Report Projects Positive Economic Growth In The Coming Decade

In the midst of all the doom and gloom about our economy, Washington Post columnist David Ignatius offers his evidence that there really is a light at the end of the tunnel.

Ignatius believes that the real prospect exists for an American economic boom a decade or so from now.  He cites studies from two bi-partisan think tanks as rationale for his optimism.

First, Ignatius believes that America is heading into an era of energy security and growth.  He argues that due to the rapid expansion of oil and gas production from shale, America is likely to become the world’s number one producer of oil, gas and biofuels by 2020…even surpassing energy superpowers Russia and Saudi Arabia.  As a result we will no longer rely on the Middle East or compete with China and India for resources.

The other area in which Ignatius believes that America is poised to explode is in manufacturing.  Ignatius reports that the revival of American manufacturing will be driven by the low cost of electricity in the US which will be relatively flat through the rest of the decade and roughly one-third that of economic competitors such a Spain, France or Germany.  He cites studies by the Boston Consulting Group (BCG) that show that there is what they refer to as a “reshoring”  back to America of manufacturing that previously migrated offshore, especially to China.  BCG believes that by 2015 China’s cost advantage will have shrunk to the point that many manufactures will prefer to open new plants in the US.  BCG economists believe that the cost-risk inflection point in seven key areas will begin tipping away from China and toward the US: computer/electronics, appliances/electrical equipment, machinery, furniture, fabricated metals, plastics/rubber and transportation goods.  BCG estimates that as these industries move back to the US the economy will add $80-$120 billion in output and 2-3 million new jobs.

These estimates are backed up by a recent survey of executives at 106 US based companies with annual sales of over $1 billion dollars.  The movement toward reshoring manufacturing is very real.

In a recent interview Ignatius pointed out that these positive trends are the result of private industry and investment…without the aid of government assistance.

We’d like to point out that these positive trends are occurring are in spite of the alleged “oppressive government regulations” and “high corporate taxes” that conservative politicians believe to be the root of our economic malaise.

Congratulations to David Ignatius on his fine reporting; and our thanks for providing a source of hope in these tough economic times.

You can read David Ignatius’ column: “US energy, manufacturing ready for a boom” in its entirety in today’s edition of the Washington Post.  

     

European Elections Send Clear Message To Washington

The Associated Press is reporting that voters in France went to the polls Sunday, and in clear repudiation of the austerity measures implemented by the by the current government, ousted sitting President Nicholas SarKozy and handed the reins of power to leftist Francois Hollande.  Hollande is the first socialist to ascend to the presidency since Francois Mitterrand held the office from 1981-1995.  Hollande favors an increase in government stimulus and a change in the tax structure that could see the wealthiest in France pay as much as 75% of their income in taxes.  His policies stand in stark contrast to the austerity measures favored by the incumbent, Sarkozy.

Sarkozy, who along with Germany’s Andrea Merkel spearheaded the movement to drastically reduce government spending and services throughout Europe, is the latest victim of a tsunami of voter anger over spending cuts that has ousted governments and leaders in the past couple of years. 

Voters in Greece, Serbia, Germany and Italy sent similar messages to their prospective governments in Sunday elections.

This overwhelming repudiation of austerity measures that is sweeping Europe raises the question…Why, when faced with the very real prospect of the bankruptcy of their respective economies are voters stubbornly refusing to implement cost cutting measures to save themselves?

Former National Security Advisor to President Carter, and one of the foremost authorities on international affairs, Dr. Zbigniew Brzezinski, offered this enlightened explanation.  Doctor Brzezinski said that an authoritarian government or a royal government can implement austerity measures with impunity from repercussions from its citizenry.  But if a democratic government wishes to implement austerity measures it will only be successful if it can clearly demonstrate that the measures are fair to everyone.  For when austerity measures are considered, the first question asked by the citizenry is whose life will become the most “austere”.

The European election results should send a clear message to our politicians here at home.  Those who would suggest that the burden of economic recovery be borne on the shoulders of the middle class while the wealthiest among us continue to live unaffected lives might want to consider Dr. Brzezinski’s analysis.  For only through fairness will austerity measures become acceptable to the American voter.                       

Do As I Say...Not As I Do!

The plight of Chinese activist Cheng Guancheng has been the lead news story for the past several days.  It is the tragic story of a man imprisoned for speaking out against China’s practice of implementing forced abortions and sterilizations as a means of family planning.  Cheng spent four years in prison for his activities followed by eighteen months of house arrest.  Cheng, who is blind, managed to escape his captors and find his way to the American embassy; where he sought protection.  After six days in the embassy Cheng asked to leave the embassy in order to be reunited with his wife and children.  US officials say they negotiated an agreement whereby Cheng would be granted freedom and safety for him and his family.  Now Cheng believes that he and his family are in danger and he wants to return to the protective custody of the American embassy and eventually relocate to the United States.  He has spoken by phone to a congressional committee investigating the matter and he has requested to speak to Secretary of State Clinton. 

Critics of the Obama administration have jumped all over the state department’s handling of the situation.  They say that the state department wanted the matter resolved quickly and quietly fearing that it would overshadow the upcoming summit meeting between Secretary of State Clinton and the Chinese government.  They say that the embassy staff cobbled together a loose, non-binding agreement with the Chinese just to get Cheng out of the embassy and out of their hair. 

Cheng’s ultimate fate remains undecided.

From our prospective the bigger story is the reaction to Cheng’s situation here in the states.  The outrage here over the perceived violation of Cheng’s civil rights is palpable.  And naturally Willard Mitt Romney is leading the criticism over the administration’s handling of the situation.  Romney said that the Obama administration failed to protect the Chinese dissident by factoring political considerations into the negotiations.  “If these reports are true, this is a dark day for freedom and it’s a day of shame for the Obama administration…We are a place of freedom here and around the world and we should stand up and defend freedom wherever it is under attack.”

The hypocrisy in Romney’s outrage would be laughable if it wasn’t so sad.  If Romney wants to “defend freedom wherever it is under attack” he need look no further than right under his own nose.   Romney is quick to point out the perceived failure of the Obama administration to protect the rights of a Chinese dissident.  But he is silent as a church mouse when it comes to violations of civil rights by his party and his own administration.

Where was Romney when the far right evangelical faction of his party demanded that his openly gay foreign policy spokesman, Richard Grinnell, be removed from the campaign?  Did he not “factor in political considerations”, when he refused to defend his choice of Grinnell?   In fact Romney remained silent, diminished Grinnell’s position within the campaign, and marginalized him until he eventually resigned.

Where was Romney’s outrage when members of his party were passing laws that mandated that women undergo invasive trans-vaginal ultrasounds before having a legal abortion?

Where was Romney’s outrage when members of his party were passing laws specifically designed to make it more difficult for African Americans and Hispanics to exercise their right to vote?

Where was Romney when his party was voting to overturn the Lilly Ledbetter Equal Pay Act…a bill which grants women the right to equal pay for equal work?

Where was Romney when members of his party were attempting to pass legislation that outlawed a woman’s right to obtain contraceptives?

Romney seems to be very concerned about the rights of Chinese dissidents; but not overly concerned about violating the rights of American citizens.

In fairness to Willard…he is not so different from most Americans when it comes to criticizing the activities of foreign governments while turning a blind eye to our own deficiencies.  We rail about the civil rights violations in China.  We cluck our tongue at the subjugation of women in Saudi Arabia.  We complain about treatment of young girls by the Taliban and we are revolted by the religious persecution that is rampant throughout the world. 

Yet racism is still prevalent in this country.  Women do not receive equal pay for their work or equal consideration for their efforts.  Many will not vote for Mitt Romney simply because he is a Mormon.  And the citizenship and religious beliefs of the President of the United States are questioned and demonized because of his “exotic” upbringing.  We are the proverbial pot calling the kettle black.

Make no mistake; we have come a long way to practicing the tolerance that we preach.  But we still have a long way to go.

So to those who would be quick to criticize the practices of other countries, institutions or individuals we would suggest that get they examine their own conscience first.

After all, we all live in a glass house.

       

          

Give Jimmy Carter his "Props"

Over the past couple of weeks we have heard a number of references to the Carter administration…and not in a good way.

President Obama has publically admitted that thoughts of Carter’s failed attempt to rescue the Iranian hostages and the resulting political fallout was one of the considerations in assessing the raid to get Osama bin Laden.  Crowded into a tense Situation Room; Chairman of the Joint Chiefs Admiral Mullen admitted feeling a sense of déjà vu when the first helicopter crashed while attempting to land inside bin Laden’s compound.  Mullen said that upon learning of the crash he immediately glanced over at Secretary of Defense Gates who was in that same room in 1980 monitoring Carter’s ill fated attempt to rescue the Iranian hostages.  Carter had to abort the mission when three of the helicopters developed mechanical trouble.  Another chopper crashed into a C-130 transport plane on takeoff killing eight servicemen and injuring three others.  The failed mission devastated Carter’s presidency and 7 months later he lost his bid for a second term to Ronald Reagan.

Mitt Romney derisively referenced the Carter administration just this week.  He said that the Obama administration policies had stifled small businesses in a manner not seen since the Carter administration.  “The most anti-small business president that I’ve seen probably since Carter….Who would have thought that we would look at the Carter years as the good old days.” joked Romney.

Romney channeled Carter again when asked if he would have made the call to go after bin Laden.  “Of course” Romney said.  “Even Carter would have made that call.”

Jimmy Carter is a prickly individual.  He has a habit of speaking his mind and not giving a damn when his ruminations are unpopular or overly critical.  He has a sense of self importance about him that does not trend toward likability.  Therefore it is not often that you find anyone in politics defending Jimmy Carter.  But will give it a shot.

Carter should be given credit for having the courage to authorize the mission to rescue the Iranian hostages.  Carter understood that there was a general malaise in the country exacerbated by our inability to win the release of the hostages. He took a huge political risk to authorize the mission.  That the mission failed was not his fault but the result of a series of unfortunate circumstances.  Had the mission succeeded Carter would have been a hero and the country might not have elected a B grade actor to the presidency.

Carter is generally blamed for the sluggish economy that was pervasive during his term in office.  We remember long gas lines and rationing.  But Carter is the only president to have developed a comprehensive national energy policy; one that included conservation, price controls and new alternative technology.  We laughed at him.  But had we followed his lead we would be far better off now.  Carter wanted to wean us off our dependency on foreign oil.  He understood the costly far reaching effects that dependency would have on us both domestically and internationally.  Instead we ignored him, manufactured and sold big gas guzzling cars, paid more at the pump and spent trillions on military solutions to assure that oil would continue to flow to our shores.  We opened the doors for foreign auto companies and Toyota and Honda made trillions filling the void.

Oh, he also created the Department of Energy and the Department of Education.

Jimmy Carter made a lot of mistakes.  But let’s give the guy credit where credit is due.          

      

Obama Leaves Afghan Options Open

The President addressed the nation last night and announced that the United States would maintain a presence in Afghanistan through 2024.  The ten year agreement with the Afghan government allows for the possibility of keeping US forces in Afghanistan beyond the previously announced 2014 withdrawal date.

Word of the announcement spread like wild fire.  Neo-cons took to the streets, firing their automatic assault weapons into the air in celebration.  Left wing liberals were seen running through the streets of Manhattan setting their hair on fire and sobbing in anguish.

Calm down! 

The only thing the President did yesterday was to keep his options open.

The President said that the current draw down of US troops would continue “And as our coalition agreed, by the end of 2014 the Afghans will be fully responsible for the security of their own government.” He then explained that the agreement that he signed with the Karzai government is designed to cover the decade after this planned withdrawal. 

The Associated Press reports that under the terms of the agreement, US forces would continue to be involved in counter-terrorism and training of the Afghan military.  In addition the US commits to supporting Afghan’s social and economic development, security, institutional operations and regional co-operation for 10 years, through 2024.  In return the Afghan government commits to strengthen government accountability, transparency and oversight, and to protect the rights of all Afghans, both men and women. The agreement commits the US to seek funding from Congress on an annual basis to support the Afghan Security Forces, as well as social and economic assistance.

More telling than what the agreement says is what the agreement doesn’t say.  How many troops will be left in country for the next decade and will these troop levels increase if the Karzai government fails to keep its end of the bargain?  How much will all this cost the American tax payer?  Our financially strapped country cannot continue to pay $2 billion dollars a week to support the Karzai government.    And what happens in 2024 if the Afghan government is still unable to maintain its own security?

We believe that the President wants to bring the combat troops home and return the security issues over to the Afghan government.  We also believe that the President wants to maintain a presence in the region in order to allow the military and the CIA to rapidly respond to events in Pakistan, Iraq, Syria and Iran should the need occur.  There is no question that among those “support forces” training and maintaining Afghan security will be a host of Seals and special ops forces who will continue to wage war against Al Qaeda and the Taliban.  The US will also continue to control Afghan air space.     

(For those keeping score at home…this is the very counter insurgency plan that Joe Biden recommended three years ago; the same Joe Biden that the President chose as a running mate for his foreign policy experience.  The President ignored his Vice President choosing instead to triple the number of combat troops in theater.  Perhaps the Vice President isn’t so dumb after all.  But we digress.)

The thing that we find most troubling about the agreement is that it ties us to the Karzai government for another decade.  With partners like that who needs enemies.  But you’ve got to dance with the one you brought to the party.

The President understands that there isn't a central front in the war against terror...least of all in Afghanistan.  He understands that Al Qaeda is scattered; and if there is any central control point for their operations it resides in Yemen.  But the President believes that a continued presence in Afghanistan is critical to our efforts in the Middle East.  While we would prefer that he bring all of our troops home and reduce our military footprint throughout the world; we will trust his judgement on this matter.   

We would remind the President’s critics that he has been pretty shrewd and nuanced in his foreign policy dealings.  He has a history of signaling that he is moving in one direction while in reality doing something quite different.  One need only to remember a that a year ago we watched the President crack jokes at the National Correspondence Dinner while knowing that the risky mission to eliminate bin Laden was underway…a mission whose failure would have all but ended his presidency.    The President has a pretty good poker face. 

For all his rhetoric the President knows that Afghanistan will look no different in 2024 than it does today.  The lack of specificity in this agreement leads us to believe that he has more up his sleeve than he is letting on.

One thing is certain.  Any conversation about this President being weak on foreign policy is now over.  If Republicans want to continue that debate they do so at their political peril. 

       

       

This & That...

Ok!  We just have to say this.  In all our years of watching politics we have never seen a politician who plays as fast and loose with the truth as Willard Mitt Romney.  Nixon was a choir boy compared to this guy.  In his latest remake of reality we see the presumptive Republican nominee taking credit for the resurgence of the automobile industry.  Mitt and his campaign surrogates would like us to believe that the industry followed his advice by going through a structured bankruptcy.  What Mitt has conveniently left out is that it was the government bridge loans authorized by former President George W. Bush and continued under President Obama that allowed the industry to stay afloat until the restructuring could occur.  Mitt would like us to forget his New York Times op-ed titled “Let Detroit Go Bankrupt” in which he criticized the government bailout loans and suggested the financing should have come from private sources…sources that were non-existent due to the frozen credit markets at the time.  Not even Romney’s own Bain Capital would lend money to the struggling industry.  Mitt would also like us to forget that he referred to the President’s efforts as “crony capitalism” designed to support his political ally the UAW.  Now that the industry is making a profit and has repaid the loans…with interest…their remarkable success was all Willard’s idea.

You would think that the first anniversary of the elimination of Osama bin Laden would be something the entire country could rally round and celebrate.  Not in Washington.  The food fight over the President’s use of the successful mission to get bin Laden in campaign ads has incensed the right.  Conservative pundits are apoplectic.  They would have us believe that we would never see such blatant political grandstanding from their side of the aisle.  We still do not understand all the weeping and gnashing of teeth over this.  First of all it was the Republicans who opened the door by aggressively criticizing and even lying about the President’s foreign policy credentials.  Secondly, who believes for a moment that had the mission failed these same conservative mouthpieces would not be raking the president over the coals for his incompetence.  Third, the presumptive Republican nominee has publically said that he would not have “moved heaven and earth to go after one person.” a stark contrast in an election year.  And last but not least…to those who would have us believe that conservatives would never sink so low as to politicize a military victory…we refer them to YouTube where they can watch George W. Bush land on an aircraft carrier in a navy fighter jet…strut around the deck in full fighter pilot costume complete with helmet tucked rakishly under his arm…and then under a huge banner touting “MISSION ACCOMPLISHED” announce to the world that Saddam and the Iraqi regime had fallen.  It’s just a campaign ad…get over it.

Did you see the NYT piece about Apple’s tax dodge?  It turns out that by merely setting up small store fronts offshore in Ireland and the Netherlands and a post office box in a state that doesn’t have corporate taxes; Nevada you can make $38 billion in profits and only pay 9.8% in taxes.  We should point out that Apple did nothing wrong.  They just found ways to legally shelter their profits from the IRS.  They are not alone.  According to several economists major corporations like Apple, Microsoft, GE and others have sheltered over $3 trillion dollars in corporate profits by way of offshore and domestic loopholes.  Now these major corporations would like the government to order a tax holiday during which they could bring this money back home and invest it in the economy without the burden of a heavy tax bill.  We tried this before.  In 2004 the government implemented a tax holiday and billions in corporate profits returned to the homeland.  However it did not result in any appreciable increase in jobs or corporate expansion.  It did however fatten the wallets of several major shareholders. Both sides of the aisle agree that our tax policy is broken.  It unfairly benefits big corporations and wealthy individuals at the expense of small businesses and the middle class.  The tax laws need to be reformed in their entirety.  Another tax holiday is not the answer.                         

       

Republicans Wage Losing War On Defense

The Republican Party has decided that one of the keys to victory in the November election is to wage war on the President’s record of waging war.  Their latest hissy fit comes on the heels of a newly released campaign video featuring Bill Clinton lavishly praising President Obama’s “courageous” decision to go after Osama bin Laden.  Republicans are appalled that the President’s campaign would dare to use the success of this mission for political purposes.  Romney senior campaign advisor Ed Gillespie was on Meet the Press Sunday going on and on about how the video was nothing more than a cheap political tactic taken on by a weakened campaign.  In truth the video is nothing more than the President walking through a door that the Republicans have generously opened for him.

For some unfathomable reason the Republicans feel that attacking the President’s foreign policy record is a winning strategy.  They have criticized his efforts in Iraq, Afghanistan, Pakistan, Libya, Somalia, Yemen, Syria and Iran.  Most recently they have railed against his response to the incarceration of activist Chen Guangcheng.  They have tried to portray Obama as a weak President who coddles our enemies.  They have warned that his policies have made America “less safe.”  Their assertions and criticisms are not only factually incorrect but they have allowed the President the opportunity to reiterate his foreign policy bona fides over and over again.

Factually, there hasn’t been a more hawkish President in decades.  Obama increased the troop levels in Afghanistan and led the international coalition that ousted Libyan dictator Moammar Gadhafi.  He has ordered crippling sanctions against Iran and Syria and has ordered a carrier fleet into the Persian Gulf to ward off any Iranian thoughts of cutting off the flow of oil through the Straits of Hormuz.  He has ordered drone strikes in at least seven countries including our “ally” Pakistan.  He has ramped up special ops efforts to capture or kill Al Qaeda terrorists.  And lest we forget…he ordered the raid that took out bin Laden…a decision that had it failed would have cost him his Presidency.  Even during his acceptance speech for the Nobel Peace Prize he talked about the fact that certain times call for going to war.  This is not a President who shies away from taking military action.

Historically the Republican Party has worn the mantle of “Defender of the Homeland.”  They have ceded that title to this Democrat President…and they desperately want it back.  But their criticism of his record flies in the face of the facts.  And when they try to paint themselves as being more to the right of this President they fall into disfavor with a war weary nation.  It is an argument they cannot win.

If Republicans want to play the “economic” hand and talk about a sluggish economy, high unemployment and record deficits…they are holding three aces.  But if they continue to play the “weak on defense” card…they got nothing.