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Rampant Stock Market Pumping

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It has always been one of my pet peeves.  The usual stock market cheerleaders start chanting into the echo chamber.  Do they always believe that their efforts will create a genuine, consensus reality?  A posting at the Daily Beast website by Zachary Karabell caught my attention.  The headline said, “Bells Are Ringing!  Confidence Rises as the Dow –  Finally – Hits 13,000 Again”.  After highlighting all of the exciting news, Mr. Karabell was thoughtful enough to mention the trepidation experienced by a good number of money managers, given all the potential risks out there.  Nevertheless, the piece concluded with this thought:

The crises that have obsessed markets for the past years – debt and defaults, housing markets, Europe and Greece– are winding down.  And markets are gearing up.  Maybe it’s time to focus on that.

As luck would have it, my next stop was at the Pragmatic Capitalism blog, where I came across a clever essay by Lance Roberts, which had been cross-posted from his Streettalklive website.  The title of the piece, “Media Headlines Will Lead You To Ruin”, jumped right out at me.  Here’s how it began:

It’s quite amazing actually.   Two weeks ago Barron’s ran the cover page of “Dow 15,000?.  Over the weekend Alan Abelson ran a column titled “Everyone In The Pool”.  Today, CNBC leads with “Dow 13,000 May Finally Lure Investors Back Into Stocks”.   Unfortunately, for most investors, the headline is probably right.  Investors, on the whole, have a tendency to do exactly the opposite of what they should do when it comes to investing – “Buy High and Sell Low.”  The reality is that the emotions of greed and fear do more to cause investors to lose money in the market than being robbed at the point of a gun.

Take a look at the chart of the data from ICI who tracks flows of money into and out of mutual funds.  When markets are correcting investors panic and sell out of stocks with the majority of the selling occurring near the lows of the market.  As the markets rally investors continue to sell as they disbelieve the rally intially and are just happy to be getting some of their money back.  However, as the rally continues to advance from oversold conditions – investors are “lured” back into the water as memories of the past pain fades and the “greed factor” overtakes their logic.  Unfortunately, this buying always tends to occur at, or near, market peaks.

Lance Roberts provided some great advice which you aren’t likely to hear from the cheerleading perma-bulls – such as, “getting back to even is not an investment strategy.”

As a longtime fan of the Zero Hedge blog, I immediately become cynical at the first sign of irrational exuberance demonstrated by any commentator who downplays economic headwinds while encouraging the public to buy, buy, buy.  Those who feel tempted to respond to that siren song would do well to follow the Weekly Market Comments by economist John Hussman of the Hussman Funds.  In this week’s edition, Dr. Hussman admitted that there may still be an opportunity to make some gains, although the risks weigh heavily toward a more cautious strategy:

The bottom line is that near-term market direction is largely a throw of the dice, though with dice that are modestly biased to the downside.  Indeed, the present overvalued, overbought, overbullish syndrome tends to be associated with a tendency for the market to repeatedly establish slight new highs, with shallow pullbacks giving way to further marginal new highs over a period of weeks.  This instance has been no different.  As we extend the outlook horizon beyond several weeks, however, the risks we observe become far more pointed.  The most severe risk we measure is not the projected return over any particular window such as 4 weeks or 6 months, but is instead the likelihood of a particularly deep drawdown at some point within the coming 18-month period.

Economist Nouriel Roubini (a/k/a Dr. Doom) provided a sobering counterpoint to the recent stock market enthusiasm in a piece he wrote for the Project Syndicate website entitled, “The Uptick’s Downside”.  Dr. Roubini focused on the fact that “at least four downside risks are likely to materialize this year”.  These include:  “fiscal austerity pushing the eurozone periphery into economic free-fall” as well as “evidence of weakening performance in China and the rest of Asia”.  The third and fourth risks were explained in the following terms:

Third, while US data have been surprisingly encouraging, America’s growth momentum appears to be peaking.  Fiscal tightening will escalate in 2012 and 2013, contributing to a slowdown, as will the expiration of tax benefits that boosted capital spending in 2011.  Moreover, given continuing malaise in credit and housing markets, private consumption will remain subdued; indeed, two percentage points of the 2.8% expansion in the last quarter of 2011 reflected rising inventories rather than final sales.  And, as for external demand, the generally strong dollar, together with the global and eurozone slowdown, will weaken US exports, while still-elevated oil prices will increase the energy import bill, further impeding growth.

Finally, geopolitical risks in the Middle East are rising, owing to the possibility of an Israeli military response to Iran’s nuclear ambitions.  While the risk of armed conflict remains low, the current war of words is escalating, as is the covert war in which Israel and the US are engaged with Iran; and now Iran is lashing back with terrorist attacks against Israeli diplomats.

Any latecomers to the recent festival of bullishness should be mindful of the fact that their fellow investors could suddenly feel inspired to head for the exits in response to one of these risks.  Lance Roberts said it best in the concluding paragraph of his February 21 commentary:

With corporate earnings now slowing sharply, the economy growing at a sub-par rate, the Eurozone headed towards a prolonged recession and the American consumer facing higher gas prices and reduced incomes, a continued bull market rally from here is highly suspect.   Add to those economic facts the technical aspects of a very extended market with overbought internals – the reality is that this is a better place to be selling investments versus buying them.  Or – go to Vegas and bet on black.


 

Abundance Of Goofiness

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The world is beset by a plague of goofiness.  I thought it was limited to the United States until recent events demonstrated that goofiness has become a worldwide phenomenon.  Premature European austerity programs, commenced before unemployment subsided, have led to higher deficits, elevated bond yields and more recession.  Although sober-minded economists warned against implementation of austerity measures until justified by economic circumstances, there was this itch that politicians had to scratch.  Now they have a nice infection.

In America, everyone had some good laughs of this video clip of President Obama’s discovery that he was locked out of the White House upon his return from Brazil.  Although it was widely reported that the White House staff was “caught off guard” by the First Family’s early return from their Brazilian vacation, I don’t believe it.  Such things don’t happen by accident.  My suspicion is that Chief of Staff, Bill Daley and his real boss, The Dimon Dog, deliberately locked Obama out of the White House as an admonition against cracking down on the megabanks, increasing taxes on the rich and empowering Elizabeth Warren.

Our President has been busy puzzling over the situation in Libya, where he (with authorization from the United Nations) has joined in on the “kinda-sorta” invasion.  Few people have dared to suggest that interloping in the Libyan civil war is sheer goofiness.  Many Republicans, such as Newt Gingrich, were in favor of intervention until Obama made the decision to launch air strikes.  Gingrich and his contrarian cohorts suddenly found it necessary to do a 180 on the issue.  Meanwhile, the smart conservative, George Will, was asking all the right questions.  I’ll reprint just a few of them here – but be sure to read his complete list.  These questions are among those that remain unanswered:

  • The world would be better without Gaddafi. But is that a vital U.S. national interest? If it is, when did it become so? A month ago, no one thought it was.

*   *   *

  • Presumably we would coordinate aid with the leaders of the anti-Gaddafi forces. Who are they?
  • Libya is a tribal society.  What concerning our Iraq and Afghanistan experiences justifies confidence that we understand Libyan dynamics?

More recently, George Will wrote an essay raising the question, “Is it America’s duty to intervene wherever regime change is needed?”  Consider this point:

.  .  .  America has intervened in a civil war in a tribal society, the dynamics of which America does not understand. And America is supporting one faction, the nature of which it does not know.  “We are standing with the people of Libya,” says Secretary of State Hillary Clinton, evidently confident that “the” people are a harmonious unit.  Many in the media call Moammar Gaddafi’s opponents “freedom fighters,” and perhaps they are, but no one calling them that really knows how the insurgents regard one another, or understand freedom, or if freedom, however understood, is their priority.

While many commentators have been busy condemning Bradley Manning as a “terrorist” and the worst American traitor since John Anthony Walker, few of those hypocrites would admit that the “people power” revolutions now taking place throughout the Middle East have resulted from the publication of Manning’s purloined files by WikiLeaks.  Beyond that, few – if any – of those self-righteous journalists have hesitated to quote from those leaked documents in their own essays.  A look at one of those leaked cables (dated February 15, 2008 and originating from the American Embassy in Tripoli) gives us a better understanding of who some of those Libyan “freedom fighters” really are:

xxxxxxxxxxxx partly attributed the fierce mindset in Benghazi and Derna to the message preached by imams in eastern Libyan mosques, which he said is markedly more radical than that heard in other parts of the country. xxxxxxxxxxxx makes a point of frequenting mosques whenever he visits Libya as a means to connect with neighbors and relatives and take the political pulse.  Sermons in eastern mosques, particularly the Friday ‘khutba’, are laced with “coded phrases” urging worshippers to support jihad in Iraq and elsewhere through direct participation or financial contributions.  The language is often ambiguous enough to be plausibly denied, he said, but for devout Muslims it is clear, incendiary and unambiguously supportive of jihad.  Direct and indirect references to “martyrdom operations” were not uncommon.  By contrast with mosques in Tripoli and elsewhere in the country, where references to jihad are extremely rare, in Benghazi and Derna they are fairly frequent subjects.

The foregoing cable was discussed in a recent piece by Alexander Cockburn of CounterPunch.  Mr. Cockburn also focused on some information contained in the so-called Sinjar Records, which American forces retrieved from an Al Qaeda stronghold in northern Iraq during 2007:

The West Point study of the Iraqi Sinjar Records calculates that of the 440 foreign al-Qaeda recruits whose hometowns are known, 21 came from Benghazi, thereby making it the fourth most common hometown listed in the records.  Fifty-three of the al-Qaeda recruits came from Darnah, the highest total of any of the hometowns listed in the records.  The second highest number, 51, came from Riyadh, Saudi Arabia.  Darnah (80,000) has less than 2 per cent the population of Riyadh.  Darnah contributed “far and away the largest per capita number of fighters.”

The Embassy cable from February of 2008 and the Sinjar Records provide some useful information to consider when pondering the questions raised by George Will.  Is Team Obama “up to speed” on any of this?

The aforementioned CounterPunch article by Alexander Cockburn covered another episode of tragic goofiness – the Fukushima power plant disaster.  As I previously discussed here and here, the feeble information flow concerning this crisis has been downright sleazy.  Mr. Cockburn provided a must read critique of how this critical situation has been mishandled and misrepresented by the media:

Amid reasonable suspicions that leading news media might have been in receipt of informal government advisories to stop creating panic, it became much harder to find credible bulletins on what was actually happening.  In fact careful perusal of the daily briefings at the  Vienna hq of the UN’s International Atomic Energy Agency in Vienna disclosed absolutely no substantive progress and indeed discreet admissions that “[this was on March 23)  the “Agency still lacks data on water levels and temperatures in the spent fuel pools at Units 1, 2, 3 and 4.”

*   *   *

On our own website, by contrast, several articles and interviews stressed what Hirose Takashi said:

“All of the information media are at fault here I think.  They are saying stupid things like, why, we are exposed to radiation all the time in our daily life, we get radiation from outer space.  But that’s one millisievert per year.  A year has 365 days, a day has 24 hours; multiply 365 by 24, you get 8760.  Multiply the 400 millisieverts by that, you get 3,500,000 the normal dose.  You call that safe?  And what media have reported this?  None.  They compare it to a CT scan, which is over in an instant; that has nothing to do with it.  The reason radioactivity can be measured is that radioactive material is escaping.  What is dangerous is when that material enters your body and irradiates it from inside.   .  .  .”

Allow me to repeat Hirose Takashi’s question:  “And what media have reported this?  None.”  That’s because the media are incapable of covering serious (non-goofy) subjects.  Unfortunately, those vested with positions of responsibility and authority all over the world are impaired by a degree of goofiness, leaving them incapable of making the right decisions or taking the necessary steps to protect public safety and welfare.  Is this a permanent situation or just a temporary condition?


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Wealth Redistribution

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One of the sleaziest, most disingenuous arguments exploited by politicians is the “wealth redistribution” theme.  Whenever an influential corporate sponsor of some creepy politician is confronted with proposed legislation, which might change the status quo by reducing unconscionable profiteering, we are told that the new bill is a “socialist” attempt at “wealth redistribution”.  Unfortunately, there are too many sheeple who don’t realize that “wealth redistribution” already happened.

The recent uprisings in the Middle East have demonstrated how difficult it can be to maintain a plutocracy in the modern world.  As the American voting public becomes more familiar with the economic circumstances which led to the Egyptian turmoil, attention gradually gets refocused on how our domestic situation compares with Mubarak’s dystopia.  Blogger “George Washington” (a former law school professor) of Washington’s Blog recently wrote a piece concerning how the “Gini coefficient” demonstrates that America’s upward wealth redistribution has reduced this nation to banana republic status:

Egyptian, Tunisian and Yemeni protesters all say that inequality is one of the main reasons they’re protesting.

However, the U.S. actually has much greater inequality than in any of those countries.

Specifically, the “Gini Coefficient” – the figure economists use to measure inequality – is higher in the U.S.

*   *   *

Gini Coefficients are like golf – the lower the score, the better (i.e. the more equality).

According to the CIA World Fact Book, the U.S. is ranked as the 42nd most unequal country in the world, with a Gini Coefficient of 45.

In contrast:

  • Tunisia is ranked the 62nd most unequal country, with a Gini Coefficient of 40.
  • Yemen is ranked 76th most unequal, with a Gini Coefficient of 37.7.
  • And Egypt is ranked as the 90th most unequal country, with a Gini Coefficient of around 34.4.

And inequality in the U.S. has soared in the last couple of years, since the Gini Coefficient was last calculated, so it is undoubtedly currently much higher.

So why are Egyptians rioting, while the Americans are complacent?

Well, Americans – until recently – have been some of the wealthiest people in the world, with most having plenty of comforts (and/or entertainment) and more than enough to eat.

But another reason is that – as Dan Ariely of Duke University and Michael I. Norton of Harvard Business School demonstrate – Americans consistently underestimate the amount of inequality in our nation.

Ariely and Norton’s paper, based on their 2005 poll of 5,522 citizens about their preferences for wealth division, has been the subject of much commentary.  Last fall, Bruce Watson wrote an article for Daily Finance discussing Ariely and Norton’s report.  As Watson explained, the following empirical data compiled by Professor Edward Wolff, (and incorporated into the Ariely-Norton paper) portrayed the “real world” wealth distribution in America:

Currently, 85% of America’s wealth, which is defined as total assets minus total liabilities, is held by the country’s richest 20%.  Meanwhile the upper middle class holds 11%, the middle class has 4%, and the lower class and poor share an anemic 0.3%.

Here’s how Watson summarized the results of the Ariely-Norton research:

In the poll, the vast majority of Americans across the political, gender and wealth spectrum displayed a markedly skewed understanding of how America’s money is divided.  On average, respondents thought that the rich hold only 58% of the nation’s wealth, 32% less than their actual holdings.  They thought that the middle class controls 13% of the country’s wealth, more than three times their actual holdings.  As for the bottom 40% of the population, the assumption was that the lower class and poor own a measly 9% of the country’s wealth.  In reality, these two groups control about one thirtieth of that amount.

Who Should Get the Money?

Although the perception that America’s wealth distribution is unfair cut across partisan lines, Republicans and Democrats disagreed about the ideal distribution.  People who voted for George Bush believed that the richest 20% of the population deserved roughly 35% of the nation’s wealth.  Kerry voters radically disagreed:  they felt that the rich deserved only about 30%. When it came to the country’s poorest citizens, Bush voters felt that they deserved about 9% of the country’s assets; Kerry voters preferred to give them 12%.

Respondents making over $100,000 per year, the group most heavily skewed toward a top-heavy distribution of wealth, advocated a system in which the top 20% received about 40% of the country’s assets and the bottom 20% got roughly 7%.  Yet even this comparatively Dickensian wealth distribution still gave America’s rich less than half of their current holdings, while giving the poorest more than twenty times their current holdings.

In October of 2008, before the full extent of the Wall Street megabank bailouts had been completely understood by most Americans (and before those multi-million-dollar bonuses had been awarded to the malefactors who caused the financial crisis) the Gallup Organization conducted a poll on the subject of wealth redistribution.  This is what they observed:

A majority of Americans (58%) say money and wealth should be more evenly distributed among a larger percentage of the people, although slightly less than half (46%) go so far as to say that the government should redistribute wealth by “heavy taxes on the rich.”

*   *   *

Still, in each of the four times Gallup has asked this question in recent years, between 45% and 51% of Americans have gone so far as to agree with the fairly harsh-sounding policy of “redistribut[ing] wealth by heavy taxes on the rich.”

Because the polls discussed above reveal that the current wealth distribution is unacceptable to most Americans, the “wealth redistribution” argument — as it is often used by politicians – should be a non-starter.  Perhaps a program of  “enhanced tax incentives for generosity” might enjoy more widespread acceptance than Gallup’s “heavy taxes on the rich” – to the point where an overwhelming majority of Americans would support it.

Unfortunately, unless that “overwhelming majority of Americans” has an army of lobbyists to advance such an initiative, the cash registers politicians portraying the effort as “socialism” will be the only voices that matter.


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Hillary Clinton Begins Making History

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March 5, 2009

While most American media outlets focus their attention on Rush Limbaugh’s vainglorious publicity extravaganza, Hillary Clinton is traveling around the world, letting everyone know that the foreign policy of the United States is being drastically changed by the new administration.

The new Secretary of State took quite a bit of heat for her failure to stage a fit of righteous indignation over China’s record of human rights abuses, during her visit there.  Nevertheless, America has been a critic of these transgressions for decades.  Given the current economic situation, our need to maintain a healthy business relationship with China and our country’s embarrassing human rights track record for the past eight years, her decision to leave that issue on the back burner for her initial visit, wasn’t such a bad idea.

Her trip to the Middle East was the first step toward rehabilitating the role of the United States as an effective peace broker for the Israeli – Palestinian conflict.  As Barak Ravid reported for Haaretz, prior to Clinton’s arrival in Israel, a list of demands or “red lines” was created and “approved by Prime Minister Ehud Olmert, Foreign Minister Tzipi Livni and Defense Minister Ehud Barak at a meeting with senior defense officials last week”.  These individuals are apparently so accustomed to browbeating Condoleezza Rice, they feel comfortable about dictating their own “marching orders” to be followed by Clinton as she approaches engaging Iran in formal, diplomatic relations.  The Haaretz article itemized these four mandates as follows:

1. Any dialogue must be both preceded by and accompanied by harsher sanctions against Iran, both within the framework of the UN Security Council and outside it.  Otherwise, the talks are liable to be perceived by both Iran and the international community as acceptance of Iran’s nuclear program.

2. Before the dialogue begins, the U.S. should formulate an action plan with Russia, China, France, Germany and Britain regarding what to do if the talks fail.  Specifically, there must be an agreement that the talks’ failure will prompt extremely harsh international sanctions on Iran.

3. A time limit must be set for the talks, to prevent Iran from merely buying time to complete its nuclear development.  The talks should also be defined as a “one-time opportunity” for Tehran.

4. Timing is critical, and the U.S. should consider whether it makes sense to begin the talks before Iran’s presidential election in June.

Steve Clemons of The Washington Note emphasized that “Israel is crossing the line” by attempting to dictate this agenda to our new Secretary of State and President:

Iran’s pretensions in the region are a problem in my view — but Iran, which fears regime change efforts by the US and other of its neighbors, is responding to an “ecosystem” that many around the world have complicity in building.

Israel should be rebuffed by Hillary Clinton.  She should listen to Israel’s views on the region of course — and consider proposals.  But this kind of instruction manual on what red lines can be tolerated or not is pretty outrageous — and borders on the type of irresponsibility and consequences of what a Taiwanese declaration of independence from China would mean.

In another Haaretz article by Barak Ravid, we see Clinton giving Israel some “pushback” that may or may not have been anticipated:

U.S. Secretary of State Hillary Clinton on Wednesday blasted Israel’s plans to demolish Palestinian homes in East Jerusalem as a violation of its international obligations and “unhelpful” to Middle East peace efforts.

“Clearly this kind of activity is unhelpful and not in keeping with the obligations entered into under the ‘road map’,” Clinton said, referring to the long-stalled peace plan.

On March 4, a day before meeting with Israeli leaders in Jerusalem, Clinton met with Palestinian Authority President Mahmoud Abbas and Palestinian Prime Minister Salam Fayyad in the West Bank city of Ramallah.  According to a CNN report, Clinton advised the Palestinian leaders that the United States is committed to the “two-state solution” (establishing a separate Palestinian state) despite the objections to that plan, voiced by Israel’s Prime Minister-designate, Benjamin Netanyahu.

“The United States through President Obama is committed to a comprehensive peace including a two-state solution,” Clinton said.  “I have said that publicly, I have said that privately.  There is no difference in any message.”

Meanwhile, Secretary Clinton made it a point to single out Iran’s “supreme leader”, Ayatollah Ali Khamenei, for interfering in Palestinian affairs by funding terrorism “whether it’s Hezbollah, Hamas or other proxies”.  As the Voice of America News pointed out:

Khamenei also called the Jewish state a “cancerous tumor” and accused U.S. President Barack Obama of following what he called the same mistaken path as George W. Bush in supporting Israel.  He made the comments during a conference in Tehran earlier Wednesday.

Clinton and Palestinian President Mahmoud Abbas dismissed the ayatollah’s remarks.  Mr. Abbas said Iran should look after its own affairs and stop trying to widen the divide among Palestinians.

Although many critics of the new administration complain that Obama has failed to deliver on his promise of “Change”, one important agent of Change on the Obama team is turning out to be none other than Hillary Clinton.  Who could have foreseen that development at this point, last year?

Another Crisis On Obama’s Crowded Front Burner

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December 29, 2008

Barack Obama’s first day as President is still three weeks away.  Nevertheless, on that first day in the Oval Office, he will be expected to focus his attention on a number of crisis situations.  How many are there now?  First, we have the economic crisis and all of its subplots:  infrastructure spending and job creation, stopping the foreclosures, oversight of the TARP giveaway (which should include bringing the TARP thieves to justice), a new economic stimulus package, getting the Securities and Exchange Commission to start doing its job, responding to cries of help from state governments and deciding on what to do about the American automakers.  As if those economic emergencies weren’t enough, the new President will need to multitask his crisis management skills to take on a number of other issues.  These include health care reform, undoing all of Bush’s “midnight” Executive Orders, winding down the Iraq war, building up troop strength in the neglected Afghanistan war and, speaking of neglect, the age-old Israeli-Palestinian conflict, which has again reared its ugly head.

Jeremy Ben-Ami is the Executive Director of J Street, which he describes as “the political arm of the pro-Israel, pro-peace movement”.  On December 27, Mr. Ben-Ami issued the following plea to the Obama administration from the J Street website:

The need for diplomatic engagement goes beyond a short-term ceasefire.  Eight years of American neglect and ineffective diplomacy have led us directly to a moment when the prospects of a two-state solution to the Israeli-Palestinian conflict hang in the balance and with them the prospects for Israel’s long-term survival as a Jewish, democratic state.

We urge the incoming Obama administration to lead an early and serious effort to achieve a comprehensive diplomatic resolution to the Israeli-Palestinian and Arab-Israeli conflicts.

This is a fundamental American interest as we too stand to suffer as the situation spirals, rage in the region is directed at the United States, and our regional allies are further undermined.  Our goals must be a Middle East that moves beyond bloody conflicts, an Israel that is secure and accepted in the region, and an America secured by reducing extremism and enhancing stability.  None of these goals are achieved by further escalation.

The December 27 Israeli air strike on the Gaza Strip was code-named:  “Operation Cast Lead”.  Reaction to the strike from the Israeli media ran the spectrum from support to outrage.  On December 28, The Jerusalem Post ran a favorable editorial approving the attack:

The IDF’s mission is not to bring down the Hamas regime, but to bring quiet to the South.  In a sense we are asking Hamas to stop being Hamas. The Islamists need to decide whether they want to go down in flames or are prepared to take on the responsibilities that come with control over the Strip. T hey may give Israel no choice but to topple their administration.

On the other hand, Gideon Levy wrote a scathing commentary on the incident for the December 29 edition of Haaretz:

Once again the commentators sat in television studios yesterday and hailed the combat jets that bombed police stations, where officers responsible for maintaining order on the streets work.  Once again, they urged against letting up and in favor of continuing the assault.  Once again, the journalists described the pictures of the damaged house in Netivot as “a difficult scene.”  Once again, we had the nerve to complain about how the world was transmitting images from Gaza.  And once again we need to wait a few more days until an alternative voice finally rises from the darkness, the voice of wisdom and morality.

On December 28, Barak Ravid of Haaretz provided an excellent, objective “back-story” on the planning and execution of this air strike.  The article explained that prior to the offensive, Israeli Foreign Minister, Tzipi Livni, went to Cairo to inform Egypt’s president, Hosni Mubarak, of Israel’s decision to strike at Hamas.  Ms. Livni is the candidate from the centrist Kadima party who will oppose Likud party stalwart, Benjamin Netanyahu, in the February 10 election for the office of Prime Minister.  Netanyahu had been ahead in the polls, prior to the execution of Operation Cast Lead.  If Israel can avoid a ground war in Gaza, she may win the support of the more hawkish voters who would have voted for Netanyahu.  A televised broadcast by Haaretz in conjunction with Channel 10 News, reported that   “Palestinians said 180 of those killed were Hamas officials, the rest — civilians.”  As of the present time, the total death toll from the assault is believed to be 280.  If 180 of those individuals really were “Hamas officials”, this could work to Livni’s advantage in the upcoming election.

The Obama administration’s diplomatic initiative on this conflict will redefine America’s role in the Middle East.  A December 28 editorial in The Washington Post concluded that the Gaza incident could prove to be a costly distraction from the effort to curb Iran’s nuclear ambitions.  Nevertheless, if Hillary Clinton were to dispatch an envoy to Syria to engage the al-Assad regime in getting control over Hamas’ activities in Gaza:  Could this undermine Iranian hegemony in the area?  Ultimately, everyone in the world is hoping that the Obama administration will provide the aggressive diplomacy that has been lacking in the Middle East for the past eight years.  The pressure for immediate results will be just one more headache waiting for him on Day One.

The Biggest Challenge For Hillary

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December 1, 2008

The recent attacks in Mumbai, India focused international attention back to the continuing problem of organized terrorist activity.  As Hillary Clinton is presented to the world as our next Secretary of State, the more sensationalist elements of the media have their focus on terrorism.  Terrorism is highlighted to the exclusion of the other pressing matters to be faced during Secretary Clinton’s upcoming tenure, presiding over that all-important bureaucracy in the neighborhood known as “Foggy Bottom”.  Nevertheless, Secretary Clinton will have several other pressing issues on her agenda  — “leftovers” that have stumped the previous administration for the past eight years.  Among these abandoned, stinking socks on the floor of the Oval Office, the least fragrant involves the situation with Iran.  The Bush years took that bad situation and made it far worse.  A December 1 article in the Tehran Times focused on the remarks of Majlis Speaker, Ali Larijani, about what might lie ahead between the United States and Iran.  While suggesting that the Bush Administration “sabotaged” efforts to resolve the dispute over Iran’s nuclear program, the article mentioned Larijani’s criticisms of what was described as the Democrats’ Iran containment policy.

A report in the December 1 Los Angeles Times examined the expectations of Arabs and Israelis, with Hillary Clinton as Secretary of State.  Discussing various forecasts concerning American strategy towards Iran, the article noted:

Some analysts predict the Obama administration will try instead to broker an Israeli-Syrian accord, aimed at drawing Syria away from Iran’s influence and diminishing Iran as a threat to the Jewish state.

Elizabeth Bumiller’s article in the November 22 New York Times described the “working chemistry” that has developed between Barack Obama and Ms. Clinton.  This chemistry resulted in a softening of Clinton’s position, expressed during the primary season debates, about negotiating with Iran:

But although Mrs. Clinton criticized Mr. Obama for being willing to sit down and talk to dictators, he has said he would have a lower-level envoy do preparatory work for a meeting with Iran’s leaders first.  Mrs. Clinton has said she favors robust diplomacy with Iran and lower-level contacts as well.

In the November 24 Jerusalem Post, Douglas Bloomfield gave us a refreshing look at how the Obama – Clinton foreign policy team might function:

Hillary’s great challenge will be to remember who IS President, who ISN’T and who WAS.  She will have to focus on rebuilding relationships damaged during the Bush years of “my way or the highway” foreign policy, taking the lead from the man she once described as not ready to be president.

*  *  *

In the Middle East peace process, as in other policy areas, Obama seems intent on charting a pragmatic, centrist course.  While that will disappoint both the Jewish Right and Left, it could prove a welcome change after eight years of the Bush administration’s faith-based foreign policy and not-so-benign neglect of the peace process.

As Inauguration Day approaches, the Bush Administration’s legacy of complete incompetence in nearly all areas is being documented by countless writers around the world.  By invading Iraq, Bush-Cheney helped Iran realize its dreams of hegemony.  Bush’s mishandling of Iran’s rise as a nuclear power became the subject of a thought-provoking opinion piece by David Ignatius in the November 30 Washington Post.  Mr. Ignatius noted that Iran had neither enriched uranium nor the technology to enrich uranium (centrifuges) when Bush took power.  As Bush’s days in the White House wind down, we now see Iran with nearly 4,000 centrifuges and approximately 1,400 pounds of enriched uranium.  The 2006 precondition that Iran halt uranium enrichment before the United States would participate in diplomatic efforts to address this issue, exemplifies the handicapped mindset of the Bush-Cheney regime.  As Mr. Ignatius pointed out:

It’s impossible to say whether Iran’s march toward nuclear-weapons capability could have been stopped by diplomacy.  But there hasn’t yet been a good test.  Because of bitter infighting in the Bush administration, its diplomatic efforts were late in coming and, once launched, have been ineffective.

By the time we finally have a President and a Secretary of State who are capable of taking on the dicey task of negotiating with Iran on the nuclear issue, it may be too late.  Hillary Clinton’s biggest challenge in her new job has already been cut out for her by the Bush Administration’s nonfeasance.

The Tool” Picks Up Fear Flag and Gets Shot Down By A Real Soldier

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June 30, 2008

Last week, John McCain’s chief campaign strategist, Charlie Black, caused quite a stir with his invitation for an Al Qaeda attack on the United States, to help improve McCain’s chances for election.  Black was obviously thinking about Osama bin Laden’s last “October Surprise” in which bin Laden released a video right before the 2004 election.  That video was widely considered to have given Bush a crucial “bump”, putting him over the top to defeat John Kerry.  Knowing that Al Qaeda (and other terrorist groups) hate to see moderates get elected, Charlie Black saw fit to remind Al Qaeda that they would have no rallying call if Barack Obama were to become President and pull the U.S. troops out of Iraq.  Al Qaeda’s best chance for maintaining their status quo appears to Black as another terrorist attack in the U.S.  He knows they want McCain to win the election because they wanted Bush to win in 2004.  Four days before Election Day in 2004, bin Laden released an 18-minute videotape taunting George Bush about the events of September 11, 2001 and he claimed credit for directing the 19 hijackers.  Osama’s gambit in helping Bush win seems to have paid off.  The incompetent Bush will likely leave office without having caught bin Laden.

After Charlie Black tried his shot at a self-fulfilling prophecy last week, with his announcement (in an interview with Fortune magazine) that a terrorist attack in the United States would “be a big advantage” to help McCain get elected President, Black was widely scorned and criticized.  Many commentators placed this remark in context with Black’s earlier statement that the assassination of Benazir Bhutto helped McCain in the New Hampshire Primary.  Although McCain attempted to distance himself from Black’s remarks, he has kept Black onboard “The Straight Talk Express”.

Just as criticism of the McCain campaign, for relying on “the politics of fear”, is starting to die down, along comes our old friend, Joe “The Tool” Lieberman.  On June 29, The Tool appeared on the CBS television program, “Face The Nation”.  Looking into his crystal ball (perhaps that should be plural) The Tool predicted a terrorist attack against the United States in 2009.  Out of fear of getting caught at an attempted, self-fulfilling prophecy similar to Black’s, The Tool, speaking with his forked tongue, tried to distinguish his prediction from Black’s wish:

Certainly the implications there I know were not what Charlie intended. And he apologized for it. Senator McCain said he didn’t agree. And, of course, I feel the same way.

Actually, The Tool feels the same way as Charlie Black.  He continued on by picking up Black’s “fear flag” to carry it on to victory for McCain in November:

If we had done what Senator Obama asked us to do for the last couple of years, today Iran and al Qaeda would be in control of Iraq. It would be a terrible defeat for us and our allies in the Middle East and throughout the world. Instead, we’ve got a country that’s defending itself, that’s growing economically, where there’s been genuine political reconciliation, and where Iran and al Qaeda are on the run. And that’s the way it ought to be.

Iraq is “growing economically”?  It has yet to rebuild its infrastructure.  The Tool is obviously talking to those people referred to as “low information voters”.  He is insulting the intelligence of everyone else.  Iraq is “defending itself”?  Tell that to our troops who are stationed there.  If Iraq really is defending itself, then we should be able to leave.  Iran is “on the run”?  I thought they were getting ready to nuke Israel.  The Tool is now so used to telling lies that he can effortlessly spit out a sentence containing three big ones.

On the same program, we heard from someone who, unlike Lieberman, actually has some military experience.  Retired General Wesley Clark told host Bob Schieffer: “I think Joe has it exactly backwards here.”  After comparing the qualities of Obama to those of McCain, General Clark said:

And I think what we need to do, Bob, is we need to stop talking about the old politics of left and right, and we need to pull together and move the country forward.

Both Lieberman and McCain used to pride themselves on being centrists in a highly-partisan Senate.  Both are now singing the same, sorry tune we’ve been hearing from our unpopular President for the last seven years, at a time when we would expect a theme of hope and bipartisan progress.  With Obama singing solo on that theme, the prospects for any Republican candidate this year don’t appear much better than the outlook for the S&P 500.