Wednesday, December 30, 2009

Union Baggage Claims

Flight 253 becomes an excuse to organize airport screeners.

The notion that unionized airport baggage screeners in Detroit could have prevented Umar Farouk Abdulmutallab from boarding a plane in Amsterdam or Lagos doesn't make much sense. But sure enough, some in Congress are using the thwarted Christmas Day terrorist attack to argue that a new leader for the Transportation Security Administration could have saved the day.
Rahm Emanuel's famous declaration that a crisis is a terrible thing to waste seems to have become a way of Washington life.
That's the meaning of the political and media beatdown now being visited on Republican Senator Jim DeMint for the high crime of putting a hold on the nomination of Erroll Southers to head TSA, which runs the 50,000 airport screeners. Mr. DeMint objects because Mr. Southers has refused to say whether he would reverse current policy and back collective bargaining for baggage and passenger screeners, which the Obama Administration and Democrats on Capitol Hill support.
Thus the faux security outrage. "If TSA is to become the kind of nimble, responsive organization the American people deserve in times like this, it will need a Senate-confirmed administrator," said House Homeland Security Chairman Bennie Thompson on Monday. "If nothing else, the events of last week highlighted this lack of leadership."
Associated Press
Transportation Security Administration employees screen passenger bags.

They did? We thought the episode highlighted the dangers of Yemen as a radical Islamist sanctuary and the failure to revoke a visa to Mr. Abdulmutallab despite warnings from his father—neither of which have much to do with TSA.
A spokesman for Senate Majority Leader Harry Reid also couldn't resist displaying his boss's union baggage, calling Senator DeMint's actions "disgraceful" and claiming that "Republican obstructionism has prevented TSA from having the leadership in place that the organization deserves." Mr. Reid's 24/7 forced health-care march has made him even crankier than usual.
Neither Democrat mentioned that President Obama didn't bother to nominate Mr. Southers to fill the TSA post until September, nor that Democrats didn't vote the nominee out of committee until the middle of last month. Such a languid pace hardly suggests that they considered the TSA job to be vital to national security.
By contrast, Mr. DeMint's objection is rooted in a substantive concern that union practices and work rules will compromise security. TSA uses a performance pay system that tries to reward ability and effort, with the goal of recruiting and retaining the best employees. Unions prefer seniority-based pay that puts a premium on time served rather than performance.
TSA also needs to be able to change its procedures or move personnel to high-risk locations on short notice. Agency managers now have the ability to do that, but under union work rules they might need to get the permission of union leaders, who won't want to upset the rank-and-file.
In other words, Congressman Thompson has it exactly backwards. If the goal is to have a "nimble, responsive" TSA, a non-union work force makes more sense.
TSA employees already have the right to join the American Federation of Government Employees (AFGE) and the National Treasury Employees Union, but the unions are not allowed to bargain on their behalf. Gale Rossides, the acting head of TSA, has declined to change the policy on collective bargaining, as has every previous TSA leader.
But during last year's Presidential campaign, Mr. Obama sent a letter to the AFGE seeking an endorsement and expressing support for collective bargaining for TSA employees. He got the endorsement, and now he's trying to pay the union back with 50,000 new dues-paying members. Homeland Security Secretary Janet Napolitano said earlier this year that she was exploring whether she had the legal authority to give TSA workers the right to bargain.
We don't like the practice of Senators putting holds on nominees, preferring up or down votes. But Democrats did this routinely during the Bush years—remember John Bolton—and they hardly have standing to object now that Republicans are returning the favor. And to the extent that Mr. Southers would unionize airport screeners, he'd be the one doing more potential harm to national security.


Monday, December 28, 2009

Fighting Back the Big Spending Socialists in Minnesotah!

Pawlenty Pushes Caps on Spending

Minnesota Governor Seeks Limits in His State and Amendment to U.S. Constitution


Minnesota Gov. Tim Pawlenty, considered a possible 2012 Republican presidential candidate, is calling for strict spending limits as states and the federal government confront enormous deficits.
[palenty and politics and balanced budget] Associated Press
Minnesota Gov. Tim Pawlenty at a GOP fund-raiser in Concord, N.H., this month, when he pushed a constitutional amendment on a balanced budget.
Mr. Pawlenty has proposed an amendment to the Minnesota constitution that would limit spending during any two-year budget period to the amount of revenue collected during the previous budget cycle. At a Republican fund-raiser in New Hampshire on Dec. 16, the governor also pushed the idea of an amendment to the U.S. Constitution that would force Congress to pass, and the president to sign, a balanced budget.
"Government spending in the country and in many states is progressing at an unsustainable, irresponsible and reckless pace," Mr. Pawlenty said in an interview this week. "The bathtub is overflowing onto the floor, and the first thing we need to do is shut off the faucet."
Although the U.S. economy is showing signs of improvement, states are coping with major revenue shortfalls. States' budgeted general-fund spending for the current fiscal year totaled $627.9 billion, down 5.4% from a year earlier, according to a Dec. 2 report from the National Association of State Budget Officers and the National Governors Association. Even after those cuts, state deficits total $14.8 billion for their current fiscal year, which for most began July 1.
At the federal level, the Senate voted Thursday to temporarily raise the nation's debt limit, currently $12.1 trillion, by $290 billion. The House passed the measure Dec. 16.
All states except Vermont have at least a limited requirement to balance their budgets. The federal government has no such restriction.
Previous efforts to pass a national balanced-budget amendment have foundered in Congress. Many lawmakers believe deficit spending can help boost the U.S. economy during downturns, and calls to balance the budget sometimes fade as other priorities surface.
Changing the U.S. Constitution requires a two-thirds vote in both houses of Congress, followed by approval of three-fourths of states. State legislatures have petitioned Congress about a balanced-budget amendment, but they haven't reached the threshold needed to call a constitutional convention.
[government spending and politics]
Mr. Pawlenty's proposal for a federal amendment would include exceptions for war, natural disasters and other emergencies. The U.S. has been at war for most of the past decade.
The proposals could boost Mr. Pawlenty's popularity with conservative interest groups, some of which have been longtime proponents of a balanced-budget amendment. But it is unclear how much support his budget-capping plan will have in Minnesota, where residents historically have supported generous social-service spending.
Mr. Pawlenty's state proposal has some similarities to the Taxpayer Bill of Rights amendment passed in Colorado in 1992. That amendment limited state spending growth to inflation plus population increases. Excess revenue was returned to taxpayers via rebate checks.
The amendment lost support as Colorado began experiencing service cuts, such as declines in the number of children with health insurance. In 2005, voters suspended portions of the amendment for five years.
Because the costs of health care and other services tend to grow faster than overall inflation, Colorado routinely was short "about one or two percentage points of what you need to maintain the same level of services as the previous year," said Iris J. Lav, a senior adviser at the Center on Budget and Policy Priorities, a liberal think tank.
Mr. Pawlenty said that under his plan, Minnesota lawmakers could keep extra revenue and spend it on one-time items such as construction projects.
A change to the Minnesota constitution requires approval by a majority in both legislative chambers. The amendment must then be ratified by voters.
Minnesota state Sen. Tom Bakk, chairman of the Senate Taxes Committee, said he would consider the governor's proposal once he saw more details. He raised concerns that lawmakers could circumvent the amendment by levying a new tax and putting the money in an account outside the state's general fund. "That's a hole big enough to drive a truck through," said Mr. Bakk, a Democratic-Farmer-Labor candidate for governor.
A spokesman for the governor said the amendment could be expanded to cover all funds, not just the general fund.
Mr. Pawlenty has said that he wouldn't seek a third term next year, and that he hadn't made any decision about his political future. He has started a political action committee to raise money, and he recently visited the presidential campaign battleground states of Iowa and New Hampshire.
Some Minnesota residents already are upset with Mr. Pawlenty for spending cuts he made this summer. The governor invoked a rarely used "unallotment" law to unilaterally shrink a $2.7 billion budget deficit. The sharpest criticism has been aimed at his decision to eliminate subsidized medical care for about 30,000 low-income residents.
Minnesota's budget office said this month that the state faces a $1.2 billion deficit over the next 18 months and a $5.4 billion deficit for the two-year budget period beginning July 1, 2011.
Write to Amy Merrick at

Tuesday, December 22, 2009

Colombia to Chavez: Maybe 'spy plane' was Santa

The Associated Press
Monday, December 21, 2009; 9:01 PM

BOGOTA -- Colombia's defense chief joked Monday that Venezuelan troops might have mistaken Santa's sleigh for a spy plane, dismissing accusations by President Hugo Chavez about drones flying over Venezuela.
Chavez on Sunday accused the United States of violating Venezuela's airspace with an unmanned spy plane and ordered his military to be on alert and shoot down any such aircraft.
The Pentagon has declined to comment on Chavez's accusations.
Colombian Defense Minister Gabriel Silva and armed forces commander Freddy Padilla told reporters Monday that Colombian aircraft couldn't fly the kind of espionage mission described by Chavez.
"Colombia doesn't have that capability," said Silva. He quipped that perhaps "Venezuelan soldiers mistook Father Christmas' sleigh for a spy plane."
Padilla said Colombia has only small, unmanned surveillance planes that it uses to monitor pipelines and other installations against sabotage by rebel groups.
"They don't have any firepower and what they do is observe to prevent attacks on electrical towers," Padilla said.
Silva and Padilla did not discuss U.S. military capabilities at Colombian bases.
Chavez has accused Colombia of allowing the United States to use its military bases to prepare a possible attack on Venezuela.
Both the U.S. and Colombia have denied such allegations in the past, saying the U.S. military presence is for the sole purpose of giving support to Colombia in combatting drug traffickers and rebels.
Tensions between Venezuela and neighboring Colombia have been high for months amid Chavez's accusations of warmongering and Colombian President Alvaro Uribe's allegations that Venezuela has harbored Colombian rebel leaders.

Thursday, December 17, 2009

Putting our economy in the hands of Chavez fans

Andrew Bolt

Thursday, December 17, 2009 at 10:34am

These maniacs in Copenhagen are voting on your future:
President Chavez brought the house down.
When he said the process in Copenhagen was “not democratic, it is not inclusive, but isn’t that the reality of our world, the world is really and imperial dictatorship…down with imperial dictatorships” he got a rousing round of applause.
When he said there was a “silent and terrible ghost in the room” and that ghost was called capitalism, the applause was deafening.
But then he wound up to his grand conclusion – 20 minutes after his 5 minute speaking time was supposed to have ended and after quoting everyone from Karl Marx to Jesus Christ - “our revolution seeks to help all people…socialism, the other ghost that is probably wandering around this room, that’s the way to save the planet, capitalism is the road to hell....let’s fight against capitalism and make it obey us.” He won a standing ovation.
And at the end of this first clip, Chavez rouses the rabble with more anti-Americanism, too:
I don’t think Obama is here yet. He got the Nobel Peace Prize almost the same day as he sent 30,000 soldiers to kill innocent people in Afghanistan.

And a mass-murderer at Copenhagen lectures us about our crimes:

The anti-capitalist theme was picked up on by Mr Mugabe, Zimbabwe’s veteran President, who is the target of Western sanctions over alleged human rights abuses.

“When these capitalist gods of carbon burp and belch their dangerous emissions, it’s we, the lesser mortals of the developing sphere who gasp and sink and eventually die.”
Nothing is real in Copenhagen - not the temperature record, not the predictions, not the agenda, not the “solution”. In fact, here’s how fake it all is:
The lead negotiator for the small island nation of Tuvalu, the bow-tie wearing Ian Fry, broke down as he begged delegates to take tough action.
“I woke up this morning crying,” and that’s not easy for a grown man to admit,” Mr Fry said on Saturday, as his eyes welled with tears.
The fate of my country rests in your hands,” he concluded, as the audience exploded with wild applause.
So moving. But let’s now learn more from Samantha Maiden about this former Greenpeace official from “Tuvalu”:

But the part-time PhD scholar at the Australian National University actually resides in Queanbeyan, NSW, where he’s not likely to be troubled by rising sea levels because the closest beach at Batemans Bay is a two-hour, 144km drive away. Asked whether he had ever lived in Tuvalu, his wife told The Australian last night she would “rather not comment”....

Still, it’s a long way from the endangered atolls of Tuvalu, with his neighbour Michelle Ormay confirming he’s lived in Queanbeyan for more than a decade, while he has worked his way up to being “very high up in climate change”.
(Thanks to readers captainperi and Observer of Wodonga.)

Wednesday, December 16, 2009

Socialism in Stages

Even soft, incremental expansions of government produce poverty.

By Dan Oliver Jr.

America debated three strategies during the Cold War. The Right wanted “roll back” — dreams of Patton driving his tank into Red Square. The Left wanted d├ętente — which is French for “surrender.” The country loosely followed containment, a program outlined by George Kennan in 1946, which argued that the political contradictions of the Soviet state would eventually cause its own demise. America had but to be patient.

Kennan may have been the first to realize that a society based on Communism would not survive politically, but it was Ludwig von Mises, in his 1922 work Socialism, who demonstrated that any such society could not survive economically.

When a collection of free individuals — the market — is willing to pay a price for a product that creates “excess” profits, it signals producers to provide more of that product. If the market does not support a given price, producers are forced to redeploy their assets for more pressing social needs. Similarly, if a factor of production, such as labor or capital, changes in price, producers instantly react, sending signals — through the prices of intermediate goods — down to the consumer. Prices effortlessly allocate society’s assets to reflect consumer preference and adjust to accommodate the ever-changing availability of scarce resources.

Mises argued that governmental interference in prices, through taxation, subsidies, and regulation, complicates this process — affecting not only the consumption of final goods, but also the economic calculations that are necessary to provide intermediate goods and services. Higher-order division of labor fails. Poverty results. For example, while Chinese and Russian central planners were busy setting quotas for steel mills, there was no method for consumers to signal that they preferred food — and millions starved to death.

If the hard socialism of Communism produces economic and societal collapse quickly, Mises theorized, the soft, incremental socialism of the West — popularized again recently as the “Third Way” by Tony Blair and Bill Clinton — would produce poverty in stages. Every bureaucratic intervention in the market reduces long-term wealth creation, even if it provides a temporary boost to the economy. In time, this reduction of wealth is blamed on the inefficiencies of the remaining “unfettered” market, which provokes calls for greater intervention, ad infinitum.

Health care is a perfect example of the incremental socialization process. Government programs such as Medicare and Medicaid began by providing limited assistance to the old and the indigent. As health-care costs rose, these programs were expanded and new ones, such as S-CHIP, were added. The government now pays 32 percent of all non-military health-care bills, up from 6 percent in 1960. The remaining private expenditures are heavily regulated, resulting in the anticipated economic chaos. Under Obamacare, the situation can only grow worse. As P. J. O’Rourke quipped: “If you think health care is expensive now, wait until it’s free.”

Housing provides another example. Today, 71 years after Fannie Mae was founded, the central government provides a stunning 90 percent of the liquidity in the mortgage market, enabled by the Federal Reserve’s repurchase of 85 percent of new mortgages with freshly printed money. Banking is next.

Ronald Reagan’s 1980 election was the zenith of the conservative movement’s attempt to defeat Communism and limit government. Internationally, deployment of Pershing II missiles in Europe and military support of anti-Communist movements gave teeth to containment. Nine years later, the Soviet Union fell. Domestically, Reagan promised to get government off our backs by reducing taxes to starve Leviathan. Instead, politicians made up the shortfall with deficits, which soared as government grew relentlessly under both political parties. Twenty-nine years after Reagan’s election, the federal government spends 37 cents of every dollar in the economy. Operation Rollback as applied to the federal government has failed.

The economic laws described by Mises that brought down Communism apply equally to the American brand of soft socialism. Market forces will soon lay waste to American central planning just as surely as they did to the Soviet version two decades ago. The crises in housing, health care, and banking, the inevitable results of government intervention, are but harbingers of greater instability in our way of life. If Republicans wish to stay relevant, they must return to their conservative roots.

— Dan Oliver Jr. is Founder of Myrmikan Capital, LLC. He has a J.D. from Columbia Law School and an MBA from INSEAD.

Tuesday, December 15, 2009

You've Got Mail, But the Mailman Hid It


Getty Images
If your mother-in-law's mail goes through the Waterbury or Wallingford post offices, she might not have received the birthday card you sent in time.
Apparently managers at the post office have been hiding mail, Ray Arcovio, president of the Waterbury area postal worker’s union, told the Waterbury Republican-American. And he wants to sincerely apologize.
Workers have been stuffing mail into closets and unused rooms at mail facilities in Waterbury and Wallingford because they don’t know how to keep up with such a high volume of mail, he told the newspaper.
"They're just pushing it aside for the next day," Arcovio told the paper. "We've had issues with them hiding the mail."
In an effort to cut back on costs, the postal service now transfers mail processing from Waterbury to Wallingford.
Arcovio says the problem is being handled.
"We have dealt with it and got the assurance it wouldn't happen again," he  told the Republican American. "The employees who see it and are aware of it are fearful to speak out about it for fear of repercussions."
In some cases, even first-class letters were pushed aside because there weren't enough workers to handle it.
The USPS offers a different side of the story.  There was one incident, said a spokeswoman.  It was four months ago and the supervisor made a "poor judgment call about how to handle some late arriving mail and moved it out of the work area," Maureen Marion explained.  Appropriate administrative action was taken, she said.
"To suggest this activity is routine is a falsehood," she added in a statement.
What's more, it didn't involve first class mail.

Monday, December 14, 2009

James Cameron Reveals Liberal Propaganda in Avatar

Feds owe Uncle Sam $3B in unpaid taxes

WASHINGTON - At a time when the White House is projecting the largest deficit in the nation's history, Uncle Sam is trying to recover billions of dollars in unpaid taxes from its own employees.
Federal workers owe more than $3 billion in income taxes they failed to pay in 2008. According to Internal Revenue Service documents, 276,300 federal employees and retirees owe $3,042,200,000.
The IRS tracks the voluntary compliance rate of federal employees and retirees each year, and each year feds come up short. The one bright spot in this year's report is that after several years of a steady increase, the amount owed by feds is down from the previous year.
Federal employees and retirees owed $3,586,784,725 in unpaid income taxes in 2007.
The documents show delinquent employees from nearly every federal agency with more than 25 employees. Based on percentages, the Department of The Treasury, which includes the IRS, has the best compliance rate. Fewer than 1 percent of Treasury employees didn't pay their taxes in 2008.
The IRS is the only federal agency where employees can be fired for not paying their taxes. The non-compliance rate for IRS employees in 2008 was 0.76 percent -- down from 0.89 percent in 2007.
The agency with the most tax scofflaws is the U.S. Postal Service, with 28,913 employees who owe $297,933,756. But that is still a dramatic improvement from 2007 when more than 54,000 employees owed more than $407 million.
"We urge our employees to comply with all tax laws and are encouraged that many who have been delinquent have agreed to payment plan with the IRS," USPS spokesperson Mark Saunders tells WTOP in a statement.
"It's important to look at the percentage of postal employees who may be delinquent on their federal taxes, not just the number itself. According to IRS figures, the delinquency rate for Postal Service employees is relatively small."
The Postal Service, the largest employer in the federal government aside from the military, has a non-compliance rate of 3.95 percent compared to the federal average of 2.8 percent.
Retired military personnel make up about 33 percent of the money owed with $1,343,538,055 in unpaid taxes for 2008.
The agency with the highest percentage of delinquent employees is the National Capital Planning Commission, where 10.42 percent of its 48 employees owe $26,947.
"NCPC is committed to working closely with the Department of The Treasury to resolve issues of federal income tax delinquency involving its staff," NCPC spokeswoman Lisa MacSpadden said in a statement.
"The agency takes this matter very seriously and recognizes that federal employees must adhere to the highest ethical standards regarding financial matters.
"We remind our employees of this responsibility as part of our mandatory annual ethics training. Upon receipt of an official notice from the IRS about a specific employee's noncompliance, NCPC will take appropriate administrative action."
Other notable agencies on the list:
  • Executive Office of the President (includes the White House): 50 employees owe $812,917;
  • U.S. Senate: 231 employees owe $2,469,026;
  • U.S. House of Representatives: 447 employees owe $5,809,631;
  • U.S. Tax Court: 3 employees owe $39,752;
  • Active Duty Military: 27,111 employees $102,474,672.
While some taxpayers may scratch their heads and ask why the federal government doesn't garnish the wages of these employees, the reality is they can't. According to federal tax laws, employees are treated the same as any other taxpayer who doesn't pay their taxes.
The IRS must go through the same procedures and court process with feds as it does with John Q. Public. Once a court awards the IRS a judgment or if the employees enter a voluntary payment plan, the IRS can garnish wages. However, federal employees do jeopardize any security clearance they may have if they don't pay their income taxes.
As for the general public's voluntary compliance rate, the IRS no longer tracks those numbers, so it is impossible to compare. But an IRS report from 2001 (PDF) showed the total tax gap to be about $345 billion. The tax gap is the difference between what is owed each year and what is paid, and includes income, corporate, employment, estate and excise taxes.
(Copyright 2009 by WTOP. All Rights Reserved.)

Exclusive: IRS hires "hundreds" for new wealth unit

Holding a tax rebate letter from the Internal Revenue Service, U.S. President George W. Bush speaks about the economy during a visit to a small business in Sterling, Virginia March 26, 2006. REUTERS/Kevin Lamarque
WASHINGTON (Reuters) - A new Internal Revenue Service unit set up to catch rich tax cheats hiding their wealth in complex business entities is rapidly taking shape with the hiring of hundreds of employees.
The IRS high wealth unit, part of a broader effort to combat international tax evasion, is focusing on "the entire web of business entities controlled by a high wealth individual," IRS Commissioner Doug Shulman told a tax conference this week.
Another IRS official told Reuters "hundreds" of people have already been hired to staff the new unit, including some from within the agency.
"We have drawn top talent within the IRS that have expertise involving wealthy individuals as well as examination of their related entities," said Mae Lew, an IRS special counsel.
The high-wealth unit is focusing on trusts, real estate investments, privately held companies and other business entities controlled by rich individuals.
While use of sophisticated legal structures can be legal, in other instances they "mask aggressive tax strategies," Shulman said.
Tax authorities in Japan, Germany and the UK have also created similar units.
The U.S. House of Representatives on Thursday approved a $387 million boost for the IRS for the fiscal year that started October 1, in part to fund the high-wealth unit. The Senate is expected to vote on the measure on Sunday.
The IRS is also opening new criminal offices in Beijing, Panama City and Sydney to focus on funds flowing out of Europe and into Asia, in part because of a heightened focus on international enforcement in Europe.
The goal is to get those up and running during this fiscal year, which ends September 30, according to Barry Shott, IRS deputy commissioner for international issues for large and midsized business.
At the center of the agency's offshore effort is its legal cases against Swiss banking giant UBS AG. UBS agreed to turn over nearly 5,000 names of individual American clients and paid $780 million to settle a criminal case for aiding tax evasion.
The IRS has also begun initial steps to join forces with other governments to scrutinize corporate tax filings to prevent "tax arbitrage" by companies seeking the best regime.
President Barack Obama has proposed tightening tax rules for U.S. multinationals, including one in which companies delay paying taxes on income earned offshore, a legal practice known as deferral that officials say is abused.
Some tax practitioners expressed worry about such coordination.
"With any new thing, you never want to be the guinea pig," Mary Lou Fahey, general counsel for the Tax Executive Institute, comprised of business executives, said.
Shott said a likely scenario will likely be two countries getting together and decide to examine a narrow issue. In the beginning it will operate like a pilot program where the corporation examined would agree to take part.
"With rare exception ... the taxpayer will absolutely know they are subject to a simultaneous examination," Shott said.
Still, he said there could be cases where the audit needs to be kept quiet, such as when a criminal probe is ongoing.
Initial partners would likely include Canada, the UK and Australia, Shott said.

Friday, December 11, 2009

Pushing Government Power Too Far

By Michael Barone
"Knowledge is becoming more specialized and more dispersed, while government power is becoming more concentrated," writes economist Arnold Kling in his new book, "Unchecked and Unbalanced." "This discrepancy creates the potential for government to become increasingly erratic and, as a result, less satisfying to individuals."
"Less satisfying to individuals" is a mild way to put it. In a recent Annenberg focus group, pollster Peter Hart asked Philadelphia suburbanites to write the name that came to mind when they thought of Congress. A retired auto executive and 2008 Obama voter wrote, "Satan." When asked why, he said, "Because I wasn't sure of the correct spelling of 'Beelzebub.'"

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Kling's point is that such disenchantment is inevitable when government officeholders make sweeping decisions about matters on which they lack, and only a few specialists have, detailed knowledge. Which is what Congress and the Obama administration have been busy doing these past 11 months.
Consider the 2,000-plus-page health care legislation now before the Senate. There is coherent debate on abortion coverage because it's a discrete issue easily isolated from the rest of the bill that raises concerns among people with conflicting strong moral beliefs.
But any abortion provision would have less effect on real life than dozens of other provisions in the bill. The Congressional Budget Office, drawing on specialist knowledge, tells us the Senate bill would result in 10 million people losing employer-provided insurance and increased premiums for buyers of individual health insurance. And the CBO says the bill would not bend the cost curve downward.
Democratic leaders want to pass something, almost anything, for fear of political damage. They want to give government even more power over one-sixth of the economy, and over ordinary people's health care. To that end, they have been happy to game the CBO's scoring system, misusing specialized knowledge to achieve political ends.
On the issue of carbon emissions, the e-mails hacked from Britain's Climate Research Unit show even leading specialists in climate research have been busy manipulating data and suppressing alternative views in pursuit of political ends. Their goal, and that of the Democrats backing cap-and-trade legislation, is government control over energy production and distribution essential to all of the economy.
The Environmental Protection Agency's designation of carbon dioxide as a pollutant is an attempt to give EPA bureaucrats such control in the likely event that the Senate fails to pass something like the bill the House passed last June.
So politicians are acting either in ignorance of specialist knowledge or by manipulating and misusing it in the conviction that central planners can organize and control human behavior better than individuals can through markets and voluntary action operating under the rule of law.
History provides copious evidence that this conviction is mistaken. Writing in Policy Review, economists Paul Gregory and Kate Zhou compare the success of market reforms in China and their failure in Russia. They point out that reform in China was bottom-up: Peasants started producing food for private sale and, as markets thrived, Communist leader Deng Xiaoping winked at their rule-breaking and changed the rules. The economy mostly thrived.
In contrast, reform in Russia was top-down: Mikhail Gorbachev changed the rules, but that allowed apparatchiks to gobble up state industries and created new monopolies, over which Vladimir Putin's government re-established control. The economy mostly stagnated.
The Democrats' health care and cap-and-trade bills are classic top-down legislation. Many inside players have bought into the changes and are preparing to game the new systems. Far from banishing lobbyists from Washington, Barack Obama has provided them with enormous amounts of new business.
An alternative approach was taken in George W. Bush's major domestic legislation. Tax cuts, the education accountability bill and the Medicare prescription drug benefit law opened up areas where markets and incentives could operate. Costs came in lower and revenues higher than projected. An economy stalled by recession proved capable of creating new jobs without direction from central planners.
Polls have shown that in the last 11 months, as Americans have started to think hard about Democratic proposals, they have become less confident in government's ability to direct society. Underlying the angry responses in focus groups and tea parties is an appreciation that problems can best be addressed by widely dispersed people with specialized knowledge operating in a predictable framework. Not by central planners acting in ignorance of or by manipulating specialized knowledge.

Thursday, December 10, 2009

GE chief attacks executive ‘greed’

Jeffrey Immelt, General Electric’s chief executive, said on Wednesday his generation of business leaders had succumbed to “meanness and greed” that had harmed the US economy and increased the gap between the rich and the poor.
Mr Immelt’s attack on his fellow corporate chiefs – made in a speech at the West Point military academy – is one of the strongest criticisms by a top executive of the compensation and business practices that prevailed before the financial crisis.
“We are at the end of a difficult generation of business leadership ... tough-mindedness, a good trait, was replaced by meanness and greed, both terrible traits,” said Mr Immelt, who succeeded Jack Welch, one of the toughest leaders of his generation, at the helm of the US conglomerate. “Rewards became perverted. The richest people made the most mistakes with the least accountability.”
Several executives, especially in financial services, have apologised for their companies’ role in the crisis but Mr Immelt’s remarks went further, linking bad leadership to growing inequality.
“The bottom 25 per cent of the American population is poorer than they were 25 years ago. That is just wrong,” he said. “Ethically, leaders do share a common responsibility to narrow the gap between the weak and the strong.”
GE wants to win a large slice of the infrastructure projects funded by governments around the world in an effort to kick-start their economies.
Mr Immelt said business should welcome government as “a catalyst for leadership and change”.
Mr Immelt also issued a mea culpa over his inabilty to foresee the financial turmoil, which slashed GE’s profits and put its financial arm, GE Capital, under pressure, saying he should have been a better listener.
“I felt like I should have done more to anticipate the radical changes that occurred,” he said.
The GE chief now gathers GE’s top 25 executives to twice-monthly Saturday sessions to talk about the company and its future.
In the speech, Mr Immelt indicated GE would continue to shrink GE Capital, which accounted for around half of the company’s profits as reently as two years ago. He said it was wrong for the US economy to have “tilted toward the quicker profits of financial services” at the expense of the manufacturing industry and research and technology investments.

Wednesday, December 9, 2009

Administration Warns of 'Command-and-Control' Regulation Over Emissions

EPA Administrator Lisa Jackson gestures during a briefing in the U.S. center at the Climate Conference in Copenhagen Dec. 9. (AP Photo)

The Obama administration is warning Congress that if it doesn't move to regulate greenhouse gases, the Environmental Protection Agency will take a "command-and-control" role over the process in a way that could hurt business.
The warning, from a top White House economic official who spoke Tuesday on condition of anonymity, came on the eve of EPA Administrator Lisa Jackson's address to the international conference on climate change in Copenhagen, Denmark.
Jackson, however, tried to strike a tone of cooperation in her address Wednesday, explaining that the EPA's new powers to regulate greenhouse gases will be used to complement legislation pending in Congress, not replace it.
"This is not an 'either-or' moment. It's a 'both-and' moment," she said.
But while administration officials have long said they prefer Congress take action on climate change, the economic official who spoke with reporters Tuesday night made clear that the EPA will not wait and is prepared to act on its own.
And it won't be pretty.
"If you don't pass this legislation, then ... the EPA is going to have to regulate in this area," the official said. "And it is not going to be able to regulate on a market-based way, so it's going to have to regulate in a command-and-control way, which will probably generate even more uncertainty."
Climate change legislation that passed the House is stuck in the Senate, but the EPA finding Monday was seen as a boost to the U.S. delegation in Denmark trying to convince other countries that Washington is capable of taking action to follow through with any global commitments.
The economic official explained that congressional action could be better for the economy, since it would provide "compensation" for higher energy prices, especially for small businesses dealing with those higher energy costs. Otherwise, the official warned that the kind of "uncertainty" generated by unilateral EPA action would be a huge "deterrent to investment," in an economy already desperate for jobs.
"So, passing the right kind of legislation with the right kind of compensations seems to us to be the best way to reduce uncertainty and actually to encourage investment," the official said.
Republicans fear that the EPA will ultimately end up stepping in to regulate emissions -- though many oppose the congressional legislation as well. They had urged Jackson to withdraw the finding in light of leaked e-mails from a British research center that appeared to show scientists discussing the manipulation of climate data.
Rep. James Sensenbrenner, R-Wis., ranking Republican on the House Select Committee for Energy Independence and Global Warming, said Tuesday he is going to attend the Copenhagen conference to inform world leaders that despite any promises made by President Obama, no new laws will be passed in the United States until the "scientific fascism" ends.
"I call it 'scientific fascism,'" Sensenbrenner said during a press conference with fellow climate change skeptics. Sensenbrenner said, "The U.N. should throw a red flag" on scientists who support global warming to the exclusion of dissent.
Administration officials, though, said the e-mails do not change the debate.
Former Vice President Al Gore, a leader in the movement on man-caused climate change, told CNN on Wednesday that the e-mails in questions were 10 years old and taken "out of context."
Fox News' Major Garrett and The Associated Press contributed to this report.

The Rabbit-Ear Wars

Get ready for a rumble over the future of over-the-air TV.

You stupidly built a drive-in theater in the desert just as your customers were all deciding to stay home and watch HBO. Fortunately, the theater turns out to be sitting on a mountain of oil.
With a few asterisks, such is the situation of old-style TV broadcasters, whose viewers have fled to cable or satellite but whose spectrum is lusted after by the wireless industry. According to a much-noted study sponsored by the Consumer Electronics Association, in the hands of the broadcasters, that spectrum is worth a mere $12 billion. In the hands of mobile phone carriers struggling to meet explosive growth for mobile broadband, it would be worth $62 billion.
To the Silicon Valley types who people the Obama administration, this suggests a rational policy: Pay broadcasters to give up some or all of the airwaves used to send signals to their dwindling rabbit-ear audience. Turn it over to mobile phone folks at a hefty markup.
Blair Levin, a veteran telecom analyst who heads the FCC's broadband efforts, has floated a Hindenburg of a trial balloon by broaching just such a deal with broadcasters. Virtually all agree that any such "grand bargain," to be politically deliverable, must enlist the willing, nay eager, participation of broadcast station owners. No problem—broadcasters would be the biggest winners, right?
Sadly, remember what happened to the original Hindenburg. Broadcasters, who have a keen sense of political realities, note that their broadcast licenses don't actually confer a property right, so whatever deal the FCC struck with them, Congress would certainly rewrite it to make sure Congress got all the money. Broadcasters would receive squat, and probably be vilified as bandits in the process.
"Pipe dream" was the verdict of Colleen Brown, chief of Fisher Communications, owner of 20 stations in the Pacific Northwest.
"Politically they would fall flat on their face," opined Sinclair Broadcasting's Mark Aitken, estimating the agency's chances selling a cash-for-spectrum deal to Congress.
But, hold on. We mentioned asterisks. The FCC and Mr. Levin are correct (and brave) in pointing out the need for a market mechanism to guide spectrum to its highest and best uses. But the FCC is in no position to know whether mobile broadband is that higher and better use. A reason is the regulatory straitjacket, including ownership limits, that for decades has prevented license holders themselves from exploring new broadcast business models.
For the truth is, broadcast offers impressive economies for distributing rich media content compared to the Internet. An infinity of users can be served by a single bitstream. It doesn't matter how many receivers tune into a TV broadcast. It never gets overloaded.
Consider a small company called Sezmi, now testing in Los Angeles a competitor to cable and satellite TV. Users get a box with a powerful HDTV antenna, allowing them to receive not just traditional over-the-air TV channels but also popular cable networks, broadcast locally using spare capacity leased from TV stations.
A separate broadband connection supplies on-demand movies and even material plucked from YouTube. And to help make the most of limited bandwidth, each also comes with a giant terabyte-sized disk drive capable of storing many hours of programming, automatically downloaded in advance based on a viewer's demonstrated habits and tastes.
All this, of course, would also yield a cornucopia of information with which to deliver the truly individualized advertising that TV ad buyers crave.
Who knows whether Sezmi will pan out technologically, and at the very-much-cheaper-than-cable price the company touts. The FCC quite properly worries about a coming mobile capacity crunch, with all those proliferating iPhones. But throwing spectrum at it won't be the only solution. Greater integration of fixed and wireless will help. Software innovation, cramming more bits into the same frequency, will help. So will usage-based pricing. And as Sezmi shows, local storage can substitute for bandwidth too.
The FCC is looking in the right direction, but we need more than just a "market solution" to liberate spectrum from the current government-approved incumbents. We need a market that can fully explore the potential of all the business models that might contest to find the highest and best use of that resource.
In the meantime, the agency's trial balloon is having a perverse effect, spurring broadcasters to new Potemkin feats to prove they are making full use of their existing spectrum, such as rolling out new digital "subchannels" that nobody watches. Some broadcasters even invoke the 1962 All-Channel Receiver Act and insist a new "golden age of broadcasting" is around the corner—just as soon as the FCC mandates that every smart phone be capable of receiving over-the-air TV signals.
In short, one picture is starting to come in clearly: The spectrum puzzle won't be solved by the clean and simple deal the agency envisioned just a month ago.


FistGate II: High School Students Given Fisting Kits at Kevin Jennings (Obama Safe-School Czar) 2001 GLSEN Conference

by Jim Hoft
In March 2000 the Gay, Lesbian, and Straight Education Network (GLSEN) organization of Massachusetts held its 10 Year Anniversary GLSEN/Boston conference at Tufts University. This conference was fully supported by the Massachusetts Department of Education, the Safe Schools Program, the Governor’s Commission on Gay and Lesbian Youth, and some of the presenters even received federal money. During the 2000 conference, workshop leaders led a “youth only, ages 14-21″ session that offered lessons in “fisting” a dangerous sexual practice. During another workshop an activist asked 14 year-old students, “Spit or swallow?… Is it rude?” The unbelievable audio clip is posted here. Barack Obama’s “Safe Schools Czar” Kevin Jennings is the founder of GLSEN. He was paid $273,573.96 as its executive director in 2007. Jennings was the keynote speaker at the 2000 GLSEN conference.
Photo: This kit for fisting was distributed by Planned Parenthood at Fistgate II. (Mass News)

Unfortunately for GLSEN, undercover journalists with Mass Resistance recorded these outrageous sessions. The audio was later leaked to a local radio station. This created such an uproar that GLSEN leaders were forced to apologize for their disgusting behavior.
Thanks to Soros-linked Media Matters we now know that GLSEN director, and current Obama Safe Schools Czar, Kevin Jennings was confronted on the vile content discussed at the children’s conference.
“Like the Parents Rights Coalition and the Department of Education, GLSEN is also troubled by some of the content that came up during this workshop,” said Kevin Jennings, national executive director of the Gay, Lesbian and Straight Education Network.
He said people who run workshops in the future will get clearer guidelines, though Jennings said the network’s annual conference at Tufts University should not be judged on the 30-student seminar “What They Didn’t Tell You About Queer Sex and Sexuality in Health Class.”
“We need to make our expectations and guidelines to outside facilitators much more clear,” said Jennings. “Because we are surprised and troubled by some of the accounts we’ve heard.”
But despite Media Matters’ claims, Kevin Jennings and his GLSEN organization did nothing to clean up their act. In fact in 2001 activists handed out “fisting kits” to the children and teachers who attended the GLSEN conference.
That’s correct. Fisting kits.

At Kevin Jennings’ 2001 GLSEN Conference an estimated 400 student attendees were given their own “fisting kit.”
Mass News reported on the 2001 conference:
Fistgate II was held on Saturday in the same building at Tufts University as last year with the same message about how to practice homosexual sex.
More students attended this year. Out of approximately 650 attendees, about 400 of those were students.
Kits of plastic gloves intended for “fisting” or oral sex were distributed at Planned Parenthood’s table in the lobby.
Public funds were used for the event with at least two school buses being used to transport students, from Methuen High School and Marblehead Public Schools. Adam Glick, Conference Coordinator, said he did not know how the buses were paid for. Other children were transported by public school teachers in private cars.
The private homosexual sponsor, GLSEN, is given state funds for many purposes and does not publicly report on how the money is spent.
There was a heightened sense of security with many Tufts campus police being highly visible in order to stop parents from seeing what occurred at the conference.
Although Tufts University was able to claim ignorance about the event last year, they obviously became complicit this year when they welcomed the conference back and provided the security muscle to keep the strategy sessions and indoctrination of the children running smoothly.
Founding Bloggers has a photo of one of the school buses that brought students to the conference.
Mass News had another article that described the contents of the “fisting kits” given to the students.
Planned Parenthood of Massachusetts distributed kits for fisting and oral sex. They contained a single plastic glove, a package of K-Y lubricant and instructions on how to make a “dental dam” out of the material.
The instructions explained how to cut up the glove with scissors until all that remains is a rubber rectangle with the “thumb” portion protruding from the middle. “Use the thumb space for your tongue,” say the directions.
The label on the ziplocked package says, “protects against STD’s,” and bears the Planned Parenthood logo and phone number.
GLSEN (Gay Lesbian and Straight Education Network) got into trouble last year for hosting a workshop that gave young teens explicit how-to instructions on homosexual sex practices such as “fisting.” The ensuing scandal was subsequently dubbed “Fistgate.”
Regarding “dental dams,” Dr. John Diggs, a specialist in internal medicine who lectures about STDs, said that the kits create a false sense of security. “I’ve written a brochure about this whole thing,” he said. “The way I describe it is, I ask ‘How many people want to take a bite of a sandwich without taking the wrapper off?’ ‘How many people want to suck on balloons?’ Nobody does.”
Again, Barack Obama’s Safe Schools Czar organized and sponsored this conference as executive director of GLSEN. His organization later pushed filthy books on America’s children.
Today he’s running the Office of Safe and Drug Free Schools in the US Department of Education.
Do you feel safe now?
There’s more to come.

Tuesday, December 8, 2009

Chavez: Venezuela acquires thousands of missiles

Venezuela's President Hugo Chavez salutes upon his arrival to the launching...

CARACAS, Venezuela (AP) - President Hugo Chavez said Monday that Venezuela has received thousands of Russian-made missiles and rocket launchers as part of his government's military preparations for a possible armed conflict with neighboring Colombia. "They are preparing a war against us," Chavez said during a televised address, repeating a charge he has been making for months. "Preparing is one of the best ways to neutralize it."
Both Colombia and Washington deny having any plans to attack Venezuela, but Chavez argues they are plotting together a military offensive against Venezuela. Chavez says his government is acquiring more weapons as a precaution.
"Thousands of missiles are arriving," Chavez said. The former paratrooper-turned-president did not specify what type of missiles, but said Venezuela's growing arsenal includes Russian-made Igla-1S surface-to-air missiles and rocket-propelled grenades.
Chavez, who has been feuding with Colombia for months, claims an agreement between Bogota and Washington allowing the U.S. military to increase its presence at seven Colombian military bases poses a threat to his country. Colombia says the deal is only to help it fight the war on drugs and insurgents inside its territory.
Chavez also said Monday that Russian tanks, including T-72s, will be arriving "to strengthen our armored divisions."
Venezuela has bought more than $4 billion worth of Russian arms since 2005, including 24 Sukhoi fighter jets, dozens of attack helicopters and 100,000 Kalashnikov assault rifles. In September, Russia opened a $2.2 billion line of credit for Venezuela to purchase more weapons.

Monday, December 7, 2009

PROMISES, PROMISES: A closed meeting on openness

WASHINGTON — It's hardly the image of transparency the Obama administration wants to project: A workshop on government openness is closed to the public.
The event Monday for federal employees is a fitting symbol of President Barack Obama's uneven record so far on the Freedom of Information Act, a big part of keeping his campaign promise to make his administration the most transparent ever. As Obama's first year in office ends, the government's actions when the public and press seek information are not yet matching up with the president's words.
"The Freedom of Information Act should be administered with a clear presumption: In the face of doubt, openness prevails," Obama told government offices on his first full day as president. "The government should not keep information confidential merely because public officials might be embarrassed by disclosure, because errors and failures might be revealed, or because of speculative or abstract fears."
Obama scored points on his pledge by requiring the release of detailed information about $787 billion in economic stimulus spending. It's now available on a Web site, Other notable disclosures include waivers that the White House has granted from Obama's conflict-of-interest rules and reports detailing Obama's and top appointees' personal finances.
Yet on some important issues, his administration produced information only after government watchdogs and reporters spent weeks or months pressing, in some cases suing.
Those include what cars people were buying using the $3 billion Cash for Clunkers program (it turned out the most frequent trades involved pickups for pickups with only slightly better gas mileage); how many times airplanes have collided with birds (a lot); whether lobbyists and donors meet with the Obama White House (they do); rules about the interrogation of terror suspects (the FBI and CIA disagreed over what was permitted); and who was speaking in private with Treasury Secretary Timothy Geithner (he has close relationships with a cadre of Wall Street executives whose multibillion-dollar companies survived the economic crisis with his help).
The administration has refused to turn over important records. Obama signed a law that let the Pentagon refuse to release photographs showing U.S. troops abusing detainees, and Defense Secretary Robert Gates then did so. The Obama administration, like the Bush administration before it, has refused to release details about the CIA's "black site" rendition program. The Federal Aviation Administration wouldn't turn over letters and e-mails among FAA officials about reporters' efforts to learn more about planes that crash into birds.
Just last week, a State Department deputy assistant secretary, Llewellyn Hedgbeth, said at a public conference that "as much as we want to promote transparency," her agency will work just as hard to protect classified materials or information that would put the United States in a bad light.
People who routinely request government records said they don't see much progress on Obama's transparency pledge.
"It's either smoke and mirrors or it was done for the media," said Jeff Stachewicz, founder of Washington-based FOIA Group Inc., which files hundreds of requests every month across the government on behalf of companies, law firms and news organizations. "This administration, when it wants something done, there are no excuses. You just don't see a big movement toward transparency."
The San Francisco-based Electronic Frontier Foundation, a civil liberties group, said it filed 45 requests for records since Obama became president, and that agencies such as NASA and the Energy Department have been mostly cooperative in the spirit of Obama's promises. But the FBI and Justice Department? Not so much, said Nate Cardozo, working for the foundation on a project to expose new government surveillance technologies.
The FBI resisted turning over copies of reports to a White House intelligence oversight board about possible bureau legal violations. The FBI said it's so far behind reviewing other, unrelated requests that it can't turn over the reports until May 2014.
"This administration started with a bang, saying this was going to be a new day, and we had really high expectations," Cardozo said. "We haven't seen much of a change. The Justice Department said there would be a stronger presumption in favor of disclosure, but that hasn't been the case."
Obama has approved startup money for a new office taking part in Monday's closed conference, the Office of Government Information Services. It was created to resolve disputes involving people who ask for records and government agencies. But as evidenced by the open-records event behind closed doors, there is a long way to go.
"We'd like to know, when they're training agencies, are they telling them the same thing they're saying in public, that they're committed to making the Freedom of Information Act work well and make sure that agencies are releasing information whenever possible while protecting important issues like individual privacy and national security," said Rick Blum, coordinator of the Sunshine in Government Initiative, of which The Associated Press is a member.
The closed conference will provide tips for FOIA public liaisons on communicating and negotiating with people who make requests, and introduce the new Office of Government Information Services to them, said Melanie Ann Pustay, director of the Justice Department's Office of Information Policy, which takes the lead on government openness issues.
Pustay said she planned to say the same things at the private workshop that she would say publicly. She offered these reasons to explain why it was closed: She wanted government employees to be able to speak candidly, and the conference would be in an auditorium at the Commerce Department, where she said a government ID was required to be admitted. The AP and others news organizations routinely enter government buildings to cover the government.
Pustay said she is looking for ways to improve how the government responds to information requests, which costs roughly $400 million each year.
The director of the new Office of Government Information Services, Miriam Nisbet, said the event was closed to make sure there would be room for all the government employees attending.
"I can understand skepticism anytime a meeting for government people is not necessarily open to the public," Nisbet said. "However, everything that is discussed there is absolutely available for the public to know about."
Associated Press writer Ted Bridis contributed to this report.

Friday, December 4, 2009

The Welfare State and Military Power

Europe-style entitlements mean Europe-sized defenses. 

For our money, one of the better parts of President Obama's speech at West Point this week was his connection between a healthy economy and U.S. national security. To quote: "Our prosperity provides a foundation for our power. It pays for our military. It underwrites our diplomacy." We only wish Mr. Obama understood the link between the larger welfare state he is trying to build at home and the economic weakness that will undermine our military power.
The proof is right before his eyes in the U.S. struggle to get Europe to contribute more forces to Afghanistan. Mr. Obama has called on NATO to buttress the U.S. surge of 30,000 in Afghanistan with 5,000 or more European troops. Secretary of State Hillary Clinton is in Brussels today to round up promissory notes. But except for the usual stalwarts—Britain and Poland—the allies are having trouble meeting even this modest goal. Germany and France are reluctant to contribute anything more to defeat the Taliban.
This is by now a familiar story, and a big part of the problem is the relative lack of military spending. Among the Western Europeans, only France and the U.K. spend more than 2% of GDP on defense, supposedly the NATO-mandated minimum. Nearly everyone else is below that. Germany, the continent's largest economy, stands at 1.3%. U.S. defense spending has been above 4% of GDP since 2004, having fallen to 3% after the Cold War ended.
No amount of pleading and shaming has worked on the continentals. NATO launched the "Defense Capabilities Initiative" in 1999, only to abandon it a few years later. Various attempts to stand up European "rapid reaction" forces have floundered.
Most European countries also commit more than half of what little they do spend on defense to soldier salaries and benefits. Equipment and training are shortchanged. Belgium devotes 74% to personnel; the U.S. 30.6%. Europeans lack cargo planes and helicopters to enable troops to get to, and move within, far-off conflict zones. In 2007, the U.S. deployed 14% of its troops in overseas operations, Europe 4%.
Such relative strategic weakness has made the Europeans more dependent on the American security umbrella, even as they resent it. But it also makes Europeans more disposed to avoid confrontation with adversaries like Saddam Hussein or Mahmoud Ahmadinejad. As Henry Kissinger has put it, European leaders are no longer able to ask their people to make major sacrifices.
The overlooked culprit here is the rise of the modern welfare state. Since World War II and especially from the 1960s, Europe has built elaborate domestic income-maintenance programs, with government-run health care, pensions and jobless benefits. These are hugely expensive, requiring high taxes and government spending that is a huge proportion of GDP. The nearby table compares the so-called tax wedge across nations, which is one measure of the relative burdens to finance cradle-to-grave entitlements.
One consequence has been slower growth in Europe, relative to the U.S. and China, with less tax revenue to spend on everything. Another result is that welfare spending has crowded out defense spending. The political imperative of health care and pensions always trumps defense spending, save perhaps in a hot war. Europe may never again be able to muster public support for a defense buildup of the kind the U.S. undertook to end the Cold War in the 1980s, or even the smaller surge after 9/11.
The tragic irony of this year is that Democrats are rushing the U.S. down this same primrose entitlement path. With ObamaCare certain to eat up several more percentage points of GDP as it inevitably expands, we will take a giant step toward European social priorities.
Associated Press 
For many Democrats, this is precisely the goal. Many Europeans, such as those at the Financial Times, will also welcome America's relative decline. But we doubt the American people fully understand what such a gilded entitlement cage means for our national vitality, or for our ability to defend U.S. interests at home and abroad.
The chart nearby shows the change in the share of U.S. federal spending on defense and domestic programs across recent decades. The upward blips in defense outlays occurred during Vietnam, the Reagan buildup and post-9/11. But the overall trend has been to spend less of the budget on defense. Add the stimulus, ObamaCare, a new entitlement for college and other Democratic plans, and the defense squeeze will only tighten. Higher taxes and borrowing may allow guns and butter to co-exist for a while. But over time, the welfare state will defeat the Pentagon here, as it has in Europe.
President Obama's domestic agenda may well mean that his successors lack the option to deploy 100,000 troops to Afghanistan, or to some other future trouble spot. This is the way superpowers lose their superiority.


Tuesday, December 1, 2009

Russia building arms plants in Venezuela

VENEZUELA-ARMS/RUSSIA:Russia building arms plants in Venezuela


By Walker Simon
CARACAS (Reuters) - Russia is building arms plants in Venezuela to produce AK-103 automatic rifles and cartridges and is finalizing contracts to send 53 military helicopters to the Andean nation, Moscow's envoy to Venezuela said Monday.
Ambassador Vladmir Zaemskiy told a news conference that Russian engineers and Venezuelan construction firms were building the rifle and cartridge plants which, when operational, would employ more than 1,500 workers.
He gave no completion date for the plants under construction in the central state of Aragua.
Details about Moscow's military shipments and projects have been scarce since socialist President Hugo Chavez's government began signing military agreements with Russia back in 2001.
In recent years, Venezuela has bought over $4 billion in weapons from Russia, including 24 Sukhoi fighter jets. Critics say Caracas is fueling an arms race in Latin America. Chavez says he is modernizing the military for defensive purposes.
When Chavez he returned from his latest trip to Russia in September, he said Russia had agreed to lend Venezuela $2.2 billion to purchase 92 tanks and an S-300 missile system that can shoot down fighter jets and cruise missiles.
Two years ago, Russia agreed to sell the same S-300 system to Iran but has dragged its feet over delivering the weapons amid U.S. and Israeli concerns they will be used to defend Iran's nuclear installations.
Zaemskiy declined to provide details on delivery dates for the tanks and missile system. He could not say if Moscow already disbursed part of the $2.2 billion loan.
But he added that "big contracts" were being finalized to deliver 53 "Mil" helicopters that can be used by the Venezuelan armed forces and for humanitarian missions.
Between 2006 and 2008, Moscow delivered a total of about 59 military helicopters to Venezuela, according to data from the Stockholm International Peace Research Institute.
Russia was also providing "a complete range" of military spare parts to Venezuela, Zaemskiy said. It is also transferring technology and building technical maintenance centers.
"As a result of this cooperation, Venezuela's defense capacity has increased considerably, as well as its level of technological independence," the ambassador said.