levy on wages for couples earning more than $250,000 ($200,000 for singles) and a new 3.8% tax on investment income on those same people (technically, people with "adjusted gross incomes" above those amounts).
Each tax signals a radical change in policy. For workers, the extra 0.9% levy puts a progressive element in what used to be a totally flat tax. The 3.8% tax on investment income also knocks down a longstanding wall by applying a "payroll" tax to unearned income. Until now, FICA taxes for Social Security and Medicare have applied only to wages, not investment income.
While many details remain unclear and the Internal Revenue Service hasn't issued any guidance, here are preliminary answers to the most important questions taxpayers are asking.
These taxes take effect in 2013, two elections away. Might they be repealed first?
Not likely. "Congress would have to undo the health reform, and budget constraints would still be there," says Clint Stretch of Deloitte Tax. "Even if Republicans take control of Congress, President Obama holds the veto pen until Jan. 20, 2013."
How does the 0.9% tax work?
If Joe and Mary each earn $175,000, their total employment income is $350,000. Currently they owe 1.45%—$5,075—of regular Medicare tax, and their employers owe a matching amount. In 2013, the couple will owe an extra 0.9%—$900—on their wages above $250,000, which is $100,000. Their employers pay nothing extra.
What about the 3.8% tax on net investment income?
This levy is keyed to "modified adjusted gross income," with a threshold of $250,000 for couples and $200,000 for singles. (This is simply adjusted gross income for nearly everybody except expatriates, who must add back certain exclusions.) The tax is a flat 3.8% on investment income above the threshold.
How would this work?
Example 1: John and Jane, a married couple, have $400,000 of AGI—$200,000 of wages plus $200,000 of investment income. Because they have $150,000 of investment income above the $250,000 threshold, they would owe an extra $5,700.
Example 2: Anne, a single filer, earns $40,000 but has an investment windfall of $190,000, for total income of $230,000. Because she has investment income of $30,000 above her $200,000 threshold, she would owe $1,140 of additional tax.
Example 3: Retirees Mary and Bill have no wages but they do have a taxable IRA payout of $90,000, plus investment income of $150,000, for a total of $240,000. They don't owe the new tax, because they have no investment income above the $250,000 threshold.
What is investment income?
Interest, except municipal-bond interest; dividends; rents; royalties; and capital gains on the sales of financial instruments like stocks and bonds. The taxable portion of insurance annuity payouts also counts, unless it is from a company pension. So do gains from financial trading, as well as passive income from rents and businesses you don't participate in. All are subject to the 3.8% tax on amounts above the $250,000 or $200,000 threshold, as described above.
Not taxed: Distributions from regular and Roth IRAs and other retirement accounts, including pensions and Social Security, and annuities that are part of a retirement plan. Life-insurance proceeds, muni-bond interest and veterans' benefits don't count, nor does income from a business you participate in, such as a Subchapter S or partnership.
Could the 3.8% tax apply to gains on the sale of a home?
Yes, if there is a taxable gain above the $500,000 ($250,000, single) exclusion for gains on the sale of your residence.
Example: Fred and Fran, who bought their home in a New York suburb for $50,000 in 1972, sell it in 2013 for $1 million. After subtracting the $50,000 cost and $500,000 exclusion, they have investment income of $450,000. If they also have a taxable IRA payout of $70,000 and a pension of $30,000, they would owe the tax of $11,400 on $300,000.
What happens if a taxpayer who owes the new tax on investments also has a large itemized deduction—say, medical expenses or a theft loss?
Even if taxable income is zero because of deductions, he or she could still owe the 3.8% tax. Example: Myra is a single filer with investment income of $100,000 and wages of $200,000. But during the same year she loses $300,000 in a Ponzi scheme. She pays no income tax, but she still owes the new Medicare tax of $3,800 on her net investment income, says Sharon Kreider, a tax expert in Sunnyvale, Calif.
Does the 3.8% tax affect trusts and estates?
Yes, and it can hit them hard. The tax is levied on investment income as low as $12,000 that isn't paid out to beneficiaries. Some believe the tax may also hit children's unearned income subject to the "kiddie tax" if the parents owe it themselves.
What professions are able to avoid this tax?
Ms. Kreider and others see a sweet spot for real-estate professionals. The law deems their rents to be "active" income, so they wouldn't be subject to the investment tax. Often they don't owe self-employment taxes on that rental income, either.
What steps do experts recommend to minimize these taxes, other than taking capital gains before 2013 or buying municipal bonds?
• Examine both your regular and investment income: the higher your regular AGI, the more likely that your investment income will be subject to the new tax. So while Social Security and pensions don't count as investment income, they raise AGI. This makes Roth IRA conversions even more attractive for many. "Roth withdrawals don't raise AGI and aren't investment income," says Vern Hoven, a tax expert in Gig Harbor, Wash.
• Reconsider a defined-benefit pension if you're eligible—say, you're in a small business or have consulting income, says Mark Nash of PricewaterhouseCoopers. Pension payouts don't count as investment income, and the older a taxpayer is, the more he can contribute.
• Taxpayers selling assets should consider installment sales, says Ms. Kreider, if spreading out the income would minimize the new tax.
• For some, life insurance may become more attractive. Because life-insurance proceeds at death aren't subject to this tax, a taxpayer could buy a policy, borrow from it and settle up at death, avoiding income tax on investment gains within the policy. But Mr. Nash cautions that the savings must outweigh the fees and other disadvantages such policies may have.
Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Israel, and its neighbors
on: June 13, 2010, 10:19:44 PM
I could swear there is a word "specious" , , , anyone have a URL for a good dictionary?
I did not say equal, I said one helluva lot closer to equal than vice versa in the Muslim countries, none of whom are surrounded by suicidal killers screaming "Death to the Muslims" as they target Muslim women and children. C'mon man, get serious.
Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Israel, and its neighbors
on: June 13, 2010, 05:14:24 PM
JDN, I found that that Makdisi piece to be remarkably specious. Its kind of tough to live with side by side with folks like this preacher and his congregation, but in Israel Arabs get citizenship, to vote, to be Muslim, to bring law suits, etc. Try the other side of that coin in any of Israel's neighbors.http://www.youtube.com/watch?v=WmnpMXOpaM4&NR
DBMA Martial Arts Forum / Martial Arts Topics / Re: DBMA Knife and Anti Knife
on: June 13, 2010, 04:57:52 PM
I can see I need to clarify some things here.
1) As "I" define things, all four of StillJames's scenarios are defensive. You are defending yourself from attack. When I say "offensive" here I am talking about , , , initiation.
2) I'm not sure why Herb is bringing here something I said on another forum that I did not have time for at the moment, but since he has I will take a moment to comment that I am not really sure why what I wrote above is being taken as/being presented as meaning that I am advocating giving poor quality, unrealistic knife attacks. Surely with DLO-1, DLO-2, and DLO-3 out there it should be pretty fg clear by now that I believe in training to solve realistic knife attacks?