Quotes
"Fascism and communism both promise "social welfare," "social justice," and "fairness" to justify authoritarian means and extensive arbitrary and discretionary governmental powers." - F. A. Hayek"
"Life is a Bungling process and in no way educational." in James M. Cain
Jean Giraudoux who first said, “Only the mediocre are always at their best.”
If you have ten thousand regulations, you destroy all respect for the law. Sir Winston Churchill
"summum ius summa iniuria" ("More laws, more injustice.") Cicero
As Christopher Hitchens once put it, “The essence of tyranny is not iron law; it is capricious law.”
"Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it." Ronald Reagan
"Law is where you buy it." Raymond Chandler
"Why did God make so many damn fools and Democrats?" Clarence Day
"If I feel like feeding squirrels to the nuts, this is the place for it." - Cluny Brown
"Oh, pshaw! When yu' can't have what you choose, yu' just choose what you have." Owen Wister "The Virginian"
Oscar Wilde said about the death scene in Little Nell, you would have to have a heart of stone not to laugh.
Thomas More's definition of government as "a conspiracy of rich men procuring their own commodities under the name and title of a commonwealth.” ~ Winston S. Churchill, A History of the English Speaking Peoples
“Laws are like cobwebs, which may catch small flies, but let wasps and hornets break through.” ~ Jonathon Swift
Monday, January 31, 2011
Much like Carter, Obama will go down in history as the president who lost Egypt
The street revolts in Tunisia and Egypt show that the United States can do very little to save its friends from the wrath of their citizens.
By Aluf BennJimmy Carter will go down in American history as "the president who lost Iran," which during his term went from being a major strategic ally of the United States to being the revolutionary Islamic Republic. Barack Obama will be remembered as the president who "lost" Turkey, Lebanon and Egypt, and during whose tenure America's alliances in the Middle East crumbled.
The superficial circumstances are similar. In both cases, a United States in financial crisis and after failed wars loses global influence under a leftist president whose good intentions are interpreted abroad as expressions of weakness. The results are reflected in the fall of regimes that were dependent on their relationship with Washington for survival, or in a change in their orientation, as with Ankara.
America's general weakness clearly affects its friends. But unlike Carter, who preached human rights even when it hurt allies, Obama sat on the fence and exercised caution. He neither embraced despised leaders nor evangelized for political freedom, for fear of undermining stability.
Obama began his presidency with trips to Turkey, Egypt and Saudi Arabia, and in speeches in Ankara and Cairo tried to forge new ties between the United States and the Muslim world. His message to Muslims was "I am one of you," and he backed it by quoting from the Koran. President Hosni Mubarak did not join him on the stage at Cairo University, and Obama did not mention his host. But he did not imitate his hated predecessor, President George W. Bush, with blunt calls for democracy and freedom.
Obama apparently believed the main problem of the Middle East was the Israeli occupation, and focused his policy on demanding the suspension of construction in the settlements and on the abortive attempt to renew the peace talks. That failure led him to back off from the peace process in favor of concentrating on heading off an Israeli-Iranian war.
Americans debated constantly the question of whether Obama cut his policy to fit the circumstances or aimed at the wrong targets. The absence of human rights issues from U.S. policy vis-a-vis Arab states drew harsh criticism; he was accused of ignoring the zeitgeist and clinging to old, rotten leaders. In the past few months many opinion pieces have appeared in the Western press asserting that the days of Mubarak's regime are numbered and calling on Obama to reach out to the opposition in Egypt. There was a sense that the U.S. foreign policy establishment was shaking off its long-term protege in Cairo, while the administration lagged behind the columnists and commentators.
The administration faced a dilemma. One can guess that Obama himself identified with the demonstrators, not the aging dictator. But a superpower isn't the civil rights movement. If it abandons its allies the moment they flounder, who would trust it tomorrow? That's why Obama rallied to Mubarak's side until Friday, when the force of the protests bested his regime.
The street revolts in Tunisia and Egypt showed that the United States can do very little to save its friends from the wrath of their citizens. Now Obama will come under fire for not getting close to the Egyptian opposition leaders soon enough and not demanding that Mubarak release his opponents from jail. He will be accused of not pushing Prime Minister Benjamin Netanyahu hard enough to stop the settlements and thus indirectly quell the rising tides of anger in the Muslim world. But that's a case of 20:20 hindsight. There's no guarantee that the Egyptian or Tunisian masses would have been willing to live in a repressive regime even if construction in Ariel was halted or a few opposition figures were released from jail.
Now Obama will try to hunker down until the winds of revolt die out, and then forge ties with the new leaders in the region. It cannot be assumed that Mubarak's successors will be clones of Iran's leaders, bent on pursuing a radical anti-American policy. Perhaps they will emulate Turkey's prime minister, Recep Tayyip Erdogan, who navigates among the blocs and superpowers without giving up his country's membership in NATO and its defense ties with the United States. Erdogan obtained a good deal for Turkey, which benefits from political stability and economic growth without being in anyone's pocket. It could work for Egypt, too.
The Left (redundant) Media's Boogeyman - Silicon Graffiti: How America's Paranoid Press Steers the Coverage - PJTV Report
Obama and his administration are clueless: Innovation doesn't emanate from government; it begins with productive individuals matched with capital
... the president uniquely presented an overall strategy for the country, not unlike a SWOT strategy (strengths, weaknesses, opportunities, threats) used in corporate planning. More the strategy was intertwined in a vision for the U.S.--a vision of leadership through innovation. As I've argued in my recent book The Comeback: How Innovation Will Restore the American Dream, to reassert America's economic leadership in the world Washington must place innovation at the center of U.S. domestic policy.
Which is why it was odd to hear the president refer to today's "Sputnik moment" and call for increased government funding of research and technology initiatives. It's almost as if nothing has happened innovation-wise between 1969 when Neil Armstrong walked on the moon and Tuesday's speech.
... But it's not so much the label that should bother businesses, but rather the choose-a-winner assumption behind the president's innovation agenda. At the beginning of his speech the president rightly noted that "none of us can predict with certainty what the next big industry will be, or where the new jobs will come from." This is precisely why the government shouldn't be deciding which industry or company to reward with taxpayer dollars.
[read article at the above link]
Mummies in Egypt's national museum destroyed by looters trying to steal treasures of King Tutankhamun
Britons trapped in the country were told by the Foreign Office yesterday to stay clear of the nationwide violence and abide by a 4pm curfew ordered by President Hosni Mubarak.
The British Government also advised against all non-essential travel to Cairo, Luxor, Alexandria and Suez as all flights from the UK to Egypt were cancelled.
One BMI flight en route to Cairo from London was turned around at 30,000ft as the situation worsened yesterday.
British Airways chartered an extra aircraft to rescue stranded tourists from Cairo as its airport witnessed chaotic scenes, with tourists desperately trying to flee the violence.
Yesterday mummies in the country's national museum were destroyed by looters attempting to steal the treasures of King Tutankhamun.
Soldiers were positioned at the Pyramids and Cairo’s Egyptian Museum – the holding place for Tutankhamun’s priceless golden mask and other artifacts – on the fifth day of anti-government demonstrations in the country’s capital.
The military deployment came amid an almost complete collapse of law and order, with the violence escalating outside the capital. Residents in Alexandria, north-west of Cairo, were forced to stand guard outside their homes armed with sticks as gangs rampaged through the city.
The death toll was estimated to have reached 74 yesterday, with at least 48 of those being killed since Friday and 2,000 people suffering injuries.
President Mubarak also gave the first indication of a succession plan when he announced that his intelligence chief, Omar Suleiman, had been appointed his deputy, a position last filled by the president himself 30 years ago.
The latest wave of violence has been most notable for the widespread looting, indicative of the scale of the breakdown in law and order.
Read more: http://www.dailymail.co.uk/news/article-1351826/Egypt-protests-U-S-advises-Americans-leave-30-000-Brits-stranded.html#ixzz1Cd90pbL1
Constant Concession from American Left and the Crisis in Egypt
Sunday, January 30, 2011
Anwar Ibrahim and the Muslim Brotherhood
Egypt and the Muslim Brotherhood are dominating world news. The Ikhwan’s influence apparatus is vast and it’s deceiving U.S. politicians.
A blog called Malaysia Watcher, has a prime example in Malaysian opposition leaderANWAR IBRAHIM AND THE MUSLIM BROTHERHOOD: A Picture is Worth a Thousand Words:
Anwar Ibrahim is a far cry from the “voice of democracy” he’d like you think he is. Nor is he the “moderate” Muslim he has persuaded some in America to see him as, with friends like Al Gore and Paul Wolfowitz. In fact, if a picture is worth a thousand words, take a look at the ones we have here: they harken back twenty years, and show Anwar in the company of a man branded by many counter-terrorism experts as a one-time inspiration to Osama bin Laden and Al Qaeda!
That man is Yusuf al-Qaradawi.
Qaradawi, whom the American Jewish Committee has called “a radical Muslim Brotherhood Ideologue” with “xenophobic and anti-Semitic views”, has beenlinked to Al Qaeda and Osama Bin Laden through the Bank Al-Taqwa, where he is a principal shareholder and former Sharia advisor . His decades-long leadership role (he has twice been offered a chairmanship and admits that the Brotherhood considers him “their Mufti”) within the Muslim Brotherhood may also indicate a further link to Al Qaeda, as the Brotherhood served as a springboard for Al Qaeda devotees like Ayman Al-Zawahiri and Khalid Sheik Mohammed.
The Brotherhood, also known as the Ikwhan, was founded in Egypt in 1928 by an Egyptian schoolteacher named Hassan al-Banna, whom Qaradawi cites as a key figure in his own religious and intellectual development. Dedicated to the supremacy of Islam and Sharia law, the Brotherhood’s motto from its earliest day is chilling to Western ears: “Allah our objective; the Quran our constitution; the Prophet our leader; Jihad our way; and death for the sake of Allah the highest of our aspirations.”
The Brotherhood was banned in Egypt decades ago, but going underground, and being forced to create and engage front groups did not slow its evolution. Today the Brotherhood comprises a global network of Islamist extremists that has spawned such groups as al-Jihad and al-Gama’at al-Islamiyya in Egypt, Hamas, and mujahideen groups in Afghanistan. Though the Brotherhood often claims to be made up of moderates, it is in reality one of the largest, most influential anti-Semitic, Islamist terrorist groups in the world. Qaradawi now serves as the organization’s spiritual leader, issuing fatwas that legitimize and encourage the most controversial Brotherhood methods and ideas, including suicide bombing, the death penalty for homosexuality, and the rightness of the Holocaust.
Qaradawi tries to masquerade as a moderate Muslim, but his outspoken views mark him as the most dangerous kind of radical;and here he is with Anwar Ibrahim, another so-called moderate:
But this is not the only evidence that Malaysia’s Opposition Leader is no moderate Muslim. In fact Anwar seems positively proud of his association with Qaradawi. As recently as 2005, his website featured a picture of him with Yusuf al-Qaradawi, one of the most important leaders of the Muslim Brotherhood and in many ways its spiritual father. (The photo has since been removed, Anwar having apparently realized how unwise it was to display it.)
There is more, but it should be noted, as Malaysia Watcher does, that the twice convicted (once reversed) Anwar Ibrahim was given prime space in the op-ed section of the Wall Street Journal last week to lecture Americans and American politicians. Claire Berlinski took note and responded in, With Friends Like This, Egypt Doesn’t Need Enemies.
…
I don’t believe this is an Islamist uprising. I believe it is a genuinely democratic uprising. But Egyptian civil society is fragile and the Muslim Brotherhood is strong, well-organized, and well-financed. Were it to take power, there is every reason to believe it would make those very Egyptians for whom my heart aches long for Mubarak. The Muslim Brotherhood does not envision for Egypt a tolerant, pluralistic modern democracy: It envisions a theocracy. I have made this case at length and I stand by it.
This is why my heart sank when I saw this op-ed by about Egypt by Anwar Ibrahim in the Wall Street Journal:
The problems that plague the Arab world remain overwhelming: the concentration of wealth and power by the few over the many, poor infrastructure, primitive education systems, minimal health care, and decreasing incomes in the face of rising food prices and cost of living. Corruption and nepotism reign in the complete absence of accountability and transparency.
It is a perfect recipe for political upheaval: political marginalization and economic impoverishment for the people and ill-gotten wealth for the ruling elite. It’s a reality that can’t be cloaked by propaganda—citizens can see the reality on YouTube and Facebook—though the leaders certainly try. Indeed, no Arab leader has owned up to any of these evils, other than by offering pious platitudes about improving the economic lot of their people. …
And he’s right! He’s right! What man of conscience could read this without nodding?
Except for one thing. Anwar is a textbook exemplar of Islamism 2.0, an anti-Semitic Muslim Brotherhood loyalist (no doubt about that) who has come to appreciate that the word “democracy” is his friend and that no one in the West will be that curious about what he truly believes or the company he keeps so long as he liberally uses the magic word “moderate.”
I’ve written about this before. Among his other Islamist achievements, Anwar co-founded the IIIT, a Muslim Brotherhood front organization in the United Stateswhose members have been arrested on terrorism charges. It publishes obscene Islamist propaganda, and has been implicated very credibly as a financier of terrorism:
There is more evidence of IIIT’s links to terrorism. A few examples: according to court documents, in the early 1990s IIIT donated at least $50,000 to a think tank run by Sami al-Arian, the World Islamic and Study Enterprise (WISE), that served as a front group for Palestinian Islamic Jihad. IIIT is also named as a defendant in two class-action lawsuits brought by victims of the 9/11 attacks. One alleges that IIIT received the bulk of its operating expenses from the SAAR network, whose component groups are accused in another class-action suit of being “fronts for the sponsor of al Qaeda and international terror.”
In 2006, lecturing in Washington DC, Anwar noted (not at all for the first time) that he was most influenced by the writings of “Syed Qutb, Hassan Al Banna, and Maududi.” Those names will be familiar to Ricochet’s readers: You’ll know what they stand for, and it’s surely not democracy. To the extent that such ideologues embrace democracy, it is not democracy for its own sake–it’s democracy as a streetcar to sharia. In Malaysia, Anwar’s party has formed an electoral alliance with the PAS, the party that calls for the strict imposition of sharia law. And he is positively proud of his association with Yusuf al-Qaradawi.
Anwar continues:
The bogeyman of Islamism, the oft-cited scapegoat of Middle Eastern dictators to justify their tyranny, must therefore be reconsidered or junked altogether. The U.S., too, should learn a lesson about the myth that secular tyrants and dictators are its best bet against Islamists. Revolutions, be they secular or religious, are born of a universal desire for autonomy. The common thread that binds the Iranian revolution and the Tunisian upheaval is the rising discontent of the people after years of suffering under oppressive rule.
Anwar is the bogeyman of Islamism: It’s a self-refuting statement. One of the most sinister aspects of Islamism today is that it has learned to exploit democracy, or at least the rhetoric of democracy, and it has learned to exploit the way the West pays no attention to the details.
Tunisia is falling to sharia and wants to form its own Hizbollah. Lebanon is falling to terrorist group Hizbollah. ‘Palestine’ is already in the grips of the Muslim Brotherhood via terrorist Hamas, and there are reports of escaped Brotherhood prisoners fleeing Egypt for Gaza. In Jordan, the Muslim Brotherhood has stated “Arabs will topple leaders allied with the United States.” What does that mean for non-Arab Muslims? And the potential for the Muslim Brotherhood to take control in Egypt looms.
Despite naive Western hopes for “democracy” in the Middle East, the names may change, but the story will remain much the same if Islamist groups like the Muslim Brotherhood gain control. None of this bodes well for the security of the United States – where the Muslim Brotherhood has already infiltrated all aspects of government. Stay tuned.
Thanks to Creeping Sharia
Egypt in perspective - Ricochet Podcast Special Edition: Claire Berlinski and Judith Levy - Ricochet.com
In this special edition of the Ricochet Podcast, Claire Berlinski in Istanbul and Judith Levy in Israel, discuss unfolding events in the Middle East and take questions from Ricochet members and Twitter.
The direct link to listen to this podcast is here or download it through iTunes here.
Our regular weekly podcast is here.
Kennedyitis - Sizzle, no Steak- And it will cost $ - In the U.S., 3 trillion is written as the number "3" followed by 12 zeros ($3,000,000,000,000).
Kennedy was witty, erudite, and delivered wonderful speeches. He was lacking in political acumen and a novice against the hard nosed Soviets. He failed almost immediately with the bay of pigs. The Soviets, under Khrushchev, considered him week and inexperienced. They were able to build the Berlin Wall and, in reality, got our ICBM's out of Turkey in exchange for our promise not to invade or cause invasions in Cuba. The Soviets did have to remove their nuclear missiles from Cuba. The 'Missile Crisis' was a classic Communist dialectic, two steps forward, one step backward. Net, one step forward.
‘This is our generation’s Sputnik moment,” President Obama declared in his State of the Union address. It was the first of several references — some oblique, some direct — to the Kennedy presidency. He issued a “challenge” to America’s scientists and engineers, offering to fund an “Apollo” project for clean energy. Echoing Kennedy’s iconic 1961 call to put a man on the moon “by the end of this decade,” Obama set the year 2035 as the date by which America should obtain 80 percent of its power from clean-energy sources. By 2015, he proclaimed, America should have a million electric cars on the road. Within 25 years, he declared, 80 percent of Americans should have access to high-speed rail.
“We do big things,” said the president. ---[Including make big mistkes in presidential elections.]
For some Americans, weaned on black-and-white images of John F. Kennedy’s romantic, soaring speeches, the presidency isn’t an executive’s job — it’s a knight-errant’s. President Obama, who was born three months after Kennedy’s moon-shot address, seems to have a particularly bad case of Kennedyitis. Challenges, quests, “winning the future” — all cast the president as the prophet who leads the nation toward a glorious destiny. [Kennedy delivered Sorensen's speaches beautifully.]
President Obama has budgeted $635 billion for Obamacare over the next decade. Even those not given to panic, like the CBO, estimate that $1.2 trillion is closer to the mark. But even that is probably way too low. The bill doesn’t really kick in until 2014. From 2014 to 2024, the more likely costs will be $2.5 to $3 trillion. That added burden, along with the stimulus and other spending during the two years in which he enjoyed a Democratic House, is the inescapable yoke of Barack Obama’s presidency.
Read the article at the above link.
Saturday, January 29, 2011
Obama swaps Iraq and Afghanistan
Which war?
Obama swaps Iraq and Afghanistan
Obama swapped “Iraq” for “Afghanistan” when he answered a question on YouTube about whether he still believes soldiers need to die in the wars there.
“As I said, we will be out of Afghanistan by the end of this year,” Obama said, a fairly significant misstatement of his administration’s Afghanistan policy, which doesn’t call for a troop withdrawal until 2014. The misstep was picked up by the Future of Capitalism blog.
CAIR’s Ahmed Rehab goes to Egypt to participate in protests
Is Shirley MacLaine his new Czar? Obama’s recent ideological makeover is the story that he is modeling his presidency on Ronald Reagan’s-
One of the least credible tales to come out of President Obama’s recent ideological makeover is the story that he is modeling his presidency onRonald Reagan’s. Time Magazine asserted this week that “there is no mistaking Obama‘s increasing reliance on [Mr. Reagan’s] career as a helpful template for his own.” Just to keep this preposterous public relations ploy in perspective, we have compiled a handy list to remind people how little these two men have in common:
Reagan: Fostered national pride in the military.
Obama: Fostered gay pride in the military.
Reagan: We begin bombing in five minutes.
Obama: We begin golfing in five minutes.
Reagan: Made big government a bad word.
Obama: Made big government a bad dream.
Bet they wished they could do it to private guns and Kindle Books too! Zombie internet 'kill switch' bill back to haunt the Senate
Reminding free speech advocates and libertarians that bad bills are like zombies in DC, the “internet kill switch” will be revived in the Senate. Still sponsored by Maine Sen. Collins and Sen. Lieberman, the Sen. Snowe supported bill has been revised and will presented once more.
Cnet reports on the “improved” bill. But first we need a bit of history.
"A draft Senate proposal that CNET obtained in August 2009 authorized the White House to "declare a cybersecurity emergency," and another from Sens. Jay Rockefeller (D-W.V.) and Olympia Snowe (R-Maine) would have explicitly given the government the power to "order the disconnection" of certain networks or Web sites. House Democrats have taken a similar approach in their own proposals.”
As The Hill pointed out when this idea was first proposed. Those in support of the bill bawk at calling it a “kill switch” and think its merely a clarification.
“At the heart of the issue is whether the president already has the authority to intervene in private-sector networks in the event of such an emergency. Collins and other supporters of the bill contend the president has had that authority for some time under a little-known provision of the Communications Act passed one month after the December 1941 Japanese attack on Pearl Harbor."
Some might question this wisdom of the timing of such an idea considering the fact that Egypt has just shut off the internet (and mobile phones) in order to aid in their crackdown on street protests. Tea party and other activists will see this as hint of what could happen here with an over-zealous President. HuffPo reports the following.
“Internet and cell-phone services were disrupted across Egypt starting overnight and throughout the day as authorities used extreme measures to hamper protesters from organizing the mass rallies called after Friday prayers.“...
What should be most concerning is that this “kill switch” is being proposed and is backed by two Republican Senators. No doubt freedom and liberty activists country-wide will be melting the phones when this hits the Senate floor again.
Read more at the Washington Examiner: http://washingtonexaminer.com/blogs/opinion-zone/2011/01/zombie-internet-kill-switch-bill-back-haunt-senate?sms_ss=blogger&at_xt=4d4422ccfecb0363%2C0#ixzz1CRiBOdL7Friday, January 28, 2011
A Welcome Omission
GET A LIFE!!! - Chinese descent lawmakers demand Limbaugh apology
During a Jan. 19 radio program, Limbaugh said there was no translation of the Chinese president's speech during a visit to the White House.
"He was speaking and they weren't translating," Limbaugh said. "They normally translate every couple of words. Hu Jintao was just going ching chong, ching chong cha."
He then launched into a 20-second-long imitation of the Chinese leader's dialect.
The next day, Limbaugh said he "did a remarkable job" of imitating China's president for someone who doesn't know a language spoken by more than 1 billion people.
"Back in the old days, Sid Caesar, for those of you old enough to remember, was called a comic genius for impersonating foreign languages that he couldn't speak," Limbaugh said. "But today the left says that was racism; it was bigotry; it was insulting. And it wasn't. It was a service."
Fool from South of the Rappahannock, Virginia's Rep. Jim Moran -- beyond uncivil
Rep. Jim Moran (D-Va.) has been roundly criticized in the past for his noxious comments about Jews and Israel. On an al-Hurra broadcast last night, he surpassed himself in calling much of the country a bunch of racists.
The Republican victories in the midterm elections, he said:
happened for the same reason the Civil War happened in the United States. It happened because the Southern states, the slaveholding states, didn't want to see a president who was opposed to slavery. In this case, I believe, a lot of people in the United States don't want to be governed by an African-American, particularly one who is liberal, who wants to spend money and who wants to reach out to include everyone in our society.
I am not going to try to unravel that obnoxious sentiment, or the political wisdom of calling his own state (which elected three Republican congressmen in November) racist. But, once again, this is a perfect time for the Democrats to police one of their own. Will they? What about the liberal pundits? I'm waiting.
I asked for comment from the offices of Democratic Sens. Jim Webb and Mark Warner and from Democratic Rep. Gerry Connolly. So far, none of these colleagues from Virginia, one of the former "slaveholding states," have responded.
Thursday, January 27, 2011
We Should Sue him for the feeling he gives us in our Pit -Kucinich sues over olive pit in sandwich -
WASHINGTON – Rep. Dennis Kucinich of Ohio is suing a congressional cafeteria for dental damage he says he suffered after biting into an olive pit in a sandwich wrap he bought there.
Kucinich's attorney, Andrew Young, declined to comment Wednesday on the lawsuit seeking $150,000 in damages from companies involved with the Longworth House Office Building cafeteria. A spokesman in Kucinich's congressional office also declined to comment.
The civil suit filed earlier this month in the Superior Court of the District of Columbia said the wrap "contained dangerous substances, namely an olive pit," that a consumer would not reasonably expect to find in the product served. The suit said that Kucinich suffered "serious and permanent" dental and oral injuries requiring multiple surgical and dental procedures.
Kucinich's lawsuit said the Ohio Democrat bought the sandwich on or about April 17, 2008. He is seeking damages for "past and future medical and dental expenses, compensation for pain, suffering and loss of enjoyment and other damages."
The liberal congressman made an unsuccessful bid for the 2008 Democratic presidential nomination.
Wednesday, January 26, 2011
Public Unions Took Taxpayers Hostage - Taxpayers Lose Most When Munis Fluctuate
How Public Unions Took Taxpayers Hostage
Near panic in the market for municipal bonds has prompted talk of a coming Armageddon in state and local finance, with predictions of major bankruptcies and even a proposal to allow states, whose debt has been a safe haven for many investors for decades, to seek the protection of Chapter 9.
But the real losers in this game will not be traditional muni investors. That's because most big municipal issuers in America, despite their budget woes, do not face an imminent liquidity crisis of the sort that is likely to prompt massive defaults. Instead, these issuers have built up significant long-term obligations that legislators are now under increasing pressure (including pressure from the market) to deal with after having ignored them for years. The result is likely to be what I call the Illinois solution: some service cuts, moderate concessions from unions and big tax increases which politicians will justify in part by saying, ‘the market made me do it.'...
So far, at least one governor, Chris Christie, is trying to deal with both his state's long-term obligations and its short term deficit without raising taxes. It's a worthwhile effort. But New Jersey's politicians (and voters) have dug themselves such a deep hole that there is also no quick fix. The state still has problems balancing its budget even though it is not making contributions to its pension system, which require another $3 billion a year in revenues that the state doesn't have. Illinois is in similar shape.
Of course, there's always the chance that some unanticipated, ‘black swan' event could prompt a real liquidity crisis, perhaps by further rattling the muni markets and prompting a flight from the debt of those states and municipalities that have been most irresponsible. It is perhaps because Illinois legislators finally saw how jittery the muni market was about their budget that they finally decided to act earlier this month.
But absent any such unanticipated event, the real risk right now is not to bondholders from some massive series of defaults. It is instead to taxpayers who are about to take it on the chin.
[read the full article at the above link]
High-Speed Rail to Perdition
State of the Federal Budget
1-26-11
In his state of the union address, President Obama proposed to build a high-speed rail network reaching 80 percent of Americans within 25 years. But he also proposed to freeze domestic spending for five years. These two goals are incompatible. We can build that rail network, but it will not lead to the economic revival Obama envisions; it will only make it harder to reign in government spending.
More than three-fourths of federal revenues go for just four things: social security, medicare, medicaid, and interest on the national debt. By 2020, those four things will consume more than 90 percent of federal revenues. By 2030, they will consume all of those revenues.
At least, that’s the projection made by a November 15, 2010 report from the Government Accountability Office. It has apparently become news now because the national debt exceeded $14 trillion for the first time on January 20. ...
... Why is social security (and, to a lesser degree, medicare and medicaid) likely to be exempt? If you think AARP is powerful today, just wait until all the baby boomers retire and many of them join. Congress might be able to raise retirement age by a year or two, but it will have a hard time making significant reductions in benefits.
[see above link to article]