|J.D. Foster, Ph.D.||August 22nd 2012|
The Heritage Foundation
The tax extenders bill approved by the Senate Finance Committee on August 2 took important, albeit small, bipartisan baby steps: two forward followed by one big step back. The two steps forward were the committee working toward avoiding a component of Taxmageddon and making the effort to begin sorting through the long list of small, expiring tax provisions and dropping those of inadequate merit. The big step backward is that the bill would raise taxes. The committee approved the bill by a vote of 19–5, which means that five Republican Senators joined with the Democrats to raise taxes.
Finance Committee passage is just the first step, which leaves time for improvement. When the bill is brought to the Senate floor, Members should look to further pare the list of retained provisions. They should then expand one or more of the most meritorious remaining provisions, such as the deduction for higher education expenses, so that the overall product does not raise taxes. The tax extenders bill should be revenue neutral, which would make it an excellent model for tax reform in 2013. Read more ..
The 2012 Vote
|William A. Galston||August 22nd 2012|
The Brookings Institution
Political polarization has become an obstacle to economic growth because it is increasing uncertainty, and delaying new private sector investment and hiring. That’s the view emerging from the business community and—increasingly—from the economics profession.
Earlier this month, in a front-page New York Times story, a number of CEOs gave voice to their fears about the fiscal cliff and the broader policy impasse in Congress. According to Vincent Reinhart, chief U.S. economist at Morgan Stanley, more than 40 percent of companies in their monthly survey cited the fiscal cliff as a major reason for pulling about on hiring and investment, and he expects that percentage to rise. These concerns go well beyond the defense sector, whose stake in a speedy resolution of the controversy is direct and clear. Alexander Cutler, the CEO of a large Ohio-based maker of industrial equipment, put it this way: “We’re in economic purgatory. In the nondefense, nongovernment sectors, that’s where the caution is creeping in. We’re seeing it when we talk to dealers, distributors, and users.” Read more ..
|Shoshanna Bryen||August 22nd 2012|
Jewish Policy Center
While noting in The Washington Post that Israel “cannot afford to outsource its security to another country,” Maj. Gen. (ret.) Amos Yadlin, former chief of Israeli Military Intelligence, contends that President Obama can/should frame “a nuclear-armed Iran as an impermissible threat to the national interests of the United States and its allies in the Persian Gulf.” This, he says, would have the effect of “cooling off” Israel and, presumably, permitting more time for U.S.-led diplomacy. He requests that the President:
* Notify the U.S. Congress in writing that he reserves the right to use military force to prevent Iran’s acquisition of a military nuclear capability.
* Signal its intentions via a heightened US military presence in the gulf, military exercises with Middle East allies and missile defense deployments in the region.
* Provide advanced military technology and intelligence to strengthen Israel’s military capabilities and extend the window in which Israel can mortally would Iran’s program.
* Speak publicly about the dangers of possible Iranian nuclear reconstitution in the wake of a military strike.
Publicly commit to the security of U.S. allies in the Gulf. Read more ..
The 2012 Vote
|Scott Gottlieb and Thomas P. Miller||August 21st 2012|
Before November’s presidential election gives Americans a final vote on whether Obamacare survives, consumers should consider the kind of health insurance that they would get under the President’s plan. So far, President Obama is withholding the final set of regulations that describe just what health benefits the Obamacare plans will deliver. He may be waiting until after the election. But there’s enough detail already in the law to make decent estimates.
The answer turns out to get a lot worse, the closer one looks. There’s good reason to believe that in short order, the health plans sold in Obamacare’s heavily regulated, state-based insurance exchanges will degrade into something akin to today’s Medicaid managed care plans. If a lot of consumers who presently get their health coverage at work are dumped into these state exchanges (as many independent analysts predict), then tens of millions of Americans could find that they’re worse off under the new law and that their health benefits have been substantially devalued. Read more ..
The 2012 Vote
|Henry J. Aaron||August 21st 2012|
The Brookings Institution
Now that Mitt Romney has picked Paul Ryan to be his running mate, a major national debate on Representative Ryan’s so-called ‘premium support’ plan has become certain. Ryan’s plan would replace the current Medicare program for workers under the age of 55. When eligible, they would receive a flat dollar amount—or voucher—that would cover part of the cost of a health insurance plan. The value of the voucher would be adjusted annually according to a pre-specified index. If health care costs increased faster than that index, enrollees would have to pay the added cost themselves or accept narrowed insurance coverage.
Because that plan would not apply to anyone age 55 or older, supporters claim that older Americans don’t ‘have a dog in that fight.’ For reasons I explain below, that isn’t true, even if one looks only at Representative Ryan’s Medicare proposal. Other elements of the Romney/Ryan health care program have even larger implications for older Americans, but let’s start with the Ryan Medicare plan. Read more ..
The Battle for Syria
|Luke Coffey and James Phillips||August 20th 2012|
In the aftermath of Secretary of State Hillary Clinton’s trip to Turkey last weekend, there has been speculation that the U.S. might support the idea of establishing a no-fly zone (NFZ) over Syria. Under the current conditions, an establishment of an NFZ would be a costly and risky action that would do little to stop the killing on the ground while entangling the U.S. in an intensifying civil war. While the U.S. and its partners have the military capability to establish and enforce an NFZ above Syria if they wanted to, an NFZ is the wrong policy at the wrong time. The U.S. should concentrate on determining which elements inside the opposition want a stable and secure Syria, marginalizing elements inside the opposition movement that promote an extremist agenda, and drumming up regional support against the Bashar al-Assad regime.
Syria Is Not Libya
Other than providing a very expensive psychological boost to the loose alliance of disparate Syrian opposition groupings, it is likely that a U.S.-backed NFZ would have minor impact. Most of the Assad regime’s killing is done on the ground. Although the regime has made limited use of fixed-wing aircraft and attack helicopters in recent weeks, most of the death toll is caused by artillery barrages and brutal paramilitary hit squads—all of which, including attack helicopters, an NFZ would have a negligible impact on. Read more ..
Egypt and Israel
|Shoshana Bryen||August 20th 2012|
Egypt has moved forces into the Sinai beyond what was agreed to in the Egypt-Israel Peace Treaty. Getting them in wasn't that difficult – Israel agrees that security in the Sinai has deteriorated. Getting them out again later may be another matter. And how the U.S. positions itself to safeguard the treaty itself will be crucial.
One of the lesser-known American military deployments is as part of the Multinational Force & Observers in the Sinai (MFO), inserted in 1981. Its mission is to "supervise the implementation of the security provisions of the Egyptian-Israeli Treaty of Peace and employ best efforts to prevent violations of its terms." The MFO consists of 1,656 soldiers from 12 nations.1 and, according to its website, operates checkpoints, reconnaissance patrols and observation posts; verifies the continued implementation of various arms limitations in the Sinai; ensures freedom of navigation through the Strait of Tiran; and monitors the deployment of border guards along the Egyptian side of the Gaza/Egypt border to ensure that it meets the terms agreed to by Israel and Egypt in 2005. Read more ..
Energy vs Environment
|Mark J. Perry||August 20th 2012|
Even if a carbon tax could significantly reduce greenhouse gas emissions, should it be implemented if it would undermine the economic recovery and stall short-term growth?
Under one possible approach, all countries would agree to penalize carbon emissions at an internationally harmonized carbon tax. But let’s be realistic: Because of the huge economic and political imbalances between the industrialized and developing world, the carbon-tax approach to emissions reduction is a pipe dream.
As much as 85 percent of the projected increase in man-made global emissions of carbon dioxide will come from developing countries, as a result of growing electric power use and automobile ownership that accompany economic growth. The United States and other advanced countries won’t sacrifice their living standards, and the developing ones aren’t going to worry about climate change while their incomes are a fraction of those in advanced nations. Read more ..
Israel's Looming Attack
|Patrick Clawson||August 19th 2012|
The Washington Institute
Earlier this week, Defense Secretary Leon Panetta and Joint Chiefs chairman Gen. Martin Dempsey continued a months-long pattern of tougher U.S. statements about Iran. To be sure, both were still uncomfortable about the prospect of an Israeli strike when addressing reporters on August 14 -- Dempsey noted that such a move would only "delay, not destroy, Iran's nuclear capabilities," while Panetta stated "there is room to continue to negotiate." Yet neither repeated their pre-March warnings about the potential negative consequences of an attack. In fact, Panetta emphasized that it is up to Israel to decide whether or not to strike.
SHIFT SINCE MARCH
Until early March, U.S. officials speaking about Iran tended to include warnings about the risks of resorting to force. On February 5, President Obama stated, "Any kind of additional military activity inside the Gulf is disruptive and has a big effect on us. It could have a big effect on oil prices. We've still got troops in Afghanistan, which borders Iran." Three days earlier, Dempsey had argued that "a conflict with Iran would be really destabilizing, and I'm not just talking from the security perspective. It would be economically destabilizing...I personally believe that we should be in the business of deterring as the first priority." Most striking was Panetta's December 2 warning: "At best [a military attack] might postpone [Iran from getting a bomb] maybe one, possibly two years...Of greater concern to me are the unintended consequences." In his view, these consequences included increasing the risk of "retaliation from Iran," allowing an isolated regime "to suddenly reestablish itself," ushering in "severe economic consequences," and sparking "an escalation that could consume the Middle East in a confrontation." Read more ..
Israel's Looming Strike
|Dennis Ross||August 18th 2012|
Read more ..
Obama administration officials have made it clear that they believe there is still time and space for diplomatic efforts to succeed in stopping Iran from achieving a nuclear weapons capability. But Israel's deputy foreign minister, Danny Ayalon, has said it is time to declare that "diplomacy has failed."
While Israel's prime minister, Benjamin Netanyahu, has not yet declared the failure of diplomacy, he has spoken about its inability to alter the course of Iran's nuclear program. In addition, he has told his cabinet that the nuclear threat from Iran dwarfs all the other threats Israel faces and pointedly added, "Iran cannot be allowed to have nuclear weapons."
The words of Israeli leaders are signaling not just increasing impatience with the pace of diplomacy but also Israel's growing readiness to act militarily on its own against Iranian nuclear facilities.
Although the United States and Israel share the same objective of preventing Iran from acquiring nuclear weapons capability, the two differ on the point at which it may become necessary to act militarily to forestall the Iranian nuclear advance. I say "forestall" because neither America nor Israel can fully destroy the Iranian capability to build a nuclear weapon. Each country could set Iran back militarily, but neither could destroy Iran's skill or technical and engineering capacity to develop nuclear weapons. Since 2007, when Iran mastered the full nuclear fuel cycle and the means to enrich uranium on its own, it has been too late for that. Their differences on the possible timing of military action are a function of both capabilities and perspective. The United States has significantly greater military might than Israel and therefore feels that it can wait substantially longer than Israel before resorting to force.
The Wikileaks Case
|Sarah Slater||August 18th 2012|
|Wikileaks Founder Julian Assange|
Recently, the Ecuadorian Foreign Minister Ricardo Patiño announced that Quito would grant political Asylum to Julian Assange, the founder of Wikileaks, who currently faces extradition to Sweden on charges of sexual assault. Assange has rejected the charges and expressed his fear that if London indeed extradites him, he will subsequently be sent to the United States where he could face the death penalty for espionage or treason.
On Wednesday, August 15, Patiño charged that London had all but threatened in a diplomatic letter to storm the British embassy in order to arrest Assange. Further, following a meeting with President Rafael Correa, he declared, “The colonial times are over.” London countered, however, saying that the letter simply pointed out that it would have a “legal base” to enter the embassy and make an arrest if Britain decided to revoke Ecuador’s diplomatic immunity under the Diplomatic and Consular Premises Act of 1987. Ecuador, as well as many international observers, have pointed out that if London took such an action, it would violate the Vienna Convention. London has reiterated that it wants to find a diplomatic solution to this quandary, a wise strategy given the dangerous diplomatic precedent that revoking the Ecuadorian embassy’s diplomatic immunity could establish.
Recently, Correa asserted, “no one is going to terrorize us!” London, however, eventually countered declaring that it would arrest Assange the moment he sets foot on British soil, or in other words: steps out of the embassy. Ecuadorians, for their part, are understandably divided on the matter of Assange’s asylum, but certainly have their qualms with the British handling of the situation. Read more ..
The 2012 Vote
|Juan Williams||August 18th 2012|
Last year in this column I wrote: “If you have not been paying attention, it is time to look around and realize that we are living in the political age of Rep. Ron Paul.”The first section of the Wikipedia page entry for the Tea Party Movement even quotes a sentence from that column, where I argued the Tea Party dynamic that won the House majority for the GOP in 2010 “grew largely out of the ashes of (Paul’s) 2008 presidential campaign” by emphasizing “limited government and a return to constitutional principles.”
Now, the 76-year-old Texan is retiring at the end of this Congress after 12 terms in the House of Representatives. During his latest run for the Republican presidential nomination, Paul tangled with Mitt Romney, particularly over civil liberties.
But unlike other candidates, he did not attack Romney harshly. Paul and Romney remain friendly but Paul was never on the short list – or any other list – of people who were considered as Romney’s running mate. Just last month, well after Romney had wrapped up enough delegates to win the Republican race, Paul continued to try to get enough unpledged GOP delegates to commit to vote for him so he could get his own name placed in nomination. The idea was to give him a moment of national recognition at the Tampa convention and assure him one final platform before a national audience.
But the effort failed. Now he will leave the national political scene quietly, although he probably had a hand in getting a coveted convention speech slot for his son, Sen. Rand Paul (R-Ky). Sen. Paul may give his dad a final shout out from the podium. Ron Paul deserves more. In presidential debates, and until his last days in Congress, Paul has continued to stir revolution in the Republican Party by fighting the GOP establishment. Read more ..
Israel on Edge
|Daniel L. Byman and Natan B. Sachs||August 18th 2012|
The Brookings Institution
Late this past June, a group of Israeli settlers in the West Bank defaced and burned a mosque in the small West Bank village of Jabaa. Graffiti sprayed by the vandals warned of a “war” over the planned evacuation, ordered by the Israeli Supreme Court, of a handful of houses illegally built on private Palestinian land near the settlement of Beit El. The torching of the mosque was part of a wider trend of routine violence committed by radical settlers against innocent Palestinians, Israeli security personnel, and even mainstream settler leaders — all aimed at intimidating perceived enemies of the settlement project.
In the past, settlers who opposed attacks against Palestinian civilians or the Israeli state (the vast majority of them) could exert control over radical elements, or work with the Israeli authorities to do so. Recently, however, several factors have contributed to a rise in unchecked settler radicalism: the dramatic growth over the past generation in the size of the settler population, the diversification of religious and ideological strands within it, and the sense of betrayal felt by settlers following Israel’s evacuation of the settlements in the Gaza Strip in 2005. Read more ..
Energy Policy on Edge
|Kenneth P. Green||August 17th 2012|
With the passage of California's Assembly Bill 32, the Golden State has embarked upon an experiment in energy policy that has no modern parallel. Several recent studies have shown that the consequences to the state could be dire, and that California faces a choice between continuing on its current trajectory toward a future of reduced economic growth and opportunity, or changing course and adopting less draconian climate and energy policies.
For the sake of California, and the national economy that prospers when California prospers, one can only hope lawmakers are paying attention to the possible consequences of their hasty actions.
In 2006, the California Legislature passed Assembly Bill 32, also known as the Global Warming Solutions Act. The bill was signed into law by Gov. Arnold Schwarzenegger on Sept. 27, 2006. AB 32 represents the most aggressive greenhouse gas control regime implemented by any of the states and imposes a vast array of controls on the use of energy. Its goal is nothing less than the remaking of California's entire energy economy. Read more ..
|Ben Cohen||August 17th 2012|
Cutting Edge Commentator
Ecuador’s decision to grant political asylum to Julian Assange, the founder of Wikileaks, is a spectacular example of the gesture politics beloved by the far left. It is gesture politics because Assange, an Australian citizen who has spent the last two months camping in the Ecuadorean embassy in London, will have to smuggle himself past a phalanx of armed police officers if he is to make it to Quito in one piece.
While Assange and his supporters are portraying his current status as the consequence of politically motivated persecution, the truth is considerably more sordid. Assange fled to the Ecuadorean embassy after the British government decided to extradite him to Sweden, where he is wanted on sexual assault charges. To go by a recent op-ed penned for the Guardian by the dreadful Glenn Greenwald, you’d think that Sweden was a slightly milder version of North Korea, where prisoners are held in “oppressive pre-trial conditions,” and where someone like Assange could quickly find himself in American custody in order to face trial for espionage, given the release by Wikileaks of several thousand confidential American diplomatic and military cables. Read more ..
After the Holocaust
|Saul Roth||August 17th 2012|
Wolrd Jewish Daily
Another sorry chapter in Europe's inability to come to terms with the Holocaust appears to be starting in Hungary, with the news that charges against recently captured war criminal Laszlo Csatary are being dropped by prosecutors. Csatary fled prosecution after World War II and lived for years in Canada under an assumed name. After he was exposed, he fled back to his native Hungary, where he disappeared. Not long ago, however, the Simon Wiesenthal Center and reporters from the UK's Sun magazine tracked him down in Budapest.
“I was young, but I remember the name Csatary,” witness Marika Weinberger, now over 80 years old, told an interviewer. “It surfaced when my father was trying to find out what happened to my uncles.” Weinberger's nine uncles were rounded up and deported to death camps on Csatary's orders. Of the night they were taken, Weinberger says, “I remember it better than I remember what happened yesterday.” It now appears that Ms. Weinberger will never get her day in court. Budapest prosecutors claim that Csatary was not present when the deportations took place and have dropped their charges against him.
Ms. Weinberger believes that the proverbial fix was in, and she seems to be correct. Astoundingly, the prosecutors never questioned her about Csatary's crimes. “No one bothered to ask me what I know," Ms. Weinberger says. "Now he’s off the hook.” Martin Kornfeld, CEO of the Federation of Jewish Communities in Slovakia agrees. “Hungarian authorities are trying to avoid a decision on Csatary in court," he told the Times of Israel, "and are trying to find points that make the trial positive for Csatary.” Kornfeld and his organization may hold out the last hope for justice in the Csatary case. Csatary was convicted in absentia for war crimes in what was then Czechoslovakia. Read more ..
The 2012 Vote
|Brent Budowsky||August 16th 2012|
Here is one ad I propose for Democrats:
"My name is Lilly Ledbetter. I passionately support pay equity for women. Paul Ryan voted against me. I will be voting against him. President Obama and Democrats are fighting for pay equity for all women. I will be voting for them.”
Along with Social Security and Medicare, pay equity for women will be a paramount issue in November. Mitt Romney's selection of Paul Ryan is nationalizing public opinion about the extremist, influence-peddling brand of crony capitalism of today's Republicans. They have abandoned the GOP's heritage and will be pinned to the mat by Paul Ryan's record, which belies Mitt Romney's endless equivocations. There is a new wind behind the sails of Democrats. Sweeping Republican hostility to the interests of women could be decisive. Read more ..
|Alan Dershowitz||August 16th 2012|
J Street, which calls itself “pro-Israel and pro-peace”, is now making it more likely that Israel and/or the United States will have no choice but to take military action against Iran’s nuclear weapons program.
The Israeli government is facing what may be its most daunting existential challenge since the founding of the State and certainly since the eve of the 1967 War. There are no perfect solutions to the problem posed by Iran’s determination to develop nuclear weapons capable of destroying Israel. It has become clear that sanctions, coupled with diplomatic efforts, may hurt Iran, but will never pressure them into giving up their quest for nuclear weapons. It has also become clear, as President Obama has stated, that containment of a nuclear Iran is not an option. The only thing that will deter Iran from moving forward with its nuclear program is a credible threat of military action by the United States. Read more ..
Healthcare on Edge
|Joseph Antos||August 16th 2012|
We baby boomers are beginning to realize that the future of Medicare matters — to us, not just to our grandchildren. Most of us will still be around in 25 years, and we’re beginning to wonder whether Medicare will be there for us. It will be, but we will not like what we get unless Washington gets serious about overhauling the program.
Some may think that the president’s Affordable Care Act (ACA) already reformed Medicare. Congress reduced Medicare spending by $700 billion over the next decade by cutting provider payments rather than reducing benefits, or so the politicians claim. That money was not used to shore up Medicare for the future. It was used to fund new federal health programs, leaving Medicare in no better financial shape than before. Worse yet, those savings did not come from any significant change in the way Medicare operates. It is business as usual, and that business is obviously failing. Read more ..
The Defense Edge
|Morris J. Amitay||August 16th 2012|
The specter of the January 2, 2013 sequestration has created rare unanimity here in Washington. Just about everyone both in the defense establishment and Congress maintains it would have disastrous consequences if implemented.
This new round of budget cuts was mandated by the U.S. Budget Control Act after the failure of a super committee - the Joint Select Committee on Deficit Reduction - to reach an agreement on a balance between taxes and spending. The Act was part of a compromise between Democrats and Republicans to permit raising the Federal debt ceiling. This translates into a $55 billion cut in fiscal year 2013 from the roughly $511 billion base defense budget, $93 billion from the war budget and $82 billion from unobligated funding.
These cuts, mandated by the sequester, would be on top of the $487 billion in budget reductions already scheduled over the next decade, because Congress could not find another $1.2 trillion in Federal savings over the same period. With the Administration's decision to exempt military personnel from the cuts, the rest of the defense budget would be looking at an 11.2 percent reduction and could mean an estimated 89,000 job cuts at the Department of Defense and a hiring freeze. Non-defense spending would also be sequestered, but at a lower rate. Read more ..
The New Egypt
|Ben Cohen||August 16th 2012|
Canada Jewish News
If you are seeking to understand what motivates the jihadists who have swarmed into the Sinai Peninsula in recent months, their own words are the best guide available.
“Every outing with rockets is a life-and-death adventure. It is one we love,” a terrorist who belongs to a Palestinian Islamist faction told Reuters last week. “If we live we will be back to fire more, and if we die we go to heaven as martyrs.”
If there’s one thing that can be said for jihadists, it’s that they are honest. In Sinai, as in Afghanistan, Iraq, Yemen, Lebanon and all the other territories where the Islamists have emerged as a destabilizing influence, they are frank about their devotion to continuing the conflict against western encroachment—of which Israel’s existence is a particularly hated example—and they do not fear death or capture in the process. Read more ..
The Battle for Syria
|Irwin Cotler||August 16th 2012|
Aleppo – Syria’s second-largest city, its commercial hub and an ancient heritage site – is under relentless assault. This siege follows what has been called “Assad’s pattern of depravity”: first, cutting off electricity, water, and the inhabitants’ food supply; second, intensifying indiscriminate bombardment through tank, artillery, helicopter gunships, and even fighter jets; third, warning inhabitants that Syrian forces would “purge” the city of its “armed terrorists” – the euphemism for Assad’s Scorched Earth policy – the whole as prologue to massacres foretold, as have happened so many times before.
In the words of Nabil Elaraby, secretary general of the Arab League, speaking one week ago: “The massacres that are happening in Aleppo and other places in Syria amount to war crimes that are punishable under international law.” Indeed, the situation has only deteriorated since, as some 1,000 have been killed in the last 10 days alone, and over 20,000 since the peaceful beginnings of the “dignity and freedom revolution” in Daara in March 2011. Read more ..
The Economy on Edge
|Edward J. Pinto||August 15th 2012|
With the Romney/Ryan ticket now in place, the debate moves to fundamental questions about the economy. The big issue which Governor Romney continues to focus on is the contrast between the government-centered society embraced by President Obama, and the Romney/Ryan vision for a society centered on freedom of choice, and free markets.
When it comes to a government centered society and its deleterious consequences, our Government Mortgage Complex is the undisputed poster child. There has been no greater economic failure than the collapse of the housing market due to decades of government intervention and crony capitalism.
Voters need to be reminded about how this disaster came about. It began with the premeditated assault on high-quality, credit-worthy prime mortgages. The perpetrators were Fannie Mae, community groups, and Congress, each of which had the means, motive and opportunity for undertaking this assault.
As early as 1991, community activist Gale Cincotta, was laying the path for undertaking such an assault in her testimony before the Senate Banking Committee. "Lenders will respond to the most conservative standards unless [Fannie Mae and Freddie Mac] are aggressive and convincing in their efforts to expand historically narrow underwriting," she stressed. Read more ..
|Tracy Gordon||August 15th 2012|
The Brookings Institution
States and localities are often cast as the unsung heroes of American government: They spend more than the federal government on direct public goods and services, employ twice as many workers as the manufacturing sector, and generate about $1.8 trillion (12 percent) of GDP. But most people only really think about state and local governments when enrolling their kids in public school or visiting the DMV.
This narrative changed in the Great Recession and its aftermath. Casual observers became concerned about payroll and service cuts at state and local levels and what they meant for aggregate unemployment and growth. Although the federal government distributed unprecedented fiscal relief to states and localities through the Recovery Act, some have suggested it ought to do more.
The latest news is upbeat, however. Census Bureau figures show state revenues are up for the ninth consecutive quarter, although growth is slower than last year and uneven across states. The National Conference of State Legislatures reports that no states are projecting deficits at the end of fiscal 2013 and many expect modest surpluses. The July jobs report suggests state and local job losses, although continuing, are abating. So is the coast clear? Not yet. For one thing, local governments are still contending with lower property tax revenues as assessed values catch up with depressed home values. Read more ..
The 2012 Vote
|William A. Galston||August 14th 2012|
The Brookings Institution
Many observers are working overtime to figure out which party benefits from Mitt Romney’s selection of Paul Ryan. I don’t mean to sound holier than thou, but I’m more interested in a different question: will it benefit the country?
The case that it will is straightforward and familiar. Before Ryan’s selection, the 2012 presidential contest was the worst that most of us had ever seen. Although the country faces massive economic and fiscal challenges, the presidential campaigns weren’t talking about them. Instead, they were trading low blows about tertiary issues. Ryan’s entrance, it is said, will “elevate” the debate by forcing the real issue back onto the agenda. The candidates will be arguing about Medicare and tax reform and the role of government in our society. We’ll get the real debate we need, and whoever wins, the country will be better off. Read more ..
The Battle for Syria
|Kenneth M. Polluck||August 13th 2012|
The Brookings Institution
“The beginning of wisdom,” a Chinese saying goes, “is to call things by their right names.” And the right name for what is happening in Syria — and has been for more than a year — is an all-out civil war.
Syria is Lebanon of the 1970s and ’80s. It is Afghanistan, Congo or the Balkans of the 1990s. It is Iraq of 2005-2007. It is not an insurgency. It is not a rebellion. It is not Yemen. It is certainly not Egypt or Tunisia.
It is important to accept this simple fact, because civil wars — especially ethno-sectarian civil wars such as the one burning in Syria — both reflect and unleash powerful forces that constrain what can be done about them. These forces can’t be turned off or ignored; they must be dealt with directly if there is to be any chance of ending the conflict. Read more ..
The 2012 Vote
|Darrell M. West||August 13th 2012|
The Brookings Institution
There will be no Sarah Palin style debate about the qualifications of Wisconsin Representative Paul Ryan for vice president. The guy is smart and knowledgeable about public policy issues and is exceptionally thoughtful about federal budget issues. He is the author of a very detailed plan for deficit reduction and entitlement reform. He answers the call of critics who say Mitt Romney has no fiscal plan.
The downside of that substantive depth is the choice will enable Democrats to run against Republicans as cold-hearted conservatives who want to downsize government and end Medicare as we know it. Up to this point, there hasn’t been a serious national discussion about what actually is involved in deficit reduction and which programs need to be changed and in what manner. The specificity of Ryan’s budget plan guarantees we now will have that debate this Fall. Read more ..
The 2012 Vote
|Michael R. Whitaker||August 13th 2012|
Those following Mitt Romney in the news may have noticed the frequency with which the former Massachusetts governor’s name has been linked to former New York governor Al Smith.
Eighty-four years ago, Smith was the Democratic candidate in the 1928 presidential election, which he lost in a landslide to his Republican opponent, Herbert Hoover. Looking forward to this November’s contest, more than a few historically-minded journalists have suggested that Smith’s miserable showing might augur something for Romney when he challenges Barack Obama for the presidency in a few months’ time.
Why the comparison is relevant is that it allegedly set the precedent for first-of-their-kind religious outsiders seeking the Oval Office, and Smith, the first Roman Catholic in American history to headline a major party’s presidential nomination, saw his campaign wilt under a glare of virulent anti-Catholic hysteria. As a member of the Church of Jesus Christ of Latter-day Saints (better known as the Mormons), Romney may have to endure something similar, and, we are told, is probably doomed to suffer the same outcome as Smith.
Yet a closer look at the last presidential tilt of the Roaring Twenties reveals that the fable of Smith as the capable candidate stymied by a bigoted electorate simply doesn’t fit the facts. Ascribing Smith’s defeat to his religion ignores his opponent’s considerable electoral appeal and assumes, wrongly, that religious bigotry worked in only one direction. Read more ..
Healthcare on Edge
|Gary Burtless||August 11th 2012|
The Brookings Institution
In any comparison of healthcare costs in rich countries, the United States is an extreme outlier. This is true both in terms of the percentage of its income devoted to health and the absolute level of our health spending per person.
The U.S. has always been a high-spending country, but the difference with other countries has widened over time. International statistics on health outlays suggest the share of our GDP devoted to health was about 40 percent higher than the average for other rich countries in the 1970s. The differential increased substantially during the 1980s and early 1990s and then continued to widen, though more slowly, in later decades. By 2010 the U.S. health share was almost 7.2 percentage points of GDP (or 70 percent) higher than the health spending share in countries with comparable incomes. We can describe that estimate in a slightly different way: The United States spent about $7,500 per capita on health care compared to an average of $3,300 in other rich countries.
If the nation obtained better-than-average health outcomes in exchange for its much-higher-than-average health spending, we would have little reason to complain. However, there is almost no evidence U.S. health outcomes are better than those in other rich countries. A variety of statistics on mortality and morbidity suggest outcomes may be worse in this country than they are elsewhere.
The nation's ever-increasing health bill has had a little-noticed impact on our income distribution statistics. That's because of the way we pay for most health care and the way most income statistics are reported. Less than a quarter of the cost of the health care we consume is paid for with our cash incomes. Most is financed by the government or reimbursed through insurance purchased by our employers. Read more ..
The Race for AgriFuels
|José Graziano da Silva||August 10th 2012|
UN Food and Agricultural Organization
The worst drought for 50 years is inflicting huge damage on the US maize crop, with serious consequences for the overall international food supply. The situation reminds us that even the most advanced agricultural systems are subject to the vagaries of the weather, leading to volatility in supplies and prices not just on domestic markets but also internationally. Climate change
and extreme weather events will further complicate the picture. US maize production had been expected to increase to record levels this year. That view will prove optimistic. Much of the reduced crop will be claimed by biofuel production
in line with US federal mandates, leaving even less for food and feed markets. The August US Department of Agriculture estimates, announced on Friday, will give a more precise idea for just how much the maize crop is reduced. Few people are expecting good news.
Read more ..
Maize prices have already gone higher than their 2008 and 2011 peaks, increasing by 23 per cent during July alone. Wheat prices have followed maize prices upwards. Repercussions are already being felt in the US livestock sector.
The 2012 Vote
|William A. Galston||August 10th 2012|
The Brookings Institution
Republicans should not be surprised if voter laws becomes a major topic of debate this election season—they will be the ones responsible for making it so. Over the past two years, the GOP has made a concerted attempt in a number of states to tighten voter registration procedures, cut back on alternatives such as early voting, and—most controversially—require would-be voters to show state-issued photo IDs as proof of identity. Because there’s such little evidence that these changes are needed to eliminate widespread voter fraud, it’s hard to avoid the conclusion that many Republican legislators want to discourage voting among groups—especially minorities and the poor—that cast their ballots mainly for Democrats.
But it’s worth remarking that beneath these crass political motives are some deeper moral issues. Proponents and opponents of these changes agree on one thing: Voting will be harder, and turnout will be lower. But is that necessarily a bad thing? Proponents think not. Speaking for many others, Florida State Senator Mike Bennett said, “I don’t have a problem making [voting] harder. I want people in Florida to want to vote as bad as that person in Africa who walks 200 miles across the desert. This should be something you do with a passion.” Read more ..
Obama and Israel
|Barry Rubin||August 9th 2012|
Recently there has been a controversy when State Department spokespeople refused to say what they thought to be Israel’s capital. To understand this issue we need to understand that there are two different issues involved: that of 1947 and that of 1967.
I’m not going to discuss ancient history, religious factors, and the merits of varying claims here but rather will merely point out some simple facts of practical diplomacy.
The U.S. embassy, like others, is located in Tel Aviv. When diplomats need to meet with Israeli officials they pile into their vans and drive up to Jerusalem. There are other restrictions on just where these diplomats can go and under what conditions, to avoid any implication that they recognize Israel’s annexation of the Golan Heights or east Jerusalem.
Presidents have repeatedly promised to move the U.S. embassy to Jerusalem, but have never made the tiniest move toward doing so because that would make Muslims and Arabs angry. In his speeches to AIPAC, President Barack Obama has said - to thunderous applause - that Jerusalem was the capital of Israel and should remain undivided. But of course this was a totally cynical gesture. Read more ..
The 2012 Vote
|David Hill||August 9th 2012|
The latest James Carville-inspired Democracy Corps polling in so-called battleground congressional districts is entertaining, as is most everything the Ragin’ Cajun touches. We learn that Republican incumbents are on the verge of being gunned down like Pickett’s men charging up that hill at Gettysburg. The poll’s summary memorandum’s headlines are relentless. “Republican vote falling.” “Republican incumbents out of touch with districts.” “Republicans now lose the healthcare debate.” “The Ryan budget: Vulnerability.” Can’t catch a break, can we? And we learn that Democrats are going to scare seniors on Medicare after they frighten recently poor folks with threats of being “pushed back into poverty” by Republicans.
I can just see the Carville Democrats laughing and giving themselves high-fives as they celebrate the pending total evisceration of the Republican brand they so abhor, along with the motley members of Congress who march under that banner. The poll proves it. We Republicans should negotiate surrender before the Democrats come for our spouses and children. There is no love for Republicans.
Do they really believe all this stuff? Or do they realize it’s mostly what the Good Book calls “the noisy gong or clanging cymbal” of those who have no love in their hearts? This is vintage propaganda. Page after page of mind-numbing tables compare the past two or three elections with this one, arriving at favorable conclusions while ignoring equally plausible conclusions to the contrary. Read more ..
The 2012 Vote
|Markos Moulitsas||August 8th 2012|
|Sen. Sherrod Brown|
Pity poor conservative billionaires. The ultra-rich didn’t get that way by burning their dollars, but that’s exactly what they appear to be doing in this new era of the super-PAC. Nowhere did they expect to have a greater impact than in Ohio, where first-term Democratic incumbent Sen. Sherrod Brown is at his most vulnerable — his first reelection campaign. Conservatives are convinced that Brown, a populist firebrand, is too liberal for the evenly divided battleground state he represents. So big right-wing donors staked their money behind those beliefs — sinking over $10.5 million into attack ads as of early July.
No non-presidential candidate has been on the receiving end of more super-PAC sludge than Brown. Yet Brown’s numbers haven’t exactly suffered. In January, the Ohio senator had a polling average, as compiled by Talking Points Memo (TPM)’s poll tracker, of 46.9 percent (his Republican opponent, Josh Mandel, trailed at 33.2 percent).
Now, seven months and $10.5 million later, Brown is up to 47.8 percent. Read more ..
Economic Recovery on Edge
|Armstrong Williams||August 8th 2012|
Cutting Edge Conservative Commentator
A recent Wall Street Journal article examined how the Fed’s use of low interest rate policies has failed to reach those in need the most. Aptly calling it the “credit divide,” the article finds that “Fed officials have been frustrated in the past year that low interest rate policies haven’t reached enough Americans to spur stronger growth, the way economics textbooks say low rates should.” That conclusion is of no surprise to many, especially to the 73 million unbanked and under banked Americans who don’t even figure into the Fed’s equation. That’s because extending credit to these individuals has never been seen as a meaningful contributing factor to the overall health of the economy. Sure there have been special initiatives like the FDIC’s small dollar loan program a few years back, which by all measurable accounts failed. Not because banks weren’t willing to participate in the pilot program, but at the end of the day, without FDIC incentives banks simply couldn’t make money.
Yet, we have 73 million men and women who live with the constant fear that a financial hiccup will trigger a need for money that they don’t have and most likely can’t get. While the Feds are making easy credit, it’s going to those with near perfect credit scores&—which leaves many of these 73 million Americans scrambling for other options. In other words, while interest rates are at an all time low, money still isn’t available to those that need it the most.
In a recent study, Serving Consumers’ Needs for Loans in the 21st Century, author Michael Flores finds that neither banks nor alternative financial services providers are extending loans in the $750 to $5,000 range. It’s not complicated to understand; despite benefiting from the Fed’s easy money, loans of under $5,000 simply aren’t profitable for banks. Even if such loans were to exist, many customers wouldn’t qualify. On the other hand, alternative financial services (AFS) providers can’t fill the space because of the burdensome costs of complying with 50 distinct sets of state regulations. Read more ..
|Michael Oren||August 7th 2012|
|Israeli Ambassador Michael Oren|
Nearly two decades ago, Israel started alerting the world about Iran's nuclear program. But the world ignored our warnings, wasting 10 years until the secret nuclear enrichment plant at Natanz was exposed in 2002. Then eight more invaluable years were lost before much of the international community imposed serious sanctions on Iran.
Throughout that time, the ayatollahs systematically lied about their nuclear operations, installing more than 10,000 centrifuges, a significant number of them in a once-secret underground facility at Qom. Iran has blocked International Atomic Energy Agency (IAEA) inspectors from visiting its nuclear sites, refused to answer questions about the military aspects of its program, and rejected all confidence-building measures. Iran has tested long-range missiles capable of reaching any city in the Middle East and, in the future, beyond.
Iran is also the world's leading state sponsor of terror. It has supplied more than 70,000 rockets to terrorist organizations deployed on Israel's borders and has tried to murder civilians across five continents and 25 countries, including in the United States. In July, Iranian-backed Hezbollah terrorists killed five Israeli tourists, among them a pregnant woman, in Bulgaria. Iran's forces have attacked American troops in Afghanistan and Iraq. Its agents are operating in Yemen, Africa and South America. By providing fighters and funds, Iran is enabling Syrian dictator Bashar al-Assad to massacre his own people. Read more ..
The 2012 Vote
|Honor Sachs||August 6th 2012|
|Stanley Dunham, Stanley Ann Dunham, Maya Soetoro, Barack Obama|
On July 30, the New York Times broke a story about the Obama family’s ties to slavery. Not Michelle Obama. Her family connection to slavery has been extensively covered by the Times and documented in Rachel Swarn’s American Tapestry. Rather, the story revealed the history of Barack Obama’s ties to slavery through his mother’s side. The article announced that genealogists have traced the family history of Obama’s mother, Stanley Ann Dunham, to seventeenth-century Virginia, where they claim it is possible she may have descended from an African servant named John Punch. Using ancestral databases and DNA evidence, researchers have linked Dunham’s history to the “mixed-race Bunch line,” a family who became wealthy colonial landholders and were racially considered white despite their ties to Africans like John Punch.
The story of John Punch occupies an important place in the history of slavery in North America. When the English imported Punch to the Virginia colony in the mid-seventeenth century, he became an indentured servant. The primary source of labor in the Virginia colony for the better part of the seventeenth century was servitude. The colony imported workers from Europe to work in tobacco fields. They had little interest in utilizing African slaves. African imports were comparatively expensive next to the cheap imports they could scoop off the streets or out of the jails of London. At the time John Punch arrived in the English colony, he was one of a relatively small population of Africans. Read more ..
Israel and Palestine
|Evelyn Gordon ||August 6th 2012|
When a blue-ribbon panel of Israeli legal experts issued a report this July declaring that the West Bank isn't "occupied territory," but territory to which Israel has a legitimate claim, and that settlements therefore cannot be considered ipso facto illegal, it raised an outcry both in Israel and overseas. A group of prominent American Jews even wrote Prime Minister Benjamin Netanyahu to urge him against adopting the report, arguing that it would imperil both "the two-state solution, and the prestige of Israel as a democratic member of the international community," because the latter depends on persuading the world that Israel is "committed to a two-state vision." Many Israeli pundits voiced similar concerns.
Since the Levy Report essentially reiterates the official position of all Israeli governments, this concern seems strange. Nevertheless, its opponents are right to see it as a potential game changer. Where they err is in deeming it a negative one. In reality, the report offers Israel a golden opportunity to start regaining the diplomatic ground it has lost over the last two decades. Read more ..
China on Edge
|Eswar Prasad||August 6th 2012|
The Brookings Institution
China pessimists are claiming vindication as growth slows in the world’s second-largest economy. Optimists point out that Beijing has fiscal room to respond but there are risks to any short-term policy measures. A surge in bank-financed investment, for example, could boost growth but it is also likely to increase the stock of non-performing loans in the banking system and set back the goal of rebalancing growth by promoting private consumption. An aging population and a rocky leadership transition strengthen the bears’ case.
However, there are grounds for hope. Recent political turmoil, including the Bo Xilai affair, put reactionary forces in the Communist Party of China on the defensive. Meanwhile, reform-minded officials pushed through some modest but significant financial market reforms.
The government has long recognised that reforming the financial sector is needed to improve the balance and sustainability of growth. Why has it not acted more forcefully before? The present system works well – for some. State-owned banks provide cheap financing for state enterprises, which are key fiefdoms of political patronage. Banks also provide financing to powerful provincial officials through shell corporations that bankroll pet investment projects. This is financed by paying Chinese households low or negative inflation-adjusted returns on their voluminous bank deposits. Read more ..
|Armstronmg Williams||August 5th 2012|
Cutting Edge Conservative Commentator
A recent Wall Street Journal article examined how the Feds use of low interest rate policies has failed to reach those in need the most. Aptly calling it the "credit divide," the article finds that "Fed officials have been frustrated in the past year that low interest rate policies haven't reached enough Americans to spur stronger growth, the way economics textbooks say low rates should." That conclusion is of no surprise to many, especially to the 73 million unbanked and under banked Americans who don't even figure into the Feds' equation. That's because extending credit to these individuals has never been seen as a meaningful contributing factor to the overall health of the economy. Sure there have been special initiatives like the FDIC's small dollar loan program a few years back, which by all measurable accounts failed. Not because banks weren't willing to participate in the pilot program, but at the end of the day, without FDIC incentives banks simply couldn't make money.
Yet, we have 73 million men and women who live with the constant fear that a financial hiccup will trigger a need for money that they don't have and most likely can't get. While the Feds are making easy money, it's going to those with near perfect credit scores which leave many of these 73 million Americans scrambling for other options. In other words, while interest rates are at an all time low, money still isn't available to those that need it the most.
In a recent study, Serving Consumers' Needs for Loans in the 21st Century, author Michael Flores finds that neither banks nor alternative financial services providers are extending loans in the $750 to $5,000 range. It's not complicated to understand, despite benefiting from the Feds' easy money, loans of under $5,000 simply aren't profitable for banks. Even if such loans were to exist, many customers wouldn't qualify. On the other hand, alternative financial services (AFS) providers can't fill the space because of the burdensome costs of complying with 50 distinct sets of state regulations. Read more ..
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