Saturday, January 31, 2015

The Imaginary Islamic Radical

sultanknish.blogspot.comhttp://sultanknish.blogspot.com/2015/01/the-imaginary-islamic-radical.html?pfstyle=wp

The Imaginary Islamic Radical

The debate over Islamic terrorism has shifted so far from reality that it has now become an argument between the administration, which insists that there is nothing Islamic about ISIS, and critics who contend that a minority of Islamic extremists are the ones causing all the problems.But what makes an Islamic radical, extremist? Where is the line between ordinary Muslim practice and its extremist dark side? It can’t be beheading people in public.
Saudi Arabia just did that and was praised for its progressiveness by the UN Secretary General, had flags flown at half-staff in the honor of its deceased tyrant in the UK and that same tyrant was honored by Obama, in preference to such minor events as the Paris Unity March and the Auschwitz commemoration.
It can’t be terrorism either. Not when the US funds the PLO and three successive administrations invested massive amounts of political capital into turning the terrorist group into a state. While the US and the EU fund the Palestinian Authority’s homicidal kleptocracy; its media urges stabbing Jews.
Clearly that’s not Islamic extremism either. At least it’s not too extreme for Obama.
And there are few Islamic terrorist groups that don’t have friends in high places in the Muslim world.
If blowing up civilians in Allah’s name isn’t extreme, what do our radicals have to do to get really radical?
Sex slavery? The Saudis only abolished it in 1962; officially. Unofficially it continues. Every few years a Saudi bigwig gets busted for it abroad. The third in line for the Saudi throne was the son of a “slave girl”.
Ethnic cleansing? Genocide? The “moderate” Islamists we backed in Syria, Libya and Egypt have been busy doing it with the weapons and support that we gave them. So that can’t be extreme either.
If terrorism, ethnic cleansing, sex slavery and beheading are just the behavior of moderate Muslims, what does a Jihadist have to do to be officially extreme? What is it that makes ISIS extreme?
From a Muslim perspective, ISIS is radical because it declared a Caliphate and is casual about declaring other Muslims infidels. That’s a serious issue for Muslims and when we distinguish between radicals and moderates based not on their treatment of people, but their treatment of Muslims, we define radicalism from the perspective of Islamic supremacism, rather than our own American values.
The position that the Muslim Brotherhood is moderate and Al Qaeda is extreme because the Brotherhood kills Christians and Jews while Al Qaeda kills Muslims is Islamic Supremacism. The idea of the moderate Muslim places the lives of Muslims over those of every other human being on earth.
Our Countering Violent Extremism program emphasizes the centrality of Islamic legal authority as the best means of fighting Islamic terrorists. Our ideological warfare slams terrorists for not accepting the proper Islamic chain of command. Our solution to Islamic terrorism is a call for Sharia submission.
That’s not an American position. It’s an Islamic position and it puts us in the strange position of arguing Islamic legalism with Islamic terrorists. Our politicians, generals and cops insist that the Islamic terrorists we’re dealing with know nothing about Islam because that is what their Saudi liaisons told them to say.
It’s as if we were fighting Marxist terrorist groups by reproving them for not accepting the authority of the USSR or the Fourth International. It’s not only stupid of us to nitpick another ideology’s fine points, especially when our leaders don’t know what they’re talking about, but our path to victory involves uniting our enemies behind one central theocracy. That’s even worse than arming and training them, which we’re also doing (but only for the moderate genocidal terrorists, not the extremists).
Our government’s definition of moderate often hinges on a willingness to negotiate regardless of the results. The moderate Taliban were the ones willing to talk us. They just weren’t willing to make a deal. Iran’s new government is moderate because it engages in aimless negotiations while pushing its nuclear program forward and issuing violent threats, instead of just pushing and threatening without the negotiations. Nothing has come of the negotiations, but the very willingness to negotiate is moderate. The Saudis would talk to us all day long while they continued sponsoring terrorists and setting up terror mosques in the West. That made them moderates. Qatar keeps talking to us while arming terrorists and propping up the Muslim Brotherhood. So they too are moderate. The Muslim Brotherhood talked to us even while its thugs burned churches, tortured protesters and worked with terrorist groups in the Sinai.
A radical terrorist will kill you. A moderate terrorist will talk to you and then kill someone else. And you’ll ignore it because the conversation is a sign that they’re willing to pretend to be reasonable.
That’s more than Secretary of State Kerry is willing to be.
Kerry views accusations of extremism as already too extreme. ISIS, he insists, are nihilists and anarchists.
Nihilism is the exact opposite of the highly structured Islamic system of the Caliphate. It might be a more accurate description of Kerry. But as irrational as Kerry’s claims might be, they have a source. The Saudis and the Muslim Brotherhood successfully sold the Western security establishment on the idea that the only way to defeat Islamic terrorism was by denying any Islamic links to its actions.
This was like an arsonist convincing the fire department that the best way to fight fires was to pretend that they happened randomly on their own.
Victory through denial demands that we pretend that Islamic terrorism has nothing to do with Islam. It’s a wholly irrational position, but the alternative of a tiny minority of extremists is nearly as irrational.
If ISIS is extreme and Islam is moderate, what did ISIS do that Mohammed did not?
The answers usually have a whole lot to do with the internal structures of Islam and very little to do with such pragmatic things as not raping women or not killing non-Muslims.
Early on we decided to take sides between Islamic dictators and Islamic terrorists, deeming the former moderate and the latter extremists. But the dictators were backing their own terrorists. And when it came to human rights, there wasn’t all that much of a difference between the two.
It made sense for us to put down Islamic terrorists because they often represented a more direct threat, but allowing the Islamic dictators to convince us that they and the terrorists followed two different brands of Islam and that the only solution to Islamic terrorism lay in their theocracy was foolish of us.
The Islamic terrorist group is more mobile, more agile and more willing to take risks. It plays the short game and so its violent actions are more apparent in the short term. The Islamic dictatorship takes the longer view and its long game, such as immigration, is harder to spot, but much more destructive.

ISIS and the Saudis differ in their tactics, but
there was very little in the way of differences when it came to how they saw us and non-Muslims in general. The Soviet Union was not moderate because it chose to defer a nuclear confrontation and because it was forced to come to the negotiating table. It was still playing a long game that it never got a chance to finish. The Saudis are not moderate. They are playing the long game. We can’t win the War on Terror through their theocracy. That way lies a real Caliphate.
Our problem is not the Islamic radical, but the inherent radicalism of Islam. Islam is a radical religion. It radicalizes those who follow it. Every atrocity we associate with Islamic radicals is already in Islam. The Koran is not the solution to Islamic radicalism, it is the cause.
Our enemy is not radicalism, but a hostile civilization bearing grudges and ambitions.
We aren’t fighting nihilists or radicals. We are at war with the inheritors of an old empire seeking to reestablish its supremacy not only in the hinterlands of the east, but in the megalopolises of the west.

Can Israel Survive?

Can Israel Survive?

victorhansonJanuary 29, 2015 7:38 am

Traditional pillars of the tiny democracy’s security have begun to erode.

by Victor Davis Hanson // National Review Online

FDIC retreats on Operation Choke Point?

January 30, 2015

IF SO, IT’S BECAUSE THEY FEARED INVESTIGATIONS BY A GOP CONGRESS: FDIC retreats on Operation Choke Point? I’ll be interested, though, to hear what people in the affected industries have to say over the coming months.
 
 
 

FDIC retreats on Operation Choke Point?

January 29
In what seems to be a retreat from its Operation Choke Point initiative, the FDIC has announced new regulatory guidance that instructs banks to judge their relationships with their customers on a case-by-case basis, rather than refusing to provide banking services to entire categories of industries. From the Press Release:
The Federal Deposit Insurance Corporation (FDIC) issued a Financial Institution Letter today encouraging supervised institutions to take a risk-based approach in assessing individual customer relationships, rather than declining to provide banking services to entire categories of customers without regard to the risks presented by an individual customer or the financial institution’s ability to manage the risk.
The FDIC also reinforced the agency’s policies on managing customer relationships to examiners and other supervisory staff. Financial institutions that properly manage customer relationships and effectively mitigate risks are neither prohibited nor discouraged from providing services to any category of customer accounts or individual customers operating in compliance with applicable laws. FDIC examiners must provide notice in writing for any case in which an institution is directed to exit a customer relationship.
The move comes in response to growing complaints that Operation Choke Point was choking off access to banking services for legitimate businesses. According to documents released last summer by the House Oversight Committee, the FDIC’s prior position (at least with respect to payday lenders) had been that if companies really were legitimate, then the burden was on them to prove it. But this latest guidance suggests that in practice examiners and banks were treating it as a categorical rule.
A recent column in the American Banker argues, for example, that Operation Choke Point (or some knock-on variation) has been leading banks to close the bank accounts of many churches and religious charities. One church’s lawyer speculates that the reason for her client’s account being closed is that it receives a large percentage of its contributions in cash. It is not clear whether this is specifically the result of the federal government’s Operation Choke Point or some similar state initiative.
So where does this leave Operation Choke Point? The Washington Times (where I first came across the story) argues that it effectively ends Operation Choke Point. And if the FDIC guidance is taken at face value, that would seem to be the case–it hardly seems revolutionary for the FDIC to say that banks should determine whether to provide services based on the risk profile of each customer, not the “reputation risk” of entire industries. In that sense, it is just stating the obvious. 

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Thursday, January 29, 2015

Mach Mining v. EEOC.

Trust us, we’re the government, Obama administration tells Supreme Court [With Comment by John]

Earlier this month, the Supreme Court heard a case in which the Obama administration made the extraordinary claim that there can be no judicial review as to whether a government agency met a statutory prerequisite for filing a lawsuit. The case is Mach Mining v. EEOC.
The Federalist Society asked me to report on the case via audiotape. My report is here.
The Civil Rights Act requires the EEOC to negotiate an end to an employer’s alleged discrimination before it sues the employer. The process is called conciliation. Congress required concilation because it believed, sensibly, that informally resolving discrimination suits, if possible, is preferable to resolving them through litigation.
But when the EEOC wants to bring a big lawsuit, it will often blow off conciliation. In my experience, it will do so, for example, by presenting a monetary demand with no explanation for its derivation and then, when the employer asks for one, declare that conciliation has failed. Then, it will proceed directly to court.
Why does the EEOC do this? Because the results of conciliation must remain confidential, and the EEOC wants the publicity that will come with the settlement of a lawsuit (or a victory in court).
When the EEOC behaves this way, the employer often will assert as a defense to the lawsuit that the EEOC failed to meet its statutory obligation to conciliate. For four decades, this has been a defense that courts would assess — typically under a standard that is deferential to the EEOC. If a court finds that the EEOC failed to meet its obligation, typically the EEOC will then engage in real conciliation, as Congress intended. If conciliation then fails, the case will proceed on the merits.
But the Obama EEOC challenged this regime, arguing, in effect, that there is no “failure to conciliate” defense. If the EEOC declares that it engaged in conciliation, that’s the end of the matter; there is no judicial review.
In Mach Mining, the Seventh Circuit Court of Appeals agreed with the EEOC, thereby creating a split in the circuits. The Supreme Court granted review.
And no wonder. Although the issue of conciliating employment discrimination claims is hardly an earth-shattering one, the Obama administration’s position regarding the power of government in this context seems seismic.
A statutory requirement that courts cannot review for compliance is no statutory requirement at all. The Seventh Circuit’s ruling in Mach Mining leaves the EEOC free to refuse to do what the statute requires of it — “endeavor to eliminate the employment practice by informal methods of conference, conciliation, and persuasion.”
Compliance is entrusted entirely to the government. This is music to the Obama administration’s ears. But it should be chilling to the rest of us, especially when advocated not in the context of a need for secrecy to protect national security but rather in the connection with a garden variety government obligation.
During oral argument, the Supreme Court Justices may or may not have shivered, but the Court as a whole seemed a bit shocked. Justice Breyer, for example, reminded the government attorney that these days there is judicial review of virtually everything. He added, “of course there should be judicial review” here.
The Court, then, will almost certainly reject the EEOC’s position. The real questions are whether it will articulate a general standard for reviewing the EEOC’s conciliation efforts and, if so, what that standard will be.
The other question is whether any of the Court’s liberal Justices will back the EEOC’s position. The Obama administration has lost its share of Supreme Court cases 9-0. I hope this will be another such defeat. It’s appalling enough that the Seventh Circuit adopted the EEOC’s lawless position.
JOHN adds: This is a very serious matter. The sad reality is that the Democrats have succeeded in appointing a substantial number of far-left activist judges to the federal courts, and a handful of Republican appointees have joined them. The idea that any judge, let alone a circuit court panel, would endorse the Obama administration’s patent lawlessness in this case is almost unbelievable. It should be a wake-up call for Senate Republicans: they cannot allow the appointment of such out of the mainstream judges to continue.

Wednesday, January 28, 2015

The American middle class didn't get much love From Republicans

Why are Republicans so weirdly hesitant to talk about America's middle class?
 
James Pethokoukis
 
 

The American middle class didn't get much love over the weekend at the Iowa Freedom Summit — at least not directly. The event was the Republican presidential race's de facto kickoff. And if the C-SPAN transcribers got it right, all those potential 2016ers only used the phrase "middle class" nine times during the nine-hour affair. The number gets even lower when you note that Sarah Palin — more performer than serious pol these days — accounted for three of the nine mentions. And it's not a question of language: "Middle income" workers got one measly shout-out, from Chris Christie.
The paucity of "middle" mentions is bizarre. The story of this anemic economic recovery — and really of the entire 2000s — is how poorly America's broad middle has done. Countless news stories and research reports have highlighted the middle class' financial struggles. Clearly, Democrats have gone long on "middle class" for 2016. In his recent State of the Union speech, President Obama coined a new term for his policy agenda: "middle-class economics." And the Center for American Progress, the "ready for Hillary" think tank, recently produced a lengthy report devoted to solutions for middle-class woes.
But weirdly, much of the GOP is reluctant to explicitly target the middle, either with rhetoric or ideas. It's not necessarily that Republicans don't care about the 99 percent. They just think their way is better than the Democrats' way, even if it's less obviously and directly helpful to the middle class. This is the party that believes "a rising tide lifts all boats," that faster economic growth is the best path to shared prosperity. To concede otherwise is to challenge one of the modern party's first principles. Moreover, many think mentioning the "middle class" by name — much less pushing policies to directly help it — smacks of "class warfare" and uses the language of Karl Marx. As Rick Santorum, one GOPer who has actually focused on the middle, has put it, "since when in America do we have classes? Since when in America are people stuck in areas or defined places called a class? That's Marxism talk."
I also hear this a lot: "President Reagan didn't mention the 'middle class,' and he won two landslide elections." That's a valid point, as far as it goes. I looked at seven major Reagan speeches from his 1980 presidential campaign and early presidency and found not one mention of the "middle class" (and just one of "middle-income people.") Then again, the heart of Reaganomics was a giant, across-the-board income tax cut. All income tax rates were cut, and no longer would inflation be allowed to nudge middle-income workers into higher and higher tax brackets. In politics, cash money means never having to say I love you.
But what is the modern GOP offering during a time when a rising tide is leaving too many Americans stuck and stranded? The party's desire to cut business taxes at a time of record corporate profits probably seems off point to many voters (even though workers bear at least a portion of the corporate tax burden.) And cutting the personal income tax rate — even if it boosts GDP growth — won't immediately help the nearly half of Americans who don't pay those taxes.
Of course, the GOP could try to reframe its existing agenda as pro-middle by, you know, just saying it is. Check out this recent Karl Rove op-ed in The Wall Street Journal: "Most important, Republicans should fill the policy vacuum left by Mr. Obama's dead-on-arrival package with a robust, pro-growth reform agenda that focuses on the middle class — one that simplifies the tax code, rolls back onerous regulations, further expands domestic energy production, restrains spending, controls the debt, increases trade, and modernizes entitlements." And that's different than the 2012 Romney agenda how exactly?
Call them what you want: the middle class, middle incomers, working Americans. Maybe GOP wordsmith Frank Luntz can cook up a new phrase. What's more important is for Republicans to recognize (a) upward economic mobility is stalled and the economic gains we do have are going almost exclusively to the top, (b) key forces behind this trend — automation, globalization — aren't going away, and (c) boosting economic growth is necessary but perhaps not sufficient for broadly shared prosperity. Whether it's tax relief for Americans even if they only pay payroll taxes, improving college affordability, or pro-consumer universal health care, the GOP has both political and policy reasons to acknowledge America's struggling you-know-who.

WH Hiding Bowe Bergdahl Charges


January 27, 2015

Obama WH Hiding Bowe Bergdahl Charges - Treason Too?

INVESTOR'S BUSINESS DAILY
Transparency: The administration is said to be hiding for reasons of damage control a report on the soldier we traded five Taliban leaders for. Bowe Bergdahl's lawyers have already been given a charge sheet for desertion.
Both Fox News and now NBC News have reported that Sgt. Bergdahl will be charged with desertion. "I have been told and confirmed by two other sources that his attorney has been given what we call a charge sheet," retired Army Lt. Col. Tony Shaffer, a respected military analyst, told Fox's Bill O'Reilly on Monday. NBC's Jim Miklaszewski quoted senior defense officials on Tuesday as saying charges could be referred within a week.
"A charge sheet is the results of investigation listing out the articles of the Uniform Code of Military Justice that have been violated," Shaffer e xplained. "The key violation is desertion."
Shaffer, an analyst with the London Center for Policy Research, White House Deputy National Security Adviser Ben Rhodes, who played a key role in the cover-up of administration malfeasance in the Benghazi terrorist attack that killed four Americans, has been laboring to keep this information under wraps as long as possible, perhaps to be included later in one of those Friday data dumps the administration is famous for.
We'd be stunned if any other decision were reached, for the uncontestable fact is that Bergdahl walked away from his combat post in 2009 in a time of war, leaving behind his weapon, his gear and his fellow soldiers. At least six soldiers were reported to have been killed in operations looking for him. He was not out for a walk to relieve stress or clear his head.
Bergdahl was believed to have been held by the Haqqani terror network in the tribal area of Pakistan's northwest frontier on the Afghan border. He was picked up in eastern Afghanistan, near the Pakistani border, by a Navy SEAL team as part of a trade involving the return of five top Taliban commanders who'd been held at Guantanamo Bay.
After the trade, the Taliban released a statement attributed to their leader, Mullah Omar, declaring the release of the commanders from Gitmo a "great victory."
It was this trade that told the world that America was now ready to deal with terrorists, putting a price on all our heads. President Obama not only broke America's pledge that we will never negotiate with terrorists. He also broke a law that requires congressional notification of such a trade. Not coincidentally, ransom is now a prime source of income for the Islamic State.
There's another law the president himself may have broken — that of giving material aid and comfort to a terrorist enemy. As pointed out by Allen West, former congressman and Iraq War veteran, Obama recently signed into law the National Defense Authorization Act, which makes it a crime to offer or provide any material support to terrorist groups. It makes no exception as to who and under what circumstances.
"We have a federal statute which makes it a felony to provide material assistance to any terrorist organization," said Fox News judicial analyst Andrew Napolitano in support of West's opinion. "It could be money, maps, professional services, any asset whatsoever, including human assets."
Releasing official charges against Bergdahl for desertion would also indict Obama for illegal activities that benefit terrorism. Shaffer spoke of "a titanic struggle behind the scenes," with the Army trying to do the right thing while the White House worried about the images of a president welcoming the parents of someone now charged with desertion and a terrorists-for-deserter narrative coming out.
But it will come out, and it will be damning.

CB Report: Soaring Deficits & 10Million Mor Uninsured

Political & Economic Analysis

 

What Mainstream Media Missed: New CBO Report Shows Soaring Deficits By 2025

4 Comments
You might have seen the good-news headlines in the media touting the most recent Congressional Budget Office forecast that deficits will shrink over the next two years.
What you didn't see was this: That over the next decade, deficits will soar out of control, totaling $7.6 trillion over that time, and that by 2025 we will be running $1 trillion annual deficits in perpetuity unless something's done.
Even that gloomy assessment, by the way, assumes that Congress does nothing in the intervening years to increase the deficit. Good luck with that.
This is more than just an accounting debate. America's finances are in such bad shape that the CBO expects total public debt to surge from $13 trillion today to $21.6 trillion by 2025, a 66% rise. This, the CBO helpfully points out, is "unsustainable." That means it eventually leads to national insolvency.
How did this problem arise? Spending, of course - especially on entitlements. Outlays for Social Security, health care and interest on the debt will grow sharply in the next decade, pushing up total federal spending from 20.3% of GDP this year to 22.3% in 2025. Revenues, meanwhile, are expected to stay flat at around 18% of GDP, leaving a huge hole in the budget.
As the bipartisan budget watch group the Committee for a Responsible Federal Budget noted in a report, "Ultimately, it will take a significant package of entitlement and tax reforms to truly put the debt on a sustainable path."
That's true, but it will never happen unless we all stop talking about nonsense issues like football's Deflategate and the bogus threat of global warming and address out-of-control spending on entitlements that threaten our children and our children's children with generational bankruptcy.




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January 27, 2015

CBO Now Says 10 Mil Will Lose Employer Health Plans Under ObamaCare

INVESTOR'S BUSINESS DAILY
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Health Reform: The Congressional Budget Office now says ObamaCare will push 10 million off employer-based coverage, a tenfold increase from its initial projection. The "keep your plan" lie just gets bigger and bigger.
The latest CBO report is supposed to be a big win for the Obama administration because the projected costs are 20% below what the CBO first projected in 2010.
But the CBO report also shows that ObamaCare will be far more disruptive to the employer-based insurance market, while being far less effective at cutting the ranks of the uninsured, than promised.
Thanks to ObamaCare, the CBO now expects that 10 million workers will lose their employer-based coverage by 2021.
This finding stands in sharp contrast to earlier CBO projections, which at one point suggested ObamaCare would increase the number of people getting coverage through work, at least in its early years.
The budget office has, in fact, increased the number it says will lose workplace coverage every year since 2011.
The latest CBO finding also thoroughly debunks the many promises ObamaCare backers made when selling the law — about how those with work-based coverage had nothing to worry about.
ObamaCare architect Jonathan Gruber, for example, said the law was specifically designed "to leave those who are happy with their employer-sponsored insurance alone."
Then Washington Post reporter Ezra Klein reassured readers that "for most companies ... there's little reason to expect their behavior will change."
The White House insisted that "respected independent analysts have concluded that the number of Americans who get their health insurance at work will not change in a significant way."
Obama endlessly repeated his iron-clad guarantee that those who liked their plans could keep them.
And those who suggested at the time that employers might take advantage of ObamaCare to offload their health costs onto taxpayers by dumping workers into the government exchanges were told to read those now-discredited CBO reports.
At the same time CBO was upping ObamaCare's impact on work-based insurance, it's been downgrading the impact on the uninsured.
The CBO now says ObamaCare will leave 31 million uninsured after more than a decade, up from its 23 million forecast made in 2011.
Put another way, the CBO promised that ObamaCare would cover 60% of the uninsured.
Now it says the program will cover less than half, despite spending $2 trillion to subsidize premiums and expand Medicaid.
Does anyone really believe that if Obama announced a plan to spend $2 trillion on a program that would leave 31 million uninsured and force 10 million workers off their employer-based insurance, that even Democrats would have voted for it?

Barack Obama, Empire Builder

Barack Obama, Empire Builder

victorhansonJanuary 27, 2015 9:09 am

Not since the 1930s and early 1940s have we seen so many malevolent empires on the rise.

by Victor Davis Hanson // National Review Online  
 

Tuesday, January 27, 2015

Deflationary Spirals

 Deflationary Spirals

Both the European Central Bank and the New England Patriots are battling expectations of deflation.

  
Deflation.
By + More
Here is the question: What do European Central Bank President Mario Draghi and New England Patriots Coach Bill Belichick have in common? Answer: Both are worried about deflationary spirals.
In prices, the dangerous unanchoring of inflation expectations accompanied by the emergence of actual deflation in a number of European countries has led to deflation headlines that have raised the risk of a deflation spiral. In football, the allegation that Belichick-sanctioned, spin-enhancing football deflation occurred during the Patriots’ AFC Championship victory last Sunday has produced deflation headlines in the sports pages. The former problem is far more threatening to the global economy than the latter problem. But until the Feb. 2 Super Bowl game is played, the football deflation spiral issue will receive more front page media attention.
Never mind the sports deflation story; it's comical and engaging, yet it will disappear from the headlines as soon as the Super Bowl is over. In sharp contrast, the financial market deflation story has legs. It has grown as an issue over the past six months, and with the 50 percent collapse in oil prices since late-2014, the much-vaunted stabilizing-inflation-expectations anchor broke down as talk of widespread deflation rose sharply.
[SEE: Political Cartoons on the Economy]
Up until a few months ago, deflation (actual falling prices) was viewed as a boring issue, confined largely to discussions among Keynesian economists. Phrases like “deflation is not a serious threat” and it “won’t spread because inflation expectations are well-anchored” were reminiscent of dismissals of the incipient crisis in mortgage-backed securities during 2006 and early 2007. This view was widely-held among mortgage market participants, including the Fed, until June 2007 when two Bear Stearns hedge funds specializing in mortgage-backed securities failed.
During 2014 and 2015, the same pattern emerged when deflation actually appeared in southern Europe, Japan and the goods sector of the U.S.. Simultaneously, inflation expectations dropped sharply (see figure below) starting in mid-2014 to a degree that made it impossible to argue that inflation expectations were well-anchored. The key to anchored inflation expectations broke down, and prices spiraled downward.
From a mean level over the past five years of around 2.5 percent, U.S. five-year forwards (or expected inflation five years from now, which, outside of financial crisis, is usually a stable magnitude in the U.S.) dropped sharply, by about one standard deviation, to 2.2 percent by late 2014. It fell by another 0.25 percent, or another standard deviation, to about 1.95 percent in the first few weeks of 2015.
150123_deflation
Date from the Federal Reserve Bank of St. Louis
The comic relief provided by football’s deflation spiral mess will disappear after the next Sunday’s Super Bowl, but the dangerous drop in deflation may continue at a more rapid — spiraling — pace. The Fed’s determination to start raising interest rates coupled with the ECB’s ongoing under-reaction to its intensifying deflation problem mean that the financial markets’ deflation problems will intensify.
[SEE: 2014: The Year in Cartoons]
The Jan. 22 ECB announcement that it will purchase $60 billion euros per month for 18 months (a total of $1.2 trillion), impressive as it sounds, represents just a leisurely replacement of the cash it drained from the banks in 2013-2014. In addition, the low yield bonds it is buying are already close substitutes for cash and so will produce only small credit channel effects on the price of assets. As close to the zero-bound interest rate as Europe is indicates that effective quantitative easing must raise inflation expectations in the market for goods and services and induce direct substitution of goods for the newly injected cash from QE. There is, as yet, little evidence of this direct boost in purchases of goods and services in Europe, hence it is likely the "too little too late" moniker will characterize the latest ECB effort during coming weeks.
In light of the key role that a rise in inflation expectations plays in the efficacy of QE at the zero bound, Federal Reserve Chair Janet Yellen needs to take a hard look at the above chart and ask herself if it is still reasonable to assume that inflation expectations are well-anchored. Clearly they are not, and clearly they are not rising. As inflation expectations fall, the rising demand for cash and near-cash will render the Fed’s now passive QE strategy from neutral to contractionary status, especially given the Fed’s continued determination to start raising interest rates at mid-year.

Random Thoughts - Thomas Sowell


January 27, 2015

Random Thoughts

Thomas Sowell

1/27/2015 12:01:00 AM - Thomas Sowell
Random thoughts on the passing scene:Who says President Obama doesn't promote bipartisanship? His complicity in Iran's moving toward nuclear bombs has alarmed some top Senate Democrats enough to get them to join Republicans in opposition to the Obama administration's potentially suicidal foreign policy.
Before the current measles outbreak, measles was once almost wiped out in the United States. But an article in a medical journal more than a decade ago had many parents afraid to have their children vaccinated, for fear that the vaccine causes autism. After scientific studies refuted that claim, the medical journal repudiated the article, and the doctor who wrote it had his license revoked.
If not a single policeman killed a single black individual anywhere in the United States for this entire year, that would not reduce the number of black homicide victims by one percent. When the mobs of protesters declare "Black lives matter," does that mean ALL black lives matter -- or only the less than one percent of black lives lost in conflicts with police?
In politics, never assume that because something is insane, it will not be done. The Holocaust was as insane as it was a moral horror. But it was done. Even after the tide of war turned against Germany and it faced invasion and devastation, Hitler continued to pour scarce resources into the mass killing of people who were no threat.
When someone tries to lay a guilt trip on you for being successful, remember that your guilt is some politician's license to take what you worked for and give it to someone else who is more likely to vote for the politician who plays Santa Claus with your money.
So long as public schools are treated as places that exist to provide guaranteed jobs to members of the teachers' unions, do not be surprised to see American students continuing to score lower on international tests than students in countries that spend a lot less per pupil than we do.
Would you go to a funeral if you knew that your presence would be unwelcome and would just add to the pain of the mourners? Probably not. But New York's mayor Bill de Blasio went to both funerals for the two New York City policemen recently murdered -- and gave speeches. That epitomized what a truly despicable human being he is, even by the low standards of politicians.
Demographic "diversity" is a notion often defended with fervor but seldom with facts.
Few things are more irritating, or more phony, than statements from various organizations about their "privacy policy." What that really means is their invasion of privacy policies -- how much information about you that your bank, hospital or Internet service is going to pass on to other people without your permission.
Somewhere Justice Oliver Wendell Holmes says that the purpose of an education should be to produce a mind that cannot be humbugged. But today our educational system, from kindergarten to the universities, is engaged in the mass production of fashionable humbug -- propaganda rather than education.
Some people see discrimination when schools punish black students more often than white students. But schools punish white students more often than Asian students. Lenders turn down black applicants for loans more often than white applicants -- but they turn down whites more often than Asians. Most statistics on such things omit Asians, rather than spoil a politically correct story.
President Obama may have gained something politically or ideologically by recognizing Cuba, but just what did the United States gain? Like so much that has been done by this administration, the diplomatic recognition of Cuba demonstrates how safe it is to be our enemy, while our policies toward Ukraine and Israel demonstrate how risky it is to be our ally.
Despite radical feminist organizations' frequent bursts of outrage, these same radical feminists' response to the mass capture of school girls by Islamic terrorists in Nigeria, and turning those girls into sex slaves, has been strangely muted. Is this because there is no political mileage or lawsuit settlements to be achieved by expressing outrage at such unconscionable raw savagery in Nigeria?

Monday, January 26, 2015

Iran’s emerging empire

Iran’s emerging empire

Opinion writer January 22
While Iran’s march toward a nuclear bomb has provoked a major clash between the White House and Congress, Iran’s march toward conventional domination of the Arab world has been largely overlooked. In Washington, that is. The Arabs have noticed. And the pro-American ones, the Gulf Arabs in particular, are deeply worried.
This week, Iranian-backed Houthi rebels seized control of the Yemeni government, heretofore pro-American. In September, they overran Sanaa, the capital. On Tuesday, they seized the presidential palace. On Thursday, they forced the president to resign.
Charles Krauthammer writes a weekly political column that runs on Fridays. View Archive
The Houthis have local religious grievances, being Shiites in a majority Sunni land. But they are also agents of Shiite Iran, which arms, trains and advises them. Their slogan — “God is great. Death to America. Death to Israel” — could have been written in Persian.
Why should we care about the coup? First, because we depend on Yemen’s government to support our drone war against another local menace, al-Qaeda in the Arabian Peninsula (AQAP). It’s not clear if we can even maintain our embassy in Yemen, let alone conduct operations against AQAP. And second, because growing Iranian hegemony is a mortal threat to our allies and interests in the entire Middle East.
In Syria, Iran’s power is similarly rising. The mullahs rescued the reeling regime of Bashar al-Assad by sending in weapons, money and Iranian revolutionary guards, as well as by ordering their Lebanese proxy, Hezbollah, to join the fight. They succeeded. The moderate rebels are in disarray, even as Assad lives in de facto coexistence with the Islamic State, which controls a large part of his country.
Iran’s domination of Syria was further illustrated by a strange occurrence last Sunday in the Golan Heights. An Israeli helicopter attacked a convoy on the Syrian side of the armistice line. Those killed were not Syrian, however, but five Hezbollah fighters from Lebanon and several Iranian officials, including a brigadier general.
What were they doing in the Syrian Golan Heights? Giving “crucial advice,” announced the Iranian government. On what? Well, three days earlier, Hezbollah’s leader had threatened an attack on Israel’s Galilee. Tehran appears to be using its control of Syria and Hezbollah to create its very own front against Israel.
The Israelis can defeat any conventional attack. Not so the very rich, very weak Gulf Arabs. To the north and west, they see Iran creating a satellite “Shiite Crescent” stretching to the Mediterranean and consisting of Iraq, Syria and Lebanon. To their south and west, they see Iran gaining proxy control of Yemen. And they are caught in the pincer.
The Saudis are fighting back the only way they can — with massive production of oil at a time of oversupply and collapsing prices, placing enormous economic pressure on Iran. It needs $136 oil to maintain its budget. The price today is below $50.
Yet the Obama administration appears to be ready to acquiesce to the new reality of Iranian domination of Syria. It has told the New York Times that it is essentially abandoning its proclaimed goal of removing Assad.
For the Saudis and the other Gulf Arabs, this is a nightmare. They’re engaged in a titanic regional struggle with Iran. And they are losing — losing Yemen, losing Lebanon, losing Syria and watching post-U.S.-withdrawal Iraq come under increasing Iranian domination.
The nightmare would be hugely compounded by Iran going nuclear. The Saudis were already stupefied that Washington conducted secret negotiations with Tehran behind their backs. And they can see where the current talks are headed — legitimizing Iran as a threshold nuclear state.
Which makes all the more incomprehensible President Obama’s fierce opposition to Congress’ offer to strengthen the American negotiating hand by passing sanctions to be triggered if Iran fails to agree to give up its nuclear program. After all, that was the understanding Obama gave Congress when he began these last-ditch negotiations in the first place.
Why are you parroting Tehran’s talking points, Mr. President? asks Democratic Sen. Bob Menendez. Indeed, why are we endorsing Iran’s claim that sanctions relief is the new norm? Obama assured the nation that sanctions relief was but a temporary concession to give last-minute, time-limited negotiations a chance.
Twice the deadline has come. Twice no new sanctions, just unconditional negotiating extensions.
Our regional allies — Saudi Arabia, the other five Gulf states, Jordan, Egypt and Israel — are deeply worried. Tehran is visibly on the march on the ground and openly on the march to nuclear status. And their one great ally, their strategic anchor for two generations, is acquiescing to both.

Prime Minister Netanyahu to address a joint session of Congress


Amb. Dermer speaks

The Obama administration is throwing a hissy fit over the invitation extended by Speaker Boehner to Prime Minister Netanyahu to address a joint session of Congress over the threat posed by Iran. Given the existential nature of the threat posed by Iran to Israel, one might have entertained hopes that the Obama administration would behave otherwise, but those hopes would have been foolish.
Last night Israeli Ambassador to the United States Ron Dermer addressed the gala dinner convened on behalf of Israel bonds in Boca Raton, Florida. Ambassador Dermer spoke to the current controversy as follows:
[Dermer] argued [that] it is Netanyahu’s “sacred duty” to speak up in Congress against a possible agreement with Iran which “could endanger the very existence of the State of Israel.”
“The Prime Minister’s visit here is not intended to show any disrespect for President Obama,” he continued. “Israel deeply appreciates the strong support we have received from President Obama in many areas – the enhanced security cooperation, heightened intelligence sharing, generous military assistance and iron dome funding, and opposition to anti-Israel initiatives at the United Nations.”
“The Prime Minister’s visit is also not intended to wade into your political debate. Israel deeply appreciates the strong bipartisan support we enjoy in the American Congress — where Democrats and Republicans come together to support Israel – just as Israel appreciates the wide and deep support that it enjoys among the American people,” added Dermer.
Rather, Dermer said, “the Prime Minister’s visit to Washington is intended for one purpose — and one purpose only. To speak up while there is still time to speak up. To speak up when there is still time to make a difference.”
“There may be some people who believe that the Prime Minister of Israel should have declined an invitation to speak before the most powerful parliament in the world on an issue that concerns the future and survival of Israel. But we have learned from our history that the world becomes a more dangerous place for the Jewish people when the Jewish people are silent,” he asserted. “And if was important for the Prime Minister to speak out in Paris about anti-Semitism and the threat from militant Islam, it is even more important for him to speak out in Washington DC about the dangers of a nuclear Iran. The agreement that is being discussed today is not an agreement that would dismantle Iran’s nuclear weapons capability, but rather one that could leave Iran as a nuclear threshold state. That is an agreement that could endanger the very existence of the State of Israel.”
“That is why the Prime Minister feels the deepest moral obligation to appear before the Congress to speak about an existential issue facing the one and only Jewish state, ” the Israeli ambassador continued.
“Th[at] is not just the right of the Prime Minister of Israel. It is his most sacred duty — to do whatever he can to prevent Iran from ever developing nuclear weapons that can be aimed at Israel.”
Dermer concluded his remarks by stating, “The Jewish people are a people who have survived all the evil that history has thrown at us. And we will survive the evil that we face today. But we will not do it by bowing our heads and by hoping that the storm will pass. We will do it by standing tall and by confronting the storm with faith and courage.”
Ambassador Dermer has posted the full text of his remarks on Facebook here. The video below excerpts Ambassador Dermer’s remarks speaking to the threat posed by Iran in the context of the current controversy.

2014 Was One of the 3% Coldest Years in the Last 10,000

2014 Was One of the 3% Coldest Years in the Last 10,000

Climate alarmists play a number of tricks to try to make their catastrophic anthropogenic global warming theory seem plausible. One of the most important is that they focus on a ridiculously short period of time, beginning either in the late 19th century or at the beginning of the 20th. This is, of course, not even the blink of an eye in geologic time. Given that the Earth began emerging from the Little Ice Age in the mid to late 19th Century, it is hardly surprising–and a very good thing–that from then until now, temperatures have tended to rise.
Alarmists shriek that 2014 was the warmest year ever! But that claim is absurd if put in the context of the Earth’s recent history. As Dr. Tim Ball writes:
In fact, 2014 was among the coldest 3 percent of years of the last 10,000, but that doesn’t suit the political agenda.
This chart shows Northern Hemisphere temperature changes over the last 10,000 years, based on ice core data. Dr. Ball explains: “The red line, added to the original diagram, imposes the approximate 20th century temperatures (right side) against those of the last 10,000 years.”
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If the Earth continues to be warm, temperatures will be more nearly aligned with what they have generally been over the last 10,000 years.
There are many other problems with global warming alarmism, of course, and Dr. Ball touches on several of them. For one, the quality of the surface temperature record is terrible, nowhere near good enough to support the alarmists’ claims of precision. For another, the surface temperature record has been corrupted. The records are maintained by alarmist organizations, which have repeatedly “adjusted” historical data to make the past look cooler and the present warmer. This is one of many examples; it relates to New Zealand, where historical temperature records have been “adjusted” by the National Institute of Water and Atmospheric Research:
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Typically these adjustments are carried out surreptitiously, and only come to light when someone comes across contemporaneous temperature records from, say, the 1930s, and finds that the temperatures reported at the time are different from the ones now claimed by the same agencies. If you are willing to spend many billions of dollars, as the world’s governments are, you can buy a lot of rewriting of history.
So next time one of your liberal friends tells you that 2014 was the hottest year on record, and therefore we must turn what is left of our economy over to the Obama administration, you can tell him that actually, 2014 was one of the 3% coldest years of the last 10,000.


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When Climate Heretics Speak. . .

. . . They usually mop the floor with the climatistas. That’s one reason why the climate campaign has resorted to rank conformism and outright bullying.
Matt Ridley offered his observations about the state of things in an article in the London Times a few days ago entitled “My Life as A Climate Lukewarmer.”
I am a climate lukewarmer. That means I think recent global warming is real, mostly man-made and will continue but I no longer think it is likely to be dangerous and I think its slow and erratic progress so far is what we should expect in the future. That last year was the warmest yet, in some data sets, but only by a smidgen more than 2005, is precisely in line with such lukewarm thinking.
This view annoys some sceptics who think all climate change is natural or imaginary, but it is even more infuriating to most publicly funded scientists and politicians, who insist climate change is a big risk. My middle-of-the-road position is considered not just wrong, but disgraceful, shameful, verging on scandalous. I am subjected to torrents of online abuse for holding it, very little of it from sceptics.
I was even kept off the shortlist for a part-time, unpaid public-sector appointment in a field unrelated to climate because of having this view, or so the headhunter thought. In the climate debate, paying obeisance to climate scaremongering is about as mandatory for a public appointment, or public funding, as being a Protestant was in 18th-century England.
Kind friends send me news almost weekly of whole blog posts devoted to nothing but analysing my intellectual and personal inadequacies, always in relation to my views on climate. Writing about climate change is a small part of my life but, to judge by some of the stuff that gets written about me, writing about me is a large part of the life of some of the more obsessive climate commentators. It’s all a bit strange.
Freeman Dyson
Freeman Dyson
There’s more; definitely worth reading the whole thing. Equally interesting is a back and forth exchange of public letters between the London Independent’s science editor, Steve Connor, and the legendary Princeton physicist Freeman Dyson, who has become one of the leading climate skeptics, much to the supreme annoyance of the climatistas. Because of Dyson’s eminence in science, he can’t be attacked or dismissed for supposedly bad motives or other low causes. Connor tries to corner him semi-politely, but Dyson won’t fall for it.
A few samples:
From: Freeman Dyson
To: Steve Connor
. . . The whole point of this discussion is that I am interested in a far wider range of questions, while you are trying to keep us talking about narrow technical questions that I consider unimportant.
You ask me where the extra trapped heat has gone, but I do not agree with the models that say the extra trapped heat exists. I cannot answer your question because I disagree with your assumptions.
From: Steve Connor
To: Freeman Dyson
Sorry you feel that way, I hope we can get back on track. I was only trying to find out where your problem lies with respect to the scientific consensus on global warming.
Connor’s use of “your problem” is very telling here, like an elementary school teacher correcting the math mistakes of an 8th grader. Anyway:
From: Freeman Dyson
To: Steve Connor
. . . The most I expect is that you might listen to what I am saying. I am saying that all predictions concerning climate are highly uncertain. On the other hand, the remedies proposed by the experts are enormously costly and damaging, especially to China and other developing countries. On a smaller scale, we have seen great harm done to poor people around the world by the conversion of maize from a food crop to an energy crop. This harm resulted directly from the political alliance between American farmers and global-warming politicians. Unfortunately the global warming hysteria, as I see it, is driven by politics more than by science. If it happens that I am wrong and the climate experts are right, it is still true that the remedies are far worse than the disease that they claim to cure.
I wish that The Independent would live up to its name and present a less one-sided view of the issues.
Boom!