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Broken Healthcare

Obamacare Insurance Plans Will Bare Bones and Expensive

March 5th 2013


There's mounting evidence that come fall, the health plans sold through the Obamacare exchanges will be bare bones affairs - with narrow networks of providers to select from, and heavy co-insurance once patients go "out of network."

In many ways these plans will be a throwback to insurance schemes of the late 1990s, when managed care was dominant and restrictive networks standard fare. With one difference: The Obamacare plans won't be cheap. Quality of coverage is just one issue. Price is the other. There's mounting evidence that even though the new health coverage will be austere, it'll still be pricey.

Health plans have ample incentives to price the Obamacare coverage high, which is precisely what they're likely to do. For one thing, insurers will want to protect against the risk that individuals entering the exchanges are those who most need health insurance because of pre-existing illness. If this sort of "adverse selection" occurs, it will raise costs to insurers. To guard against this, insurers are likely to price the coverage at a premium. Read more ..

Broken Economy

New Qualified Mortgage Rule Setting Up for Another Meltdown

March 4th 2013


Despite the claim that it is “protecting consumers from irresponsible mortgage lenders,” the new Qualified Mortgage rule finalized in January by the Consumer Financial Protection Bureau turns out to be simply another and more direct way for the government to keep mortgage underwriting standards low. This sets the country up for a repetition of the mortgage meltdown of 2007 and 2008.

Simply put, government housing policies, implemented by the Department of Housing and Urban Development (HUD), caused the 2008 financial crisis. Before 1992, the vast majority of  mortgages in the United States were prime loans. Yet a 1992 law required the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac—then the dominant players in the U.S. mortgage market—to purchase an increasing quota of loans that were made to borrowers at or below the median income in their communities.

Finding prime loans among borrowers who were below the median income was difficult, especially when, by 2000, HUD had raised the quota from 30 percent to 50 percent. To meet this goal, Fannie and Freddie had to reduce their underwriting standards. In 1995, they were acquiring loans with 3 percent downpayments, and five years later they were advertising mortgages with no downpayment at all. The credit scores required of borrowers were also reduced. Read more ..

The Way We Are

Republicans an Their Faulty Moral Arithmetic

March 4th 2013

family with teenagers

In the waning days of the 1992 presidential campaign, President George H.W. Bush trailed Bill Clinton in the polls. The conventional wisdom was that Mr. Bush seemed too aloof from voters struggling economically. At a rally in New Hampshire, the exhausted president started what was probably the fourth campaign speech of the day by reading aloud what may have been handed to him as a stage direction: "Message: I care."

How little things have changed for Republicans in 20 years. There is only one statistic needed to explain the outcome of the 2012 presidential election. An April YouGov.com poll—which mirrored every other poll on the subject—found that only 33 percent of Americans said that Mitt Romney "cares about people like me." Only 38 percent said he cared about the poor.

Conservatives rightly complain that this perception was inflamed by President Obama's class-warfare campaign theme. But perception is political reality, and over the decades many Americans have become convinced that conservatives care only about the rich and powerful. Read more ..

Edge of the Cliff

5 Myths About the Sequester

March 3rd 2013

Capitol Senate

Our political system was not designed to be efficient, but it wasn’t supposed to be self-destructive, either. After a near-default on the public debt and a fiscal cliff that threatened a new recession, we are facing another man-made crisis: the sequester, across-the-board cuts in discretionary domestic and defense spending that are set to begin Friday and extend over a decade. Let’s separate fact from fiction about the sequester and its impact.

1. Blame Obama — the sequester was his White House’s idea.

Identifying the origins of the sequester has become a major Washington fight. Bob Woodward weighed in recently with a Washington Post op-ed making the case that the idea began in the White House. He’s right in a narrow sense, mainly because he focuses on the middle of the 2011 negotiations between Obama and Republican lawmakers. If you look before and after, a different picture emerges. Read more ..

The Edge of Terrorism

New Issue of Al Qaeda Magazine Quotes Yours Truly

March 2nd 2013

Erick Stakelbeck

I'm not sure if I should be flattered or appalled. I just learned that the new issue of Al Qaeda's official, English-language magazine, called Inspire (and published by Al Qaeda in the Arabian Peninsula), features quotes from your humble correspondent. It appears that a CBN report from last May featuring my analysis of Inspire and the lingering influence of deceased jihadi cleric Anwar al-Awlaki caught Al Qaeda's attention. The terror group features my comments, along with those of other journalists, on page 9 of the new issue of the magazine.

On one hand, I guess the fact that the bad guys are noticing my work (this isn't the first time: see here and here) must mean I'm doing something right. On the other hand, Al Qaeda loves publicity of any kind, and the fact that Inspire is in the news and making headlines surely galvanizes them and makes them think they are having an impact. In a perfect world, I and others would just ignore Inspire.

But as things stand, I don't think that would be a wise move. We need to know our enemy and its strategy, and the AQ mag lays it out in chilling detail. As you'll see, it is extremely slick and well produced--the perfect diabolical recruiting tool to attract disaffected, young American Muslims. For example, in a section called "Open Source Jihad" (beginning on page 49), AQ gives instructions for aspiring jihadists on how to torch parked vehicles and cause road accidents. Read more ..

Edge of the Cliff

Obama: Failure to Prevent Sequester 'Inexcusable' and 'Dumb'

March 1st 2013

Click to select Image

President Barack Obama has called lawmakers' failure to prevent across-the-board budget cuts "inexcusable." Speaking at the White House on March 1, President Obama called the $85 billion in automatic spending cuts "dumb" and "arbitrary" and said they will hurt the economy and cost jobs. The cuts are due to take effect at midnight Friday, and the president said the longer they are in effect, the greater the impact will be.

Obama spoke after meeting with top Republican and Democratic lawmakers this morning to discuss efforts to avoid the spending cuts, known as the "sequester." The White House meeting was largely viewed as symbolic, after dueling bills to avoid the cuts were defeated in the Senate on February 28. After meeting with President Obama, Republican John Boehner, Speaker of the U.S. House of Representatives, said there was nothing new to report on efforts to avoid the cuts before the Friday deadline. He reiterated Republicans' stance that higher taxes will not be part of any budget deal. Read more ..

The Battle for Syria

US Aid to Syria’s Revolution Not to the Jihadists

March 1st 2013

Syrian Jihadis

The new Secretary of State John Kerry has proposed $60 million in aid to the Syrian Opposition Council in order to provide basic services in areas they control as well as medical and food supplies for their military. This announcement was met with skepticism by some backers of the Syrian opposition affiliated with the secular forces and also by a number of military and Middle East experts.

Farid Ghadri, leader of the Syria Reform Party and a secular supporter of the Syrian opposition, has been arguing that "since the bulk of the opposition, the one recognized by the United States, is dominated by the Islamists the funds will be used by the Muslim Brotherhood and the Salafists to ensure a political influence in the zones controlled by the rebels." Read more ..

Broken Borders

Immigration Revisted

February 28th 2013


You know why immigration brings people to a boiling point, separates races, and creates classes in our society? It’s simple, really: OWNERSHIP. Hard line Mexican and Latin Americans coming across the border to Texas and California believe the states belong to them. Because of the United States’ contentious history with its southern neighbors, these extremist Mexican immigrant groups coming across the border couldn’t care less about assimilating with American society, and in fact prefer not to. For they believe that it’s their land and that Americans better leave or get used to their presence.

The great irony that is overlooked in the immigration debate is that the typical political players in this fight are absent. Where are the unions and their leaders who pounce at every opportunity to protect wages and worker rights? Why aren’t they railing against the notion of unskilled, cheap labor flooding into this country? Where are the liberals who cry against "big business" at any chance they get? How come they aren’t deriding corporations for supporting amnesty to continue the cheap labor pool? Why do liberals support the immigrants and their “we just want a job to provide for our families” story, yet rally against tax relief and the minimum wage? The simple fact is that in this case business is seen as an ally, so unions, leftists, and an entire political party are hopping on board because its suits their agenda. This is another example of the Obama White house and Democratic Party moving forward with no clear agenda, no real leadership, and no real stance. Read more ..

Edge of the Fiscal Cliff

No Halt to Budget Sequestration in Sight

February 28th 2013

Click to select Image

The sequester is here to stay — at least for a while. Lawmakers and aides say they do not expect Congress to turn off budget sequestration before April and that negotiations to freeze the automatic spending cuts could drag into May or beyond. Over the last few weeks, there has been increased speculation that the sequester would go into effect Friday but be addressed in a March deal to keep the government funded.

Don’t bet on it.

Sen. Richard Burr (R-N.C.), a member of the Finance Committee, predicted sequestration would last through the end of the year. “Are we going to roll back the size of the cuts? No. I can promise you that,” said Burr.

President Obama has invited congressional leaders to meet at the White House on Friday, the same day $85 billion in automatic cuts are due to begin. However, congressional sources do not anticipate a deal at that gathering or any time soon. “It’s going to be one last attempt at trying to convince Republicans of the need for a balanced approach to sequester before the deadline,” said a senior Senate Democratic aide. Read more ..

Broken Economy

The Jobs Crisis is Much More Than Unemployment

February 27th 2013

Emplyment Application

President Obama has positioned himself as champion of the middle class. In his State of the Union speech, he declared that it was "our generation's task" to "reignite the true engine of America's economic growth-a rising, thriving middle class." Repeatedly, he has appealed to the middle class as a means of justifying tax increases, rolling back the sequester, or expanding government programs. But how have middle class workers fared since the start of the recession in 2007?

A typical measure of middle class labor market health is the unemployment rate, which currently stands at 7.8 percent. But even for those who are fortunate enough to have jobs, the labor market has exacted a toll on their standards of living. Since 2007, the real median income of American families has dropped by over $5,000 per family, while the BLS reports that the average employed person spends 8.3 hours per day working, up from 7.6 hours per day in 2007. In other words, American employees are working more and earning less. Read more ..

Europe on Edge

Europe: Ignoring a Disappearing La Dolce Vita

February 27th 2013

Euro Symbol

Europeans seem determined to ignore the depth of an approaching economic and political crisis which will end its longest period of prosperity and peace in history and threatens the very foundations of post-World War II democratic progression. In the fleshpots of Vienna and Zurich I have just visited, for example, even seemingly well-informed journalists and academics are determined to reject the obvious: the European economy is grinding down, with the growing double digit unemployment of youth and the unfunded deficits of southern Europe only the first signs of what is to come.

It's worth recalling that it was just that sort of phenomena which nurtured authoritarian and totalitarian governments in the 1920s and 1930s and the onset of World War II.
But for those who can afford it, the exaggerated vulgarity of conspicuous consumption continues, whether a shop in Zurich's fashionable Bellevue selling outrageous young men's shirt designs or deliberately worn denims or an equally outrageously overpriced American-style steakhouse with frozen meat, lumpy purée des pommes de terre [mashed potatoes to you] and over salted lobster bisque. Read more ..

The New Egypt

Morsi's Fouls

February 26th 2013

Mohammed Morsi

Military troops are protecting factories and government offices on the fifth day of a general strike in the Suez Canal city of Port Said that has brought together two groups with working class roots that played key roles in the toppling of former Egyptian president Hosni Mubarak: militant, highly politicized, street-battled hardened soccer fans and the labor movement.

Operating independently both groups constituted key centers of resistance to the repression of Mr. Mubarak’s regime during the years that preceded his downfall. The fans fought police and security forces in the stadiums in a battle for control of one of the country’s most crucial public spaces while workers in industrial towns like Mahalla organized strikes against Mr. Mubarak’s economic liberalization policy and corrupt and nepotistic privatization of state-owned assets. Read more ..

Obama's Second Term

Secretary Kerry's Maiden Speech

February 25th 2013

John Kerry

Stipulating that foreign aid can be an important part of American foreign policy, and further that trade is an important component of U.S. foreign policy; Secretary of State John Kerry made two really important mistakes in his maiden speech, delivered to a fawning audience of American university students.

The first was in the definition of America's challenges in the second decade of the 21st Century.  Mr. Kerry posited: "Our challenge is to tame the worst impulses of globalization even as we harness its ability to spread information and possibility, to offer even the most remote place on Earth the same choices that have made us strong and free."

"Our challenge" is, in fact, to defeat the forces of Islamic radicalism that threaten us at home sometimes, and that threaten our friends in the Middle East, Southwest and East Asia all the time.  Secular people, Christian people, Jews, women and progressive people in those regions -- including Afghanistan, Pakistan, Indonesia, North Africa, Egypt, Jordan, Nigeria, Mali, Iraq and Turkey, and more -- feel the pressure of the Muslim Brotherhood, Salafists, al Qaeda and Taliban forces snuffing out the tentative whiffs of freedom and equality presaged by President Bush's "democracy agenda" and the now-cold "Arab Spring."  The less-than-optimal "impulses of globalization" are far more benign than the less-than-optimal impulses of a political-religious philosophy that holds the 7th Century to be the apex of human endeavor. Read more ..

The Iranian Threat

Iran's Upper Hand

February 25th 2013

Iran holy missiles

The United States participation in the Kazakhstan negotiations with Iran, as part of the P5+1 (five permanent members of the United Nations Security Council: China, France, Russia, the United Kingdom, and Germany) creates the impression that the Obama administration is determined to end the U.S. role as the super power it once was.

Nothing seems to deter the administration's determination to negotiate with the Ayatollahs. Not the IAEA report that Tehran has already begun to install advanced centrifuges at its nuclear plant at Natanz to increase the pace of uranium enrichment, or Iran's "skyjacking" of American drones, cyber attacks on American financial institutions, or support of the Assad regime, Hezbollah and other jihadist groups. Read more ..

The Edge of Terrorism

Latin America Puts a Monkey Wrench in Washington Extraordinary Renditions

February 23rd 2013

Guantanamo prisoner

The map tells the story. To illustrate a damning new report, “Globalizing Torture: CIA Secret Detentions and Extraordinary Rendition,” recently published by the Open Society Institute, the Washington Post put together an equally damning graphic: it’s soaked in red, as if with blood, showing that in the years after 9/11, the CIA turned just about the whole world into a gulag archipelago.

Back in the early twentieth century, a similar red-hued map was used to indicate the global reach of the British Empire, on which, it was said, the sun never set. It seems that, between 9/11 and the day George W. Bush left the White House, CIA-brokered torture never saw a sunset either.

All told, of the 190-odd countries on this planet, a staggering 54 participated in various ways in this American torture system, hosting CIA “black site” prisons, allowing their airspace and airports to be used for secret flights, providing intelligence, kidnapping foreign nationals or their own citizens and handing them over to U.S. agents to be “rendered” to third-party countries like Egypt and Syria. The hallmark of this network, Open Society writes, has been torture. Its report documents the names of 136 individuals swept up in what it says is an ongoing operation, though its authors make clear that the total number, implicitly far higher, “will remain unknown” because of the “extraordinary level of government secrecy associated with secret detention and extraordinary rendition.” Read more ..

Broken Healthcare

Florida Medicaid: A Concession on a Program Too Few Care About

February 22nd 2013


Governor Rick Scott’s decision to take federal Obamacare money to expand his state’s Medicaid program was unsurprising. Amidst declining political fortunes, he was under intense pressure by local health care firms to accept the new cash.

Florida health care businesses, perhaps more than any other state, feed off of the Medicaid program. Many health care plans refuse to do business in the state precisely because it’s so rife with corruption. The breadth of government financing in Florida, and the state’s poor supervision, enables a lot of fraud.

This new expansion should help those businesses' concepts expand. How much? JP Morgan is out with a research note this morning that estimates the largesse paid to the legitimate side of the state’s health care market. Read more ..

Broken Healthcare

Bowles-Simpson Doesn't Address Unsustainable Health Care Spending

February 21st 2013

Obamacare Protest

Erskine Bowles and former Sen. Alan Simpson are back, advocating once again for lawmakers to reduce discretionary and mandatory spending, increase tax revenues, and shift focus to a simple but powerful metric: our federal debt burden relative to the size of our economy.

The new proposal credits Congress with as much as $2.7 trillion in deficit reduction, owing to caps on discretionary spending and recent increased taxes on high-income earners. This math leads Simpson and Bowles to call for $2.4 trillion in additional deficit reductions in the coming decade: $600 billion from new revenues and the rest from spending reforms and limits and interest expense savings. The proposal, while admirable, has two shortcomings.

First, while I commend them for their tireless efforts to right our fiscal ship by pursuing a "leave no stone unturned" approach that seeks to squeeze efficiencies from across all of government and reform both sides of the ledger, their "balanced" approach overlooks one key fact: Federal health care spending is the only government spending that is truly on an ever-increasing and completely unsustainable path. And while they list various ways to curb health care spending, they seem not to realize that it is not a lack of ideas but a lack of willpower holding back lawmakers. Read more ..

Islam on Edge

Let's Protest the Real Apartheid State

February 21st 2013

Afgan Women in Burka

With the Middle East in turmoil, as Arabs from North Africa to the Persian Gulf seek to escape decades of authoritarian rule and the denial of their civil and political rights, students around the world will spend a week in March denouncing the one democracy in the region that offers equal rights to all -- Israel. Through films, lectures and demonstrations students will attempt to smear Israel with comparisons to the discriminatory policies of South Africa in what has become an annual campus hate fest directed at Jews and Israel. Israeli policy has nothing to do with South Africa's; however, if the demonstrators were really interested in human rights, they'd be campaigning against every Arab regime and, especially, apartheid Saudi Arabia.

Women's rights are virtually non-existent throughout the Arab world, but the situation in Saudi Arabia may be the worst. For example, Saudi women may not marry non-Saudis without government permission (which is rarely given); are forbidden to drive motor vehicles or bicycles; may not use public facilities when men are present; and are forced to sit in the backs of public buses, segregated from men. Women must cover their entire body and face in public, and those who do not are subject to physical harassment from the Saudi religious police. Read more ..

Obama and Israel

Obama at Ramallah

February 20th 2013

Obama and Flag

President Obama's plans in the Middle East include three and a half hours in Ramallah to meet with Palestinian leader Mahmoud Abbas. The president's hope is to find a mechanism for advancing Israeli-Palestinian "peace." The appearance of the President of the United States in "Palestine" is calculated to provide Abbas with a tangible benefit in hopes of moderating/modifying his behavior vis a vis Israel and strengthen him vis a vis Hamas. If President Obama succeeds, however, the result will be to strengthen a dictator by betraying his people on behalf of their enemy, Israel.

It won't be the first time the United States has tried to entice -- OK, bribe -- dictatorial governments into doing what we want. Bribery didn't work in Iraq or in Afghanistan, Pakistan, Libya, or Tunisia. It hasn't moved Iran or North Korea, and it didn't keep U.S.-armed and trained Malian troops from overthrowing their elected civilian leadership. In none of those cases was Israel a factor. But Ramallah will be more like Egypt, where President Obama did it twice. Read more ..

Edging Toward the Cliff

Budget Cuts Would Not Harm the Economy

February 19th 2013

One Million Dollars

The Congressional Budget Office projects that the federal budget deficit will exceed three-quarters of $1 trillion in 2013. The U.S. economy continues to badly underperform, leaving millions of Americans out of work, depressing wage gains, and restricting opportunities. Despite a broad consensus favoring deficit reduction, some worry that reducing the budget deficit too rapidly might further weaken the recovery. These concerns are misplaced.

Steady, sustained deficit reduction would not hamper the recovery and may well provide modest near-term support for growth by whittling away at the debilitating uncertainty restraining growth. President Obama and Congress should work toward cutting spending in 2013 as part of a credible plan to balance the budget in 10 years in full confidence that the economy would benefit thereby. Read more ..

Venezuela on Edge

The Strange Return of Hugo Chavez

February 18th 2013

Hugo Chavez infirm

“Hugo Chavez returns to Venezuela after Cuba cancer care,” announced the BBC. “Hugo Chavez returns home to Venezuela,” reported the Associated Press. “Chavez in surprise return from Cuba,” said Reuters. All these headlines make clear that after a two-month sojourn in Cuba for cancer treatment, Chavez is back.

Or is he? Buried in the Reuters story is the following sentence: “Unlike previous returns to Venezuela after treatment, state media showed no images of Chavez this time.” Even Venezuela’s state broadcaster was reduced to using an archive image showing Chavez on one of his previous returns from Cuba. Indeed, the only evidence we have of Chavez’s return are three tweets issued from the Comandante’s feed, which until today had been dormant since November 1st.

In quick succession, Chavez thanks God for returning him to his Venezuelan fatherland, thanks Fidel and Raul Castro for their hospitality in Cuba, and assures us that through his faith in both Christ and his medical team, Venezuelans are going “ever onward to victory!!” (“Hasta la victoria siempre!!”) Read more ..

The Edge of Justice

Jesse Jackson's Son to be Imprisoned for Corruption

February 17th 2013

Jesse Jackson, Jr

In what's being touted by Republicans as an example of liberal-left and Democratic Party hypocrisy, the son of civil-rights leader Jesse Jackson, Jesse, Jr., is facing federal jail time for turning his campaign war chest into a private slush fund for him and his wife, according to the Department of Justice on Friday.

Democratic Congressman Jesse Jackson, Jr., and his spouse Sandra, agreed to enter guilty pleas to felony charges stemming from Jackson's use of more than three-quarters of a million dollars in campaign funds for non-campaign items including celebrity memorabilia, a $50,000 wristwatch, and furs for Mrs. Jackson.

"Here we have a perfect example of hypocrisy in Washington: a liberal-left congressman who is on record complaining about businessmen who live lavish lifestyles and who 'don't pay their fair share.' It turns out that Mr. Fair Share is using campaign funds -- donated by voters who put their trust in him -- to put on the 'Ritz,'" said Michael Baker, a conservative political strategist and attorney. Read more ..

Israel on Edge

Israel's Challenging Diplomatic Predicament

February 16th 2013

Western/Wailing Wall

In light of developments over the last few years, there has been a growing realization in Israel that the chances of reaching a complete final status agreement with the Palestinians are presently extremely small. This is not just an ideological position coming out of certain quarters in Israel, but it is also the professional view of practitioners who have been involved in the political process itself.

Last June in an interview in Haaretz, Professor Itamar Rabinovich, Israel's former ambassador to Washington and head negotiator with Syria, reached this very conclusion. He added, as part of his proof of this point, that "the bold proposals" by former prime ministers Ehud Barak and Ehud Olmert were not even responded to by the Palestinians. Looking back on Olmert's far-reaching proposals, Mahmoud Abbas himself told The Washington Post on May 29, 2009 that the gaps between the parties were just too wide. Read more ..

Obama's Second Term

State of the Union Carefully Conceals Foreign Policy Disasters

February 14th 2013

Obama and Flag

While the State of the Union message was overwhelmingly domestically oriented, the foreign policy sections were most interesting. I’ll review them here.

The president began in the same neo-patriotic mode used in the second inaugural address, with a special emphasis on thanking U.S. troops. He used the imagery of the end of World War Two paralleling the return of troops from Iraq to promote his idea that the American economy must be totally restructured.

Obama defined his main successes—careful to credit the military (whose budget he seeks to cut deeply and whose health benefits he’s already reduced) rather than his usual emphasis on taking the credit for himself—were the following points:

“For the first time in nine years, there are no Americans fighting in Iraq.

“For the first time in two decades, Osama bin Laden is not a threat to this country.

“Most of Al Qaida’s top lieutenants have been defeated. The Taliban’s momentum has been broken. And some troops in Afghanistan have begun to come home.” Read more ..

Broken Economy

Tim Geithner a Champion of Big Banks, But Not a Shill

February 13th 2013


Some people were surprised this week when Treasury Secretary Timothy Geithner announced his post-Obama job: distinguished fellow at the Council on Foreign Relations.

There was, as Matt Yglesias noted at Slate, a widespread belief that Geithner would land a job on Wall Street. For one thing, everyone cashes out these days. But Geithner, particularly, was friendly to Wall Street.

At the NY Fed, Geithner was something of a mastermind of the Bear Stearns bailout and the AIG bailout, and a guiding force behind the TARP. In Obama’s Treasury, Geithner expanded TARP and made it more generous to the big banks. He presided over a bailout and regulatory regime that resulted in saving failed megabanks like Citigroup and increasing the market share of the five biggest banks. Read more ..

Obama's Second Term

Brennan Defends Obama Drone Program

February 12th 2013

MQ-1 Predator Drone

President Barack Obama's national security advisor and nominee to serve as Central Intelligence Agency (CIA) director defended the Obama administration's secretive drone assassination program this past weekend on the Sunday morning news shows.

John Brennan, who currently oversees the unmanned aerial vehicles (UAV) program at the Obama White House, was faced with questions from lawmakers from both political parties during the confirmation hearing before the Senate Intelligence Committee.

Brennan conceded that there continues to be intense debate over the Obama administration's counterterrorism efforts. But he claimed President Obama only used drone strikes as a preventative tool against imminent terrorist threats, not as a method of execution for past acts. Read more ..

Turkey on Edge

Obama Reluctant to Put His Hand into the Syrian 'Beehive'

February 11th 2013

Syria Pro-Assad demonstration

As the civil war in Syria grinds on, refugees flood into crowded camps. So far, the Obama administration has remained cautious about intervening militarily, even while humanitarian appeals have streamed from Syria and to the international community. In Turkey, political and terrorist activities on the part of Kurdish nationals continue to roil the political climate just as concerns over how the outcome of the Syrian conflict might affect the Kurds living in Turkey.

Iran and its Hezbollah proxies are involved on the ground in the conflict, while Russia continues to prop up its long-term ally in the person of dictator Bashr al-Assad and his regime. Israel looks on warily - largely because of the possibility that Syria's stockpile of chemical weapons might fall into the hands of terrorists. Read more ..

Obama's Second Term

Two Cheers for Rebranding

February 10th 2013

Paul Ryan

Ever since Mitt Romney lost the presidential election, there’s been a lot of talk about how the Republican party needs to “rebrand” itself.

Louisiana governor Bobby Jindal wants, among other things, for the GOP to stop being “the stupid party.” Representative Paul Ryan has concluded that the watchword for the Republican party needs to be “prudence.” Senator Marco Rubio is the frontman for the most tangible aspect of the rebranding effort: getting on the right side of the immigration issue. In the process, he’s become something of the de facto point person for the party.

The latest entrant into this effort: House Majority Leader Eric Cantor. On Tuesday, Cantor gave a well-received speech at the American Enterprise Institute (where I am a fellow), titled “Making Life Work.” In it, Cantor argued for utterly reasonable conservative solutions that would improve the plight of the working poor and the middle class. Read more ..

Broken Healthcare

Governors: Let US Build Flawed Healthcare, Then Duck

February 9th 2013

Docs and Tech

The post-election rollout of the Obama administration's plans to implement insurance exchanges in time for January 2014 enrollment has met substantial state government opposition, raised more questions than answers, and flashed warning signs of a train wreck ahead.

Thirty-three states — a clear majority — still are not fully on board with running their own exchanges to comply with the dictates of the Affordable Care Act. Most of those states — as many as 23 — would rather leave the daunting implementation process entirely in the hands of federal officials. The strong resistance of many state governors — who are being asked to build the key regulatory architecture for Obamacare — is fully justified.

While it may simply be good short-term politics for Republican state officials looking to avoid the blame for ongoing complications and contradictions that were made in Washington, it should also reinforce a more principled strategy to support a better version of choice and competition for diverse health insurance products. Read more ..

American Times

Reviving American Liberalism with a Dose of Anger

February 8th 2013

Koch carter moynihan
(L to R) Sen. Moynihan, Pres. Carter, Gov. Carey, Mayor Koch

The rapturous praise for the late New York Mayor Ed Koch tames his legacy, overlooking the fact that in 1988 the Atlantic called him “disgraceful” while the New York Times declared his “relentless … truculence” and “tantrum[s],” embarrassing and “inflammatory.” Beyond the kind sentiment, caricaturing Koch as a feisty lone gunslinger wisecracking his city back to health misses the deeper historical significance of Koch’s attempt to save liberalism from itself, as well as the broader ambivalence Americans have had with political anger.

Ed Koch, Daniel Patrick Moynihan, and other practitioners of the politics of patriotic indignation understood, especially in the 1970s, that sometimes anger is the rational response to challenges -- and can certainly pay off politically. They used flashes of anger -- and wit -- to inspire Americans while seeking to preserve a more muscular, patriotic liberalism under assault from the more self-critical, McGovernik, identity-politics-driven New Left. Read more ..

The Edge of Foreign Policy

Rand Paul's Side Effects

February 8th 2013

Rand Paul

It is hard to square the speech of Senator Rand Paul (R., Ky.) at the Heritage Foundation Wednesday with the global and political context in which he spoke. The speech was an erudite exposition of a foreign policy of restraint, retrenchment, and containment as described by George Kennan at the start of the Cold War. It was a warning against foreign entanglements and the threat posed to the separation of powers by the presidential practice of avoiding formal declarations of war when sending American troops overseas. It was, above all, a call to avoid backing ourselves into a corner that would make war with Iran inevitable. It was, in other words, a more artful defense of the foreign policy of the Obama administration than that administration has ever made itself.

Passing for the moment the wisdom of the foreign policy Senator Paul is proposing, we note that the shrillness of his warnings against war are bizarre at a moment when the president — with no meaningful opposition from Congress — has completely withdrawn U.S. troops from Iraq, allowed his intention to withdraw almost completely (or perhaps completely) from Afghanistan to be leaked, refused to support Syrian rebels in any meaningful way, removed the U.S. from playing any significant role in the unraveling of Egypt, and indicated his intention to reduce the American military dramatically. Read more ..

Broken Economy

Tax Hikes You May Have Forgotten About

February 8th 2013


The Affordable Care Act (ACA) has a lot to do with tax policy, and the new taxes it created are starting to add up. A 2.3 percent medical device excise tax will raise $1.7 billion in revenues this year, while the new unearned income Medicare contribution tax on high-income savers will raise $20.5 billion. A tax on pharmaceuticals that took effect in 2011 will also raise $2.9 billion this year.

One of the next ACA taxes scheduled to take effect is a health insurance tax that will hit small businesses and their employees particularly hard. The tax is officially imposed on health insurance companies, but the greatest effect will be felt by their customers because the insurance companies will pass most of the burden on through higher premiums. An analysis by the nonpartisan Joint Committee on Taxation found that the tax will raise insurance premiums on average by $350-$400 per affected family in 2016. Read more ..

Obama's Second Term

Rocky Reboot for GOP

February 7th 2013


Reset. Rebrand. Reframe. Reposition. Renew. Call it what you want, Republicans are exhausted. It has been three months since the bruising election of 2012, when political rehabilitation began anew for the GOP. After wandering the wilderness for a few years then winning a historic House majority in 2010, another makeover wasn’t exactly what the party had in mind. With the White House in their sights but out of reach until they overcome certain demographic liabilities, Republicans are searching once again.

House Majority Leader Eric Cantor (R-Va.) mounted the most conspicuous public relations effort yet with a major speech this week, defending GOP principles as those best suited for opportunity and economic growth for the middle class. Not much new there, but it was wrapped in soothing aspirational calls for the fulfillment of dreams in a speech Cantor titled “Making Life Work.” Similarly, newly reelected Republican National Committee Chairman Reince Priebus has told the Republicans they need to be the “happy party.” Louisiana Gov. Bobby Jindal was more direct: Republicans need to stop being the “stupid party,” he said. And GOP pollster Kellyanne Conway has instructed House Republicans to stop talking about rape. Read more ..

Broken Economy

Which Depositors Should Suffer Losses When a Bank Fails?

February 7th 2013

I Bailed Out a Bank

As the Europeans busily discuss how to provide bailouts from the "European Stability Mechanism" directly to banks, Jyrki Katainen, the prime minister of Finland (a country whose government has triple-A bond ratings), has asserted that the "mind-set" must be changed "from bail-out to bail-in."

When it comes to sharing in the losses of failing banks, Katainen asserts, in particular, that shareholders and bondholders should take losses – absolutely right — and that "only in rare, exceptional occasions, public money should be used" —again right, although the historical record demonstrates that such occasions are not a rare as one might hope. 

But Katainen did not mention depositors. What about them? Depositors are lenders to banks by another name. A remarkable feature of virtually all discussions of banking crises these days is that they simply assume depositors should always be protected, and that money should be taken from taxpayers to give to depositors to enforce this proposition, if need be. In the U.S., large depositors are theoretically at risk, but usually the Federal Deposit Insurance Corp. arranges mergers of failed banks so that all depositors are, in fact, protected. Moreover, in the financial crisis of the 2000s, all size limits for deposit insurance were increased and the FDIC model was widely praised. Read more ..

The Media on Edge

Reporting on Mali War Reveals Media Bias about Gaza

February 6th 2013

French troops Mali

I support France’s military action in Mali. But the media’s reaction to it – when contrasted with coverage of Israel’s military actions in Gaza – reveals flagrant double standards. More on that after my reasons for supporting France’s Mali operation.

Islamists – like those who overran Mali last March – reverse human progress and bring misery to those they subjugate: women, religious minorities, moderate Muslims, secularists, gays, and anyone else who doesn’t accept their primitive worldview. Islamists vitiate Islam, twisting its meaning and practice to advance their real aim: brute power. To that end, they break whatever Islamic and non-Islamic laws they please, engaging in drug smuggling, kidnapping, human trafficking, victimizing perceived opponents, and murdering innocents. Read more ..

Significant Lives

Despite the Contrarians, Mayor Koch was a True Liberal

February 6th 2013

Ed Koch RIP

Ed Koch was laid to rest with applause for leading his city out of the despair of the 1970s with bluff, bluster and chutzpah. Yet the Koch mayoralty, for all its theater, was also a turning point. In complex and contradictory ways, Koch hastened the shift from a liberal New York that dates to the 1930s to the more conservative city of today. His record bears marks of both.

When I interviewed Koch in 2010 for a book about New York City from LaGuardia to Bloomberg, he said he wanted to be remembered as the mayor who restored the city’s confidence after the fiscal crisis; balanced the city’s budget; built affordable housing on a massive scale; and reformed the process of selecting judges to take the politics out. All three were measures (excepting perhaps the pride in budget balancing) that any liberal Democrat could endorse. Yet his style and policies gave him a reputation as a conservative. Read more ..

Paraguay on Edge

Election Process Roiled in Paraguay Following Death of Populist Candidate

February 5th 2013

Paraguay Filizzola (L) Alegre (R)
Rafael Filizzola, wearing scarf, and Efrain Alegre.

Lino Oviedo, a polarizing political figure and candidate in Paraguay’s April presidential election, died in a helicopter crash on February 2 while returning from the country’s Chaco region. The death of the 69-year-old former army officer throws the current political process wide open and has increased uncertainty in a country where in 2012 former President Fernando Lugo was impeached and removed from office.

Even while the Paraguayan government has ruled that the helicopter crash was an accident, members of Oviedo’s National Union of Ethical Colorados (UNACE) party openly questioned whether their favourite had been assassinated. Paraguay was officially commemorating the 1989 overthrow of long-term dictator Alfredo Stroessner on the day of the crash which also killed Oviedo’s aide and the pilot. Aviation authorities said the helicopter crashed during a storm in northern Paraguay but averred that an investigation will continue. Read more ..

Obama's Second Term

Why Today’s American Foreign Policy Is So Unrealistic

February 3rd 2013

obama binocular

One of the main features of this misguided contemporary foreign policy debate is the corruption of the concept of Realism.  In some ways, the school called Realism was simply a way of teaching principles long regarded as obvious in Europe to Americans, whose idealism about the world had both good and bad implications. Both isolationism and the idea that America’s mission is to spread democracy are typical non-Realist patterns of how American exceptionalism plays into foreign policy thinking. That’s why the concepts that made up Realism were introduced to the United States by Hans Morgenthau, a refugee from Germany, and most clearly practiced in office by Henry Kissinger, ditto.

But American policymakers–with notable and often disastrous exceptions–have mostly used a Realist approach in their work to the point that they take it for granted. At times, of course, ideology has overridden Realism, with the two most obvious cases being Jimmy Carter and Barack Obama. Republican presidents, for a reason we will see in a moment, have tended to be more universally Realist because they have accepted the idea of the predominance of national interest and power. The one who was probably least so was George W. Bush. Read more ..

Obama's Second Term

A Not-So-Doomed GOP

February 2nd 2013


The Republicans are doomed. Conservatism is over. President Obama is conducting a mop-up operation at this point. That’s the basic consensus in places like New York City; Washington, D.C.; and other citadels of blue America.

And let’s be fair, liberals have every reason to gloat — a little. The GOP has its troubles. Long-term demographic trends; often-irrational animosity from Hollywood, the media, and academia; a thumbless grasp of the culture on the part of many Republicans: All of these things create a headwind for the party and the broader conservative movement.

But here’s the weird part. That’s all true of presidential politics, but less so when it comes to state politics or even other federal races. In 2010, the GOP had its best performance in congressional races since 1938. In North Carolina, a state that is supposed to represent the trends benefitting Democrats — it’s attracting liberal northern transplants, immigrants, high-tech workers, etc. — the GOP now has veto-proof majorities in the state house and senate. Last November, North Carolina became the 30th state with a GOP governor. What gives? Read more ..

Obama's Second Term

Say No To Hagel

February 1st 2013

Chuck Hagel

Now that leading Jewish Democrats have endorsed the Hagel nomination for defense secretary, his confirmation is likely to be approved, despite the fact that a liberal newspaper such as The Washington Post challenged the appropriateness of the nomination. Even The New York Times at one stage conceded that “some Obama aides had doubts about the wisdom of the choice.”

Christians United for Israel this week brought over 400 of its members to Washington to lobby against the appointment. However major Jewish organizations such as the ADL and the American Jewish Committee have withdrawn from the controversy and the only Jewish group continuing to battle against the nomination is the Zionist Organization of America. Individual Jewish Democrats such as Alan Dershowitz and Ed Koch have also become silent. Read more ..

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