It's Still the Economy, Stupid!

So today, we got another slew of economic indicators showing the economy continues to be on the skids.  And you thought 1.8% GDP growth in the first quarter was bad:

• The Dallas Fed Texas Manufacturing Survey index for business activity fell from 10.5 in April to -7.4 in May.  The worst part was that expectations were for a positive 8.5.
• The Chicago Purchasing Managers Index (PMI) Business Barometer fell from 67.6 in April to 56.6 in May, the biggest monthly drop since Lehman went bankrupt.  Once again, this is much worse than expectations of 62.
• S&P/Cash-Shiller Home Price Indices hit a recession low in March.  The National Home Price Index fell 4.2% in the first quarter after falling 3.6% in the fourth.  Nationally, home prices are down to levels not seen since mid-2002.  Also, there is only one metro area seeing positive home price trends, Washington, DC.  Now how is Washington different from all other areas?  Oh yeah, incomes there are more tied to government and government spending than anywhere else. 
  
• The Conference Board Consume Confidence Index also declined more than expected dropping to 60.8 from 66 in April.  Just so you know, this is an index where the value for 1985, the base year, was 100. 
  

And that was just today!  Late last week we had pending home sales, a leading indicator of actual completed sales, which fell 11.6% in April, compared to March and fell 26.5% compared to April 2010.  And spring is supposed to be the busy season for realtors!  Looks like the homebuying tax credit, just like cash for clunkers, did nothing but accelerate the timing of purchases, not actually spur purchases that would not otherwise happen.  Things are getting so bad that even the New York Times is saying something despite the fact that there is nothing the White House would like more than to have everyone ignore the numbers.  The Times even said "no one in Washington is pushing policies to promote stronger growth now".  Not that the Times actually provides any real solutions either.  They suggest easier rules to refinance mortgages backed by Fannie Mae and Freddie Mac.  From what I can tell, the only people having problems refinancing right now are people who either are currently underwater or just can't justify having as high a mortgage as they need with the income they have.  How exactly would the Times like to fix that?  That should be a hoot.  And, of course, the Times wants the Federal Reserve to keep doing what they are doing for as long as possible.  As if the inflationary monetization of the debt and devaluing the dollar which is sending commodities spiraling have been complete victories.  There is no such thing as a free lunch and the longer the Fed maintains its current policies the greater the pain later on.  It wasn't that long ago that Paul Volcker had to increase interest rates to 20% to combat inflation and in an already weak stagflationary economy!

It would be nice if our President could get out of campaign mode and actually think about some pro-growth policies that don't just mean public sector growth.  First, he should cancel Obamacare, which is already increasing costs for most consumers and increasing the cost of hiring new workers thanks to premiums that started to spiral out of control once Obama "reformed" the health insurance market by no longer allowing pre-existing condition exclusions.  Perhaps announce a moratorium on new regulations and a full review of existing regulations to figure out which ones are actually needed and which are just increasing costs for businesses and depressing their ability to hire.  The current weak dollar policy creates an incentive for US companies to invest overseas and a disincentive for foreign companies to invest here, how about reversing that?  And this is just the tip of the iceberg of what he should do...

Would the Land Swaps Be Defensible?

Joel Klein has a piece today in Time where he lambasts Bibi for "misrepresenting" what Obama said in his speech on the middle east. He's basically just arguing that the pre-1967 borders with land swaps have been the basis of the negotiations for years (and what did that get the Israelis exactly?). However, besides parroting White House talking points, what I found interesting was a map he included which showed how the land swamps would work and what would be exchanged.  Now this is not the official map, it was generated by David Makovsky of the Washington Institute for Near East Policy in a report titled "Imagining the Border".  Take a look below:

In case you can't read the legend, those orange rivulets are the tracts of land that Israel will annex so that they could keep some of their larger settlement blocs.

I have two major problems with this map:

1. It does nothing to change the fact that Israel is 9 miles wide at its narrowest.  Downtown Tel Aviv will still be seen from the hills of Palestine and could easily be targeted by missiles and rockets (with little to no warning given to civilians before they hit).  As Bibi said during his speech, nobody can live like this.
2. Those rivulets of Israeli territory carved out of the West Bank are a disaster waiting to happen.  Terrorists from Hamas or the PFLP or Islamic Jihad could take pot shots at settlers all day every day.  And if there were ever a conflict between Israel and Palestine (which is probably likely, especially if Hamas stays in or runs the government), those armed gangs could easily cut off those settlements from the rest of Israel.  If you thought a territory 9 miles wide was not defensible, how about 1 km wide (or less).  You could easily have a bloodbath/massacre on your hands which will make Itamar look like youthful vandalism by comparison.

The argument of Klein and, for that matter, Obama, seems to be that because pre-1967 borders with land swaps  were offered to the Palestinians by two previous Israeli governments, that somehow that needs to be the basis for all future agreements.  In both cases, the Palestinians were offered over 90% of the West Bank AND THEY STILL SAID NO!  In 2000, they actually started the second intifada after one of those extremely generous peace offers.  The Palestinian strategy seems to be that if they say no, make some threats and commit some violence, that the international community will put pressure on Israel to offer even more.  And that is exactly what is happening.  The Palestinians need to learn that if they don't say yes, they might be offered even less by a future government.  That is probably the only way you will actually get them to agree to a peace treaty (note I don't say peace, because I think that if the PLO signs a peace agreement, Hamas will just tear it up once they win elections). 

I recently read, Henry Kissinger's book Diplomacy (a very interesting book for anyone interested in history) and he went on at length about the peace negotiations between the US and North Vietnam.  When the US was trying to take it easy on the Vietnamese in order not to "upset them" all they got in return from the Vietnamese was a bunch of games.  The Vietnamese only started getting serious when they were actually in danger of losing the war after the US started bombing the north and started acting like they actually wanted to win the war.  That is what got the US troops out.  I think a similar strategy would work with the Palestinians.  Convince them that they might get less territory the longer they stall and you might actually get a deal from them.

Obama 2012 Budget Defeated Unanimously (0-97)!

This just shows how out of touch Obama has become from the current budget debate.  His budget was defeated 0-97, not receiving a single solitary vote.  Maybe he should stop campaigning and trying to sabotage allies and focus on our budgetary mess.  Ryan's budget was also defeated 40-57 in the Senate.  Not too shocking given the Democrats still run the Senate and they just passed the 2011 budget April 15th, still lots more jockeying for position to come.  The Democratic strategy is likely to make the Republicans vote for the Ryan budget as many times as possible, and if they can continue voting on it into 2012, an election year, even better (from the Democrats view).

Obama Abuse of Power #54637

I don't think many people are aware of this but the Obama Administration is currently putting an extraordinary amount of pressure on Forest Laboratories, the makers of Lexapro, to dump their CEO, Howard Solomon.  The Office of the Inspector General, Department of Health and Human Services (OIG-HHS) is using a rule dug up from the Social Security Act of 1935 to personally exclude him from doing business from the Federal Government.  With medicare, medicaid and VA being such a large slice of the US Healthcare Spending pie (last I checked, government spending as a % of total healthcare spending was about 50%), this would reduce Forest revenues considerably.  If the OIG-HHS actually does exclude Mr. Solomon, who has been CEO since 1977, he will have no choice but to resign.  The grounds that the government is using is that Forest Labs settled a case in which the government charged them with improper marketing of Lexapro and obstruction of justice, by pleading guilty and paying a $313 million fine. 

The problem is the most serious charges stemmed from plant employees misleading FDA inspectors back in 2003, something that it is doubtful Mr. Solomon was aware of and his knowledge has definitely not been proven (the government states that a CEO's knowledge is not necessary for them to try to exclude them from doing business with the Feds, but if he didn't have knowledge why persecute him in the first place?).  Another issue is that the improper marketing was really kind of a fuzzy area.  What seems to have been the crux of the Federal case on improper marketing was lunches and dinners funded by the company where doctors spoke to other doctors on how good Lexapro was.  They also bought lunch for doctors ("lunch and learns) which allows the sales representative more time to pitch the doctors on a product.  This is hardly Enron level stuff.  And when I'd attend medical conferences I attended some of those physician education dinners funded by companies.  We're not talking about hookers and strippers cajoling docs to write prescriptions.  They are relatively boring affairs where you get "conference chicken" and a little desert in exchange for sitting through a boring 1 hour presentation.  When you are away from home at a conference and have nothing better to do, this is better than sitting in your hotel room looking through pay per view (especially if you are actually interested in the science or clinical data presented).

If this is true then why did Forest settle in the first place, you ask?  There is a reason why you've never seen any of these improper marketing cases go to trial, why they are always settles for gobs of money.  I was told the reason by the late CEO of Cephalon, Frank Baldino, who also settled for gobs of cash.  It's all about risk-reward for the CEO.  If you go to trial and you lose, recent legislation (like Sarbanes Oxley) makes it clear that the CEO could actually go to jail.  Since we are talking about gray areas here, even if you are innocent, there is no way to guarantee victory.  A simple thing like the location of the trial can determine this case more than anything.  If it's in the corporations hometown, they will likely win, if it's in an area where people hate big corporations, the government will probably win.  So when a CEO thinks about whether they want to risk their own personal freedom or just pay shareholder dollars, the choice is pretty clear.  Settle.  So just because Forest did plead guilty and settle doesn't mean they were actually guilty, they just didn't want to take the personal risk of a trial.

It's the Economy, Stupid!

While the political press seems to be talking about everything but the economy, it is the economy, and how people feel about it, that will likely drive the outcome in 2012.  If the economy is growing at 4%, inflation is low and unemployment is down to a more reasonable level, the GOP will have a hard time to wrestle the Presidency away from him.  Conversely, if the economy starts to double dip, his chances of re-election will recede.  According to this paper, for every 1% increase in GDP, an incumbent can expect a 5% increase in electoral vote share.  This is a considerable amount as 5% equates to 27 electoral votes, or a state the size of Florida.  A 2% increase could add the electoral equivalent of California to an incumbent's totals. 

Unfortunately for Obama (and for those of us who need to earn a living), the economy seems to be going in the wrong direction. Today, the second revision to 1st quarter GDP came out.  It remained unchanged from the initial estimate of 1.8%, which is pretty anemic.  But what is really concerning is the change in the components of growth that occurred between the revisions.  The first go round, inventory building added only 0.09% to the 1.8% growth number.  This time around, it added 1.19%, meaning that if you exclude inventory building, the economy only grew by 0.6% in the quarter.  On top of that, inflation is picking up with the price index going up 3.8% in the quarter, up from 2.1% in the fourth quarter.  And if that stagflationary GDP report wasn't enough, jobless claims also came in higher than expected and the previous week was revised up.

The problem for Obama is that he has already used all his Keynesian tools.  He has massively expanded the budget, increasing spending across the board, but to no avail.  He is even getting the assistance of probably one of the most dovish Fed Chairmen ever, who is leaving interest rates near zero AND monetizing the debt so that the Federal Reserve now is the biggest owner of US Treasuries, bigger than China (ponzi scheme anyone?).  Given all that has been done, the economy, according to Keynesian economics, should be on fire right now (although some might say it is burning).  It didn't have to be that way.  If he hadn't wasted the $800 billion in "stimulus", he would have that ammunition now.  Perhaps if he instituted an $800 billion tax cut, things would be better right now.  Or maybe he could have concentrated on instituting pro-growth policies instead of focusing on anti-growth recessionary healthcare proposals, which increases taxes or costs on just about every taxpayer (premiums went up 25-50% for insurance plans in the year after Obamacare was implemented!  That comes out of our pay and does nothing to benefit us). 

The longer Obama waits to fix our problems, the longer he campaigns instead of governs, the worse they will be for all of us and in 2012, for him.

Bibi's Great Speech

Here is Bibi's speech to Congress. I don't see how any logical person could listen to this speech and think Israel is to blame for the impasse in the talks:

Remember NY-23?

While the lootersphere gloats and chides the GOP for overreach after the NY-26 special election, I can't help but remember the NY-23 special election in November 2009.  The similarities are pretty uncanny, both have been historically Republican seats that had to have a special election in an off time and because of certain extremely localized issues, there was a third party challenger who helped elect a Democrat in that district. 

In the 23rd district, because the GOP nominee Dede Scozzafava (aka Scuzzy Face or Scuzzy Flava) was pretty much a RINO (Republican in Name Only), the Conservative Party candidate Doug Hoffman was able to get many national personalities to endorse his candidacy.  Eventually, Scuzzy Face dropped out of the race and endorsed the Democrat, Bill Owens (kind of proving her RINO status).  The final tally was 48.3% for Bill Owens, 46% for Doug Hoffman and 5.7% for Scuzzy Face.  It's pretty clear that had it been a standard two party race that the GOP candidate would have won.  Unfortunately, the ineptitude of the NY GOP caused this horrible situation to happen.  Note there wasn't a primary for the GOP nomination, she was selected in a backroom deal because she was viewed as most "electable" (again showing the brilliance of the NY GOP).  I remember at the time, people thought that NY-23 might be a sign of something, but that did not stop Scott Brown from winning in Massachusetts just a few months later and the GOP from having historic gains in 2010 (though NY-23 once again was not one of them because Doug Hoffman ran again and took votes from the GOP candidate in another close election in that district which at one point had only GOP representation since 1873). 

The situation with the 26th district is no less unique.  Here you had a disgraced GOP Congressman forced to resign for some strange behavior involving pictures of him without a shirt and craigslist.  Once again the GOP selected a candidate without a primary (will they please stop doing that!) which pissed off a local Republican military hero who was runner up in the selection process. He then endorsed the third party candidate who was a Democrat running on the Tea Party ticket.  Because of this, the Democrat was able to win with 47% of the vote, compared to 43% for the GOP candidate and 9% for the fake Tea Party candidate.  Again a unique situation, unless the Democrats want to start a fake Tea Party to take votes away from the Republican and then get other disgruntled Republicans to endorse them.

The lessons are clear for the GOP and do not include backing away from much needed reform.  Simply, don't trust the NY GOP to wipe their tuchus' without supervision and try not to piss your own people off too much.

The Lootersphere Gets Smug

I am officially sick of the smug sense of victory emanating out of the lootersphere recently (since I'm elbow deep in Atlas Shrugged, I feel that lootersphere is a good way to refer to the left) thanks to the killing of Bin Laden and a few people dropping out of the GOP race in 2012 (Bob Shrum, who is an impressive 0-8 in Presidential contests, gives a great example of that smugness here). As if Obama's poll average of 52.5% is some insurmountable stratospheric level.

I've been fascinated with politics since I was 9 years old, which coincided with the 1984 election (first the Mondale vs. Hart battle, then the general election).  One thing that I've learned is that THINGS CHANGE.  Let's do a quick rundown of the elections since 1988 and look how things get volatile during an election:

1988 - Gary Hart was the front runner after a strong showing in 1984 but had to drop out because of his little fling with Donna Rice on Bimini.  And although Dick Gephardt won the Iowa campaign, Michael Dukakis, the very uncharismatic Governor of Massachusetts was the Democratic nominee.  He had a double digit lead over George Bush I but eventually lost by quite a bit.

1992 - Despite losing both Iowa (to Tom Harkin) and New Hampshire (to Paul Tsongas), Bill Clinton was the nominee for the Democrats.  He eventually was able to defeat George Bush I, who pissed away a 90% approval rating in 1991 (about 40 points higher than Obama's at a similar time point) because the economy worsened (which seems to be happening now, based on current economic statistics) and he raised taxes (something else Obama has done).  Also, there was a point where H. Ross Perot was the front runner, albeit by the smallest of margins.

1996 - Admittedly a rather boring election where the early frontrunners for both parties one (Clinton, of course, was the incumbent).

2000 - I remember seeing polls that showed Gore having a several point lead over George Bush II, just weeks before the election.  I do realize that many people view Gore as the rightful winner but that ignores the Florida recount completely, which was in Bush's favor as well as the fact that Florida was called by the major networks before the polls in the Republican dominated panhandle were closed, siphoning off votes.

2004 -   At first Gore was considered the front runner.  Then, remember Howard Dean was the front runner through much of the second half of 2003?  He had tremendous momentum, outraising everybody else in the field.  However, thanks to going completely negative in Iowa, he ended up losing that state and even his neighbor to the East, New Hampshire (probably in part because of the Dean Scream).

2008 - This was a crazy-ass election.  The two early front runners, Rudy Giuliani and Hillary Clinton, both of whom had very large leads in national polls, lost in the primaries.  Hillary's loss was close, Rudy's was not even close.  Also I found this article about a poll conducted in August 2007 for both the Democratic and GOP fields:

The survey, taken Friday through Sunday, puts Clinton at 48% — up 8 percentage points from three weeks ago — and Obama at 26%, down 2 points...Former New York mayor Rudy Giuliani at 33%, former Tennessee senator Fred Thompson at 21%, Arizona Sen. John McCain at 16% and former Massachusetts governor Mitt Romney at 8%.

The eventual nominee for the Democrats was down 22% and the eventual Republican was down 17%, just 5 months before Iowa!  So I'm sorry, Obama being up a smidge above 50% and a few people declining to enter the GOP race is no reason for the Democrats to be smug about this.  I shouldn't have to even mention the fact that three of the higher profile Republicans not running, didn't have a chance for the nomination anyway.  The GOP was not going to nominate Huckabee, who is not a believer in the free market at all, Trump, who gave heavily to Democrats in the past and even endorsed Obama, or Haley Barbour, a Southern insider who probably would get little support outside the South.  The only loss was Mitch Daniels, who might have been strong or might not have.  He wasn't completely trusted by social or economic conservatives because of his talk of a social "truce" and his desire to avoid "wedge issues" (i.e. he might not have been willing to fight to reform entitlements).  I know people are disappointed with Paul Ryan and Chris Christie not running but I think it just comes down to this, neither has actually accomplished anything yet.  They both know it, they are just not as arrogant as The One, who ran for President before actually accomplishing anything or gaining ANY administrative experience.  Note that Paul Ryan just became head of the Budget Committee this year and Chris Christie would be a much stronger candidate if his turnaround plan for New Jersey actually works.  Just having charisma is how we ended up with the incompetent schmuck we have as President now.  The GOP already has two high quality (in the general election sense) candidates running right now, Mitt Romney, who I might not like but is polished and popular with non Republicans, and Tim Pawlenty, a two term Conservative Governor of a Blue State.

In case you are still drinking the proverbial kool-aid and think Obama is unbeatable, let me point out a couple of things that could still go wrong for him:

• The economy.  Recent indicators, such as the Empire Manufacturing, Richmond Fed Index and the Philadelphia Fed Index were all disappointing.  Let us also not forget that GDP for Q1 was only 1.8%, a very anemic level considering how loose fiscal and monetary policy both are.  And Fiscal and monetary policy can't get any looser than they are now, chances are they will probably get tighter in the next year.  We can't sustain $1.5 TRILLION dollar deficits every year and the Federal Reserve can't keep pumping money into the market, both need to get tighter for the purposes of sanity and that will likely have a negative impact on the economy, at least in the short term (long term, its better if we get our house in order as soon as we can).  Also, let's not forget about the possibility of another financial crisis.  If Greece defaults or soft defaults or "reprofiles", that will be a major negative event which will eat up the capital of many European banks.  It could also cause a cascade effect as many other sovereigns get dumped.  I wouldn't be shocked if some money market funds "break the buck" again.  It could be Lehman all over.
  
• War in the middle east.  We all know that foreign policy is not even close to Obama's strong suit, from the mundane (giving the UK PM DVD's from the wrong region as a gift) to the complex (completely messing up the peace process so much that the parties refuse to speak to one another, they were speaking under W after all).  Given the recent "Arab Spring" this next war could involve more of the neighbors who will want to satisfy their populations.  Say hello to $200 oil if that happens and whether or not it is Obama's actual fault, he will get blamed.
• Rising healthcare costs.  Historically rising healthcare costs have not been blamed on the President but then historically, they also haven't been their fault.  Obamacare's insurance "reforms" such as the requirement of insurance companies to allow "kids" to stay on their parents plan to age 26, and the banning of pre-existing condition exclusions have caused the expenses of the insurance companies to increase which has been passed along to the consumer.  Most premiums have gone up 25-50% in just one year, and are likely to go up again come January 2012.  Companies are doing two things to deal with this, changing to lower quality plans and forcing their employees to pay a higher percentage of the premiums.  Neither of which have been good news for those of us who are currently insured.  Don't be surprised if this becomes a big issue next year.
• What have you done for me lately syndrome.  Killing Osama was definitely a victory for Obama.  But election history is full of voters wondering "what have you done for me lately".  As Obama is already in campaign mode and seems to no longer be interested in actually governing (note his absence, for the most part, from the budget debate) the chances that he will do something major that people will like between now and election day is minor.
  

The US is Backing Egyptian Debt?

Egyptian Finance Minister, Samir Radwan, announced today that Egypt is planning a $1 billion debt issue, with a "sovereign guarantee" from the US.  Should we really be funding the revolutionary government of Egypt before we really know what they stand for or before we know what the government is going to look like come September?  Considering one of the first things the new junta did was force Israel to renegotiate its gas deal and help Hamas enter back into the Palestinian Authority, I am not very confident for the future direction of Egypt.  On another, somewhat more nitpicky note, isn't giving someone our sovereign guarantee for debt in violation of our debt ceiling?  After all, by definition, aren't treasuries just debt with the US sovereign guarantee?

Israel Has No Partner For Peace

As I've said to people countless times, the Palestinians are not just upset about the West Bank and Gaza, but about the very existence of Israel.  This is why, Israel giving away the land it took in the Six Day War, will not lead to peace.  Proof of this comes from today's statement by Senior Hamas leader Mahmoud Zahar who said:

Why won't we talk about the 1948 borders? Why won't we discuss the partition plan which was internationally recognized?..  {Obama} wants to keep us on 22% of the area of Palestine, and talks about the possibility of swapping land, including Jerusalem...and he wants us to give Jerusalem to the occupation in return for 5% of historic Palestine, which is originally our land. This is a great trick.

Personally, I love how he refers to "historic Palestine".  When exactly was there an Arab Palestine?  What history is he talking about?  If he wants to have a battle over history, he picked the wrong people to mess with given that at one point under King David, Israel stretched all the way to the Euphrates.  Also, some argue that Jordan was also part of historic Palestine and it was only split off to reward the Hashemite family, so technically, under that view, they are already in control of the majority of the area of "historic Palestine".

Ryan at His Best

Paul Ryan tells NBC's David Gregory what he thinks about polls:



It's really nice when a politician has the courage of his convictions and doesn't bend like a reed in the wind when a poll goes against him. Speaking of which, Obama is already saying his statements from Thursday were "misrepresented" even though people like your humble author either saw footage of him saying what he said or read transcripts.  There wasn't really much room or need to misrepresent the hoakum that he was spewing.

The Palestinian Leadership Can't Be More Reasonable Than Obama

Here is something that isn't that much of a shocker, the Palestinians are now saying that they won't negotiate with Israel unless the Israelis accept the 1967 borders as the starting point of negotiations.  This was never a pre-condition before Obama's speech on Thursday, but now suddenly is, as the Palestinian leadership doesn't want to be seen as less anti-Israel than Obama.  This has happened before.  Remember Obama's declaration that Israel must stop all settlement activity? It was soon followed by the Palestinians saying that they wouldn't return to negotiations before Israel stops all building in the West Bank.  Previously, they just demanded that no new settlements were built, some expansion in existing settlements and in Jerusalem were not even mentioned.  Again, I have to wonder if Obama is just incompetent or just incredibly anti-Israel.

Compassion At the Point of a Gun

Neal Gabler, a Ted Kennedy biographer, just wrote an op-ed in the LA Times titled "America the stony-hearted".  Besides realizing that I never heard stony-hearted used ever in my life, I was amazed at how stilted the op-ed was.  It was essentially about how conservatives are waging a war against compassion:

One can see this division in something as simple as the denigration of the term "liberal," the "L" word, with its attendant idea that to be compassionate, caring and tolerant — virtues that had been celebrated, if only via lip service, by most Americans — is really to be mush-minded, weak and, more concretely, willing to give taxpayer largesse to the undeserving and lazy. (This was essentially the argument that some Republicans, such as former Sen. Judd Gregg (R-N.H.), used when they sought to deny an extension of unemployment benefits.

It is easy to miss how significant a change this is. It transforms compassion, a bulwark in practically any moral system, into a negative force that undermines the good of individual initiative. Indeed, conservative ideologue Marvin Olasky wrote a book to this effect, pungently titled "The Tragedy of American Compassion," in which he called for the privatization of all charitable efforts. It rapidly became a conservative touchstone.

He clearly doesn't have any conservative friends.  Does he really think we sit around talking about how bad compassion is and how it is ruining the country?  Conservatives are some of the most compassionate people I know and regularly give to various charities and volunteer to help out.  The difference though between how conservatives want to be compassionate and how liberals want to be compassionate is that conservatives want to be able to choose how to be compassionate and to which charities to be involved with while liberals tend to want to force everyone to be compassionate to the causes that "experts" say we should be involved with.  Basically they focus on how to spend other people's money, money collected at the point of a gun (imagine what would happen to you if you refused to pay taxes or even the portion that would go to social programs).

Also, note Neal Gabler's use of the word "tolerant" to describe liberals. I guess that means that non-liberals are "intolerant" or "racist".  That seems to be the usual argument I face these days when I talk to a liberal about ANYTHING.  I remember having discussions on Facebook about cutting Planned Parenthood funding by the Federal Government.  I really just don't want any of my tax money going to an organization that performs so many abortions and was started by Margaret Sanger, who believed in using eugenics to weed out the poor and minorities from society.  Somehow, even being against Planned Parenthood funding made me a "horrible racist" because apparently Planned Parenthood is the site where many minority women get their healthcare.  As if minorities were being turned away from hospitals because of the color of their skin.

Neal Gabler's piece is just another example of how liberals really have no idea how conservatives think and are basically devolving into 21st century thought police.

Mitch Daniels Isn't Running

Okay so I was a bit shocked by this one, as all the buzz seemed to point to him running.  I wasn't 100% sure that I would have supported him in the primaries, but he did get a "B" from the Cato Institute in their Fiscal Policy Report Card and he actually does sound like he tries to be libertarian.  The only downside I saw was that he was a bit too much in the Dick Lugar camp on foreign policy, which I have never been a fan of.  Oh well, looks like Tim Pawlenty is my guy.  He got an "A" from Cato and seems to be saying all the right things.  The only dig I can make against him is that he doesn't seem comfortable in his own skin, hopefully that changes in time for 2012.  I really don't think that Paul Ryan or Chris Christie are running as I think both need more administrative experience under their belt first.

Do They Even Know What They Say?

So by now, you probably have seen or heard of this clip, it's Bibi giving Obama a little lesson as to why going back to the 1967 borders and admitting Palestinian refugees is such a bad idea for the Jewish State.

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Anyway, this whole situation with the Obama speech and everything has gotten me pretty wound up.  At first, when I just heard the reports of the speech, it didn't sound so bad, and he did say some things I liked, the stuff about not forcing anyone to sign an agreement, the problems with the Hamas deal, etc.  Then I read the transcript, which said:

The United States believes that negotiations should result in two states, with permanent Palestinian borders with Israel, Jordan and Egypt, and permanent Israeli borders with Palestine. The borders of Israel and Palestine should be based on the 1967 lines with mutually agreed swaps so that secure and recognized borders are established for both states. The Palestinian people must have the right to govern themselves, and reach their potential, in a sovereign and contiguous state.

It was the word "contiguous" that really got me.  Ummm, how exactly can the West Bank and Gaza make a contiguous Palestinian State while maintaining the contiguity of Israel?  It almost sounds like Obama believes Israel has no right to any land in the area and they should be happy they are being "allowed" to keep any of it.  Another part that got to me was:

Palestinians should know the territorial outlines of their state; Israelis should know that their basic security concerns will be met. I know that these steps alone will not resolve this conflict. Two wrenching and emotional issues remain: the future of Jerusalem and the fate of Palestinian refugees. But moving forward now on the basis of territory and security provides a foundation to resolve those two issues in a way that is just and fair and that respects the rights and aspirations of Israelis and Palestinians.

So even after giving up the West Bank and Gaza and a strip connecting them, Israel still can't rely on peace.  But wasn't that the whole point of this entire process?  Wasn't this all about the formula "land for peace"????  Is it now just, "land for nothing"?  Maybe it is "land for maybe we will not look our noses down upon you for a little while but not much else"? I don't remember any party that has been told to just accept the other parties position as their opening position.  It really seems that first they will turn the clock back to 1967, then they will turn it back to 1948.

It is always possible that I am wrong about all this.  There are really two choices, either Obama didn't comprehend what he said or he is really that Anti-Israel.  Reading the Washington Post and the New York Times, it really seems that nobody on the left has really thought this through.  They are focusing on the creation of a Palestinian State and not on what that state will do to Israel or what will happen a few years down the line after an agreement.  I think the biggest points which are not understood well enough are:

1. President Abbas' term ended on January 9th, 2009, so for almost the last 2.5 years this guy has "ruled" the PA without any democratic authority.  He was supposed to hold an election but it seemed likely that Hamas would win and then they would be in control of both Gaza and the West Bank.  The thing is, as part of his "reconciliation" with Hamas, he has promised to hold elections, likely this fall.  So Israel might make a deal with the PA (technically the PLO, but Abbas heads both), but then have to rely on Hamas to implement it.  Nothing could possibly go wrong in that scenario could it?
2. People seem to brush off the fact that Israel was only 9 miles wide before the Six Day War.  I think they are thinking that "hey Israel still has the strongest military in the area so no matter how wide the country is, they will be able to defeat any enemy."  That may or may not be true of a conventional war (even the Israelis are in danger if Egypt with their M-1's becomes a full fledged enemy once again), but Hamas fights using non-conventional means.  What does a 9-mile width mean in this scenario?  It means that the hills of the West Bank are close enough to Tel Aviv, that you can see the skyscrapers.  This will make rocket/missile fire that much deadlier.  Hamas won't even have to use advanced weaponry anymore to do real damage, they can just launch a bunch of Qassam's, they are bound to hit something valuable at some point at that range.  
3. What exactly will be Israel's recourse after they give the land up?  Once "Palestine" is a member of the UN, even if they are the aggressor, it will be just that much harder for Israel to retaliate against attacks.  In fact, you probably will have a UN force there to make sure the Israelis can't make any physical incursions into Lebanon and also limit their ability to retaliate against attacks.  I remember seeing a picture of UN forces standing up, telling the Israelis not to shoot, while Lebanese troops were firing into Israel.  You can imagine that Israel will really have their hands tied once the Palestinians have a full state and UN membership.  Israel will probably be told to take the matter up with the ICC or something (it would be funny if it weren't so sad).  
4. What about all the Jewish historic sites in the West Bank?  We have the Old City of Jerusalem, Joseph's Tomb, Rachel's Tomb, the Cave of the Patriarchs, all very holy and important places.  Are we supposed to have faith that there will be full access to Jews to these sites?  Before 1967, there was no access to Jews at all, and recently a Palestinian policeman murdered a Jewish worshiper at Joseph's Tomb.  That really gives you faith that Jews will have access to their holy sites.
5. Palestinians have been murdering Jews well before there was a state, started the PLO before 1967 and don't even talk about actually making peace with the Jews at all, they just talk about how much land they want.

I just don't see how anyone who really knew all these things, could possibly have said what Obama said on Thursday.  That is why I am very happy Bibi did say what he did at the White House.  I know some people were upset that he was so "uppity" for an ally that receives billions in aid a year, but really it had to be said, at least for the record.  I did notice that the Obama administration did backtrack a little after the speech, but an election is coming up, so who knows if they really mean the backtrack or if it is just so they can continue to ask for Jewish money to fund their campaigns.  Methinks all bets are off if Obama gets a second term.  Think about how bad he acted in the first term, with the full understanding that he will have to get re-elected.  Now think about how he will act in a second term, when he doesn't have anyone to answer to and his actions will have zero negative impact on him personally.

Welcome!

So I've finally decided to start blogging again.  Previously, I was part of the group that was blogging at Common Sense & Wonder, on and off, for the last 9 some years.  Most recently, I was annoying all my liberal friends by posting stuff on Facebook and also starting arguments on their threads (honestly I can't help myself, if someone posts something negative about Americans or Israelis or even westerners in general, I feel like I have to launch myself into the breach).  Anyway, I don't think I've decided to really let my leftie friends off the hook, Ill probably repost most of my stuff on Facebook and keep the fires stoked over there. 

What is this blog going to be about you ask?  Well, you probably aren't asking, a blog titled "libertarian neocon" doesn't leave much to the imagination.  It's going to be mainly about politics with some economics/investing.  Some slightly personal rants are probably in order as well given I have a wife and two kids in the burbs, no shortage of material there.