SOAKING THE RICH? WHO CARES?

"Who cares if the Bush tax cuts for the wealthiest Americans expire? I'm not one of them, so as long as MY tax cut remains in place, why should I care? It's nothing to me." This, understandably, is the attitude of most middle-class Americans. I get it. But what is the attitude of the 43% of American wage-earners who pay no federal income taxes at all?
Do they care if the rich get soaked? Nope. (See the above.) Would they care if the tax rates for middle-class tax-payers went up? Nope. If they're not paying, they don't care who does. And since they're not paying, why should they care how tax money is being spent? They have no skin in the game.
Do you think that it is desirable that so many Americans should be disincentivized from caring about how tax money is spent? Let's recall the advice of Deep Throat: Follow The Money. That's how you know where the Federal Government is going. Unless the government is spending YOUR money, you don't care where it comes from, and you don't care where it goes.
This is why all Americans need to pay income taxes, even if just a little bit: It makes you care, it makes you pay attention.

CARS NOBODY WANTS

General Motors/Government Motors is ready to begin selling the Volt. For $41,000. They first thought, a long time ago (long before the bankruptcy, etc.) that they could sell it for $28,000. But things have changed.
Oh, wait! The majority shareholder, the Federal Government, is willing to subsidize purchases of the Volt with a $7,500 tax credit! That brings the actual cost of the base model down to $33,500! Except you have to finance the $41,000 up front, then get the tax credit when you file your next tax return. OK...
My first question is this: If someone wants to spend $41,000 on a brand spanking new car, why do I have to help them pay for it with my tax dollars?
My second question is: Who is going to spend $$33,500 - $41,00 on a car the size of a Toyota Corolla? I don't think many people will do that. I think this is the same old story, "General" Motors trying to sell cars nobody wants. This whole thing is about "Government" Motors pursuing a political agenda. On my dime.

BERNANKE ON THE NATION'S ECONOMIC FUTURE

Today, Fed Chairman Bernanke explained that by the year 2020, the federal debt ratio to GDP could exceed 100%. The debt could be larger than the entire U.S. economy at that time, unless there existed the political will to do things necessary to avoid this result.
Don't worry, though. Treasury Secretary Geithner said that President Obama's budgetary measures will prevent that outcome. The Congressional Budget Office agrees with the secretary. They say that if things go as well as President Obama predicts, the debt to GDP ratio will only go to 90% by 2020.

WHEW! That was a close one.

DRILL, OBAMA, DRILL!

Everyone has known for a long time that the only way in the world that California can hope to ever balance its budget is to expand off-shore oil drilling, and get healthy on the royalties that it would receive.

Now recall Candidate Obama deriding Sarah Palin's "drill, baby, drill" slogan, saying that off-shore drilling would not save Americans any money. Now he has changed his mind about this, and will support drilling in the Gulf and the east coast, and in Alaska. Great. Look for Arnold to press for drilling off the California coast. This could easily be done using parallel drilling from existing platforms.

Now recall Teddy Roosevelt and his successful efforts to acquire lots of land in the western states, creating lots of national parks, reserves, and monuments. He was a great progressive. Let's just say, without cynicism, that this was his only motivation in buying up the western states. The federal government owns virtually all of Nevada and Utah. The government owns a great deal of Colorado and Wyoming. It's true that there is great natural beauty in the west. But that's also where the nation's natural resources exist, including oil. The government owns very little land east of Colorado.

Now recall Maxine Waters threatening the nations oil execs by saying that she would not be opposed to nationalizing all the oil companies in the country. Recall Hillary Clinton screaming about the oil companies' "obscene" profits, and calling for a large tax increase on their "excess" profits.

Recall that a lot of countries have nationalized their oil resources. These include not only the OPEC countries, but also Mexico and Venezulea, among others.

Although President"s plan for drilling is quite modest, it is a sign that something else is afoot: A plan to gain additional federal revenue from oil. Not by nationalizing the industry, at least not at first, but to gain revenue from royalties by expanding drilling on federal lands, and taxing the increased profits of oil companies.

Only a Democratic president can get this off. The environmentalists will be quieted by the fact that this kills two birds with one stone: Decreasing reliance on foreign oil, and solving the federal government's deficit problem. And throw in "job creation" as a rationale.

President Obama reluctantly got in the automotive business, the student loan business, the insurance and banking industries. Now watch him get in the oil business. Why would he do this? For the same reason that Willie Sutton robbed banks, and that middle-class tax increases are inevitable: Because that's where the money is.

PRESIDENT OBAMA SAYS RIDICULOUS THINGS ABOUT HEALTHCARE

President Obama, in his remarks following the House vote on the Senate healthcare bill said that that this bill was a "common sense" reform. If this was the case, why did it take more than a year to get it done? Why was it is so contentious? Why was it passed without a single Republican voting in support? Had it been a "common sense" reform, none of this would have been true.
He also said the passage of the bill was not a "top-down" effort, but came from the bottom up. How can that be said when every poll taken reflected overwhelming opposition on the part of the American people? This was most definitely a top-down process involving pay-offs and arm-twisting like we've never seen.

ARE THE ECONOMIES OF CHINA AND THE U.S. CO-DEPENDENT?

In a word, yes. For now.

Generally, every national economy in the world is dependent of the health and success of the U.S. economy. The current global economic problems have their roots in the U.S. What happens here doesn't stay here. As the U.S. economy goes, so goes the world. This is true for many reasons, not the least of which is that the U.S. dollar is the world's reserve currency. Every nation has a stake in the dollar's maintaining its value.
It seems like a long time ago, but there was a time when the U.S. was a creditor nation. Other nations owed us money. We were the world's banker. China was a debtor nation. They were poor. Now, the reverse is true. The U.S. is a debtor nation, and China (and Japan) is our banker. We have to borrow lots of money from them because Americans consume far more government services than we are willing to pay for. China has been willing to finance our consumption because their economy, since some capitalistic principles have been embraced, is generating a lot of money which has to be invested somewhere. Like a lot of other nations around the world, China decided that the U.S. offered safety and a good return, so they have invested heavily in U.S. government securities.
China's economy is export-driven. They sell a lot of goods in U.S. markets. In order to keep the prices of their goods low, the Chinese have for years suppressed the value of their currency. The U.S. has mixed feelings about this. On one hand, the artificially low value of the yuan creates an unfair advantage for the Chinese as the U.S. competes with them internationally. On the other hand, America really needs to import cheap goods. So while we sometimes complain about China's currency not being allowed to float toward its true value relative to other currencies, we don't really mind.
So right now, it goes like this: We buy tons of cheap Chinese goods, and they invest their profits in U.S. government securities. But how much longer can this co-dependency go on?

The Chinese government understands that, in the long term, their economy must become less export-driven and more consumer-based. That is to say that more and more of their goods must be sold to their own citizens. Right now, they have too many eggs in the export basket. Being one of the most populous nations on earth, their potential consumer base is massive. But, at present, the citizens of China are too poor to be a better market for Chinese goods than citizens in the rest of the world.
At some point in the future, China's expanding middle class will be able to buy the kinds of goods that are currently exported. This will diversify and stabilize their economy. Also, at this time, there will be no reason not to allow the yuan to find its own level in currency markets. When the yuan becomes stronger, the costs of Chinese exports will increase for consumers around the world. America will no longer enjoy the cheap prices we currently have at Target.
How much longer the Chinese will continue to finance our government is an open question. Very recently, Chinese government officials asserted that they have no intention to abandon the U.S. debt market. This statement was made despite China's having recently sold some of their debt holdings in the secondary bond market.
So, for now, the Chinese and American economies are co-dependent. China's long-term plans are to de-couple from the U.S. This may take a long time, but the U.S. will have to adjust to China's long-term economic policies.

THE STUPIDEST LOANS BANKS ARE MAKING RIGHT NOW

The stupidest loans banks are making right now are home mortgage loans at rates fixed at 5 to 5.5% for 30 years. Think about it.

THE DEVIL IN THE DETAILS IS GOLDMAN SACHS, PART II

Like I said in Part I, all analogies will collapse if pushed far enough. That still goes, so give me a break.

Say you are Goldman, and I am Sachs (or vice-versa). We own a bank. We have a rep for being able to solve anyone's financial problems. It is also well known that we are extremely risk averse, so our fees are high, and our profits must be assured.

Mr. Zorba comes to us having a real bad problem. He wants to join a very exclusive club whose members are all snobs of European descent. The people in the club don't think you're rich unless you hold Euros. The club has high admission standards, and requires potential members to prove that they have short-term debts of no more than 3% of their annual incomes, and long-term debt of no more than 60%. Zorba explains that he can't meet either standard, and he needs to put some cash on the books, because he wants to join the club real bad.

Zorba says he's heard that we helped his acquaintance, Salvatore, get into the club in the past. We can neither confirm or deny this, but we say that if Zorba gives us the ugly truth about his finances, we'll see what we can do.
Zorba's financial statement shows that he holds a lot of real estate, and recently bought a parking garage in Little Tokyo. To buy the business, he borrowed Yen. To buy real estate, he borrowed Dollars. Interest costs are eating him up.
We explain to Zorba that his interest expenses on his debt could be reduced if it were expressed in Euros, but while this would be good, he couldn't really put any cash on the books by a break-even transaction in the present spot currency market.

And so...

We suggest that we could pick out an historical exchange rate that would be quite favorable for him, and we could acquire his debt at that rate, paying him in Euros. But he couldn't tell anyone. This would give him the equivalent of $1 billion right away, and maybe $9 billion more in the long term. Of course, he'd have to pay us back with a balloon payment in 15 or 20 years. This sounds good to Zorba.
Then we go see an insurance agent named Otto. He charges us $200 million for a policy insuring us against Zorba's default on the $1 billion. Of course, Zorba has to pay for our credit risk. That would only be fair.

With Zorba's balance sheet now looking pretty good, he applies for admission into the club. He gets in, and is very happy.

Now all we have to do is sell Zorba's debt to somebody else, and, you know, "buyer beware". This won't be too tough, because, after all, he just got into a very exclusive club, and everyone in the world knows that to get in, your financial statement has to be in great shape. Besides, the "currency swap/loan" was off the books. He'll have to deal with all the deferred interest payments the best way he can, if he can. Not our problem. We got him in the club, and we're off the hook. Plus we made money.

This is basically how Goldman Sachs helped Greece get into the European Union by falsifying its balance sheet and concealing its true debt levels. Then they underwrote Greek debt and sold it, knowing it was shaky.

THE DEVIL IN THE DETAILS IS GOLDMAN SACHS, PART I

All analogies break down when pushed far enough. I know this. But bear with me.

Say my name is Goldman, and you are Sachs (or vice-versa). We recently bought a house for $165,000 cash. The fair market value is $200,000. Our friend, Lehman, wants to buy it, but he's making $400/month payments to his brother for a car loan that he got on a handshake deal, and he can't make a 20% down payment. We tell him we'll take 5% down, and we'll finance the balance with interest payments he can afford. We require a financial statement from him which leaves out the part about the car loan. We close the deal.
Then we take all the mortgage papers and Lehman's financial statement to another friend, Mr. AIGner, who is an insurance agent/bookie who thinks he knows something about real estate finance. We tell AIGner (with tongue in cheek) that although we know we have made a very solid loan, we'd like for him to sell us a kind of insurance policy against Lehman's possible default. AIGner examines the documents,and goes for it. We agree to pay premiums of $100/month for a $200,000 "policy'.
Then we put the word out that we have a golden mortgage loan for sale. Lots of people who trust us want to buy it. The more we talk it up, the greater the demand to buy it increases. We decide to sell the loan at auction. The bidding is frenzied, and our other friend, Stearns, pays us $210,000 for the note. We transfer it to him. We no longer on the hook as a lender.

But we still own the "insurance policy".

So when Lehman defaults two months later, we have $419,800 in bank (which we also own), and everyone else is screwed and tattooed.

This is how credit default swaps work. This is how Goldman Sachs hyped crummy mortgage paper (that they knew was crummy), sold it to people who should have known better, and put AIG on the hook for all of it.

PAUL KRUGMAN DISTORTS HISTORY

Liberal economists like Paul Krugman have always tried to sell the story that conservative politicians have a very sinister agenda: to intentionally erode the government's fiscal position to such an extent that social welfare/entitlement programs would have to be eliminated in order to reconcile the national budget. Most recently, Krugman claims that President Reagan's tax-cutting program was the mechanism through which which he attempted to accomplish this evil goal. That's not how Krugman and others portrayed Reagan's reputed "strategy" at the time. Back then, liberal economists insisted that Reagan's spending on military and national security initiatives (remember the Star Wars debate?) was secretly designed to take so much money out of the budget that there would be no choice but to eliminate welfare and other entitlements.
A couple funny things happened, though. Instead of the arms race bankrupting the U.S. economy, it bankrupted the Soviet economy. It was their government that was "fundamentally transformed" by Reagan's military spending, not ours. Also, if it had been Reagan's intention to ruin the nation's balance sheet by cutting taxes, he failed miserably. Revenues went up. Does anyone, even Krugman, really believe that President Reagan was disappointed in that result?

PAUL KRUGMAN SHADES THE TRUTH

Paul Krugman's most recent column ("Now, Finally It's Time For GOP To Put Up Or Shut Up") is a perfect example of how he often distorts the truth. He notes that "conservatives have backed away from spending cuts they themselves proposed in the past". He is referring to the fact that Republicans, about twenty years ago wanted to cut Medicare spending, and that they now oppose the Democrats' plan to move about $500 billion out of Medicare in order to help fund their Health Care/Health Insurance Reform bill(s). Sounds like a purely political flip-flop made by the "Party of No". But it isn't, and Krugman knows this very well.
The Republicans oppose stripping the Medicare budget for two reasons. The first is that Medicare is on a course to insolvency. Taking money away from the program will only accelerate its demise. Secondly, the Republicans doubt that Democrats will, when push comes to shove, actually take money away from Medicare. Cutting entitlement programs is not their M.O. The Republicans expect that the Dems would contoct a way to take $500 billion out of Medicare, spend it on their Health Care program, then restore the Medicare budget with tax increases.

HAVE CHINA AND JAPAN OVER-EATEN?

There is some tension building between China and the U.S. A lot of it has to do with our plans to sell Taiwan a bunch of sophisticated military equipment. Some of it has to do with the Chinese government's disregard for the human rights of its citizens, as displayed in its dispute with Google. Some of it has to do with our concern for China's occupation and suppression of Tibet. Part of the tension is due to China's holding so much U.S. debt, and their worry that the debt will be repaid with inflated dollars. Part of it is due to China's indifference to the intellectual property rights of American companies. Some of the tension is due to all the cyber-attacks that originate in China, government-sponsored or not. Then there's China's reluctance to participate in sanctions against Iran.
Some have been concerned that China might someday, in anger, or out of spite, or just to flex its economic muscles, flood the market with U.S. government paper. I don't think there are any circumstances under which this would happen due to the negative impact it would have on China's balance sheet.
What has happened, though, is that in December, China sold off 34.2 Billion dollars worth. Interestingly, Japan sold off $11.4 Billion.
The next U.S. debt auction will be very interesting.

OBAMA'S ADMINISTRATIVE FIAT

Several days ago, a bill was defeated in Congress by a bi-partisan majority which would have allowed President Obama to appoint a commission that would recommend specific spending cuts and tax measures that bring the budget down, and help control long-term government debt. The bill was offered as a solution to these problems because of Congress' demonstrated unwillingness to confront them.
But the bill was defeated. There were a couple reasons. First, the Congress was unwilling to convey their constitutional responsibilities to a presidential commission, although some Republicans, in the past had favored the idea. Secondly, legislators were unsure if the the commission would truly be a bi-partisan group. In the end, the bill was defeated, and even co-sponsors of the bill (Democrats and Republicans) voted against it, even though congress would have had to approve its recommendations in an all-or-nothing, up-or-down vote.
What was President Obama's response to the congressional rejection of the commission? He said that he would appoint one anyway by executive order.
When it became clear that Obama's Cap-and-Trade legislation was dead in the water, how did the president respond? He said that he would just have the EPA regulate CO2 emissions and achieve his energy policy in this way.
President Bush was widely (and rightly) criticized after 9-11 for trying to unconstitutionally consolidate governmental power within the executive branch. Now where are the critics when President Obama does the same thing?

SKEPTICS AND DENIERS

I'm not big on conspiracy theories. I believe, for example, that the U.S. really landed a man on the moon. I don't think that the film of the landing was shot in the Arizona desert. I think that Lee Harvey Oswald acted alone. I don't think that FDR allowed Pearl Harbor to be attacked, just to get into WWII. I don't think that Bush stole the election from Gore. (However, everyone knows that Mayor Daley stole the election for JFK in 1960.) I don't believe that the U.S. government was complicit in the 9-11 attacks, or that the Jews were behind it. I believe that the Rosenbergs were guilty as sin. The Holocast is not a hoax. There was no UFO at Roswell.
There is only one thing in history I'm not sure about. "Shoeless" Joe Jackson might have actively tried to throw the 1919 World Series. I hope it ain't so, but I don't know.
Conspiracy theories abound. For every true believer you can name, there is a skeptic or denier. I am always among them. This goes for global warming being a "man-caused" phenomenon. It also goes for the claim that President Obama's stimulus package created a single, solitary job. Or "saved" one. Nor do I believe for a second that the stimulus package prevented a national economic melt-down or prevented a second Great Depression as the president asserted yesterday.
I'm skeptical about any numbers released by the Bureau of Labor Statistics. I have no faith in the numbers released by the Obama administration regarding the U.S. GDP. I find it odd that our economy can be growing while energy consumption and gasoline prices are not increasing. Shell and Chevron have both reduced personnel, citing low demand as the reason. That make any sense to you?
What really bothers me, as a denier and a skeptic, is that the true believers think that I am stupid or crazy. President Obama has no patience for those that think the stimulus package has been an overall bust, or that Cash For Clunkers was idiotic. Now we go on to his "Jobs" bill, which is nothing more than another stimulus bill we can't afford. Does anyone think an employer will be motivated to hire an employee for $40,000 a year just to get a $5000 tax credit? Not lately.
I just don't believe a word of it.

"PAY-AS-YOU-GO" BROKE

The Democrats are all giddy about their new dedication to a "pay-as-you-go" strategy to control the deficit. Basically, this means that for every dollar of new government spending, there has to be an equal reduction somewhere else in the budget. Alternatively, a new source of revenue may be found to fund the new expenditure. Either way, the new spending is off-set, and the deficit is not increased. Good idea. It worked before when Clinton was president, and Congress was led by Republicans.
Now the picture is a little different. President Obama, as a candidate, assured us that taxes on persons making less than $250,000 per year would not see their taxes increased. Now he is an "agnostic" about tax increases on the middle class. It's not hard to foresee that any new expenditures will result in higher taxes, and that they will be rationalized as deficit-neutral under the "pay-as-you-go" program.

GREECE, THE SQUEAKY WHEEL

The problems in the Greek economy have not yet been addressed. The Greek government keeps insisting that they do not want or need a bail-out from the other nations in the Euro Zone. Germany and France keep implying that they may help, but they have not done so yet. The IMF is still on the sidelines. It would be best for all if Greece could solve its own problems. They are talking about a major bond issue. Good luck with that.
A number of other countries in better economic shape have tried recently to raise some money in the bond market (e.g. Panama and Great Britain), but have not had very good results. It's hard to think that anyone will have any enthusiasm for a Greek issue. Greece has to reduce its spending, particularly in government payroll. Watch the union members hit the streets when that happens. The only other way out is for the Greek government to PRIVATIZE their way out. The government owns banks, hotels, resorts, and other hard assets that they can sell off. The Greek government needs to get "out of business" before they are really "out of business".

PREVENTING INFLATION

If an inflationary period can be foreseen, how can it be prevented? It can only be prevented (or ended once it has begun) by sucking out of the economy all the excess money that is causing the problem. This can be difficult at any time, but especially difficult in the circumstances the U.S. finds itself in now with the extremely rapid expansion of the money supply, and the rates of government spending and borrowing.
There are only a few ways to get money out of the economy once it has been issued. They all involve monetary and fiscal policies. On the monetary side, the Fed has to stop digging the hole. The printing presses have to stop excessive printing. Obviously, this tightens the money supply. Secondly, the Fed can use the banking system to take money out of circulation by increasing their reserve requirements. (It is the opinion of some that this is nearly all the "banking reform" that is currently needed. If you don't want banks to take big risks with their money, make them hold more of it in reserve.) To make it easier for banks to do this, the Fed will pay a higher rate of interest on money that the banks park with the Fed.
Higher interest rates will be a broad-based feature of inflation control. Higher rates take money out of the economy, and also serve to reduce demand for goods and services. Higher rates discourage individual and corporate borrowing. They result in higher rates of savings.
On the fiscal side, government spending has to decrease. Also, government borrowing has to decline. Finally, higher taxes will take money out of the economy. And with less disposable income, demand for goods and services declines.

So, what do you think the prospects are that the U.S. can avoid a period of inflation? As for monetary policy, these things can be done. As for the fiscal side of the coin, I think we can be sure that taxes will go up, but will government spending and borrowing be curtailed? Unless that happens, the likelihood of inflation is increased.

IS INFLATION ON THE WAY?

Yes. It is. There is no question about that. The only question is whether hyperinflation is on the way.
First of all, hyperinflation is only possible if paper money is in use. Back in the gold rush days, new discoveries put more gold in circulation and reduced its value temporarily. This was a kind of inflation, but it was limited in its effects because soon the amount of goods available for purchase caught up with the money supply as the gold came into wider circulation. And the supply of gold was soon stabilized as were prices of goods.
With paper money, the currency isn't tied to availability of precious metal. Its supply can be expanded for almost nothing at any time. It's just as east to print a $10 bill as it is to print a single. As many times as you want. And this is why inflation exists: The amount of money in circulation out-paces the amount of goods produced, and the availability of services for purchase. The thumbnail definition of inflation is "too much money chasing too few goods".
So understand this: the only cause of modern inflation is a government that prints too much money.
Why would a government deliberately debase its own currency by over-printing? The government needs money to operate, and politicians need it to support the programs they want. The money can only be raised in limited ways. These include taxation, borrowing,and imposition of fees, tariffs and duties. Citizens don't mind any of these things as long as somebody else pays the freight. But it becomes very unpopular if it affects you personally. But who knows, and who cares, if the government just prints a little more money here and there? So it's easy for the U.S. Treasury to sell bonds to the Federal Reserve who pays for them with notes fresh off the presses. Politically, this is a simple solution.
It looks like nobody really pays. Of course, everyone who holds the currency pays, because prices inevitably go up as the value of the money declines. The more there is of anything, the less value it has.
Another reason the government may be willing to promote inflation by over-issuing money is that it can pay back its debts with dollars cheaper than the ones it borrowed.
So these are the reasons the U.S. money supply has nearly doubled in recent times. The government needs to spend money, and it has to come from somewhere. So we're printing and borrowing as fast as we can. The more debt we accumulate, the greater the incentive to print more money.
Inflation is on the way. But will it go hyper?

HERE COME THE P.I.G.S.!

About a month ago, I discussed the P.I.G.S. (Portugal, Ireland, Greece, and Spain) of the European Union, and the financial risk they posed for the E.U. At that time, it looked like Greece would be the first P.I.G.S. economy to tank, and it has. The E.U. "requires" that its members hold no more than 3% of its GDP in debt. Greece now acknowledges debt of nearly 13%, which means that it probably is more like 17%.
The dilemma for the rest of the E.U. is what to do about it. Officially, the E.U. charter doesn't permit a bail-out. And officially, Greece isn't asking for one. . That doesn't mean there won't be one, but it is no sure thing. Yesterday, the US stock market was buoyed by the prospect, and today, as the bail-out became less certain, the market was down, but only slightly as of this writing.
The Euro has been sliding against the dollar for about 7 months. It remains to be seen what effect this will have in the currency market, whether or not there is a bail-out. Generally, the Euro is seen as the "anti-dollar". If the Euro weakens further, this will continue to strengthen the dollar and bring money into the U.S. bond market as investors seek refuge.
All this will be up to France and Germany to decide. The U.K. has never adopted the Euro, in part because of the viral nature of currency problems. Another reason is that when countries like the U.S. get in debt trouble, they can print more money and inflate their way out. This is not an option for any country using the Euro. And they can't print gold.
Of course the rest of the P.I.G.S. are still in trouble.

WHERE ARE THE SANCTIONS ON IRAN?

Almost a month ago, I commented on President Obama's delinquency in imposing sanctions on Iran for its refusal to negotiate an end to its nuclear program. The deadline was supposed to be January 1, 2010. There still have been no sanctions imposed. While the U.S. has done nothing, Iran has:
1. Said that it has no intention of allowing Russia or France to receive its nuclear material, and return it to them in a form that can be used for medical or other non-military purposes.
2. Has launched a missile in as part of its emerging "space program" that can be tipped with a nuclear payload.
3. Has assured the world that it has begun to enrich uranium to beyond 20%, a level that is obviously consistent with a nuclear weapons program.

Meanwhile, President Obama announces that it remains his policy to pursue a dual-track policy toward Iran, which includes seeking international sanctions while being open to negotiations. Hillary Clinton has, of course said that the purpose of sanctions would be to force Iran into negotiations. Very simply, this means that there is only a single track being pursued, and that is negotiation.

Where will the sanctions, if any (if ever), come from? Not the U.N. Security Council. China will veto it. From NATO? Only France, the U.K., and Germany would be interested, and without Russia signing on to a serious set of sanctions (which is unlikely), any sanctions President Obama achieves may be puny.
Of course, the government of Israel is watching closely. They have said that their expectation is that any sanctions imposed would be "crippling" to Iran.
We continue to watch and wait .

MODERN MONEY MELTDOWNS

The collapse of currencies is not a phenomenon which occurred only in ancient history. There are plenty of modern examples. I'll note a few.
We all remember seeing in our history books pictures of Germans taking wheelbarrows full of Weimar marks to the grocery store to buy a loaf of bread. The Weimar government owed so much in war reparations that they had to run their printing presses full-time to print enough money to pay it off. Germans saved "money" by burning marks in their stoves instead of coal.
Here's how the mark was valued in relation to one USD:
April, 1919: 12 marks
Nov, 1921 263 marks
Jan, 1923 17,000
Aug, 1923 4.621 Million
Oct, 1923 25.26 Billion

In 1932, Argentina had the world's 8th largest economy when its currency collapsed.

In 1994, Mexico's peso crashed.

In 1998, the Russian ruble was severely devalued.

Right now, the currency of Zimbabwe has no value due to hyperinflation (among other things).

Note to Obama, Geithner, and Bernanke: This is Peoria, not Port au Prince!

JOHN LAW AND FRENCH CURRENCY

John Law was a Scot. He was a brilliant economist and monetary theorist. But he was a Scot. Which, by definition, meant that he had a propensity for trouble-making. By the time he croaked, he was persona non grata in several European nations. He wound up in charge of the French money supply after Louis XIV croaked and France was deeply, almost hopelessly, in debt. There had been wars to finance, don't you see?
So, Law withdrew all coinage from circulation, and outlawed the export of gold and silver. In substitution, paper currency was issued which was backed by the coinage that contained precious metals and had actual value. Law thought that the French citizens would accept the new paper money, and for a while, they did. And Louis XV loved the stuff. It allowed him to retain all the gold and silver.
To keep the French economy humming right along, the king kept the printing presses running to ensure that everyone had enough cash in their pockets. Pretty soon, people noticed that it took a whole lot of the paper money to buy stuff, and they wanted their coins back. When the government declined these requests, the currency collapsed and John Law went to live in Italy.

Note to Obama, Geithner, and Bernanke: This is Peoria, not Paris.

MARCO POLO AND CHINESE CURRENCY

From 1271 to 1295, Marco Polo went around China and saw a bunch of things. Kublai Khan was running the place. (Coleridge tells us that Kublai decreed that a stately pleasure dome be built in Xanadu, but I think he made that up.) Anyway, among the strange things that MP saw was paper money that was being printed in vast quantities. He thought this was a brilliant idea, because it cost Kublai nothing to produce it. MP thought that printing paper money was akin to alchemy.
Later on, he saw the results of China's experiment with paper money. He observed thusly:
"Population and trade had greatly increased, but the emissions of paper notes were suffered to largely outrun both... All the beneficial effects of a currency that is allowed to expand with a growth of population and trade were now turned into those evil effects that flow from a currency emitted in excess of such growth. These effects were not slow to develop themselves... The best families in the empire were ruined, a new set of men came into the control of public affairs, and the country became the scene of internecine warfare and confusion."

Note to Obama, Geithner, and Bernanke: This is Peoria, not Peking!

DOING AS THE ROMANS DID

Here's a little history for you as it relates to the debasement of currency and the collapse of economic empires:
The silver content of Roman coins was continually reduced.
In the beginning of the first century, it was essentially pure silver.
By A.D. 54: 94%
By A.D. 100: 85%
By 218: 43%
By 244 : 0.05%
At the collapse in 476: 0.02%. Nobody wanted it anymore.

Message to Obama, Geithner, and Bernanke: This is Peoria, not Pompeii!

PRESIDENT OBAMA'S STATE OF THE UNION PROMISES

President Obama, being the free-trader that he is, promises to get the free-trade agreements with Columbia and Panama approved. Wow! What has been taking so long? Nancy Pelosi?
Now the president also wants to pursue nuclear power and off-shore drilling for oil. What has been the hold-up on this? Nancy Pelosi?
Let's see who wins these arguments. And let's find out if the president really has his heart in these things, or is just appearing to shift to the Republican positions. President Obama had no interest at all in any of these things as a candidate.

OBAMA GIVETH, THEN TAKETH AWAY

The $787 billion stimulus package had a little provision called the "Make Work Pay" tax credit. This how President Obama gave a "tax cut" to 95% of Americans. It wasn't a cut in marginal rates, as tax cuts are commonly understood. It was a tax credit, but not as tax credits are commonly understood, either. Usually, if you get a tax credit, it doesn't come until you file your tax return, and then it is deducted from the amount you owe, or is added to the amount of your refund. That's not how this one worked.
This tax credit was given to tax payers in advance by a decrease in the amount of federal withholdings. For individuals, it amounted to about $400; for joint filers, about $800 over the course of a year.
But wait...
What if a person had more than one job? Or was drawing a pension or Social Security while still working? OOPS! In these cases, both paychecks had reduced withholdings. There was a double-dip when the worker was entitled to only one scoop of tax credit. What now?
They'll have to pay it back. It's like getting a loan that you didn't ask for, and didn't know you had received. But on April 15, the loan is due in full. Millions of taxpayers don't know what's in store for them.
That's the bad news. The good news is that the IRS expects that most taxpayers who will have to pay back their tax credit will not have to send in additional money with the amount they would ordinarily owe to pay their taxes. They will simply get a smaller refund than they were expecting.
Maybe that's bad news, too.

IT'S THE ENTITLEMENTS, STUPID!

President Obama wants to reduce federal discretionary spending to save $10 billion a year. OK, fine. That makes the president look like budget hawk? Not so much...
The big entitlements (social security, medicare, medicaid) are non-discretionary, and account for 59% of the budget. Everyone knows these programs are on the road to insolvency. The benefits these programs provide are unsustainable. Until spending on these programs is managed, the federal budget is in trouble. Nibbling around the edges of discretionary spending is almost meaningless.
But does anyone think that the House Democrats will be into reducing federal spending? They think more spending is needed to further "stimulate" the economy.

PRESIDENT OBAMA AND THE SPECIAL INTERESTS

President Obama is always screaming about special interest groups, and how they are spoiling our political processes.He especially seems to detest Big Pharma and the health insurance companies. So why is it that the pharmaceutical and insurance industries signed on to the Democrats' health care bill? Because deals were struck. Big Pharma signed on when the president promised not to pursue legislation that would authorize re-importation of medicines from Canada. Why did the insurance companies agree to basically to be regulated like utilities? Because the health care bills contained a provision that would require everyone to buy a health insurance policy. In this way, the profits they might lose in margin would be made up for in volume. So the president isn't above deal-making with special interests, while at the same time blaming them for their influence.

PRESIDENT OBAMA, FACE THE FACTS!

President Obama has to face the facts. Although most people like him personally, the don't like his policies. His pursuit of health care reform has been a nightmare. He out-sourced the writing of the reform bill to Reid and Pelosi in an attempt to avoid a repeat of President Clinton's mistake of formulating a plan without the input of Congress. Since there was no congressional investment in Clinton's bill, Congress had no allegiance to it, and when the American people smelled a rat, no one was willing to support it. Now, no one in Congress is willing to walk the plank for health care reform since the people still smell that rat. President Obama has wasted a lot of time and political capital on an journey that was almost doomed from the start, an almost quixotic quest to where no president had gone before. There is a reason why other presidents have failed to enact health care reform: The American voters don't want anything that approaches a government take-over of the health care system!
Time to face the facts.

HURRY UP AND WAIT

All of a sudden, Nancy Pelosi and Chris Dodd want to slow down on a health care bill. After all the urgency, now they want to "take a breather", maybe for a month or six weeks. Wasn't this what the congressional Republicans were advocating all along? Funny how the senatorial loss in Massachusetts has made Democrats more cautious.

LEFT-WING VITRIOL

If anyone thinks that the right-wingers are the nasty personal-attack artists, take a look at MSNBC. Rachel Maddow is ripping President Obama a new one. It's not just Evan Bayh or Jim Webb who's being stabbed. It's wild!

OBAMA GETTING THE MESSAGE OUT

In explaining Coakley's defeat in Massachusetts (and the Democrats' losses in the governors races in New Jersey and Virginia), President Obama says that that were so busy solving crises that they weren't able to get their message out to the American people. This "explanation" has become the refuge of every failed politician in recent history. Couldn't get his message out? He's on TV more often than Jay Leno.
He got the message out just fine. The voters simply rejected it.
But he continues to believe the American people acted stupidly, like a bunch of cops who would arrest someone in their own home. Maybe the president will announce a National Beer Summit Day so we can all hear him better, and he can get his point through our thick skulls.
Really now, who's the one not getting the point?

THE PARTY OF "KNOW BETTER"

The Democrats have portrayed the Republicans as "The party of 'no'". They have blamed Republicans for the failure, so far, to pass a health care bill. This, even though they have the presidency, a majority in the House, and (until today) a fillibuster-proof majority in the Senate. The Dems could have passed any bill they wanted. The problem is, they couldn't write a bill they wanted. They could only write bills nobody wants. And I mean nobody.
But even though the American people don't want the House or Senate bills passed, the Democrats think they know better. They really think that when the full provisions of a health care bill kick in (three or four years from now), the American people will love them. Because everybody loves an entitlement. People love Social Security, Medicare/Medicaid, unemployment insurance, etc., even though they were too stupid to understand them when they were first proposed. Of course. The Dems think they know better what is best for the nation than the nation itself. They don't understand why anyone would decline health care as a "right", as Senator Harkin believes it is.

THE MEANING OF THE MASSACHUSETTS SENATE ELECTION

The future of the Democratic Party's health care reform efforts are very much in doubt. Most people think that the only way a bill will be passed is if the House of Representatives swallows the Senate bill whole. Don't look for that. Instead, there will be several smaller bills passed that can be supported by some Republicans. This is what the Republican leadership has been after. This won't satisfy the left wing of the Democratic Party, but it's the best they can get. This way, the Dems can say they got some reforms passed on a bi-partisan basis.
The real consequence of this election, however, does not concern health care. It concerns "cap and trade". As legislation, it is dead. Democrats, after seeing the results in Massachusetts, won't have the stomach for legislation that Candidate Obama conceded would "necessarily" cause energy bills to "skyrocket". Not that President Obama will give up on "cap and trade". He'll just have the EPA impose regulations that will get the same results. This will take congressional Democrats off that particular hook.
But achieving "cap and trade" through administrative fiat will put President Obama on the hook all the way. He already is regarded as arrogant and unconcerned about the popular opinion of his policies. His turning EPA regulators loose on CO2 emission standards will only reinforce the negative opinion that Americans are developing about their president.

MASSACHUSETTS SENATE ELECTION

There is much to say about the ironic election of Scott Brown to fill the senate seat of Ted Kennedy. This election is seen by many as a referendum on the agenda of President Obama generally, and on the health care bill specifically. While this may be true, there is one factor which must be kept in mind in interpreting the results of this election. Massachusetts already has had a law on the books which provides health care for its citizens. The health care bill pending in Washington offers nothing for Massachusetts. If it were to pass (and this is not certain), the people of Massachusetts would be taxed to provide health care for the remainder of the nation without receiving any benefit themselves. No wonder the pending national health care bill was unpopular, and this contributed to a big Republican victory.

THOSE CRAZY TELEVANGELISTS

Perhaps the stupidest people people in America have been called by God to disgrace themselves as televangelists. Among the worst exhibitions of self-loathing ever performed in public was the weeping and wailing of Jimmy Swaggart as he confessed his penchant for prostitutes. Or the spectacle of Jim Bakker and Tammy Faye when Bakker's dalliances were revealed.
I remember Oral Roberts' plea for contributions for some special project he was cooking up. Afraid that his fund-drive would fail, Roberts warned his supporters that God had told him that if the money didn't come in, God would "call him home". I guess the threat must have worked, as Roberts didn't croak until a couple weeks ago.
Then there was the time that Jerry Falwell seriously blamed the 9-11 attack on American gays and lesbians. He never met a conspiracy theory he didn't like.
But Pat Robertson takes the cake. I saw him on TV when a hurricane was expected to hit Virginia Beach where his college/broadcasting complex was. He announced that he had prayed that the hurricane would stay out at sea, take a northeasterly course, and that his property would be spared the devastation that loomed. I thought to myself at the time that his prayer was not nearly bold enough. He should have announced that he had prayed that the hurricane would hit his place directly, bash it mightily for five days, and that when the storm clouds lifted, not a single shingle would have been disturbed, and not a single tree would have been uprooted. Now that would have proved something.
Now Robertson has proclaimed that Haiti's current devastation is the result of its being cursed by God for the nation's deal with the Devil that was struck in 1791 to rid Haiti of its French colonists. I think the nation of Haiti was cursed by the twenty-year rule of mass-murderer Francois "Papa Doc" Duvalier who was crazier than Idi Amin. But maybe not as crazy as Pat Robertson.

I THINK YOU MISUNDERSTOOD THE PRESIDENT

He didn't say anything about "carpet tacks". He said "CARBON TAX".

HOME-GROWN TERRORISTS

Coming soon to a shopping mall near you.
These guys are game-changers.

I think that the Christmas Day attack was rather an impromptu affair. I think Abdulmutallab walked into the al-Qaida office in Yemen, and told them he wanted to kill himself by blowing up a plane-ful of Americans. They looked him over, said "OK",and enrolled him in a "training program" just so they could keep an eye on him long enough to check him out a bit. Then they bought him a ticket, packed his pants, and drove him to the airport. They left some of the operational details up to him, and this resulted in the bomb's failure.
I don't think we'll see a similar plan next time. Next time, they'll be home-grown.
No passport/visa issues, no "watch list" problems. No international cell phone intercepts. Lots simpler. Much more difficult to predict. Even "profiling" won't help. They will be Americans who've never been to the Middle East. Citizens. Under the radar. Educated middle-classers. Dozens of them.

TRANSPORTATION SECURITY ADMINISTRATION

Some of you may recall my suggestion at the time this agency was created, that airports should be assessed for security needs considering such factors as: 1) Whether international flights terminate at the location. 2) Whether the airport as been the target (or rumored target) of an attack. 3) The volume of air traffic including both passenger and commercial flights. 4) The "propaganda value" of an attack at the airport.
When such an assessment was complete, the government could have then decided which airports most needed security enhancements, decide the kinds of physical and procedural security measures which would be most appropriate, and initiate changes beginning with the vulnerable airports. As far as I know, the TSA was established at all U.S. airports at virtually the same time, using the same security policies and procedures in all locations.
The result has been a cookie-cutter approach to airport security. Because one size fits all, an older female passenger flying from Dayton to Daytona passes through the same security protocol as a younger male passenger flying from Boston"s Logan airport to Dulles International in Washington, D.C. I never thought this made sense.
OK, I know what you're saying to yourself: "Where would the Detroit airport have fit into this security scheme"? On the second tier, of course. Detroit was not a "chosen" as a site for a terrorist attack in the same way the Twin Towers were. Amsterdam was chosen as a departure site, and Christmas Day was chosen as a time for the attack, and the plane was full of passengers. These were the things that mattered. The fact that the flight was bound for Detroit was incidental.
Not every prison in America is a maximum security facility. Not every airport in America need be a maximum security facility, either. The "security" afforded by the TSA and their silly procedures is an illusion anyway, and to impose them in every airport equally is a waste of money and resources.

UNIVERSITY of PHOENIX

This school is owned by The Apollo Group (Nasdaq: APLO). The Apollo Group has flying high for several years, making a lot of money. The money basically was from the federal government Title IV program which gives out grant money and guarantees student loans. U of P caters to part-time students, a lot of whom are already employed, but looking to improve their work situation. They spend a lot of money in advertising. Their recruiters are apparently very aggressive, and earn bonuses based on their enrollment of new students.
And there's the rub. The feds are evidently suspicious of U of P's practices in this regard, and wonder if the money they are passing on to U of P is really benefitting students, or just boosting the market cap of The Apollo Group.
This is worth watching as U of P is not the only private proprietary "institution of higher learning" that has been raking in the federal dollars. Kaplan has been doing pretty well, too.

SANCTIONS AGAINST IRAN

As noted previously, President Obama had given Iran only until the end of the year to make major concessions on their nuclear program, or they would face a new round of "tougher, smarter" sanctions than ever before. What's with that? Isn't Iran's time up?
Oh, wait. President Obama was really hoping that China would be on board with the sanctions program. And they're not. Security Council resolutions are out of the question So, now what? Will the president assemble a "coalition of the willing" to impose sanctions outside of the U.N.? Or will he do that cowboy thing and go it alone?
Probably not. Really, as Hillary said, the only purpose for further sanctions in the Obama foreign policy was to force Iran back to the negotiation table anyway. That's great. Everyone loves a good, tough negotiation. Especially when you have no leverage.
Lots of people have formed the opinion that the Obama administration has reconciled itself to Iran actually possessing nuclear weapons. They think that they can deter the actual use of the weapons just like the Soviets were deterred. Or in the way that North Korea has been deterred.
Hope has its place, but there is no hope that Iran will abandon its nuclear weapons program. My hope is that President Obama snaps out of it.

TAXING THE BANKS

The federal government is beginning to think that they are not going to recover about $120 billion in TARP money that was used to bail-out American car companies and AIG. What's the surprise? GM never had any hope of repayment. So now, what to do? To get about $100 billion, President Obama is considering taxing what he believes are the windfall profits of the biggest banks in the U.S.
These are the same banks that themselves got a TARP bail-out, and have repaid the money with interest. Wasn't that the deal?
Now that the banks are in "bonus season", everyone is watching to see how huge the banks' bonus pay-outs will be. No doubt, they will be large. And a lot of people will be angry about this, President Obama among them. His rationale for taxing the banks will be based on their bonus payments, and his belief that the banks' accepting TARP money in the first place creates a social obligation on their part to pay the debts of other companies that cannot pay their own.
So what will be the consequence for large banks which will be taxed? Well, for one thing, they will have less money to lend. (I know they are not lending anyway. That's not the point. We've been over this before.) Secondly, President Obama's apparent hostility toward profit-makers will be demonstrated once again. This will create the suspicion among the business community that they will also be subject to new taxation in the future. This will contribute to the "uncertainty" that most people believe is causing businesses to avoid new hiring. And that defeats any jobs program you can name.

MARK McGUIRE IS DELUDED

A delusion is a false belief that cannot be modified by reasoning or a demonstration of facts. Sometimes, delusions are a feature of psychosis, like paranoia. Sometimes they exist in a milder form in otherwise normal personalities, and while they remain entrenched, do not interfere with relationships or adversely affect a person's ability to manage daily life. We have all known people who believe things about themselves or others which are preposterous, and we have given up trying to convince them otherwise. (For example, an untalented writer may create a blog, thinking that he is performing a public service. Or an untrained and unlicensed person may attempt psychological diagnosis to try to impress others with his "insight".) As long as the delusions of others are not worrisome, they are minimized and dismissed as "quirks", superstitions, or oddities of other descriptions.
Now Mark McGuire presents himself in a prepared statement, and in a nationally televised interview with Bob Costas. The subject is his use of steroids and other performance-enhancing drugs. His motivation, he says, is to "come clean" and to apologize. These are things which he says he was unable to do in the past. His admissions were unnecessary as historical data in the present, as no one needed confirmation that he had used steroids. If he thought his confession would be a revelation to anyone, even his family, about his behavior, he was wrong. In making his mea culpa, Mark McGuire's revelation is that he is delusional.
He said with sincerity that he used steroids for "health purposes", not to increase his strength. He said he used them to help him heal, and to prevent future injury. He implied that his use of steroids after being injured brought him back to "even", and did not enhance his performance. He said that his achievements on the field were a product of his God-given talent, hard work, and understanding of the science of hitting a baseball. He said these things with a straight face. He believed he was telling the truth. No one else does. His beliefs are his alone. They are his delusions.
By definition, he cannot abandon these delusions. Were they merely rationalizations for his conduct, he could renounce them. Had he misunderstood the nature of steroids, he could plead ignorance. Had they been given to him unsuspectedly, he could claim to have been a victim. But clearly, he has developed a delusional system to protect his ego and to maintain his psychological equilibrium.
Under these circumstances, how are we to respond to Mark McGuire? Is he more to be pitied than scolded? Is he to be forgiven? Is he to be dismissed as a unrepentant liar and cheat? Should we care about Mark McGuire at all?
I do care about McGuire. I hate his delusional guts.

BONDS HAVE ISSUES

The U.S. government is hoping to raise $160 billion in an upcoming bond auction. It will be successful, but the issue for the U.S. is how long we'll be able to sell them, and at what rate of interest. Dubai recently faced default in its sovereign debt, and it's looking bleak for the P.I.G.S (Portugal, Ireland, Greece and Spain). Greece may be the first to go. Whether the E.U. will bail them out by buying or guaranteeing the debt remains to be seen. In the last year, the bond issues of Germany and the U.K. have gone over like lead balloons, and the U.K.'s bond rating has recently dropped. The only thing that maintains our ability to borrow internationally is a belief that the U.S. is too big to fail. With our level of national debt, it's not out of the question that our bond rating may drop as well.

BAD BOMB

The Nigerian Christmas bomber took some powerful explosives onto an airplane, and couldn't light a match to blow up the plane. Michael Moore could have farted and done better than that.

DORGAN, DODD, REID, AND BOXER

Yesterday, Dorgan hit the eject button, and today, Dodd reached for the doorknob. Dorgan is a doofus, and enough said about him. He knew he was through, and better to clear out than be embarrassed by the the rejection of the voters. Good riddance.
I took some pleasure in Dodd's announcement. For two reasons. He's a crook and a liar. Got two (count 'em - two) sweetheart mortgage deals from Countrywide, and then said with a straight face that he didn't know they had made it good to him. He's chair of the Senate Banking Committee, and he doesn't know what the current mortgage rates are? Then he made sure that AIG executives could retain the bonuses they received after the bail-out. The fact that AIG maxed out their contributions to his campaign had nothing to do with that, however.
Harry Reid will be the next one to drop out because he knows he can't get re-elected. How he ever got elected in the first place is a mystery to me, much less becoming Majority Leader. Together, he and Dodd have screwed this country up. (Don't get me started on Pelosi.) Dodd enabled the financial collapse, and Reid bought enough votes in the Senate to get the disastrous health care bill approved.
Barbara Boxer won't run again, either. At least she won't have to watch herself on YouTube anymore.

WHEN IMMIGRATION REFORM AND HEALTH CARE COLLIDE

Some sort of health care plan will become law within the next month or so. It will likely not contain two major provisions that were originally at the heart of the plan. These are a "public option" and "universality" of care. The first has received a lot of attention, but the latter... not so much. Although health care coverage will be expanded, millions of people will remain uninsured. Who are they, and why isn't this the subject of more discussion?
The people who will remain uninsured are illegal immigrants. The Republicans don't want to discuss this, because they are cool with it. Democrats don't want to discuss it because they are embarrassed by it, and besides, they have in mind a couple other ways to skin this cat. One way around the exclusion of illegals from the health care plan is to allow them to purchase participation in a health insurance exchange with their own money. This will be debated by Democrats during reconciliation. While this might find its way into the final bill, many illegals will still find it too expensive to participate. So, what then?
Well, when the Dems turn their attention to immigration reform, this will be resolved when they propose an easy path to citizenship for illegals. Having attained citizenship, these people will entitled to participate fully in the health care program, and universal coverage will be achieved.

SHOW TRIALS

All the world loves a good show trial. They're like a mash-up of Judge Judy and Blazing Saddles. Hilarious courtroom antics! Now, THAT'S entertainment!
The one I liked best was when the Soviet Union put a CIA U-2 (no, not that U-2) pilot named Francis Gary Powers on trial after they shot his spying ass out the sky in 1960 or so. It was real funny. See, the U.S. thought they'd just say that Powers wasn't spying, he was innocently checking up on Russian weather, just to see if they had any. They figured Powers had blown himself up before he crashed, or that he had at least had the courtesy or patriotism to cyanide himself. But, no, the plane was in great shape, and Powers lived to have his little show trial. It was real theater in Moscow, and real theatre in London.
Now the stage is being set for a new round of show trials in New York, New York. They'll be off-Broadway, but not far off ground zero. The only questions are: Who will have the starring role? Who will get center stage? Will the defense attorney up-stage the federal prosecutor? Will the terrorists steal the scene? If the judge accepts a supporting role, whom will he support?
We'll laugh, we'll cry! We'll have a great time, just witnessing history left and right! We won't want it to end, and it most assuredly never will.
The sequel is already being written. Part Two will be "The Appeal". The story-line goes like this: The terrorists/defendants didn't get a fair trial. They were not tried by a jury of their peers, as no Jihadists were even in the jury pool, at least as far as we knew. And besides, the President and the Attorney General had already found them guilty before the trial even started, and assured everyone that the verdict really didn't matter anyway, because the defendants would never get out of prison no matter what.
So what is the real purpose of having such a trial? To SHOW the world that we are a nation of laws. That's the ticket!

FREE CAR INSURANCE

I just saved a bunch of money on my car insurance by fleeing the scene of an accident.
But here's how to get your car insurance for free: First, switch to 21st Century and save $434 per year. Then switch immediately to Allstate. This will save you $382 per year. Then switch right away to AmFam to save $265 more per year. By this time, your insurance will be free. If you actually want to make money by owning car insurance, switch again to Geico for an additional 15% savings. It works for me.

THREE WRONGS DON'T MAKE A RIGHT

The Obama administration has blamed Bush/Cheney for every problem under the sun. They want to constantly point out what a hole they started out in. Complain about what they inherited. Whine about the mess they have to clean up. In fairness, they are right about a lot of it. But, isn't it the height of audacity when they also justify their own mistakes by saying, "Well? Bush did the same thing"!
I think President Obama is nuts to want to close Gitmo. "But Bush wanted to close it, too"!
It's nuts to send detainees from Gitmo to Yemen. "But Bush did it, too"!
It's nuts to try terrorists in federal courts. "But Bush did it, too"!
Sure, Bush did these things, too. But we have to learn from mistakes, not willfully repeat them. President Obama will have to be held accountable for the results of his own decisions. It's not on Bush anymore.

TRIAL BY ERROR

John Brennan, President Obama's Assistant National Security Advisor, made the rounds on the Sunday talk shows. He seemed to have two points to make. The first was that Janet Napolitano, Secretary of Homeland Security, is not the fool that she appeared to be when she said "the system worked" in the Christmas attack on a U.S. airliner. He assured us that the president has full confidence in her. I think at this very moment that Janet is evaluating whether she should be spending more time with her family back home.
Brennan's second message was that the terrorist, Abdulmutallab, (trained, armed, and directed by Al-Qaida in the Arab Peninsula) was properly charged as a criminal defendant, rather than being detained as an enemy combatant. He acknowledged that this second course was available, but the administration's considered judgement was that the guy should be treated as a criminal with full constitutional protections. This must be a lie.
Abdulmutallab was immediately arrested by the FBI. There was no time for anyone to debate the issue, flip a coin, or bounce it by Barack. Clearly, it is the considered opinion of the president and Eric Holder that all terrorists who survive suicide bombing attacks deserve the constitutioonal protections we would grant a car-jacker.
Brennan was asked if it would not have been preferable for the terrorist to have been questioned by military or intelligence personnel to see what kind of exigent information he might have offered regarding other pending attacks, or his own contacts with Al-Qaida. Brennan allowed that the guy did start talking immediately, but after he was lawyered up, he stopped talking.
However, this did not mean to Brennan that the terrorist would never talk. No, Brennan felt that when the guy saw what kind of trouble he was in, he would start talking again in a plea-bargain scenario.
ARE YOU KIDDING ME? We already plan to negotiate with the terrorist? We think a would-be suicide bomber may be so afraid of a lethal injection that he will beg to snitch so that he can live for 50 years in a super-max prison?
So President Obama is compounding his mistake of trying Kaleed Shiek-Mohammad in federal court in New York. And he is doing it to show that, being a nation of laws, we are being true to our values. What a load of crap!