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Broken Government

Some Light at the End of Tunnel in Congressional Fiscal Debates

March 8th 2014

After much ado and little done in Washington, is that a glimmer of light we see coming down the tracks? It could be, maybe.

There have been three items of good news during this last week or so. Three. Count them.

Let’s take a moment to say a small — but not excessive — hallelujah.

First and not necessarily foremost, but still truly significant: Sen. Ron Wyden (D-Ore.), the incoming chairman of the all-powerful Finance Committee of the Senate, implied that the Congressional Budget Office and Joint Tax Staff may be turning rational. For years, the CBO and Joint Tax Staff have subscribed to a counter-intuitive method of scoring tax law changes. Read more ..

Obama's Second Term

Obama's Mistaken Belief that Others See the World as He Sees It

March 7th 2014

Obama game face

Solipsism. It’s a fancy word which means that you assume others see the world as you do and will behave as you would.

It’s a quality often found in narcissists, people who greatly admire themselves — like a presidential candidate confident that he is a better speechwriter than his speechwriters, knows more about policy than his policy directors and is a better political director than his political director.

If that sounds familiar, it's a paraphrase of what President Obama told top political aide Patrick Gaspard in 2008, according to the New Yorker's Ryan Lizza. More recently, Obama’s solipsism has been painfully apparent as the United States suffers one reversal after another in world affairs. But it has been apparent ever since he started running for president in 2007. Read more ..

The 2014 Election

Just the Facts on 2014

March 6th 2014

us voters

The enrollment numbers for the Affordable Care Act skyrocket while unemployment plummets? A rash of ethics and sex scandals breaks out in the Republican conferences of both the House and Senate? President Obama brokers Middle East peace and disarms Iran? It’s hard to imagine a scenario, or “opportunity,” as it is called in politics, that could help Democrats alter their fortunes in the midterm elections this fall.

Democrats knew all along they couldn’t win the House by flipping 17 seats this fall; after redistricting there simply aren’t enough competitive seats, though the party’s leadership has asked members not to acknowledge this publicly. Winning six seats to flip control of the Senate, however, is now within reach for Republicans.

With West Virginia, Montana and South Dakota most likely takeovers at this point, Republicans are looking for more pickups in Arkansas, Michigan, Colorado, North Carolina, Alaska and Louisiana. The GOP could actually win between 10-13 seats, by some estimates, if a wave opened up. That’s not likely, but the bad news for Democrats is that losses in South Dakota, Montana, West Virginia, Arkansas, Louisiana or Alaska could mean Democrats won’t win those seats back for a generation. Read more ..

Broken Government

Dave Camp's Tax Reform Riles Special Interests: Especially Real Estate

March 5th 2014


Special interests of every species and subspecies populate the office towers of downtown Washington, D.C. And the Republicans’ top tax writer just sent a threatening letter to all of them.

Rep. Dave Camp, chairman of the House Ways and Means Committee, recently rolled out his proposal for reforming the federal tax code. Tax reform means lowering rates and closing loopholes - that is, repealing deductions, exemptions and credits. The arguments for tax reform are plentiful and powerful.

Our gnarled tax code drags on the economy. Consider General Electric's battalion of nearly 1,000 tax experts working to reduce the company's bill to Uncle Sam. There's nothing wrong with GE doing this. The shame is that it's worth it for GE to do this. Corporate America's army of tax experts are good people with families to feed, but our economy would be better off if they were creating value rather than navigating arcane statutes, codes and rules. Read more ..

Russia and the Ukraine

Why Did Russia Invade Ukraine? Because the West is Weak

March 4th 2014

Russian M17 Helos

This is the lesson the liberal world needs to relearn, a quarter-century after the fall of the Berlin Wall: none of its choices, be it military cuts, inaction, or diplomatic posturing, happens in a vacuum. While perceptions of Western irresolve or weakness don’t necessarily create conditions of instability by themselves, their real danger is that they make aggressive opportunism seem a more attractive path for revanchists like Putin or revisionist powers like Beijing.

The toxic brew of negative perceptions of Western/liberal military capability and political will is rapidly undermining the post-1945 order around the world. Reduced military budgets, global perceptions of American and European weakness, the outright dismissal of presidential redlines, and memories of total inaction like during the 2008 Georgian invasion or Syrian civil war have set the stage for future opportunism. Read more ..

Ukraine's Crisis

Made in EU: The Mess in Ukraine

March 3rd 2014


The situation might have been different if in April 2008 the West had extended NATO membership to Ukraine and Georgia. Russia would never have dared to deploy troops on NATO territory. Given that Europe opposed the admission of Ukraine to NATO, it should not then have tempted the Ukrainians with EU membership, exacerbating the divisions between the Ukrainians and their ethnic Russian minority.

It seems to be a tragic but hard lesson of history that Jews are often forced to play the role of canary in the mineshaft. Today, we are witnessing that phenomenon in Ukraine. As the situation in Ukraine, where nationalists last week deposed pro-Russian president Viktor Yanukovych, is worsening, Jews are receiving blows from both sides. They are distrusted by the Ukrainian nationalists as well as the pro-Russian separatists.

With Ukraine descending into civil war, people on both sides are blaming "Jewish conspiracies" and attacking Jewish targets. The Jews, however, are not to blame for the crisis in Ukraine. The European Union is to a large extent to blame. Ukraine is an ethnically mixed country, with a large Russian minority. Preserving the balance succeeded relatively well until the EU began to foment trouble. Read more ..

Ukraine's Crisis

Ukraine: The Lies of Empire and the Smokescreen of Democracy

March 3rd 2014

John Herbst, US ambassador to Ukraine from 2003 to 2006, last week gave an interview to the RT television channel about current developments in Ukraine . According to Herbst, what we are witnessing is a peaceful uprising against an authoritarian, oppressive regime. He is unequivocal about this. He said that the protests and protesters are being smeared and discredited, and the only ones wanting to portray the opposition in Ukraine as being ultra nationalist, neo Nazis and violent are those who fear democracy on their own doorstep (i.e. Russia).

Herbst says the protests are a reaction to four years of oppressive government. While admitting that Yanokovych won a free and fair election in 2010, Herbst argues since that time he has put increasingly authoritarian strictures on the opposition and asserts that Yanokovych authorised the use of armed snipers against unarmed protesters. Read more ..

Defense on Edge

How Much Army is Enough?

March 2nd 2014

The Pentagon

The Pentagon's new strategy calls for an active-duty Army of 450,000 soldiers — the fewest number of full-time soldiers since before World War II.

That would be just 10% less than the average since the mid-1990s to halfway through the Bush years — not a huge change. Marines and Army Guardsmen and Reservists would be cut slightly less, in percentage terms.

Even so, how much is enough? Since 1992, the U.S. has based its planning for ground forces around the possibility of fighting two large regional wars at once. We thought they'd be Iraq and North Korea. They turned out to be Iraq and Afghanistan.

Now, Saddam Hussein is gone, Iraq is violent but not looking to invade anybody and all the military buzz is about drones, cyberspace, SEALs and long-range strike systems. And the Pentagon, since 2012, has declared the end of any interest in large-scale counterinsurgency and stabilization missions. Most Americans, chastened and fatigued by the Iraq and Afghanistan experiences, might happily go along with this new way of thinking.  Read more ..

The Way We Are

Let Authority of 'Hidden Law' Rule in Arizona

March 1st 2014

Gay Marriage

Future historians will likely be flummoxed by the moment we're living in. In what amounts to less than a blink of an eye in the history of Western civilization, homosexuality has gone from a diagnosed mental disorder to something to be celebrated -- or else.

Indeed, the rush to mandatory celebration is so intense, refusal is now considered tantamount to a crime. And, in some rare instances, an actual crime if the right constable or bureaucrat concludes that you have uttered "hate speech."Or, if you refuse to bake a gay couple a cake for their wedding. That was the horror story that sparked much of this foofaraw.

Arizona's proposed SB 1062 would have amended the state's 15-year-old Religious Freedom Restoration Act in a few minor ways so as to cover businesses the way it already covers government. Arizona's religious freedom statute was modeled on a similar federal law signed by Bill Clinton with large bipartisan majorities in both houses. It would have allowed small businesses to decline work that violated their consciences, unless the government could show a compelling reason why such refusal was unreasonable or unjust. Read more ..

Inside Politics

Bill Clinton's Rescue Ride

February 28th 2014

Bill & Hillary Clinton

Springtime is coming, baseball teams have reassembled for training, Robert Redford is back on cable playing Roy Hobbs in “The Natural” and Bill Clinton has begun his ride to rescue Democrats in the 2014 midterm elections.

In politics, the trick is to know the difference between the noise and the music. What passes for discourse in Washington is noise, which most Americans deplore, while the Democratic call to arms of Clinton, who reminds Americans of a time when jobs were plentiful and politics was not a dirty word, is pure music.

The 2014 midterm elections will be decided by votes in about 40 races for the House and Senate, which could well be won by either party with razor-thin margins. What distinguishes 2014 from midterm elections in 2006 and 2010 is that power in Washington today is divided between the two parties, and voters are unhappy with both of them.

Enter the former president, who began his rescue ride for Democrats this week in Kentucky, a state he carried in 1992 and 1996, which is now led by a widely respected Democratic governor, Steve Beshear. Read more ..

Asia Rising

The Asian Status Quo

February 27th 2014


Arguably the greatest book on political realism in the 20th century was University of Chicago Professor Hans J. Morgenthau's Politics Among Nations: The Struggle for Power and Peace, published in 1948. In that seminal work, Morgenthau defines the status quo as "the maintenance of the distribution of power that exists at a particular moment in history." In other words, things shall stay as they are. But it is not quite that clear. For as Morgenthau also explains, "the concept of the 'status quo' derives from status quo ante bellum," which, in turn, implies a return to the distribution of power before a war. The war's aggressor shall give up his conquered territory, and everything will return to how it was.

The status quo also connotes the victors' peace: a peace that may be unfair, or even oppressive, but at the same time stands for stability. For a change in the distribution of power, while at times just in a moral sense, simply introduces a measure of instability into the geopolitical equation. And because stability has a moral value all its own, the status quo is sanctified in the international system. Let us apply this to Asia. Read more ..

Inside Politics

Democrats' Enemy No. 1

February 26th 2014

Hillary Clinton in blue

Democrats have a big job in 2014: they need to hold onto control of the Senate, win back leadership of the House, and elect Democratic governors and state legislators in key states. But to get there, they face one big obstacle.

Arrayed against them will be an obscene amount of money. The dreaded Koch brothers alone, who spent $400 million in 2012 bashing President Obama and Democratic candidates, are expected to raise and spend just as much, if not more, in 2014. They’re already running TV spots against several incumbent senators and House members they deem vulnerable.

But Republican opponents and outside groups like the Koch brothers are not the Democrats’ biggest problem. Their No. 1 obstacle: themselves. As Pogo once famously said, “We have met the enemy — and he is us.” Here’s the problem: Too many Democrats, and too many members of the media, are spending too much time talking and scheming about 2016. Read more ..

The World on Edge

A World Ablaze - But Different Fuels

February 25th 2014

Ukrainian armed protesters

A bane of modern military studies (let's eschew the term "science") is the concept of counter-insurgency--the idea that indigenous revolts around the world can be analyzed with "the scientific method" and that a set of general principles, if implemented, could cure the problem. Common sense tells us that the essence of any dissidence/armed insurrection is its particularity, its basis in specific local conditions. They differ not only in geography but in the characteristics of individual societies. So, yes, that the army should not steal the peasants' chickens is a good maxim--but such bromides do not go far to tell you how to prevent civil war.


At the moment, we have one bitter internecine war in Syria, and three incipient revolts between two or more elements in Ukraine, Venezuela, and Thailand. Other conflicts, even messier to define, are growing in the Central African Republic and Nigeria. The question, of course, is whether there is anything that connects all these conflicts? And, if so, what if anything can be done to lessen tension and conflict?


The World on Edge

Why So Much Anarchy?

February 24th 2014

Ukraine protest

Twenty years ago, in February 1994, I published a lengthy cover story in The Atlantic Monthly, "The Coming Anarchy: How Scarcity, Crime, Overpopulation, Tribalism, and Disease are Rapidly Destroying the Social Fabric of Our Planet." I argued that the combination of resource depletion (like water), demographic youth bulges and the proliferation of shanty towns throughout the developing world would enflame ethnic and sectarian divides, creating the conditions for domestic political breakdown and the transformation of war into increasingly irregular forms -- making it often indistinguishable from terrorism. I wrote about the erosion of national borders and the rise of the environment as the principal security issues of the 21st century. I accurately predicted the collapse of certain African states in the late 1990s and the rise of political Islam in Turkey and other places. Islam, I wrote, was a religion ideally suited for the badly urbanized poor who were willing to fight. I also got things wrong, such as the probable intensification of racial divisions in the United States; in fact, such divisions have been impressively ameliorated. Read more ..

Russia and the West

Geopolitical Fight Between Russia and the West for Ukraine

February 23rd 2014

Protest in Ukraine

A geopolitical battle of sorts is being waged between Russia and the West over Ukraine—but it’s an uneven struggle. By all appearances, Russia cares more about losing Ukraine than Europe and the West care about gaining it. Moscow has fought hard to slow Ukraine’s effort to draw closer to the European Union, even imposing trade sanctions last summer as a foretaste of what Kyiv could expect if it signed an EU association agreement. Why the hard ball tactics? Vladimir Putin’s image of Moscow includes a sphere of influence in the post-Soviet space. If Ukraine draws closer to Europe, that leaves a huge hole. Moreover, pulling Ukraine closer to Russia matters to Putin in domestic political terms; it appeals to the conservative Russian constituency that forms the center of his political base. In December, Putin thus offered Ukraine $15 billion in credits and a whopping 30 percent cut in the price of Russian natural gas sold to Ukraine, a thinly veiled bribe to persuade President Victor Yanukovych to slow Ukraine’s relationship with Europe. Read more ..

Retirement on Edge

Why myRA is Not the Way to Save for Retirement

February 22nd 2014

Elderly couple

President Obama recently proposed to help more workers save for retirement through an executive order creating the myRA. The plan is being billed as the ROTH IRA for every man or woman with neither access to a 401(k) plan at their workplace nor the lump-sum deposit to open an IRA on their own.

Though well-intentioned, this isn't the best way to encourage workers to save more—it's just a politically easier route. A better way is to automatically enroll workers with a retirement plan through payroll deductions and give them the option to opt out. Congress has considered such a plan for years, but it has never gone anywhere and it's tough to see how things could turn around given the partisan bikering we've seen in Washington.

Nonetheless, an automatic Individual Retirement Account (IRA) is worth re-evaluating as the president makes his pitch for myRa. Half of America's full-time employees, about 75 million, arenot offered any type of retirement plan at work (except for Social Security).  Although many work at small firms with fewer than 10 employees, some work at larger firms. Over 20percent of American employers with 100 or more employees—mainly in agricultural, construction and retail sectors --do not offer any type of retirement plan at work. Read more ..

Obama's Second Term

Obama, the Shriking Imperialist President

February 21st 2014


Of all the time-honored failings for which we criticize sitting presidents — by "we" I mean pundits, academics and other members of the chattering phylum — two charges stand out: imperialism and shrinkage. Usually it's one or the other.

When the president is unpopular or when he's lost control of his agenda or when he just seems inadequate to the demands of the job, the headline "The Incredible Shrinking Presidency" proliferates like kudzu. When the Republicans lost control of Congress in 2006, the Economist proclaimed "The Incredible Shrinking Presidency" of George W. Bush on its cover. Barack Obama has been diagnosed with presidential shrinkage many times, including in Politico, the New York Times and my own National Review. The flip side of the shrinking presidency is the imperial presidency, something we've been fretting by name since at least Franklin Roosevelt and in principle since the founding. Read more ..

The 2016 Race

GOP in a Mess for 2016

February 20th 2014

Chris Christie

Democrats are busy changing the subject these days: to the minimum wage, climate change, income inequality, the 2016 presidential election — anything but ObamaCare. So you can imagine their excitement over the release of 25,000 pages of emails involving Wisconsin Gov. Scott Walker.

Many long months before a midterm election and two years until primary contests begin, any Republican who is thinking of running or is thought of as running will be the subject of endless discussion by Democrats, who can pretty much lump candidates into two camps: the Christie wing, which they will label “corrupt,” or the Cruz wing, which they will label “crazy.”

After the New Jersey governor, recently the Republican front-runner, found himself in a whole mess of trouble with a home-state scandal involving political retribution he still says he knew nothing about, Chris Christie is no longer the darling he was on the national stage. So all eyes turned to Walker, whom establishment types hoped could win his third statewide election this year to become a top contender in the 2016 line-up, running as a successful reformer from an Obama state.

The honeymoon lasted only weeks before the news hit that Walker also had sullied himself in a political mess, which, if not illegal, is at least embarrassing. Dating back to when Walker was county executive and running for governor in 2010, two investigations have led to convictions for six former allies and staffers; emails reveal Walker not only knew of coordination between staff in his public county office and campaign staff but that he directed them to hold a daily conference call to facilitate it.

Should the county executive investigation impair Walker’s path to a second term, in what promises to be a challenging campaign this year, his presidential hopes are over. And if Walker gets reelected, the story could still dog him in a run for the White House. Read more ..

Inside Politics

Clinton's Ups and Downs

February 19th 2014

Hillary Clinton in blue

Last fall I read an analysis of a poll, conducted by Franklin & Marshall College, that used the survey’s findings to anoint Hillary Clinton the “most popular politician in Pennsylvania.”

Despite this glittering title, the bar for this Keystone moniker seemed surprising low. Her favorable rating was just 57 percent. The lynchpin of the enthusiastic analysis was ostensibly her “very favorable” numbers. At 38 percent, her most admiring slice of the electorate was said to be within a single percentage point of President Obama’s 39 percent “very favorable” apex, in his post-first-inauguration days.

I’m still not impressed, but the Legions of Hillary will continue to swoon over numbers like these, preparing the way for her ascendency to the Democrats’ throne room in 2016.

In nationwide polls conducted by well-respected public pollsters over the past four months, Clinton’s favorables have varied weirdly widely, from only 51 percent in two polls (NBC/Marist and Quinnipiac) to 59 percent in a CNN/ORC study and 58 percent in an ABC/Washington Poll survey. More recently, CNN/ORC asked for retrospective job approval of her performance as secretary of State, which showed 62 percent approval. Read more ..

Financial Edge

Eighty-Five Billionaires and the Better Half

February 18th 2014

The world's 85 richest individuals possess as much wealth as the 3.5 billion souls who compose the poorer half of the world's population, or so it was announced in a report by Oxfam International. The assertion sounds implausible to me. I think the 85 richest individuals, who together are worth many hundreds of billions of dollars, must have far more wealth than the poorest half of our global population.

How could these two cohorts, the 85 richest and 3.5 billion poorest, have the same amount of wealth? The great majority of the 3.5 billion have no net wealth at all. Hundreds of millions of them have jobs that hardly pay enough to feed their families. Millions of them rely on supplements from private charity and public assistance when they can. Hundreds of millions are undernourished, suffer food insecurity, or go hungry each month, including many among the very poorest in the United States. Read more ..

Inside Politics

Bill de Blasio Lifts the Left

February 17th 2014

New York skyline dusk

On great matters of income inequality and social justice for what is called the 99 percent, a new star is born from the streets of New York, who has lifted the spirits of progressives everywhere. The election of Bill de Blasio as mayor of New York City creates a powerful opportunity to turn the core vision of the Occupy Wall Street movement, as well as the core teachings of Pope Francis about economic justice, into the daily workings of city government in the global center of media and finance.

Already, during his short tenure at City Hall and with his rising stature on the national stage, de Blasio has applied his “tale of two cities” campaign to real-time governing initiatives to promote a higher minimum wage for workers, improved education for the young, better treatment of immigrants, more affordable housing for the homeless and the poor, and a more just contribution from the 1 percent who prospered so greatly before the financial crash, so inequitably from the financial bailouts, and so disproportionately from the so-called recovery. Read more ..

The Coal Problem

Coal is Good for Taxpayers and Everyone Who Pays an Electric Bill

February 16th 2014

coal mine

Fifty years after President Lyndon Johnson announced a “War on Poverty,” some Democrats in Washington and environmental extremists are more focused on winning the “War on Coal.” These two battles coincide because without the good jobs and affordable energy coal provides, more Americans would have a lower standard of living. If environmental extremists win the war on coal, we will certainly lose the war on poverty.

Just recently, some of our anti-coal colleagues tried to strike another blow against coal with a report on the Bureau of Land Management’s (BLM) federal coal leasing program.  Coal opponents asked the Government Accountability Office (GAO) to find something wrong with the program.

To their disappointment, the report actually highlights how vital coal from these leases is as part of our energy supply and economy.  The GAO report found that more than 40 percent of the nation’s coal production in 2012 came from federal leases generating roughly $1 billion annually for the Treasury.  Read more ..

Inside Politics

Boehner: A True Leader

February 15th 2014

john Boehner

It is the end of the “Boehner Rule” — a victory for President Obama, the final chapter in the bitter budget battles between Democrats and Republicans that have eroded confidence in the U.S. economy for years, and a precedent-setting retreat by the majority party in the House that means debt-ceiling deadlines might no longer be forcing mechanisms that rein in the nation’s staggering debt.

All of this is true. Yet bringing a clean debt-ceiling increase up for a vote, without any “compromise” policy attached, was Speaker John Boehner’s (R-Ohio) only choice.

Sure, there were great ideas about what Republicans could pair it with: a bill to block the “risk corridors” provision of the Affordable Care Act in order to prevent an insurer bailout, the approval of the Keystone XL oil pipeline, the restoration of the cost-of-living increases for military veterans that had been struck in the bipartisan budget deal in December, even a sustained growth rate adjustment or Medicare “doc fix.” But nothing could satisfy conservatives, unite the conference, create consensus — nothing got 218 votes. Read more ..

Broken Government

Congress Twists the Relevant Facts on Purpose

February 14th 2014


If you’re curious about what I used to do as a PR guy for the health insurance industry, how I often took facts and figures and twisted them to advance a specific political or financial agenda, take a look at the behavior of some members of Congress last week.

Like I used to do, they took numbers in a report from a government agency — in this case the nonpartisan Congressional Budget Office — and twisted their meaning to suggest something never intended by the report’s authors. Like I used to do, they misled the public with statistics to advance their team’s ultimate agenda, which, of course, is to win votes in November. And if getting people to vote against their own best interests means making comments that not only are dishonest but also contradict what they’ve said previously, so be it. I have to wonder if, also like my former me, they have trouble sleeping at night. Read more ..

Broken Government

American Military Accomodation of Islamism

February 14th 2014

Accused mass murderer Nidal Malik Hasan

“Caving to pressure from Muslim groups, the Pentagon has relaxed uniform rules to allow Islamic beards, turbans and hijabs. It’s a major win for political correctness and a big loss for military unit cohesion,” said a recent report.

This new relaxation of rules for Muslims comes at a time when the FBI is tracking more than 100 suspected jihadi-infiltrators of the U.S. military. Just last month, Craig Benedict Baxam, a former Army soldier and convert to Islam, was sentenced to seven years in prison due to his al-Qaeda/jihadi activities. Also last month, Mozaffar Khazaee, an Iranian-American working for the Defense Department, was arrested for sending secret documents to America’s enemy, Iran. Read more ..

Broken Economy

An Old Story About the War On Poverty

February 13th 2014

Homeless in Cheap Motels

Recent weeks have seen a blizzard of media stories and reports, including one from the Council of Economic Advisors, about whether the War on Poverty was a success. What a surprise—Democrats tend to say it worked wonders while Republicans judge it to be a flop. However, there is one impact of President Johnson's War on Poverty that everyone should agree has been a terrific success, although a future problem looms. I'm referring to the positive impacts of the War on Poverty on the health, life expectancy, and poverty rates of the elderly. The three programs that account for these impacts on the elderly are Social Security, Medicare, and Medicaid. Johnson expanded the first and created the second two.

Eligibility for Social Security is based primarily on insurance principles and does not involve a means test. Rather, the benefit is an earned insurance payment in the sense that money is deducted from nearly everyone's earnings, beginning with the first dollar, and credited to an individual account for nearly every worker in the U.S. Read more ..

Broken Economy

The Fed is Not to Blame for Turmoil in Emerging Markets

February 12th 2014


The Federal Reserve is causing heartburn for central bankers in emerging markets. Since 2008 the US central bank has been flooding capital markets with cheap money, forcing down yields on safe assets. Many investors scurried into places such as India and China in the hope of earning higher returns. Now that the Fed is reversing course, credit booms in emerging markets are turning to bust. This is especially painful for countries with current account deficits, which are reliant on foreign finance.

It is not just the Fed. China’s currency policies over the years and the Bank of Japan’s recent monetary easing have added to the angst of central bankers in other countries and ratcheted up currency tensions.

The trouble is that every central bank has a mandate that focuses on its own economy. The Fed has argued that any spillover effects of its policies would be limited if other countries let their exchange rates adjust freely. Emerging markets have indeed used currency adjustments to cushion themselves from the impact of Fed policy. That is why, despite the turmoil they are experiencing, few of them are on the verge of a classic currency crisis. But this has not prevented their central bankers from complaining vigorously about a US central bank that, so far as they are concerned, displays all the sensitivity of a bull in a china shop. Read more ..

Broken Borders

Immigration Wimps

February 11th 2014

Immigration Protest

This is not complicated: There will be no immigration reform legislation this year.

Why? Because a minority of House Republicans believe that doing anything about immigration would only hurt them in this year’s Republican primaries. And under Speaker John Boehner (R-Ohio), the minority rules.

No, this is not complicated. But how we reached this point in the debate over immigration reform says a great deal about the lack of direction in today’s Republican Party.

Only a year ago, Republicans were the loudest voices for immigration reform. After watching the GOP share of the Latino vote sink from 44 percent in 2004 to 27 percent in 2012, many party leaders realized they had to do a better job of reaching out to the fastest-growing share of the electorate. Sen. Lindsey Graham (R-S.C.) even warned that Republicans were “in a demographic death spiral” and would fail to win the presidency again if their party were seen as blocking immigration reform. Read more ..

Broken Economy

Meet the 99.999999 Percent

February 10th 2014

American poverty

Forget about the 1 percent versus the 99 percent. It’s really more like the 0.000001 percent versus everybody else. A tiny group — mostly comprising the Obama White House, a bunch of Washington Democrats, progressive economists, and the media elite — continues to fixate on income inequality as America’s greatest challenge.

Most everybody else, the 99.999999 percent, sees things differently. Surveys continue to show Americans most worried about jobs and economic growth, not the income gap between the top and bottom. It’s a rational view given new employment data from the government. The January jobs report showed only 113,000 net new jobs created last month. It was the second straight month that job growth fell way short of both expectations and the level needed to return the U.S. economy to full employment. Now an alternative, less reliable jobs survey from the Labor Department shows much stronger employment gains. So perhaps reality lies somewhere in the merely mediocre middle. Read more ..

Obama' Second Term

Freedom for the Job-Locked

February 9th 2014


It’s only February, but it’s already my favorite word — or phrase, I guess — of the year. (Who knows, by December it may be shortened to “joblock.”) It’s not euphonious or edgy, but it does offer insight into the unreality of the Democrats’ predicament.

The Congressional Budget Office issued a politically explosive report this week, finding that Obamacare will reduce the number of hours Americans work by the equivalent of 2.5 million full-time jobs. This is different from killing 2.5 million jobs, Obamacare defenders are quick to insist. This will be a shortfall on the demand, not supply, side. In other words, people with health insurance will opt not to work in certain circumstances if they know they won’t lose their coverage. Democrats insist this is a boon. Indeed, many are talking about it as an act of liberation (which reminds me of an 11-year-old headline from the Onion: “IBM Emancipates 8,000 Wage Slaves”). Read more ..

Russia on Edge

No More Mr. Nice Putin

February 8th 2014


Vladimir Putin has been on his best behavior as the Sochi Olympic Games approach. He has granted amnesty to prisoners and political opponents, downplayed Russia's anti-gay law, lifted a blanket prohibition on demonstrations at Sochi and acted the welcoming host. The Olympics are a showcase for Russia and for him personally. He wants nothing to spoil the Games.

The Sochi Olympics will come and go, and the less kind, less gentle Putin will be back. He is likely to turn attention to Russia's neighbors that drew closer to the European Union last year — to punish them and to try to drag them back into Moscow's fold. Moldova and Georgia are prime targets, having initialed agreements with the EU in November. If a settlement of Ukraine's current crisis eventually puts it back on track to sign its association agreement with the EU, that country also will find itself in Putin's cross hairs. Washington and the European Union must consult and agree on a joint strategy in anticipation of such a development.

Putin does not want to re-create the Soviet Union. He wants deference from neighboring states. He knows that EU association agreements would pull states from Moscow's economic and geopolitical orbit. Keeping them in requires leverage. In past disputes with neighbors, Russia has used natural gas price increases and cutoffs, embargoed key imports and stoked inter-ethnic tension as a means of pressure or simply as payback. Each of the potential target countries has significant vulnerabilities.

Moldova remains dependent on Russia for natural gas. Many Moldovans work in Russia, remitting their pay back home. Moscow could move to recognize Transnistria, Moldova's breakaway eastern region, or exploit the upcoming Moldovan parliamentary elections to support candidates opposed to deepening links with Europe. Read more ..

The Diplomatic Edge

Rings of Fire

February 7th 2014

Sochi 2014 Olympic games torch

As Russia stumbles from one embarrassing snafu to the next in the lead-up to the Sochi games, at least one thing is certain: The 22nd Winter Olympics will be both the most controversial since 1980, when much of the free world boycotted the Moscow Games, and potentially the least peaceful since 1972, when Palestinian terrorists killed 11 members of the Israeli team. Amid the controversy over the Russian government's crackdown on gays and against the backdrop of threats by al Qaeda-affiliated groups, the Olympic Charter's promise to "place sport at the service of the harmonious development of humankind, with a view to promoting a peaceful society concerned with the preservation of human dignity," seems increasingly tenuous.

This should hardly come as a surprise. While International Olympic Committee (IOC) officials and diplomats the world over sing the praises of sporting diplomacy, the idea that athletics can break down barriers and advance peace is more myth than fact. Read more ..

Nigeria on Edge

Nigeria's Promise and Potential

February 6th 2014


While Americans celebrated the New Year on January 1, the date was a major milestone in the history of Nigeria.  It marked 100 years to the day since the separate protectorates of Southern and Northern Nigeria was united.  

There are many signs that Nigeria is increasingly catching the attention of the world and cementing its position as a leading force in Africa.  It possesses one of the strongest militaries on the continent, which it has been forced to rely upon as it combats the radical Islamic terrorists of Boko Haram. 

The group, which may be receiving help from al-Qaeda and al-Qaeda inspired fighters, has attempted to thwart Nigeria’s modern-day progress with sickening suicide attacks and the vicious targeting of Christians.  Nigerian President Goodluck Jonathan has demonstrated an iron-clad resolve to safeguard his citizens and to take far-reaching steps to ensure that the jihadists do not succeed.

But when it comes to Nigeria and assessing its future, the focus should be on economic indicators that reveal enormous opportunity for Jonathan’s countrymen as well as outside investors and the nation’s allies. For the second year in a row, the U.N. Conference on Trade and Development has named Nigeria as the top destination for foreign direct investments in Africa with inflows of nearly $9 billion in foreign direct investment.

The influx of that degree of capital should help spur further economic growth and kick-start a new era of prosperity for Nigeria.  Further evidence of that positive momentum was the opening by GE of a $1 billion service and manufacturing facility in 2013. The American titan of industry has been active in Nigeria for decades, but this marks the largest-ever investment in sub-Saharan Africa to date. Other blue-chip American companies ranging from Coca Cola to Intel to Apple, Google and Microsoft have a presence in Nigeria and Procter and Gamble runs a factory there. Read more ..

Internet on Edge

Children Deserve Protection from On-Line Predators and Rogue ISPs

February 5th 2014

Child protection police working with Interpol and Europol have arrested hundreds of paedophiles in many countries: the UK, other EU countries, Australia, Canada and the United States, for ordering, paying, and viewing Philippine children forced to strip naked and do sexual acts live in front of video cameras connected to computers. These horrific and heinous crimes are generally ignored by the Philippine police, telecommunication companies and the government agencies that are mandated to protect the children. The children are victims of human trafficking for sexual exploitation and the telecommunications corporations, who are the Internet Service Providers (ISP) that allow it must be held responsible.

The recent revelations by Interpol and police raids on cyber sex dens in Cebu, Manila and Quezon city by the National Bureau of Investigation.(NBI) showed that these crimes are widespread and common practice in the Philippines. In Cordova, Cebu, the village of Ibabao has internet connections and several cyber-sex dens. Parents even sold their children to the cyber sex operators. Such is the level of economic and moral poverty there. Read more ..

Obama's Second Term

Republicans are Right to Keep the Fires of Benghazi Burning

February 4th 2014

It is hard to count all the investigations into the Benghazi, Libya, attack — the exhaustive hearings and extensive testimony, the State Department review, the Senate report, the House report, the piles of newspaper and television stories. All failed to reveal any cover-up, any orders for the military not to help, or any lies from administration officials.

Yet Mitt Romney, the GOP’s 2012 presidential nominee, told a conservative radio host last week that Americans still do not have the “full story” behind the deaths of the U.S. ambassador and three other Americans. Also last week, a Republican invited the father of one of the Americans killed in the terror attack to be his guest at the State of the Union address. And, by the end of last week, a House resolution to form a select committee to investigate the episode had more than 181 Republican co-sponsors. Read more ..

Russia on Edge

The Moscow Missile Mystery: Is Russia Actually Violating the INF Treaty?

February 3rd 2014

50 Minuteman

In December 1987, Ronald Reagan and Mikhail Gorbachev signed the treaty on intermediate-range nuclear forces (INF), a landmark agreement that banned an entire class of U.S. and Soviet nuclear weapons. The agreement put the brakes on a spiraling arms race, but this week brings worrying news that -- just over two decades later -- Russia may be actively going back on its word. Questions have arisen as to whether Russia has tested missiles in violation of the treaty's terms, most recently in a Jan. 30 story in the New York Times. Some claims are spurious; others appear more serious.

If Moscow has developed a prohibited INF missile, it will have implications for U.S.-Russia arms control. But it will have even more important implications for Russia's relations with its neighbors in Europe and Asia, including China.

The INF Treaty banned all U.S. and Soviet land-based ballistic and cruise missiles with ranges between 500 and 5,500 kilometers (300 to 3,400 miles). When the treaty's reduction period concluded in June 1991, 846 American and 1,846 Soviet missiles had been eliminated, as well as their associated launchers and other equipment. The treaty's intrusive verification measures pioneered provisions incorporated into the 1991 Strategic Arms Reduction Treaty (START I).

There have been periodic charges -- often made by critics of the Obama administration's arms control policy -- that Russia has violated the INF Treaty's terms. (Russia took on Soviet treaty obligations after the USSR's collapse at the end of 1991.) Up until now, most charges have focused on the RS-26 ballistic missile. Those charges have no basis.  Read more ..

Obama's Second Term

The Obama Complex

February 2nd 2014

Obama with baseball bat

President Obama couldn’t resist confiding to a recent interviewer, “I am comfortable with complexity.” In fact, he is comfortable with a kind of pseudo-complexity that lends itself to pseudo-thoughtful formulations.

Thus, in his State of the Union address last week the president explained to his benighted and presumably bellicose fellow citizens: “You see, in a world of complex threats, our security and leadership depends on all elements of our power​—​including strong and principled diplomacy.” (The “you see” is particularly condescending, even by Obama’s standards.) The point is, with respect to Iran, “we must give diplomacy a chance to succeed.”

The trouble is that, in a world of complex threats, diplomacy won’t succeed unless backed up by the other elements of our power. And Obama has abandoned everything but diplomacy. Sanctions are being dismantled. The threat of military action has virtually disappeared. Obama’s Iran policy now rests exclusively on diplomacy and will therefore fail. Read more ..

Inside Politics

The Cowardice of Wendy Davis

January 31st 2014

Jonah Goldberg

Wendy Davis, a Democratic state senator running to replace Rick Perry as governor of Texas, owes her political stardom to two things: a pair of pink sneakers and her unstinting support for a woman’s right to terminate a late-term pregnancy in a substandard clinic. Yay, feminism!

Last year, Davis led an eleven-hour filibuster — that’s where the sneakers came in handy — to block legislation that would ban abortion after 20 weeks and require abortion clinics to meet the same standards that hospital-style surgical centers do.

This was all going on against the backdrop of the sensational Kermit Gosnell case in Pennsylvania. Gosnell ran a bloody, filthy “clinic” where he performed late-term abortions with a barbarity you’d expect to find in a Saw movie. Sometimes he’d “snip” the spines of fully-delivered babies with a pair of scissors. His instruments were so unsanitary that some women got STDs from them. Cat feces was a common sight on the procedure-room floors.

In short, you didn’t need to be an abortion-rights activist to find the story of interest, but you’d certainly expect an activist to be up to speed on it. Working on that theory, The Weekly Standard’s John McCormack caught up with Davis last August to ask her a few questions. Read more ..

Obama's Second Term

Order Boosting Federal Salaries Means Real Action on Economic Mobility

January 29th 2014

Click to select Image

When it comes to boosting economic opportunity, President Obama isn’t going to wait for Congress anymore.

In his State of the Union Address last night, the President made a powerful statement about employers’ obligation to reward work -- starting with his own obligation as the executive in charge of millions of federal contracts.

In a study my colleagues Robert Hiltonsmith and Amy Traub released last May, Demos found that nearly two million private sector employees paid with federal tax dollars through contracts, loans, grants, leases and health spending, earn wages too low to support a family. These are people working on behalf of America, doing jobs that we have decided are worthy of public funds—yet they’re being treated in a very un-American way. That’s why federal workers have been walking off the job for the last year, organizing with Good Jobs Nation to call on President Obama to raise their wages. Read more ..

Obama's Second Term

Obama versus Hobby Lobby

January 28th 2014

Senior advisor to President Obama, Valerie Jarrett, wrote for the White House blog and the Huffington Post that, "A Woman's Health Care Decisions Should Be in Her Own Hands, Not Her Boss's." I couldn't agree more.

Odd then that the administration is trying to insert bosses, many of them against their deeply held religious beliefs, into the private health care decisions of women. Ms. Jarrett writes that, "The ACA (Affordable Care Act) was designed to ensure that health care decisions are made between a woman and her doctor, and not by her boss, or Washington politicians."

In fact, the administration has done the opposite. It has forced employers to act as middlemen between women and their doctors by forcing them to participate in providing four potentially life terminating drugs and the whole gamut of FDA-approved contraceptives, even when they object on religious grounds. And then it thrust the issue right into the portfolio of Washington politicians by making it an election wedge issue, by using it to stoke partisan bickering, and by peddling lies about a "war on women." Read more ..

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