Tuesday, January 27, 2009

More Muslim Madness

Defending freedom's defenders

Last week, the Israel Defense Forces issued an unprecedented directive. All Israeli media outlets must obscure the faces of soldiers and commanders who fought in Operation Cast Lead. Henceforth, the identities of all IDF soldiers and officers who participated in the operation against the Hamas terror regime in Gaza are classified information.

The IDF acted as it did in an effort to protect Israeli soldiers and officers from possible prosecutions for alleged war crimes in Europe. The army's chief concern is England. In England, private citizens are allowed to file complaints against foreigners whom they claim committed war crimes. Based on these complaints, British courts can issue arrest warrants against such foreigners if they are found on British territory and force them to stand trial. Over the past few years, a number of active duty and retired IDF senior officers were forced to cancel visits to Britain after such complaints were filed against them in sympathetic local courts.

Following the IDF's move, on Sunday the government announced that Israel will provide legal assistance to any IDF veteran prosecuted abroad for actions he performed during his service in Gaza. The legal assistance will include representation, investigation of the allegations made against veterans, attempts to have the charges against them dismissed and defense at trials.

Defense Minister Ehud Barak, who brought the decision before the full cabinet, Prime Minister Ehud Olmert, Foreign Minister Tzipi Livni and their colleagues all asserted that by committing the state to defending its warriors, they were fulfilling their sacred duty to protect Israel's protectors.

Unfortunately, both the cabinet decision itself and our leaders' statements missed the point.

LAST WEDNESDAY, an appellate court in Amsterdam ruled that the Dutch lawmaker and leader of the anti-jihadist Dutch Freedom Party Geert Wilders must stand trial for the alleged "crime" of inciting hatred against Muslims with his short film "Fitna," released last year.

In "Fitna," Wilders juxtaposes verses from the Koran with Islamic terror attacks, mosque sermons inciting believers to murder non-Muslims, and proclamations by Islamic clerics that Muslims must kill all the Jews, conquer the world and subjugate non-believers.

The second half of the 15-minute film is devoted to Holland. It highlights the massive immigration of Muslims to the country over the past 15 years, and calls by Islamic leaders in Holland to kill homosexuals, subjugate women, stone adulteresses, and take over the country. "Fitna" ends with a call for Muslims to expunge Koranic verses commanding them to conduct jihad from their belief system, and with a call for Dutchmen to defend their country, their culture and their civilization from the rising current of Islam in Europe.

All the material presented in "Fitna" is accurate. And it is also explosive. But it is hard to see how it could be illegal. By presenting the material in the way that he does, Wilders is not demonizing Muslims, he is challenging - indeed he is practically begging - his countrymen to engage in a debate about whether or not his dim assessment of Islam is correct.

Wilders has been living under 24-hour police protection since a Dutch jihadist murdered filmmaker Theo Van Gogh in 2004. Van Gogh was murdered after he released his short film "Submission," which described the misogyny of the Islamic world and the systematic terrorization of women in Islamic societies. Since then numerous Muslim clerics have issued religious judgments, or fatwas, calling for Wilders to be murdered.

Last month Wilders visited Israel and was the keynote speaker at a counter-jihad conference at the Menachem Begin Heritage Center in Jerusalem sponsored by MK Dr. Aryeh Eldad. Speaking to a standing-room only crowd, and under heavy guard, Wilders argued that Israel is a frontline state in the global jihad. The war against Israel, he claimed has nothing to do with territory, and everything to do with ideology. Israel, as the forward outpost of Western civilization in the Islamic world, stands in the way of Islamic expansion. Consequently, he claimed, when Israel defends itself by fighting its enemies, it is also protecting Europe and the rest of the free world.

As he put it, "Thanks to Israeli parents who see their children go off to join the army and lie awake at night, parents in Europe and America can sleep well and have pleasant dreams, unaware of the dangers looming."

Unfortunately, the Dutch court's decision to prosecute Wilders for calling attention to the threat of jihad in Europe demonstrates that the Europeans aren't particularly grateful to their defenders. Indeed, they despise them. Films like "Fitna," and Israel's use of its military to defend its citizens from Islamic supremacists, serve to remind them of the growing threat they desperately seek to ignore. Consequently, Europeans embrace every opportunity to blame any messenger.

THE RIPPLE effects of Wilders' indictment were immediately evident. In England, the British Muslim community mobilized to prevent his film from being screened in public. "Fitna" was scheduled to be shown at the House of Lords on January 29. But last Friday, with the threat of mass Muslim riots hanging thickly in the air, the House of Lords announced that it was cancelling the event.

British Lord Nazir Ahmed called the decision to prevent the thought-provoking, factually accurate film from being shown, "a victory for the Muslim community."

WILDERS' INDICTMENT is a textbook example of blaming the victim. Wilders has been forced to live a miserable life for the past four years. He has no home. Security forces move him from place to place every single day. Since Van Gogh's murder, Wilders' entire life has become one long attempt to dodge the bullet permanently pointed at his head by radicalized Muslims in Holland and throughout the world. These would-be killers wish to see him dead not to avenge any violence Wilders committed, but rather, they believe he must die for doing nothing more than talking about Islam and how he interprets its message and meaning.

Needless to say, the Dutch Muslims Wilders caught on tape in Fitna calling for an overthrow of the Dutch constitutional order and threatening homosexuals have not been arrested for inciting hatred. Likewise, Lord Ahmed, who blocked "Fitna's" screening in the British Parliament was made a British peer after supporting the late Ayatollah Khomeini's 1989 death sentence against British novelist Salman Rushdie.

AND THAT'S the thing of it. Increasingly, throughout Europe, those who point out the dangers of radical Islam are hounded - first by Muslims - and then by legal authorities. In contrast, those who seek to intimidate and physically silence them are embraced by the states of Europe as legitimate leaders of their Muslim communities.

This dismal state of affairs, where jihadists are supported and their victims are oppressed, is true not only of people like Wilders who actively fight radical Islam's encroachment on European freedom. It is also the case for people who are victimized solely on the basis of their ethnic identity.

At the same time Wilders and people like him are forced into hiding, Jews throughout Europe find themselves assaulted and under siege not because of anything they have done, but because they are Jews.

Incidents of anti-Semitic violence in Europe reached post-Holocaust record highs over the past month. Jewish children have been violently attacked in France, barred from schools in Denmark, and harassed in England, Sweden, Switzerland, Holland and Germany just for being Jews.

In Britain, Muslims have now taken to entering into Jewish-owned businesses and kosher restaurants to threaten the owners and patrons - just because they are Jewish. Synagogues have been firebombed and defaced. Calls have been issued in the US Muslim community on the Internet for Muslims in America to similarly intimidate Jews by entering into synagogues during prayer services and condemn worshippers for supporting Israel.

Jewish men have been brutalized by Muslim gangs in Britain and viciously stabbed in France, just because they are Jewish. In Sweden, pro-Israel demonstrators were attacked with stones by Muslims this week. Even in the US, anti-Semitic violence and intimidation has reached levels never seen before. And in almost all cases of anti-Semitic violence throughout what is commonly referred to as the free world, the perpetrators of the violence and intimidation are Muslims. They attack with the full backing of non-Muslim multiculturalists as well as neo-Nazis. The two groups, which are usually assumed to be at loggerheads, apparently have no problem converging on the issue of hating Jews.

And in almost all cases of anti-Semitic violence, the Islamic identity of the attackers has been de-emphasized or obscured by the media and by politicians, or used as justification for their crimes. In France, for instance, from the way government officials talk it, would be reasonable to assume that a dozen Muslim teenagers were provoked to viciously beat a ten-year-old Jewish girl by the IDF's operation against Hamas in Gaza.

HERE THEN, we arrive at the point that the cabinet missed on Sunday when it passed its decision to commit the government to providing legal assistance to any IDF veteran who runs afoul of European legal authorities during vacations in London and Brussels and Oslo and Stockholm. The point that was missed is that in the event that IDF veterans are charged with war crimes, even the best attorneys will be of little use. These veterans will not be defendants at legitimate trials. They will be the victims of politically motivated show-trials.

In an interview with Ha'aretz on Friday, Wilders claimed rightly that the Dutch court's decision to prosecute him was not a legal decision but a political one. And if he is convicted, his conviction won't be based on evidence. It will be based on the desire of the Dutch multiculturalists to make an example of him to appease the radical Muslims who seek his death, and intimidate any would-be disciples into keeping their mouths shut.

So too, if IDF veterans are indicted for war crimes, they won't be prosecuted based on facts. They will be persecuted to advance the prosecutors' and judges' goal of appeasing their homegrown radical Muslims who seek the destruction of Israel and who violently attack anyone perceived as supporting Israel.

Given this bleak reality, the steps that Israel must take to defend its citizens are not legal but diplomatic. Israel should announce travel advisories against all states that enable the conduct of show trials against its citizens. And it should threaten to cut off diplomatic ties with any country that seeks to persecute Israeli soldiers. Only by recognizing and pointing out what is really going on will Israel have any chance of protecting those who defend our freedom from Europeans who have decided to surrender to Islamic intimidation rather than protect their own liberty.

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Saturday, January 24, 2009

Gasbag Environ-Mental Cases

The fabulous debate over wind power on Nantucket Sound.

For all the hype about the Bush Administration's oil-and-gas energy bias, one of its last official acts was to give the go-ahead to what could be America's first offshore wind farm -- thus enraging more than a few self-deputized environmentalists. Such are the ironies of the wilderness of mirrors known as the Cape Wind project.

For the last seven years and counting, the green entrepreneur Jim Gordon has been trying to build a fleet of wind turbines in federal waters near the upscale seascapes of Cape Cod, Martha's Vineyard and Nantucket. The site seemed ideal, given the stiff ocean breezes and the eco-friendly politics in Massachusetts. The company says its 130 towers could meet 75% of the region's electricity needs and reduce carbon emissions by some 734,000 tons every year.

The sort of people who can afford to use "summer" as a verb are in favor of all that. Completely in favor, really. But they did want to raise one quibble. Unfortunately, the wind farm would create "visual pollution" in Nantucket Sound, particularly the parts within sight of their beachfront vacation homes.

Mr. Gordon went ahead anyway, and the opposition rose to gale force. Supposedly the wind farm will lead to everything from the disruption of seabird habitats to "desecrating ancient American Native burial sites," in the words of Glenn Wattley, the head of an antiwind outfit funded by the likes of Bunny Mellon. But what really upsets these well-to-do Don Quixotes is the thought of looking at windmills that would appear about as tall on the horizon as the thumbnail at the end of your outstretched arm.

Then there is the political saga, with the Kennedy family as the Hyannis Port Sopranos, supplying the muscle. While Ted Kennedy was castigating President Bush for destroying the environment, the Senator was working furiously behind the Congressional scenes to kill Cape Wind. He even had the inspiration of getting former GOP colleague Ted Stevens of Alaska to slip wording into a spending bill that would have handed a veto to then-Governor Mitt Romney, another aesthetically minded opponent. Robert Kennedy Jr., a Time magazine "hero of the planet," tried to get the Sound designated as a national marine sanctuary to bar development.

Incredibly enough, this political sabotage has so far failed. And last week the Interior Department issued its long-awaited regulatory study, mostly finding "negligible" environmental impact -- apart from a "moderate" impact on the scenery. If the Obama Administration signs off, construction could begin next year.

Mr. Kennedy blustered that the report was rushed out: amusing, considering it runs to 2,800 pages. Bill Delahunt, the windy Cape Democrat, also denounced the action as "a $2 billion project that depends on significant taxpayer subsidies while potentially doubling power costs for the region."

Good to see the Congressman now recognizes the limitations of green tech, such as its tendency to boost consumer electricity prices -- but his makeover as taxpayer champion is a bit belated. Green energy has been on the subsidy take for years, including in 2005 when Mr. Delahunt was calling for "an Apollo project for alternative energy sources, for hybrid engines, for biodiesel, for wind and solar and everything else." The reality is that all such projects are only commercially viable because of political patronage.

Tufts economist Gilbert Metcalf ran the numbers and found that the effective tax rate for wind is minus-163.8%. In other words, every dollar a wind firm spends is subsidized to the tune of 64 cents from the government. The Energy Information Administration estimates that wind receives $23.37 in government benefits per megawatt hour -- compared to, say, 44 cents for coal. Despite these taxpayer crutches, wind only provides a little under 1% of U.S. net electric generation.

We'd prefer an energy policy that allows markets to shape the sources that predominate -- which would almost certainly put Cape Wind out of business. But President Obama seems determined to unload even more subsidies on green developers as he seeks to boost renewables to 10% of the U.S. electricity mix by the end of his first term and 25% by 2025; their share today is about 9% (5.8% of which is hydropower).

We wouldn't be surprised to see the President's green future wrestled to the ground by the likes of Mr. Delahunt, the Kennedys and other anticarbon Democrats. Environmentalists love the idea of milking Mother Nature for power, but they hate the hardware needed to make it work: huge windmills, acres of solar panels, high-voltage transmission lines to connect them to the places where people live. Of course, they still totally, absolutely, wholeheartedly support green energy -- as long as it gets built where someone else goes yachting.

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Friday, January 23, 2009

When Muslim Terrorists are Freed...

A chief problem that has always plagued the United States involves the lives of violent felons after they are released from prison. We have a recidivism problem. The bad boys too often go back to the behavior that previously put them in jail. Everyone who studies this problem understands the reasons. We know there are too few legitimate opportunities for ex-convicts. We also know that many choose their former criminal life-styles over more socially acceptable alternatives.

Based on the behavior of felons released from prison, is there any reason to think ideologically driven muslim terrorists will change for the better after they are released from places like the Guantanamo Bay prison camp? Since Islamic terrorists are driven by their murderous ideology, rather than financial gain, which can be satisfied legitimately, the recidivism rate among terrorists is likely to approach 100%.

What can we do with the captured terrorists? Conventional prosecutions are unworkable. In most cases it would be impossible for prosecutors and the defense attorneys to present their cases. Why? Because, the terrorists are prisoners of war, not suspects in criminal cases. Most were captured on battlefields where no one advises detainees of their Miranda Rights. Others were captured as a result of our intelligence-gathering. Prosecuting many of them would require exposure of our agents and methods, which is an unacceptable price to pay for keeping enemy combatants from returning to the fight.

Obama might have made the right move, however. He signed an order to close the Guantanamo Bay prison camp within a year. As time passes and it becomes clear there is no safe alternative for holding many of the current Gitmo occupants, he will have little or no opposition from fellow Democrats when his people in his administration report to him and the American public that most of these Gitmo prisoners are too dangerous to be released and it is best for all if they remain where they are until our war on Islamic terrorism is won.

Report: Ex-Gitmo detainee joins al-Qaida in Yemen

Cairo, Egypt – An Internet posting purportedly by al-Qaida in Yemen says the group's No. 2 is a Saudi national who is a former Guantanamo detainee.

The Yemeni group — known as "al-Qaida in the Arabian Peninsula" — posted the statement this week on a militant Web site that regularly carries al-Qaida messages.

It says the man returned to his home in Saudi Arabia after his release from the U.S. prison at Guantanamo Bay, Cuba about a year ago and from there went to Yemen to join the terror group.

The Internet statement identified the man as Said Ali al-Shihri and says his prisoner number at Guantanamo was 372.

The posting could not immediately be verified, and Yemen and Saudi Arabian authorities would not immediately comment on it.

Thursday, January 22, 2009

Is the Koran the original Mein Kampf?

The latest twist in the clash between Western values and the Muslim world took place yesterday in the Netherlands, where a court ordered the prosecution of lawmaker and provocateur Geert Wilders for inciting violence. The Dutch MP and leader of the Freedom Party, which opposes Muslim immigration into Holland, will stand trial soon for his harsh criticism of Islam.

Mr. Wilders made world news last year with the short film "Fitna." In the 15-minute video, he juxtaposes Koranic verses calling for jihad with clips of Islamic hate preachers and terror attacks. He has compared the Koran to Hitler's "Mein Kampf" and urged Muslims to tear out "hate-filled" verses from their scripture. This is a frontal assault on Islam -- but, as Mr. Wilders points out, he's targeting the religion, not its followers. "Fitna," in fact, sparked a refreshing debate between moderate Muslims and non-Muslims in the Netherlands, and beyond.

There are of course limits to free speech, such as calls for violence. But one doesn't need to agree with Mr. Wilders to acknowledge that he hasn't crossed that line. Some Muslims say they are outraged by his statements. But if freedom of speech means anything, it means the freedom of controversial speech. Consensus views need no protection.

This is exactly what Dutch prosecutors said in June when they rejected the complaints against Mr. Wilders. "That comments are hurtful and offensive for a large number of Muslims does not mean that they are punishable," the prosecutors said in a statement. "Freedom of expression fulfills an essential role in public debate in a democratic society. That means that offensive comments can be made in a political debate."

The court yesterday overruled this decision, arguing that the lawmaker should be prosecuted for "inciting hatred and discrimination" and also "for insulting Muslim worshippers because of comparisons between Islam and Nazism." This is no small victory for Islamic regimes seeking to export their censorship laws to wherever Muslims reside. But the successful integration of Muslims in Europe will require that immigrants adapt to Western norms, not vice versa. Limiting the Dutch debate of Islam to standards acceptable in, say, Saudi Arabia, will only shore up support for Mr. Wilders's argument that Muslim immigration is eroding traditional Dutch liberties.

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Our Socialist Creep

The Obama presidency: Here comes socialism

2009-2010 will rank with 1913-14, 1933-36, 1964-65 and 1981-82 as years that will permanently change our government, politics and lives. Just as the stars were aligned for Wilson, Roosevelt, Johnson and Reagan, they are aligned for Obama.

Simply put, we enter his administration as free-enterprise, market-dominated, laissez-faire America. We will shortly become like Germany, France, the United Kingdom, or Sweden — a socialist democracy in which the government dominates the economy, determines private-sector priorities and offers a vastly expanded range of services to many more people at much higher taxes.

Obama will accomplish his agenda of “reform” under the rubric of “recovery.” Using the electoral mandate bestowed on a Democratic Congress by restless voters and the economic power given his administration by terrified Americans, he will change our country fundamentally in the name of lifting the depression. His stimulus packages won’t do much to shorten the downturn — although they will make it less painful — but they will do a great deal to change our nation.

In implementing his agenda, Barack Obama will emulate the example of Franklin D. Roosevelt. (Not the liberal mythology of the New Deal, but the actuality of what it accomplished.) When FDR took office, he was enormously successful in averting a total collapse of the banking system and the economy. But his New Deal measures only succeeded in lowering the unemployment rate from 23 percent in 1933, when he took office, to 13 percent in the summer of 1937. It never went lower. And his policies of over-regulation generated such business uncertainty that they triggered a second-term recession.

Unemployment in 1938 rose to 17 percent and, in 1940, on the verge of the war-driven recovery, stood at 15 percent. (These data and the real story of Hoover’s and Roosevelt’s missteps, uncolored by ideology, are available in The Forgotten Man by Amity Shlaes.)

But in the name of a largely unsuccessful effort to end the Depression, Roosevelt passed crucial and permanent reforms that have dominated our lives ever since, including Social Security, the creation of the Securities and Exchange Commission, unionization under the Wagner Act, the federal minimum wage and a host of other fundamental changes.

Obama’s record will be similar, although less wise and more destructive. He will begin by passing every program for which liberals have lusted for decades, from alternative-energy sources to school renovations, infrastructure repairs and technology enhancements. These are all good programs, but they normally would be stretched out for years. But freed of any constraint on the deficit — indeed, empowered by a mandate to raise it as high as possible — Obama will do them all rather quickly.

But it is not his spending that will transform our political system, it is his tax and welfare policies. In the name of short-term stimulus, he will give every American family (who makes less than $200,000) a welfare check of $1,000 euphemistically called a refundable tax credit. And he will so sharply cut taxes on the middle class and the poor that the number of Americans who pay no federal income tax will rise from the current one-third of all households to more than half. In the process, he will create a permanent electoral majority that does not pay taxes, but counts on ever-expanding welfare checks from the government. The dependency on the dole, formerly limited in pre-Clinton days to 14 million women and children on Aid to Families with Dependent Children, will now grow to a clear majority of the American population.

Will he raise taxes? Why should he? With a congressional mandate to run the deficit up as high as need be, there is no reason to raise taxes now and risk aggravating the depression. Instead, Obama will follow the opposite of the Reagan strategy. Reagan cut taxes and increased the deficit so that liberals could not increase spending. Obama will raise spending and increase the deficit so that conservatives cannot cut taxes. And, when the economy is restored, he will raise taxes with impunity, since the only people who will have to pay them would be rich Republicans.

In the name of stabilizing the banking system, Obama will nationalize it. Using Troubled Asset Relief Program funds to write generous checks to needy financial institutions, his administration will demand preferred stock in exchange. Preferred stock gets dividends before common stockholders do. With the massive debt these companies will owe to the government, they will only be able to afford dividends for preferred stockholders — the government, not private investors. So who will buy common stock? And the government will demand that its bills be paid before any profits that might materialize are reinvested in the financial institution, so how will the value of the stocks ever grow? Devoid of private investors, these institutions will fall ever more under government control.

Obama will begin the process by limiting executive compensation. Then he will urge restructuring and lowering of home mortgages in danger of default (as the feds have already done with Citibank).

Then will come guidance on the loans to make and government instructions on the types of enterprises to favor. God grant that some Blagojevich type is not in charge of the program, using his power to line his pockets. The United States will find itself with an economic system comparable to that of Japan, where the all-powerful bureaucracy at MITI (Ministry of International Trade and Industry) manages the economy, often making mistakes like giving mainframe computers priority over the development of laptops.

But it is the healthcare system that will experience the most dramatic and traumatic of changes. The current debate between erecting a Medicare-like governmental single payer or channeling coverage through private insurance misses the essential point. Without a lot more doctors, nurses, clinics, equipment and hospital beds, health resources will be strained to the breaking point. The people and equipment that now serve 250 million Americans and largely neglect all but the emergency needs of the other 50 million will now have to serve everyone.

And, as government imposes ever more Draconian price controls and income limits on doctors, the supply of practitioners and equipment will decline as the demand escalates. Price increases will be out of the question, so the government will impose healthcare rationing, denying the older and sicker among us the care they need and even barring them from paying for it themselves. (Rationing based on income and price will be seen as immoral.)

And Obama will move to change permanently the partisan balance in America. He will move quickly to legalize all those who have been in America for five years, albeit illegally, and to smooth their paths to citizenship and voting. He will weaken border controls in an attempt to hike the Latino vote as high as he can in order to make red states like Texas into blue states like California.

By the time he is finished, Latinos and African-Americans will cast a combined 30 percent of the vote. If they go by top-heavy margins for the Democrats, as they did in 2008, it will assure Democratic domination (until they move up the economic ladder and become good Republicans).

And he will enact the check-off card system for determining labor union representation, repealing the secret ballot in union elections. The result will be to raise the proportion of the labor force in unions up to the high teens from the current level of about 12 percent.

Finally, he will use the expansive powers of the Federal Communications Commission to impose “local” control and ownership of radio stations and to impose the “fairness doctrine” on talk radio. The effect will be to drive talk radio to the Internet, fundamentally change its economics, and retard its growth for years hence.

But none of these changes will cure the depression. It will end when the private sector works through the high debt levels that triggered the collapse in the first place. And, then, the large stimulus package deficits will likely lead to rapid inflation, probably necessitating a second recession to cure it.

So Obama’s name will be mud by 2012 and probably by 2010 as well. And the Republican Party will make big gains and regain much of its lost power.

But it will be too late to reverse the socialism of much of the economy, the demographic change in the electorate, the rationing of healthcare by the government, the surge of unionization and the crippling of talk radio.

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Wednesday, January 21, 2009

Obama's Inaugural Address of Insults and Oversights

My fellow citizens:

I stand here today humbled by the task before us, grateful for the trust you have bestowed, mindful of the sacrifices borne by our ancestors. I thank President Bush for his service to our nation, as well as the generosity and cooperation he has shown throughout this transition.

Forty-four Americans have now taken the presidential oath. The words have been spoken during rising tides of prosperity and the still waters of peace. Yet, every so often the oath is taken amidst gathering clouds and raging storms. At these moments, America has carried on not simply because of the skill or vision of those in high office, but because we the people have remained faithful to the ideals of our forebears, and true to our founding documents.

So it has been. So it must be with this generation of Americans.

That we are in the midst of crisis is now well understood. Our nation is at war, against a far-reaching network of violence and hatred.

In the first of the two preceding statements he makes a false claim. The crisis wildly misunderstood by millions. There are too many who believe the US bears the blame and is at fault for angering muslims to the point that they took the step of killing Americans -- starting with Robert Kennedy in 1968. In the second sentence he fails to name the ideology that has declared its enemy status.

Our economy is badly weakened, a consequence of greed and irresponsibility on the part of some, but also our collective failure to make hard choices and prepare the nation for a new age.

What is the meaning of the preceding? Is he stating that Congress sent the nation down a slipper slope when it mandated issuing mortgages to people with poor credit ratings, questionable employment and virtually no money for downpayments?

Homes have been lost; jobs shed; businesses shuttered. Our health care is too costly; our schools fail too many; and each day brings further evidence that the ways we use energy strengthen our adversaries and threaten our planet.

Again he communicates in non-sequiturs. But the one thing ties his list of troubling events and realities together: Money. People were borrowing more than they were able to repay; businesses were unable to pay the wages expected; some businesses saw their revenue disappear; the cost of every aspect of healthcare has continued to rise; our schools consume billions and billions of dollars while too many students learn remarkably little; and we spend far too much importing energy supplies that are available here.

Money links all of these problems. But the source of the trouble can be tracked to government intrusion. Worse for all of us is Obama's desire to lead the government as it intrudes further in free markets.

These are the indicators of crisis, subject to data and statistics. Less measurable but no less profound is a sapping of confidence across our land — a nagging fear that America's decline is inevitable, and that the next generation must lower its sights.

He descended into fear mongering when he claims confidence is gone and America is on the way down, hoping, I suppose to draw fearful people to him, the leader expected to find the path out of the woods.

Today I say to you that the challenges we face are real. They are serious and they are many. They will not be met easily or in a short span of time. But know this, America — they will be met.

The preceding feels as though it might have been taken from The Quest for the Holy Grail or The Lord of the Rings.

On this day, we gather because we have chosen hope over fear, unity of purpose over conflict and discord.

Is this to suggest we will lock arms and march resolutely into the future sharing a common goal? He seems to be suggesting a horrifying degree of group-think and a complete sacrifice of the individual for the common good. Marxism, anyone?

On this day, we come to proclaim an end to the petty grievances and false promises, the recriminations and worn out dogmas, that for far too long have strangled our politics.

If there is anything that demonstrates the inherent superiority of our democracy, it is the in-fighting. Meanwhile, it seems Obama prefers that we fight over major grievances, true promises, answer our accusers with confessions of guilt and adopt new dogmas, such as Global Warming.

We remain a young nation, but in the words of scripture, the time has come to set aside childish things. The time has come to reaffirm our enduring spirit; to choose our better history; to carry forward that precious gift, that noble idea, passed on from generation to generation: the God-given promise that all are equal, all are free and all deserve a chance to pursue their full measure of happiness.

What does he mean when he says "we remain a young nation"? Does he mean we are an immature nation? Or does he mean the United States is a nation that has existed for a small number of years? Or does he mean America has an eternally youthful spirit? Who knows? Frankly, the United States, as a polity, has existed for more years than most today's nations. Many of the nations in the world today were born or reborn in the 20th Century.

In reaffirming the greatness of our nation, we understand that greatness is never a given. It must be earned. Our journey has never been one of shortcuts or settling for less. It has not been the path for the faint-hearted — for those who prefer leisure over work, or seek only the pleasures of riches and fame. Rather, it has been the risk-takers, the doers, the makers of things — some celebrated but more often men and women obscure in their labor, who have carried us up the long, rugged path towards prosperity and freedom.

For us, they packed up their few worldly possessions and traveled across oceans in search of a new life.

For us, they toiled in sweatshops and settled the West; endured the lash of the whip and plowed the hard earth.

For us, they fought and died, in places like Concord and Gettysburg; Normandy and Khe Sahn.

The preceding sentence insults America and its soldiers, airmen, sailors and marines for what it does not say. Obama seems to have no regard for the sacrifices of American military personnel in Iraq and Afghanistan. No mention of Fallujah, and no mention of fighting the Taliban and al-Qaeda in the Afghani mountains, or of the pursuit of Osama bin Laden. Was Obama recalling the moments of US military history that he believes show America's best intentions? If so, how could he skip World War I? The Korean War? There is no mention of the battle at the Chosin Reservoir or those who landed at Inchon. Not a word. Does the freedom, prosperity and advancement of South Korea that came after we stopped the communists at the 38th parallel trouble Obama?

Time and again these men and women struggled and sacrificed and worked till their hands were raw so that we might live a better life. They saw America as bigger than the sum of our individual ambitions; greater than all the differences of birth or wealth or faction.

This is the journey we continue today. We remain the most prosperous, powerful nation on Earth. Our workers are no less productive than when this crisis began. Our minds are no less inventive, our goods and services no less needed than they were last week or last month or last year. Our capacity remains undiminished. But our time of standing pat, of protecting narrow interests and putting off unpleasant decisions — that time has surely passed. Starting today, we must pick ourselves up, dust ourselves off, and begin again the work of remaking America.

For everywhere we look, there is work to be done. The state of the economy calls for action, bold and swift, and we will act — not only to create new jobs, but to lay a new foundation for growth. We will build the roads and bridges, the electric grids and digital lines that feed our commerce and bind us together. We will restore science to its rightful place, and wield technology's wonders to raise health care's quality and lower its cost. We will harness the sun and the winds and the soil to fuel our cars and run our factories. And we will transform our schools and colleges and universities to meet the demands of a new age. All this we can do. And all this we will do.

He must have gotten tired. He slipped into writing a stream of cliches to fill the preceding paragraph. We will "harness the sun and the winds and the soil to...", yeah, phrasing as old as the Bible with some inspiration from Greek mythology.

Now, there are some who question the scale of our ambitions — who suggest that our system cannot tolerate too many big plans. Their memories are short. For they have forgotten what this country has already done; what free men and women can achieve when imagination is joined to common purpose, and necessity to courage.

What the cynics fail to understand is that the ground has shifted beneath them — that the stale political arguments that have consumed us for so long no longer apply.

The question we ask today is not whether our government is too big or too small, but whether it works — whether it helps families find jobs at a decent wage, care they can afford, a retirement that is dignified. Where the answer is yes, we intend to move forward. Where the answer is no, programs will end. And those of us who manage the public's dollars will be held to account — to spend wisely, reform bad habits, and do our business in the light of day — because only then can we restore the vital trust between a people and their government.

Nor is the question before us whether the market is a force for good or ill. Its power to generate wealth and expand freedom is unmatched, but this crisis has reminded us that without a watchful eye, the market can spin out of control — and that a nation cannot prosper long when it favors only the prosperous. The success of our economy has always depended not just on the size of our gross domestic product, but on the reach of our prosperity; on our ability to extend opportunity to every willing heart — not out of charity, but because it is the surest route to our common good.

As for our common defense, we reject as false the choice between our safety and our ideals. Our founding fathers, faced with perils we can scarcely imagine, drafted a charter to assure the rule of law and the rights of man, a charter expanded by the blood of generations. Those ideals still light the world, and we will not give them up for expedience's sake. And so to all other peoples and governments who are watching today, from the grandest capitals to the small village where my father was born: know that America is a friend of each nation and every man, woman, and child who seeks a future of peace and dignity, and that we are ready to lead once more.

Recall that earlier generations faced down fascism and communism not just with missiles and tanks, but with sturdy alliances and enduring convictions. They understood that our power alone cannot protect us, nor does it entitle us to do as we please. Instead, they knew that our power grows through its prudent use; our security emanates from the justness of our cause, the force of our example, the tempering qualities of humility and restraint.

We are the keepers of this legacy. Guided by these principles once more, we can meet those new threats that demand even greater effort — even greater cooperation and understanding between nations. We will begin to responsibly leave Iraq to its people, and forge a hard-earned peace in Afghanistan.

With old friends and former foes, we will work tirelessly to lessen the nuclear threat, and roll back the specter of a warming planet. We will not apologize for our way of life, nor will we waver in its defense, and for those who seek to advance their aims by inducing terror and slaughtering innocents, we say to you now that our spirit is stronger and cannot be broken; you cannot outlast us, and we will defeat you.

For we know that our patchwork heritage is a strength, not a weakness. We are a nation of Christians and Muslims, Jews and Hindus — and non-believers. We are shaped by every language and culture, drawn from every end of this Earth; and because we have tasted the bitter swill of civil war and segregation, and emerged from that dark chapter stronger and more united, we cannot help but believe that the old hatreds shall someday pass; that the lines of tribe shall soon dissolve; that as the world grows smaller, our common humanity shall reveal itself; and that America must play its role in ushering in a new era of peace.

To the Muslim world, we seek a new way forward, based on mutual interest and mutual respect. To those leaders around the globe who seek to sow conflict, or blame their society's ills on the West — know that your people will judge you on what you can build, not what you destroy. To those who cling to power through corruption and deceit and the silencing of dissent, know that you are on the wrong side of history; but that we will extend a hand if you are willing to unclench your fist.

To the people of poor nations, we pledge to work alongside you to make your farms flourish and let clean waters flow; to nourish starved bodies and feed hungry minds.

And to those nations like ours that enjoy relative plenty, we say we can no longer afford indifference to suffering outside our borders; nor can we consume the world's resources without regard to effect. For the world has changed, and we must change with it.

As we consider the road that unfolds before us, we remember with humble gratitude those brave Americans who, at this very hour, patrol far-off deserts and distant mountains. They have something to tell us today, just as the fallen heroes who lie in Arlington whisper through the ages. We honor them not only because they are guardians of our liberty, but because they embody the spirit of service; a willingness to find meaning in something greater than themselves.

And yet, at this moment — a moment that will define a generation — it is precisely this spirit that must inhabit us all.

For as much as government can do and must do, it is ultimately the faith and determination of the American people upon which this nation relies. It is the kindness to take in a stranger when the levees break, the selflessness of workers who would rather cut their hours than see a friend lose their job which sees us through our darkest hours. It is the firefighter's courage to storm a stairway filled with smoke, but also a parent's willingness to nurture a child, that finally decides our fate.

Our challenges may be new. The instruments with which we meet them may be new. But those values upon which our success depends — hard work and honesty, courage and fair play, tolerance and curiosity, loyalty and patriotism — these things are old. These things are true. They have been the quiet force of progress throughout our history. What is demanded then is a return to these truths. What is required of us now is a new era of responsibility — a recognition, on the part of every American, that we have duties to ourselves, our nation, and the world, duties that we do not grudgingly accept but rather seize gladly, firm in the knowledge that there is nothing so satisfying to the spirit, so defining of our character, than giving our all to a difficult task.

This is the price and the promise of citizenship.

This is the source of our confidence — the knowledge that God calls on us to shape an uncertain destiny.

This is the meaning of our liberty and our creed — why men and women and children of every race and every faith can join in celebration across this magnificent mall, and why a man whose father less than sixty years ago might not have been served at a local restaurant can now stand before you to take a most sacred oath.

So let us mark this day with remembrance, of who we are and how far we have traveled. In the year of America's birth, in the coldest of months, a small band of patriots huddled by dying campfires on the shores of an icy river. The capital was abandoned. The enemy was advancing. The snow was stained with blood. At a moment when the outcome of our revolution was most in doubt, the father of our nation ordered these words be read to the people:

"Let it be told to the future world ... that in the depth of winter, when nothing but hope and virtue could survive...that the city and the country, alarmed at one common danger, came forth to meet (it)."

America, in the face of our common dangers, in this winter of our hardship, let us remember these timeless words. With hope and virtue, let us brave once more the icy currents, and endure what storms may come. Let it be said by our children's children that when we were tested we refused to let this journey end, that we did not turn back nor did we falter; and with eyes fixed on the horizon and God's grace upon us, we carried forth that great gift of freedom and delivered it safely to future generations.

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Friday, January 16, 2009

Let the Bank Takeovers Begin

There are over 8,000 banks, almost 2,000 Savings & Loans and 9,600 credit unions in the United States. That's too many. The largest are too large and the smallest too small. Failures occur at both ends of the spectrum. But the costs appear in different ways. Almost no one notices when small financial institutions fail. The cost of failure at the small institutions means nothing to most consumers. But we begin to panic when the huge financial supermarkets crumble, as Citicorp has done.

Fortunately, some of the huge banks have been led by conservative managements. Wells Fargo, for example. The financial crisis has hit Wells, but it will survive because its management stayed away from the activities that have harmed Citi and other financial institutions that have already disappeared.

However, it takes very little to upset the balance at the smallest banks. They are vulnerable due to their insignificant mass. Thus, the industry, consumers and taxpayers will benefit if small banks merge with their local and regional competitors.

In contrast to the US, Canada has six banks. That's it. Just six. Of course the population of Canada is only 34 million, compared with a US population of 305 million. If the US were to adopt the Canadian model, roughly 60 banks would operate here. That's probably too few for optimal service. But we have 20,000 banking companies, which is clearly too many.

Investor Wilbur L. Ross to Buy Majority Stake in Florida Bank

Jan. 16 (Bloomberg) -- Wilbur L. Ross will buy the majority shares of First Bank and Trust Co. of Indiantown, Florida.

The agreement allows Ross to acquire 68.1 percent of the shares in the community bank, subject to regulatory approval, Ross said today in a PR Newswire statement.

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Thursday, January 15, 2009

Car Crash

General Motors released its estimate of 2009 car sales: 10.5 million vehicles. That estimate includes all cars sold in the US. However, the estimate omitted the number of cars GM expects to sell. As we know, estimates are prepared for each model.

Where are the numbers?

Meanwhile, it's early yet. Undoubtedly the full-year estimate will decline as credit limitations lead to continuing sluggish buying during the year.

If Detroit wants to survive, it had better slash prices and slash its cost structure down to a size the car market will support.

GM cuts US sales forecast
General Motors reduces its industrywide US sales predictions for 2009 to 10.5 million units

Thursday January 15, 2009

NEW YORK (AP) -- General Motors Corp. is cutting its 2009 industrywide U.S. sales forecast to 10.5 million vehicles.

The Detroit automaker previously said it expected industrywide sales of about 12 million for the year, with 10.5 million seen as a worst-case scenario for the industry. It revised its prediction in an analyst conference Thursday where Chief Executive Rick Wagoner is speaking.

U.S sales fell to 13.2 million in 2008, down 18 percent from 16.1 million in 2007.

Many analysts have been predicting sales of 10.5 million to 11.5 million in 2009.

General Motors is also projecting 2009 global sales of 57.5 million units.

GM says the lower sales outlook will force it to make hard decisions that will result in a stronger viability plan and better position the company for long-term growth.

Hamas Can Run, But It Can't Hide...

Finally. The concept of sanctuary is seen for what it truly is, a ruse to protect terrorists. Israel should have taken the same steps when it attacked Hezbollah in Lebanon. It looked like a sure bet that Hezbollah leader Nasrallah was hiding in an embassy building in Beirut. The Israeli military should have turned that building into a heap of rubble.

Destroying the UN building in Gaza will send the message that no place is safe for Hamas. It's crucial for everyone in Gaza to know that proximity to Hamas fighters defines being in the wrong place at the wrong time.

Will Hamas change as a result of aggressive Israeli tactics? Maybe. But if Hamas remains willing to sacrifice its membership for the sake of firing rockets and guns at Israelis, then Israel continue to destroy every site from which a rocket or shot is fired, no matter how many women and children sorround the terrorists.

Israeli forces shell UN headquarters in Gaza

GAZA CITY, Gaza Strip – Israel shelled the United Nations headquarters in the Gaza Strip on Thursday, engulfing the compound and a warehouse in fire and destroying thousands of pounds of food and humanitarian supplies intended for Palestinian refugees.

Another Israeli bombardment on Thursday killed the Hamas security chief.

U.N. workers and Palestinian firefighters, some wearing bulletproof jackets, struggled to douse the flames and pull bags of food from the debris after the Israeli attack, which was another blow to efforts to ease the humanitarian crisis in the Gaza Strip. Dense smoke billowed from the compound.

U.N. Secretary-General Ban Ki-moon, who is in the region to end the devastating offensive against Gaza's Hamas rulers, demanded a "full explanation" and said the Israeli defense minister told him there had been a "grave mistake."

Israeli Prime Minister Ehud Olmert said the military fired artillery shells at the U.N. compound after Hamas militants opened fire from the location. Three people were wounded.

"It is absolutely true that we were attacked from that place, but the consequences are very sad and we apologize for it," he said. "I don't think it should have happened and I'm very sorry."

Interior Minister Said Siam was killed in an Israeli airstrike that flattened a home in Gaza City. Israel and Hamas both confirmed the death of Siam, who oversaw thousands of security agents and was considered to be among the militant group's top five leaders in Gaza.

Even as a top Israeli envoy went to Egypt to discuss a cease-fire proposal, the military pushed farther into Gaza in an apparent effort to step up pressure on Hamas. Ground forces thrust deep into a crowded neighborhood for the first time, sending terrified residents fleeing for cover. Shells also struck a hospital, five high-rise apartment buildings and a building housing media outlets in Gaza City, injuring several journalists.

Bullets also entered another building housing The Associated Press offices, entering a room where two staffers were working but wounding no one. The Foreign Press Association, representing journalists covering Israel and the Palestinian territories, demanded a halt to attacks on press buildings.

The army had collected the locations of media organizations at the outset of fighting to avoid such attacks.

In Washington, the Bush administration was racing in its final days to negotiate a last-minute deal on American support for Egyptian-led truce mediation efforts under which the U.S. would provide technical support and expertise to prevent Hamas from re-arming, said U.S. and Israeli diplomats.

It was not immediately clear if members of President-elect Barack Obama's or Secretary of State-designate Hillary Rodham Clinton transition teams were being advised of the talks, which could lead to a prominent and ongoing U.S. role in the truce.

The diplomats spoke on condition of anonymity due to the sensitivity of the negotiations.

Israel launched its war on Dec. 27 in an effort to stop militant rocket fire from Gaza that has terrorized hundreds of thousands of Israelis. Some 1,100 Palestinians have been killed, roughly half of them civilians, according to U.N. and Palestinian medical officials. Gaza health official Dr. Moaiya Hassanain said at least 70 people were killed or died of wounds throughout Gaza on Thursday.

Thirteen Israelis also have been killed since the campaign began. Israel says it will press ahead until Hamas halts the rocket fire and stops smuggling weapons into Gaza from neighboring Egypt.

Israeli police said 20 rockets hit southern Israel on Thursday, injuring 10 people. Five of the wounded were in a car that was struck in the city of Beersheba.

The U.N. compound struck Thursday houses the U.N. Works and Relief Agency, which distributes food aid to hundreds of thousands of destitute Gazans in the tiny seaside territory of 1.4 million people.

"I conveyed my strong protest and outrage to the defense minister and foreign minister and demanded a full explanation," said Ban, who arrived in Israel on Thursday morning from Egypt.

It had only that morning become a makeshift shelter for 700 Gaza City residents seeking sanctuary from relentless Israeli shelling, U.N. officials in Gaza said.

John Ging, director of UNRWA operations in Gaza, said the attack at the compound caused a "massive explosion" that wounded three people.

A senior Israeli military officer said troops opened fire after militants inside the compound shot anti-tank weapons and machine guns. The officer spoke on condition of anonymity pending a formal army announcement later in the day.

Ging, who was in the compound at the time, dismissed the Israeli account as "nonsense."

Israeli shells first hit the courtyard filled with refugees, then struck garages and the U.N.'s main warehouse, sending thousands of tons of food aid up in flames, Ging said. Later, fuel supplies went up in flames, sending a thick black plume of smoke into the air.

"It's a total disaster for us," Ging said, adding that the U.N. had warned the Israeli military that the compound was in peril from shelling that had begun overnight. U.N. officials say they have provided Israel with GPS coordinates of all U.N. installations in Gaza to prevent such attacks.

The refugees were moved to a school away from the immediate fighting, he said.

Separately, Israel shells landed next to a U.N. school in another Gaza City neighborhood, wounding 14 people who had sought sanctuary there, medics and firefighters said.

An Israeli attack near a U.N. school in northern Gaza earlier this month killed nearly 40 people. At the time, Israel said militants had fired on army positions from the beginning.

Tuesday, January 13, 2009

Killers hiding behind women and children

Hamas Stakes Its Identity on Resistance to Israel Gaza Strikes

Jan. 14 -- Ismail Haniya, Hamas’s leader in the Gaza Strip, said Gaza “will not falter” when he appeared on television -- from a hiding place because Israeli war planes had bombed his office.

His determination, even as he left open the door for a negotiated end to the fighting, at a time when almost 1,000 Palestinians have died under Israeli attack is part and parcel of Hamas’s self-declared reason for being: maintaining an armed struggle against a country whose existence it refuses to accept.

“Without resistance, Hamas would have no identity,” said Khalid Amayreh, a political commentator and analyst in the West Bank city of Hebron. “It must maintain its principles of fighting Israel at all costs.”

Haniya’s call on Jan. 12 for an immediate cease-fire, unconditional Israeli military withdrawal and the unfettered opening of Gaza’s borders fell short of Egyptian-government mediators’ proposals that Hamas stop firing rockets into Israel and permit international monitoring of Gaza’s border with Egypt to end arms smuggling.

Still, there was a change in tone. In addition to the “track of resistance,” Haniya said Hamas was also working on “the political track.”

And the No. 2 Hamas figure in Damascus, Mussa Abu Marzuk, earlier this week sounded more open to the Egyptian cease-fire plan, telling Al-Jazeera television that there was “still a chance” his group would accept it. Hamas negotiators spent yesterday in talks in Cairo, after a day of consultation in Damascus.

Medical personnel in Gaza put the Palestinian death toll at 919, while 13 Israelis have died since fighting began Dec. 27.

Suicide Bombings

Hamas, branded a terrorist organization by the U.S. and the European Union, was attacking Israel long before this war. In the mid-1990s, it spearheaded suicide bombings inside Israel. It was a period when that country was ceding control of the West Bank cities of Ramallah, Nablus, Qalqilya, Jenin, Tulkarm, Bethlehem and Hebron to the Palestinian National Authority, then led by Yasser Arafat.

These concessions did nothing to alter Hamas’s anti-Israeli stand. In its view, the Palestinian territory that Israel illegally occupies includes not only the West Bank and Gaza, conquered by Israel in 1967, but also Israel itself.

The Islamic party posits use of force as an alternative to peace talks promoted by Arafat’s successor, Palestinian president Mahmoud Abbas, to create a Palestinian state alongside Israel.

“Israel is simply an illegal state,” said Nizar Ramadan, a Hamas member of the Palestine Legislative Council, or parliament, from the West Bank city of Hebron. “It is not a moral entity we can accept.”

Hamas and Fatah

Hamas’s power struggle with the Fatah Party of Abbas is a subplot of the Israeli invasion. Hamas won West Bank and Gaza parliamentary elections in 2006, pushing aside Fatah. In 2007, Abbas’ security forces -- armed by the U.S., some trained in Egypt and given passage into the Gaza Strip by Israel -- tried to oust the Hamas government from Gaza. Hamas routed Fatah.

The Israeli army sealed Gaza’s borders, periodically cutting off fuel and food supplies, while Abbas continues to rule the West Bank.

“Hamas is reaching to take the flag of the Palestinian national cause from Fatah and their battle with Israel may deliver it,” said Mohammed Naim Farhat, a sociology professor at Al-Quds Open University in Bethlehem.

On Dec. 28, a day after Israel invaded Gaza, Abbas blamed Hamas for breaking a six-month truce with the Israelis. “We were not surprised. Abbas frequently does Israel’s work for them,” said Ramadan, 48, in an interview at his Hebron office. “He kept talking with them while we starved.”

No White Flag

Israeli officials say they believe Hamas is being badly battered but remains resilient. In a Jan. 12 briefing for reporters, Israeli cabinet secretary Oved Yehezkel said the group is “unlikely to raise a white flag.”

Hamas’s world vision is informed by a moralistic view of Israel as the embodiment of evil and by its roots in the West Bank and Gaza, said sociologist Farhat.

“It was bred under occupation and was not an exiled force like Fatah,” he said, referring to the years of PLO exile that ended with Arafat’s return to the West Bank and Gaza in 1994.

“Fatah likes red carpets and visits to foreign capitals,” said commentator Amayreh. “Hamas’s horizons are limited to Palestine.”

Ramadan, the Hamas parliament member, was freed from 39 months of captivity in Israeli prison last October, during which time he was elected to the Palestinian parliament.

Rocket fire is specifically aimed at ending what Hamas calls Israel’s siege of Gaza, he said. “We don’t expect to get Haifa with rockets,” he said. “Just something to eat. Recovering all of Palestine is for future generations. Someday it will happen.”

Land for Peace?

No phrase represents more of a triumph of hope over experience than the phrase "Middle East peace process." A close second might be the once-fashionable notion that Israel should "trade land for peace."

Since everybody seems to be criticizing Israel for its military response to the rockets being fired into their country from the Gaza strip, let me add my criticisms as well. The Israelis traded land for peace, but they have never gotten the peace, so they should take back the land.

Maybe a couple of generations of Palestinians in Gaza living in peace under Israeli occupation and a couple of generations of the occupation troops squelching the terrorists — "militants" for those of you who are squeamish — would establish conditions where the Palestinians would be free to vote on whether they would like to remain occupied or to have their own state — minus terrorists and their rockets.

Casualty totals alone should be enough to show that the Palestinian people are the biggest losers from the current situation, where the terrorists among them, firing rockets into Israel, can bring devastating retaliatory strikes.

Why don't the Palestinians vote for some representatives who would make a lasting peace with Israel? Because any such candidates would be killed by the terrorists long before election day, so nobody volunteers for that dangerous role.

We don't know what the Palestinians really want — and won't know as long as they are ruled by Hamas, Hezbollah and the like.

Whatever the benefits of peace for the Palestinian population, what are the terrorists going to do in peacetime? Become librarians and furniture salesmen?

So-called "world opinion" has been a largely negative factor in this situation. Nothing is easier than for people living in peace and safety in Paris or Rome to call for a "cease fire" after the Israelis retaliate against people who are firing rockets into their country.

The time to cease fire was before the rockets were fired.

What do calls for "cease fire" and "negotiations" do? They lower the price of launching attacks. This is true not only in the Middle East but in other parts of the world as well.

During the Vietnam war, when American clergymen were crying out "Stop the bombing!" they paid little attention to the fact that bombing pauses made it easier for North Vietnam to move more ammunition into South Vietnam to kill both South Vietnamese and Americans.

After Argentina invaded the Falkland Islands, if British Prime Minister Margaret Thatcher had heeded calls for a "cease fire," that would have simply lowered the price to be paid by the Argentine government for their invasion.

Go back a hundred years — before there was a United Nations and before "world opinion" was taken into account.

An Argentine invasion of the Falkland Islands at that time would have risked not only a British counter-attack to retake the islands but also British attacks on Argentina itself.

Anywhere in the world, attacks such as those on Israel today would not only have risked retaliation but invasion and annihilation of the government that launched those attacks.

Today, so-called "world opinion" not only limits the price to be paid for aggression or terrorism, it has even led to the self-indulgence of third parties talking pretty talk about limiting the response of those who are attacked to what is "proportionate."

By this reasoning, we should not have declared war on Japan for bombing Pearl Harbor. We should have gone over to Japan, bombed one of their harbors — and let it go at that.

Does anyone imagine that this would have led to Japan's becoming as peaceful today as it has become after Hiroshima and Nagasaki?

Or is the real agenda to engage in moral preening from a safe distance and at somebody else's expense?

Those who think "negotiations" are a magic answer seem not to understand that when A wants to annihilate B, this is not an "issue" that can be resolved amicably around a conference table.

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Monday, January 12, 2009

Sweden Has No Plans to Become Owner of Volvo, Saab

Jan. 12 (Bloomberg) -- Sweden has no plans to become the owner of General Motors Corp.’s Saab brand or Ford Motor Co.’s Volvo unit, a government official said.

Joran Hagglund, a deputy minister in the Swedish government, made the comment to reporters at the North American International Auto Show in Detroit. Sweden has met with GM and Ford to discuss aid packages and expects to make a decision in early March, Hagglund told reporters. Both brands are based in Sweden.

Unfortunately, the US Government lacks the wisdom of the Swedes. American Taxpayers are about to become the new owners of GM and Chrysler. Eventually, Ford may join them, and we will see the emergence of American Motors, though the company will have little in common with the former American Motors that was known for building the Rambler and Chrysler's only big seller in recent years -- the Jeep.

The New American Motors will employ the United Auto Workers to build a lot of cars that will fail to attract buyers. Undoubtedly they will be good cars. But American Motors will produce as many as government forecasters request, and Taxpayers will pay the wages and benefits of those workers.

How large will unsold inventories grow if there's no penalty for building too many cars? Will the government allow American Motors to clear out unsold vehicles by cutting prices at the end of the year?

Will American Motors persuade Congress to limit the number of cars Toyota and Honda can build in the US? Probably. How will that affect the market for used cars?

Our best bet for Detroit is to hand ownership of GM to the UAW. Taxpayers can acquire 100% of GM's stock for less than $3 billion. That's a worthwhile purchase for taxpayers. After buying the stock it should be GIVEN to the UAW and the union should take it from there. Im sure they know what's best.

Tuesday, January 06, 2009

Hot Foot

Footstar (FTAR.OB), a shoe seller operating in leased space in Kmart and Rite Aid is liquidating. That suggests opportunity for venturesome investors.

The company appears to have tangible equity of $82 million ($3.84 per share) and a liquidation value of about $96 million ($4.50 per share). This compares to the current stock price of $3.40. If the liquidation figure proves accurate, investors have an excellent opportunity of seeing a real return of about 30% in less than a year.

Footstar operates footwear departments in almost 1,400 Kmarts (SHLD) and over 800 Rite Aid (RAD) stores. In March 2004, due to poor acquisitions, accounting problems and liquidity issues, Footstar entered Chapter 11 bankruptcy. In February 2006, the company emerged and paid creditors in full. While in bankruptcy in 2005, its contract with Kmart was amended. Originally the contract was to expire on December 31, 2012. As a result of the Chaper 11 reorganization, the contract expired December 31, 2008.


Subsequent to the recent expiration of the contract, Kmart will purchase the inventory related to its stores, excluding unsalable or damaged inventory for book value. Seasonal (four months past season) inventory will be purchased at 40% of cost. Footstar has written down seasonal inventory by $2.4 million.

The remaining asset is Footstar’s headquarters in Mahwah, NJ. The building is listed for $19.5 million.

Footstar eliminated three executive positions and notified 218 employees of termination. The severance cost related to the employees is $8.5 million plus $2 million in benefit costs. The company has accounted for $3.6 million of the total. But $6.9 million remains to be expensed.

Footstar’s second half 08 operating earnings are critical. Income taxes are virtually zero due to deferred tax assets. Thus, operating earnings are the best measure of performance. Operating income was $28.4 million for the first half of 2008. This figure includes a non-recurring gain of $22.3 million for reduced severance after Kmart agreed to hire all store and district managers.

Netting out all items leads to estimated second-half operating earnings of $12.1 million compared with $21.5 million for the first six months of last year. Second-half factors effecting earnings include lower operating expenses due to reduced headcount and the weak retail environment. In the first half, Kmart recorded same-store sales declines of 6% compared with Footstar’s decline of 10.6%.

Sears stated it anticipates a modest decline in same store sales for the second half. Operating earnings declined 40% in the first half. Operating earnings were $32 million in the 2nd half of 07. Estimates for second-half 2008 operating earnings are in the range of $19 million-$25 million.


The biggest risk is a slow liquidation. Footstar will file a plan of liquidation in early 09. However, the inability to sell the headquarters building might delay the final payout.