Monday, June 25, 2012

Quick Hits - June 25, 2012

The Supreme Court of the United States released four major rulings today, but alas, we will have to wait on the decision on the constitutionality of Obamacare's individual mandate and that decision's impact on the entire legislative for Thursday morning, 10am Eastern.

Two major rulings were announced, one on the Arizona SB1070 Illegal Immigration legislation, passed and signed by the state, and immediately challenged by the Obama Administration.  The second major ruling involved a revisit to the 2010 Citizens United decision which came to the court via a Montana Supreme Court decision which blocked corporations making expenditures to support or oppose candidates or political parties. remains the go-to site for information and analysis - and they will be hosting a live blog chat / analysis of Thursday's announcements.

The Supreme Court issued a mixed ruling on Arizona's SB1070 that has both sides declaring victory. The Administration is focusing on three key elements of the state's legislation that were struck down by the Court as being unconstitutional.  Struck down were provisions in the bill that made it a misdemeanor for immigrants to fail to carry identification that they are in the U.S. legally; that made it a crime for illegal immigrants to apply for a job; and that the state or local authorities cannot arrest someone solely on the suspicion that the person is in the country illegally.

However, the Court upheld a major component of the legislation, the provision that requires police to check on the immigration status of anyone they detain if there is 'reasonable suspicion' that the person is illegally in the United States.

This last provision was one of the flashpoints of opposition against the Arizona bill - with opponents claiming that this was opening the door for racial profiling and intimidation by the police.

Arizona Governor Jan Brewer cited the decision of the Court to support this provision of the law as a victory for her and Arizona in statements earlier today.

While the Administration did gain some minor victories in the three aspects that were struck down, not only did they lose on the main point, but the Court also delivered a sharp slap at the Administration saying that it was 'improper' when it attempted to block the legislation before an Arizona state court had a chance to interpret the legislation and see if it was in conflict with existing federal immigration law.

The Court voted 5-3 in their decision, with Justice Kagan recusing herself.  Justice Kennedy wrote the majority opinion with Roberts, Ginsberg, Breyer, and Sotomayor concurring.  Justices Scalia, Thomas, and Alito concurred in part and dissented in part.

I've always suspected that the aspect of the Arizona bill that made it a crime for illegal immigrants to apply for a job was a bit of a stretch.  The existing Federal law already puts the onus on this with the employer - and that it is already illegal for employers to hire undocumented workers.  As for the failure to carry documentation, I suspect that if someone doesn't have documentation and there is a 'reasonable suspicion' of one's illegal status, they will be checked.  I recall, when I held my 'green card', the card itself said that it needed be carried at all times - and I did.

The real takeaway from this ruling however, to me, is the slap that the Court delivered to the Administration for its actions regarding contesting the state.  I wonder if this will continue as the Court evaluates the Administration's actions regarding states Voter ID laws in the term starting this October.

Another aspect that will reverberate is the dissent from Associate Justice Scalia, which directly referenced the decision by President Obama, via executive fiat, to halt enforcing immigration laws on a certain aspect of the illegal immigration population in the United States - asking what recourse states would have if the executive decided to not enforce federal laws on the books.

Another major decision was the Supreme Court reaffirmation of the 2010 Citizens United decision that was specifically attacked by President Obama during the 2011 State of the Union speech.  In a 5-4 decision that matched the court breakdown in Citizens United (Roberts, Alito, Scalia, Thomas, Kennedy for), the SCOTUS reversed a Montana Supreme Court ruling that blocked corporations from making expenditures to support / oppose candidates or political parties - ruling that corporations could contribute to political causes, parties, and candidates.

As SCOTUSblog notes in their recap...
Leaving no doubt that the Supreme Court has no intention of putting new restraints on political campaign spending, despite the huge outflow of cash this year, a five-Justice majority on Monday seized on a new case from Montana to solidify the controversial ruling two years ago in Citizens United v. Federal Election Commission. Only two potential developments might make a difference in the future: if the Court were persuaded to crack down on secrecy in such spending, or if the Court’s own membership changes. With complete freedom of donors to contribute and to spend, the disclosure of their identities now looms as the next major issue on campaign finance.
The President himself is bringing the last issue to the forefront with the efforts of his reelection campaign to obtain, target, and attack the names of private contributors to conservative SuperPACS.

Also announced by the SCOTUS, a decision to declare unconstitutional laws that sentence juveniles to either the death sentence or for life in prison without the opportunity for parole.

These decisions have temporarily pushed the Fast and Furious kerfuffle to the back pages, but a poll conducted by The Hill is showing that voters disapprove of the President's use of executive privilege in this case by over a 2 to 1 margin.  Even 28% of the self described Democrats in the poll believed that the President overreached in the use of executive privilege to block Congressional investigators from receiving documents they requested.

Yesterday's QH featured a video blog post by Bill Whittle where he made the (IMO strong) case that Fast & Furious might have started as a political operation intending to create a justification for far more stringent gun control legislation in the U.S.  Chairman of the House Oversight and Government Reform Committee, Darrell Issa said he believed the same while appearing on ABC's News This Week yesterday.

Wasting little time, Egypt's new Muslim Brotherhood President says his first order of business is to forge an alliance with Iran and 'rethink pact with Israel'.....
Egypt’s Islamist president-elect, Mohamed Morsi, wants to “reconsider” the peace deal with Israel and build ties with Iran to “create a strategic balance” in the Middle East, according to an interview published by Iran’s Fars news agency on Monday.

The stated goals are certain to alarm Israel and its ally the United States as they adapt to the new direction Egypt will chart with Morsi at the helm.

They could also boost Iran’s influence in the Middle East at a time of heightened tensions between Tehran and the West.

But President Mohamed Morsi was not done as he defined his domestic policy directions...
Egypt’s Constitution should be based on the Koran and Sharia law, presidential candidate from the Muslim Brotherhood Islamist movement Mohamed Morsi said.

“The Koran is our constitution, the Prophet is our leader, jihad is our path and death in the name of Allah is our goal,” Morsi said in his election speech before Cairo University students on Saturday night.

Today Egypt is close as never before to the triumph of Islam at all the state levels, he said.

“Today we can establish Sharia law because our nation will acquire well-being only with Islam and Sharia. The Muslim Brothers and the Freedom and Justice Party will be the conductors of these goals,” he said.

Senator John Kerry, who I heard once served in Vietnam, Chair of the Senate Foreign Relations Committee, is telling us that we should not prejudge the Muslim Brotherhood and their claims for support of 'jihad' and a fundamentalist enforcement of Sharia law. Wow, I feel so much better now that Senator Kerry has picked his side - particularly given his personal history of siding with America's enemies.

Meanwhile, Hamas is continuing to step up their rocket attacks from Gaza on Israeli towns and villages - over 160 were launched last week.

Last week I reported about merchant ship sailing from Russia to Syria carrying attack helicopters for the Assad regime that was forced to return to Russia after British insurers cancelled the insurance for the shipping line the vessel was registered to. The Guardian is reporting today that the ship has now been reflagged under a Russian flag and is set to sail for Syria carrying attack helicopters and air defense missiles and systems for the Syrian strongman. Sailing under the Russian flag limits the ability of Western powers to intercept or stop the ship as any such action can be seen as an act of war against Russia.

The European fiscal crisis continues to fester as Cyprus makes its formal request to the EU for a bailout to prevent their default on their debt obligations.

The debt status and weak financial standing of most major European banks continue to pressure the markets.    Health issues have forced the resignation of the newly appointed Greek Finance Minister.  With all of this turmoil, all eyes continue to focus on Germany - and if Germany will blink by opening their purse strings to bailout the troubled countries (Greece, Spain, Italy), and accept a 'fiscal union' that would have the debt from southern Europe shared with those countries of northern Europe.

Last week, during the G20 meetings in Mexico, President Obama directly called on Germany to do this while also requesting that Germany and other European nations embrace Keynesian economics by increasing their government spending and stop focusing on the austerity of measures of lowered government spending and fewer entitlements.

Germany's finance minister gave his answer today, telling President Obama to 'butt out on the debt crisis'.
Germany’s finance minister is rejecting U.S. President Barack Obama’s calls on Europe to move faster in fighting its debt crisis, telling him to get the American deficit under control instead.

Wolfgang Schaeuble told public broadcaster ZDF in an interview late Sunday that “people are always very quick at giving others advice.”

He says: “Mr. Obama should first of all take care of reducing the American deficit, which is higher than in the euro zone.”

Germany also has a similar message for the new Greek government - stop asking for help and start cutting spending...

NYT's Paul Krugman, the former Enron financial advisor, continues his gymnastics to try to reconcile and build a case that Keynesian economic policies are the solutions to not only the economic woes in Europe, but also in the United States. As he frequently does, he starts from a preconceived conclusion and then contorts a 'case' to lead to that conclusion. This time he is focusing on the Austrian banking crisis of 1931 and that the failures of the ECB or Federal Reserve to act to take a more proactive role (since governments are not) are the causes of today's economic challenges in Europe and the United States...
It started with a banking crisis in a small European country (Austria). Austria tried to step in with a bank rescue — but the spiraling cost of the rescue put the government’s own solvency in doubt. Austria’s troubles shouldn’t have been big enough to have large effects on the world economy, but in practice they created a panic that spread around the world. Sound familiar?

The really crucial lesson of 1931, however, was about the dangers of policy abdication. Stronger European governments could have helped Austria manage its problems. Central banks, notably the Bank of France and the Federal Reserve, could have done much more to limit the damage. But nobody with the power to contain the crisis stepped up to the plate; everyone who could and should have acted declared that it was someone else’s responsibility.

The problem is, the action that Krugman advocates, while fitting his ideological bent, will not work because it has not worked - ever. What Krugman advocates effectively is nothing more than more of the 'ponzi scheme' that we've been subscribing to as we ignore spending and debt.
So, because governments are not spending enough to get economies out of the doldrums, the pain of unemployment goes on and on, as Krugman puts it. We have to embrace inflation. It will erode the real value of all debt, including mortgages and, even better, government bonds. Let governments borrow and spend enough to push prices up at a significantly higher rate, to generate inflation of 4% or perhaps even 5% a year.

He writes that government debt likely “won’t have to be paid off quickly, or indeed at all,” with enough inflation. Of course this is what folks have suspected for a while, hence the popularity of gold as an investment. Krugman comes right out and says what officials tend to obscure, namely the temptation to destroy the purchasing power of the currency through inflation, thereby shrinking the government’s liabilities. He’s all for falling into the temptation.

Yes, let's return to 1979-1980 - with the double digit (11-14%) annual inflation rate, prime interest and mortgage rates of 18-20%. After all, as many ideologues contend, the 2008-2009 recession was far worse than that experienced between 1980-81.

As Victor Davis Hanson notes in his latest read it all essay, 'Is the Country Unraveling?' -
As we see in New Jersey, Ohio, Texas, and Wisconsin, the cure for the present economic malaise is not rocket science — a curbing of the size of government, a revision of the tax code, a modest rollback of regulation, reform of public employment, and holding the line on new taxes. Do that and public confidence returns, businesses start hiring, and finances settle down. Do the opposite — as we see in Mediterranean Europe, California, or Illinois over the last decade — and chaos ensues.

Obama took a budding recovery in June 2009, and through massive borrowing, the federal takeover of health care, new expansions of food stamps and unemployment insurance, the curtailing of oil and gas leasing on public lands, new regulations, and non-stop demagoguery of the private sector, slowed the economy to a crawl. His goal seems not to restore economic growth per se but to seek an equality of result, even if that means higher unemployment and less net wealth for the poor and middle classes. Obama hinted at that in 2008 when he said he would raise capital gains taxes even if it meant less revenue, given the need for “fairness.” Indeed, equality is best achieved by bringing the top down rather than the bottom up. Nowhere is the Obama model of massive borrowing, vast increases in the size of the state, more regulations, and class warfare successful — not in California or Illinois, not in Greece, Spain, or Italy, not anywhere.

How many people recall that this recession technically ended June 2009?

VDH also makes another interesting observation regarding the Obama Presidency when he looks at the appointments this President has made...
Appointments? Where does one find the like of an Anita Dunn (her hero was Mao), the truther Van Jones, or Al “Crucify” Armendariz? Do we remember guests to the Bush White House being photographed flipping off portraits of Bill Clinton? Usually Treasury secretaries are models of tax probity, not tax violators themselves. Why is the secretary of Labor issuing videos inviting illegal aliens to contact her office when lodging complaints against employers? Even John Mitchell did not violate so many ethical standards as has Eric Holder, who sees nothing wrong in appointing an Obama appointee and Obama campaign donor to investigate possible Obama administration legal violations. Why was grilling Alberto Gonzalez not racism, but doing the same to Eric Holder supposedly is? From where dids“Shut the f— up” National Security Advisor Thomas Donilon appear? Fannie Mae and K Street? Do Commerce secretaries usually drive Lexuses as they promote U.S. industry?
'How's that Hopey Changey Thingy working out for ya?'

With all of this, let's not forget our 'friend' in the Far East - which is reading the US as weak - and taking advantage of it...
This outcropping has been claimed by both China and the Philippines because of the rich fishing beds that surround it and the possibility of drilling for oil.

You would think that the Philippines would have the better claim, having built a lighthouse and planted its flag there in the 1960s. The shoal is only 140 miles west of Luzon, the main Philippine island, well within Manila's 200-mile "exclusive economic zone" as recognized under international law. It is 750 miles from the Chinese landmass.

Nevertheless, China is trying to assert its sovereignty over nine-tenths of the South China Sea based on tendentious historical "evidence" ranging from purported trips by Chinese explorers 2,000 years ago to a 1947 map issued by China's Nationalist government and recognized by no other state.

However unconvincing its claims, China is attempting to make good on them by sending fishing vessels and paramilitary patrol boats into disputed waters.
The response by the Obama Administration - effectively, crickets chirping...  The article goes on to contrast this response of the small island nation of Palau - which was far more effective than the non-action of the U.S.

Today in History

1876 – 600 troopers of the 7th Cavalry, under the command of Lt. Colonel George Armstrong Custer, enter the Little Bighorn Valley overlooking a camp of more than 10,000 Native Americans. One of the leaders of the Sioux, Sitting Bull organized a defense of the camp, while the majority of the warriors, led by Crazy Horse engaged the 7th Cavalry. Elements of the 7th were separated by the attacks, with Custer and about 210 of his men engaged by over 3,000 Native Americans on what became known as ‘Last Stand Hill’.   Custer and all of his men were killed in the attack – the most decisive victory for the Native Americans in the Plains War. The US government responded by increasing their efforts to subdue the tribes. Within 5 years, almost all the Sioux and Cheyenne would be confined to reservations.

1942 – Major General Dwight D. Eisenhower takes command of US Forces in Europe and arrives in London, England.

1950 – Armed forces from communist North Korea smash into South Korea igniting the Korean War. The United States responded by pushing a resolution through the U.N.'s Security Council calling for military assistance to South Korea. (Russia was not present to veto the action as it was boycotting the Security Council at the time.) With this resolution in hand, President Harry S. Truman rapidly dispatched U.S. land, air, and sea forces to Korea to engage in what he termed a "police action."

1973 – White House Counsel John Dean admitted that President Richard Nixon took part in the Watergate cover-up.

1998 – Microsoft releases Windows 98

2009 - Michael Jackson dies

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