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Heavy-Handed Politics

"€œGod willing, with the force of God behind it, we shall soon experience a world
without the United States and Zionism."€ -- Iran President Ahmadi-Nejad

Friday, December 19, 2008

Bank sees unrest in Iran due to 'worst global economic contraction' since great depression'

World Tribune
The sharp drop in the price of crude oil will continue in .......

World Tribune:
Peace on Earth? Israel poised to invade Gaza as rocket strikes continue

WASHINGTON — Israel's military on Dec. 18 launched its most intense air strikes against Hamas in the Gaza Strip in six months. The military said the targets included a missile arsenal and production facility in the Jabalya refugee camp and Khan Yunis.

Meanwhile, the Washington Institute reported Israel's military appears to ....

Thursday, December 18, 2008

The Pelosi GTxi SS/Rt Sport Edition from Congressional Motors.

I received this as an email and I traced it down to IowaHawk.

It's in the way you dress. The way
you boogie down. The way you sign
your unemployment check. You're a
man who likes to do things your
own way. And on those special
odd-numbered Saturdays when
driving is permitted, you want it in
your car. It's that special feeling of a
zero-emissions wind at your back
and a road ahead meandering with
possibilities. The kind of feeling you
get behind the wheel of the Pelosi
GTxi SS/Rt Sport Edition from
Congressional Motors.

Good stuff. Go here to see the whole thing.

Bush as Bankrupt as GM

By Jed Babbin

President Bush is now as bankrupt politically as GM is financially. He spent the last week lobbying Senate Republicans to bail out GM, Chrysler and Ford and succeeded only in alienating the people he needed most.

A RINO vs. El Rushbo

By A.W.R. Hawkins

Since the presidential election, former Secretary of State Colin Powell has not been making rounds on Sunday morning talk shows with the frequency he did when supporting Barack Obama for president. But last Sunday, he popped up on CNN to criticize Rush Limbaugh for misleading, if not destroying, the Republican Party.

Powell tried to make the rejection of Limbaugh the path Republicans need to take to win elections again. Thus he asked rhetorically, “Can we continue to listen to Rush Limbaugh?”

Of Limbaugh’s supposed influence on the Republican Party, Powell said: “Is this really the kind of party that we want to be when these kinds of spokespersons seem to appeal to our lesser instincts rather than our better instincts?" This is the language of an elitist, or what Limbaugh calls a “Washingtonian.”  Continued

Paul Weyrich : Procedural Uncertainty in the Minnesota Senatorial Election
I am worried that the Minnesota United States Senate race in effect will be run by the United States Senate. When one has been around as long as I have, one has seen things that seem familiar. In the 1974 New Hampshire election in, one of the State's two Congressmen, Louis C. Wyman, ran for the Senate. On election night Wyman won by 355 votes but his opponent demanded a recount. After all the disputed ballots were counted, Wyman's opponent, John Durkin, was certified the winner of the Senate seat by ten votes. After another recount Wyman won by two votes. Durkin appealed to the United States Senate, which, under Article I, Section 5, of the Constitution, is the final arbiter of such disputes. The Senate Leadership declared the seat vacant. They told Governor Meldrim R. Thomson, Jr. to appoint an interim Senator. He brought back retired Senator Norris Cotton, paving the way for another Wyman-Durkin race. On August 8, 1975 a special election was held, which Durkin won. He served in the Senate until 1980.

The same scenario may happen in the Minnesota Senate race. Al Franken has lost the recount. He may well lose..... [CONTINUE]

Brent Bozell III : What Democrat Scandal?
In October 2006, the national media projected Rep. Mark Foley's online sex chats with House pages into a disaster that would swallow the Grand Old Party whole. CBS, for example, proclaimed it the "congressional equivalent of Katrina." In 2008, when federal investigators found Illinois Gov. Rod Blagojevich trying to put Barack Obama's Senate seat on the auction block, these same "news" gatherers found a storm, to be sure, but a storm they suggested would in short order be "pushed out to sea."

With the governor caught on tape unloading obscenity....


Dick Morris and Eileen McGann:
United States, Israel on Collision Course

With the election of Obama, the United States has moved dramatically to the left in its foreign policy at just the time that Israel, which seems likely to return Bibi Netanyahu to office in early February, is moving to the right. A collision is almost inevitable.

Caroline Glick, the highly astute conservative columnist for the Jerusalem Post, writes that the "international community" believes that Obama "will move quickly to.....


Ben Shapiro : Why Atheism Is Morally Bankrupt
If you walk around Washington, D.C., on a regular basis, youre likely to see some rather peculiar posters. But you wont see any more peculiar than the ads put out by the American Humanist Association. Why believe in a god? Just be good for goodness sake, say the signs, in Christmas-colored red and green.

Sounds great, doesnt it? Just be good for goodness sake. You dont need some....


George Will : A "Car Czar" - Silliness on Stilts
DEARBORN, Mich. -- Designed by architects from Skidmore, Owings and Merrill, the Chicago firm that created many icons of postwar modernism, Ford's headquarters building has the sleek glass-and-steel minimalism that characterized up-to-date architecture in the 1950s, when America was at the wheel of the world and even buildings seemed streamlined for speed. Ford's building opened in 1956, a peak of American confidence -- one year before Sputnik shook Americans' faith in their technological supremacy and the Edsel shook their faith in the acumen of corporate America grown slothful from complacency.

Today the building is home to high anxiety. Yet CEO Alan ....



"Since private and publick Vices, are in Reality, though not always apparently, so nearly connected, of how much Importance, how necessary is it, that the utmost Pains be taken by the Publick, to have the Principles of Virtue early inculcated on the Minds even of children, and the moral Sense kept alive, and that the wise institutions of our Ancestors for these great Purposes be encouraged by the Government. For no people will tamely surrender their Liberties, nor can any be easily subdued, when knowledge is diffusd and Virtue is preservd. On the Contrary, when People are universally ignorant, and debauchd in their Manners, they will sink under their own weight without the Aid of foreign Invaders."

--Samuel Adams, in a letter, 4 November 1775

The Presidential Inaugural: Challenges and the Home Field Advantage

By Fred Burton and Scott Stewart
Security Weekly

In a little more than a month, Washington will host the 56th U.S. presidential inauguration, during which Barack Obama will be sworn in as the 44th president of the United States. In recent years, presidential inaugurals have turned into huge gala events. They comprise not only the swearing-in ceremony for the new president and vice president at the Capitol building and the historic parade down Pennsylvania Avenue to the White House, but also scores of other events including balls, dinners, prayer services and charity events sponsored by a wide array of organizations. Essentially, there will not be a hotel or other large venue in the U.S. capital that will not be hosting some sort of inauguration-related event. These events will range in style from the somber national prayer service at the Washington National Cathedral to the raucous live-on-MTV party at the Ronald Reagan Building & International Trade Center.

Due to the popularity of President-elect Obama and the significance of his election as the first African-American president, the Secret Service (USSS) and other authorities are anticipating the largest crowds in inaugural history. These crowds will present a number of security challenges and, perhaps just as significantly, huge logistical challenges. But unlike the presidential campaign, when the security resources of the USSS were scattered nationwide, the inauguration occurs on the USSS’ home turf. This provides the USSS with a decided advantage over anyone planning an attack.

The Environment and Events

Since the 9/11 attacks, security measures for high-profile events such as the inauguration have been stepped up dramatically. The Department of Homeland Security (DHS) has announced that it has designated the 56th Presidential Inaugural — including the swearing-in ceremony, the inaugural parade, the official reviewing stand on Pennsylvania Avenue and the inaugural balls — as a National Special Security Event (NSSE). This makes the Secret Service the top agency responsible for the design and implementation of the inauguration security plan. (Planning for the inauguration in fact begins about a year before the event, with the USSS hosting regular planning meetings with its counterparts.) The NSSE designation also places virtually unlimited resources in the hands of the USSS, the police and the security services that will be assisting it to neutralize any potential threat. From a security and intelligence perspective, the inauguration will take precedence over any thing else happening in the country.

The events leading up to the inauguration normally begin several days in advance. This year, in a move invoking memories of the election of another man from Illinois, Abraham Lincoln, president-elect Obama will travel to Washington by train. Obama will hold an event Jan. 17 in Philadelphia. Next, he will travel by train to Wilmington, Delaware, where he will pick up Vice President-elect Joe Biden. The two will then hold another event in Baltimore before finally proceeding to Washington’s Union Station.

The analogy to Lincoln’s historic election is picked up on the Joint Congressional Committee on Inaugural Ceremonies, which has a large photo of the Lincoln Memorial statue on its home page, http://inaugural.senate.gov/. More sobering is the fact that the parallels with Lincoln’s trip run deeper than they might appear from a security perspective. Numerous rumors of assassination plots followed Lincoln’s election, and his train trip to Washington had to be heavily guarded.

As we approach the inaugural, many rumors of threats to president-elect Obama are swirling. The president-elect received USSS protection at the earliest point in his campaign of any candidate in U.S. history, and during the final stages of the campaign, the perceived threat led the USSS to provide him with essentially the same level of security given to sitting presidents — another unprecedented measure. As with Lincoln’s historic train journey, the security for Obama’s train trip to Washington will be extremely tight. It undoubtedly will involve a massive operation to freeze, inspect and then post guards along the rail line, bridges and tunnels to prevent any potential attacks. This will mean a lot of cold hours for the agents and police officers assigned to guard the rail line.

The events of Inauguration Day, Jan. 20, will be fairly controlled for the first part of the day. The president-elect traditionally attends a morning worship service. Both Bush presidents and Ronald Reagan attended a service at St. John’s Episcopal Church, which sits on Lafayette Square near Blair House and the White House. Bill Clinton chose to attend worship services at Washington’s Metropolitan African Methodist Episcopal Church on the mornings of his two inaugurations.

After the morning worship service, the president-elect and vice president-elect will proceed to the U.S. Capitol for the swearing-in ceremony; the vice president will be sworn in first. After taking the oath of office, the newly sworn-in president will deliver his inaugural address. Following the address, the outgoing president will make his ceremonial departure from Washington, and the new president will attend the inaugural luncheon in the National Statuary Hall at the Capitol. After the luncheon, the new president and his entourage will proceed down Pennsylvania Avenue from the Capitol to the White House, where he will review the inaugural parade from the presidential reviewing stand.

After the parade, the inaugural schedule will become much more chaotic. The president, vice president and their wives typically make appearances at a number of the inaugural balls, many of which traditionally run well past midnight.

The Challenges

In addition to the security issues presented by Obama’s train trip to Washington, there are a number of other factors that will challenge the USSS and supporting agencies. The first is the size of the crowd expected to attend the inauguration. Normally, hundreds of thousands of people attend the inauguration and line the parade route. But as noted previously, the number of attendees this year might surpass prior records due to the historic nature of Obama’s election. This means there will be more people than ever to screen for weapons. Because of the normal January weather in Washington, people will be wearing heavy winter coats, further complicating screening procedures. The large number of attendees also means the Metro will carry a far higher volume of people than normal.

Crowd control is difficult, even when the crowd is adoring and not hostile. And the bigger the crowd, the harder it is to control. Fortunately, in the case of the inauguration, the U.S. Capitol Police, U.S. Park Police and Washington’s Metropolitan Police Department have extensive experience in crowd control — not only from past inaugurals, but also from working countless other mass rallies and protests in the District of Columbia. With their experience and resources, they should be able to keep the crowds in line. It can be anticipated, however, that those attending the inaugural events might have to wait for prolonged periods at screening points before being allowed access to the bleachers, parade route, reviewing stands or inaugural ball sites.

With dozens of inaugural balls taking place at once, the number of venues involved also will pose a security problem. The USSS agents in charge of security of these events not only will have to craft detailed security plans for the facilities and any VIP attendees, they also will have to consider the human factor. They will have to conduct name checks on thousands of cooks, waiters, caterers and other venue employees in addition to the thousands of people actually invited to attend the functions. Of course, some sites will be more heavily guarded than others, depending on their location and who will be attending.

Another security challenge associated with crowds occurs when a protectee approaches the crowd to shake hands. As long as the protectee stays in his fully armored vehicle, he is relatively safe from most threats. But once he steps out of the vehicle to greet the crowd — as new presidents are wont to do for at least a part of the inaugural parade route — he immediately becomes far more vulnerable. Most protection agents really dislike working the crowd because danger can lurk there. The compact nature of a crowd makes it very difficult for agents to see bulges and bumps that can indicate that a person is armed — and this is amplified when the crowd is wearing bulky winter clothing. Moreover, the sheer number of people makes it difficult for agents to spot individuals behaving abnormally. That said, the USSS spends a great deal of time and effort training its special agents to work the crowd. They are the best in the world at it, but that does not mean it is an easy task or one the agents enjoy.

Another significant issue is coordination. A large number of important people with their own security details will attend the inauguration. This will apply not only to incoming Cabinet secretaries and senior military officers, but also to governors, the diplomatic corps, visiting foreign dignitaries, high-profile corporate leaders, celebrities and other high-net-worth individuals. The USSS must identify, vet and keep track of each of these protective details to avoid any incidents. Such an incident occurred in 1989, when the inaugural parade was delayed after a USSS countersniper team noticed an armed man inside a room at the Willard Hotel overlooking the parade route. The armed man was later identified as an agent from another government agency working a protective detail, but the USSS did not want to begin the parade until he had been identified. That 1989 incident resulted in an increased effort to coordinate and share information regarding the locations of protective d etails. These coordination efforts also include issuing identification to security personnel, placards for motorcade vehicles and providing screening points where motorcades can enter the secure perimeter.

There’s No Place Like Home

While there are challenges associated with managing huge crowds at a number of venues, the inauguration occurs squarely in the USSS’ home turf. Not only do many of the supervisory special agents have experience working past inaugurations, but even many of the street-level agents have an intimate knowledge of the area and the various sites. For example, the USSS has provided protection at Union Station thousands of times, and the site agent responsible for security there probably has worked dozens or even hundreds of events there. The USSS thus has a big leg up given that past experience, and based on its intimate knowledge of the facility, its agents know all the entrances, exits, nooks and crannies.

This superior area knowledge extends beyond the detail agents. Specialized support teams such as countersniper, explosive ordnance disposal (EOD), hazardous materials and counterassault also know the sites well and have operated at them for years. They have plans for inaugural events that have been adapted and honed over many election cycles. They know precisely where to stage, sweep and secure. Undoubtedly, the countersniper teams will use the same vantage points they have long used, and the access control magnetometers also will be set up in their usual locations.

Security people like working in places they know intimately. This not only provides them with superior knowledge of the physical area, but it also gives them a baseline understanding of the human dynamics of the area. They have a good idea of who belongs there, what types of activities are normal and what is out of place. While at times this familiarity can serve to breed a sense of complacency, given the threats and perceived threats to Obama, the USSS special agents, uniformed officers and their counterparts from other agencies will undoubtedly be very alert this year.

Furthermore, even in non-inaugural times, the area along the parade route is one of the most heavily policed areas in the country. Consider that the parade starts at the U.S. Capitol, and in a few short blocks passes by heavily guarded facilities such as the National Archives, the Department of Justice, the FBI Headquarters, the Department of Commerce and the U.S. Treasury before reaching the White House. This normally high level of security would make it difficult for an attacker to place a device prior to the inauguration, and it also would complicate efforts to conduct preoperational surveillance.

The airspace over Washington is already carefully restricted. It will therefore not be terribly difficult for the USSS to work with the Federal Aviation Administration and the military to exercise even more control of the airspace over the event, and for them to have aircraft on station to enforce such restrictions.

Soft Targets

Our forecast, then, is that as with the last inauguration, the home-turf advantage will allow the USSS to erect a very significant wall of security around the main inaugural events. Therefore, potential attackers will have a much greater chance for success by concentrating on other, less secure targets — what we refer to as soft targets.

These soft targets could include crowds at Metro stations or on trains on Inauguration Day. While we anticipate a greatly increased police and EOD canine presence at Metro stations that day, such resources are nonetheless limited, and security personnel can only watch, question or screen a finite number of people at any one time. Thus, a huge influx of passengers will likely overwhelm the capacity of even an increased police presence in the Metro system.

Other potential soft targets are crowds outside of secure areas or the lines of people waiting to pass through metal detectors. There have been many examples of such queues and crowds being attacked in places like Iraq and Afghanistan.

Perhaps one of the greatest threats exists at some of the lower-profile inauguration-related events in Washington, and even in the Maryland or Virginia suburbs. Such events will not have the same level of security afforded to the big inaugural parties. This could cause them to be viewed as attractive soft targets, especially as they are being held in the Greater Washington area and are related to the inauguration.

Tuesday, December 16, 2008

Grand Jury Investigates Richardson Contributor
A federal grand jury is investigating whether a financial firm improperly won more than $1.4 million in work for the state of New Mexico shortly after making contributions to political action committees of Gov. Bill Richardson (D).

The probe focuses on whether the governor's office urged a state agency to hire CDR Financial Products. The probe is in a highly active stage at a time when President-elect Barack Obama has chosen Richardson as his nominee for secretary of commerce, according to two sources familiar with the investigation. [continue]

American Kidnapping Negotiator Abducted in Mexico

Gunmen Abducted American Last Week
MEXICO CITY, Dec. 15 -- An American anti-kidnapping negotiator, whose company says he has resolved almost 100 kidnapping cases in Latin America, was abducted by gunmen last week -- while meeting with Mexican business executives and their bodyguards to discuss ways to thwart such crimes.

The abduction of Felix Batista was bold and chilling, and the report of his disappearance, which hit the news media here Monday morning, had Mexicans wondering whether anyone was safe.  [continue]

Zimbabwe Crisis Deepens, But South Africa Still Blocking Security Council Action

(CNSNews.com) – Any U.N. Security Council action on Zimbabwe may have to wait until South Africa, Zimbabwe’s neighbor and longstanding defender of President Robert Mugabe’s government, relinquishes its council seat at the end of the year. Amid mounting pressure from the U.S. and elsewhere on Mugabe to stand down, Harare continues to look to its allies to block meaningful U.N. action.  [continue]

Hey .. I have an idea.....

Why don't we just have the government take possession of our children as newborns - right at the hospital. No muss, no fuss.

Teacher’s Union Chief Pushes Preschool for Three-Year-Olds
(CNSNews.com) – Children as young as three years old should be in public pre-school programs, according to Randi Weingarten, president of the American Federation of Teachers. When asked if she thought that children that age would be better off at school than at home, Weingarten said: “Look, I think that when kids have great home situations, that is the best thing that can happen to them.” But some children, she said, don’t have good home situations.

Down the Road to Socialism

By Brian Darling

Congress and the White House are racing toward a deal on a $15 billion bridge loan to the “Big Three” automakers: General Motors, Chrysler and Ford. Talk about a lemon.

The “Auto Industry Financing and Restructuring Act” would effectively reward three failing companies with billions of your dollars and further nationalize private enterprise. Taxpayers should be outraged at the prospect of yet another unpopular bailout -- one that will undermine America’s free enterprise system.

[continue reading]

Autoworkers and Taxpayers Deserve Better than Washington's Flawed Bailout

By John Boehner
Washington has been abuzz lately with debate over possible federal action to save the American auto industry from financial collapse. American autoworkers and taxpayers deserve better than a taxpayer-funded bailout of the auto industry that simply guarantees failure. They deserve a plan that removes barriers and gives the industry a chance to be competitive again. I and some of my colleagues recently put forth a plan that would do this.

I opposed the recent bailout plan put forth by the Democrats who control Congress because I believe it is... [continue reading]

Minorities Should Express Shame, Not Only Pride

By Dennis Prager
Gay Pride. Jewish Pride. Black pride. Hispanic Pride.


Ethnic pride. Minority rights vs. tyranny of the majority.

For a generation, America has been awash in the celebration of minorities and minorities celebration of themselves. Just recall Black is Beautiful or I am a woman, I am invincible.

At the same time, the majority group in America -- white Christians -- has been allowed to celebrate very little. Rather, they have constantly been reminded of what they should be ashamed of -- their racism, sexism, homophobia, patriarchy, and xenophobia -- real and alleged.

But what about minority shame? [continue reading]

Monday, December 15, 2008

Falling Fortunes, Rising Hopes and the Price of Oil

By Peter Zeihan
Geopolitical Weekly

Oil prices have now dipped — albeit only briefly — below US$40 a barrel, a precipitous plunge from their highs of more than US$147 a barrel in July. Just as high oil prices reworked the international economic order, low oil prices are now doing the same. Such a sudden onset of low prices impacts the international system just as severely as recent record highs.

But before we dive into the short-term (that is, up to 12 months) impact of the new price environment, we must state our position in the oil price debate. We have long been perplexed about the onward and upward movement of the oil markets from 2005 to 2008. Certainly, global demand was strong, but a variety of factors such as production figures and growing inventories of crude oil seemed to argue against ever-increasing prices. Some of our friends pointed to the complex world of derivatives and futures trading, which they said had created artificial demand. That may well have been true, but the bottom line is that, based on the fundamentals, the oil numbers did not make a great deal of sense.

Things have clarified a great deal of late. We are now facing an environment in which the United States, Europe and Japan are in recession, while China is, at the very least, expecting to see its growth slow greatly. Demand for crude the world over is sliding sharply even as the Organization of the Petroleum Exporting Countries (OPEC) member states so far seem unable (or, in the case of Saudi Arabia, perhaps unwilling) to make the necessary deep cuts in output that might halt the price slide. The bottom line is that, while the breathtaking speed at which prices have collapsed has caught us somewhat by surprise, the direction and the depth of the plunge has not.

Prices are likely to remain low for some time. Most of the world’s storage facilities — such as the U.S. Strategic Petroleum Reserve — are full to the brim, so large cuts are needed simply to prevent massive oversupply. Yet any OPEC production cuts — the cartel meets Dec. 17 and deep cuts are expected — will take months to have a demonstrable impact, especially in a recessionary environment. And there is the simple issue of scale. The global oil market is a beast: Total demand at present is about 86 million barrels per day. This is not a market that can turn on a dime. A firm fact that flies in the face of conventional wisdom is that oil actually falls far faster than it rises when the fundamentals are out of whack. This has happened on multiple occasions, and not that long ago.

Falls occurred both in the aftermath of the 1990-1991 Persian Gulf War and as a result of the 1997-1998 Asian financial crises that were similar in percentage terms to the present drop. Until the balance between supply and demand is restruck — something not likely until a global economic recovery is well under way — there is no reason to expect a significant price recovery. The journey, of course, is not necessarily a one-way trip. Quirks in everything from weather to shipping to Nigerian riots and Russian military movements can set prices gyrating, but the fundamentals are clearly bearish. It will most likely take several months for the core features of the new reality to change much at all.

Low oil prices create both winners and losers on the international scene. First, the winners’ list.

Far and away the biggest winner from drastically lower prices is the world’s largest consumer and importer of oil: the United States. The last two years of high prices have spawned a sustained American consumer effort to get by with less oil via a mix of conservation and a shift to better-mileage vehicles. Whether this purchase pattern in automobiles lasts is not at issue. The point is that it has already happened: Many Americans have already shifted to more fuel-efficient vehicles. Just as the 1990s obsession with sport utility vehicles artificially boosted American gasoline demand so long as those automobiles were on the road, so the new fleet of hybrids and smart cars will push demand in the opposite direction for a sustained period.

Overall U.S. oil consumption has plummeted by nearly 9 percent from its peak in August 2007 to November 2008, according to the U.S. Department of Energy. Combining this with the drop in prices since July translates into U.S. energy savings of approximately US$1.95 billion at a price of US$50 a barrel and US$2.1 billion at a price of US$40 a barrel. And that is daily cost savings. In recessionary times, that cash will go a long way to building confidence and stanching the recession.

Next on the list are the major European importers of crude: Germany, Italy and Spain. As a rule, European economies are less energy-intensive than the United States, but by dint of fuel mix and lack of domestic production these three major states are forced to rely on substantial amounts of imported oil. We exclude the other major European economies from this list as they are either major oil producers themselves (the United Kingdom and the Netherlands) or their economies are extremely oil efficient (France, Belgium and Sweden). Don’t get us wrong — the EU states are all quite pleased that oil prices have dialed back. Nevertheless, in terms of relative gain, Germany, Italy and Spain are the real winners. And with Europe facing a recession much deeper and likely longer than that in the United States, the Europeans need every advantage they can get.

India, far removed from Europe culturally and geographically, sports a somewhat similar economic structure in that it boasts (or suffers from, based on your perspective) an industrializing base that is highly dependent on oil imports. Broadly, the Indians are in the same basket as Spain in that they are voracious energy consumers who have seen their demand skyrocket in recent years. Between the Nov. 26 Mumbai attack, upcoming federal elections and the energy price pain from earlier in the year, the government is desperate to pass on the cost savings to the population to shore up its support.

Then there are the East Asian states of South Korea, China and Japan (listed in descending order of how much each one benefits from the price drop). All import massive amounts of crude oil, but we put them at the end of the list of winners because of their financial systems. In East Asia — and particularly in China and Japan — money is not allocated on the basis of rate of return or profitability as it is in the West. Instead, the concern is maximizing employment. It does not matter much in East Asia if one’s business plan is sound; the government will provide cheap loans so long one employs hordes of people. One side effect of this strategy is that firms can get loans for anything, including raw materials they otherwise could not afford — such as oil at US$147 a barrel.

Therefore, high oil prices just do not affect East Asia as badly as they affect the West. Just as the East Asian financial system mutes the impact of high prices, the converse is true as well. In the West, energy consumers are not shielded from high prices, so lower prices immediately translate into more purchasing power, and thus more economic activity. Not so in East Asia, where the same financial shielding that blunts the impact of high prices lessens the benefits of low prices.

The order in which we listed the three Asian giants relates to how much progress they have made in reforming their financial practices. South Korea’s financial system is much closer to the Western model than the Asian model: South Korea hurts more as prices rise, and so will be more relieved as prices fall. China is in the middle in terms of financial practices, but it is also attempting to unwind its system of energy price-fixing as oil costs drop; due to subsidies being reduced, Chinese consumers actually may not be seeing much of a change in retail prices. Finally, Japan will benefit the least because its system is already highly efficient compared to the other two, so the price impact was less in the first place. One barrel of oil consumed in Japan generates approximately US$2,610 of Japanese gross domestic product (GDP), while the comparative figures for Korea and China are US$1,270 and US$1,130 respectively.

In short, the heavily industrialized Asians still benefit, but the impact isn’t as much as one might think at first glance. In fact, the biggest benefit to these states from cheaper energy is indirect — lower prices spur consumption in the West, and then the West purchases more Asian products.

And now, the losers.

Venezuela and Iran top this list by far. Both are led by politicians who have lavished vast amounts of oil income on their populations to secure their respective political positions. But that public approval has come at its own price in terms of economic dislocation (why diversify the economy if strong oil prices bring in loads of cash?), low employment (the energy sector may be capital-intensive, but it certainly is not labor-intensive), and high inflation (high government spending has led to massive consumption and spurred rampant import of foreign goods to satiate that demand).

Of the two states, Venezuela is certainly in the worse position. By some estimates, Venezuela requires oil prices in the vicinity of US$120 a barrel to maintain the social spending to which its population has become accustomed. Iran’s number may be only somewhat lower, but President Mahmoud Ahmadinejad is in the process of at least beginning to bow to economic reality. On Dec. 5, he announced massive cuts in subsidy outlays with the intent of reforging the budget based on a price of only US$30 a barrel.

It is an open question whether the Iranian government — and especially the increasingly unpopular Ahmadinejad — can survive such cuts (if they are indeed made), but at least there is a public realization of the depth of the crisis at the top level of government. In Venezuela, by contrast, the mitigation process has barely begun, and for political reasons it cannot truly be implemented until after a referendum in early 2009 on term limits that could allow Chavez to run for president indefinitely.

Next is Nigeria. In terms of seeing an increase in human misery, Nigeria should probably be at the top of the losers’ list. But the harsh reality is that Nigerians are used to corrupt government, inadequate infrastructure, spotty power supply and all-around poor conditions. Some of the perks of high energy prices undoubtedly will disappear, but none of those perks succeeded in changing Nigeria in the first place.

The real impact on Nigeria will be that the government will have drastically less money available to grease the political wheels that allow it to keep competing regional and personal interests in check. Those funds have been particularly crucial for funneling cash to the country’s oil-rich Niger Delta region, giving local bosses reason not to hire and/or arm militant groups like the Movement for the Emancipation of the Niger Delta to attack oil and natural gas sites. With Abuja having less cash, the oil regions will see a surge in extortion, kidnapping and oil bunkering (i.e., theft). We already have seen attacks ramp up against the country’s natural gas industry: Within the last few days, attacks against supply points have forced operators to take the Bonny Island liquefied natural gas export facility offline. And since Nigeria’s militants never really differentiate between the country’s various forms of energy export, oil disruptions are probably just around the corner.

Russia is also in the crosshairs, but not nearly to the same degree as Venezuela, Iran and Nigeria. Russia has four things going for it that the others lack. First, it exports massive amounts of natural gas and metals, giving it additional income streams. (Venezuela and Iran actually import natural gas and have no real alternative to oil income.) Second, Russia never spent its money on its population. Thus, Russians have not become used to massive government support, so there will be no sharp cuts in public spending that will be missed by the populace. Third, Russia has saved nearly every nickel it made in the past eight years, giving it cash reserves worth some US$750 billion. The financial crisis is hitting Russia hard, so at least US$200 billion of that buffer already has been spent, but Russia still remains in a far better position than m ost oil exporters. Fourth and last, the Russians can rely on Deputy Prime Minister and Finance Minister Alexei Kudrin to (somewhat forcefully) keep the books firmly in balance. At his insistence, the government is in the process of refabricating its three-year budget on the basis of oil prices of below US$35 a barrel, down from the original estimate of US$95.

At the end of the losers’ list we have two states that most people would not think of: Mexico and Canada. Both have other sources of economic activity. Canada is a modern service-based economy with a heavy presence of many commodity industries, while Mexico has become a major manufacturing hub. But both are major oil exporters, and have been leading suppliers to the American economy for decades. So both are exposed, but their concerns are more about unforeseen complications rather than the “simple” quantitative impact of lower prices.

Mexico has purchased derivatives contracts that, in essence, insure the price of all its oil exports for 2009. So should prices remain low, Mexico’s actual income will be unchanged. We only include Mexico on the list of losers, therefore, because it’s quite rare in geopolitics that such planning actually works out as planned. Hurricanes and strikes happen. (Mexico also faces the problem of insufficient funds, expertise and technology to counter rapidly declining output, something that will leave it with a lack of oil to sell in the first place — but that is an issue more for 2012 than 2009.)

As for Canada, most of the oil it produces comes from Alberta province, the seat of power of the ruling Conservative Party. Right now, the Canadian government is wobbling like a slowing top. Seeing the Conservatives’ power base take a massive economic hit due to oil prices is not the sort of complication the government needs right now. In the longer term, Alberta recently increased taxes on oil sands projects. Oil sands extraction is among the more capital-intensive and technologically challenging sorts of oil production currently possible. Combine the tax changes with the nature of the subindustry and the recent price drops and there is likely to be precious little investment interest in oil during — at a minimum — 2009.

Most readers will take note of the countries we have chosen not to include on the list of vulnerable states. These include the bulk of the OPEC states — specifically Angola, Iraq, Kuwait, Saudi Arabia, the United Arab Emirates, Qatar and Libya. All of these states count oil as their only meaningful export (except the United Arab Emirates and Qatar, which also export natural gas), so why do we feel such countries are not in the danger zone?

For its part, Angola only became a major producer recently. Nearly all of Angolan oil output is from offshore projects controlled by foreigners — shutting in such production is a very tricky affair for a country that is utterly reliant on foreign technology to operate its only meaningful industry. But the primary reason Angola is not feeling the heat is that most of its income has not been spent but instead has been stashed away due to a lack of the necessary physical and personnel infrastructure needed to leverage the income.

Iraq is in a somewhat similar position as far as finances are concerned. While Iraq has been producing crude for decades, its current government is only a few years old, and its institutions simply cannot allocate the monies involved. Despite massive outlays by both Iraq and Angola, their respective governments simply lack the capacity to spend, and so have stored up cash accounts worth US$26 billion and US$54 billion respectively.

The rest of the Arab oil producers warrant a much simpler explanation: They’ve been fiscally conservative. While all have shared the wealth with their somewhat restive populations, none of them has repeated the mistakes of the 1970s, when they overspent on gaudy buildings and overcommitted themselves to expensive social programs. All have been saving vast amounts of cash, with the Saudis alone probably having more than US$1 trillion socked away. Tiny Kuwait officially has a wealth fund worth more than US$250 billion.

So while none of the Arab oil states are particularly thrilled with the direction — and in particular the speed — oil prices have gone, none of these governments faces a mortal danger at this time. What they are now missing is the ability to make a substantial impact on the world around them. At oil’s height the Gulf Arab oil producers were taking in US$2 billion a day in revenues — far more cash than they could ever hope to metabolize themselves. Bribes are powerful tools of foreign policy, and their income allowed them — particularly Saudi Arabia — to wield outsized influence in Iraq, Syria, Lebanon, and even in Beijing, London and Washington. So while none of these states faces a meltdown from falling prices, there are certainly some hangovers in store for them. It is just that they are more political than economic in nature, at least for now.

Related article:

The Depression -- let's call it what it is -- leaves us, well, depressed. But there is very good news from around the world. Our enemies are collapsing under the strain of dropping oil and gas prices. What we had all hoped conservation and off-shore drilling would achieve, the global economic collapse is accomplishing: the defeat of OPEC, Iran, Chavez, Putin and the weakening of the financial underpinnings of Islamist terrorism. In each of these nations, the hold of the dictator is weakening as, one after the other, they face the consequences of dropping oil prices.

Can Inflation and Deflation Coexist?, Part I

By Robert Ringer

Another one of those dimwitted financial experts recently popped up on CNN and said that she believed the economy would start "turning around" by the end of the first quarter of 2009. She offered four reasons:

1. Banks are now lending to each other. (So?)

2. Government programs are working. (They are?)

3. Consumer confidence will rise. (It will?)

4. The housing market is ready to revive. (It is?)

I've gotten so used to this kind of gibberish from TV-created experts that her inane opinion did little more than cause me to shake my head and smile condescendingly. It was right up there with O'Reilly saying that the media is hurting the economy by scaring people. Sure, Bill. Maybe we should put a cap on scare mongering right along with gas prices.

Sorry, Ms. CNN Financial Expert, but the end to our financial woes is nowhere in sight. What we do not know with certainty, however, is when and how the end will come - and whether it will be a result of inflation or deflation.

Please Click Here to read the rest of Robert Ringer's current article, "Can Inflation and Deflation Coexist?, Part I."


"Anyone who relies solely on MSM outlets ... may not even know that Obama has, to this day, not authorized the state of Hawaii to release his Certificate of Live Birth -- the 'long form' -- to prove that he is a 'natural born citizen' (NBC), a Constitutional requirement of all presidents. Instead, We, the People, have online access to an Obama document known as a Certification of Live Birth, which, as Randall Hoven explains at American Thinker blog, is a computer-generated short form that is not even accepted by the Hawaii Department of Home Lands as adequate verification of Hawaiian identity. ... Further dimming the online document's Holy Grail aspects, it has been altered -- the certificate's number has been redacted -- which, according to a statement printed on the document, actually invalidates it. But that's not all. Back on Oct. 31, Hawaii's director of health, along with the registrar of Vital Statistics, released a statement verifying that the Hawaii's Department of Health has Obama's 'original birth certificate on record in accordance with state policies and procedures.' Well, that's just great. But no matter how many times this statement from 'Hawaiian authorities' is cited as the NBC clincher, it doesn't prove a thing. It turns out, as Hoven reports, that Hawaii issues birth certificates even for babies born elsewhere, so simply having an original Hawaiian birth certificate 'on record' doesn't answer the key questions. Namely: What exactly does this original birth certificate say? And why doesn't Obama simply authorize the document's release and be done with the question? ... I think it is nothing less than good citizenship to seek to verify that Obama is a 'natural born citizen' since our elites, which include the major political parties and the MSM, failed to bring the matter to its extremely simple resolution long ago. But while important, this isn't just a story about whether we as Americans are right or wrong to ask our president-elect the question about his original birth certificate. It is about whether our president-elect is right or wrong not to answer it." --columnist Diana West

Let the American Dream Work Again

By Terry Paulson:

While our "Republican" President and the Democrats work to figure out how to bailout and nationalize more troubled corporations, citizens need to send them a message.

A Legal System Only a Mother Could Love

By Burt Prelutsky:

I think I understand the reason why so many politicians are reluctant to take a tough stand against the illegal aliens pouring in from Mexico. [continue]

Why did the chicken cross the road?

An even handed joke that both sides of the aisle should be able to find humor in:

BARACK OBAMA: The chicken crossed the road because it was time for a change! The chicken wanted change!

JOHN MC CAIN: My friends, that chicken crossed the road because he recognized the need to engage in cooperation and dialog with all the chickens on the other side of the road...ZZZZZzzzzzzzzz


HILLARY CLINTON: When I was First Lady, I personally helped that little chicken to cross the road. This experience makes me uniquely qualified to ensure right from Day One that every chicken in this country gets the chance it deserves to cross the road. But then, this really isn't about me.

GEORGE W. BUSH: We don't really care why the chicken crossed the road. We just want to know if the chicken is on our side of the road, or not. The chicken is either against us, or for us. There is no middle ground here.

DICK CHENEY: Where's my gun?

COLIN POWELL: Now to the left of the screen, you can
clearly see the satellite imag e of the chicken crossing the road.

BILL CLINTON: I did not cross the road with that
chick. What is your definition of crossing?

AL GORE: I invented the chicken.

JOHN KERRY: Although I voted to let the chicken cross
the road, I am now against it! It was the wrong road to cross, and I was misled about the chicken's intentions. I am not for it now, and will remain against it.

ANDERSON COOPER, CNN: We have reason to believe there is a chicken, but we have not yet been allowed to have access to the other side of the road.

PAT BUCHANAN: To steal the job of a decent, hardworking American.

MA R THA STEWART: No one called me to warn me which way that chicken was going. I had a standing order at the Farmers Market to sell my eggs when the price dropped to a certain level. No little bird gave me any insider information.

DR SEUSS: Did the chicken cross the road? Did he cross
it with a toad? Yes, the chicken crossed the road, but why it crossed I've not been told.

ERNEST HEMINGWAY: To die in the rain, alone.

JERRY FALWELL: Because the chicken was gay! Can't
you people see the plain truth? That's why they call it the other side. Yes, my friends, that chicken is gay. And if you eat that chicken, you will become gay, too. I say we boycott all chickens until we sort out this abomination that the liberal media whitewashes with seemingly harmless phrases like "the other side." That chicken should not be crossing the road. It's as plain and as simple as that .

GRANDPA: In my day we didn't ask why the chicken
crossed the road. Somebody told us the chicken crossed the road, and that was good enough.

ARISTOTLE: It is the nature of chickens to cross the road.

JOHN LENNON: Imagine all the chickens in the world
crossing roads together, in peace.

BILL GATES: I have just released eChicken2008, which
will not only cross roads, but will lay eggs, file your import and documents, and balance your checkbook. Internet Explorer is an integral part of Chicken2008. This new platform is much more stable and will never crash.

ALBERT EINSTEIN: Did the chicken really cross the road, or did the road move beneath the chicken?

COLONEL SANDERS: Did I miss one?