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The Digital Edge

A Battle Royal Emerges in Congress over Internet Gambling

April 13th 2014

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Ever since Bugsy Siegel opened the Flamingo Hotel in 1946 and launched the Las Vegas Strip, gambling has held a tenuous position in American life, suggesting glamour, wealth, depravity and corruption all at once. Now that casinos have spread throughout the nation and allegedly shed their mafia ties, a new branch of the industry is fighting for legitimacy here.

Las Vegas-based casinos and overseas operators have begun an all-out battle over Internet gambling, which is mostly banned nationwide but carries with it the promise of billions of dollars in additional revenue for casinos and state governments. Three states began licensing online betting last year, and lawmakers are debating online gambling bills in seven others right now. In Washington, meanwhile, Congress is facing increasing pressure to either bar or regulate the fledgling industry federally. Read more ..

Obama's Second Term

Top Washington Lobbyist Crafts Obama's Legacy

April 12th 2014

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White House senior adviser John Podesta is running against the clock.

Time is winding on Podesta’s objective, which is to make sure President Obama put points on the board in the final three years of his second term through either legislation or executive action.

With Obama and the White House flailing in late 2013, Podesta returned to the West Wing in January as part of an Obama reboot.
A little more than three months later, the former chief of staff for President Clinton gets good marks from Democrats and fellow West Wingers for helping to improve the White House’s strategy and communications. Read more ..

Edge of Islam

Another Year in the Muslim War on Christians

April 10th 2014

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As happens at Christmas every year throughout the Muslim world, Christians and their churches were especially targeted-from jihadi terror strikes killing worshippers, to measures by Muslim authorities restricting Christmas celebrations. Some incidents follow:

Iraq: "Militants" reported the Associated Press, "targeted Christians in three separate Christmas Day bombings in Baghdad, killing at least 37 people, officials said Wednesday. In one attack, a car bomb went off near a church in the capital's southern Dora neighborhood, killing at least 26 people and wounding 38, a police officer said. Earlier, two bombs ripped through a nearby outdoor market simultaneously in the Christian section of Athorien, killing 11 people and wounding 21." Read more ..

The Gender Edge

The '77 Cents on the Dollar' Myth About Women's Pay

April 9th 2014

cubicle workers

April 8 is "Equal Pay Day," an annual event to raise awareness regarding the so-called gender wage gap. As President Obama said in the State of the Union address, women "still make 77 cents for every dollar a man earns," a claim echoed by the National Committee on Pay Equity, the American Association of University Women and other progressive groups.

The 23 percent gap implies that women work an extra 68 days to earn the same pay as a man. Mr. Obama advocates allowing women to sue for wage discrimination, with employers bearing the burden of proving they did not discriminate. But the numbers bandied about to make the claim of widespread discrimination are fundamentally misleading and economically illogical.

In its annual report, "Highlights of Women's Earnings in 2012," the Bureau of Labor Statistics states that "In 2012, women who were full-time wage and salary workers had median usual weekly earnings of $691. On average in 2012, women made about 81 percent of the median earnings of male full-time wage and salary workers ($854)." Give or take a few percentage points, the BLS appears to support the president's claim. Read more ..

Ukraine in Crisis

American Defense Policy in Eurasia and the Ukrainian Affair

April 8th 2014

Ever since the end of the Cold War, there has been an assumption that conventional warfare between reasonably developed nation-states had been abolished. During the 1990s, it was expected that the primary purpose of the military would be operations other than war, such as peacekeeping, disaster relief and the change of oppressive regimes. After 9/11, many began speaking of asymmetric warfare and "the long war." Under this model, the United States would be engaged in counterterrorism activities in a broad area of the Islamic world for a very long time. Peer-to-peer conflict seemed obsolete.

There was a profoundly radical idea embedded in this line of thought. Wars between nations or dynastic powers had been a constant condition in Europe, and the rest of the world had been no less violent. Every century had had systemic wars in which the entire international system (increasingly dominated by Europe since the 16th century) had participated. In the 20th century, there were the two World Wars, in the 19th century the Napoleonic Wars, in the 18th century the Seven Years' War, and in the 17th century the Thirty Years' War. Read more ..

The Ukraine on Edge

Five Tips For Cleaning Up Corruption

April 7th 2014

One Million Dollars

The European Union, the United States, and the International Monetary Fund plan financial support for Ukraine worth billions of dollars. But they want Kyiv to rein in corruption first.

Some EU Association Agreements with potential future EU members require specific anticorruption reforms. International financial institutions and nongovernmental groups, like Transparency International, also have advice.

Here are five top recommendations:

1. Strengthen Public Sector Accountability
EU Association Agreements for countries that seek EU membership require public officials to declare their assets in order to prevent conflicts of interest. Carl Dolan, director on EU issues for Transparency International, explains that a “conflict of interest” exists when officials can profit by making decisions that help firms in which they are stakeholders.

"Number one is to make sure that the basic reforms are in place on the ground," Dolan says. "There should be at least some groundwork there for reforming the public sector. There needs to be some system for the declaration of assets by public officials and for some way of checking whether those declarations are accurate or not.” Read more ..

The Arab World

War Across the Borders

April 6th 2014

Syrian Rebel w/SAW

It has become a commonplace to claim that the unrest in the Arab world is challenging the state borders laid down in the Arab world following the collapse of the Ottoman Empire in 1918.

This claim, however, is only very partially valid. It holds true in a specific section of the Middle East, namely the contiguous land area stretching from Iran’s western borders to the Mediterranean Sea, and taking in the states currently known as Iraq, Syria and Lebanon.

In this area, a single sectarian war is currently taking place. The nominal governments in Baghdad, Damascus and Beirut may claim to rule in the name of the Iraqi, Syrian and Lebanese peoples. But the reality of power distribution in each of these areas shows something quite different. In each of these areas, local, long suppressed differences between communities are combining with the region-wide cold war between Iran and Saudi Arabia to produce conflict, discord and latent or open civil war. Read more ..

Broken Government

Building Better Housing Assistance

April 5th 2014

American poverty

Housing assistance for low-income Americans is premised on a simple value that most Americans share: no citizen should go without a roof over his head. But policy has done a poor job of achieving that goal. As of January 2013, more than 610,000 Americans were homeless. Many more are paying very high percentages of their income toward rent or are doubling up with other households.

Low-income housing assistance (for the non-elderly) is intended to provide struggling households with temporary support while they gain an economic foothold - a safeguard against homelessness. But demand for that assistance far outstrips supply; and unlike other means-tested programs, like food assistance, many housing applicants must get on a waiting list to receive assistance.

Those lists can be long. 70,000 applicants in the District of Columbia were waiting for one of just 8,000 public housing units in early 2013. Many had been on the list for more than a decade - so long that the city has since stopped accepting applications. Read more ..

The Way We Are

The Disconnected Generation

April 4th 2014

Walking-Cell phone

When Alexis de Tocqueville visited America in 1830, he was struck by how many Americans were participating in voluntary associations. It was quite a contrast with his native France, where power was centralized in Paris and people did not trust each other enough to join in voluntary groups.

Tocqueville might have a different impression should he, utilizing time travel, visit the America of 2030. Or so I conclude on reading the recently released Pew Research Center report on the attitudes and behavior of America’s Millennial generation.

By then the Millennials, people born after 1980, will be closing in on age 50 and will be the dominant segment of the working-age population. Today the Millennials, write the Pew analysts, are “relatively unattached to organized politics and religion,” and significantly more unattached than the age cohorts — Generation Xers, Baby Boomers, the Silent Generation — that came before. Read more ..

Inside Politics

Supreme Court Opens Door to Flood of Political Cash -- Again

April 3rd 2014

Supreme Court

The U.S. Supreme Court today issued an opinion that is likely to further increase the flow of big money into politics.

In a 5-4 decision, the high court’s conservative-leaning justices struck down aggregate contribution limits to candidates and parties but kept base limits intact.

“The government may no more restrict how many candidates or causes a donor may support than it may tell a newspaper how many candidates it may endorse,” Chief Justice John Roberts wrote for the majority in McCutcheon v. Federal Election Commission.

Thus, at the federal level, a donor may still only give no more than $2,600 to a candidate per election, no more than $5,000 per year to a single PAC and no more than $32,400 to a national party committee. But there is no longer a limit on how many candidates, party committees or PACs a single donor can financially support.

The decision is the most important since the Citizens United v. Federal Election Commission case in 2010, which allowed for unlimited corporate and union spending in races, a decision which led to the creation of super PACs — groups that cannot directly contribute to candidates’ campaigns but can spend money on uncoordinated advertisements encouraging people to vote for or against candidates. Read more ..

Inside Politcs

Supreme Court Strikes Overall Limit on Campaign Contributions

April 2nd 2014

Supreme Court

The Supreme Court overturned decades-old limits on an individual's overall campaign contributions in a landmark ruling Wednesday that could unleash a new torrent of money into the midterm elections.

In a splintered decision, five of the nine justices found that aggregate contribution limits — the maximum amount that a donor can give to federal candidates and political party committees throughout the course of a two-year election cycle — violate the Constitution’s protections for free speech.

Now set at just over $123,200, the limits were enacted by Congress in the early 1970s and upheld by the court’s 1976 decision in a case dubbed Buckley v. Valeo. Led by Chief Justice John Roberts, the high court overruled that decision, finding that aggregate limits do not pass constitutional muster. Read more ..

BDS Jihad

Effort to Delegitimize Israel at UWindsor in Canada Exposes as Illegitimate

April 2nd 2014

UWindsor BDS Banner

In early March, The University of Windsor Students’ Alliance seemed to have become the first student union in Canada to approve a boycott, divestment and sanction strategy against Israel following an undergraduate referendum that was held on the matter. 

The BDS movement in some areas seems to have been gaining popularity of late, as efforts of the United States to push a peace agreement between Israel and the Palestinians rages on.  Yet, BDS, which U.S. Secretary of State referred to in a February 1st speech when he said, "People are talking about boycott. That will intensify in the case of failure," has been exposed by NGO Monitor as an effort to delegitimize Israel rather than one to establish a lasting peace.

So, when this controversial referendum at the University of Windsor was held and appeared to have passed, it came as a shock to some.  It appears, however, that the effort to delegitimize Israel was itself not legitimate, according to an investigation by the school’s lawyer Raj Anand. Read more ..

Ukraine on Edge

The United States and Russia Parley over the Future of Ukraine

April 1st 2014

During the Cold War, U.S. secretaries of state and Soviet foreign ministers routinely negotiated the outcome of crises and the fate of countries. It has been a long time since such talks have occurred, but last week a feeling of deja vu overcame me. Americans and Russians negotiated over everyone's head to find a way to defuse the crisis in Ukraine and, in the course of that, shape its fate.

During the talks, U.S. President Barack Obama made it clear that Washington has no intention of expanding NATO into either Ukraine or Georgia. The Russians have stated that they have no intention of any further military operations in Ukraine. Conversations between Russian Foreign Minister Sergei Lavrov and U.S. Secretary of State John Kerry have been extensive and ongoing. For different reasons, neither side wants the crisis to continue, and each has a different read on the situation. Read more ..

Israel and the Palestinians

Where did the Peace Process Go in the Mideast?

March 31st 2014

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Check your newspaper, Twitter feed, or CNN. You will find the Malaysian airplane, Ukraine, the mudslide in Washington State, and in Washington, D.C. the terrible story of a missing 8-year-old girl. There is the occasional story about the Syrian civil war, the Central African Republic, or the declining U.S. defense budget. You are unlikely to learn much about the meeting between Palestinian leader Mahmoud Abbas and President Barack Obama, or about the current state of Secretary of State John Kerry's "American Framework" for Israel-Palestinian peace.

The reason is that Secretary Kerry and the president have managed to alienate both sides at the same time, so they don't want to talk about it. This takes some doing, so it is worth considering how they managed. Read more ..

Broken Government

Treasury to Comerica: Take Our Money, Please!

March 30th 2014

One Million Dollars

The Treasury Department paid Comerica Inc. tens of millions of dollars for a government payment card that left poor and disabled Americans vulnerable to fraud and shoddy customer service, a new inspector general report says.

Trying to save money, Treasury officials pressured vulnerable citizens to use the Direct Express cards. Comerica issued the cards under a contract that was supposed to be cost-free for the government and relatively cheap for consumers. Officials spent years promoting the card at road shows around the country.

Yet the department did not properly oversee the program, Treasury’s inspector general concluded in the report to be released today. Officials ignored available data about fees charged to customers and call center wait times, and based many decisions on unverified information from Comerica, according to a report due out Friday by Treasury’s inspector general. Read more ..

Obama's Second Term

How Much Does Obamacare Rip Off Young Adults?

March 29th 2014


Obamacare is still struggling to sign up young people. In order to offset the high cost of the older, and probably less healthy people who are joining Obamacare plans, the White House must coerce a sufficient number of thirty-somethings to also join. Problem is, the health plans are too pricey to make economic sense for many young adults.

Just how costly are the Obamacare plans for young beneficiaries? We ran the numbers. Here are our results:
Overall, the Federal government reports that 32% of on-exchange enrollees as of March 1st are under the age of 34. And many of these are teenagers who are part of family policies, not the young yuppies that Obamacare is fervently targeting. Earlier estimates showed only 20 percent of enrollees were between the ages 18 and 34.

The final number of young enrollees is well below the required cohort. Premiums will rise next year as a result of the adverse selection of older, and probably less healthy consumers. Why are young adults staying away? In one word, economics. Read more ..

Obama's Second Term

Arab Nations Don't Take Obama Seriously

March 28th 2014

The extension of the peace talks means only one thing: that Abbas will be able to use the new time given to him to try to extract further concessions from the U.S. and Israel, while all the time bearing in mind that Obama and Kerry are willing to do almost anything to avoid a situation where they are forced to admit that their efforts and initiatives in the Middle East have failed.

The communiqué issued by Arab heads of state at the end of their summit in Kuwait this week shows that the Arab countries do not hold the Obama Administration in high regard or even take it seriously. Read more ..

The US and Egypt

Sissi Bid for Egyptian Presidency Puts US in Complex Position

March 27th 2014

General Al-Sisi

Egyptian General Abdel Fattah el-Sissi's decision to run for president comes as the United States is pushing Cairo to improve its treatment of journalists and political opponents. What does his decision mean for an Obama administration trying to balance support for Egyptian democracy with security concerns in Saudi Arabia?

Sissi’s candidacy, which could bring Egypt back to the 60-year-old rule of civilian-dressed generals after a one-year-break, has been expected for months.  The U.S. says the announcement has no impact on its suspension of weapons deliveries to Egypt over human rights concerns. 

"As you know, we put a range of assistance on hold,” State Department Spokeswoman Jen Psaki told reporters. “Last year there was some assistance, security assistance that moved forward because it was in our national security interest.  But I don’t have any prediction for you on when any decision will be reached on the rest." Read more ..

Broken Government

Why the Johnson and Crapo 'Taxpayer Protection Act' Will Not Protect Taxpayers

March 25th 2014

Home Foreclosure

The draft bill released on Sunday, March 16 by Senate Banking Committee Chairman Tim Johnson (D-S.D.) and Ranking Member Mike Crapo (R-Idaho) will not protect taxpayers from future bailouts.
It will replace the implicit federal guarantees enjoyed by Fannie and Freddie with explicit guarantees enjoyed by their successors.

It will replace the single-family affordable housing mandates with a new set of affordable housing provisions that will also lead to debased underwriting standards.

It will raise taxes on the middle class by imposing a new tax on homeownership that will be used to provide billions annually in furtherance of a misguided policy to promote risky lending to lower income homebuyers.

Experience has shown that any bill which includes an explicit guarantee of an insurance program will fail to protect taxpayers. The proposed Federal Mortgage Insurance Corporation (FMIC) will be no different. Read more ..

Vote 2016

GOP Presidential Hopefuls Consider their Last Best Shot

March 22nd 2014

Vote Buttons

Many Republicans with an eye on the White House in 2016 may be asking themselves “Why not run?” when pondering a presidential bid.

Their party is at a crossroads with no clear frontrunner among more than a dozen candidates, and such a fluid field offers both fresh faces and old hands their best shot at the nomination they may ever get.

But even with a tantalizing, wide open field, there’s still plenty of risks the run the gamut from the personal to the political if a candidate does take the plunge.
Families, private relationships and day jobs are all upended by a White House bid. Rising stars could diminish their stature with a disappointing performance, while re-runs may end up known in the history books not as statesmen or former senators but a multiple loser. Read more ..

El Salvador on Edge

El Salvador's President-Elect Sanchez Ceren Asks for National Dialogue

March 22nd 2014

On March 16, El Salvador’s Supreme Electoral Tribunal (TSE), officially confirmed that the Farabundo Marti National Liberation Front (FMLN) had indeed won a hard fought and extremely close race (6,364 vote margin out of 3 million). Since this was such a close race, it is understandable that the their right-wing rival, the Nationalist Republican Alliance (ARENA), would closely scrutinize the electoral process. However, instead of abiding by the final determination of the TSE, ARENA’s leadership has refused to concede victory to their opponents and have, as their own presidential candidate put it, “gone on the war path.”

Since the preliminary total vote count was announced on March 9, ARENA has launched a fierce campaign alleging voter fraud designed to taint the FMLN victory and discredit the integrity of the TSE. However, ARENA’s claim is contradicted by all the credible international observers that monitored the election process including the United Nations, Organization of American States, U.S. Embassy, and various international civil society organizations. Read more ..

Obama's Second Term

Obama's Abysmal Approval Ratings Hurt Fellow Democrats

March 20th 2014

President Barack Obama’s public approval ratings have hit new lows in recent weeks, sparking fears among Democrats about their chances in the November midterm congressional elections. Historically speaking, two-term presidents experience losses in midterm congressional elections. It’s usually not a question of if, but how many? This year the stakes are especially high because Republicans believe they have an excellent chance of wresting control of the Senate from Democrats, which would have enormous political implications for the final two years of the Obama presidency. Read more ..

The Battle for Ukraine

Eastern Orthodox Christianity and the Future of Europe

March 19th 2014

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Horia-Roman Patapievici is a Romanian philosopher who, way back in the late 1990s, told me that Romania's task was to acquire a public style based on impersonal and transparent rules like in the West, otherwise business and politics would be full of intrigue. And he questioned whether Romania's Eastern Orthodox tradition is helpful in this regard. He went on to explain that Romania, Bulgaria, Serbia, Macedonia, Russia, Greece and Cyprus -- the Orthodox nations of Europe -- were all characterized by weak institutions, compared with those of northwestern Europe. He and many others have intimated that this is partly because Orthodoxy is flexible and contemplative, thus tolerant of the world as it is, having created its own alternative order. Read more ..

Obama's Second Term

Obama's 2015 Budget: The Good and the Bad

March 18th 2014

Homeless in Cheap Motels

After 50 years of the War on Poverty, we have neither a clearly defined mission nor a consensus on policy options. We don’t even have a good way to measure poverty. President Obama’s fiscal year 2015 budget is an example of the jumble that U.S. anti-poverty efforts have become, featuring both ill-conceived and promising policies.

The official poverty statistics indicate that there has been virtually no progress in reducing poverty in the United States in half a century, with the poverty rate – a measure of income – stuck at around 15 percent. But, as my colleague Nicholas Eberstadt has explained, income is a lousy measure of poverty, and consumption – roughly twice income for the poor – is rising faster than income itself. Given our inability to accurately quantify poverty, it’s not surprising that many of our proposed solutions are often poorly-targeted or confused as well. Read more ..

The Economy on Edge

Crimea Secession Likely to Spark Economic Disorder

March 17th 2014

Ukraine protest

When Crimea’s two million people wake up Monday after likely having voted in Sunday’s snap referendum to break with Ukraine in favor of joining the Russian Federation they will quickly feel the impact in their pockets from the secession and will endure months of economic disorder, say analysts.

“It is going to be a long and painful process and the chaos is going to hit and cost ordinary people hard,” says Yevhen Panchenko, a professor at Crimea’s Economics Institute, a branch of the Kyiv headquartered National University.

A lack of planning for how the region will manage the split with Ukraine – how Ukrainian state property will be handled, whether Ukraine will be compensated on assets losses or when existing private-sector business contracts have to be re-written to comply with Russian law – will compound the turmoil, he says. Read more ..

Defense on Edge

So Many Defense Budgets; So Little Clear Direction

March 16th 2014


This is the most confusing defense budget submission in recent times. It will not help Pentagon leaders achieve the goal they seek, which is for Congress and the White House to pass a new law softening the effects of sequestration for the remainder of the decade.

While the mandatory budget cuts known as sequestration are part of the problem, good old fashioned politics loom large as well. All the parties — whether at the Pentagon, White House or Capitol Hill – are acting as rational actors in trying to avoid blame; the problem is few of their interests strategically align. So the military is left in limbo and unable, again, to plan for the long term. Instead, the services must try to simply manage the immediate mess while still cleaning up from recent year’s indecision, constantly-shifting priorities and reduced funding.

The irony of this is that the murk will only prompt more questions from the very politicians charged with providing and maintaining the Armed Forces, even though the Pentagon tried to provide answers about the continuing consequences of sequestration. The difficult task of being able to discern what is in and what is out of the President’s military budget, what is a priority and what is not, means Pentagon leaders will muddle through another year. They will miss the bigger opportunities, breakthrough and political “buy in” that come with clear-eyed awareness, unity, purpose and direction. Congress, meanwhile, will continue to fight for individual programs and one-off projects without regard for the bigger picture because they will be hard pressed to make heads or tails of it with this budget. Read more ..

The Chinese Edge

China Set To Gain From Most Outcomes In Crimea

March 15th 2014

Thick Hair Man

A draft UN Security Council resolution condemning Russian actions in Crimea as violations of Ukraine's territorial integrity is expected to be put to a vote ahead of Crimea's March 16 referendum on whether the region should secede from Ukraine and join Russia.

There is no doubt Russia will use its veto powers as a permanent Security Council member to block such a resolution.

But Western diplomats hope a vote showing where other Security Council members stand will increase pressure on Moscow by demonstrating that Russia is isolated from the rest of the international community.

As a result, Western diplomats have been focusing their efforts on trying to convince China not to side with Russia by vetoing the resolution. So far, China has remained largely silent about the Kremlin's incursion in Crimea and its military buildup this week on Russia's border with eastern Ukraine. Read more ..

The Edge of History

What's The Difference Between Putin And Milosevic? About 22 Years

March 14th 2014

Vladimir Putin sunglasses

As I watch the news and images from Crimea, I can’t help but feel a sense of deja vu. It's as if I am reliving the 1992 break-up of Yugoslavia and the beginning of the war in Bosnia-Herzegovina.

When Russia's propaganda machine claims the unmarked troops in Crimea are spontaneously organized self-defense forces comprising concerned citizens, I am reminded of similarly "self-organized" armed groups setting up barricades in Sarajevo in March 1992.

Just like in Crimea, these troops lacked recognizable insignia. What they did have were brand new Kalashnikovs, impeccably organized communication, and military discipline. The similarity is eerie and ominous for anyone who was in Sarajevo at that time. What's the difference between Vladimir Putin and Slobodan Milosevic? About 22 years.

They are one man with two shadows; one modus operandi separated by a little more than two decades. In fact, if Milosevic were alive today, he could probably sue Putin for plagiarism. Read more ..

The Battle for Ukraine

What Do Russian Troop Movements Near Ukraine's Border Signify?

March 13th 2014

Russian Tanks Invade Georgia

Officials in Kyiv have warned that Russian military forces are massing on Ukraine's borders "in an offensive manner" and suggested they could be preparing for an invasion in the country's east.

What are the specific claims that Ukrainian officials have made about Russian military forces?
Andriy Parubiy, the secretary of Ukraine’s National Security and Defense Council, said on March 12 that Russian troops are massing along Ukraine’s borders for a possible invasion.

Parubiy said the troops are being deployed “in an offensive manner,” and that the forces include more than 80,000 soldiers, “up to 270 tanks, 180 armored vehicles, 380 artillery systems, 18 multiple-launch missile systems, 140 combat aircraft, 90 combat helicopters,” and 19 naval warships. Read more ..

The Digital Edge

Reporters Without Borders Names 'Enemies Of Internet'

March 12th 2014

Shadowy Computer User

The media freedom organization Reporters Without Borders has released its annual list of " Enemies of the Internet."

The report was issued on March 12 to coincide with World Day Against Cyber Censorship and seeks to draw attention to "government units and agencies that implement online censorship and surveillance."

Antoine Hery, the head of RSF's World Press Freedom Index, said that many chronic offenders remained on this year's list.

"Belarus, of course, and Turkmenistan, and Kazakhstan, etcetera -- those countries are looking pretty much uniquely at the Russian model and the Russian model is absolutely terrible," he said. "We have a feeling that those countries are getting worse and worse every year. But that's not only related to their online activities or censorship of the Internet, it's related to [the situation of the media] in general." Read more ..

The Defense on Edge

America's Navy Needs 12 Carriers and 3 Hubs

March 11th 2014


President Obama’s latest defense budget would shrink the US Navy’s fleet from 11 aircraft carriers to 10 absent additional funding. But the truth is that America is currently a nine-carrier nation.

Several years ago, Congress waived the 11-carrier requirement. As a result, the Navy currently operates 10 aircraft carriers until the USS Gerald R. Ford (CVN 78) joins the fleet in 2016. But one is in constant maintenance at all times and unavailable for global deployment.

Whereas the question used to be “Where are the carriers?” a new question emerges—“What carriers?” Congress must now decide if America’s single-digit carrier fleet is enough to meet the global demands of a superpower. The short answer is no.

Pentagon leaders have tried twice now to retire an aircraft carrier earlier than planned to recoup the savings. President Obama has personally vetoed the decision, calling the aircraft carrier a “strategic asset.” Part of its value is that it is an asset in constant demand. Last year, Navy Rear Admiral Thomas Moore said it best, noting “We’re an 11-carrier Navy in a 15-carrier world.” Read more ..

Russia on Edge

The Permanent Crisis of the Russian State

March 10th 2014


A permanent legitimacy and capacity crisis exists today in Russia and the state's nature ensures that this cannot be otherwise. Indeed, we have arguably entered into what Soviet historians called a revolutionary crisis, i.e. a long-term crisis of the state culminating in a revolution or fundamental transformation because that system cannot function any longer and collapses under the combined stresses of domestic failure and international competition. But understanding this state is particularly difficult. Western analysts are trapped in a self-imposed labyrinth of an ethnocentric American or Western approach to politics that sees Russia merely as an authoritarian construct. But to call Russia authoritarian is tantamount to observing that the sun rises in the East.

To understand both the masquerade and the reality of the Russian state we must understand that Russia is trapped in what Claude Levi-Strauss called a frozen [political] culture. Today's Russian state fundamentally remains the patrimonial Muscovite state originating in the medieval formation of the Tsar surrounded by his Boyars, an aristocratic tier of society that formed the early supreme council, the Duma. This system characterized both Tsardom and Soviet power. Over time it has become increasingly clear that this state cannot, for the most part, obtain domestic or external legitimacy or create a government equal to the tasks of economic and political modernization except through Stalinist mobilization, which is no longer possible. Hence the current situation of a permanent legitimacy and capacity crisis that will last as long as the present system continues. Read more ..

The Battle for the Ukraine

Russian Invasion of Crimea Likely to Affect US Foreign Policy

March 9th 2014

John Kerry

Russia’s invasion of the Crimean Peninsula could have a major impact on U.S. foreign policy regarding such issues as Iran’s nuclear program, Syria’s civil war and Afghanistan. Analysts say NATO also must consider changes to counter Russian troop movements in Ukraine. Vladimir Putin is flexing Russia’s military might.

President Putin has captured Ukraine’s Crimean Peninsula -- though Moscow says these are local self-defense forces -- causing world tensions to skyrocket.

Secretary of State John Kerry said, “There's no place in the community of nations for the kind of aggression and steps that we have seen taken in Crimea, in Ukraine in these last days." And now analysts say the Crimean crisis is likely to affect other conflicts such as the Syrian civil war. The U.S. and Russia have cooperated on removal of Syrian chemical weapons, but support opposite sides in the fighting. Read more ..

Obama's Second Term

Three Worthwile Initiatives in the Obama Budget

March 8th 2014

Capitol Senate

I think it is incorrect to describe the entire Obama budget released on Tuesday as “dead on arrival.”  Yes, the document was full of retread proposals that did not find favor in previous years and are no more likely to be enacted in 2014. Yes, the budget was honed as a political tool for the fall elections — a “campaign brochure” in the words of Representative Paul Ryan, Republican of Wisconsin. And yes, President Obama’s failure to take on entitlement reforms means that he intends to leave his successor to face a horizon with a mounting burden of debt relative to gross domestic product — a reflection of a budget proposal that would stabilize the national debt for only about a decade, even with a panoply of new taxes.

Despite these inadequacies, within the budget are at least three ideas that deserve serious consideration: proposals related to spending on infrastructure like roads and bridges, to job training and to early childhood education. Each of these initiatives involves new spending, but more money would be merited if accompanied by improvements that make better use of existing funds. And new legislation in these three policy areas could address pressing economic challenges in the United States and result in substantial positive returns for both individual families and for the nation as a whole. Read more ..

China on Edge

New Investment Platforms Raise Questions for China's Banking System

March 6th 2014

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The growth of large online investment platforms has captured the attention of Chinese authorities in recent months. Non-state enterprises such as Alibaba Group Holding Ltd., which runs the e-commerce website Taobao, and Tencent Holdings Ltd., a social media conglomerate that runs the popular WeChat online messaging program, are an emerging force in China's financial system.

The question is whether these online financing platforms could start to chip away at state-controlled banks' effective monopoly over the country's vast pool of household and corporate savings. For now, funds invested into new online financing platforms such as Alibaba's Yu'e Bao are equivalent to a little more than 1 percent of the state-controlled banking sector's roughly 74.2 trillion yuan ($12 trillion dollars) in consumer deposits. But the platforms are growing rapidly. Read more ..

Russia and the Ukraine

The Ukraine Crisis, The Ruble, And The Russian Economy

March 5th 2014


The Russian ruble has plummeted to a record low against the U.S. dollar as the Ukrainian crisis revives Cold War-style tensions. Here are four things to know about the ruble's fall, and where things might go from here.

How much has the Russian ruble fallen in recent days
Russia's ruble fell to a record low of below 36.4 to the dollar and below 50 to the euro for the first time on March 3.

Lars Christensen, head of emerging markets analysis at Danske Bank in Copenhagen, says a big reason for the fall is foreign investors' perceptions of Russia are changing as the Ukrainian crisis deepens.

"There is a fear among investors that Russia is moving away from the West. Whether or not that should be called a new Cold war is controversial but, at least, investor sentiment is influenced by the fact that we are seeing a cooling down of relations between East and West. And obviously in such an environment you would see less foreign direct investment into Russia," Christensen says. Read more ..

Afghanistan on Edge

A Month Before Afghan Election, Karzai Maneuvers To Retain Influence

March 4th 2014


Although constitutionally barred from seeking a third term, Afghan President Hamid Karzai has made no secret of the fact that he intends to remain a central force in Afghan politics even after his successor is elected this spring.

And observers say the horse-trading intended to make that happen has begun in earnest, just a month ahead of the April 5 ballot.

A public rift between Karzai and one of the candidates, his own older brother Qayum, has raised some eyebrows. But observers say appearances may not be what they seem.

Sarah Chayes, a senior associate at the Carnegie Endowment for International Peace in Washington, spent almost a decade working in southern Kandahar Province, where for the first few years she ran Qayum Karzai's NGO. She says the apparent falling-out between the Karzai brothers is actually part of the Afghan president's election strategy.

"I don't think he [Qayum Karzai] is a real candidate. This whole alleged dispute is smoke and mirrors. I think Qayum is in fact serving as a placeholder -- to withdraw and throw his support to an agreed candidate at the last minute," Chayes says. "This scene of Hamid Karzai telling Qayum Karzai not to run is pure theater. These two men are pretending to be opposed to each other when in fact they're joined at the hip. I have seen this dynamic for years." Read more ..

Obama's Second Term

New Obamacare Delay Dings Congressional Democrats

March 4th 2014

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The Obama administration is set to announce another major delay in implementing the Affordable Care Act, easing election pressure on Democrats.

As early as this week, according to two sources, the White House will announce a new directive allowing insurers to continue offering health plans that do not meet ObamaCare’s minimum coverage requirements.

Prolonging the “keep your plan” fix will avoid another wave of health policy cancellations otherwise expected this fall.
The cancellations would have created a firestorm for Democratic candidates in the last, crucial weeks before Election Day.

The White House is intent on protecting its allies in the Senate, where Democrats face a battle to keep control of the chamber. Read more ..

Defense on Edge

Deeply Unsettling

March 3rd 2014

Chuck Hagel

America’s chattering classes seem at last to have awoken to the fact that the U.S. military ain’t what it used to be. Even the New York Times allows that “the Pentagon’s proposals to reduce the Army to pre-World War II levels” could “seem unsettling to a nation that prides itself on having the world’s most capable military.” It could also unsettle the world, and most of all those allies who rely on the United States to keep a variety of dangers at bay.

Indeed, the real news in last week’s budget announcements from Defense Secretary Chuck Hagel is that it’s finally news. After all, this is hardly the first time Barack Obama has cut military spending. When this president moved into the White House, he inherited a military that George W. Bush belatedly had expanded to conduct the Iraq surge and whose budget, outside of war costs, had made only the smallest dent in the drawdowns and the “procurement holiday” of the Clinton era. However, instead of addressing the “hollow buildup” of the Bush years, President Obama, with Robert Gates at the Pentagon’s helm, proceeded to cut some $400 billion more from the military’s planned spending—all of this coming before the Budget Control Act (BCA) and its nearly trillion dollars in mandated cuts. Read more ..

Ukraine on Edge

Everything You Wanted to Know about Crimea But Were Afraid to Ask

March 2nd 2014

Russian troops in Crimea

The situation in Ukraine remains incredibly tense, despite Ukrainian president Victor Yanukovych’s flight from Kiev and the establishment of an interim government in the capital.

On February 27, masked gunmen seized control of the regional parliament buildings in Simferopol, capital of the Ukrainian autonomous republic of Crimea, and raised the Russian tricolor.

The Crimean peninsula, long associated in the West with Russia thanks to events like the Crimean War in 1854-1855 and the Yalta conference at the end of World War II, was once a part of the Soviet-era Russian Soviet Federative Socialist Republic, but became part of the Ukrainian Soviet Socialist Republic in 1954. Today, Russians form an ethnic majority in Crimea, alongside significant minorities of Ukrainians and the Turkic Crimean Tatars.

To get a better understanding of the situation in Crimea and Ukraine generally, I spoke with Charles E. King, Professor of International Affairs and Government at Georgetown University and a specialist on Ukraine, Crimea, and Russia. He is the author of Odessa: Genius and Death in a City of Dreams.

Why was Crimea handed over to Ukraine in 1954?

Well, there’s still a lot of debate about why that actually happened, but we have to be very clear about this – it wasn’t handed to Ukraine. The administrative boundaries were changed so that Crimea became a part of the Ukrainian Soviet Socialist Republic. Read more ..

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