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The Battle for Egypt

Egypt at a Bleak Crossroads

August 19th 2013

Egyptian bannerman

The bloody crackdown on the sit-in camps in support of deposed President Mohammad Mursi in Egypt’s Rabaa al-Adawiya and Ennahda squares on Wednesday left more than 600 Egyptians dead and more than 2,000 injured, according to the Health Ministry.

While the estimate of the makeshift hospital in Cairo’s Rabaa square was a lot worse, at around 2,000 fatalities, the figure still does not account for fatalities elsewhere in the bloodied country.

To many, the profiles of the murdered protestors reflect a less publicized reality. The sit-ins included more than just Muslim Brotherhood (MB) members, and even more than just the supporters of the pro-Mursi coalition (the National Coalition for the Support of Legitimacy).

The victims of the crackdown included young activists, such as Abdullah Sultan an activist who organized petitions and distributed anti-Mursi posters on June 30, celebrated his ouster on July 3, and then joined the Rabaa sit-in to protest the Presidential Guard massacre of July 8, 2013. Read more ..

The Battle for Egypt

How the Israeli Drone Strike in the Sinai Might Backfire

August 18th 2013

Drone Chopper

In April 1982, Israel withdrew the last of its military forces from Egypt's Sinai Peninsula. On Friday, for the first time in more than 30 years, Israeli military assets reportedly reentered Egyptian territory. On August 9, an Israeli drone operating in Sinai airspace with Egyptian approval killed five militants preparing to launch a rocket into Israel.

The proactive Israeli action may herald a positive new dynamic in Israeli-Egyptian relations. But for the Egyptian military -- which depends on popular goodwill to govern post-coup Egypt -- enhanced security coordination with Israel might not be politically sustainable. Already, this unprecedented move has provoked a backlash against the generals.

Ever since the toppling of Egypt's longtime President Hosni Mubarak in 2011, security in the Sinai -- a region long underserved by Cairo -- has become precarious. Read more ..

Broken Economy

The Economic Case for Social Mobility

August 17th 2013

Detroit abandoned house

Social mobility is flavor of the month in the politico-academic complex. President Obama passionately denounced the narrow opportunities for upward mobility from the bottom of the income scale as a "betrayal of the American idea." While the President provided the rhetoric, a team of academics from Harvard and Berkeley produced the data: a ground-breaking academic study on rates of mobility in local economies around the U.S.

Defined as "everyone getting a chance to get ahead in life," social mobility is a less controversial good than motherhood or apple pie. The controversies begin when it comes to explaining why some towns and nations – say, Salt Lake City and Denmark - have high rates of mobility and others – say, Atlanta and the UK – do not. Conservatives point to family breakdown; liberals to investments in education for poorer kids. (Both, of course, are right.)

Not just a social problem
But an overlooked aspect of the mobility debate is the connection to growth. Social mobility is not just a social problem, but an economic imperative too. And despite recent positive signs, sluggish economic growth is the single biggest problem facing the US, and indeed most advanced economies around the globe. Read more ..

The Iranian Threat

Balancing Iran

August 16th 2013

Iranian clerics

This past May 29, Turkish Prime Minister Recep Tayyip Erdogan and President Abdullah Gül came together to dedicate the building of a new bridge to span the Bosporus. Launched on the anniversary of the Ottoman Empire’s conquest of Istanbul, the new bridge was christened after Selim the Grim, the architect of the Ottoman wars against Persia during the 16th century. For observers of Turkey, the namesake certainly seemed suggestive: Selim I is also remembered for smashing the Ottoman Alevis and Shi‘a during the most brutal chapter of the Turkic-Persian wars.

In exalting Turkey’s Ottoman champion against Iran, Turkish leaders may have unwittingly paraphrased contemporary Turkish foreign policy. If nothing else, they called attention to an historical parallel that is increasingly coming into starker relief. Once upon a time, Turkish-Persian rivalry was the defining political contest of the Middle East. Following the retraction of the Mongol armies in the mid-14th century, Ottoman Turks and Safavid Persians—claiming to stand for Sunnis and Shi‘a, respectively—fought incessantly for two centuries over Iraq, the Caucasus and what is today eastern Turkey. It was a contest for geopolitical and economic dominion, for the victor would control the hub of the lucrative global silk trade and production. Read more ..

Egypt's Second Revolution

Making the Most of Limited U.S. Leverage in Egypt

August 16th 2013

Cairo Violence Dec 2012

Although Washington cannot dispel the existential fight between the military and the Brotherhood, it can exert influence in other ways.

Washington's confusion about the rapidly worsening events in Egypt is understandable. The Muslim Brotherhood's yearlong, stunningly inept attempt to consolidate total power has given way to a new military-backed government that appears inclined to do the same -- albeit with far better arms. American policy makers are once again wringing their hands over what to do; specifically, whether to cut off $1.3 billion in annual military aid.

According to U.S. law, foreign aid must be cut off to any country after a coup. So some worry that by not withdrawing aid from Egypt following what was, technically speaking, a military coup, Washington is sending the message that American law doesn't matter. Many also fear that continuing military aid will reflect -- for the umpteenth time -- a lack of American seriousness about promoting democracy in Egypt. Read more ..

The Edge of Justice

Why Would You Foolishly Waste it All Hernandez?

August 15th 2013


A contract worth 40 million dollars, a newborn child, a fiancée, on top of being the star receiver for one of the NFL’s best teams and historically successful franchises apparently didn’t matter to Aaron Hernandez. How anyone in their right mind do something so sinister after becoming “set” for the rest of their life seems to be the general consensus. The headline for the Aaron Hernandez case however shouldn’t be about the tragedy he was involved in, as horrific as it was, it should focus on the fact that despite stardom, athletes fame and fortune actually enhances their past demons, they become lost in an inner image struggle, and revert back to their comfort zone and their old life, too give them a deeper sense of power. This is a problem that can be fixed, sports leagues and their owners around the world can do a couple of things to help prevent a situation like this in the future, believe it or not, but first it’s important to understand the underlying reason for Hernandez’s behavior, at the most basic level.
Generally speaking people act like the people that surround them; it gives insight to your personality, your interests, and your ambition, or your lack thereof. If you hang out with people that aren’t very ambitious it’s fair to say you aren’t or won’t be in the future, and if you’re Aaron Hernandez and you hang out with a crowd that got you in trouble in years past, it should be no surprise for your facing time in prison. According to a columnist for the Orlando Sentinel "The fact is, nobody in Gainesville is totally shocked that Hernandez seems to be a person of interest in a homicide probe."But why is everyone else in the media so surprised? Born in the home town of ESPN, Bristol Connecticut, Hernandez was the star of the high school football team and was heavily recruited to play at the University of Florida. Read more ..

Broken Government

State and Local Government Deficits Soar. Are Others Following Detroit's Footsteps?

August 14th 2013

Detroit abandoned house

What if state and local government deficits doubled over night and nobody noticed? That’s what happened last Wednesday when the Bureau of Economic Analysis released its comprehensive revision of the National Income and Product Accounts.

As my TPC colleague Donald Marron noted, the new BEA numbers downsized the federal government relative to GDP. They assigned economic value to intellectual property (such as a TV show about nothing). The numbers also brought about some soul searching on what GDP should be measuring.

But few people noticed that the numbers included a new measure of defined benefit (DB) pension obligations, which remain a big deal in the public sector even as most private employers have switched to 401(k)s. Largely because of this accounting change, what the BEA calls state and local government “net savings”—or the difference between current revenues and expenditures—fell from -$129 to -$252.7 billion.

Given attention to state and local pensions lately, especially in Detroit, one would think this news would have been met with cries of alarm or at least mild curiosity. But alas, no. That oversight is unfortunate because the new data shed light on an important issue. Read more ..

Islam and Europe

Islam Advances towards Conquest of Higher European Education

August 13th 2013

Muslims pray at Vitorio Emanuele in Rome

The Catholic University of Leuven, the oldest university in Belgium and one that has been a major contributor to the development of Roman Catholic theology for more than 500 years, will offer a degree in Islamic theology beginning in 2014.

The decision by KU Leuven, as the university is commonly known, to focus on Islam follows similar moves by other leading universities in Europe and reflects the growing influence of Islam on the continent.

The proliferation of degree programs in Islamic theology is being justified by European governments -- which are subsidizing the teaching of Islam in European universities with taxpayer money -- as a way to "professionalize" the training of Muslim imams, or religious teachers, many of whom do not even speak the language of their European host countries.

Some European governments believe that by controlling the religious education of imams, they can promote the establishment of a "European Islam," one that combines Islamic principles and duties with European values and traditions such as the rule of law, democracy, human rights and gender equality. Read more ..

The Iranian Threat

Iran's "Reformist" Charade

August 13th 2013

Quds Force

The U.S. resolve to deny Iranian aggression, especially its ongoing nuclear weapons development is giving the Ayatollah Khamenei and his new government operative, "reformist" Hassan Rowhani the rope with which to hang the U.S. The more Obama squirms away from the unpleasant reality of Iran, the tighter the noose gets.
Rowhani's nomination of Hossein Dehghan as defense minister, should have made headlines in the NYT and the WSJ, but it didn't.  Apparently they've forgotten Dehghan's role in the 1983 Marine Barracks bombing in Lebanon that killed 241 American troops. Instructions from Tehran for the attack were sent to the Iranian ambassador to Syria, who passed then on to the Revolutionary Guards in Lebanon and their Lebanese Shiite allies.  Dehghan was in command of the Revolutionary Guards in Lebanon and saw to it that the actual bombers got the funding and operational training required. Read more ..

The Digital Edge

App-Powered Protests Put Democracy in Peril

August 12th 2013

french of turkish descent protesing genocide bill

Should we have democracy on demand? Spain, Turkey, Brazil, Egypt have experienced forms of it. What other country might be next to feel the wrath of people power?

In the past few years, TV news cameras have gone from capital to capital to film the anger of people demanding change from their governments.

Europeans have taken to the streets to oppose economic austerity policies — demanded by the IMF and eurozone powerhouses in exchange for sorely needed money to shore up public finances.

In Turkey, an urban planning issue turned a small green space into a national crisis for a third-term president who was viewed as a populist leader. In Brazil, people poured into the streets to tell its democratically elected president that policy priorities should be transportation, solving inequities and better education — not flashy international games. Read more ..

Broken Education

Obama Needs Push to Shake Up Higher Education

August 11th 2013

College expenses

President Barack Obama keeps declaring war on rising college costs. In a speech at Knox College last month, he vowed to unveil an “aggressive strategy to shake up the system, tackle rising costs and improve value.” He said something similar in his 2012 State of the Union address, so I’m a little skeptical that much will happen.

As students get ready to go to college this month, let me suggest ways to “shake up the system” and “tackle rising costs.” In doing so, I would point out that two things lead to higher prices: rising demand and falling supply. Any efficient solution to the explosion in college tuition and fees must either damp demand or increase supply. With that in mind, here is a five-point federal-action plan.

First, scale back federal student loans and related government programs. The increased demand for higher education in recent decades partly results from the explosive growth of these programs. They were originally intended to help poor people gain access to college, yet they have probably had the opposite effect, pushing up the sticker prices of colleges substantially. The easy money has helped fuel an academic arms race that provides amenities such as climbing walls and luxury student centers that entice kids from higher-income families but scare poor students away. The proportion of recent college graduates from low-income backgrounds has fallen since the federal student-assistance programs became large. Read more ..

The Edge of Terrorism

The Coming of Al Qaeda 3.0

August 10th 2013

Ayman al-Zawahiri

In case anyone needed reminding, the recent global terror alert illustrates that, 15 years after its first attacks on America, Al Qaeda is thriving. The coup in Egypt and the chaotic aftermath of the Arab awakening is only going to add more militants to this army of radicals. Failed revolutions and failing states are like incubators for the jihadists, a sort of Pandora’s Box of hostility and alienation.

The news that al Qaeda leader Ayman al-Zawahiri and his man in Yemen, Nasr al Wuhayshi, were communicating and hatching plots to attack Western targets in the region is no surprise. Like any CEO of a multinational company, Zawahiri is in regular communication with al Qaeda’s half dozen regional franchises—just as Osama bin Laden was before he was killed.

What is new is the rapid growth of these franchises—associated cells and sympathetic movements from Algeria to Aden. The uprisings that swept the Middle East two years ago initially threatened al Qaeda by suggesting a better alternative to terror and jihad in the form of democracy and peaceful change. Now the revolutions have all but failed, creating more chaos than constitutions, and Twitter is not mobilizing reform. The pandemonium in Syria, Libya, and Egypt, are like a hothouse for al Qaeda, which is thriving just as it has in Somalia and Afghanistan. Read more ..

Broken Healthcare

A Brave New World for Health Insurance

August 9th 2013

Click to select Image

If you pay attention and listen closely, you can hear it.

That’s the sound of the death rattle. Soon we’ll need to put the undertakers and gravediggers on notice.

It is just a matter of time, no more than a few years, before we will be bidding farewell to the U.S. health insurance industry as we have grown to know it.

The big New York Stock Exchange-listed insurance firms have known for several years that their core business models are not sustainable, but they have dared not talk about it publicly. The demise of those companies started way before Barack Obama was elected president but, with the passage of ObamaCare, it has accelerated.

It is ironic, but the companies have become victims of their own success, or more accurately, victims of the prevalent industry business practices that contributed to that success.

Even more ironic: these companies, which got their start by assessing and assuming risk, have gone to great lengths in recent years, because of pressure from Wall Street, to shun as much risk as possible. That’s why with one notable exception — WellPoint — the big for-profit “insurers” are not looking at the new health insurance marketplaces, which will go online October 1, as opportunities. Aetna, Cigna and UnitedHealthcare have all said they will be participating in only a few of those state-based marketplaces, at least in 2014. Read more ..

America and Israel

Memo to Republicans: Israel on the Rise

August 8th 2013

Click to select Image

As Sen. Lindsey Graham (R-S.C.) and BFF John McCain (R-Ariz.) head to Egypt on President Obama’s orders, should not Nancy Mace, who brings Graham a primary challenge, take a trip to Israel to establish contrast? Mace has the opportunity here to educate and awaken Sens. Rand Paul (R-Ky.), Mike Lee (R-Utah) and Ted Cruz (R-Texas), the avant garde of the rising conservative generation, just as Dorothy did her erstwhile triumvirate on their journey to Oz.

Recently, Paul visited Israel, possibly hoping to quash rumors that his father is an anti-Semite.

Ron Paul is no anti-Semite. He may have believed, like many, that American foreign policy regarding the Middle East was coordinated with Israel and dominated by American Jews. American Jewish influence on policy in Washington no doubt reflects the great presence of second- and third-generation Jews from Europe to America.

It is anti-Semitism lite, compared to what we have seen in Europe in past centuries. But the easy new anti-Semitism emitting from academia and global pop culture may be damning for Israel. And Israel’s American friend may in fact be her worst enemy. It has been so these past 20 years.

To generalize Jewish dominance is misguided and has fostered a new, Certain American Christians greatly influence policy on Israel, which is why an American politician with Jeffersonian and libertarian roots should identify with Israel as a liberty and freedom-loving American without the apparent imperial and paternalistic intent to educate (a 5,773 year-old people) and the conquistador mentality that conspicuously drips from visiting Americans like Secretary of State John Kerry, including religious leaders. Read more ..

The Defense Edge

Dog Days of Summer and the Electrical Grid

August 8th 2013

Electromagnetic Pulse Weapon

In these "dog days of summer" and with congress out of town, intelligence warnings have provoked an unprecedented closure of our embassies and consulates, associated overseas travel alerts, and presumably preparations to deal with jihadi attacks at home and abroad.

These sobering events suggest it is time to reconsider our policies for dealing with jihadi terrorists and protecting the American People at home and abroad against failures of past policies-especially in view of the dysfunctional features of the Federal Government that prevent the common defense called for by the Constitution.

When a young SC farm boy, I thought the "dog days of summer" referred to the hot, humid, sultry days of summer-before air conditioning. Recently, I was not sure what it had to do with man's best friend. So I googled . . . and learned the term had nothing to do with our furry, four-legged friends lounging in the shade.

Apparently, the "Dog Days" date to when our Greek ancestors, after nightfall, studied the sky in the dark-no electricity. They looked up at the billions of stars, none brighter than Sirius-this time of year, part of the Canis Majoris constellation, hence Dog Star. After a long night of wishing on falling stars, Sirius would finally awake from his slumber, rise, stretch, and bark with the sunrise as the earth proceeded in its orbit around the sun.

When the philosophers of ancient Greece were eclipsed by the warriors of ancient Rome, the Dog Days evolved to include a new ritual-the sacrifice of a brown dog to mollify Sirius, who was believed to be responsible for the hot, sweaty weather. Contemporaries of the Greeks and Romans, the ancient Egyptians connected Sirius rising to the season of the Nile's flooding, and thought of the star as a watchdog for the event. Read more ..

Israel on Edge

Iron Dome Is A Game Changer, But It’s Just The Beginning

August 7th 2013

Iron Dome sunset

Thousands of rockets aimed at schools, nursing homes and city centers within Israel have killed or injured hundreds of innocent Israelis. For well over the past decade, Israel has been terrorized by indiscriminate rocket fire from Hamas, Hezbollah and other neighboring terrorist entities.

Thousands of rockets aimed at schools, nursing homes and city centers within Israel have killed or injured hundreds of innocent Israelis.

Over 50,000 rockets are pointed at Israel at any given time, not including chemical weapons from Syria or intercontinental ballistic missiles (ICBMs) from an Iran on the brink of nuclearization.

To address this increasingly sophisticated and aggressive threat, the United States and Israel are co-producing a multi-tier missile defense apparatus capable of intercepting virtually any rocket or missile. This unprecedented joint venture will save lives, prevent further conflict escalation, create American jobs and pay dividends far into the future. Read more ..

The Edge of Terrorism

"Dealing" with Terrorism, the Obama Way

August 6th 2013

Hamas head

The State Department's extended embassy closures in the Middle East and Africa and worldwide alert to Americans traveling abroad, according to ABC News was announced because of fear of al Qaeda attacks by "living (but not ticking) bombs," i.e. surgically implanted undetectable liquid explosives. Most likely these were developed by AQAP's expert bomb-maker, Ibrahim Hassan al-Asiri, who is alive today probably thanks to the Associated Press.

The AP's May 7, 2012. report on al-Asiri's new explosive device probably saved his life only to threaten our lives.
Thus undermining the efforts underway to kill the terrorist .

Al-Asiri remained free to improve his super-bomb.  At that time, Dianne Feinstein (D-CA), chairwoman of the Senate Intelligence Committee, remarked, "I don't think those leaks should have happened. There was an operation in progress and I think the leak is regarded as very serious." And the chairman of the House Intelligence Committee, Mike Rogers (R-MI) stated, "If something bad happens because it was leaked too early, that's a catastrophe and it's also a crime." AP called it 'free speech'. Alas, as we are witnessing today, this was irresponsible speech.  Read more ..

Inside Politics

Dogmatism of GOP's Base Leading Party Down a Dead-End Street

August 5th 2013

Juan Williams 02

The summer recess sends home 535 members of our nation’s wildly unpopular Congress.
Will members be told to do better at job creation and fixing the broken immigration system? Will voters get in their faces and say ‘Enough’ to meaningless votes over healthcare reform? It is not likely.

The old Pogo comic-strip zinger applies here: “We have met the enemy and he is us.”

The heavily manipulated drawing of congressional districts over the last decade has created insulated pockets for dysfunctional political behavior. Most members of Congress face little criticism from people in their districts because those districts are increasingly limited to like-minded voters of the same party. And the political activists in those homogenized districts are often more polarizing than the people they send to Congress.

Only 16 House Republicans come from congressional districts that voted for President Obama. Among Democrats, there are only nine members who represent a district won by the Republicans’ last presidential candidate, Mitt Romney.

Thanks to an increase in Republican-led state legislatures over the last two years, the borders of several congressional districts nationwide have been redrawn to increase the odds that Republicans will retain control of those seats. One consequence is an increase in the racial imbalance in Republican congressional districts. In a nation that is more than one-third Hispanic, black and Asian, the voters in GOP congressional districts are on average 75 percent white. The Cook Political Report puts an even sharper edge on what ‘home’ means to members of Congress. There are almost no swing districts anymore. Read more ..

Inside Politics

A Divided GOP Will Fall

August 4th 2013

Capitol Hill

Buy a ticket and have a seat — the curtain is up on the GOP’s implosion as high-profile Republicans considered future leaders and presidential contenders insult and accuse each other, hurling enough cable news kindling around to not only break through the story of Anthony Weiner’s self-immolation but to make President Obama look like the grown-up heading into the budget battle this fall. This was no easy feat.

Forget conservative revolts on the farm bill or immigration reform; after a season of legislative avoidance, Congress will return in September to face deadlines for funding the government and raising the debt ceiling on which GOP division is nearly as stark as the divide between the two parties. What’s more, recent disagreements on national security policy have now split Republicans into two camps of hawks and doves. Read more ..

Defense on Edge

The Pentagon's Illusion of Choice: Hagel's 2 Options Are Really 1

August 2nd 2013

U.S. Naval Carrier

Yesterday at the Pentagon, Secretary of Defense Chuck Hagel unveiled the results of his Strategic Choices and Management Review (SCMR). The belated effort sought to think through the options — many unsavory — available to the military should sequestration and its $500 billion defense budget cuts remain law for the rest of the decade.

Secretary Hagel’s cafeteria menu of options for policymakers should sequestration continue is so unpalatable because this is not the first round of defense budget cuts. Sequestration’s $500 billion in Pentagon reductions come on top of the close to $1 trillion in military spending cuts already enacted under the Obama administration.

The bottom line of the Pentagon’s review: Secretary Hagel says the choice will be between a smaller and modern military or a bigger and older one. The harsh truth is that the result of sequestration will actually entail both: The US military is set to become both smaller and less modern in course of this defense drawdown. Readiness continues to fall under all options and scenarios, as well. Read more ..

The Iranian Threat

The Revolutionary Guard & The Iranian “Reformer”

In mid-July 2013 Revolutionary Guards Spokesman Ramazan Sharif gave an extensive, rare interview to the reformist daily Shargh.

 In the interview, the high-ranking officer discussed the Revolutionary Guards’ interaction with past governments, their involvement in politics and economy, the role they played in suppressing the 2009 riots, and their attitude towards president-elect Hassan Rowhani. Sharif denied claims of Revolutionary Guards support for Ahmadinejad and said that the organization faced greater difficulties than before during his presidency, concerning their involvement in economic projects. The spokesman rejected criticism leveled at the Revolutionary Guards over their growing involvement in politics and economy, saying that the organization intends to help the new government within the framework of the law. Read more ..

Israel and Palestine

Fixing Palestine

August 1st 2013

Palestinian Rock Attackers

The greatest success of the Arab States against Israel (there aren't many) has been to change the terms of reference. In 1947, the Arabs unanimously rejected the UN Partition Plan for Palestine and in 1948 attacked Israel, Goliath against David. Through 1956, 1967, and 1973 Israel was understood to be on the receiving end of the enormous wealth, fury and rejection of the Arab States -- hence the name, "Arab-Israel conflict." But with the exercise of the Arab oil weapon, international priorities were transformed; the first priority being not to irritate Saudi Arabia. The Arab States let themselves off the hook, passing the onus of rejectionist thuggery on to Israel, the Goliathite aggressor against the Davidish Palestinians. Now there is the "Palestinian-Israeli conflict," reflecting the preference of the Arab States and priorities of Washington.

To read the Washington newspapers this week, which are representative, Israeli and Palestinian negotiators are meeting under the auspices of the American government to make Palestine. The Palestinians and Secretary of State John Kerry allowed it to be known that the Israelis were asked/pushed/threatened to provide a prisoner release, a settlement freeze, and a commitment to begin negotiations on the 1949 Armistice Line (the so-called 1967 border). The Palestinians were asked to provide... well, nothing, actually because that's not the issue. Read more ..

Paraguay on Edge

The Reasons Why Paraguay Should not Join the Pacific Alliance

July 31st 2013

Horacio Cartes Paraguay
President-elect Horacio Cartes of Paraguay

On May 23, 2013, Paraguay was accepted as an observing member of the newly formed Pacific Alliance at a summit of regional leaders in Cali, Colombia. Paraguayan officials have expressed confidence that entrance into the regional bloc will strengthen economic ties to global partners in Asia and Latin America and further stimulate the economy. But Paraguay’s problems, most notably the continued high level of economic inequality, will not be quickly remedied by an increase in exports of soybeans and other goods. In fact, entrance into the Pacific Alliance could well serve to exacerbate economic inequality, possibly even generating a land grab by Brazilian soybean farmers and agribusinesses in Paraguay that could push small holders off their plots.

While there are certainly advantages to joining the Pacific Alliance, doing so cannot, in the end, offer a one-step solution to what ails Paraguay. Incoming president Horacio Cartes would be well advised to instead focus on pushing through land reform for small holders and amending Paraguay’s regressive taxation system rather than entering into trade arrangements that are mainly designed to profit the already prosperous landholders. Read more ..

Obama's Second Term

Obama Says Pay Gap is 'Morally Wrong'

July 30th 2013


President Barack Obama is changing gears on the economy, highlighting income inequality as a growing problem in advance of pitched fall battles with congressional Republicans over funding the government and raising the debt ceiling. The focus is intended to make it easier for Obama to argue that new taxes on the rich — and not cuts to social spending — should be imposed to lower the deficit.

It also dovetails with Obama’s call for Congress to raise the federal $7.25 minimum wage and to end the automatic spending cuts known as sequestration. “This growing inequality is not just morally wrong, it’s bad economics,” Obama said in remarks last week in Galesburg, Ill., where he began a new push on the economy. “The income of the top 1 percent nearly quadrupled from 1979-2007, but the typical family’s incomes barely budged,” he said. Read more ..

Broken Economy

Fact-Free 'Middle Out Economics'

July 29th 2013


President Obama has finally stopped blaming George W. Bush for America’s current economic mess. Now it’s Ronald Reagan’s fault.

Obama didn’t use those exact words or make that explicit claim in his Knox College speech last week, but that’s the gist of it. The Great Recession and its slow-growth, high-unemployment aftermath are really just the culmination of three decades of pro-market economic policies that favored the rich at the expense of the middle class.

Here’s how Obama rewrites economic history: The shared national purpose of World War II was followed by a golden age of shared prosperity in the 1950s and 1960s. Unions were strong, taxes high, pension benefits guaranteed — thanks to a grand egalitarian bargain between Big Government, Big Business, and Big Labor. “But over time, that bargain began to fray,” Obama said. “Technology made some jobs obsolete. Global competition sent a lot of jobs overseas. It became harder for unions to fight for the middle class. Washington doled out bigger tax cuts to the very wealthy and smaller minimum-wage increases for the working poor.” And with the recession and financial crisis, Obama concluded, “the decades-long . . . erosion of middle-class security was suddenly laid bare for everybody to see.” Read more ..

The Battle for Syria

Agitating for an American War in Syria

July 28th 2013

Click to select Image

Senator Carl Levin, Chairman of the Armed Services Committee, wants to go to war in Syria -- not with Syria, necessarily, but in Syria.  And it's not really war, although it involves weapons and American troops (in the air -- Sen. Levin has been very explicit about "no boots on the ground," as if American bombs are less war-ish than American infantry).  He and Senators John McCain and Robert Menendez aren't looking for victory, and they don't want the military to remove Assad from power.  But they're pretty sure that weapons could be useful somehow, used by someone -- maybe by barefoot Americans (no boots).  All this appears in their letter to President Obama urging "American leadership" in Syria. It is a stunning mess. Read more ..

The Edge of Terrorism

Al Qaeda Is Back

July 27th 2013

Bomb explosion

Two spectacular al Qaeda prison breaks in Iraq, freeing over 500 of its members in two separate prisons simultaneously this week, demonstrate the group is back with a vengeance. Al Qaeda’s Iraq branch is also the moving force behind the jihadist success in Syria. The resurgence of al Qaeda in Iraq has sobering implications for what is likely to follow the drawdown of NATO forces in Afghanistan for the al Qaeda mother ship in Pakistan.

The double jailbreaks at Abu Ghraib and Taji prisons were massive attacks. Suicide bombers, teams of attackers using mortars and small arms, and two dozen car bombs were used. The firefight killed over a hundred Iraqi guards. The attackers also had inside help within the Iraqi security forces. The attacks were the culmination of what al Qaeda in Iraq’s leadership had promised a year ago when it launched the “Breaking the Walls” offensive to free its prisoners from Iraqi jails.

Al Qaeda in Iraq, or the Islamic State of Iraq and the Levant, as it is officially named, was created by Abu Musab al Zarqawi in the wake of the American invasion of Iraq in 2003. A Jordanian, Zarqawi had worked with Osama bin Laden in Afghanistan before 9/11 and built many connections in Iraq in the months before the war. Within months of the occupation, his terror gang was killing American troops and Iraqi Shia and taking the country to civil war. Bin Laden publicly anointed him al Qaeda’s amir for the entire region including Iraq, Syria, Jordan, Lebanon, and even Turkey. Read more ..

Obama's Second Term

How New International Law Undermines Democratic Sovereignty

July 26th 2013

Obama Bowed Head

Rarely does the U.S. Senate reject a treaty. But on December 4, 2012, it did just that, blocking ratification of the UN Convention on the Rights of Persons With Disabilities. President Barack Obama had argued that by joining, the United States would "reaffirm America's position as the global leader on disability rights" and help inspire other countries to improve their treatment of the disabled. Skeptics asked why ratification would prove more inspirational than the U.S. domestic laws already on the books. When skeptics also warned of the effect on U.S. sovereignty, supporters stressed that the treaty imposed no burdensome requirements. That was a peculiar argument, for if the treaty lacks substance, then there is no point in ratifying it, and if it makes substantive demands on the parties, then the concerns about sovereignty are well founded.

What little news coverage the Senate vote did garner tended to describe the treaty's supporters as sympathetic to the disabled and its opponents as insensitive. Little light was shed on why any senator would appear to subordinate the interests of the disabled to an ideological abstraction such as sovereignty. But what sank the treaty was not heartlessness, nor was it any abstract quibble. Rather, opponents were worried about something practical and fundamental: whether U.S. laws should be made by politicians held accountable to Americans through the ballot box or by unaccountable officials in multinational organizations. Read more ..

The Edge of Terrorism

The EU’s “Eureka” Moment on Jihadists

July 24th 2013

Hezbollah rally

The news of Hezbollah’s “military wing’s” designation as a terrorist organization by the European Union made headlines in the U.S. and in Europe. The EU demands unanimity on such policy decisions. However, because only 22 of the 28 member states favored the listing of all of Hezbollah, the compromise was to designate only the “military wing” as a terrorist organization. Hezbollah, like all terrorist organizations, does not make such a distinction between its political, “charitable,” and “military” activities. They are one for all and all for one. Moreover, Hezbollah has publicly denied such a division of the organization.

In October 2012, Hezbollah’s second-in-command, Naim Qassem, declared in Beirut: ”We don’t have a military wing and a political one. We don’t have Hizballah on one hand and the resistance party on the other. Every element of Hizballah, from commanders to members as well as our various capabilities, are in the service of the resistance and we have nothing but the resistance as a priority.”

The EU’s willful blindness towards jihadist organizations, be they Sunni or Shia, is motivated by greed. Buying Iranian oil and gas and selling Iran “dual use” products, which are sanctioned by the U.S., has always had a priority over security. Read more ..

Broken Education

Failing Our Children

July 24th 2013

Student at Blackboard-Togo

America’s public school system has largely become a disaster. A few weeks ago, a listener of my radio show told me how her son had recently graduated high school and gone to college. He quickly discovered he could not keep up with the coursework because he could only read at a 6th grade level. This is not an uncommon occurrence. In fact, it is typical.

State and federal funding for schools is determined by how many kids pass, graduate, as well as score on standardized tests. Administrators are pressured to pass poor students to ensure funding. Teachers are pressured to go along and teach to the tests. Kids know they will be promoted to the next grade, so many choose the path of least resistance.

You are left with a multitude of young adults that are not prepared for higher education or the work force because they were never held accountable. There is plenty of blame to go around. We can start by looking at the failures of two groups at the top and bottom of the education debate: politicians and families. Read more ..

Israel on Edge

Israel in an Era of Decline American Influence in the Mideast

July 23rd 2013

Palestinians Villify Obama

The chaos gripping the Middle East, especially Syria, Egypt, Libya and Tunisia, is leading to a surprising turnabout for many powers, in and outside of the region. Starting with the United States, long-time superpower in the region not since the British withdrawal in the 1950s and 1960s, now finds itself surprisingly powerless to deal with the "Arab Spring" or ongoing Islamist upheaval. In Libya, the decision to let the British and French lead the charge translated into U.S. weakness and powerless.

Once the powerful benefactor of Hosni Mubarak in Egypt and its main supplier of military equipment ($40 billion of U.S. equipment) ever since Camp David in 1978, the United States finds itself sidelined in the current Egyptian showdown. Its support for Muslim Brotherhood leader Mohamed Morsi alienated its natural base (Christians, secularists, liberals and the old "deep Egypt") while underwhelming the Muslim Brotherhood when it failed to prevent the military, once a close U.S. ally, from ousting it from power. Read more ..

The EU and Israel

The Other Occupied Territories: Cyprus, Tibet and Kashmir

July 23rd 2013

Turk flags

What about Cyprus? That is just one of the questions that Israelis and Europeans should be pondering now that the European Union has again decided that it should dictate Israeli border and security policy.

Last week the European Union issued a ban on funding of, or cooperation with, any Israeli institutions that are shown to operate in what it calls the "occupied territories" – meaning the West Bank, or Judea and Samaria. Never mind that -- as Palestinian groups have already admitted -- the ban will affect Palestinians as much as Israelis. In its perpetual rush to find new double-standards to enforce, the EU has rushed straight in, regardless.

As one senior Palestinian Authority official said on the announcement of the news, many Palestinians in Ramallah and elsewhere will be just as affected by the EU's decision as their Israeli neighbors. The senior PA official was quoted saying:

"For our part, we approached a number of [European] Union officials, in the [Palestinian] Authority and also in Israel, to try and prevent the decision or at least to keep it unofficial," said the official, who declined to give his name. "It's not just Israeli companies that are going to be hit economically, it's also going to be disastrous economically and socially for the Palestinian community." Read more ..

Wall Street on Edge

Financial Reform, On a Roll

July 22nd 2013

Financial reform now protest

Five years ago, the financial crisis crushed the American economy and cost millions of Americans their livelihoods, their homes, and their savings. Two years later, passage of the Dodd-Frank Act, on July 21, 2010, laid the foundation for reform in key areas. Implementation is now at the three-year mark. Let’s take stock.

The Act created the authority to regulate Wall Street firms that pose a threat to financial stability, without regard to their corporate form, and bring shadow banking into the daylight; to wind down major firms in the event of a crisis, without feeding a panic or putting taxpayers on the hook; to attack regulatory arbitrage, restrict risky activities, regulate short-term funding markets, and beef up banking supervision; to require central clearing and exchange trading of standardized derivatives, and capital, margin and transparency throughout the market; to improve investor protections; and to establish a new Consumer Financial Protection Bureau (CFPB) to look out for the interests of American households. Read more ..

The Edge of Justice

The George Zimmerman Trial: Virtues of an Acquittal

July 21st 2013

trayvon martin protest nyc

The bottom line is that a boy, on the cusp of manhood, is dead; his only crime: wearing a hoodie while going out to buy a can of soda. Everything that followed is a footnote. There is nothing to celebrate here. The man who killed him is acquitted, although he behaved badly, ignored what the police told him, and appears to have been motivated by racial stereotypes if not racial hatred. He may also, in fact, have committed murder in the second degree or manslaughter, but he will not serve time if he has. Yet his trial and the verdict are not without their virtues.   

Chief among them is that legal justice has been done. It is easy to construct scenarios consistent with a guilty George Zimmerman. We have only Zimmerman’s word that Trayvon Martin turned on him or ambushed him, yet he refused to tell this tale under oath. Zimmerman’s claim that Martin pounded his head violently and repeatedly against the pavement such that he feared for his life seems inconsistent with the few bumps and scrapes on his head and the absence of any trace of his DNA on Martin’s fingernails, hands or body. If Martin was pounding Zimmerman’s head, he wasn’t aggressive enough to prevent Zimmerman from retrieving his gun and precisely, or with great luck, aiming it directly at Martin’s heart. The defense’s strongest evidence, testimony that Martin was on top of Zimmerman as they struggled, tells little of moment, even if it is accurate. Consider. You turn to confront a man who has been following you and is closing in. You see him reaching for a gun. You lunge at him to stop him from getting it, and your weight pushes him to the ground with you on top. Your position on top as you struggle does not mean you are the aggressor. Read more ..

Broken Elections

A System for Picking Best Presidential Candidates

July 20th 2013


You can get agreement from almost all points on the political spectrum that the worst aspect of our political system is the presidential nomination process. It is perhaps no coincidence that it is the one part of the system not treated in the Constitution.

That's because the Founding Fathers abhorred political parties and hoped that presidents would be selected by something like an elite consensus. But we have political parties, the oldest and third-oldest in the world, and they are not going away.

Surely a better system is possible. The current system of primaries, caucuses and national conventions is the result of reforms initiated by Democrats in the late 1960s and constantly fiddled with, mostly but not entirely by Democrats, ever since. The resulting system is replete with oddities. Nothing in the Constitution says that Iowa and New Hampshire vote first, but they do. Any politician thinking of ever running for president wouldn't dare suggest otherwise. Read more ..

Broken Economy

For the Last Time, Robots Do NOT Cause Unemployment

July 19th 2013

Robotic Orange Harvester

Parts of the nation’s commentariat have been seized, in recent months, with a nasty bout of technophobia. Technophobia is a psychological condition, but infectious. Hardly a week goes by without a new outbreak documented in another blog post or business column. To judge from the symptomatic hand-wringing the epidemic is spreading, we are on the verge of mass unemployment as work becomes increasingly automated.

Technophobia is an affliction we have yet to cure even after decades of evidence-based ameliorative efforts. We might not have expected much resistance to the disease in earlier times, before evidence accumulated that the fears it inspired were irrational. Back in 1930, a mind as brilliant as John Maynard Keynes was susceptible to the condition. Keynes sensed sickness in the air but misdiagnosed it as a feature of the capitalist economy: “We are being afflicted with a new disease of which some readers may not yet have heard the name, but of which they will hear a great deal in the years to come—namely, technological unemployment.” Read more ..

The World on Edge

INGOs' Insatiable Power Grab

July 18th 2013


The rapidly increasing role of nongovernmental organizations internationally (INGOs) has been a matter of concern for a very long time.

First and foremost, INGOs are responsible to no one. They are motivated by a group's interest and its financial and political backers.   Second, there are some 40,000 of them, each with its supposedly particular idea regarding the needs and priorities of an international civil society. Often, though, their ideas differ very little. Collectively, they've become a powerful force in international politics. Third, international civil society is infeasible. The world today as we know it is made up of some 200-plus independent and semi-independent countries and 40,000 INGOs. The 200-plus countries can't agree on much in political, social and economic matters. The addition of 40,000 more "interested parties" does not help. Read more ..

Broken Economy

The Next Shoe

July 17th 2013

Home Foreclosure

In the summer of 2005 I was invited to speak ­in relation to energy markets--at a conference in Lausanne convened by the Geneva Centre for Security Policy on the subject of 'Economic Terrorism'.  Essentially this conference concerned the resilience of financial rather than physical infrastructure to attack by terrorists using economic rather than physical means.

My message was that the existing market architecture concentrated risk in centralised organisations such as banks and clearing houses to an extent that was not appreciated. I made the wry observation that the only difference between a hedge fund and an economic terrorist was their motive.

In October 2008 the first shoe dropped.  Following the collapse of Lehman Brothers, which I regard as a milestone in the evolution of markets, we saw the financial system freeze up almost entirely. In fact, in the UK we came two hours away from the ATMs being switched off, and a day or so from what has been described as 'shopping with violence'. Read more ..

Broken Bookselling

Should We Even Care About Barnes & Noble's Survival?

July 16th 2013

Barnes and Noble Closing dated

Once upon a time, the book superstore elicited two major responses. One: I'm in heaven; here are more books I've ever seen in one place, ever! Two: This is hell on independent bookstores; it's a sad time indeed.

Today, everything's come full circle. Borders failed, and even though one huge rival was wiped off the map, Barnes & Noble is showing serious signs of losing to its aggressive competition.

Some investors may be studying Barnes & Noble as a value play, but they'd better think twice. Not only is the bookstore chain in big trouble, but if it fades from the scene, maybe in the long run, nobody would even really care. This is a story of more than a decade of disruptive change. It illustrates the economic theme of creative destruction, as painful as that may be. Read more ..

Obama's Second Term

America Joins the Jihad

July 16th 2013


It is not just that the United States government has aligned itself with the avowed vanguard of Islamic jihad -- the Muslim Brotherhood [MB] -- or committed American troops to battle (in Libya, and maybe soon in Syria) to ensure the victory of al-Qa'eda-linked militias. It is not just that whenever an opportunity has arisen, as in Iran in 2009, or pre-and-post revolutionary Egypt, or the Syrian civil war, the U.S. deliberately has chosen to side with the forces of jihad and shariah law and against the voices of civil society and genuine democracy.

The current U.S. administration has actually managed to flip from one side to the other, from "for the people in the streets" to "against the people in the streets," as recently became evident in late June 2013, when protests mounted against the incompetent, oppressive regime of Egyptian President Mohamed Morsi and the Muslim Brotherhood. Read more ..

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