Benghazi

Let’s recap….

9/11/12 – On the anniversary of the 9/11/01 al-Qaeda attack against the US, the US Consulate and an Annex compound in Benghazi, Libya is attacked over a nearly 8 hour timeframe starting at about 9:40pm local time. In the Consulate, the US Ambassador to Libya and a State Department employee are murdered by the attackers. Several Americans escape from that compound and under rifle and RPG fire from attackers, flee to the Annex compound. Not too long afterwards nearly 200 heavily armed terrorists attack the Annex compound under supporting mortar fire. Two Security officers man a machine gun on the roof of the Annex to defend the compound and call for airstrikes / assistance – even lasing the attacking mortar positions for precision munitions. They are killed after running out of ammunition and after covering the escape of others from the Annex compound whom fled to the Benghazi airport and the protection of a State Department rescue team held in position at that airport.

- No one ordered any rescue, relief, or support military missions to assist those in either of the compounds…. Yet these forces were within reach of the area and ready for orders.

- The State Department had live / real-time video and audio from both compounds during the attack.  An unarmed Predator drone circled overhead as well as communication with US personnel in both the Consulate and Annex compounds.

- Units / people in Libya, Italy, Germany, at sea in the Med, and in Washington DC knew of these contacts.

- The President was made aware of the attack – then went to bed prior to heading out from Washington DC to a Las Vegas campaign fundraiser.

- The Administration – White House and State Department – initially defined the attack as a public / popular demonstration against the US sparked by an obscure video hosted in June on You Tube that was ‘insulting’ to Islam – a demonstration that turned bad and resulted in the storming of the Consulate / Annex and the four deaths. This coincided with other demonstrations and violence against US Embassies in Tunisia, Egypt, Yemen, and Pakistan.

- Secretary of State made several high profile speeches / briefs for the press condemning the obscure video and its creator as the cause for the demonstrations and violence – asking for an end to the violence since the US government neither condoned or produced the video.

- The President and the Secretary of State participated in public service messages on Pakistani TV blaming the violence on the video and its creator and saying the US government had nothing to do with it.

- According to the father of one of the murdered security officers, the Secretary of State told him at the service marking the return of the murdered Americans to the US, that the US government would ensure that the creator of the video was going to be prosecuted for his role in igniting the violence (ie creating the video).

- The US Ambassador to the United Nations appears on all 6 major Sunday morning news programs to assert that that violence in Benghazi was a spontaneous popular demonstration against the US motivated by the obscure video that unfortunately turned violent. Denies all links to terrorism or the 9.11 anniversary.

- The President calls for a full investigation into the attack and the government’s response / handling of the attack.

- The President, appearing on ‘The View’ on Sept. 25th, continues to push the case that this was a demonstration motivated by an anti-Islam video on You Tube that unexpectedly turned bad – and that the investigation needs to continue to know details.

- State Department spokesperson stops answering questions – citing the on-going investigation.

- The White House stops answering questions – citing the on-going investigation.

- Mid-level State Department employees testify before Congress that the State Department knew during the attack that it was linked to terrorists. They also acknowledge that the murdered security officers had requested military assistance which was not authorized or provided. [Later we learned that Glen Doherty and Tyrone Woods apparently killed 40-60 of the attackers as they made their last stand trying to defend the Annex compound as the attack took place over 2-3 hours.  They even had a laser target designator scoped in on the terrorists' mortars ready for a requested air strike to assist their defense of the Annex compound.]

- Memos and materials from the murdered US Ambassador to Libya, including materials recovered a week (plus) from the wreckage of the Consulate compound, show that the Ambassador had major concerns about a) security for the US facilities and people in Benghazi, b) requested additional security protection, c) noted that Islamic fundamentalist terrorist organizations, including an al-Qaeda affiliate are expanding their power and control over Benghazi, d) that the new Libyan government had lost effectiveness and control of the city, e) that the security for the US facilities was provided by a small British firm that depended entirely on unvetted local personnel, f) that the local security not only fled just prior to the attack, that members of the local security were busy in the days prior to the attack obtaining intelligence on the people and buildings in the US compounds, and g) and a dedicated security team for Tripoli and Benghazi were ordered out of the country by DC one month prior to the attack.

- In the wake of this information, and the State Department testimony, the ‘official’ description of the attack turned to be that it was a terrorist attack – but all references to being done by the local al-Qaeda surrogate continued to be scrubbed.

- The President and his campaign team began to press the terror attack meme – including the claim that the President called the attack a terror attack as early as his statement on the attack made on September 12th from the WH Rose Garden. This became a major issue in the 2nd Presidential debate – when the moderator, CNN’s Candy Crowley substantiated the President’s claim during the debate – and disavowed the claim during a post-debate statement.

- Attention started to focus on why the message from 9/11/12 to 9/26/12 focused only on the meme of a demonstration accidentally turned violent – in particular the statements of the President and Susan Rice.

- The White House tosses the CIA under the bus – blaming the 2 weeks of incorrect messaging on the terror attack on incomplete and inconclusive intelligence from the CIA – despite the real-time communications / proof of the contrary from the State Department.

- CIA Director David Petraeus chafes at the CIA being blamed for the Administration’s effort to spin the 9/11 attack – and instructs his aides to provide a CIA developed timeline of what they knew and when. [As this is happening, the DoJ and FBI are investigating the CIA Director over his extramarital affair with biographer Paula Broadwell. The relationship started in fall 2011 and didn’t end until sometime late summer 2012 or fall 2012. The investigation began in May 2012. According to the AG, FBI Director, and WH – the President was never told that his Director of the CIA was being investigated over the affair or misuse of classified information.]

- October 26, the CIA releases their timeline saying that they determined this was a terror attack from the start based on the evidence – including that evidence from the State Department. CBS News releases copies of the CIA briefing from the first week after the attack, used by Susan Rice for her comments to the press and American people, that does not reference terrorism or al-Qaeda.

- In the wake of the release of the CIA timeline, the Director of National Intelligence, James Clapper, begins to express doubts about CIA Director David Pretraeus.

- On November 2nd, Clapper is briefed that the FBI has an active investigation underway into David Petraeus. [He claims he did not advise the President that the FBI is investigating the Director of the CIA.]

- CIA Director Petraeus is asked to testify before Congress on what he and the CIA knew and when. Pressure increases on Petraeus from the DNI to support the Administration’s story.

- When Petraeus refuses to play ball – the DNI tells the Director that the WH has lost faith / trust in him and that he needs to resign. Petraeus resigns, stating the affair as the reason, and it is accepted by President Obama on November 9th.

- During a Nov. 14 Presidential Press Conference, the President notes that a) US Ambassador to the UN Susan Rice only spoke on the basis of the intelligence on what she was briefed – that the CIA didn’t see the attack as related to terrorists or al-Qaeda until much later, b) that Susan Rice made the appearances on the 6 Sunday news programs at the behest of the White House, and c) Susan Rice had nothing to do with Benghazi, the intelligence, or the determination of what happened. This raises questions as to why, if she had nothing to do with Benghazi, the US Ambassador to the UN was sent out as the Administration’s official spokesperson on the attack, and why was she told that there was no evidence of terrorist / al-Qaeda involvement when the State Department knew this as the attack took place.

- Former Director David Petraeus agrees to testify before Congress behind closed doors on Nov 16. On the 15th, the Wall Street Journal publishes a long story about the last days of Petraeus as the Director of the CIA and the confrontations between the Director, his aides, and the National Intelligence / National Security arm of the White House and their allies inside the CIA.

- During closed door testimony before Congress, Petraeus says that the he and the CIA determined almost as the attack was still on-going that the attack was a terror attack being conducted by an al-Qaeda surrogate timed for the Sept 11 anniversary. He also testified that the assessment / brief from the CIA sent to the WH / National Security Office stated this – and that someone unknown outside of the CIA altered the brief to remove all references to terrorism and al-Qaeda / AQ surrogates – as the brief cited by Susan Rice and the WH was not the brief sent by the CIA.

Beyond these facts – which continue to raise numerous questions about the WH / Administration, we also need to consider the following:

The Obama standard campaign stump made the following claims:

a) The Arab Spring was secular and pro-democracy – deposing dictators in numerous countries.

b) The US / NATO assistance for the Libyan revolution was based on humanitarian grounds and to support and protect the Libyan Arab Spring uprising that ultimately overthrew the Libyan dictator Qaddafi.

c) Democracy is expanding the Middle East because Tunisia, Libya, and Egypt held elections to form new governments.

d) The expansion / control of these new governments by Islamic fundamentalist / radical organizations is not a threat to the interests of the United States in the region.

e) Administration policies and actions against al-Qaeda, ranging from increased drone attacks to friendly outreach to Arab governments to killing the leader of al-Qaeda, Osama Bin Laden, have reduced the reach, scope, and terror activities of not only al-Qaeda, but other Islamic fundamentalist jihadist groups. This is not only making the US safer, but the region / world safer.

In the midst of the President’s reelection campaign – a successful terrorist attack which murdered an US Ambassador (the first in 31 years) conducted in an increasingly jihadist / radical Islamic Benghazi by an affiliate of al-Qaeda – discredits the Obama campaign stump.

The knowledge that the Administration reduced security for the compounds - in the face of contrary evidence including numerous requests by the late US Ambassador to Libya would discredit the Obama campaign stump.

The knowledge that the Administration refused to dispatch military / security teams to rescue or assist Americans under terrorist attack in Benghazi would discredit the Obama campaign stump.

Blaming the attack on a demonstration unexpectedly turned violent would reduce the culpability of the Obama Administration in the failure to anticipate the attack, prevent the attack, or order rescue / support forces to the area [citing risk of ‘innocent civilian casualties’].

During the first Obama term – the FBI has scrubbed virtually all references to al-Qaeda, Muslim Brotherhood, Islamic Jihad, and other jihadist organizations from their training manuals – replacing references to Islamic jihadists with ‘violent extremists’ as part of their institutional policy to not focus attention on ‘jihad’.

The only reason they Administration admitted it was a terror attack was because they could no longer hide the evidence / testimony of Executive Branch workers which stated that the attack was not a spontaneous demonstration sparked by an obscure anti-Islam video from three months earlier.

The reason the CIA information was ‘spun’ was to provide cover for the US Ambassador to the UN who was asked by the WH to become the ‘official’ WH spokesperson on the attack – and whom the President later told the American people ‘had nothing to do with Benghazi’ including the messaging. Questions still remain as to why the SecState, or some Dep. SecState, or National Security / DNI official did not make that ‘dog and pony show’ as the ‘official’ Administration spokesperson.

When pressed for additional information or to answer contradictions – the President has offered that he cannot say more because of the ‘ongoing investigation’.

And questions raised about Susan Rice’s selection / participation in the Administration’s messaging are now being called by Democrat members of Congress as ‘racist’ and ‘sexist’ attempts to defame a senior African-American woman in the Obama Administration.

Does any of this raise any questions or concerns with you?

The World Bank - A New Progressive Mission?

Late last month, the new President of the World Bank, Jim Yong Kim, who was advanced to lead the organization by President Barack Obama from being the former President of Dartmouth College, spoke with the left wing British newspaper 'The Guardian' about his new mission for the World Bank - 'I want to eradicate poverty...'

"The evidence suggests that you've got to do a lot of good, good things in unison, to be able to make that happen," said Kim. "The private sector has to grow, you have to have social protection mechanisms, you have to have a functioning health and education system. The scientific evidence strongly suggests that it has to be green – you have to do it in a way that is sustainable both for the environment and financially. All the great themes that we've been dealing with here have to come together to eradicate poverty from the face of the Earth."

…Nevertheless, he is a big proponent of social protection policies. "I've always been engaged in social protection programmes. But now it is really a signature of the World Bank. We're very good at helping people look at their public expenditures and we say to them things like, fuel subsidies really aren't very helpful to the poor – what you really need is to remove fuel subsidies and focus on things like conditional cash transfer plans. The Bank is great at that."

New to him are climate change and sustainability, he says. "We are watching things happen with one degree changes in ocean temperature that we thought wouldn't happen until there were two or three degree changes in ocean temperature. These are facts. These are things that have actually happened … I think we now have plenty of evidence that should push us into thinking that this is disturbing data and should spur us to think ever more seriously about clean energy and how can we move our focus more towards clean energy."

Social justice.  Climate change.  Sustainability.  The World Bank, under Kim, is going to be Obama lite - led by another far left progressive academic who believes that poverty is 'eradicated' by the redistribution of wealth as it's 'fair' - and remains clueless to the fact that these steps create far more problems than they solve.

In Forbes Magazine, comes a compelling case that the smartest move might be to totally shut down the World Bank as an obsolete non-government entity that no longer has a real mission.

Whatever the merits of individual Bank projects—and the institution has backed some notable disasters over the years—only private sector development in Third World states will raise people out of poverty. And private sector development of the sort which reaches throughout society is possible only without government direction or control. Which means the less World Bank lending, the better.

Nancy Birdsall contended that “A new president needs to corral shareholders and disparate interests to create a fresh mandate for the bank.” Best would be no mandate at all.

The World Bank was created in a different age and time. “The World Bank doesn’t have any obvious role in the current world environment,” observed Easterly: “It’s in a state of crisis, losing its traditional market share.”

In contrast, Kim argued that “the World Bank’s best days are still ahead,” pointing to: “The economic success of emerging market economies, the rise of citizen power led by young people and the unprecedented penetration of new technologies are challenging old development paradigms.” All true—but all good reasons why the Bank is no longer needed.

In Africa, for example, funds from the People's Republic of China are flooding into the region - buying friends and allies from the recipients.  None of these are benign governments or rulers.  Poverty remains endemic throughout much of Africa.  Lost in the shuffle are the really effective and limited efforts by the US and a few international aid organizations who are targeting specific issues like AIDS and Malaria - but still have challenges working through or around the corruptocrats that control so many of those countries and are interested not in eradicating poverty, but enriching their bank accounts and staying in power.

In Africa, as in the United States, the governing elite are the greatest threat to the World's middle class - and the World's middle class is the springboard to really eradicating poverty.

Not even in this country are we really interested in eradicating poverty - because under the social justice, 'fairness' advocacy of President Barack Obama and his fellow progressive Democrats, the goal is all about putting even more people on welfare and government dependency....

The federal government actually runs 126 separate anti-poverty programs. They're managed by 13 different agencies.

We use the word "welfare" to describe money that goes to needy people. But the government's war on poverty is a whole lot bigger. And it's rife with waste and redundancy.

The federal government runs 33 different housing programs: 21 programs to provide food, eight healthcare programs, 27 cash or general assistance programs. It's hard to find a government department that doesn't run an anti-poverty program. All this adds up -- and this is just the federal government.

If you also include state and local spending, the government will spend nearly a trillion dollars this year fighting poverty. That's almost the size of the national deficit this year.

Now let me be clear, I don't object to poor people getting help. My problem is a government throwing money at programs that clearly aren't working. Consider this: All this welfare spending adds up to $20,610 for every poor man, woman and child in the country.

For a poor family of three, that's nearly $62,000 dollars. The poverty line for that family is just $18,500. With this kind of spending, poverty should be wiped out - instead it's growing.

Today, one in seven Americans is living in poverty. The most in almost two decades. All the while spending is soaring.

And, welfare spending for the last four decades -- adjusted for inflation? Up, up, up. How can we spend all this money, and see so little progress?

We don't eradicate poverty by creating and perpetuating cycles of dependency.

But perhaps the progressives can take a hard look at history - and Adam Smith as a foundation, and the US Founding Fathers as another, to see how poverty, if not eradicated, can be eliminated for so many as they find welcome paths into the middle class - and perhaps beyond.

The Eurocrisis - An Update

The talks in Greece to form a new coalition government failed earlier today.  An interim government will be created, but the country will face new national elections in the mid-June timeframe as the Greek fiscal crisis continues to escalate.

Polls show the leftist Syriza party, which rejects the bailout and placed second in last week’s vote, is now on course to win, a result that would give it an automatic bonus of 50 seats in the 300-seat parliament. The conservative New Democracy party won the May 6 election, but only received 18.9 per cent of the vote as angry voters scattered to smaller parties.


New economic growth figures released Tuesday revealed the extent of Greece’s ongoing crisis. The country’s economic output slowed by 6.2 per cent in the first quarter of 2012, compared with the first three months of 2011, according to the Greek Statistical Authority.


European leaders say that they will cut off funding for Greece if it rejects the bailout agreed in March, which would mean bankruptcy and all but certain exit from the European single currency.

It seems far more likely that Greece will leave the Eurozone because of the impasse between the need, as stipulated by the EU, ECB, and IMF, for major austerity steps (reduced government spending and reduced government entitlements) to be honored as part of the over $140 billion bailout that Greece received earlier this year.

The failure of the talks weakens already ebbing confidence in Greece’s ability to remain in the euro.


On Monday, German Chancellor Angela Merkel warned Greece may be forced to leave the single currency if it refused to implement spending cuts agreed with the European Union. Syriza has already said it will not subject Greece to such cutbacks.


One outgoing Greek minister has even warned that the country could descend into “civil war” amid the chaos of a euro exit.


“If Greece cannot meet its obligations and serve its debt the pain will be great,” Michalis Chrysohoidis was quoted as telling a local radio station. “What will prevail are armed gangs with Kalashnikovs and which one has the greatest number of Kalashnikovs will count … we will end up in civil war.”

CNBC asks if a run has started on Greek banks over the future...

Stocks faded in the final hour of trading Tuesday to finish lower after a transcript from the Greek meeting showed deposits leaving the banking system, fueling speculation that the nation might leave the euro zone.


The S&P 500 closed at 3-month lows, while the Dow logged its ninth loss in the last 10 sessions.


According to the transcript, Greek depositors recently withdrew 700 million euros from the nation's local banks, said President Karolos Papoulias, though the exact timing of the transfer was unclear.


"I think people need to prepare for the eventual removal of Greece from the EU and investors are getting ahead of that before they're forced to," said Matthew McCormick, vice president and portfolio manager at Bahl & Gaynor Investment Counsel on CNBC's "Closing Bell." "It's a political market and an event-driven market."

If, or more accurately, when Greece leaves - that will not end the crisis for the Eurozone. The crisis will continue - shifting to not only other countries, but also major financial institutions within the Eurozone and US. Other countries, like Spain, Portugal, Italy, and perhaps France, will also reach this same tipping point....

Mistakenly, they have convinced themselves that it won't much matter if Greece leaves, and indeed that it might even help resolve the wider crisis to get rid of this persistent thorn in the flesh.


Bring it on, they mutter callously; it will be a lot worse for them than for us. On one level, this is just bravado. It's an attempt to put as nonchalant a face as possible on the now apparently inevitable. But they also seem to believe in their validity of their own analysis – that they have indeed used the past two years well, and are now fully prepared for a Greek exit.


Believe it if you will. The ineptitude to date of the eurozone's crisis response strongly suggests a different conclusion – both that the likely contagion from an exit has been hugely underestimated, and that by prompting a wider breakup, thereby tipping Europe into depression, it may end up as bad for everyone else as it is for Greece.


The Greek problem has been consistently misdiagnosed and mismanaged right from the start.

This is the fundamental problem with Greece and the Eurozone. They think that someone else's money will never end - so they can spend at will to fund and control so much of their economy....35 hour work weeks, massive centralized government planning and regulatory control to ensure 'fairness', massive entitlements combined with retirement ages at nearly full salary / pensions starting at age 50, the Greek government habit of paying out 14 months of benefits each and every 12 month calendar year, etc. They think that doubling taxes will result in double revenues - and that they will not lose when those who oppose paying for not only themselves but 2 or 3 others decide to pick up and relocate themselves someplace with a smaller burden. Growth doesn't come from government spending- otherwise the Eurozone would be significantly bigger than the US.

The mindset there is to do whatever we can do to avoid pain - even if that step to dodge a small pain today causes a far larger pain at some point in the future. The future is someone else's problem - so just kick that can down the road. And by all means, refuse to learn from history or the examples of others...

We have this same battle in approach and ideology here in the US between conservatism and progressivism.  But as the Wall Street Journal notes, we can see the two options at work directly in front of us - and select the more successful if we believe what we see - not see only what we want to believe...

Jerry Brown vs. Chris Christie - More states are realizing at the road to fiscal hell is paved with progressive intentions...

In his January 2011 inaugural address, California Gov. Jerry Brown declared it a "time to honestly assess our financial condition and make the tough choices." Plainly the choices weren't tough enough: Mr. Brown has just announced that he faces a state budget deficit of $16 billion—nearly twice the $9.2 billion he predicted in January. In Sacramento Monday, he coupled a new round of spending cuts with a call for some hefty new tax hikes.


In his own inaugural address back in January 2010, New Jersey Gov. Chris Christie also spoke of making tough choices for the people of his state. For his first full budget, Mr. Christie faced a deficit of $10.7 billion—one-third of projected revenues. Not only did Mr. Christie close that deficit without raising taxes, he is now plumping for a 10% across-the-board tax cut.


It's not just looks that make Mr. Brown Laurel to Mr. Christie's Hardy. It's also their political choices.

Read it all....
One state stagnating. One state turning its economy around. One is progressive. One is conservative. Which is acting in the best interests for the people of the state? Who is achieving the best results for the people of the state?

One can either exacerbate the challenge (a la Mr. Brown and much of the Eurozone leadership) or one solves the challenges (a la Chris Christie or Scott Walker). Let's learn from history - and what is happening in front of us re success or failure.  That is the battle the Eurozone faces - and the one that we face since we racing to catch up with the Eurozone.  To me, the answer is clear.

Moody's Adjusts Ratings of 9 EuroZone Countries

Moody's Investors Services downgraded the sovereign debt ratings of six European Union nations and adjusted the outlook on three others to reflect a negative outlook.

Downgraded were:

• Italy downgraded from A2 to A3; negative outlook
• Malta downgraded from A2 to A3; negative outlook
• Portugal downgraded from Ba2 to Ba3; negative outlook
• Slovakia downgraded from A1 to A2; negative outlook
• Slovenia downgraded from A1 to A2; negative outlook
• Spain downgraded from A1 to A3; negative outlook

Austria, France, and the United Kingdom had the outlook on their current Aaa rating changed to negative.

The release from Moody's noted the main drivers of the actions are:

• The uncertainty over (i) the euro area's prospects for institutional reform of its fiscal and economic framework and (ii) the resources that will be made available to deal with the crisis.
• Europe's increasingly weak macroeconomic prospects, which threaten the implementation of domestic austerity programs and the structural reforms that are needed to promote competitiveness.
• The impact Moody's believes these factors will continue to have on market confidence, which is likely to remain fragile, with a high potential for further shocks to funding conditions for stressed sovereigns and banks.

This announcement reflects the continued fragility of the Eurozone even if they decide to provide between 130 and 145 billion Euro's to Greece for the 2nd bailout of that country.  Most of the Eurozone, which has embraced Eurosocialism for at least several decades, are finding that the economic effects of these decisions do have a point where one, as Margaret Thatcher noted, 'runs out of other people's money'.

Obama and Afghanistan

One of the main platforms of candidate Barack Obama linked specifically with the hard left base of today's Democrat Party - ending the War on Terror.  The primary focus was on the military operations inside of Iraq - to stabilize that country after the removal of the odious Saddam Hussein as its dictator. 

After gaining control of Congress in the 2006 midterms, and through the end of President Bush's term, IIRC, Congress held some 42 or 44 votes to stop funding the US forces in Iraq and begin their withdrawal back home.  The pace of these efforts only increased as President Bush decided the proper response to the increasing violence in Iraq was not surrender, but a surge of forces combined with counter-insurgency tactics and taking the fight to the enemy.  The left was nearly apoplectic in their opposition to the surge.  To their chagrin, the surge worked.  Iraq stabilized significantly, and a treaty was developed that laid the ground work for smooth transition from US forces to Iraqi forces...with both sides knowing that if conditions changed, negotiations could take place to maintain some active US forces to assist the Iraqi's stay stabilized.

Throughout this, candidate Obama talked about Afghanistan as being the 'good war' - the 'legitimate' war because of the Taliban's direct assistance to al-Qaeda which facilitated their 9/11 attack on the United States.  He even rattled the sabre when it came to the double game that Pakistan was playing - one portion of the government working and cooperating with the US, the other working and cooperating with the Taliban.  During this, he threatened to take the war to Pakistan.

Once in the White House, President Obama was faced with some real dilemmas.  From the information he now saw, he had a better handle on the challenges in the region and the reality of the threats - but also had these jaded by his embracement of the hard left ideology.  He's not addressed aspects of the dichotomy of his positions - anti-war / the need for a surge in Afghanistan; the pledge to close Gitmo / the need to keep Gitmo; Bush as the 'warmonger' / Obama's expansion of the drone wars and strikes.  Since his principles seem to stand against what he knows he needs to do to gain re-election / protect the US and our interests - he's resorted to making his decisions based, in my opinion, on politics. 

Political expediency, political cover, and what he can trade-off seem to be the main factors of his decision process.

The Bush era treaty with Iraq permits the US to withdraw its troops from Iraq at the end of 2011 - pleasing his base going into re-election year.  Why renegotiate to stay longer and take a political hit?  The original date in the treaty was the end of 2011, so if Iraq explodes, it's Bush's fault for going in, not winning it, and for negotiating the treaty that had a premature withdrawal date.

Even though he promised to close Gitmo in one year, it's more important to keep it functioning to provide protection - and for the most part, his base is giving him a break on this.

As Afghanistan looked like it was failing, the military asked for a surge like Iraq.  His base protested this as they did the Iraqi surge.  So, the President gave them a limited surge - in size and time frame - while his base and the Democrat Congress looked the other way. 

Unable to reach out and understand Pakistan, the President, like Kennedy did with Special Forces, became enthralled with drones - and expanded significantly the use of drones and drone attacks on terrorist targets in Pakistan.  Once again, his left base gave him a pass - knowing that in the long run, Obama would do there what he did in Iraq - and what the US did to Vietnam in 1975 (also under the desires of a liberal Democrat Congress).

Thus, Afghanistan and Pakistan stumbled along.  When given the chance to target Osama Bin Laden in a Pakistani city - he took it.  His gamble - that this would not be another Desert One, but provide him with the political key to be able to say, 'I got Bin Laden'.

A Story About Climate Change

On Tuesday's NBC Nightly News broadcast, anchor Brian Williams took a look at the warm winter temperatures across most of the continental United States - and in particular, New York City where he broadcasts from most weeknights.

This look brought forward Williams' concern that the warmer than normal January temperatures are just the latest in the examples of the effects of climate change that we are facing.  He then turned the story over to the network's Chief Environmental Affairs correspondent Anne Thompson who proceeded to present a story to add to the climate change alarmism and promotion.

Zombie, the intrepid blogger for PJ Media, has an excellent post that brings forward something that we all need to consider the next time we are inflicted with an individual, a group, a panel, an academic, broadcasters, non-government, or government entity that argues that climate change demands immediate action and solutions...

I just finished reading a terrifying new book about climate change. I learned this:
• Climate change is happening faster than we realize and it will have catastrophic consequences for mankind.

• There’s very little we can do to stop it at this late stage, but we might be able to save ourselves if we immediately take these necessary and drastic steps:

- Increase our reliance on alternative energy sources and stop using so much oil and other carbon-based fuels;

- Adopt energy-efficient practices in all aspects of our lives, however inconvenient;

- Impose punitive taxes on inefficient or polluting activities to discourage them;

- Funnel large sums of money from developed nations like the U.S. to Third World nations;

- In general embrace all environmental causes.

You of course recognize these as the solutions most often recommended to ameliorate the looming crisis of Global Warming. But there’s a little glitch in my narrative. Because although the book I read was indeed about climate change, it wasn’t about Global Warming at all; it was instead about “The Coming of the New Ice Age,” and it isn’t exactly “new” — it was published in 1977.

The real goal and focus from the progressives who are advocating the immediate adoptions of 'solutions' is not to address what is causing the problem.  The cause for them is immaterial.  What is important is the solution - and the implementation of the solution which just so happens to support the progressive / socialistic solution to society which has nothing to do with science and everything to do with power and control for the elite progressives.

It's a perfect example of - when all you have is a hammer, everything looks like a nail.  Or in this case is it when all you have is the hammer and sickle?

State of the Union 2012

“Who is more foolish? The fool or the fool that follows it?”

This was one of the thoughts that crossed my mind as I waited for the President to deliver his third State of the Union address to a joint session of Congress and the American people.  We knew that this was going to be more of a campaign speech than a real look at this state of the country as we enter Barack Obama's fourth year as President of the United States. 

Previews of the speech throughout the day indicated that the President was going to focus on trebling / quadrupling down on class warfare, social justice, 'fairness', and defining compromise as when the GOP opponents of the President surrender on their principles and embrace wholeheartedly the President's progressive agenda.  We would get rhetoric around the these points as well as new and not so new ideas of how bigger government is better government.

But one of the real questions the American people would have would about how the President would attempt to present his record earned over the last three years...

The President has a huge challenge if he attempts to run on his record.  He may blame the economic challenges on the actions of his predecessor, but the fact remains that the actions and policies of President Obama have done little or nothing to stimulate a real economic recovery.

Unemployment may be 'officially' at 8.5%, higher than it was in January 2009 when he took office, but real unemployment level has skyrocketed during Obama's tenure.  One of the main cases for the $800 billion stimulus that the President advocated was to limit the unemployment rate to not exceed 8%.

In terms of the total level of those employed, under President Obama, our workforce has gone from nearly 65% of the population to just over 58% of the population.

If you notice on the above charge of the employment / population ration, the current level is the lowest we've seen since right at the end of the 1981-2 recession that hit during Ronald Reagan's presidency.  In fact that recession and the one we experienced in 2008-9 were the two sharpest and most painful recessions we've experienced since the Great Depression.  These recessions also reflect the effects of two polar visions towards economics - the conservative vision and approach as done by President Ronald Reagan and the progressive vision and approach as done by President Barack Obama.

This chart graphs the differences between these approaches towards promoting economic growth as measured by the country's Gross Domestic Product on a quarter by quarter basis starting with the first quarter of recovery after a recession.

Ironically, given the President's consistent blame game movement to paint the economic challenges on President Bush, the only real accomplishment of the Obama Administration, was the case of the President quietly continuing a Bush Administration policy - getting Bin Laden.  And even this major accomplishment, which opened and closed the President's speech, required President Obama being pushed hard from within his own Administration to pull the trigger on the mission.

With a record that is hardly defensible, just how would the President define the State of the Union - and highlight his vision and policies to move the country forward?

Well, he has handled the ship of state a lot like the Captain of the Costa Concordia...

He fulfilled all of the expectations by invoking class warfare, populism, renewed calls for 'fairness' in tax policy (ie tax the rich), and the obligation we all are supposed to have towards 'social justice'.  None of the problems we are experiencing are related to the policies and agenda of his Administration - and none of the failures to address the problems and challenges we face are related to his policies and agenda.  

Many of the lines the President used in last night's State of the Union address were lines that we've heard before - in 2010 and 2011.

Plans and programs that the President advocated last night were many of the same plans and programs that the Administration pushed in the last three years.  They failed then - but we are being asked by the President to believe that doing them again will deliver different results.

Blogger Tigerhawk undertook an ambitious paragraph by paragraph review of the President's speech - and highlights comments made by the President that he likes and didn't like.  Here's one that caught my eye - and one I entirely agree with...

After all, innovation is what America has always been about. Most new jobs are created in start-ups and small businesses. So let’s pass an agenda that helps them succeed. Tear down regulations that prevent aspiring entrepreneurs from getting the financing to grow. Expand tax relief to small businesses that are raising wages and creating good jobs. Both parties agree on these ideas. So put them in a bill, and get it on my desk this year.

This is without question the most disingenuous paragraph in a mostly disingenuous speech. First, Obama's torrent of formal and informal regulation has made it far more difficult for small companies than large ones. Regulation always favors the large and entrenched at the expense of the small and the disruptive. Second, Obama has promoted and enacted specific legislation that squelches start-ups. See, e.g., his tax on medical device revenues, which kicks in long before profits and which (obviously) greatly raises the return hurdles required to attract new investment in innovation. That he can read this paragraph with a straight face speaks volumes about his character.

The Wall Street Journal's editorial on the State of the Union speech also calls out the President for both his record and his so-called desire to reduce the negative impact of regulations...

The Pelosi Congress also passed ObamaCare, Dodd-Frank, cash for clunkers, the housing tax credit, and much more. The only Obama priority it didn't pass was cap-and-trade, which was killed by Senate Democrats.


Mr. Obama's regulators also currently have some 149 major rules underway, which are those that cost more than $100 million. The 112th Congress hasn't been able to kill a single major rule. The most it has been able to do is extend the Bush tax rates—which helped the economy by avoiding a tax shock—and slow the rate of increase in federal spending. This President has been "obstructed" less than anyone since LBJ.


Mr. Obama clearly has a spring in his step these days, figuring that the public hates Congress and thinks Republicans run it, that the GOP will field a weak presidential candidate, and that he can fool the public into believing only Mitt Romney's taxes will rise if Mr. Obama wins a second term. He has only one big obstacle: his record.

In my opinion, there were a number of paragraphs within the President's speech where the misrepresentation of facts clearly highlighted the character, or lack thereof, of Barack Obama.  We have in this President a person who is as narcissitic as we've claimed as well as a person who is clearly a progressive ideologue who holds the American electorate in contempt. he lacks a real record, so he has to distort the record believing that the electorate will not know the difference.

When the Washington Post takes a hard look at the claims made by the President in the speech, they are clearly struggling to minimize the damage in pointing out the misrepresentations.  They start by employing a false meme that misrepresentations in SOTU speeches do happen, citing the false meme that the Bush Administration made one in the famous 16 words claim that Iraq was attempting to purchase yellowcake from an African nation to develop weapons of mass destruction.  We know now that Mr. Valerie Plame lied about this, and that the British intelligence that provided this information to the Bush Administration stands by the information.

The Washington Post fact checks raise questions about President Obama taking credit for the withdrawal of the US troops from Iraq - as it was the agreement reached by President Bush and the Iraqi's that defined that withdrawal date - and all President Obama did was refuse to modify that agreement to keep US forces there to help the Iraqi government.  They also raise questions with the President's claims of 'success' in Afghanistan.

They note that the President calls for and touts 'new rules' for Wall Street being needed - while ignoring the challenges and problems being created by the flawed Dodd / Frank bill that the GOP is looking to repeal immediately after they repeal the fiscal disaster that is Obamacare.

The President disingenuously calls for debt reduction - while insisting that we continue to spend at a level that has created four consecutive years of annual deficits in excess of $1.2 trillion, and fought tooth and nail to avoid having debt reduction forced on him by the Republicans in Congress.

He demands that Congress provides him and the American people with a full year extension of the Temporary Social Security Payroll Tax reduction - ignoring that the House of Representatives did pass in December a full year's extension that was killed by the Democrat majority in the Senate because they didn't like how it was 'paid for'.

President Obama touted as a success three free trade agreements that were signed in 2011...forgetting that these agreements were originally done under President Bush's Administration and they sat for three years on his desk because he wanted Congress to ensure that they would provide pork to the unions as 'compensation' for moving the agreements forward.

As Fox's John Stossel notes in his column on the President's speech -

Has Barack Obama learned nothing in three years? Last night, during his State of the Union address, he promised "a blueprint for an economy." But economies are crushed by blueprints. An economy is really nothing more than people participating in an unfathomably complex spontaneous network of exchanges aimed at improving their material circumstances. It can't even be diagrammed, much less planned. And any attempt at it will come to grief.


Politicians like Obama believe they are the best judges of how we should conduct our lives. Of course a word like "blueprint" would occur to the president. He, like most who want his job, aspires to be the architect of a new society.


But we who love our lives and our freedom say: No, thanks. We need no social architect. We need liberty under law. That's it.


Obama -- and most Republicans are no different -- doesn't understand the real liberal revolution that transformed civilization. The crux of that revolution is that law should define general visible rules of just conduct, applicable to all, with no eye to particular outcomes. In other words, as Nobel laureate F.A. Hayek taught, the only "purpose" of law is to enable us all to pursue our individual purposes in peace.

President Obama's State of the Union speech reflected more hope and a view through red-tinted glasses than a realistic of view of where we are and where we are going.  He wants another four year term in the White House to promote his Alinsky based vision of 'fundamental change'.  He still sees the US as a fundamentally flawed and broken nation that is 'unfair' because there is no equality in results...and that government is the only arbitrator to ensure equality in results for all.

It is a flawed and dangerous vision that misrepresents the State of the Union.  It is a clarion call to quadruple down on the same policies and agenda that will take this country from a $10.2 trillion national debt to a $16.4 trillion debt by January 2013 - a debt level that is likely to be 110% of our Gross Domestic Product.  The same policies and agenda that has a real unemployment rate in excess of 15% and one that has significantly damaged our relations and interactions with other nations around the world.

That is why it is imperative that we all make this the last State of the Union speech President Obama ever delivers.

BREAKING NEWS - President Obama Says 'NO' to Keystone XL Pipeline - UPDATE

In a stunningly bad decision, but one that was not entirely unexpected as the President has to bow to his hard left environmentalist base, Fox News sources are saying that President Obama will reject the request to build the Keystone XL pipeline which will bring more Canadian oil to the United States.

President's message to Canada and the American people - FU

This decision is irresponsible and wrong on a number of fronts.

With the 'No' decision, the President insults the closest friend and trading partner of the United States.

With the 'No' decision, the President is taking action to not acquire needed oil from a friendly country at favorable prices - locking in our dependence to buy oil from unfriendly nations at prices defined by a cartel.

With the 'No' decision, the President ensures substantially higher energy costs for the American people.

With the 'No' decision, the President turns his back on up to 250,000 direct and indirect jobs being created by the project.

With the 'No' decision, the President has provided China with a new low cost supplier of oil for their economy.

With the 'No' decision, the President has placed party politics and his own re-election ahead of the best interests of the United States.

With the 'No' decision, the President reaffirms his interests to use higher costs and damaging the national economy in order to fulfill his social re-engineering agenda.


Question - Should Canada retaliate in any way towards the snub from President Obama beyond selling their oil to the People's Republic of China?

Or should they just reapply and hope for the best after adding 150km - 200km to the route?

Mass Eurozone Downgrades

It's official....

Standard & Poors officially cut the long-term credit ratings of Italy, Portugal, Cyprus, and Spain by two notches and cut the credit ratings of France, Austria, Malta, Slovakia, and Slovenia by a single notch.  France, for example, lost its AAA rating and now stands at a AA+ long-term credit rating.

They announced that they are standing with the current credit ratings of Belgium, Estonia, Finland, Germany, Ireland, Luxembourg, and Ireland.

All 16 of the these nations have been removed from the S&P CreditWatch which indicates that they safe from any additional near term downgrades.  Italy and France remained on the list for a negative outlook. 

The downgrades of Portugal and Cyprus to BB and BB+, respectively, pushes their bonds to 'junk bond' status.

Austria and France lost the top AAA ratings.  Italy was reduced from a A rating to a BBB+.  Spain was dropped from a AA- rating to a A rating.

The REAL Iron Lady

There's a lot of hype about actress Meryl Streep's performance as Baroness Margaret Thatcher, the former Prime Minister of Great Britain who earned the nickname 'Iron Lady'. 

As highlighted by Tina Korbe on Hot Air, here is a video produced by the Heritage Foundaiton on the 'Real' Iron Lady.  As Tina noted in her commentary...

More goosebumps from this than I’ve had from any of the “Iron Lady” trailers (in fact, I’ve had no real emotions at all upon watching those).

I would like to point this out to all of the GOP Presidential candidates - this is the message and vision that you need to be advocating today.....we need to come out of our own 'winter of discontentment' - which started on January 20, 2009....

New Round of Earthquakes Hit Christchurch, New Zealand

One person was injured as Christchurch, New Zealand was hit by a 5.8 earthquake on Friday, Dec. 23rd. 

But there were no immediate reports of serious injuries or widespread damage in the city, which is still recovering from a devastating February earthquake that killed 182 people and destroyed much of the downtown area.

The 5.8-magnitude quake struck Friday afternoon 16 miles (26 kilometers) north of Christchurch at a depth of 2.5 miles (4 kilometers), the US Geological Survey said. The quake was followed by a series of sharp aftershocks, including one with a magnitude of 5.3 and a depth of just 1.8 miles (3 kilometers).

The Pacific Tsunami Warning Center did not issue an alert.

The city's airport was evacuated and all city malls shut down as a precaution.

Now I'm wondering when it's going to be SoCal's turn....

Smoke, Mirrors, Agenda's, and Loons

One of the other contentious provisions in both the House and Senate bills to temporarily extend the temporary Social Security payroll tax reduction involves the Administration's decision to delay making a decision on the Keystone XL pipeline extension to carry more Canadian oil to US refineries along the Gulf Coast. This works against not only the Administration's policies to curb the use of fossil fuels by the United States, but the virulent environmental base of the President which is needed to be on the President's side for his reelection.

Democrat Congressman Hank Johnson, from Georgia, became well known after taking to the floor of the House to express his concern that the island of Guam would capsize into the Pacific Ocean because of overpopulation....

 This loon has now taken to the House Floor to explain why he and his fellow Democrats really oppose the Keystone XL pipeline extension...courtesy of Powerline...

Rep. Hank Johnson, D-Ga., protested today on the House floor that the libertarian Koch brothers “control Congress,” arguing that the Republican push for President Obama to approve the construction of the Keystone XL oil pipeline from Canada to Texas is motivated by a desire to reward the Koch brothers for financing the Tea Party during the 2010 election.


“The Koch brothers are a secretive brother-brother combination,” said Johnson in a floor speech about the payroll tax cut and the Keystone pipeline legislation. “They’re all involved in the energy business. And they stand to get quite a bit of return on their investment through the 2010 elections, wherein through their front group, Americans for Prosperity, they financed the Tea Party — which is supposed to be grassroots, but actually its a corporate-driven animal; and the financing for that animal comes from the Koch brothers.”

The fact that the Koch Brothers have nothing to do with TransCanada, the company that is seeking to expand the existing pipeline, is entirely lost on this nimrod. Union members, Republicans, and 60% of American's support this effort because it will create jobs, reduces our dependence on oil from the Middle East, and will lower energy costs.

But for the Administration, with its untenable position to appease the watermelon (Green (Environmentalists) / Red (Liberal Fascists)) contingency of its base, they needed some other 'justification' beyond the truth to oppose the pipeline expansion. 

The Administration, as evidenced by their other policies, wishes to continue their efforts towards enacting cap and trade / reduction of fossil fuel use in the US by any means they can.  This means reducing the amount of fossil fuel usage even if that increases the costs to the American consumer in terms of higher gasoline prices, higher heating oil prices, higher electricity costs, and higher costs on goods and services that are impacted by higher energy costs.  The fact that jobs will be lost is also immaterial towards the end result.  The focus of this Administration is not on generating prosperity for America, but rather ensuring the growth and expansion of centralized government control.

Several days ago, Canadian Prime Minister Stephen Harper contacted President Obama to remind the President that Canadian patience over the continued delays by the Obama Administration to make a decision on the plan - and the use of the pipeline as a political football has limits.  Harper let the President know that Canada has other potential customers who are eager to purchase Canadian oil - like the People's Republic of China.  Canada has a strong preference and interest to support it's neighbor and ally, the United States, but if the Obama Administration wants to take steps to piss off another ally (as they have others over the last 3 years), then Canada will have to respond accordingly to the unfriendly act.

This is just another incident and issue that reflects on the Administration's real interest and approach towards governance. The end's justify the means - smoke, mirrors, raving moonbats, and outright lies help achieve these ends.  All of these incidents, actions, and examples of contempt need to be highlighted prior to the November 2012 election.  Otherwise this country will not see it's tricentennial.

"The Euro is dead, and like Keynes it should be buried"

The decision by British Prime Minister David Cameron to veto the 'Merkozy' Eurozone plan continues to cause angry recriminations not only in Britain by the Opposition, but also from members of the European Council who are promising retaliatory steps against Britain and her interests.

Despite the bluster, however, it remains pretty clear to the investment community that the solution being enacted on by 26 nations of the European Union is not going to address or solve the root problems that are plaguing the region.  The conflict that faces the EU is not that of the 26 nations versus the non-participant, Britain, but the divide that exists between the more fiscally responsible (and productive) Northern European countries and the more fiscally irresponsible (and less productive) Southern European countries.  Or to put it another way, the conflict remains based around how long and to what level will the Northern European countries continue to subsidize and provide for the Southern European nations.

This is not dissimilar to the fight that is taking place in the United States between the visions of the Obama Administration and Progressives as articulated by the President in last week's major economic address in Kansas.  The President trebled down on his belief that the solution to the challenges comes from a far bigger and more powerful central government whose role is to ensure 'social justice' and the equality of results.  This is diametrically opposed by the vision of Conservatives who believe in limited government, personal accountability and responsibility when it comes to one's actions and conditions, and that equality in opportunity is the driver for strong economic performance.  To a Conservative, the 'nanny state' is not the solution - and many of us look at Spain, Greece, Portugal, Italy, France, and even Germany as examples of a 'nanny state'.

In an interview with Real Clear Markets, legendary trader, Victor Sperande, also known as 'Trader Vic', opined on the Euro crisis and the Merkel / Sarkozy (Merkozy) solution being enacted on by 26 countries of the European Union...

The best way to understand the Euro Crisis is to get a DVD of "Animal House" starring John Belushi. There is no hope for this chaos. They cannot come together on fiscal policy; it is impossible.


Things happen within a country; politicians do not control the people. Brussels can use all the smoke and mirrors it wishes. Ultimately, if the people get into a situation where they are suffering, they vote the leader out and the new leader will break the agreement. However the hot air gives markets the perception that change is possible, or even underway. It's all ethereal, and will dissipate in a moment's notice.


This is a sucker bet of the highest order. The Euro is dead, and like Keynes it should be buried. Also remember Merkel and Sarkozy will not win their next elections, just as Obama will not...these are not leaders but rather losers, as they are not for the people but for personal power via politics.

The proposed solution is a sucker's bet.  The reason the Euro as a currency is in trouble, why many European banks are in trouble, and why countries like Greece, Italy, Spain, Portugal, Ireland, and soon to be France are in trouble is because of the progressive / big government nanny state policies that they have embraced over decades.  French President Nicholas Sarkozy is already working to downplay the likely case that France will lose it's AAA rating as a result of the failure of the European community to develop and effective solution.


As British Prime Minister Margaret Thatcher once noted, the problem with socialism is that eventually one runs out of someone else's money.  The progressive / socialistic government policies of these nations can no longer tax enough or borrow enough to pay for the obligations on their promises.  The effects of these promises have so destroyed productivity that those who can / will produce see no value in doing so. Why should one exert oneself to pay for someone who declines to exert themselves and is content to take?

As Jacques Delors noted in an interview I that I covered in another blog post, the fault for the economic problems in Europe, in the minds of the progressives is not because of the failure of the architecture of their progressive economic policies, but in the implementation of these policies.  As long as this remains the mindset - both in Europe and the United States regarding the intellectual, social, and fiscal bankruptcy of this architecture, the solution to the problem will not be achieved unless there is a fundamental shift in power via the electoral process.

The 2012 US Presidential election will be one such decision point - will there be a fundamental shift in power from the failed Obama / Progressive policies in the United States to policies more based on the traditional American values and Conservative agenda?  In France, Sarkozy is facing his own election.  Sarkozy is part of the problem despite his 'conservative' bonafides.  He faces challenges from the left, in Martine Aubry and Francois Hollande, the hard right in Marine Le Pen, and now from his rival, former French Prime Minister (and still a weasel), Dominique de Villepin.  Based on current polling, it looks like France will lurch to the left in their April / May 2012 elections.

Europe's problems are not going to disappear anytime soon...and they are likely to get far worse in 2012.

Euro / European Union Debate

The debate over the future of the Euro and European Union continues throughout Europe. Will the EU, and in particular Germany and France, take the steps that are seen to be needed?  Will these nations decide to kick the can further down the road or will they take definitive action to solve the core problems?  If they decide to take definitive action - will it be action that addresses the irresponsible fiscal policies around excessive entitlements and spending or will it be the mandate of a significantly stronger centralized approach where member nations cede their freedom to define their own course to a central EU bureaucracy dominated by Germany - the only real 'economic power' of the EU?

Pimco, the world's biggest bond investor, has warned the Eurozone community that European governments must either rapidly commit to a far stronger fiscal union - even if this requires a renegotiation / rewrite / re-ratification of the Lisbon Treaty or accept a partial break-up of the Euro to prevent a 'fundamental erosion' in the demand for the region's debt. 

Would this partial break-up of the Euro mean that some of the less responsible nations, like those in the PIIGS or others seeing downgrades in the credit ratings, would be returned to their original currencies and set to suffer the ramifications of their fiscal responsibilities?  This would work to save a number of the EU countries from the effects of their less than responsible partners but do little to endear the EU with the residents of those countries?

Of course, the other side of the question is if the citizens of these countries would be more or less insulted by being removed from the EU or by having the EU bureaucracy, and in effect Germany, make all of the decisions regarding their fiscal policies around taxation and entitlements?  Will austerity measures being forced by Berlin, or Brussels, or Strasbourg on Greeks, Italians, Spanish, Irish, or Portuguese be accepted?

Liam Halligan, of UK's Telegraph, says that the downside for the fiscal union, like German control, and 'quanatative easing' / funny money efforts by the European Central Bank will not happen. 

We cannot dismiss the effect and the fear around German influence in the EU's solution has on member nations.  In Athens, protesters are carrying photos of German Chancellor Merkel with the swastika as they complain about the possibilities of a stronger fiscal union dominated by Germany.  Some commentators are seeing this domination of Europe by Germany becoming the 'Fifth Reich'.

What really is the right solution for the Europeans? 

The right solution is there to be seen and grasped.  It's not even a new solution.  It's the solution that was apparent when the Euro was being created and this crisis was envisioned.  Richard Fernandez, the blogger behind "Belmont Club", now part of PJ Media covers this in his post "Judgment Day"...

Twenty two years ago the Los Angeles Times juxtaposed the figures of Jacques Delors and Margaret Thatcher. The Frenchman and the Briton stood on opposite sides of the question of Europe.


Thatcher and Delors personify a broader struggle over the central question of what Europe should become as the 12 member nations of the European Community push toward greater unity. Should the 12 be merely a glorified free-trade zone of like-minded states a la Thatcher, or, in Delors’ vision, a fully integrated union–the continent’s economic and political epicenter, bound as much by a common social ethos as by commercial necessity?


In the LAT article, Delors represents the future while Thatcher represents the retrograde past. “But as Delors presses, encourages and cajoles the European countries toward greater unity, Thatcher mounts a series of delaying actions.”

“She sees herself as some kind of resistance fighter in the mountains that’s simply not going to let Big Brother take over from Brussels,” said Britain’s opposition Labor Party leader, Neil Kinnock.

Fast forward to the present. Charles Moore of the Daily Telegraph caught up with Delors in his Parisian office where he granted the newspaper a rare interview...

… Deciding not to beat about the bush, I ask the man who prides himself on being an architect of European Union whether he got it all wrong.”

Unhesitatingly, he denies it. It is a fault in the execution, not of the architects, which he claimed to have pointed out in 1997 when the plans for introducing the euro finally came together. …


For a long time, the euro did remarkably well, Mr Delors argues, bringing growth, reform and price stability to the weaker members as well as the stronger. But there was a reluctance to address any of the problems. “The finance ministers did not want to see anything disagreeable which they would be forced to deal with.” Then the global credit crisis struck, and all the defects were exposed. …


So will the euro survive? Mr Delors does not, of course, deviate from his belief in the European single currency.

Fernandez hits the real point in his conclusion...

History is a strange thing. It let Delors keep his mind long enough to witness the ruin of his dream while leaving Margaret Thatcher unable to even realize that she probably got it right. But that is how life is; we make our bets and leave the stage before it all ends. All we can do is fight the good fight, finish the race, and keep the faith.

Two key points jump out to me from Richard's excellent commentary - and the effects of the Thatcher / Delors 'debate' these decades later.

Margaret Thatcher argued and articulated the 'conservative' approach - that based towards limited government, individual accountability and responsibility, and that the EU vision should be a 'glorified free trade zone of like minded states' and nothing beyond that.  Jacques Delors argued and articulated the 'liberal' approach - that being based towards a larger and centralized government control, far less individual accountability and responsibility, and that the EU vision is one of a United States of Europe controlled by a strong central government.

Of these competing 'visions', once again, the conservative approach is the one that would have worked best for all involved - and likely avoided the crisis the region finds itself in today.  While nations like Greece, Italy, Spain, etc could still find themselves in a fiscal crisis, this would have been a crisis of their own making - one that they individually would be accountable and responsible for.  They would not have the same effect across the other nations of Europe / European Union as they do today.

This is why the solution calling for greater centralized fiscal control by the European Union bureaucracy is the wrong thing for Europe to be doing.  They are not the United States of Europe nor will the United States of Europe work as an entity.  The EU and Euro that was developed was far closer to the vision of Jacques Delors - and to complete that vision will not solve the problem of going down that path in the first place. 

The second key point that jumped out to me came from the words of Jacques Delors in the interview with the Telegraph's Charles Moore when asked if he got it all wrong. 

Unhesitatingly, he denies it. It is a fault in the execution, not of the architects, which he claimed to have pointed out in 1997 when the plans for introducing the euro finally came together.

When faced with the fact that he, and his vision, do get it all wrong, Delors resorts to the standard mea culpa of the left to place the blame not on the intellectual bankruptcy of their vision, but on the execution of that vision.  The inability of the so-called intellectuals to see or to admit the bankruptcy of their vision in the real world - as opposed to the world of theory - is what prevents new generations from learning from the past.  Each new set of converts to this bankrupt ideology believes that they will finally be the one's who will succeed in the execution of the architecture. So they will try yet again, and when they fail, they will point to the execution as the point of failure, not to the deserved fault in the architecture.

Insanity: doing the same thing over and over again and expecting different results.
Albert Einstein

Euro / European Union Death Watch Continues

The countdown of the last ditch efforts to save the Euro and the European Union is continuing.  December 9th is the deadline day.  That is when a real solution is needed to address the fiscal crisis in the Eurozone - not one that is only intended to buy additional time by kicking the can further down the road.

As the UK's Guardian newspaper notes, the action earlier this week to provide fistfuls of dollars will not save the Euro. 

So what is being envisioned as the 'right' solution?

The plan that is starting to emerge was hinted at on Thursday by the following comment by Mario Draghi, the new chief of the European Central Bank (ECB):


“The ECB’s monetary policy is constantly guided by the goal of maintaining price stability in the euro area over the medium term – and this applies to price stability in both directions.”


The key phrase here is “in both directions,” referring to both inflation and deflation. Based on this and numerous economists’ remarks about the danger of deflation in the eurozone, it’s now thought that Draghi is about to reverse himself and agree to a substantially looser monetary policy for the ECB than he’s previous said he’d allow. Thus, the emerging plan to save the euro is roughly as follows:

• Draghi’s ECB will lower interest rates.


• On Monday, French President Nicolas Sarkozy and German Chancellor Angela Merkel will announce a plan to amend the Lisbon treaty to create a “fiscal union,” giving Brussels (and Berlin) much tighter fiscal controls on eurozone countries.


• In return, Draghi will agree to allow the ECB to “print” trillions of euros of new money to purchase toxic bonds from Italy and Spain, in order to bail them out.


• The entire package will be announced with great fanfare on December 9.

There are substantial risks with the 'substantially looser monetary policy for the ECB' that is rumored to be a key part of the Eurozone solution.  Printing large numbers of Euros and using these to acquire the bonds of the nations that are at the most risk still does nothing to address the core problem behind the fiscal challenges of those nations - the fact that they cannot afford their excessive entitlement programs and deficit spending.  In fact, these countries are pretty much so far gone, they can't afford the taxes that they would need to impose to balance their budgets either.

A solution that provides a far stronger EU 'fiscal union' / centralized government control at the EU level of the national finances of all or selected members of the EU also is not a real fix to the core problems.  How are the Greeks or Spaniards or Irish going to react to the fact that bureaucrats at Brussels or Strasbourg will have the ultimate control over how, when, and where their governments will spend, provide benefits / services, and tax policy? How long are the citizens of productive or fiscal responsible nations going to want to send their treasure / expend their efforts to 'reward' the irresponsible and unproductive?

Princeton University Economics Professor, Nobel laureate, NY Times editorial writer, Enron Economic Advisor, and all purpose progressive nitwit, Paul Krugman, argues that like in the US, the problems in the Eurozone stem from far too little government spending.  Apparently, Keynesian economic theory shares a similar fate with that of Jacobinism and Communism, the failures that we've seen of those theories do not result from fundamental problems and failures within the theories, but in the insufficient and incomplete implementations of those theories in the real world.

Like this 'ism's' of the extreme left, Keynesianism only works in theory and not in the real world outside of the laboratory environment.

Increasing government spending will not result in these troubled countries from moving beyond the effects of their deficit spending.  Instead, this irresponsible action will only accelerate the death spiral.

Perhaps this is the ultimate goal being advocated.

Kicking the Can - in Europe

Today's action of major global central banks to work together to ease the liquidity issues in Europe is sparking a major rally in global stock indexes, but fundamentally is doing little more than kicking the can a little further down the road regarding the EU's economic challenges.

Michael Hewson, a market analyst at CMC Market notes:

“It gives an indication that monetary authorities are prepared to do what is required to stop a freeze up in the funding markets. But, basically all they are doing here is QE (quantitative easing) on steroids. It does not deal with the underlying issues.”

As the New York Times reports in one of their stories on the move of the central banks...

Some analysts were quick to note that the program does not address the root causes of the European crisis, falling far short of the steps that the European Central Bank, in particular, is under pressure to take, like intervening in bond markets in support of Italy, Spain and other troubled countries.


“It doesn’t change any of the fundamental issues in Europe,” Michael Cloherty, head of interest rate strategy at RBC Capital Market, said in a note to clients. “We don’t think this is a real game changer.”
At best, analysts said, the move could buy the 17 European Union nations that use the euro a little more time to agree on a broader plan to stabilize financial markets.

The Economist also is sharing the viewpoint that the action today is doing little than providing a means to buy time...

This action has contributed to a surge in equities, but the move is less significant than it seems. The central banks are extending and expanding programmes that were already available, and the focus is purely on liquidity issues. The underlying dynamics of the euro-zone sovereign debt crisis are unchanged. As we've seen over the past few years, these actions can delay a meltdown but cannot, in the absence of other steps, prevent it altogether. Central banks have effectively provided hydration to a cancer patient; a useful thing to do, but ultimately just a means to buy time.

Addressing the liquidity issues of the major European financial institutions will assist those institutions to continue to provide credit services for the businesses of Europe. Most may be able to, with this boost, to weather a possible default of one or two of the most troubled countries in the EU without creating a cascading series of collapsing organizations even more dramatic than seen in late 2008 precipitated by the collapse of Lehman Brothers.

But as noted across these analysts and observers, none of the core challenges in the EU region are being addressed. When given the choice of taking decisive, but painful, action to address the root problem, once again the decision makers are choosing a path that is intended to provide an appearance of doing something while working to postpone the need to take decisive action as long as possible. Kicking the can down the road is far easier.

Why is it easier to kick the can down the road? Because making the claim to embrace austerity measures - to reduce entitlements and government deficit spending - is very hard. Voters are loath to vote against their government entitlements and gifts - and they are loath to help provide the government with the revenues that it needs to responsibly path for those entitlements.

As an example, Forbes Magazine notes that many 'rich' nations have gone broke in history by spending too much...like Greece is doing now...

Greece has bloated government bureaucracies where unionized employees were accustomed to being paid for 14 months’ work every 12 months. For decades, Greek politicians pacified disgruntled citizens by adding people to the government payroll, and now about 1 out of every 4 Greeks work for the government. In an unsuccessful effort to pay for all the spending, taxes were raised so high that more and more Greeks did business tax-free on the black market. An estimated one third of the economy is “off-the-books.”

Everyone wants their cake for free.

Consider the post about the greed of the Teacher's Union of Neshaminy, Pennsylvania, or the actions of the public sector Unions in Wisconsin and Ohio to protect not only their political status and power, but to protect their financial benefits that are far wealthier than those available in to workers in the private sector - particularly if the company in the private sector wishes to remain competitive.

In Britain today, over 2 million public sector union workers are staging a 24 hour strike against the British government and their efforts to bring austerity to the government's budget and entitlement programs.

The strike closed more than three-quarters of schools in England, as well as courts, museums, libraries and job centres, disrupted transport, hospitals and government departments, led to around 15% of driving tests being cancelled and was described by unions as the biggest since the 1979 Winter of Discontent.


Civil service union Prospect said action by 26,000 of its members alone disrupted or stopped work at more than 400 locations, ranging from Ministry of Defence sites to prisons while more than 1,000 rallies were held across the UK, including one in central London attended by tens of thousands of workers, some accompanied by their children.

This is the largest such pro-union action in Britain since 1979's 'Winter of Discontent' which crippled the nation and antagonized millions of Britons. The country was facing a show down - either to embrace the socialism and economic stagnation advocated by the greedy public sector unions or to embrace austerity measures, limited government, and a return to common sense conservative economic policies. The result then? These steps paved the way for Margaret Thatcher to become Prime Minister and start the revitalization of Britain.

Margaret Thatcher famously said that when one embraces the socialism and progressive economic policies advocated by the unions and huge entitlements, there comes a tipping point where one runs out of other people's money - be it borrowed or taxed.

Europe is at that tipping point - but remains unwilling to change direction or face the tipping point. It's far easier to kick the can down the road...particularly thanks to the actions of the US and it's Federal Reserve Bank.

The thing is, here in the US, we are at the same tipping point....over $15 trillion in debt, $1.5 trillion annual budget deficits, Federal, State, and Local governments in financial dire straits because of irresponsible fiscal policies and kowtowing to greedy public sector unions. Like the members of the EU, like Britain, we've run out of other people's money. There is no one available to bail us out when we reach the edge of the cliff. That same cliff edge makes it harder to keep kicking the can down the road - because the road ends at the cliff.

We have very little time left to change our direction - and those who oppose that change in direction, the unions, the progressive / socialistic / Marxist Occupy movement are going to start resorting to more violence and threats to prevent any change in direction.

The riots that took place in Greece, the strikes that are plaguing Britain today, all of these are going to be taking place in increasing frequency here in the US until the American people make their last stand next November 2012. That is when we decide if we are to leap off the cliff or not.