Jun 09, 2010
Another Reason to Vaccinate Against HPV
http://www.acsh.org/factsfears/newsID.1508/news_detail.asp
Washington and Your Retirement - The agency that guarantees private-sector pensions is deep in the red
http://online.wsj.com/article/SB10001424052748704764404575286933806096818.html
The Pension Benefit Guaranty Corporation (PBGC) Is Billions in Deficit
The White House Blog - On Board with the VP: Day 2 in Kenya
http://www.whitehouse.gov/blog/2010/06/08/board-with-vp-day-2-kenya
Conservatives: Freer Political Speech - The Ninth Circuit loses again - suspension of part of Arizona's political matching-fund law
http://online.wsj.com/article/SB10001424052748703302604575294870895840844.html
Remarks by the First Lady at Congressional Service Event
http://www.whitehouse.gov/the-press-office/remarks-first-lady-congressional-service-event-0
Two Steps Forward in the War Against Cancer - The time from lab to market for new drugs keeps getting shorter, but bad government policies threaten to reverse this trend
http://online.wsj.com/article/SB10001424052748703302604575294233359450658.html
Wall Street Still Doesn't Get It - The business community has fueled populist anger by disclaiming responsibility for the excesses of the last bubble
http://online.wsj.com/article/SB10001424052748703303904575293163584472470.html
Helen Thomas never shied from piping up. In the end, that was the problem.
http://www.washingtonpost.com/wp-dyn/content/article/2010/06/07/AR2010060701493.html
Remarks by the President at a Tele-Town Hall with Seniors
http://www.whitehouse.gov/the-press-office/remarks-president-a-tele-town-hall-with-seniors
A Second Oil Disaster - The deep water drilling moratorium threatens Gulf state economies
http://online.wsj.com/article/SB10001424052748703303904575293063057023350.html
U.S. Soccer Team Connects With South African Youth
http://blogs.state.gov/index.php/site/entry/soccer_youth
Libertarians: Liberals discover regulatory capture, one of the right's critique of regulation
http://online.wsj.com/article/SB10001424052748703302604575295051484827946.html
The President Meets with His Cabinet on BP Spill: "This Will Be Contained"
http://www.whitehouse.gov/blog/2010/06/07/president-meets-with-his-cabinet-bp-spill-will-be-contained
The Alien in the White House - The distance between the president and the people is beginning to be revealed
http://online.wsj.com/article/SB10001424052748703302604575294231631318728.html
The Affordable Care Act: Strengthening Medicare, Combating Misinformation and Protecting America's Senior
http://www.whitehouse.gov/the-press-office/affordable-care-act-strengthening-medicare-combating-misinformation-and-protecting-
CBS Reporter: Thin-Skinned White House Won't Tolerate Reports Elena Kagan Is Liberal
http://www.mrc.org/biasalert/2010/20100608120411.aspx
Naive Keynesianism and Other Fallacies, by Roger Kerr
http://www.nzbr.org.nz/documents/articles/0610%20Naive%20Keynesianism%20and%20Other%20Fallacies.pdf
Tuesday, June 8, 2010
Self-identified liberals and Democrats do badly on questions of basic economics
Are You Smarter Than a Fifth Grader? By DANIEL B. KLEIN
Self-identified liberals and Democrats do badly on questions of basic economics.WSJ, Jun 08, 2010
Who is better informed about the policy choices facing the country—liberals, conservatives or libertarians? According to a Zogby International survey that I write about in the May issue of Econ Journal Watch, the answer is unequivocal: The left flunks Econ 101.
Zogby researcher Zeljka Buturovic and I considered the 4,835 respondents' (all American adults) answers to eight survey questions about basic economics. We also asked the respondents about their political leanings: progressive/very liberal; liberal; moderate; conservative; very conservative; and libertarian.
Rather than focusing on whether respondents answered a question correctly, we instead looked at whether they answered incorrectly. A response was counted as incorrect only if it was flatly unenlightened.
Consider one of the economic propositions in the December 2008 poll: "Restrictions on housing development make housing less affordable." People were asked if they: 1) strongly agree; 2) somewhat agree; 3) somewhat disagree; 4) strongly disagree; 5) are not sure.
Basic economics acknowledges that whatever redeeming features a restriction may have, it increases the cost of production and exchange, making goods and services less affordable. There may be exceptions to the general case, but they would be atypical.
Therefore, we counted as incorrect responses of "somewhat disagree" and "strongly disagree." This treatment gives leeway for those who think the question is ambiguous or half right and half wrong. They would likely answer "not sure," which we do not count as incorrect.
In this case, percentage of conservatives answering incorrectly was 22.3%, very conservatives 17.6% and libertarians 15.7%. But the percentage of progressive/very liberals answering incorrectly was 67.6% and liberals 60.1%. The pattern was not an anomaly.
The other questions were: 1) Mandatory licensing of professional services increases the prices of those services (unenlightened answer: disagree). 2) Overall, the standard of living is higher today than it was 30 years ago (unenlightened answer: disagree). 3) Rent control leads to housing shortages (unenlightened answer: disagree). 4) A company with the largest market share is a monopoly (unenlightened answer: agree). 5) Third World workers working for American companies overseas are being exploited (unenlightened answer: agree). 6) Free trade leads to unemployment (unenlightened answer: agree). 7) Minimum wage laws raise unemployment (unenlightened answer: disagree).
How did the six ideological groups do overall? Here they are, best to worst, with an average number of incorrect responses from 0 to 8: Very conservative, 1.30; Libertarian, 1.38; Conservative, 1.67; Moderate, 3.67; Liberal, 4.69; Progressive/very liberal, 5.26.
Americans in the first three categories do reasonably well. But the left has trouble squaring economic thinking with their political psychology, morals and aesthetics.
To be sure, none of the eight questions specifically challenge the political sensibilities of conservatives and libertarians. Still, not all of the eight questions are tied directly to left-wing concerns about inequality and redistribution. In particular, the questions about mandatory licensing, the standard of living, the definition of monopoly, and free trade do not specifically challenge leftist sensibilities.
Yet on every question the left did much worse. On the monopoly question, the portion of progressive/very liberals answering incorrectly (31%) was more than twice that of conservatives (13%) and more than four times that of libertarians (7%). On the question about living standards, the portion of progressive/very liberals answering incorrectly (61%) was more than four times that of conservatives (13%) and almost three times that of libertarians (21%).
The survey also asked about party affiliation. Those responding Democratic averaged 4.59 incorrect answers. Republicans averaged 1.61 incorrect, and Libertarians 1.26 incorrect.
Adam Smith described political economy as "a branch of the science of a statesman or legislator." Governmental power joined with wrongheadedness is something terrible, but all too common. Realizing that many of our leaders and their constituents are economically unenlightened sheds light on the troubles that surround us.
Mr. Klein is a professor of economics at George Mason University. This op-ed is based on an article published in the May 2010 issue of the journal he edits, Econ Journal Watch, a project sponsored by the American Institute for Economic Research.
Self-identified liberals and Democrats do badly on questions of basic economics.WSJ, Jun 08, 2010
Who is better informed about the policy choices facing the country—liberals, conservatives or libertarians? According to a Zogby International survey that I write about in the May issue of Econ Journal Watch, the answer is unequivocal: The left flunks Econ 101.
Zogby researcher Zeljka Buturovic and I considered the 4,835 respondents' (all American adults) answers to eight survey questions about basic economics. We also asked the respondents about their political leanings: progressive/very liberal; liberal; moderate; conservative; very conservative; and libertarian.
Rather than focusing on whether respondents answered a question correctly, we instead looked at whether they answered incorrectly. A response was counted as incorrect only if it was flatly unenlightened.
Consider one of the economic propositions in the December 2008 poll: "Restrictions on housing development make housing less affordable." People were asked if they: 1) strongly agree; 2) somewhat agree; 3) somewhat disagree; 4) strongly disagree; 5) are not sure.
Basic economics acknowledges that whatever redeeming features a restriction may have, it increases the cost of production and exchange, making goods and services less affordable. There may be exceptions to the general case, but they would be atypical.
Therefore, we counted as incorrect responses of "somewhat disagree" and "strongly disagree." This treatment gives leeway for those who think the question is ambiguous or half right and half wrong. They would likely answer "not sure," which we do not count as incorrect.
In this case, percentage of conservatives answering incorrectly was 22.3%, very conservatives 17.6% and libertarians 15.7%. But the percentage of progressive/very liberals answering incorrectly was 67.6% and liberals 60.1%. The pattern was not an anomaly.
The other questions were: 1) Mandatory licensing of professional services increases the prices of those services (unenlightened answer: disagree). 2) Overall, the standard of living is higher today than it was 30 years ago (unenlightened answer: disagree). 3) Rent control leads to housing shortages (unenlightened answer: disagree). 4) A company with the largest market share is a monopoly (unenlightened answer: agree). 5) Third World workers working for American companies overseas are being exploited (unenlightened answer: agree). 6) Free trade leads to unemployment (unenlightened answer: agree). 7) Minimum wage laws raise unemployment (unenlightened answer: disagree).
How did the six ideological groups do overall? Here they are, best to worst, with an average number of incorrect responses from 0 to 8: Very conservative, 1.30; Libertarian, 1.38; Conservative, 1.67; Moderate, 3.67; Liberal, 4.69; Progressive/very liberal, 5.26.
Americans in the first three categories do reasonably well. But the left has trouble squaring economic thinking with their political psychology, morals and aesthetics.
To be sure, none of the eight questions specifically challenge the political sensibilities of conservatives and libertarians. Still, not all of the eight questions are tied directly to left-wing concerns about inequality and redistribution. In particular, the questions about mandatory licensing, the standard of living, the definition of monopoly, and free trade do not specifically challenge leftist sensibilities.
Yet on every question the left did much worse. On the monopoly question, the portion of progressive/very liberals answering incorrectly (31%) was more than twice that of conservatives (13%) and more than four times that of libertarians (7%). On the question about living standards, the portion of progressive/very liberals answering incorrectly (61%) was more than four times that of conservatives (13%) and almost three times that of libertarians (21%).
The survey also asked about party affiliation. Those responding Democratic averaged 4.59 incorrect answers. Republicans averaged 1.61 incorrect, and Libertarians 1.26 incorrect.
Adam Smith described political economy as "a branch of the science of a statesman or legislator." Governmental power joined with wrongheadedness is something terrible, but all too common. Realizing that many of our leaders and their constituents are economically unenlightened sheds light on the troubles that surround us.
Mr. Klein is a professor of economics at George Mason University. This op-ed is based on an article published in the May 2010 issue of the journal he edits, Econ Journal Watch, a project sponsored by the American Institute for Economic Research.
Monday, June 7, 2010
Press Briefing
Jun 08, 2010
Economic Growth and Institutional Innovation: Outlines of a Reform Agenda
http://www.brookings.edu/papers/2010/0601_innovation_galston.aspx
The Obama Spending Nightmare Continues
http://blog.heritage.org/2010/06/08/morning-bell-the-obama-spending-nightmare-continues
ACLU's Shapiro: The Thompkins Decision: A Threat to Civil Liberties . . . The Supreme Court has undermined our Miranda protections
http://online.wsj.com/article/SB10001424052748704764404575286931630242298.html
Yoo: The Thompkins Decision, A Sensible Bow to Post-9/11 Reality - The Supreme Court may mitigate the harm of the president's weak antiterror policies
http://online.wsj.com/article/SB10001424052748704764404575286394060691572.html?mod=WSJ_newsreel_opinion
Gates on China - Speaking the truth makes the Pacific a safer place
http://online.wsj.com/article/SB10001424052748704183204575289743788180892.html
The White House Blog: "Every Child, Every Opportunity, Every Time"
http://www.whitehouse.gov/blog/2010/06/07/every-child-every-opportunity-ever-time
Obama's 'Whisper Number' - White House jobs predictions are confusing investors
http://online.wsj.com/article/SB10001424052748703303904575292891145193022.html
Travel Diary: Secretary Clinton Addresses Organization of American States 40th General Assembly
http://blogs.state.gov/index.php/site/entry/travel_diary_clinton_oas_40th_general_assembly
Auctions for Overbooking - A better idea than airline bumping
http://online.wsj.com/article/SB10001424052748703303904575293011757655060.html
Are You Smarter Than a Fifth Grader? - Self-identified liberals and Democrats do badly on questions of basic economics
http://online.wsj.com/article/SB10001424052748703561604575282190930932412.html
The Bullish Case for U.S. Equities - Though America faces long-term problems, our economy is making extraordinary improvements, especially compared to Europe
http://online.wsj.com/article/SB10001424052748703561604575282893796461472.html
Arrogance in the Executive - What the oil spill has revealed about the Obama presidency
http://weeklystandard.com/articles/arrogance-executive
In Praise of Blockades - Israel upholds an honorable tradition
http://weeklystandard.com/articles/praise-blockades
Public Education Costlier Than You Think
http://www.cato.org/pub_display.php?pub_id=11869
Economic Growth and Institutional Innovation: Outlines of a Reform Agenda
http://www.brookings.edu/papers/2010/0601_innovation_galston.aspx
The Obama Spending Nightmare Continues
http://blog.heritage.org/2010/06/08/morning-bell-the-obama-spending-nightmare-continues
ACLU's Shapiro: The Thompkins Decision: A Threat to Civil Liberties . . . The Supreme Court has undermined our Miranda protections
http://online.wsj.com/article/SB10001424052748704764404575286931630242298.html
Yoo: The Thompkins Decision, A Sensible Bow to Post-9/11 Reality - The Supreme Court may mitigate the harm of the president's weak antiterror policies
http://online.wsj.com/article/SB10001424052748704764404575286394060691572.html?mod=WSJ_newsreel_opinion
Gates on China - Speaking the truth makes the Pacific a safer place
http://online.wsj.com/article/SB10001424052748704183204575289743788180892.html
The White House Blog: "Every Child, Every Opportunity, Every Time"
http://www.whitehouse.gov/blog/2010/06/07/every-child-every-opportunity-ever-time
Obama's 'Whisper Number' - White House jobs predictions are confusing investors
http://online.wsj.com/article/SB10001424052748703303904575292891145193022.html
Travel Diary: Secretary Clinton Addresses Organization of American States 40th General Assembly
http://blogs.state.gov/index.php/site/entry/travel_diary_clinton_oas_40th_general_assembly
Auctions for Overbooking - A better idea than airline bumping
http://online.wsj.com/article/SB10001424052748703303904575293011757655060.html
Are You Smarter Than a Fifth Grader? - Self-identified liberals and Democrats do badly on questions of basic economics
http://online.wsj.com/article/SB10001424052748703561604575282190930932412.html
The Bullish Case for U.S. Equities - Though America faces long-term problems, our economy is making extraordinary improvements, especially compared to Europe
http://online.wsj.com/article/SB10001424052748703561604575282893796461472.html
Arrogance in the Executive - What the oil spill has revealed about the Obama presidency
http://weeklystandard.com/articles/arrogance-executive
In Praise of Blockades - Israel upholds an honorable tradition
http://weeklystandard.com/articles/praise-blockades
Public Education Costlier Than You Think
http://www.cato.org/pub_display.php?pub_id=11869
Press Briefing
Jun 07, 2010
Press Briefing on the New START Treaty. By Rose Gottemoeller, Assistant Secretary, Bureau of Verification, Compliance, and Implementation, Geneva, Switzerland
http://www.state.gov/t/vci/rls/142776.htm
With Friends Like the United States . . . President Obama has emboldened America's adversaries and unnerved its allies
http://online.wsj.com/article/SB10001424052748704875604575280462094012870.html
Travel Diary: “Wheels Up” With Secretary Clinton to Latin America and the Caribbean
http://blogs.state.gov/index.php/site/entry/travel_diary_wheels_up_latin_america_caribbean
Jack McConnell, The Judge From Motley Rice - The lead paint lawsuit king gets a judgeship
http://online.wsj.com/article/SB10001424052748703338004575230320609179424.html
Bailouts as Usual - The credit-raters say 'too big to fail' is alive and well
http://online.wsj.com/article/SB10001424052748704764404575286911196081790.html
Stop The Fearmongering Over Cancer - Despite recent hysteria, cancer mortality rates have fallen throughout the past decade
http://www.forbes.com/2010/06/01/cancer-hysteria-health-media-opinions-columnists-robert-lichter.html
Response to Paul Krugman's "Things Everyone In Chicago Knows Which happen not to be true"
http://blogs.chicagobooth.edu/n/blogs/blog.aspx?nav=main&webtag=faultlines&entry=11
James R. Clapper Jr. as DNI: "Four Decades of Service"
http://www.whitehouse.gov/blog/2010/06/05/james-r-clapper-jr-dni-four-decades-service
Obama's Oil Crisis Politics - Democrats want to change the subject from the Gulf spill to cap and tax. BP approves.
http://online.wsj.com/article/SB10001424052748704025304575284534183463428.html
Cooperation and Pragmatism: Malaysian Foreign Policy under Najib. By Joshua R. Johnson
http://www.eastwestcenter.org/publications/search-for-publications/browse-alphabetic-list-of-titles/?class_call=view&mode=view&pub_ID=3472
News briefing at WH to discuss the progress of the ongoing crisis in the Gulf.
Watch live: http://on.cnn.com/cnndcl1
Why Obama’s Stimulus Failed
http://blog.heritage.org/2010/06/07/morning-bell-why-obamas-stimulus-failed
Homeownership Is Overrated - Today's economy requires a more mobile workforce
http://online.wsj.com/article/SB10001424052748703559004575256703021984396.html
The Ongoing Administration-Wide Response to the Deepwater BP Oil Spill: June 5 and June 6, 2010
http://www.whitehouse.gov/blog/2010/06/06/ongoing-administration-wide-response-deepwater-bp-oil-spill-june-5-and-june-6-2010
Pelosi's Loss Could Be Obama's Gain - A pivot to the center (and re-election) would be easier without the House speaker
http://online.wsj.com/article/SB10001424052748703703704575276931429180508.html
The U.S.-ROK Alliance and China: Beyond the Sinking of the Cheonan. By Ji-Young Lee
http://www.eastwestcenter.org/publications/search-for-publications/browse-alphabetic-list-of-titles/?class_call=view&mode=view&pub_ID=3469
Tax Hikes and the 2011 Economic Collapse - Today's corporate profits reflect an income shift into 2010. These profits will tumble next year, preceded most likely by the stock market
http://online.wsj.com/article/SB10001424052748704113504575264513748386610.html
Press Briefing on the New START Treaty. By Rose Gottemoeller, Assistant Secretary, Bureau of Verification, Compliance, and Implementation, Geneva, Switzerland
http://www.state.gov/t/vci/rls/142776.htm
With Friends Like the United States . . . President Obama has emboldened America's adversaries and unnerved its allies
http://online.wsj.com/article/SB10001424052748704875604575280462094012870.html
Travel Diary: “Wheels Up” With Secretary Clinton to Latin America and the Caribbean
http://blogs.state.gov/index.php/site/entry/travel_diary_wheels_up_latin_america_caribbean
Jack McConnell, The Judge From Motley Rice - The lead paint lawsuit king gets a judgeship
http://online.wsj.com/article/SB10001424052748703338004575230320609179424.html
Bailouts as Usual - The credit-raters say 'too big to fail' is alive and well
http://online.wsj.com/article/SB10001424052748704764404575286911196081790.html
Stop The Fearmongering Over Cancer - Despite recent hysteria, cancer mortality rates have fallen throughout the past decade
http://www.forbes.com/2010/06/01/cancer-hysteria-health-media-opinions-columnists-robert-lichter.html
Response to Paul Krugman's "Things Everyone In Chicago Knows Which happen not to be true"
http://blogs.chicagobooth.edu/n/blogs/blog.aspx?nav=main&webtag=faultlines&entry=11
James R. Clapper Jr. as DNI: "Four Decades of Service"
http://www.whitehouse.gov/blog/2010/06/05/james-r-clapper-jr-dni-four-decades-service
Obama's Oil Crisis Politics - Democrats want to change the subject from the Gulf spill to cap and tax. BP approves.
http://online.wsj.com/article/SB10001424052748704025304575284534183463428.html
Cooperation and Pragmatism: Malaysian Foreign Policy under Najib. By Joshua R. Johnson
http://www.eastwestcenter.org/publications/search-for-publications/browse-alphabetic-list-of-titles/?class_call=view&mode=view&pub_ID=3472
News briefing at WH to discuss the progress of the ongoing crisis in the Gulf.
Watch live: http://on.cnn.com/cnndcl1
Why Obama’s Stimulus Failed
http://blog.heritage.org/2010/06/07/morning-bell-why-obamas-stimulus-failed
Homeownership Is Overrated - Today's economy requires a more mobile workforce
http://online.wsj.com/article/SB10001424052748703559004575256703021984396.html
The Ongoing Administration-Wide Response to the Deepwater BP Oil Spill: June 5 and June 6, 2010
http://www.whitehouse.gov/blog/2010/06/06/ongoing-administration-wide-response-deepwater-bp-oil-spill-june-5-and-june-6-2010
Pelosi's Loss Could Be Obama's Gain - A pivot to the center (and re-election) would be easier without the House speaker
http://online.wsj.com/article/SB10001424052748703703704575276931429180508.html
The U.S.-ROK Alliance and China: Beyond the Sinking of the Cheonan. By Ji-Young Lee
http://www.eastwestcenter.org/publications/search-for-publications/browse-alphabetic-list-of-titles/?class_call=view&mode=view&pub_ID=3469
Tax Hikes and the 2011 Economic Collapse - Today's corporate profits reflect an income shift into 2010. These profits will tumble next year, preceded most likely by the stock market
http://online.wsj.com/article/SB10001424052748704113504575264513748386610.html
Saturday, June 5, 2010
Press Briefing
Jun 05, 2010
Indicting the First Amendment - Bruce Shore's case
http://www.cato.org/pub_display.php?pub_id=11866
The Ongoing Administration-Wide Response to the Deepwater Oil Spill: June 4, 2010
http://www.whitehouse.gov/blog/2010/06/04/ongoing-administration-wide-response-deepwater-bp-oil-spill-june-4-2010
America and the Meaning of Courage - Abraham Lincoln called the U.S. last best hope of earth—and that description is at least as true in our own day as it was in his
http://online.wsj.com/article/SB10001424052748704875604575280771383483024.html
Weekly Address: President Obama Outlines Administration Response Efforts to the BP Oil Spill from Grand Isle, LA
http://www.whitehouse.gov/the-press-office/weekly-address-president-obama-outlines-administration-response-efforts-bp-oil-spil
Storming the School Barricades - A new documentary by a 27-year-old filmmaker could change the national debate about public education
http://online.wsj.com/article/SB10001424052748704635204575242123324855474.html
How to Prevent the Next 'Flash Crash' - Nasdaq is committed to protecting you from excessive volatility
http://online.wsj.com/article/SB10001424052748704764404575286430133595388.html
California's Pension Protection Bill - Unions try to block the bankruptcy option
http://online.wsj.com/article/SB10001424052748704342604575222642585307912.html
The 2010 U.S. QDR and Its Impact on China, by Shen Dingli
http://www.eastwestcenter.org/publications/search-for-publications/browse-alphabetic-list-of-titles/?class_call=view&mode=view&pub_ID=3460
Slouching Towards Athens - The Obama agenda and the Europeanization of America
http://online.wsj.com/article/SB10001424052748704764404575286451653109876.html
U.S., India Partnership Goes Beyond Government-to-Government Linkages
http://blogs.state.gov/index.php/site/entry/us_india_partnership_beyond_government_to_government
Employers on Strike - Congress keeps giving business reasons not to hire
http://online.wsj.com/article/SB10001424052748704764404575286831965692578.html
Larry Lindsey: Up to 20% of May Private Sector Job Growth May Be Due to BP Oil Spill
http://republicanleader.house.gov/blog/?p=898
Federal President's Meeting with Arizona's Governor
http://www.whitehouse.gov/blog/2010/06/03/meeting-with-arizonas-governor
The Jobless Obama Recovery
http://blog.heritage.org/2010/06/04/morning-bell-the-jobless-obama-recovery
Dead in the Water: A Floating Cemetery for Hong Kong
http://www.fastcompany.com/1654972/dead-in-the-water-designer-floats-harborside-columbarium-in-hong-kong
Indicting the First Amendment - Bruce Shore's case
http://www.cato.org/pub_display.php?pub_id=11866
The Ongoing Administration-Wide Response to the Deepwater Oil Spill: June 4, 2010
http://www.whitehouse.gov/blog/2010/06/04/ongoing-administration-wide-response-deepwater-bp-oil-spill-june-4-2010
America and the Meaning of Courage - Abraham Lincoln called the U.S. last best hope of earth—and that description is at least as true in our own day as it was in his
http://online.wsj.com/article/SB10001424052748704875604575280771383483024.html
Weekly Address: President Obama Outlines Administration Response Efforts to the BP Oil Spill from Grand Isle, LA
http://www.whitehouse.gov/the-press-office/weekly-address-president-obama-outlines-administration-response-efforts-bp-oil-spil
Storming the School Barricades - A new documentary by a 27-year-old filmmaker could change the national debate about public education
http://online.wsj.com/article/SB10001424052748704635204575242123324855474.html
How to Prevent the Next 'Flash Crash' - Nasdaq is committed to protecting you from excessive volatility
http://online.wsj.com/article/SB10001424052748704764404575286430133595388.html
California's Pension Protection Bill - Unions try to block the bankruptcy option
http://online.wsj.com/article/SB10001424052748704342604575222642585307912.html
The 2010 U.S. QDR and Its Impact on China, by Shen Dingli
http://www.eastwestcenter.org/publications/search-for-publications/browse-alphabetic-list-of-titles/?class_call=view&mode=view&pub_ID=3460
Slouching Towards Athens - The Obama agenda and the Europeanization of America
http://online.wsj.com/article/SB10001424052748704764404575286451653109876.html
U.S., India Partnership Goes Beyond Government-to-Government Linkages
http://blogs.state.gov/index.php/site/entry/us_india_partnership_beyond_government_to_government
Employers on Strike - Congress keeps giving business reasons not to hire
http://online.wsj.com/article/SB10001424052748704764404575286831965692578.html
Larry Lindsey: Up to 20% of May Private Sector Job Growth May Be Due to BP Oil Spill
http://republicanleader.house.gov/blog/?p=898
Federal President's Meeting with Arizona's Governor
http://www.whitehouse.gov/blog/2010/06/03/meeting-with-arizonas-governor
The Jobless Obama Recovery
http://blog.heritage.org/2010/06/04/morning-bell-the-jobless-obama-recovery
Dead in the Water: A Floating Cemetery for Hong Kong
http://www.fastcompany.com/1654972/dead-in-the-water-designer-floats-harborside-columbarium-in-hong-kong
Thursday, June 3, 2010
Hoosiers vs. Crony Capitalism - How Indiana took on the federal bailout machine and restored the rule of law
Hoosiers vs. Crony Capitalism. By MITCH DANIELS
How my state took on the Obama bailout machine and restored the rule of law.WSJ, June 04, 2010
June 10 will be a silent anniversary, but one worth noting by those alarmed at the past year's assault on free institutions. It was last June 10 when the federal government tossed aside the option of proven, workable bankruptcy procedures in order to nationalize Chrysler on behalf of its union allies.
In order to provide preferential treatment to its cronies, the Obama administration confiscated the property of those creditors who had lent money to Chrysler in good faith, believing that their interest was legally secured and that they stood at the head of the line in the event of the auto company's failure.
The shock wave through the economic markets from this arbitrary redefinition of "secured creditors" rights was profound. Could centuries of crystal-clear law really be overthrown by executive fiat? Apparently, yes. The Supreme Court declined to intervene in the takeover. The cost of corporate borrowing was clearly headed upward as the U.S. for the first time imitated those Third World despotisms where economic rules can be changed without warning at the ruler's whim and convenience.
Equally profound was the message sent to the legal community, which quickly began to cite the "Chrysler precedent" as the now-acceptable judicial model for stripping secured creditors' rights in the name of expediency. Just days after the decision, the Phoenix Coyotes of the National Hockey League invoked the Chrysler case in an attempt to undermine secured creditors' rights and hasten bankruptcy.
Those brave few who protested the brute force taking of their money were attacked by administration apparatchiks for the sin of doing their fiduciary duty to their investors and shareholders. Calls went out from the White House, encouraging submission and warning of the consequences of opposition. One by one, potential plaintiffs surrendered.
The one effort to stop the Chrysler cramdown was launched by three Indiana pension funds. Believing they were making both a wise investment and a gesture supportive of a longtime state employer, Hoosier retired teachers and state policemen had purchased some $19 million in Chrysler's secured debt. The market consensus at the time was that, at 43 cents to par, the bonds were well below their value if bankruptcy ultimately came.
Bankruptcy came, all right, but in a new, extra-legal form run by the federal government. The United Auto Workers, who owned no interest in the company, were simply handed a 55% interest, a gift valued then at $4.5 billion. When no one else wanted to buy the firm, Fiat was given a 20% stake for free to take it over. After this looting, the legitimate creditors were told to be happy with the remnants. For Indiana's retired teachers and state policemen, this amounted to 29 cents on the dollar, a loss of $6 million versus the purchase price and millions more below the expected value in a standard Chapter 11 proceeding.
When, alone among the victims, Indiana retirees went to court, they caused a lot of discomfort but no change in the outcome. The Second District U.S. Court of Appeals declined to overturn the cramdown, but the judges refused to go within a mile of the merits. How could they? The law calls certain instruments "secured" credit for a reason, and there was absolutely zero precedent for the Chrysler confiscation.
In an article by Zach Lowe published last fall in the Am Law Daily and the American Lawyer magazine, UCLA Law School Prof. Lynn LoPucki said of the cramdown: "What happened . . . was so outrageous and illegal that until March of this year [2009], nobody even conceptualized it." The Second Circuit opinion, like the Supreme Court's refusal to stay the nationalization, went out of its way to state that the ruling did not reach the substantive issues raised.
Aided by incensed counsel donating much of their time pro bono, Indiana returned to the Supreme Court with a slim hope of recovering its pensioners' assets, reinstating traditional American property rights and making secured credit secure once more. It seemed to some an exercise in futility: The judge in the Coyotes case commented from the bench that the "poor pension manager from Indiana . . . was kind of like the gentlemen in Tiananmen Square when the tanks came rolling."
On Dec. 14, 2009, in the under-reported news story of the year, the Supreme Court granted the request of Indiana pensioners and took the case. The Court immediately ruled from the bench to strike down the decision of the Second Circuit Court of Appeals, eliminating it as a possible precedent in any future proceeding. Our retirees are still out the $6 million but enjoyed the small vindication of being awarded the court clerk's costs at Chrysler's expense.
The nation is not safe from crony capitalism. In the past year we've experienced the nationalization of the student loan industry and the passage of national health-care and financial-services regulation, each of which is rife with new opportunities for government favoritism and preferential handouts to favored corporations like Chrysler.
But thanks to a quiet correction by the Supreme Court—and a little Hoosier stubbornness—the rule of law has been re-established. The greatest benefits will accrue not to lenders and borrowers but to all those whose jobs are created because investors once again can trust that the money they've risked is safe from seizure by the state.
Mr. Daniels, a Republican, is the governor of Indiana.
How my state took on the Obama bailout machine and restored the rule of law.WSJ, June 04, 2010
June 10 will be a silent anniversary, but one worth noting by those alarmed at the past year's assault on free institutions. It was last June 10 when the federal government tossed aside the option of proven, workable bankruptcy procedures in order to nationalize Chrysler on behalf of its union allies.
In order to provide preferential treatment to its cronies, the Obama administration confiscated the property of those creditors who had lent money to Chrysler in good faith, believing that their interest was legally secured and that they stood at the head of the line in the event of the auto company's failure.
The shock wave through the economic markets from this arbitrary redefinition of "secured creditors" rights was profound. Could centuries of crystal-clear law really be overthrown by executive fiat? Apparently, yes. The Supreme Court declined to intervene in the takeover. The cost of corporate borrowing was clearly headed upward as the U.S. for the first time imitated those Third World despotisms where economic rules can be changed without warning at the ruler's whim and convenience.
Equally profound was the message sent to the legal community, which quickly began to cite the "Chrysler precedent" as the now-acceptable judicial model for stripping secured creditors' rights in the name of expediency. Just days after the decision, the Phoenix Coyotes of the National Hockey League invoked the Chrysler case in an attempt to undermine secured creditors' rights and hasten bankruptcy.
Those brave few who protested the brute force taking of their money were attacked by administration apparatchiks for the sin of doing their fiduciary duty to their investors and shareholders. Calls went out from the White House, encouraging submission and warning of the consequences of opposition. One by one, potential plaintiffs surrendered.
The one effort to stop the Chrysler cramdown was launched by three Indiana pension funds. Believing they were making both a wise investment and a gesture supportive of a longtime state employer, Hoosier retired teachers and state policemen had purchased some $19 million in Chrysler's secured debt. The market consensus at the time was that, at 43 cents to par, the bonds were well below their value if bankruptcy ultimately came.
Bankruptcy came, all right, but in a new, extra-legal form run by the federal government. The United Auto Workers, who owned no interest in the company, were simply handed a 55% interest, a gift valued then at $4.5 billion. When no one else wanted to buy the firm, Fiat was given a 20% stake for free to take it over. After this looting, the legitimate creditors were told to be happy with the remnants. For Indiana's retired teachers and state policemen, this amounted to 29 cents on the dollar, a loss of $6 million versus the purchase price and millions more below the expected value in a standard Chapter 11 proceeding.
When, alone among the victims, Indiana retirees went to court, they caused a lot of discomfort but no change in the outcome. The Second District U.S. Court of Appeals declined to overturn the cramdown, but the judges refused to go within a mile of the merits. How could they? The law calls certain instruments "secured" credit for a reason, and there was absolutely zero precedent for the Chrysler confiscation.
In an article by Zach Lowe published last fall in the Am Law Daily and the American Lawyer magazine, UCLA Law School Prof. Lynn LoPucki said of the cramdown: "What happened . . . was so outrageous and illegal that until March of this year [2009], nobody even conceptualized it." The Second Circuit opinion, like the Supreme Court's refusal to stay the nationalization, went out of its way to state that the ruling did not reach the substantive issues raised.
Aided by incensed counsel donating much of their time pro bono, Indiana returned to the Supreme Court with a slim hope of recovering its pensioners' assets, reinstating traditional American property rights and making secured credit secure once more. It seemed to some an exercise in futility: The judge in the Coyotes case commented from the bench that the "poor pension manager from Indiana . . . was kind of like the gentlemen in Tiananmen Square when the tanks came rolling."
On Dec. 14, 2009, in the under-reported news story of the year, the Supreme Court granted the request of Indiana pensioners and took the case. The Court immediately ruled from the bench to strike down the decision of the Second Circuit Court of Appeals, eliminating it as a possible precedent in any future proceeding. Our retirees are still out the $6 million but enjoyed the small vindication of being awarded the court clerk's costs at Chrysler's expense.
The nation is not safe from crony capitalism. In the past year we've experienced the nationalization of the student loan industry and the passage of national health-care and financial-services regulation, each of which is rife with new opportunities for government favoritism and preferential handouts to favored corporations like Chrysler.
But thanks to a quiet correction by the Supreme Court—and a little Hoosier stubbornness—the rule of law has been re-established. The greatest benefits will accrue not to lenders and borrowers but to all those whose jobs are created because investors once again can trust that the money they've risked is safe from seizure by the state.
Mr. Daniels, a Republican, is the governor of Indiana.
Press Briefing
Jun 04, 2010
Consensus Achieved at Critical Nuclear Nonproliferation Conference
http://blogs.state.gov/index.php/site/entry/nuclear_nonproliferation_conference_consensus
Hoosiers vs. Crony Capitalism - How Indiana took on the federal bailout machine and restored the rule of law
http://online.wsj.com/article/SB10001424052748703561604575282412364326230.html
Capital Gains Taxes and the Recovery - Long-term investments should be rewarded with lower rates
http://online.wsj.com/article/SB10001424052748704025304575284440473588862.html
The Gaza Blockade and International Law - Israel's position is reasonable and backed by precedent
http://online.wsj.com/article/SB10001424052748704025304575284210429984110.html
'To Be Fair' - When does the statute of limitation run out on blaming George W. Bush for all the world's problems?
http://online.wsj.com/article/SB10001424052748704025304575285032699457228.html
Federal Spending by the Numbers 2010
http://www.heritage.org/Research/Reports/2010/06/Federal-Spending-by-the-Numbers-2010
New Treatments Needed to Alleviate Growing Burden of Alzheimer's Disease
http://www.innovation.org/index.cfm/NewsCenter/Newsletters/Newsletters?NID=183
Could More Cancer Be a Good Sign?
http://www.acsh.org/factsfears/newsID.1487/news_detail.asp
iRobot Demonstrates New Weaponized Robot
http://spectrum.ieee.org/automaton/robotics/military-robots/irobot-demonstrates-their-latest-war-robot
Turkey's Radical Drift - The Islamic charity behind the Gaza flotilla and its links to terror
http://online.wsj.com/article/SB10001424052748703561604575282423181610814.html
Wireless Heart Pressure Monitor Promises Revolution In Coronary Care
http://spectrum.ieee.org/riskfactor/biomedical/devices/wireless-heart-pressure-monitor-promises-revolution-in-coronary
Tom Vilsack’s Unconvincing Case for Farm Subsidies
http://yglesias.thinkprogress.org/archives/2010/06/tom-vilsacks-unconvincing-case-for-farm-subsidies.php
Obama and the Oil Spill
http://blog.heritage.org/2010/06/03/morning-bell-obama-and-the-oil-spill
Consensus Achieved at Critical Nuclear Nonproliferation Conference
http://blogs.state.gov/index.php/site/entry/nuclear_nonproliferation_conference_consensus
Hoosiers vs. Crony Capitalism - How Indiana took on the federal bailout machine and restored the rule of law
http://online.wsj.com/article/SB10001424052748703561604575282412364326230.html
Capital Gains Taxes and the Recovery - Long-term investments should be rewarded with lower rates
http://online.wsj.com/article/SB10001424052748704025304575284440473588862.html
The Gaza Blockade and International Law - Israel's position is reasonable and backed by precedent
http://online.wsj.com/article/SB10001424052748704025304575284210429984110.html
'To Be Fair' - When does the statute of limitation run out on blaming George W. Bush for all the world's problems?
http://online.wsj.com/article/SB10001424052748704025304575285032699457228.html
Federal Spending by the Numbers 2010
http://www.heritage.org/Research/Reports/2010/06/Federal-Spending-by-the-Numbers-2010
New Treatments Needed to Alleviate Growing Burden of Alzheimer's Disease
http://www.innovation.org/index.cfm/NewsCenter/Newsletters/Newsletters?NID=183
Could More Cancer Be a Good Sign?
http://www.acsh.org/factsfears/newsID.1487/news_detail.asp
iRobot Demonstrates New Weaponized Robot
http://spectrum.ieee.org/automaton/robotics/military-robots/irobot-demonstrates-their-latest-war-robot
Turkey's Radical Drift - The Islamic charity behind the Gaza flotilla and its links to terror
http://online.wsj.com/article/SB10001424052748703561604575282423181610814.html
Wireless Heart Pressure Monitor Promises Revolution In Coronary Care
http://spectrum.ieee.org/riskfactor/biomedical/devices/wireless-heart-pressure-monitor-promises-revolution-in-coronary
Tom Vilsack’s Unconvincing Case for Farm Subsidies
http://yglesias.thinkprogress.org/archives/2010/06/tom-vilsacks-unconvincing-case-for-farm-subsidies.php
Obama and the Oil Spill
http://blog.heritage.org/2010/06/03/morning-bell-obama-and-the-oil-spill
Press Briefing
Jun 03, 2010
Health and Safety Tips for Your Summer Vacation (Update 2010)
http://www.acsh.org/docLib/20100528_summer_tips_2010.pdf
How Far Will the Gulf Gusher Spread? - Trapped in water pockets, the oil from Deepwater Horizon will ride the Gulf Stream across the Atlantic. In years to come, some will even wash up on European shores
http://online.wsj.com/article/SB10001424052748703561604575282420254222384.html
Central bank co-operation and international liquidity in the financial crisis of 2008-9. By Richhild Moessner and William Allen. Working Papers No 310. June 2010
http://www.bis.org/publ/work310.htm
The financial crisis that began in August 2007 has blurred the sharp distinction between monetary and financial stability.It has also led to a revival of practical central bank co-operation. This paper explains how things have changed. The main innovation in central bank cooperation during this crisis was the emergency provision of international liquidity through bilateral central bank swap facilities, which have evolved to form interconnected swap networks. We discuss the reasons for establishing swap facilities, relate the probability of a country receiving a swap line in a currency to a measure of currency-specific liquidity shortages based on the BIS international banking statistics, and find a significant relationship in the case of the US dollar, the euro, the yen and the Swiss franc. We also discuss the role and effectiveness of swap lines in relieving currency-specific liquidity shortages, the risks that central banks run in extending swap lines and the limitations to their utility in relieving liquidity pressures. We conclude that the credit crisis is likely to have a lasting effect on the international liquidity policies of governments and central banks.
India’s Future Aircraft Carrier Force and the Need for Strategic Flexibility
http://www.idsa.in/idsacomments/IndiasFutureAircraftCarrierForceandtheNeedforStrategicFlexibility_irehman_010610
Entitlement Reform and the Global Budget Crisis - Putting Social Security on a sustainable path isn't nearly enough. But it would do a lot to convince markets that Washington can be serious
http://online.wsj.com/article/SB10001424052748704269204575270702838532246.html
Introducing U.S. Cyber Command, by William J Lynn III, Deputy Defense Sec
http://online.wsj.com/article/SB10001424052748704875604575280881128276448.html
More than 100 foreign intelligence agencies and militaries threaten U.S. defense networks.
Iran's Nuclear Progress - Even the U.N. now says Iran has enough fuel for two weapons
http://online.wsj.com/article/SB10001424052748704875604575280783424640448.html
Pacific Partnership Arrives in Vietnam
http://blogs.state.gov/index.php/entries/pacific_partnership_vietnam
Maybe the constitutional case for ObamaCare isn't so open and shut: Justice Needs More Time
http://online.wsj.com/article/SB10001424052748704596504575272882527805408.html
Taiwan’s Unending Dialogue over ECFA. By Jagannath P. Panda
http://www.idsa.in/idsacomments/TaiwansUnendingDialogueoverECFA_jppanda_010610
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http://online.wsj.com/article/SB10001424052748704875604575280260628776940.html
Erdogan and the Decline of the Turks - When I asked the prime minister about stories alleging a U.S.-Israeli murder and organ selling scheme in Iraq, he could not bring himself to condemn them
http://online.wsj.com/article/SB10001424052748704875604575281392195250402.html
Remarks Before the Ministerial Meeting at the Alliance of Civilizations Rio Forum. By Esther Brimmer, Assistant Secretary, Bureau of International Organization Affairs. Rio de Janeiro, Brazil, May 28, 2010
http://www.state.gov/p/io/rm/2010/142493.htm
Rethinking Darfur, by Marc Gustafson
http://www.cato.org/pub_display.php?pub_id=11862
Remarks by the President After Meeting with BP Oil Spill Commission Co-Chairs
http://www.whitehouse.gov/the-press-office/remarks-president-after-meeting-with-bp-oil-spill-commission-co-chairs
BP Oil Spill: Who's Your Daddy?, by Gene Healy
http://www.cato.org/pub_display.php?pub_id=11859
Breast Cancer Vaccine (For Mice)
http://www.acsh.org/factsfears/newsID.1486/news_detail.asp
Obamacare’s True Costs Coming to Light
http://blog.heritage.org/2010/06/02/morning-bell-obamacares-true-costs-coming-to-light
ObamaCare's Ever-Rising Price Tag - Voters will understand plenty about the hidden costs of the law by November
http://online.wsj.com/article/SB10001424052748703561604575282482320389198.html
Health and Safety Tips for Your Summer Vacation (Update 2010)
http://www.acsh.org/docLib/20100528_summer_tips_2010.pdf
How Far Will the Gulf Gusher Spread? - Trapped in water pockets, the oil from Deepwater Horizon will ride the Gulf Stream across the Atlantic. In years to come, some will even wash up on European shores
http://online.wsj.com/article/SB10001424052748703561604575282420254222384.html
Central bank co-operation and international liquidity in the financial crisis of 2008-9. By Richhild Moessner and William Allen. Working Papers No 310. June 2010
http://www.bis.org/publ/work310.htm
The financial crisis that began in August 2007 has blurred the sharp distinction between monetary and financial stability.It has also led to a revival of practical central bank co-operation. This paper explains how things have changed. The main innovation in central bank cooperation during this crisis was the emergency provision of international liquidity through bilateral central bank swap facilities, which have evolved to form interconnected swap networks. We discuss the reasons for establishing swap facilities, relate the probability of a country receiving a swap line in a currency to a measure of currency-specific liquidity shortages based on the BIS international banking statistics, and find a significant relationship in the case of the US dollar, the euro, the yen and the Swiss franc. We also discuss the role and effectiveness of swap lines in relieving currency-specific liquidity shortages, the risks that central banks run in extending swap lines and the limitations to their utility in relieving liquidity pressures. We conclude that the credit crisis is likely to have a lasting effect on the international liquidity policies of governments and central banks.
India’s Future Aircraft Carrier Force and the Need for Strategic Flexibility
http://www.idsa.in/idsacomments/IndiasFutureAircraftCarrierForceandtheNeedforStrategicFlexibility_irehman_010610
Entitlement Reform and the Global Budget Crisis - Putting Social Security on a sustainable path isn't nearly enough. But it would do a lot to convince markets that Washington can be serious
http://online.wsj.com/article/SB10001424052748704269204575270702838532246.html
Introducing U.S. Cyber Command, by William J Lynn III, Deputy Defense Sec
http://online.wsj.com/article/SB10001424052748704875604575280881128276448.html
More than 100 foreign intelligence agencies and militaries threaten U.S. defense networks.
Iran's Nuclear Progress - Even the U.N. now says Iran has enough fuel for two weapons
http://online.wsj.com/article/SB10001424052748704875604575280783424640448.html
Pacific Partnership Arrives in Vietnam
http://blogs.state.gov/index.php/entries/pacific_partnership_vietnam
Maybe the constitutional case for ObamaCare isn't so open and shut: Justice Needs More Time
http://online.wsj.com/article/SB10001424052748704596504575272882527805408.html
Taiwan’s Unending Dialogue over ECFA. By Jagannath P. Panda
http://www.idsa.in/idsacomments/TaiwansUnendingDialogueoverECFA_jppanda_010610
The Blue Dogs Roll Over - How they abet Pelosi's spending agenda
http://online.wsj.com/article/SB10001424052748704875604575280260628776940.html
Erdogan and the Decline of the Turks - When I asked the prime minister about stories alleging a U.S.-Israeli murder and organ selling scheme in Iraq, he could not bring himself to condemn them
http://online.wsj.com/article/SB10001424052748704875604575281392195250402.html
Remarks Before the Ministerial Meeting at the Alliance of Civilizations Rio Forum. By Esther Brimmer, Assistant Secretary, Bureau of International Organization Affairs. Rio de Janeiro, Brazil, May 28, 2010
http://www.state.gov/p/io/rm/2010/142493.htm
Rethinking Darfur, by Marc Gustafson
http://www.cato.org/pub_display.php?pub_id=11862
Remarks by the President After Meeting with BP Oil Spill Commission Co-Chairs
http://www.whitehouse.gov/the-press-office/remarks-president-after-meeting-with-bp-oil-spill-commission-co-chairs
BP Oil Spill: Who's Your Daddy?, by Gene Healy
http://www.cato.org/pub_display.php?pub_id=11859
Breast Cancer Vaccine (For Mice)
http://www.acsh.org/factsfears/newsID.1486/news_detail.asp
Obamacare’s True Costs Coming to Light
http://blog.heritage.org/2010/06/02/morning-bell-obamacares-true-costs-coming-to-light
ObamaCare's Ever-Rising Price Tag - Voters will understand plenty about the hidden costs of the law by November
http://online.wsj.com/article/SB10001424052748703561604575282482320389198.html
Tuesday, June 1, 2010
Press Briefing
Jun 02, 2010
Pacific Partnership Arrives in Vietnam
http://blogs.state.gov/index.php/entries/pacific_partnership_vietnam
The Meaningless Mantra of 'Border Security' - It's become the most overused—and least understood—concept in the struggle over what to do about our broken immigration system
http://online.wsj.com/article/SB10001424052748704269204575270810940585150.html
Afghanistan: Building Partnerships Through Humanitarian Mine Action
http://blogs.state.gov/ap/index.php/site/entry/afghanistan_humanitarian_mine_action
Strategy vs. Tactics in Afghanistan - Good counterinsurgency can't make up for the lack of a political plan
http://online.wsj.com/article/SB10001424052748704875604575280340680176022.html
What Issue Is Critical To Building a 21st Century U.S.-India Partnership?
http://blogs.state.gov/index.php/site/entry/q_issue_india_partnership
The Gulf Spill and Alaska - We see signs that the Obama administration wants to use the disaster to shut down oil production even in the safest areas
http://online.wsj.com/article/SB10001424052748704596504575272991022477222.html
Voters vs. George Soros - Taking judicial selection away from the lawyers guild
http://online.wsj.com/article/SB10001424052748704370704575228461914892980.html
Another Terror War Success - Drones are a crucial U.S. advantage.
http://online.wsj.com/article/SB10001424052748704875604575280643044606292.html
Buffett and the Ratings Cartel - How the Moody's investor can reduce the odds of another credit meltdown
http://online.wsj.com/article/SB10001424052748704717004575268622397797094.html
The Obama administration's plan to raise California's Nummi auto plant from the dead, at least until the November midterm elections.
http://online.wsj.com/article/SB10001424052748703325104575280380064974048.html
The Irish Example - Dublin is showing other indebted governments how to cut spending
http://online.wsj.com/article/SB10001424052748703703704575276602447506106.html
Economic Growth and Institutional Innovation: Outlines of a Reform Agenda
http://www.brookings.edu/papers/2010/0601_innovation_galston.aspx
HSAs an Endangered Species under Obamacare
http://blog.heritage.org/2010/06/01/hsas-an-endangered-species-under-obamacare
Assessing the New Course in U.S.-Italian Relations
http://www.brookings.edu/papers/2010/0525_us_italian_relations_alessandri.aspx
Why Our Poverty Measure Misleads
http://www.realclearmarkets.com/articles/2010/05/31/why_our_poverty_measure_misleads_98490.html
What is going on in Turkey?
http://rodrik.typepad.com/dani_rodriks_weblog/2010/05/what-is-going-on-in-turkey.html
Time to Change Course in the Middle East
http://blog.heritage.org/2010/06/01/morning-bell-time-to-change-course-in-the-middle-east
Anti-Salt Crusaders' Bland Arguments
http://www.acsh.org/factsfears/newsID.1484/news_detail.asp
Pacific Partnership Arrives in Vietnam
http://blogs.state.gov/index.php/entries/pacific_partnership_vietnam
The Meaningless Mantra of 'Border Security' - It's become the most overused—and least understood—concept in the struggle over what to do about our broken immigration system
http://online.wsj.com/article/SB10001424052748704269204575270810940585150.html
Afghanistan: Building Partnerships Through Humanitarian Mine Action
http://blogs.state.gov/ap/index.php/site/entry/afghanistan_humanitarian_mine_action
Strategy vs. Tactics in Afghanistan - Good counterinsurgency can't make up for the lack of a political plan
http://online.wsj.com/article/SB10001424052748704875604575280340680176022.html
What Issue Is Critical To Building a 21st Century U.S.-India Partnership?
http://blogs.state.gov/index.php/site/entry/q_issue_india_partnership
The Gulf Spill and Alaska - We see signs that the Obama administration wants to use the disaster to shut down oil production even in the safest areas
http://online.wsj.com/article/SB10001424052748704596504575272991022477222.html
Voters vs. George Soros - Taking judicial selection away from the lawyers guild
http://online.wsj.com/article/SB10001424052748704370704575228461914892980.html
Another Terror War Success - Drones are a crucial U.S. advantage.
http://online.wsj.com/article/SB10001424052748704875604575280643044606292.html
Buffett and the Ratings Cartel - How the Moody's investor can reduce the odds of another credit meltdown
http://online.wsj.com/article/SB10001424052748704717004575268622397797094.html
The Obama administration's plan to raise California's Nummi auto plant from the dead, at least until the November midterm elections.
http://online.wsj.com/article/SB10001424052748703325104575280380064974048.html
The Irish Example - Dublin is showing other indebted governments how to cut spending
http://online.wsj.com/article/SB10001424052748703703704575276602447506106.html
Economic Growth and Institutional Innovation: Outlines of a Reform Agenda
http://www.brookings.edu/papers/2010/0601_innovation_galston.aspx
HSAs an Endangered Species under Obamacare
http://blog.heritage.org/2010/06/01/hsas-an-endangered-species-under-obamacare
Assessing the New Course in U.S.-Italian Relations
http://www.brookings.edu/papers/2010/0525_us_italian_relations_alessandri.aspx
Why Our Poverty Measure Misleads
http://www.realclearmarkets.com/articles/2010/05/31/why_our_poverty_measure_misleads_98490.html
What is going on in Turkey?
http://rodrik.typepad.com/dani_rodriks_weblog/2010/05/what-is-going-on-in-turkey.html
Time to Change Course in the Middle East
http://blog.heritage.org/2010/06/01/morning-bell-time-to-change-course-in-the-middle-east
Anti-Salt Crusaders' Bland Arguments
http://www.acsh.org/factsfears/newsID.1484/news_detail.asp
Monday, May 31, 2010
The negatives of a stronger Chinese currency—higher prices and lower exports for the U.S.—offset the positives.
The Yin and Yang of Yuan Appreciation. By RAY C. FAIR
The negatives of a stronger Chinese currency—higher prices and lower exports for the U.S.—offset the positives.WSJ, Jun 01, 2010
China is under increasing U.S. pressure to allow its currency to appreciate. Many argue that a yuan appreciation would result in more American jobs. Late last year New York Times columnist Paul Krugman said his "back-of-the-envelope" calculation suggested that if there is no appreciation, then over the next several years what he calls "Chinese mercantilism" "may end up reducing U.S. employment by around 1.4 million jobs."
But that's by no means a foregone conclusion. The question of what a Chinese appreciation of the yuan would do to the world economy is complicated. There are many economic links among countries, and they need to be accounted for in analyzing the effects of exchange-rate changes. The standard link that has been stressed in the media is that if the yuan appreciates, Chinese export prices rise in dollars and the U.S. substitutes away from now more expensive Chinese exports to now relatively cheaper American-produced goods. This is good for U.S. output and employment—U.S. jobs are created.
A second link is that China may buy more U.S.-produced goods because they are now cheaper relative to Chinese-produced goods. (The yuan price of U.S. produced goods is lower because a given number of yuan buys more dollars than before.) This is also good for U.S. output and employment.
A third link is that China's output is lower because it is exporting less. With a less robust economy, China imports less, some of which are imports from America. So from this link U.S. exports are lower, which is bad for U.S. output and employment. The second link is a relative price link—China substitutes towards U.S.-produced goods. The third link is an income link—China contracts and buys fewer imports. Which link is larger is an empirical question.
A fourth link is what I will call a U.S. price link. Import prices on Chinese goods are higher. When shoppers go to Wal-Mart they will find higher prices on Chinese-produced goods. This may lead some U.S. firms to raise their own prices since Chinese price competition is now less. So prices in the U.S. will rise. An increase in U.S. prices leads to a fall in real wealth and usually a fall in real wages, since nominal wages usually adjust slowly to increasing prices. This is bad for U.S. consumption demand and thus for U.S. output and employment. In addition, the Federal Reserve may raise interest rates in response to the increase in prices (although probably not much in the present climate), which decreases consumption and investment demand.
Other issues that matter when analyzing the effects of a yuan appreciation against the dollar are what the euro, pound and yen do relative to the dollar, what the monetary authorities in other countries do, and how closely tied countries are to each other regarding trade. One needs a multi-country model to take into account all these effects. I have such a model and have used it to analyze the effects on the world economy of a Chinese yuan appreciation against the dollar. It turns out that the two positive links mentioned above are roughly offset by the two negative links—the net effect on U.S. output and employment is small. The net effect is in fact slightly negative, but given the margin of uncertainty the bottom line is roughly no net effect at all.
It thus seems to be the case, at least from the properties of my model, that the two negative links mentioned above are larger than many people realize. Chinese output is down enough to have a nontrivial effect on Chinese imports. In addition, the negative effects from the increase in U.S. prices are nontrivial. It seems unlikely that there will be a large increase in U.S. jobs if the yuan does in fact appreciate, contrary to what many think.
Mr. Fair is a professor of economics at Yale University.
The negatives of a stronger Chinese currency—higher prices and lower exports for the U.S.—offset the positives.WSJ, Jun 01, 2010
China is under increasing U.S. pressure to allow its currency to appreciate. Many argue that a yuan appreciation would result in more American jobs. Late last year New York Times columnist Paul Krugman said his "back-of-the-envelope" calculation suggested that if there is no appreciation, then over the next several years what he calls "Chinese mercantilism" "may end up reducing U.S. employment by around 1.4 million jobs."
But that's by no means a foregone conclusion. The question of what a Chinese appreciation of the yuan would do to the world economy is complicated. There are many economic links among countries, and they need to be accounted for in analyzing the effects of exchange-rate changes. The standard link that has been stressed in the media is that if the yuan appreciates, Chinese export prices rise in dollars and the U.S. substitutes away from now more expensive Chinese exports to now relatively cheaper American-produced goods. This is good for U.S. output and employment—U.S. jobs are created.
A second link is that China may buy more U.S.-produced goods because they are now cheaper relative to Chinese-produced goods. (The yuan price of U.S. produced goods is lower because a given number of yuan buys more dollars than before.) This is also good for U.S. output and employment.
A third link is that China's output is lower because it is exporting less. With a less robust economy, China imports less, some of which are imports from America. So from this link U.S. exports are lower, which is bad for U.S. output and employment. The second link is a relative price link—China substitutes towards U.S.-produced goods. The third link is an income link—China contracts and buys fewer imports. Which link is larger is an empirical question.
A fourth link is what I will call a U.S. price link. Import prices on Chinese goods are higher. When shoppers go to Wal-Mart they will find higher prices on Chinese-produced goods. This may lead some U.S. firms to raise their own prices since Chinese price competition is now less. So prices in the U.S. will rise. An increase in U.S. prices leads to a fall in real wealth and usually a fall in real wages, since nominal wages usually adjust slowly to increasing prices. This is bad for U.S. consumption demand and thus for U.S. output and employment. In addition, the Federal Reserve may raise interest rates in response to the increase in prices (although probably not much in the present climate), which decreases consumption and investment demand.
Other issues that matter when analyzing the effects of a yuan appreciation against the dollar are what the euro, pound and yen do relative to the dollar, what the monetary authorities in other countries do, and how closely tied countries are to each other regarding trade. One needs a multi-country model to take into account all these effects. I have such a model and have used it to analyze the effects on the world economy of a Chinese yuan appreciation against the dollar. It turns out that the two positive links mentioned above are roughly offset by the two negative links—the net effect on U.S. output and employment is small. The net effect is in fact slightly negative, but given the margin of uncertainty the bottom line is roughly no net effect at all.
It thus seems to be the case, at least from the properties of my model, that the two negative links mentioned above are larger than many people realize. Chinese output is down enough to have a nontrivial effect on Chinese imports. In addition, the negative effects from the increase in U.S. prices are nontrivial. It seems unlikely that there will be a large increase in U.S. jobs if the yuan does in fact appreciate, contrary to what many think.
Mr. Fair is a professor of economics at Yale University.
Press Briefing
Jun 01, 2010
Madeleine Albright on the future of NATO
http://www.washingtonpost.com/wp-dyn/content/video/2010/03/12/VI2010031202502.html
Europe's GDP Envy - The effort to hide its poor economic performance with a new metric won't fool anyone
http://online.wsj.com/article/SB10001424052748703559004575256794032784642.html
The Ongoing Administration-Wide Response to the Deepwater BP Oil Spill: May 30 and May 31, 2010
http://www.whitehouse.gov/blog/2010/05/31/ongoing-administration-wide-response-deepwater-bp-oil-spill-may-30-and-may-31-2010
WaPo Editorial: The flotilla fiasco
http://www.washingtonpost.com/wp-dyn/content/article/2010/05/31/AR2010053103160.html
The West's Wrong Turn on Natural Resources - If democracies don't extract oil, dictatorships will
http://online.wsj.com/article/SB10001424052748704596504575272790583630252.html
It's time to end secret holds on Senate legislation
http://www.washingtonpost.com/wp-dyn/content/article/2010/05/31/AR2010053103161.html
The New Cannery Row - Congress wants $18 million to offset the jobs it destroyed in Samoa
http://online.wsj.com/article/SB10001424052748704596504575272991349796452.html
Statement of the Press Secretary on the President's Briefing Call with National Incident Commander Admiral Thad Allen and
Assistant to the President for Energy and Climate Change Policy Carol Browner
http://www.whitehouse.gov/the-press-office/statement-press-secretary-presidents-briefing-call-today-with-national-incident-com
Peter Wehner on Federal President's thin skin
http://online.wsj.com/article/SB10001424052748704596504575272894271786952.html
Peter Wehner writing last week at PoliticsDaily.com:
Obama is among the most thin-skinned presidents we have had, and we see evidence of it in every possible venue imaginable, from one-on-one interviews to press conferences, from extemporaneous remarks to set speeches.
The president is constantly complaining about what others are saying about him. He is upset at Fox News, and conservative talk radio, and Republicans, and people carrying unflattering posters of him. He gets upset when his avalanche of faulty facts are challenged, like on health care. He gets upset when he is called on his hypocrisy, on everything from breaking his promise not to hire lobbyists in the White House to broadcasting health care meetings on C-SPAN to not curtailing earmarks to failing in his promises of transparency and bipartisanship.
In Obama's eyes, he is always the aggrieved, always the violated, always the victim of some injustice. He is America's virtuous and valorous hero, a man of unusually pure motives and uncommon wisdom, under assault by the forces of darkness.
It is all so darn unfair.
Not surprisingly, Obama's thin skin leads to self pity. As Daniel Halper of The Weekly Standard pointed out, in a fundraising event for Sen. Barbara Boxer, Obama said,
"Let's face it: this has been the toughest year and a half since any year and a half since the 1930s."
Really, now? Worse than the period surrounding December 7, 1941 and September 11, 2001? Worse than what Gerald Ford faced after the resignation of Richard Nixon and Watergate, which constituted the wors[t] constitutional scandal in our history and tore the country apart? Worse than what Ronald Reagan faced after Jimmy Carter (when interest rates were 22 percent, inflation was more than 13 percent, and Reagan faced something entirely new under the sun, "stagflation")? Worse than 1968, when Bobby Kennedy and Martin Luther King, Jr. were assassinated and there was rioting in our streets? Worse than what LBJ faced during Vietnam—a war which eventually claimed more than 58,000 lives? Worse than what John Kennedy faced in the Bay of Pigs and in the Cuban Missile Crisis, when we and the Soviet Union edged up to the brink of nuclear war? Worse than what Franklin Roosevelt faced on the eve of the Normandy invasion? Worse than what Bush faced in Iraq in 2006, when that nation was on the edge of civil war, or when the financial system collapsed in the last months of his presidency? Worse than what Truman faced in defeating imperial Japan, in reconstructing post-war Europe, and in responding to North Korea's invasion of South Korea?
Nuclear Non-Proliferation Treaty Review Conference Final Document
http://www.state.gov/r/pa/prs/ps/2010/05/142374.htm
The Yin and Yang of Yuan Appreciation - The negatives of a stronger Chinese currency—higher prices and lower exports for
the U.S.—offset the positives.
http://www.bipartisanalliance.com/2010/05/negatives-of-stronger-chinese.html
Background Briefing on Nuclear Nonproliferation Efforts with Regard to Iran and the Brazil/Turkey Agreement
http://www.state.gov/r/pa/prs/ps/2010/05/142375.htm
Israel's Gaza Flotilla Fiasco - Israel had no obligation to allow the ships to reach Gaza, but surely there was a smarter way to stop them.
http://online.wsj.com/article/SB10001424052748704366504575278621338138694.html
Israel's Gaza Choices - How is the Jewish state supposed to stop Hamas from re-arming?
http://online.wsj.com/article/SB10001424052748704490204575278931593199598.html
United States Closing Statement at the 2010 NPT Review Conference
http://www.state.gov/t/us/142370.htm
The Union Pension Bailout - A scheme for taxpayers to cover mismanaged multi-employer plans
http://online.wsj.com/article/SB10001424052702303491304575188263180553530.html
The Lessons of the GM Bankruptcy - Everybody knew it was ridiculous and unsustainable to pay UAW workers not to work.
http://online.wsj.com/article/SB10001424052748704113504575264641145227612.html
Madeleine Albright on the future of NATO
http://www.washingtonpost.com/wp-dyn/content/video/2010/03/12/VI2010031202502.html
Europe's GDP Envy - The effort to hide its poor economic performance with a new metric won't fool anyone
http://online.wsj.com/article/SB10001424052748703559004575256794032784642.html
The Ongoing Administration-Wide Response to the Deepwater BP Oil Spill: May 30 and May 31, 2010
http://www.whitehouse.gov/blog/2010/05/31/ongoing-administration-wide-response-deepwater-bp-oil-spill-may-30-and-may-31-2010
WaPo Editorial: The flotilla fiasco
http://www.washingtonpost.com/wp-dyn/content/article/2010/05/31/AR2010053103160.html
The West's Wrong Turn on Natural Resources - If democracies don't extract oil, dictatorships will
http://online.wsj.com/article/SB10001424052748704596504575272790583630252.html
It's time to end secret holds on Senate legislation
http://www.washingtonpost.com/wp-dyn/content/article/2010/05/31/AR2010053103161.html
The New Cannery Row - Congress wants $18 million to offset the jobs it destroyed in Samoa
http://online.wsj.com/article/SB10001424052748704596504575272991349796452.html
Statement of the Press Secretary on the President's Briefing Call with National Incident Commander Admiral Thad Allen and
Assistant to the President for Energy and Climate Change Policy Carol Browner
http://www.whitehouse.gov/the-press-office/statement-press-secretary-presidents-briefing-call-today-with-national-incident-com
Peter Wehner on Federal President's thin skin
http://online.wsj.com/article/SB10001424052748704596504575272894271786952.html
Peter Wehner writing last week at PoliticsDaily.com:
Obama is among the most thin-skinned presidents we have had, and we see evidence of it in every possible venue imaginable, from one-on-one interviews to press conferences, from extemporaneous remarks to set speeches.
The president is constantly complaining about what others are saying about him. He is upset at Fox News, and conservative talk radio, and Republicans, and people carrying unflattering posters of him. He gets upset when his avalanche of faulty facts are challenged, like on health care. He gets upset when he is called on his hypocrisy, on everything from breaking his promise not to hire lobbyists in the White House to broadcasting health care meetings on C-SPAN to not curtailing earmarks to failing in his promises of transparency and bipartisanship.
In Obama's eyes, he is always the aggrieved, always the violated, always the victim of some injustice. He is America's virtuous and valorous hero, a man of unusually pure motives and uncommon wisdom, under assault by the forces of darkness.
It is all so darn unfair.
Not surprisingly, Obama's thin skin leads to self pity. As Daniel Halper of The Weekly Standard pointed out, in a fundraising event for Sen. Barbara Boxer, Obama said,
"Let's face it: this has been the toughest year and a half since any year and a half since the 1930s."
Really, now? Worse than the period surrounding December 7, 1941 and September 11, 2001? Worse than what Gerald Ford faced after the resignation of Richard Nixon and Watergate, which constituted the wors[t] constitutional scandal in our history and tore the country apart? Worse than what Ronald Reagan faced after Jimmy Carter (when interest rates were 22 percent, inflation was more than 13 percent, and Reagan faced something entirely new under the sun, "stagflation")? Worse than 1968, when Bobby Kennedy and Martin Luther King, Jr. were assassinated and there was rioting in our streets? Worse than what LBJ faced during Vietnam—a war which eventually claimed more than 58,000 lives? Worse than what John Kennedy faced in the Bay of Pigs and in the Cuban Missile Crisis, when we and the Soviet Union edged up to the brink of nuclear war? Worse than what Franklin Roosevelt faced on the eve of the Normandy invasion? Worse than what Bush faced in Iraq in 2006, when that nation was on the edge of civil war, or when the financial system collapsed in the last months of his presidency? Worse than what Truman faced in defeating imperial Japan, in reconstructing post-war Europe, and in responding to North Korea's invasion of South Korea?
Nuclear Non-Proliferation Treaty Review Conference Final Document
http://www.state.gov/r/pa/prs/ps/2010/05/142374.htm
The Yin and Yang of Yuan Appreciation - The negatives of a stronger Chinese currency—higher prices and lower exports for
the U.S.—offset the positives.
http://www.bipartisanalliance.com/2010/05/negatives-of-stronger-chinese.html
Background Briefing on Nuclear Nonproliferation Efforts with Regard to Iran and the Brazil/Turkey Agreement
http://www.state.gov/r/pa/prs/ps/2010/05/142375.htm
Israel's Gaza Flotilla Fiasco - Israel had no obligation to allow the ships to reach Gaza, but surely there was a smarter way to stop them.
http://online.wsj.com/article/SB10001424052748704366504575278621338138694.html
Israel's Gaza Choices - How is the Jewish state supposed to stop Hamas from re-arming?
http://online.wsj.com/article/SB10001424052748704490204575278931593199598.html
United States Closing Statement at the 2010 NPT Review Conference
http://www.state.gov/t/us/142370.htm
The Union Pension Bailout - A scheme for taxpayers to cover mismanaged multi-employer plans
http://online.wsj.com/article/SB10001424052702303491304575188263180553530.html
The Lessons of the GM Bankruptcy - Everybody knew it was ridiculous and unsustainable to pay UAW workers not to work.
http://online.wsj.com/article/SB10001424052748704113504575264641145227612.html
Seoul Reviews U.S. Military Ties
Seoul Reviews U.S. Military Ties. By JAY SOLOMON
WSJ, May 31, 2010
In the wake of North Korea's alleged sinking of a South Korean naval vessel, South Korean President Lee Myung-bak's government is reviewing its long-term defense policy in ways that could significantly impact the Washington-Seoul military alliance, according to officials engaged in the reform process here and in the U.S.
Over the past week, U.S. and South Korean leaders have outlined plans to conduct new war games and strategy sessions to better equip the South for combating the type of submarine attack Pyongyang is accused by international investigators to have staged this March, killing 46 South Korean sailors.
But longer-term, Mr. Lee's conservative government also could seek to alter the alliance's command structure and Seoul's weapons arsenal in ways that would challenge the Pentagon's current strategic planning for Northeast Asia, according to these officials.
South Korean defense strategists already are publicly pressing Mr. Lee to delay the planned 2012 transfer of operational control of the combined U.S.-South Korean fighting force to Seoul from Washington, arguing South Korea isn't prepared yet to oversee American forces. The agreement between Washington and Seoul has a clause that allows South Korea's president to formally request a suspension of the transfer. The U.S. currently deploys 29,000 troops in South Korea, and the South Korean military deploys 600,000.
Some South Korean officials involved in the president's military-reform drive also are calling for Seoul to develop more offensive strategic weapons as a means to deter the nuclear-armed North from future aggression. Currently, South Korea isn't allowed by its defense agreement with the U.S. to deploy precision-guided missiles with a range of more than 300 kilometers.
"We need to have our own ways to threaten North Korea," said Kim Tae-woo, a South Korean defense expert who sits on one of two committees President Lee has established to assess Seoul's military preparedness. "We need to have this dialogue with our allies."
Mr. Lee took office in 2008 calling for an overhaul of South Korea's military apparatus, which his party had charged was weakened during 10 years of liberal rule in Seoul. But South Korea's new government initially agreed with its predecessor's plans to shrink the size of Seoul's military ranks while reining in defense spending.
Many in South Korea have viewed North Korea's million-man military as largely targeted at the U.S. South Korea's late President Roh Moo-hyun successfully pushed for the U.S. to lower it military profile in his country and to transfer control of the joint-military command to South Korea's defense department.
The North's alleged attack March 26 on the South Korean naval vessel, the Cheonan, however, has shaken up Seoul's strategic thinking, according to South Korean and U.S. officials. A major concern here now is that Pyongyang's development of nuclear technologies has provided leader Kim Jong Il with a deterrent against the more-advanced militaries of the U.S. and South Korea. This, in turn, could allow Pyongyang to stage more-aggressive conventional attacks on the South, with the belief that Seoul won't retaliate for fear of an escalation.
This fear seems to have been borne out in recent days as Mr. Lee's government has shown a reluctance to take some new steps to challenge Pyongyang over the Cheonan incident. Seoul, for example, stepped back from an initial pledge to use loudspeakers to blast pro-South Korean propaganda across the Demilitarized Zone between the two Koreas after the North threatened to attack the broadcasting infrastructure.
South Korea's leaders also have publicly sought to play down the idea that the North's two recent nuclear tests have given it a military advantage or that it has succeeded in developing atomic weapons. "Regarding North Korea's nuclear capabilities, we have not been able to verify those capabilities," South Korean Foreign Minister Yu Myung-hwan said last week at a joint-news conference with U.S. Secretary of State Hillary Clinton.
Still, many leading defense thinkers in Seoul said Pyongyang's growing nuclear technologies are "game changers" that now require South Korea to significantly upgrade its own capabilities. In addition to developing longer-range missiles, many are calling for the purchases of advanced new strike-fighters and antiballistic-missile batteries. They also are calling for the Pentagon to remain in charge of the joint-military command in South Korea beyond 2012, given the lethal effectiveness displayed by North Korea's mini-submarine fleet during the Choenan attack.
"There has been an asymmetrical shift that has weakened our deterrence structure," said Kim Byungki of Seoul's Korea University. "We are supposed to have air, ground and sea dominance."
South Korea's effort to renegotiate in the coming months its decades-old nuclear-cooperation agreement with the U.S. could now prove particularly tricky, according to current and former U.S. officials.
South Korea, under the 1974 pact, faces strict guidelines on its ability to store and reprocess the spent nuclear fuel produced by the country's 20 power reactors, because of fears it could be diverted for military purposes. The U.S. is seeking to limit any major alterations in the treaty, which expires in 2014, so as not to undermine Washington's efforts to contain the nuclear advances of countries like North Korea and Iran.
South Korean officials have said they are seeking to amend the agreement to in a bid to allow Seoul to better manage the storage of its nuclear waster. They are specifically citing South Korea's need to reprocess the spent fuel into a form that can be more easily disposed. But some analysts said Mr. Lee's government also could resist the constrictive terms being sought by the U.S. by citing the North's flouting of a 1992 agreement calling for the removal of all atomic weapons on the Korean Peninsula.
"This incident with the Cheonan could be the spark for turning around a number of things" between the U.S. and South Korea, said Victor Cha, who served as a senior White House official working on Asia during President George W. Bush's second term.
WSJ, May 31, 2010
In the wake of North Korea's alleged sinking of a South Korean naval vessel, South Korean President Lee Myung-bak's government is reviewing its long-term defense policy in ways that could significantly impact the Washington-Seoul military alliance, according to officials engaged in the reform process here and in the U.S.
Over the past week, U.S. and South Korean leaders have outlined plans to conduct new war games and strategy sessions to better equip the South for combating the type of submarine attack Pyongyang is accused by international investigators to have staged this March, killing 46 South Korean sailors.
But longer-term, Mr. Lee's conservative government also could seek to alter the alliance's command structure and Seoul's weapons arsenal in ways that would challenge the Pentagon's current strategic planning for Northeast Asia, according to these officials.
South Korean defense strategists already are publicly pressing Mr. Lee to delay the planned 2012 transfer of operational control of the combined U.S.-South Korean fighting force to Seoul from Washington, arguing South Korea isn't prepared yet to oversee American forces. The agreement between Washington and Seoul has a clause that allows South Korea's president to formally request a suspension of the transfer. The U.S. currently deploys 29,000 troops in South Korea, and the South Korean military deploys 600,000.
Some South Korean officials involved in the president's military-reform drive also are calling for Seoul to develop more offensive strategic weapons as a means to deter the nuclear-armed North from future aggression. Currently, South Korea isn't allowed by its defense agreement with the U.S. to deploy precision-guided missiles with a range of more than 300 kilometers.
"We need to have our own ways to threaten North Korea," said Kim Tae-woo, a South Korean defense expert who sits on one of two committees President Lee has established to assess Seoul's military preparedness. "We need to have this dialogue with our allies."
Mr. Lee took office in 2008 calling for an overhaul of South Korea's military apparatus, which his party had charged was weakened during 10 years of liberal rule in Seoul. But South Korea's new government initially agreed with its predecessor's plans to shrink the size of Seoul's military ranks while reining in defense spending.
Many in South Korea have viewed North Korea's million-man military as largely targeted at the U.S. South Korea's late President Roh Moo-hyun successfully pushed for the U.S. to lower it military profile in his country and to transfer control of the joint-military command to South Korea's defense department.
The North's alleged attack March 26 on the South Korean naval vessel, the Cheonan, however, has shaken up Seoul's strategic thinking, according to South Korean and U.S. officials. A major concern here now is that Pyongyang's development of nuclear technologies has provided leader Kim Jong Il with a deterrent against the more-advanced militaries of the U.S. and South Korea. This, in turn, could allow Pyongyang to stage more-aggressive conventional attacks on the South, with the belief that Seoul won't retaliate for fear of an escalation.
This fear seems to have been borne out in recent days as Mr. Lee's government has shown a reluctance to take some new steps to challenge Pyongyang over the Cheonan incident. Seoul, for example, stepped back from an initial pledge to use loudspeakers to blast pro-South Korean propaganda across the Demilitarized Zone between the two Koreas after the North threatened to attack the broadcasting infrastructure.
South Korea's leaders also have publicly sought to play down the idea that the North's two recent nuclear tests have given it a military advantage or that it has succeeded in developing atomic weapons. "Regarding North Korea's nuclear capabilities, we have not been able to verify those capabilities," South Korean Foreign Minister Yu Myung-hwan said last week at a joint-news conference with U.S. Secretary of State Hillary Clinton.
Still, many leading defense thinkers in Seoul said Pyongyang's growing nuclear technologies are "game changers" that now require South Korea to significantly upgrade its own capabilities. In addition to developing longer-range missiles, many are calling for the purchases of advanced new strike-fighters and antiballistic-missile batteries. They also are calling for the Pentagon to remain in charge of the joint-military command in South Korea beyond 2012, given the lethal effectiveness displayed by North Korea's mini-submarine fleet during the Choenan attack.
"There has been an asymmetrical shift that has weakened our deterrence structure," said Kim Byungki of Seoul's Korea University. "We are supposed to have air, ground and sea dominance."
South Korea's effort to renegotiate in the coming months its decades-old nuclear-cooperation agreement with the U.S. could now prove particularly tricky, according to current and former U.S. officials.
South Korea, under the 1974 pact, faces strict guidelines on its ability to store and reprocess the spent nuclear fuel produced by the country's 20 power reactors, because of fears it could be diverted for military purposes. The U.S. is seeking to limit any major alterations in the treaty, which expires in 2014, so as not to undermine Washington's efforts to contain the nuclear advances of countries like North Korea and Iran.
South Korean officials have said they are seeking to amend the agreement to in a bid to allow Seoul to better manage the storage of its nuclear waster. They are specifically citing South Korea's need to reprocess the spent fuel into a form that can be more easily disposed. But some analysts said Mr. Lee's government also could resist the constrictive terms being sought by the U.S. by citing the North's flouting of a 1992 agreement calling for the removal of all atomic weapons on the Korean Peninsula.
"This incident with the Cheonan could be the spark for turning around a number of things" between the U.S. and South Korea, said Victor Cha, who served as a senior White House official working on Asia during President George W. Bush's second term.
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