Press Briefing

Jan 25, 2010

On BPA: Speak Up, Science & Industry -- or Forever Hold Your Peace
http://www.acsh.org/factsfears/newsID.1565/news_detail.asp

Obama Is Missing in Action on Gay Rights - Ted Olson is on the right side of history. When will the president step up?
http://online.wsj.com/article/SB10001424052748704629804575325231395396708.html

Ambassador Eikenberry Receives First Honorary Degree From National Military Academy of Afghanistan
http://blogs.state.gov/ap/index.php/site/entry/eikenberry_nmaa

A Weakened U.S. Goes to the G-20 - In Toronto, summiteers will be courting China—not the U.S.—as the world's pre-eminent source of dollar financing
http://online.wsj.com/article/SB10001424052748704629804575325240077856192.html

Petraeus's Opportunity - His selection reassures our Afghan allies that the U.S. will not begin substantial troop reductions until the Afghans can handle the insurgents on their own
http://online.wsj.com/article/SB10001424052748704911704575326862770750660.html

The Roundtable's Great Awakening - Big business discovers President Obama's 'hostile environment.'
http://online.wsj.com/article/SB10001424052748704629804575324821751980744.html



Breakthrough in Capturing Lost Energy in Solar Cells - "Hot carrier" solar cells could be twice as efficient as today's
http://spectrum.ieee.org/green-tech/solar/breakthrough-in-capturing-lost-energy-in-solar-cells

Why It's Safer to Drill in the 'Backyard' - Texas has had 102 oil and gas well blowouts since the start of 2006, without catastrophic consequences
http://online.wsj.com/article/SB10001424052748704050804575318591702015252.html

The White House Blog - Reset with Russia Continues
http://www.whitehouse.gov/blog/2010/06/24/reset-with-russia-continues

Repeal ObamaCare: Yes We Can
http://fixhealthcarepolicy.com/in-the-news/repeal-obamacare-yes-we-can

Policies of Scarcity in a Land of Plenty
http://www.instituteforenergyresearch.org/2010/06/23/policies-of-scarcity-in-a-land-of-plenty/

Conrad Black's Revenge - The Supreme Court reins in a vague and often abused law
http://online.wsj.com/article/SB10001424052748704289504575312512968461310.html

Assistant Secretary Brimmer Speaks With Students at John Cabot University. By Esther Brimmer, Assistant Secretary, Bureau of International Organization Affairs. Rome, Italy
http://www.state.gov/p/io/rm/2010/143600.htm

No Rush to Judgment on New START
http://blog.heritage.org/2010/06/24/morning-bell-no-rush-to-judgment-on-new-start

Press Briefing

Jun 24, 2010

Using Comparative Effectiveness Research to Improve the Health of Priority Populations
http://www.brookings.edu/events/2010/0603_comparative_effectiveness.aspx

BIS Annual Reports 1931 to 1996
http://www.bis.org/publ/arpdf/archive/index.htm

War Is No Place for Libel Law - A federal court slaps down a novel claim from a Sudanese business bombed by the U.S. in 1998
http://online.wsj.com/article/SB10001424052748704895204575320840303274372.html

A Missed Opportunity on Financial Reform - How could Fannie Mae and Freddie Mac have escaped Congress's attention?
http://online.wsj.com/article/SB10001424052748704853404575322491510468572.html

U.S. Assistance in Response to the Current Humanitarian Crisis in the Kyrgyz Republic and Uzbekistan
http://www.state.gov/r/pa/prs/ps/2010/06/143576.htm

Democrats and the McChrystal Fiasco - They politicized generals during the Bush administration and fomented distrust between civilian and military leaders
http://online.wsj.com/article/SB10001424052748704629804575324610902472990.html

The White House Blog - The Secret Life of White House Bees
http://www.whitehouse.gov/blog/2010/06/23/secret-life-white-house-bees

The Family Business Revenue Act - A tax on the wealthy becomes a tax on mom and pop
http://online.wsj.com/article/SB10001424052748704629804575325031494469728.html

Al Gore & D Blood: Toward Sustainable Capitalism - Long-term incentives are the antidote to short-term greed
http://online.wsj.com/article/SB10001424052748704853404575323112076444850.html

Volcker and Derivatives - The end game for financial reform
http://online.wsj.com/article/SB10001424052748704853404575323032606552688.html

President Obama on LGBT Pride Month: Extraordinary Progress, But Hard Work Left to Do
http://www.whitehouse.gov/blog/2010/06/23/president-obama-lgbt-pride-month-extraordinary-progress-hard-work-left-do

The Petraeus Hail Mary - Obama makes a wise choice, but the general needs more support
http://online.wsj.com/article/SB10001424052748704629804575325073086949444.html

How the UN Can Contribute to International Cooperation on Climate Change. By Maria Otero, Under Secretary for Democracy and Global Affairs. NY-Alesund Symposium, Svalbard, Norway
http://www.state.gov/g/143563.htm

Federal Presidents’s Leadership Vacuum
http://blog.heritage.org/2010/06/23/morning-bell-obamas-leadership-vacuum

It's Time America Had a Fat President
http://www.cato.org/pub_display.php?pub_id=11912

Press Briefing

Jun 23, 2010

Implementing the Affordable Care Act
http://www.youtube.com/watch?v=_7vQ4KWXzMc

The "government needs to be removing itself from the private sector"
http://online.wsj.com/article/SB10001424052748704853404575322931249166908.html

The White House Blog - The Affordable Care Act -- Benefits and Weights Being Lifted
http://www.whitehouse.gov/blog/2010/06/22/afforadable-care-act-benefits-and-weights-being-lifted

$100,000 Is Plenty for Deposit Insurance - Raising the cap will enhance the ability of weak banks to expand their deposit base and cause trouble for the FDIC
http://online.wsj.com/article/SB10001424052748704050804575319051157716956.html

America and the Middle East in a New Era
http://www.state.gov/p/us/rm/2010/136721.htm

Obama's Moratorium, Drilled. WSJ Editorial
http://online.wsj.com/article/SB10001424052748704853404575323203174960586.html
A federal judge instructs the White House on the rule of law
WSJ, Jun 23, 2010

As legal rebukes go, it's hard to get more comprehensive than the one federal judge Martin Feldman delivered yesterday in overturning the Obama Administration's six-month moratorium on deep water drilling in the Gulf of Mexico.

In a remarkably pointed 22-page ruling, the judge made clear that even Presidents aren't allowed to impose an "edict" that isn't justified by science or safety.

Oil-services companies brought the case, which is supported by the state of Louisiana, arguing that the White House ban was "arbitrary and capricious" in exceeding federal authority, and Judge Feldman agreed. He noted that even after reading Interior Secretary Ken Salazar's report on safety recommendations (which included the ban), and Mr. Salazar's memo ordering the ban, "the Court is unable to divine or fathom a relationship between the findings and the immense scope of the moratorium."

Quite the opposite, said the judge, "the Report makes no effort to explicitly justify the moratorium." It does "not discuss any irreparable harm that would warrant a suspension of operations" and doesn't provide a timeline for implementing proposed safety regulations. There is "no evidence" that Mr. Salazar "balanced the concern for environmental safety" with existing policy, and "no suggestion" that he "considered any alternatives." The feds couldn't even coherently define "deep water." Ouch.

As these columns have argued, the judge said that the illogic of the moratorium is that "because one rig failed and although no one yet fully knows why, all companies and rigs drilling new wells over 500 feet also universally present an imminent danger." Because this will cause "irreparable harm" to jobs and to domestic energy supplies, such a sweeping ban couldn't stand.

The judge also went out of his way to express "uneasiness" over the Administration's claim that its safety report (which recommended the ban) had been "peer reviewed" by experts. Those experts have since publicly disavowed the ban, explaining that the ban was added to the report only after they had signed off on an earlier draft. White House green czar Carol Browner dismissed their complaints, saying "No one's been deceived or misrepresented."

But Judge Feldman directly contradicted Ms. Browner, describing the report's claim of "peer review" as "factually incorrect." Moreover, the Administration's "hair-splitting explanation" of what the experts did or didn't support "abuses reason, common sense, and the text at issue."

The judge's other public service was to list the environmental groups that had joined the Administration's defense against the suit. They included the Natural Resources Defense Council, whose president, Frances Beinecke, has been appointed by President Obama to his deep water drilling commission. Ms. Beinecke ought to resign.

The Administration says it will appeal, but the thorough-going nature of the judge's ruling suggests the Administration will need a much better legal and substantive case to prevail. It would do better to use the ruling as an excuse to drop its purely political ban and stop compounding the spill's damage to the people and economy of the Gulf.



Bosnia and Herzegovina: Promoting Security By Destroying Conventional Weapons
http://blogs.state.gov/index.php/site/entry/bosnia_herzegovina_conventional_weapons

Orszag Adieu - The 'cost curve' bent the budget director
http://online.wsj.com/article/SB10001424052748704853404575322850840791986.html

Geithner & Summers: Our Agenda for the G-20 - Countries should work to stabilize debt levels, enact new financial regulation, and reduce their dependence on fossil fuels
http://online.wsj.com/article/SB10001424052748704853404575322791729932502.html

Blowouts Will Not Always Be Prevented - We are curiously unwilling to acknowledge known risks
http://online.wsj.com/article/SB10001424052748704853404575322760763424460.html

Why McChrystal Has to Go - It is intolerable for military officers to mock senior political officials, including ambassadors and the vice president
http://online.wsj.com/article/SB10001424052748704853404575322800914018876.html

Fire McChrystal Pronto
http://progressive.org/wx062210.html

IER Statement on Court Order Overturning Obama Admin. Deepwater Drilling Ban
http://www.instituteforenergyresearch.org/2010/06/22/ier-statement-on-court-order-overturning-obama-admin-deepwater-drilling-ban/

The White House Blog: Building Regional Energy Innovation Cluster
http://www.whitehouse.gov/blog/2010/06/22/building-regional-energy-innovation-clusters

Daddy Was Only a Donor - A new study paints a troubling portrait of children conceived by single mothers who chose insemination
http://online.wsj.com/article/SB10001424052748704324304575306851423563346.html

China Currency 2.0: Yes, Change Really Is Coming
http://blogs.forbes.com/china/2010/06/21/china-currency-2-0-yes-change-really-is-coming/

Conservatives: Time to Dump the Afghanistan Timeline
http://blog.heritage.org/2010/06/22/morning-bell-time-to-dump-the-afghanistan-timeline/

Moral Hazard and China's Banks - Beijing could face its own banking crisis unless more market discipline is introduced

Moral Hazard and China's Banks. By VICTOR SHIH
Beijing could face its own banking crisis unless more market discipline is introduced.WSJ, Jun 22, 2010

Some policy makers in Beijing have taken to crowing that their economic model is superior to the West's because China didn't suffer a banking crisis. They're wrong in at least one critical respect: moral hazard. In China, just as in the West, banks and businesses have grown accustomed to gambling with other people's money on the assumption that the government will bail them out if they lose.

The key fact governing most credit and investment decisions today is that everyone believes the central bank would bail out any financial institution, large or small. The central government has consistently repaid depositors in the event of bank closures. The promise is different from, and worse than, traditional deposit insurance in that banks don't pay a premium for the benefit—it just happens.
[chiecon]

This causes ripples throughout the financial system. Depositors and investors are at ease with placing much of their savings into financial institutions because of the central bank's blanket guarantee, allowing these institutions to provide ample liquidity to firms. The guarantee also minimizes the chance of a panic, thus enforcing everyone's confidence in the system.

Two other regulations help bolster a deceptive sense of security. First, the China Banking Regulatory Commission imposes a large basket of prudential targets on all banks, including capital-adequacy ratio, debt-asset ratio and nonperforming-loan ratio requirements, as well as a long list of lending rules. Furthermore, the Communist Party sends inspectors to monitor the banking regulators.

The guarantee and intrusive regulations make the system less secure, not more. Given the ultimate backstop, profits from risky behavior can be so high that banks are willing to share some of the spoils with corrupt regulators who can help them circumvent bothersome rules. In one recent case, the vice president of the China Development Bank was convicted of receiving bribes to grant loans against regulations. In another case, a banker in southern Guangdong province bribed local police to arrest an auditor evaluating the bank branch's books.

This kind of behavior would be difficult in a system with a freer media and an independent judiciary. But China's system depends mainly on top-down monitoring, where a borrower need only elicit the help of a powerful official. As an added benefit, if the loan fails, borrowers can work with banks to roll over loans with the regulators' full blessing.

As a consequence, financial-system risks build up over time at an unknown pace. Small crises are not allowed to emerge to inform the public of accumulating systemic risks—unlike in the United States, where a growing number of small bank failures can serve as a canary in a coal mine.

The only way to avert a future crisis of confidence is to tackle moral hazard. First, the central bank's blanket guarantee should be removed from small financial institutions that engage in reckless lending. Depositors must learn to be suspicious of banks doing the bidding of ambitious local authorities.

Second, while it may be difficult to take similar steps for large banks because of systemic risks, these institutions should be required to disclose when large-scale borrowers restructure or roll over major loans. Instead of only reporting the identities of the largest borrowers overall, listed banks should disclose the identities of their largest borrowers in every province or even city so that investors can conduct their own due diligence.

Third, regulators also need to rethink the incentives their rules create. The current system of imposing target caps on nonperforming loans encourages bankers and local regulators to collude to hide them. These targets should be scrapped in favor of higher capital-adequacy ratios and much stricter restrictions on borrowers' ability to roll over loans or to convert short-term loans into long-term loans. If losses arise, banks should be encouraged to simply recognize them and move on.

China's moral hazard problem manifests itself somewhat differently from that in the West, but the end result is the same: If all financial institutions are perceived as too big to fail, while misguided regulations give a false impression of safety, plenty of bankers and investors will be happy to take advantage.

Mr. Shih is a professor of political science at Northwestern University and the author of "Factions and Finance in China: Elite Conflict and Inflation" (Cambridge University Press, 2008).

Press Briefing

Jan 22, 2010

Resolving the financial crisis: are we heeding the lessons from the Nordics?, by Claudio Borio, Bent Vale and Goetz von Peter. Bis Working Papers No 311
http://www.bis.org/publ/work311.htm

A Battle Against the Odds - How tribal leaders helped the U.S. in Iraq—and the lessons for Afghanistan
http://online.wsj.com/article/SB10001424052748704050804575319821523248194.html

An Update from the President on the BP Oil Spill
http://www.youtube.com/watch?v=Ij4ngpNcsW0

Moral Hazard and China's Banks - Beijing could face its own banking crisis unless more market discipline is introduced
http://online.wsj.com/article/SB10001424052748704050804575319582177841808.html

Iran's Democratic Manifesto - Mousavi has issued a clear call for democracy, the separation of mosque and state, and a gentler foreign policy
http://online.wsj.com/article/SB10001424052748704198004575310753382427596.html

The Sotomayor Precedent - Obama's nominee joins the Ninth Circuit, loses three times
http://online.wsj.com/article/SB10001424052748704895204575320840247308772.html

Live Video: Secretary Clinton To Deliver Remarks Celebrating LGBT Pride Month
http://blogs.state.gov/index.php/entires/secretary_clinton_lgbt_pride_month

Colombia Speaks - But will the Federal President listen?
http://online.wsj.com/article/SB10001424052748704895204575320833372467878.html

The White House Blog - The President's Record on Border Security
http://www.whitehouse.gov/blog/2010/06/21/presidents-record-border-security

The Antidrilling Commission - The White House choices seem to have made up their minds
http://online.wsj.com/article/SB10001424052748704895204575320892241446242.html
 "Under my Administration, the days of science taking a back seat to ideology are over. . . To undermine scientific integrity is to undermine our democracy. . . I want to be sure that facts are driving scientific decisions, and not the other way around."
            —President Obama, April 27, 2009

A Negotiated Solution for Afghanistan? - Whatever his other weaknesses, President Karzai is not about to surrender to the Taliban at the peace table
http://online.wsj.com/article/SB10001424052748704050804575319263117995160.html

UN Convention Against Transnational Organized Crime, by Elizabeth Verville, Deputy Assistant Secretary, Bureau of International Narcotics and Law Enforcement Affairs. Remarks at a High-level Meeting of the UN General Assembly, NYC
http://www.state.gov/p/inl/rls/rm/143406.htm

A Visit Inside Turkey's Islamist IHH - A journalist's trip to the headquarters of the extremist group that sponsored the Mavi Marmara
http://weeklystandard.com/blogs/visit-turkey-islamist-ihh

Farewell to the Shadow Shoguns
http://www.project-syndicate.org/commentary/koike6/English

The Obama Speech We're Waiting For: Fannie Mae and Freddie Mac need to get the BP treatment
http://online.wsj.com/article/SB10001424052748704895204575320922399530274.html

Iran and the European Moment - The Continent has no more excuses not to act against Tehran
http://online.wsj.com/article/SB10001424052748704122904575314880833508458.html

Decks are stacked against China keeping its stake in Korea game
http://search.japantimes.co.jp/cgi-bin/eo20100606bc.html

Can 'Pashtunistan' end the Af-Pak war?
http://www.washingtontimes.com/news/2010/jun/1/can-pashtunistan-end-the-af-pak-war/

Firms paid to shut down wind farms when the wind is blowing - Britain's biggest wind farm companies are to be paid not to produce electricity when the wind is blowing
http://www.telegraph.co.uk/earth/energy/windpower/7840035/Firms-paid-to-shut-down-wind-farms-when-the-wind-is-blowing.html

Press Briefing

Jan 21, 2010

Chomsky's Nightmare: Is Fascism Coming to America?
http://progressive.org/rothschild0610.html

Time to Stand Up to the National Standards Agenda
http://blog.heritage.org/2010/06/21/morning-bell-time-to-stand-up-to-the-national-standards-agenda

Churchill's Stogie Up In Smoke
http://www.acsh.org/factsfears/newsID.1549/news_detail.asp

On Eric Jaffe's The King's Best Highway - The Lost History of the Boston Post Road, the Route that Made America
http://online.wsj.com/article/SB10001424052748704198004575311071004764364.html

WH Blog: President Obama Breaks Ground on 10,000th Recovery Act Road Project; Let the Summer of Recovery begin!
http://www.whitehouse.gov/blog/2010/06/18/president-obama-breaks-ground-10000th-recovery-act-road-project-let-summer-recovery-

Think Globally, Sue Locally - The plaintiffs bar goes international and focuses on trashing a corporation's image
http://online.wsj.com/article/SB10001424052748704002104575291101685354766.html

On the Precautionary Principle: The Gulf disaster rehabilitates a discredited idea - The 'Paralyzing' Principle
http://online.wsj.com/article/SB10001424052748703389004575304931124455048.html

Pakistan's Medieval Constitution - It is the only Muslim nation to explicitly define who is or is not a 'Muslim'
http://online.wsj.com/article/SB10001424052748704198004575311043632237762.html

The China Currency Syndrome - World leaders would do better to worry less about imbalances and more about whether their own nations are pursuing policies that contribute to global prosperity
http://online.wsj.com/article/SB10001424052748704365204575317691493370612.html

U.S. Will Contribute Additional $60 Million to United Nations Relief and Works Agency for Palestine Refugees
http://blogs.state.gov/index.php/site/entry/unrwa_refugees

ObamaCare and the Independent Vote - Voter opposition hasn't changed, and it could be decisive in November
http://online.wsj.com/article/SB10001424052748704289504575312610438320480.html

Ending Lobbyist Appointments to Agency Boards and Commissions
http://www.whitehouse.gov/blog/2010/06/18/ending-lobbyist-appointments-agency-boards-and-commissions

Capital-Control Comeback - As money flows to Asia, politicians play King Canute
http://online.wsj.com/article/SB10001424052748704289504575312080651478488.html

Celebrex: Something to Celebrate
http://www.acsh.org/factsfears/newsID.1548/news_detail.asp

Federal President Weekly Address: Republicans Blocking Progress
http://www.whitehouse.gov/blog/2010/06/19/weekly-address-republicans-blocking-progress

Conservatives: Married Fathers-America’s Greatest Weapon Against Child Poverty
http://www.heritage.org/Research/Reports/2010/06/Married-Fathers-Americas-Greatest-Weapon-Against-Child-Poverty

Press Briefing

Jan 19, 2010

Why Pakistan Must Change Its Priorities - ISI and the Taliban
http://www.cato.org/pub_display.php?pub_id=11902

Adjustments to the Basel II market risk framework announced by the Basel Committee
http://www.bis.org/press/p100618.htm

Free eBook: Cult of the Presidency - America's Dangerous Devotion to Executive Power
http://www.cato.org/cult-of-the-presidency/

The Vanity Tax - The trouble with the government's new tax on indoor tanning services
http://reason.com/archives/2010/06/17/the-vanity-tax

Surfing the Chinternet - What hides behind the "Great Firewall" of China?
http://weeklystandard.com/blogs/surfing-chinternet

Why is the United States Always the Supplicant? Part of the answer, no doubt, is our uninhibited displays of eagerness
http://weeklystandard.com/blogs/why-united-states-always-supplicant

US Helps Drought-Affected Niger With First Award Under the Emergency Food Security Program
http://www.usaid.gov/press/releases/2010/pr100617.html

On NASA's comments to EPA Fears of Formaldehyde
http://www.acsh.org/factsfears/newsID.1540/news_detail.asp

Scoop: KUKA's youBot Mobile Manipulator Unveiled
http://spectrum.ieee.org/automaton/robotics/industrial-robots/scoop-kukas-youbot

EPA Foments Baseless Fear of Formaldehyde
http://www.acsh.org/factsfears/newsID.1538/news_detail.asp

Keep Your Junk Science Off My Salt
http://www.acsh.org/factsfears/newsID.1541/news_detail.asp

How 'Protectionist' Became An Insult - As Congress dawdles on trade agreements, the harsh results of the Smoot-Hawley tariff should not be forgotten
http://online.wsj.com/article/SB10001424052748704575304575296610452014710.html

The Trouble With Teacher Tenure - We can't make progress if bad teachers have jobs for life

The Trouble With Teacher Tenure. By TIMOTHY KNOWLES
We can't make progress if bad teachers have jobs for life.WSJ, Jun 18, 2010

Colorado did right by its kids recently when Gov. Bill Ritter signed into law groundbreaking education reform to overhaul teacher tenure and evaluation. The bill elicited an outcry from many teachers. But the many states now considering similar measures must not be cowed by the firestorm.

As a former teacher, principal and district leader, I've devoted my life to providing children with the excellent education they deserve. And in my 23 years on the job, there are two things I've learned for certain.

First, teachers have a greater impact on student learning than any other school-based factor. Second, we will not produce excellent schools without eliminating laws and practices that guarantee teachers—regardless of their performance—jobs for life.

Nearly everyone in public education has a story that illustrates the Kafkaesque process of trying to remove a tenured teacher. Mine involves a teacher in Boston who napped each day in the back of the room while students copied from the board. Despite repeated efforts, the district failed to fire him.

Such anecdotes are reinforced by hard data. An award-winning study of Illinois school districts over an 18-year period found an average of two tenured teachers out of 95,000 were dismissed for underperformance each year. Nationally, between 0.1% and 1% of tenured teachers are dismissed annually, according to the Center for American Progress.

It's not news that students suffer when very low-performing teachers are allowed to remain in the classroom. But teachers suffer too. In a forthcoming article, my colleague Sara Ray Stoelinga of the University of Chicago Urban Education Institute illustrates how teacher tenure creates perverse practices in schools across Chicago. In interviews with 40 principals, 37 admitted to using some type of harassing supervision—cajoling, pressuring or threatening—to get teachers to leave in order to circumvent the byzantine removal process mandated by the union contract. One principal plotted to remove a teacher who had trouble climbing stairs by assigning her to a fourth-floor classroom. Another reassigned a teacher who had been teaching eighth-graders for 14 years to a first-grade classroom.

This pathological status quo feeds upon itself: The more difficult it is for principals to address underperformance, the more likely they are to use informal methods to do so. This fuels labor's argument that management is capricious, strengthening their case for increased employment protection.

This cycle leads to what educators call "the dance of the lemons"—the practice of shuffling underperforming teachers from school to school. It's easier to push a teacher to a school down the street than it is to push them out of the profession.

The effect that bad teachers have on relationships among teachers and principals might be the most corrosive aspect of tenure laws. In the book "Organizing Schools for Improvement," University of Chicago researchers showed that the quality of adult relationships in a school profoundly affects student achievement. Analyzing more than a decade's worth of data from Chicago Public Schools, they found that schools where adults demonstrate a shared sense of responsibility for student learning are four times more likely to make substantial gains in reading than schools without strong professional ties. Schools where principals set high standards and involve teachers in decision making are seven times more likely to make substantial improvements in math than schools weak on such measures. But cooperative relationships are difficult to maintain when principals must use underhanded methods to remove ineffective teachers, and when bad teachers undermine staff morale.

The good news is that the majority of teachers are not interested in protecting colleagues who don't belong in the classroom. Last summer the American Federation of Teachers surveyed its members, asking: "Which of these should be the higher priority: working for professional teaching standards and good teaching, or defending the job rights of teachers who face disciplinary action?" According to Randi Weingarten, the union's president, "by a ratio of 4 to 1 (69% to 16%), AFT members chose working for professional standards and good teaching as the higher priority." She elaborated: "Teachers have zero tolerance for people who . . . demonstrate they are unfit for our profession."

The time has come to eliminate tenure. We are facing monumental challenges in our quest to provide all students with an education that will prepare them to compete in a globalized economy. By removing one of the main sources of friction between labor and management, we can focus on the substantive issues: training, evaluating and rewarding teachers to make teaching a true profession.

Mr. Knowles is the director of the University of Chicago Urban Education Institute.

Press Briefing

Jan 18, 2010

New START and implications for National Security Programs. By Hillary Clinton, Secretary of State. Opening Statement Before the Senate Armed Services Committee Hearing on the New START. Washington, DC
http://www.state.gov/secretary/rm/2010/06/143261.htm

U.S. Assistance in Response to the Current Humanitarian Crisis in the Kyrgyz Republic and Uzbekistan. US State Dept
http://www.state.gov/r/pa/prs/ps/2010/06/143229.htm

The Trouble With Teacher Tenure - We can't make progress if bad teachers have jobs for life
http://www.bipartisanalliance.com/2010/06/trouble-with-teacher-tenure-we-cant.html

Good Jobs and a Level Playing Field in the Next Recovery
http://www.whitehouse.gov/blog/2010/06/17/good-jobs-and-a-level-playing-field-next-recovery

The Gulf Spill Record - Here's the rest of the story on USA Today's "Oil spills escalated in this decade."
http://online.wsj.com/article/SB10001424052748704575304575296584097417918.html

The White House Blog: A New Process and a New Escrow Account for Gulf Oil Spill Claims from BP
http://www.whitehouse.gov/blog/2010/06/17/a-new-process-and-a-new-escrow-account-gulf-oil-spill-claims-bp

BP at first sounded arrogant and now is so obsequious it won't even stand up for its legal rights
http://online.wsj.com/article/SB10001424052748704289504575312833964048458.html

New York and the New England Journal of Medicine. By Peter R. Orszag, Director, OMB
http://www.whitehouse.gov/omb/blog/10/06/17/New-York-and-the-New-England-Journal-of-Medicine/

Reforming Main Street - A trial-lawyer bonanza gets air-dropped into the financial bill
http://online.wsj.com/article/SB10001424052748704009804575308970937631194.html

Greenspan: U.S. Debt and the Greece Analogy - Don't be fooled by today's low interest rates. The government could very quickly discover the limits of its borrowing capacity.
http://online.wsj.com/article/SB10001424052748704198004575310962247772540.html

New York and the New England Journal of Medicine. By Peter R. Orszag, Director, OMB
http://www.whitehouse.gov/omb/blog/10/06/17/New-York-and-the-New-England-Journal-of-Medicine/

In Medical Malpractice Reform, States Should Shirk the Washington Way
http://fixhealthcarepolicy.com/in-the-news/in-medical-malpractice-reform-states-should-shirk-the-washington-way

U.S. Treasury Department Targets Iran's Nuclear and Missile Programs. Bureau of International Security and Nonproliferation
http://www.state.gov/t/isn/143265.htm

Cisneros Rewriting HUD History
http://www.bipartisanalliance.com/2010/06/cisneros-rewriting-hud-history.html

Missile Defense: We've committed to developing proven technologies, and the new START Treaty won't stand in our way. By M Flournoy, Under Sec of Defense for Policy & A Carter, Under Sec of Defense for Acquisition, Technology & Logistics
http://www.bipartisanalliance.com/2010/06/missile-defense-weve-committed-to.html

Rahming Through a Lame Duck Climate Bill?
http://www.cato.org/pub_display.php?pub_id=11904

Expert: Obama speech too 'professorial' for his target audience
http://edition.cnn.com/2010/POLITICS/06/16/obama.speech.analysis/index.html

An Offer BP Couldn’t Refuse
http://blog.heritage.org/2010/06/17/morning-bell-an-offer-bp-couldnt-refuse

The Water Cost of Carbon Capture
http://spectrum.ieee.org/energy/environment/the-water-cost-of-carbon-capture

Cisneros Rewriting HUD History

Posted by Tad DeHaven, Cato, June 17, 2010 @ 1:50 pm

In a recent speech to real estate interests, former Clinton HUD secretary Henry Cisneros preposterously claimed that the recent housing meltdown “occurred not out of a governmental push, but out of a hijacking of the homeownership process by some unscrupulous interests.”
The only criticisms Cisneros could muster for the government’s housing policies over the past 20 years were that regulations weren’t tough enough and it should have focused more on rental subsidies.

The reality is that Cisneros-era HUD regulations and policies directly contributed to the housing bubble and subsequent burst as a Cato essay on HUD scandals illustrates:

• Cisneros’s HUD pursued legal action against mortgage lenders who supposedly declined higher percentages of loans for minorities than whites. As a result of such political pressure, lenders begin lowering their lending standards.

• On Cisneros’s watch, the Community Reinvestment Act was used to pressure lenders into making more loans to moderate-income borrowers by allowing regulators to deny merger approvals for banks with low CRA ratings. The result was that banks began issuing more loans to otherwise uncreditworthy borrowers, while purchasing more CRA mortgage-backed securities. More importantly, these lax standards quickly spread to prime and subprime mortgage markets.

• The Clinton administration’s National Homeownership Strategy, prepared under Cisneros’s direction, advocated “financing strategies, fueled by creativity and resources of the public and private sectors, to help homebuyers that lack cash to buy a home or income to make the payments.” In other words, his policies encouraged the behavior that he now calls “unscrupulous.”

• Cisneros’s HUD also put Fannie Mae and Freddie Mac under constant pressure to facilitate more lending to “underserved” markets. It was under Cisneros’s direction that HUD agreed to allow Fannie and Freddie credit toward its “affordable housing” targets by buying subprime mortgages. Fannie and Freddie are now under government conservatorship and will cost taxpayers hundreds of billions of dollars.

Cisneros now serves as the executive chairman of an institutional investment company focused on urban real estate. Might that explain why Cisneros is now a fan of subsidizing rental housing?
“Unscrupulous” would be a good word to describe the millions of dollars Cisneros has made in the real estate industry following his exit from government.
From the Cato essay:

In 2001, Cisneros joined the board of Fannie Mae’s biggest client: the now notorious Countrywide Financial, the company that was center stage in the subprime lending scandals of recent years. When the housing bubble was inflating, Countrywide and KB took full advantage of the liberalized lending standards fueled by Cisneros’s HUD. In addition to the money he received as a KB director, Cisneros’s company, in which he held a 65 percent stake, received $1.24 million in consulting fees from KB in 2002.
When Cisneros stepped down from Countrywide’s board in 2007, he called it a “well-managed company” and said that he had “enormous confidence” in its leadership. Clearly, those statements were baloney—Cisneros was trying to escape before the crash. Just days before his resignation, Countrywide announced a $1.2 billion loss, and reported that a third of its borrowers were late on mortgage payments. According to SEC records, Cisneros’s position at Countrywide had earned him a $360,000 salary in 2006 and $5 million in stock sales since 2001.

Missile Defense: We've committed to developing proven technologies, and the new START Treaty won't stand in our way

The Way Forward on Missile Defense. By M Flournoy, Under Sec of Defense for Policy & A Carter, Under Sec of Defense for Acquisition, Technology & Logistics
We've committed to developing proven technologies, and the new START Treaty won't stand in our way.
WSJ, Jun 17, 2010

Ballistic missile defenses have matured from a Cold War idea to a real-world necessity. Threats today from ballistic missiles are real, present and growing. Iran and North Korea have extensive inventories of these weapons that threaten their neighbors. Both are working on longer-range missiles capable of posing a direct danger to the United States in the coming years. Iran's continued pursuit of an illicit nuclear program and North Korea's rash intimidation after sinking a South Korean navy ship are but the most recent reminders of the real need for effective U.S. missile defenses.

To counter Iran's ballistic missile program, President Obama announced a phased adaptive approach for European missile defense last September—a move unanimously welcomed by our NATO allies. The first phase begins next year with the deployment of radars and ship-based systems in southern Europe. Romania and Poland have agreed to host land-based defenses for the second and third phases.

A similar phased adaptive approach is being applied to missile defenses in the Middle East and East Asia. While the details of the deployments and host-country arrangements will differ by region, the common thread is significant improvement in ballistic missile defense capabilities, meant to protect our deployed forces overseas and our allies and partners.

In a departure from past approaches, we are no longer building systems anchored in one place and wedded to current threat assessments. We know that the capabilities of potential adversaries do not always progress according to intelligence assessments. Our program must adapt accordingly in the face of evolving and unpredictable threats.

We are also making continued progress in improving our ability to defend the U.S. homeland from ballistic missile attack. By the fall, the U.S. will have 30 deployed ground-based interceptors in Alaska and California, with eight more missile defense silos near completion.

The U.S. is committed to a "fly before you buy" approach supported by a rigorous and independently-monitored testing program. An essential element of that program, and a key capability for the phased adaptive approach, is the Standard Missile 3 (SM-3) interceptor. The SM-3 version deployed on Navy ships today has hit—within inches—its exact target in nine out of 10 tests. The accuracy of these tests has been confirmed in a variety of ways: by fiber-optic grids that can precisely indicate the point of impact on the target; by images taken from the interceptor in the very last moment before impact (images not available to the public for security reasons); by data from highly accurate radars and airborne sensors; and by extensive rocket sled tests and computer simulations on the ground. All these verification sources confirm that when a missile warhead was hit, it was destroyed. These results have been validated by an independent panel of experts with access to all of the classified and unclassified test data.

Missile defenses have become a topic of some discussion in the context of the Senate's consideration of the New START Treaty with Russia. The fact is that the treaty does not constrain the U.S. from testing, developing and deploying missile defenses. Nor does it prevent us from improving or expanding them. Nor does it raise the costs of doing so. We have made clear to our Russian counterparts that missile defense cooperation between us is in our mutual interest, and is not inconsistent with the need to deploy and improve our missile defense capabilities as threats arise.

U.S. ballistic missile defenses are effective, affordable and increasingly adaptable. These capabilities are critical to protecting U.S. citizens, our forces abroad, and our allies from real and growing threats.

Press Briefing

Jan 17, 2010

The White House Blog: More Support for Curbing Special Interest Influence in Our Elections
http://www.whitehouse.gov/blog/2010/06/16/more-support-curbing-special-interest-influence-our-elections

Conservative: The Bad News About ObamaCare Keeps Piling Up - It's now obvious that many millions will lose the coverage they have.
http://online.wsj.com/article/SB10001424052748704198004575310773636609374.html

At Last, Financial Reform - Barney Frank helps prevent another crisis in the credit markets
http://online.wsj.com/article/SB10001424052748704198004575310851924122716.html

A Stealth Attack on Capital Gains - Congress has proposed a discriminatory 'enterprise value tax' on hedge funds and other partnerships. It is a threat to any business or industry that politicians decide is no longer popular
http://online.wsj.com/article/SB10001424052748704009804575308981778779248.html

The President's Meeting with BP Executives: "An Important Step Towards Making the People of the Gulf Coast Whole Again"
http://www.whitehouse.gov/blog/2010/06/16/important-step-towards-making-people-gulf-coast-whole-again

Pakistan-U.S. Strategic Dialogue Energy Working Group Meets in Islamabad
http://blogs.state.gov/ap/index.php/site/entry/pakistan_us_strategic_dialogue_energy

The President's Animosities - Since when was the American idea us versus them?
http://www.bipartisanalliance.com/2010/06/way-mr-obama-sees-life-in-xxi-century.html

Remarks by Secretary of State Hillary Rodham Clinton, USAID Administrator Raj Shah, and Secretary of Agriculture Tom Vilsack
2010 World Food Prize Laureate Announcement Ceremony, Ben Franklin Room, Washington, D.C.
http://www.usaid.gov/press/speeches/2010/sp100616.html

Crude Politics - The drilling experts speak out on the Obama deepwater moratorium
http://online.wsj.com/article/SB10001424052748704198004575311033371466938.html

United States identifies science and innovation as critical drivers to end global hunger
http://www.usaid.gov/press/releases/2010/pr100616.html

Conservatives on the oil spill and federal president: A Crisis of Competence
http://blog.heritage.org/2010/06/16/morning-bell-a-crisis-of-competence

U.S. Engagement With The International Criminal Court and The Outcome Of The Recently Concluded Review Conference. By Harold Hongju Koh, Legal Advisor, & Stephen J. Rapp, Ambassador-at-Large for War Crimes Issues, State Dept
Washington, DC, June 15, 2010
http://www.state.gov/s/wci/us_releases/remarks/143178.htm

Libertarian: Obama's Vision Deficit on Display
http://www.aolnews.com/opinion/article/opinion-oval-office-address-obamas-vision-deficit-on-display/19518002

The way Mr. Obama sees life in XXI century America: a tooth-and-fang world of private interests in constant struggle against the benevolent goals of government

The President's Animosities. By DANIEL HENNINGER
Since when was the American idea us versus them?WSJ, Jun 17, 2010

The oil company formerly known as British Petroleum is starting to look kind of beaten up. So it goes when a business finds itself tossed into the ring with the current president of the United States.

"We will make BP pay," Mr. Obama said Tuesday night.

There is a mood in the land that BP is getting what it deserves. Maybe so. But players in the political game who've found it convenient to join the president in the BP bear-baiting should not delude themselves that BP is a free hit. In politics, nothing happens in isolation.

The beating Mr. Obama is giving BP isn't the exception. It's the rule when this president finds himself in tension with the private sector. I can't recall any previous president with this depth of visceral, antibusiness animosity.

Amid the BP crisis, the president traveled to Carnegie Mellon University to give what was billed as a major speech on the economy. In its entirety, the speech is a guided tour through Mr. Obama's mind. The pundits carping yesterday that the president's oil-spill apologia was limp—even as BP gave him $20 billion in tribute—should check out this one.

That Pittsburgh speech wasn't just about "the economy," but the way Mr. Obama sees life in 21st century America: a tooth-and-fang world of private interests in constant struggle against the benevolent goals of government. All of this described in a tone that is extraordinary for a president.

"As November approaches," the president said, "leaders in the other party will campaign furiously on the same economic arguments they've been making for decades." They gave "tax cuts . . . to millionaires who didn't need them. They gutted regulations and put industry insiders in charge of oversight."

Mr. Obama believes that "if you're a Wall Street bank or an insurance company or an oil company, you pretty much get to play by your own rules, regardless of the consequences for everybody else." Al Gore campaigned hard against these same targets, but never with such ill will.

Americans, he says, want to compete but can't "if the irresponsibility of a few folks on Wall Street can bring our entire economy to its knees." A president is not some backwater pol running for sheriff. But his explanation of the financial crisis—the whole economy brought down by "a few" on Wall Street—is a scenario found nowhere outside a James Bond movie.

He punched out WellPoint and other insurers verbally for months until they dropped and the Democrats passed the president's health-care bill. And they'd better stay down. No longer, said Mr. Obama, would it be possible for people to be "thrown off" their coverage for reasons "contrived" by an insurance company.

He complains his predecessor left him with projected deficits of $8 trillion caused by unpaid-for tax cuts, a familiar analysis, except that Mr. Obama adds that the cuts were "skewed to the wealthy."

When in the Carnegie Mellon speech Mr. Obama turns from what he called "the dangers of an unfettered market" and discusses government—"only government has been able to do what individuals couldn't do and corporations wouldn't do"—he is virtually delirious with joy.

Of his proposed research and experimentation tax credit he says, "The possibilities of where this research might lead are endless." Regenerative medicine, educational software, intelligent prosthetics. "Imagine all the workers and small business owners and consumers who would benefit from these discoveries."

He then identifies what stands in the way of "a better future." It's that "there will always be lobbyists for the banks or the insurance industry that don't want more regulation; or the corporation that would prefer to see more tax breaks . . ." A president seeking tax breaks to the horizon for green industries wouldn't say this, unless whacking "corporations" was just too much fun.

The agenda Mr. Obama described at Carnegie Mellon is so vast you'd think he'd at least enlist the private sector's help. But there's nothing in the speech's enumerations to suggest any desire to have them along on these projects. If they contribute or comply, it will be out of intimidation. It's all him or the government or its "investments."

Some might say that instead of being a cheerleader for business, Mr. Obama is simply a tough-minded public official holding well-shod feet to the fire. I don't buy it. His tone and vocabulary, in use since he took office, goes beyond public policy. It sounds personal. Too personal for a president.

Populism in the United States is a trickier proposition than in, say, South America. Here, the private sector isn't automatically a suspect proposition. Bill Clinton played the populism card as well as anyone. Harry Truman and JFK had famous fights with big steel. But none of these Democratic presidents routinely pistol-whipped private interests in the language this one does. No previous president assembled a Cabinet with not one member from the private sector, as now.

The worldview in this White House is distinct and unusual. It wasn't a voting issue in 2008. The opposition should make it an issue in 2012, and this November. Since when was the American idea us versus them?

Press Briefing

Jan 16, 2010

The New START Treaty, by Rose Gottemoeller, Assistant Secretary, Bureau of Verification, Compliance, and Implementation.
Opening Statement before the Senate Foreign Relations Committee, Washington, DC
http://www.state.gov/t/vci/rls/143159.htm

Russia Rises While Kyrgyzstan Burns - The violence highlights Moscow's power in a country with an important U.S. military base
http://online.wsj.com/article/SB10001424052748704009804575308773623569614.html

Libertarians: Guns and Free Speech - The NRA sells out to Democrats on the First Amendment
http://online.wsj.com/article/SB10001424052748704009804575308470831235224.html

U.S. Priorities on sub-Saharan Africa. By Johnnie Carson, Assistant Secretary, Bureau of African Affairs
Remarks for the Diplomacy Briefing Series Conference, Washington, DC
http://www.state.gov/p/af/rls/rm/2010/143144.htm

Hungary Goes for Growth - Glimmers of policy hope on the Continent
http://online.wsj.com/article/SB10001424052748704324304575306243153045062.html

Good Business in the Global Landscape. By Maria Otero, Under Secretary for Democracy and Global Affairs
Ronald Reagan Building, Washington, DC
http://www.state.gov/g/143136.htm

A Smart Response to China’s ‘Indigenous Innovation’ Policies. By Dieter Ernst
http://www.eastwestcenter.org/news-center/east-west-wire/a-smart-response-to-chinas-indigenous-innovation-policies/

EPA Paints Rosy Picture of American Power Act
http://www.instituteforenergyresearch.org/2010/06/15/epa-paints-rosy-picture-of-american-power-act/

Government to the Economic Rescue - Historians will look back at this time and say the three-pronged strategy of TARP, fiscal stimulus and bank stress testing kept us out of the abyss
http://online.wsj.com/article/SB10001424052748704324304575307071188294124.html

Captains of Subsidy - Famous CEOs plead for more energy cash from Washington
http://online.wsj.com/article/SB10001424052748704312104575298802622225806.html

BP Doesn't Deserve a Liability Cap - The best way to deter future spills is to expose drillers to the full costs of any mistake and not let any company without proper insurance near an oil derrick
http://online.wsj.com/article/SB10001424052748704312104575298902528808996.html

Oil Talk - Obama is trying to link the Gulf gusher to his moribund green agenda
http://online.wsj.com/article/SB10001424052748704009804575309272270223654.html

Susan Rice Accepts Possibility of International Investigation of U.S. Military
http://weeklystandard.com/blogs/rice-accepts-possibility-international-investigation-us-military

Libertarian: Obama vs. BP (and You) - The government holds a company's stock price hostage
http://online.wsj.com/article/SB10001424052748704009804575308763321043220.html

The White House Blog - Keeping the Plan You Like
http://www.whitehouse.gov/blog/2010/06/14/keeping-plan-you

Conservatives: "Side Effects: Obamacare Adds to the Ranks of the Uninsured"
http://fixhealthcarepolicy.com/in-the-news/side-effects-obamacare-adds-to-the-ranks-of-the-uninsured

Lifetime Learners: One Student at a Time
http://www.cato.org/pub_display.php?pub_id=11893

The Obama Energy Tax Game Plan
http://blog.heritage.org/2010/06/15/morning-bell-the-obama-energy-tax-game-plan

The White House Blog - Cooking as a Way of Life
http://www.whitehouse.gov/blog/2010/06/14/cooking-a-way-life

Conservatives: Don't Repeal "Don't Ask/Don't Tell" - Don't sacrifice unit cohesion for a social experiment
http://weeklystandard.com/blogs/dont-repeal-dont-askdont-tell

Press Briefing

Jan 16, 2010

Good Business in the Global Landscape. By Maria Otero, Under Secretary for Democracy and Global Affairs
Ronald Reagan Building, Washington, DC
http://www.state.gov/g/143136.htm

A Smart Response to China’s ‘Indigenous Innovation’ Policies. By Dieter Ernst
http://www.eastwestcenter.org/news-center/east-west-wire/a-smart-response-to-chinas-indigenous-innovation-policies/

EPA Paints Rosy Picture of American Power Act
http://www.instituteforenergyresearch.org/2010/06/15/epa-paints-rosy-picture-of-american-power-act/

Government to the Economic Rescue - Historians will look back at this time and say the three-pronged strategy of TARP, fiscal stimulus and bank stress testing kept us out of the abyss
http://online.wsj.com/article/SB10001424052748704324304575307071188294124.html

Captains of Subsidy - Famous CEOs plead for more energy cash from Washington
http://online.wsj.com/article/SB10001424052748704312104575298802622225806.html

BP Doesn't Deserve a Liability Cap - The best way to deter future spills is to expose drillers to the full costs of any mistake and not let any company without proper insurance near an oil derrick
http://online.wsj.com/article/SB10001424052748704312104575298902528808996.html

Oil Talk - Obama is trying to link the Gulf gusher to his moribund green agenda
http://online.wsj.com/article/SB10001424052748704009804575309272270223654.html

Susan Rice Accepts Possibility of International Investigation of U.S. Military
http://weeklystandard.com/blogs/rice-accepts-possibility-international-investigation-us-military

Libertarian: Obama vs. BP (and You) - The government holds a company's stock price hostage
http://online.wsj.com/article/SB10001424052748704009804575308763321043220.html

The White House Blog - Keeping the Plan You Like
http://www.whitehouse.gov/blog/2010/06/14/keeping-plan-you

Conservatives: "Side Effects: Obamacare Adds to the Ranks of the Uninsured"
http://fixhealthcarepolicy.com/in-the-news/side-effects-obamacare-adds-to-the-ranks-of-the-uninsured

Lifetime Learners: One Student at a Time
http://www.cato.org/pub_display.php?pub_id=11893

The Obama Energy Tax Game Plan
http://blog.heritage.org/2010/06/15/morning-bell-the-obama-energy-tax-game-plan

The White House Blog - Cooking as a Way of Life
http://www.whitehouse.gov/blog/2010/06/14/cooking-a-way-life

Conservatives: Don't Repeal "Don't Ask/Don't Tell" - Don't sacrifice unit cohesion for a social experiment
http://weeklystandard.com/blogs/dont-repeal-dont-askdont-tell

Press Briefing

Jan 15, 2010

PM: Statement on Saville Inquiry about the Bloody Sunday events, Jan 2972
http://www.number10.gov.uk/news/statements-and-articles/2010/06/pm-statement-on-saville-inquiry-51888

Trafficking in Persons: Ten Years of Partnering to Combat Modern Slavery
http://www.state.gov/r/pa/scp/fs/2010/143115.htm

It's Time to Nationalize Fannie and Freddie - Any solution that allows private companies to have a special relationship to government is destined to fail
http://online.wsj.com/article/SB10001424052748703509404575301132120330798.html

Immigration: What Would Reagan Do? - The Gipper repeatedly declared that openness to immigration represents adefining aspect of our national identity
http://online.wsj.com/article/SB10001424052748703561604575282431263367708.html

Who's the Enemy in the War on Terror? - The U.S. is at war with violent Islamist extremism, and the Obama administration does moderate Muslims no favor by refusing to recognize this
http://online.wsj.com/article/SB10001424052748703509404575300420668558244.html

Latest BIS Quarterly Review discusses financial turbulence
http://www.bis.org/press/p100614.htm

Afghan Staying Power - The President needs to speak up for his war strategy
http://online.wsj.com/article/SB10001424052748704324304575306884228293658.html

The United States and Africa: Partnering for Progress
http://www.state.gov/r/pa/scp/fs/2010/143133.htm

Obama's Political Oil Fund - In its Gulf spill panic, the White House runs roughshod over the rule of law
http://online.wsj.com/article/SB10001424052748704324304575307111725173500.html

China's high saving rate: myth and reality, by Guonan Ma and Wang Yi
BIS Working Papers No 312, June 2010
http://www.bis.org/publ/work312.htm
The saving rate of China is high from many perspectives - historical experience, international standards and the predictions of economic models. Furthermore, the average saving rate has been rising over time, with much of the increase taking place in the 2000s, so that the aggregate marginal propensity to save exceeds 50%. What really sets China apart from the rest of the world is that the rising aggregate saving has reflected high savings rates in all three sectors - corporate, household and government. Moreover, adjusting for inflation alters interpretations of the time path of the propensity to save in the three sectors. Our evidence casts doubt on the proposition that distortions and subsidies account for China's rising corporate profits and high saving rate. Instead, we argue that tough corporate restructuring (including pension and home ownership reforms), a marked Lewis-model transformation process (where the average wage exceeds the marginal product of labour in the subsistence sector) and rapid ageing process have all played more important roles. While such structural factors suggest that the Chinese saving rate will peak in the medium term, policies for job creation and a stronger social safety net would assist the transition to more balanced domestic demand.

The Government Bailouts Must End
http://blog.heritage.org/2010/06/14/morning-bell-the-government-bailouts-must-end

Jordan's Nuclear Ambitions Pose Quandary for the U.S.

Jordan's Nuclear Ambitions Pose Quandary for the U.S. By Jay Solomon
WSJ, Jun 14, 2010

SAWAQA, Jordan—The Kingdom of Jordan is in a sprint to become the Arab world's next nuclear power. And America wants to help it succeed.

King Abdullah II says he wants to reduce Jordan's dependence on energy imports by developing nuclear energy.

U.S. and Jordanian officials are negotiating a nuclear-cooperation agreement that would allow American firms to export nuclear components and know-how to the Mideast country, America's closest Arab ally in the volatile region.

The Obama administration views Jordan as a key potential partner in its global program to promote the nonmilitary use of atomic energy—part of a broader plan to increase pressure on other Middle East countries, particularly Iran and Syria, to bring transparency to their own nuclear programs.

"I believe nuclear energy in Jordan will be done in such a way where it is a public-private partnership so everyone can see exactly what's going on," Jordan's King Abdullah II said in an interview. "If we can be the model of transparency, it will push others."

But it's a partnership that puts the Obama administration in a bind: It is trying to make good on its pledge to promote greater civilian use of atomic energy, without angering Israel and risking a Mideast arms race.

The deal has catches for the Jordanians, too: The U.S. is demanding that Amman not produce its own nuclear fuel. That's a right Jordan enjoys as a signatory to the United Nations key nonproliferation treaty—and is reluctant to surrender, thanks to its recent discoveries of big deposits of uranium ore.

The U.S. last week pushed through the United Nations a fourth round of economic sanctions against Iran in a bid to curtail its advancing nuclear work. Tehran says its program is purely for civilian purposes, a charge challenged by the U.N. and the West. U.S. officials worry the Arab states, fearing the Iranian threat, could one day seek to develop atomic weapons themselves.

Senior Jordanian officials say Amman can't renounce its right to produce nuclear fuel under the Nuclear Nonproliferation Treaty, both for strategic and economic reasons. They say that if Jordan cuts a side agreement with the U.S. on this point it would undermine the integrity of the treaty. They also say such an agreement would limit Jordan's ambition to become a "regional nuclear fuel supply and export center."

Failure to reach consensus on this point, U.S. and Jordanian officials acknowledge, could kill the cooperation deal.

"We believe in the universality of the NPT," said Khaled Toukan, the head of the Jordan Atomic Energy Commission. "We do not agree on applying conditions and restrictions outside of the NPT on a regional basis or a country-by-country basis."

[Known recoverable resources of uranium, 2008, in thousands or metric tons  http://sg.wsj.net/public/resources/images/P1-AV716_ARABNU_NS_20100613184437.gif]

Jordan is among a slew of Arab countries, including Egypt, the United Arab Emirates and Bahrain, that are seeking to become among the first Mideast countries to develop a civilian nuclear-power industry. Israel is the lone country in the region believed to possess atomic weapons, but it hasn't moved to build nuclear power plants.

Jordan's nuclear ambitions are driven by economics. Wedged between Israel and oil giants Saudi Arabia and Iraq, the kingdom is 95% dependent on imported oil and has among the world's smallest reserves of potable water.

But the discovery of at least 65,000 tons of uranium ore in the deserts outside Amman in 2007 has led King Abdullah to order a drastic reshaping of his nation's economic strategy.

French and Chinese geologists are combing southern, central and eastern Jordan in search of additional uranium deposits. In addition to fueling its own plants, Jordan hopes to use its projected four nuclear power plants to begin exporting electricity to neighbors including Iraq and Syria by 2030 and to commercially mine and export uranium. Even if it doesn't process any nuclear fuel itself, Jordan could still produce and export electricity by buying the fuel for its reactors on the international market.

"Now that we have a raw material, people are coming for the first time in our history and knocking on our door," King Abdullah said in the interview.

U.S. officials say they recognize Jordan's desire to achieve energy independence. They praise Jordan's early outreach to the U.N.'s nuclear watchdog, the International Atomic Energy Agency, and Amman's willingness to allow international inspectors unhindered access to its growing nuclear infrastructure.

But U.S. negotiators are unwavering in their insistence that Amman commit to purchasing its reactor fuel from the international market to guard against its potential internal diversion for military purposes. Iran's insistence on producing its own nuclear fuel stands at the center of its current conflict with the West.

U.S. officials argue if Jordan doesn't surrender its rights to produce fuel, it raises proliferation risks. Countries with the complete nuclear fuel cycle—from mining uranium to processing it into fuel—can convert their civilian plants for military applications. Under terms of the U.S. agreement, Jordan could mine the ore but not convert it into fuel for nuclear power.

Such fears could hamstring Washington's ability to win necessary Congressional approval for a nuclear cooperation agreement with Jordan. Last year, Congress approved a similar deal with the United Arab Emirates only after the country agreed to buy its nuclear fuel overseas.

Jordan could pursue its nuclear ambitions without the U.S., but would face steep diplomatic and financial hurdles. Still, Amman is aggressively pressing forward: In March, it purchased a research reactor for a northern Jordanian university and is in talks with four international consortia to buy its first nuclear power plant.

Those moves are stoking tensions with neighboring Israel.

In the interview, King Abdullah said Israel has been pressuring countries like South Korea and France not to sell nuclear technologies to Jordan. He said Israel's "underhanded" actions have helped bring Jordan-Israeli relations to their lowest point since a 1994 peace agreement.

"There are countries, Israel in particular, that are more worried about us being economically independent than the issue of nuclear energy, and have been voicing their concerns," King Abdullah said. "There are many such reactors in the world and a lot more coming, so [the Israelis must] go mind their own business."

Israeli officials denied any effort to undermine Amman's nuclear procurement efforts.

Jordan's fixation on nuclear power is rooted in its near total dependence on imported oil.

When global oil prices spiked above $100 a barrel in 2007, Amman was forced to spend the equivalent of 20% of its total economic output on energy. That bill could rise sharply over the next decade, say Jordanian officials, as electricity demand is projected to double.

Energy shortages have also threatened Amman's ability to address its severe water deficiency with power-hungry desalination plants near the Red Sea.

The oil-price shock led King Abdullah and his ministers in 2007 to fashion a new energy strategy. The project calls for Jordan to draw 10% of its energy from solar and wind by 2020; 30% from natural gas; and 14% from oil shale. The strategy foresees a special role for nuclear power: 30% of Jordan's overall energy needs by 2030.

The center of Jordan's uranium push is the desolate Bedouin village of Sawaqa, an hour south of Amman. Here the French nuclear-power giant, Areva SA, is partnering with Jordanian mining firms and geologists to try to transform the area into a major center for uranium production.

An encampment of rowed housing units, a cafeteria and sheds used to store and test mineral samples stands amid central Jordan's barren, gravely landscape. A lone camel occasionally meanders past the walled site.

Jordanian geologists have explored the Sawaqa area for decades, confirming sizable deposits of phosphates and oil shale. But the joint Areva-Jordanian camp's general manager, Gilles Recoche, has been tasked to ensure the uranium ore found here and nearby can be mined on a commercially viable scale. He then hopes to process the ore on-site into the powdery substance known as yellowcake, which can in turn be processed into the low-enriched uranium used to power nuclear reactors.

On a recent afternoon outside the Sawaqa camp, Mr. Recoche and his Jordanian colleague, Allam Saymeh, walked through a dug-out excavation trench with gamma-radiation guns.

Moving through the narrow sandy passage, they point out the yellow stains on the trench's rock walls that indicate uranium ore. They then pass their guns over the yellow markings to gauge the grade of the uranium—anything over 100 particles-per-million is judged to have commercial prospects.

"This project is my child," said the 52-year-old Mr. Saymeh, noting that he'd explored the areas around Sawaqa since the 1980s.

Jordan's government is also putting in place the bureaucracy and infrastructure to run its nuclear program. Parliament has passed laws establishing the country's first nuclear regulatory body and the Atomic Energy Commission.

Amman has signed nuclear-cooperation agreements with eight countries, including France, China and Russia. Negotiations have begun with such companies as Russia's Rosatom Corp. and Seoul's Korea Electric Power Corp. to construct Jordan's first power reactor.

The nuclear program's point man is Mr. Toukan, a Massachusetts Institute of Technology-trained nuclear scientist and a former education minister. As chairman of the country's Atomic Energy Commission, the 55-year-old has broad powers, overseeing everything from choosing the reactor's construction site to negotiating the cooperation agreement with the U.S. He views Jordan's nuclear program as providing the base for a scientific resurgence across the Middle East.

A focal point is the nuclear-engineering department at the Jordan University of Science and Technology in the northern city of Irbid. Here, Mr. Toukan's agency contracted in March with a South Korean consortium to build Jordan's first 5-megawatt research reactor, which could break ground later this year.

Students and teachers on the expansive palm-tree-lined campus talk excitedly of the research reactor's arrival. The nuclear-engineering department is only three years old, with just 100 students.

"Right now, we have nothing practical to work on here," says Abtihal Almalahim, a 21-year old junior and one of the program's female candidates. The reactor's arrival "will make our study a lot more real."

A key to achieving King Abdullah's ambitions, however, remains the cooperation agreement with the U.S., say Jordanian officials.

[Jordan's energy sources, 2007  http://sg.wsj.net/public/resources/images/P1-AV717_ARABNU_NS_20100613184448.gif]

They say it could prove difficult to secure some of the core technologies for their nuclear infrastructure without the Obama administration's seal of approval. The U.S. is a leading player in the Nuclear Suppliers Group, a Vienna-based body aimed at controlling the flow of nuclear technologies internationally. Many reactors from France, Japan and Canada contain significant U.S. components and would require Washington's approval for a sale.

Mr. Toukan nearly concluded a nuclear-cooperation pact with George W. Bush's administration in 2008, according to Jordanian and American officials. It got sidelined in the final months of Mr. Bush's term as Washington aggressively pushed forward and completed a separate nuclear deal with the United Arab Emirates, which does not have its own uranium reserves and agreed to purchase all its reactor fuel from international suppliers.

The Obama administration views the U.A.E. deal as a model for its nonproliferation drive. American experts say it would be virtually impossible for the Emirates or any other nation to develop atomic weapons without the ability to produce highly enriched uranium at home.

The White House has good reason to stick to its guns in its talks with Jordan: the U.A.E., in its agreement with the U.S., won the right to negotiate a new deal if another Mideast country concludes a nuclear pact with the U.S. on more favorable terms.

King Abdullah, is pushing ahead. He met one-on-one with President Obama during Washington's nuclear security summit in April to discuss regional peace and nonproliferation issues, according to Jordanian officials.

The king also instructed his foreign minister to formally reprimand Israel's ambassador to Jordan over the charges that Israel has been seeking to block the sale of the South Korean or French reactors to Jordan.

On the outskirts of the port city of Aqaba, just miles from the Israeli resort city of Eilat, international contractors have been conducting feasibility studies to gauge whether the site can house Jordan's first nuclear-power reactor. Aqaba also lies close to a seismic fault line. Israeli officials have publicly voiced concerns about a reactor being situated so close to the fault.

"We are way ahead of Israel" when it comes to securing new reactor technology, King Abdullah said. "And if you have the private sector involved in nuclear power, it's difficult to do anything sinister."

Press Briefing

Jan 14, 2010

Banks and financial intermediation in emerging Asia: reforms and new risks, by Madhusudan Mohanty and Philip Turner
BIS Working Papers No 313, June 2010
http://www.bis.org/publ/work313.htm
The conventional view is that microeconomic reforms after the 1997-98 Asian financial crisis have greatly strengthened banking systems in Asia. Banks have become better capitalised, external exposures have been reduced and credit risk has been managed more effectively. But this conventional view does not take enough account of the macroeconomic background. A sharp rise in domestic savings, combined with the recent large-scale sterilised intervention and easy monetary policy, has led to very easy financing conditions for banks. Bank credit expanded. Banks have accumulated a large stock of government bonds. How these conditions will change and how this will affect banks in Asia is uncertain. Supervisory authorities therefore need to be sure that the present very liquid position of most banking systems in Asia does not allow significant (but so far only latent) increases in market and credit risk to go undetected.

Obama's Foreign Policy Success - He has repaired our alliances, isolated Iran, unnerved Chávez, and he is systematically destroying al Qaeda in a way Bush never did
http://online.wsj.com/article/SB10001424052748704575304575297002717908716.html

David Souter's Bad Constitutional History - The former justice's logic would justify Plessy v. Ferguson
http://online.wsj.com/article/SB10001424052748703509404575300740568539352.html

The White House Blog - A New Health Care Survey and the Affordable Care Act
http://www.whitehouse.gov/blog/2010/06/14/a-new-health-care-survey-and-affordable-care-act

The Gulf Spill, the Financial Crisis and Government Failure - Both Republicans and Democrats fail to see the limits of centralized regulation in a modern market economy
http://online.wsj.com/article/SB10001424052748704575304575296873167457684.html

State Dept: Anniversary of Iran’s Disputed Presidential Election
http://blogs.state.gov/index.php/site/entry/iran_disputed_presidential_election

California Union Rebuke - Voters rebel against project labor deals that raise costs
http://online.wsj.com/article/SB10001424052748704575304575296750368098756.html

How to prevent huge teacher layoffs. By Christina D. Romer
http://www.washingtonpost.com/wp-dyn/content/article/2010/05/26/AR2010052604597.html

Hillary on Honduras - An education in Latin democracy
http://online.wsj.com/article/SB10001424052748703302604575294660183221400.html

The White House Blog - Focusing on the Gulf
http://www.whitehouse.gov/blog/2010/06/12/focusing-gulf

Lula's Dance With the Despots - The president of Brazil is preserving his country's unfortunate image as a resentful, Third-World ankle-biter
http://online.wsj.com/article/SB10001424052748703509404575300694085699092.html

America's Municipal Debt Racket - State and local borrowing as a percentage of U.S. GDP has risen to an all-time high of 22% in 2010
http://online.wsj.com/article/SB10001424052748704269204575270802154485456.html

Politicizing the Fed - Congress seeks more control over the 12 regional banks
http://online.wsj.com/article/SB10001424052748704575304575297130299281828.html

Press Briefing

Jan 12, 2010

The White House Blog - "The President of the United States of America believes in you"
http://www.whitehouse.gov/blog/2010/06/11/here-s-some-advice

Hillary for Defense? - The president may also want her for veep to rally the base in 2012
http://online.wsj.com/article/SB10001424052748703302604575294981386923908.html

Iran's Revolution Has Only Just Begun - The shrinking number of loyalists around the Ayatollah Khamenei are shaken by their failure to break the will of the opposition
http://online.wsj.com/article/SB10001424052748703303904575292301347865326.html

Turkey, Hamas and the PKK - Erdogan's double standard on terrorism
http://online.wsj.com/article/SB10001424052748704575304575297060796953000.html

Crashing Real Estate - Is this really the time for a tax increase on commercial property?
http://online.wsj.com/article/SB10001424052748704575304575296970648330714.html

Cutting the Pentagon Budget - Reductions in military spending are both necessary and possible
http://reason.com/archives/2010/06/11/cutting-the-pentagon-budget

Administration Modifies “Peer-Reviewed” Report After it was Reviewed by Scientists
http://www.instituteforenergyresearch.org/2010/06/11/deepwater-gate-administration-modifies-peer-reviewed-report-after-it-was-reviewed-by-scientists/

Statement by the Press Secretary on the Visit of President Medvedev of the Russian Federation to the White House
http://www.whitehouse.gov/the-press-office/statement-press-secretary-visit-president-medvedev-russian-federation-white-house

Prolonging Education’s Race to the Bottom
http://blog.heritage.org/2010/06/11/morning-bell-prolonging-educations-race-to-the-bottom

"Hands off my plastic stuff!"
http://www.acsh.org/factsfears/newsID.1519/news_detail.asp

One year later, women at forefront of Iranian democracy movement
http://progressive.org/mpebadi060710.html

Past ability to execute "indicates the degree to which we can provide the kinds of support and good service that the American people expect"
http://www.bipartisanalliance.com/2010/06/past-ability-to-execute-indicates.html

Past ability to execute "indicates the degree to which we can provide the kinds of support and good service that the American people expect"

Past ability to execute "indicates the degree to which we can provide the kinds of support and good service that the American people expect"
WSJ, Jun 11, 2010

Byron York writing in the Washington Examiner, June 6:

It's not mentioned much now, but in the late summer of 2008, a major hurricane, Gustav, was in the Gulf of Mexico and headed toward New Orleans, threatening a replay of the disastrous Katrina experience. On September 1, 2008, Barack Obama, fresh from his Roman-colonnade speech on the final night of the Democratic convention in Denver, talked to CNN's Anderson Cooper about Gustav and the Gulf. The question: As president, could he handle an emergency like that? Obama pointed to the size of his campaign and its multi-million dollar budget as evidence of his executive abilities. "Our ability to manage large systems and to execute, I think, has been made clear over the last couple of years," Obama said. That executive ability, he added, "indicates the degree to which we can provide the kinds of support and good service that the American people expect."

Press Briefing

Jan 11, 2010

Palm-Size NMR - The portable but powerful magnet could be used to find archaeological artifacts or to detect contamination in products
http://www.technologyreview.com/biomedicine/25527/?a=f

An Energy Strategy for Grown-Ups - Wind power is not a realistic substitute for oil
http://online.wsj.com/article/SB10001424052748703303904575292993661797182.html

Global Financial Industry Leaders Support Constructive Dialogue to Secure Financial Sector Stability and Economic Growth
http://www.iif.com/press/press+151.php
The IIF study compares a projected economic growth scenario without the introduction of new bank regulatory reforms with one that sees reforms coming into effect with the capital and liquidity calibration as currently projected. Mr. Sands said, “The analysis suggests that rapid implementation of the Basel Committee proposals would have a significant negative impact on economic growth and job creation. Specifically, in the core G-3 (the United States, the Euro area & Japan), the analysis indicates that GDP by 2015 would be 3% lower than it would otherwise be, which implies under reasonable assumptions, that some 9.7 million fewer jobs would be created over this five year period than would otherwise be the case.


The Gulf Spill and the Limits of Science - TV has fueled unrealistic expectations of a quick fix
http://online.wsj.com/article/SB10001424052748704575304575297084290180968.html

How the West Can Help Iran's Green Movement - Please do not barter away our democracy for nuclear weapons negotiations with the current unworthy leaders in Tehran
http://online.wsj.com/article/SB10001424052748704312104575298363129163620.html

The Rise of Chinese Labor. WSJ Editorial
Wage hikes are part of a virtuous cycle of development.
http://online.wsj.com/article/SB10001424052748704575304575297363541401760.html

The recent strikes at Honda factories in southern China represent another data point in an emerging trend: Cheap labor won't be the source of the Chinese economy's competitive advantage much longer.

The auto maker has caved and given workers a 24% pay increase to restart one assembly line. Foxconn, the electronics producer that has experienced a string of worker suicides, has also announced big raises. This is all part of the virtuous cycle of development: Productivity increases, which drive wages higher, forcing businesses to adjust, leading to more productivity growth.

The supply of Chinese migrant workers from the countryside, once thought to be endless, is running dry, and that is giving workers leverage to demand bigger pay packets. The brief drop-off in orders brought on by the global financial crisis provided a respite, as did a recent drought in southwest China that spurred extra migration to the coastal factory zones. But shoe manufacturers are the canary in the coal mine. An American industry association recently polled its members and found that 88% saw a labor shortage in China, and almost as many had experienced late deliveries as a result.

While higher wage costs could mean more expensive sneakers for consumers and squeezed profit margins for the big brands, it has some silver linings. For instance, tamping down protectionism.

New York Senator Charles Schumer is again threatening to impose punitive tariffs on Chinese goods unless there is progress toward revaluing the yuan. The Senator says that currency manipulation holds down the cost of Chinese labor, at the expense of "millions" of American jobs. If wages rise in southern China regardless of the fixed exchange rate to the dollar, it undercuts the protectionist claims.

Jobs are hardly going to flood back to the U.S. merely because final assembly costs in China rise by 20%—just as they didn't after the yuan appreciated by 21.2% from 2005-08. More likely, some labor-intensive operations will shift to the likes of Vietnam or Bangladesh.

However, rising wages would hasten the long-awaited "rebalancing" of the Chinese economy toward greater consumption. The high savings rate has been a function of profits being reinvested by both private and state-owned companies, not the savings decisions of households, whose income has lagged behind the stunning GDP figures. Government spending and bank lending have been geared toward investment, which remains the main driver of growth. Greater spending power for individual Chinese would make for more sustainable growth and also encourage imports, lessening the trade surpluses that cause tension with the U.S.

Some investors may question to what extent Beijing is encouraging workers to be more assertive in demanding higher wages from foreign companies to favor local producers, as competition for the domestic market heats up. However, the trends that are making labor more costly will ultimately force all employers to adjust, including less efficient state-owned enterprises.

No doubt the government would prefer that foreign firms go first, which is reflected in the fact that state-owned media have been allowed some freedom to report on the Honda strikes. But as China leaves behind the era of cheap labor, the quality of management will become ever more critical to success in the marketplace. That should favor foreign companies honed by global competition, and drive China's next round of state-owned-enterprise reform.


Reckless Endangerment - The Senate votes for the EPA, but only barely
http://online.wsj.com/article/SB10001424052748704312104575299091304773412.html

The White House Blog - Saving Taxpayer Dollars by Streamlining and Modernizing Government
http://www.whitehouse.gov/blog/2010/06/10/saving-taxpayer-dollars-streamlining-and-modernizing-government

How the White House is Making Oil Recovery Harder
http://blog.heritage.org/2010/06/10/morning-bell-how-the-white-house-is-making-oil-recovery-harder

Open Skies Treaty Remains Vital Instrument for Cooperation, Transparency. By Rose E. Gottemoeller, Assistant Secretary of State for the Bureau of Verification, Compliance, and Implementation. Also served as the head of the U.S. delegation and Chair of the 2010 Review Conference for the Treaty on Open Skies.
http://blogs.state.gov/index.php/site/entry/open_skies_treaty

Farewell, Medicare Advantage - Democrats strike up the funeral parade for private insurance options
http://online.wsj.com/article/SB10001424052748703302604575295021352835874.html

The iPhone, Net Neutrality and the FCC - Regulatory uncertainty is spoiling the rollout of Steve Jobs's latest inspirations. There's a better way to spur broadband competition.
http://online.wsj.com/article/SB10001424052748703303904575293021509968904.html

Success with 'cisgenics' in forestry offers new tools for biotechnology
http://www.physorg.com/news195221223.html

Iran and the 'Freedom Recession' - Facebook had no answer to the pro-regime vigilantes who ruled the streets. And the U.S. president, who might have helped, stood aside.
http://online.wsj.com/article/SB10001424052748704575304575296502638266526.html

The Ongoing Administration-Wide Response to the Deepwater BP Oil Spill: June 8, 2010
http://www.whitehouse.gov/blog/2010/06/09/ongoing-administration-wide-response-deepwater-bp-oil-spill-june-8-2010

How Not to Spur Credit-Ratings Competition - Europe would rather attack the messengers than address overspending and stagnation
http://online.wsj.com/article/SB10001424052748703303904575292112659863890.html

Liberals issue dire warnings to argue for more stimulus spending. Conservative Republicans argue (quite plausibly) that hundreds of billions in "stimulus spending" has proven counterproductive so far.The economy isn't that bad.

Don't Believe the Double-Dippers. By ALAN REYNOLDS
Liberals issue dire warnings to argue for more stimulus spending. Conservative Republicans argue (quite plausibly) that hundreds of billions in "stimulus spending" has proven counterproductive so far.The economy isn't that bad.WSJ, Jun 10, 2010

'We're falling into a double-dip recession," former Labor Secretary Robert Reich declares in a Christian Science Monitor blog post. His evidence? The Bureau of Labor Statistics (BLS) estimated that only 41,000 private jobs were added in May. But that is much too flimsy a statistic to justify predicting an aborted recovery—something that has happened only once since 1933.

The only double-dip recession in modern times began during the election year of 1980, when President Jimmy Carter's newly appointed Fed Chairman Paul Volcker slashed the federal-funds rate to 9% that April from 17.5% in July. Inflation returned with a vengeance, so the Fed gradually reversed course by pushing the fed-funds rate above 19% by the time Ronald Reagan took office in January 1981. Are those currently predicting a double-dip recession expecting the Fed to raise interest rates to 19%?

It is also misleading to label this a "jobless" recovery, which indeed took place in the early 2000s. After the recession of 2001 ended that November, the number of private jobs continued to fall by 1.3 million through July 2003. Yet production continued to grow.

This year, by contrast, civilian employment has increased by more than 1.6 million jobs, according to the BLS Current Population Survey of households. True, the Current Employment Survey of employers shows a smaller gain of 982,000 in nonfarm jobs over the past five months, nearly half of which were government jobs. But that still leaves private employment up by 495,000 or roughly 100,000 a month.

Mr. Reich divined an imminent recession largely because the increase in private jobs supposedly slowed to 41,000 in May, according to the BLS. But these monthly estimates are much too rough and variable to be taken so seriously. The household survey, for example, would have us believe the labor force suddenly surged by 805,000 in April then collapsed by 322,000 in May. By smoothing out such wild gyrations, it turns out that the labor force rose by 267,000 a month this year, while employment rose by 326,000 a month. The combination was enough to trim unemployment, but not by much.

Double-dippers use dubious devices to make mediocre job gains appear much worse than they are. One is to claim, "There are still nearly six workers competing for every available job," as Rep. Jim McDermott (D., Wash.) wrote in a May 28 letter to this newspaper.

After talking to me about those figures, CNNMoney reporter Tami Luhby wrote, "Though Labor Department statistics say there are 5.5 job seekers for every opening, Reynolds said there is work available if people are willing to relocate or take jobs in a different field." What I actually told her was that it is completely untrue that BLS statistics "say there are 5.5 job seekers for every job opening." I also remarked, with less emphasis, that making 79-99 weeks of unemployment benefits available only in states with the highest unemployment rates has the perverse effect of punishing people for moving to the 14 states where unemployment ranges from 4% to 7%.

The myth that there are nearly six job seekers for every available job arises from the misnamed BLS "Job Opening and Turnover Survey" (JOLT), which asks a few thousand businesses how many new jobs they are actively advertising outside the firm. But note well that this concept of "job openings" does not purport to include "every available job." On the contrary, it is closer to being a measure of help wanted ads.

"Many jobs are never advertised," explains the BLS Occupational Outlook Handbook; "People get them by talking to friends, family, neighbors, acquaintances, teachers, former coworkers, and others who know of an opening." Because many jobs are never advertised they are also never counted as job openings!

The BLS Handbook also notes that, "Directly contacting employers is one of the most successful means of job hunting." Those jobs are also not counted as job openings. Job openings inside a firm are also excluded—including laid-off workers who are rehired or relocated within large corporations.

Despite these severe limitations, the trend has been more upbeat than you might gather from depressing news reports. "The number of job openings increased in April to 3.1 million," reports the BLS. "Since the most recent trough of 2.3 million in July 2009, the number of job openings has risen by 740,000."

Another popular device for denigrating this year's modest-yet-positive job gains is to claim the "real" unemployment rate is actually 16.6%. That figure, called U6, is the largest of six BLS measures. The more familiar U3 rate (now 9.7%) defines "unemployment" as people who say they have looked for work at some time during the past month but have not yet started a new job.

An alternative U2 measure includes only those who were unemployed because they were laid off or fired—not because they quit or were newcomers to the job market. That rate of job loss unemployment is 6%.

A broader U4 measure, by contrast, adds "discouraged workers." People need not have looked for a job recently to be counted as discouraged. It is sufficient for them to think no work is available, or think they are too young or too old, or think they lack the necessary schooling or training. Psychological discouragement adds relatively little to the conventional unemployment rate, lifting the U4 measure to 10.3% in May (down from 10.6% in April).

The broadest U6 statistic goes much further by adding "all marginally attached workers, plus total employed part-time for economic reasons."

The phrase "working part-time for economic reasons" implies a clear divide between part-time and full-time status. That creates the misimpression that those working part-time for economic reasons means would rather have different ("full-time") jobs. In reality, only a fourth of them say they could not find a full-time job; the rest work in occupations where hours vary. The BLS counts anything below 35 hours as part-time, so those who normally work 9-to-5 are counted as working part-time for economic reasons if they report losing even a single hour due to "slack work or unfavorable business conditions . . . or seasonal declines in demand."

The "marginally attached" in the U6 statistic do not even claim to imagine they can't find work. They are not looking for work, the BLS explains, "for such reasons as school or family responsibilities, ill health, and transportation problems." To describe people who are not available for work as unemployed or even underemployed is a misuse of the language.

Using all of this statistical trickery to convert a weak job market into an imminent recession has become a bipartisan political strategy. Robert Reich and other big government Democrats play the "double dip" card to peddle more deficit spending on refundable tax credits and transfer payments. Conservative Republicans often become double-dippy for very different reasons—to argue (quite plausibly) that hundreds of billions in "stimulus spending" has proven counterproductive so far, contributed to the debt, and will eventually lead to higher taxes.

Those who want to know what is going on must sift through all of this bipartisan gloom to distinguish between (1) agenda-driven dire warnings and (2) the boring reality of a sluggish recovery being partially paralyzed by ominous threats of punitive taxes and onerous regulation.

Mr. Reynolds is a senior fellow with the Cato Institute and the author of "Income and Wealth" (Greenwood Press, 2006).

Press Briefing

Jun 10, 2010

The White House Blog: "The Toughest Sanctions Ever Faced by the Iranian Government"
http://www.whitehouse.gov/blog/2010/06/09/toughest-sanctions-ever-faced-iranian-government

Women as Agents of Change: Advancing the Role of Women in Politics and Civil Society. By Esther Brimmer, Assistant Secretary, Bureau of International Organization Affairs
House Foreign Affairs Subcommittee on International Organizations, Human Rights and Oversight, Washington, DC
http://www.state.gov/p/io/rm/2010/142907.htm

Tocqueville said that Americans 'love change but dread revolutions.'
http://online.wsj.com/article/SB10001424052748704342604575222194271251722.html

Gates Foundation and USAID Announce Innovative Fund to Incentivize Mobile Money Services in Haiti
http://www.usaid.gov/press/releases/2010/pr100608.html
Access to financial services by mobile phone can dramatically improve the lives of Haitians as country rebuilds from devastating earthquake

Stalin Storms Omaha Beach - The National D-Day Memorial has added a bust of Joseph Stalin
http://online.wsj.com/article/SB10001424052748704575304575296652965298806.html

Women Setting the Economic Policy Agenda. By Maria Otero, Under Secretary for Democracy and Global Affairs
National Press Club, Washington, DC
http://www.state.gov/g/142891.htm

Erdogan and the Israel Card - Last year the Turkish prime minister called Shimon Peres a killer at Davos. He returned home to a hero's welcome
http://online.wsj.com/article/SB10001424052748703302604575294523287747404.html

Assessing the Strength of Hizballah. By Jeffrey D. Feltman, Acting Assistant Secretary, Bureau of Near Eastern Affairs, and Daniel Benjamin, Coordinator, Office of the Coordinator for Counterterrorism
Testimony before the Subcommittee on Near Eastern and South and Central Asian Affairs of the Senate Committee on Foreign Relations, Washington, DC
http://www.state.gov/p/nea/rls/rm/142857.htm

Drilling Bits of Fiction - The Obama Administration is under political pressure to reverse its ill-considered deep water drilling moratorium, and the latest blowback comes from seven angry experts from the National Academy of Engineering who say their views were distorted to justify the ban
http://online.wsj.com/article/SB10001424052748704575304575296782675625258.html

Award-Winning DOE Technology Scores Success in Carbon Storage Project - Tracers Track Subsurface Movement of CO2 at New Mexico Pilot Test Site
http://www.fossil.energy.gov/news/techlines/2010/10016-Tracers_Track_Subsurface_Movement_.html

Atomic affairs - Nervousness over nuclear moves
http://www.armedforcesjournal.com/2010/06/4612614

National Deficit-Reduction Commissioner: "The market-worshipping, privatizing, de-regulating, dehumanizing American financial plan has failed and should never be revived"
http://reason.com/blog/2010/06/08/national-deficit-reduction-com

In 2009, only 25 new drugs were approved—less than half the number in the mid-’90s. Why are new pharmaceuticals so hard to bring to market?
http://www.theatlantic.com/magazine/archive/2010/07/no-refills/8133/

Don't Believe the Double-Dippers - Liberals issue dire warnings to argue for more stimulus spending. Conservative Republicans argue (quite plausibly) that hundreds of billions in "stimulus spending" has proven counterproductive so far.The economy isn't that bad.
http://www.bipartisanalliance.com/2010/06/liberals-issue-dire-warnings-to-argue.html

Unions Just Flushed $5 Million of Your Tax Dollars Down the Toilet
http://blog.heritage.org/2010/06/09/morning-bell-unions-just-flushed-5-million-of-your-tax-dollars-down-the-toilet