LFTC - Letter From The Capitol

LFTC - Index 6/5/09

6 posts: (1) Obama's Cairo Speech: Reviewing the Text + Second Thoughts--Wobble Watch; (2) Let RIPSAW Rip!--The Home Front; (3) Big Apple Imploding--The Ap & the Cap; (4) Economy: Explosions & Implosions--"It's the Earth Stupid!"; (5) Obama-Merkel Realities--Wobble Watch; (6) Geography & Economic Destiny--"It's the Earth Stupid!"

LFTC - Obama's Cairo Speech: Reviewing the Text + Second Thoughts

Here is the full text of President 44's June 4, 2009 Cairo speech.  My review of the written text of 44's Cairo address leads me to add to yesterday's instant reaction posted on LFTC.

In all, his speech listed seven West-Islam issues: (1) violent extremism; (2) Israel-Palestinians; (3) nuclear weapons; (4) democracy; (5) women's rights; (7) economic development & opportunity.

Omitted from the printed text is 44's comment during his speech--which I vividly recall hearing--that the fact of the Holocaust is not opinion, cannot be denied, period.  He said of the Arabs push re the Palestinians: But he did say this: "The Arab-Israeli conflict should no longer be used to distract the people of Arab nations from other problems."  I cannot recall any assertion so direct as this made by 44's predecessors.  He reiterated his goal of nuclear abolitionism, but in this he stands with Ronald Reagan; the difference being that Reagan coupled this idealized goal with resolute, realistic policies, unlike the utopian policies of Team 44 to date.

As for his Israel - Palestinian equivalence trope, James Taranto's Thursday Best of the Web posting nails 44, and rightly so.  Key points: (1) Arabs occupied West Bank/Gaza 1948-67; (2) UN aided the immiseration of Palestinians; (3) Israel took its refugees while Arabs rejected theirs.  JT concedes that truth this blunt would have been impolitic before a Muslim audience--to say nothing of contradicting Team 44's current Mideast polices.  President 44 did not use "terror" or "terrorism"--preferring "extremist."

44 gilded Islam's historic record.  Jews were at times treated worse in Christian Europe, but were hardly equal citizens in Muslim countries.  For example, the testimony of a Jew could not be admitted in court against a Muslim, Jews paid a head tax reflecting their inferior status, etc.  44 might well have been able to make the point that Islam was less intolerant than Christian in medieval times, but instead called it a tolerant faith, which sounds like a modern religion's tolerance.  That is not true.

The Fox All-Stars picked up stuff I missed: Charles Krauthammer on false equivalence: 1953 US/British coup in Iran, after oil fields were nationalized = terror; US discrimination v. women = Islamic oppression of women.  Also the US has never been a colonial or imperial power.  Mort Kondracke pointed out that Iran's role in cementing Hezbollah's hold on Lebanon.  Stephen Hayes noted that 44's reference to Iran feeling embattled will aid militant mullahs there; 44 failed to recognize major progress in post-Saddam Iraq.  Kondracke called a "crushing error" 44's failure to mention Anwar Sadat, whose peace move a generation ago made for a measure of peace--at the cost of Sadat's life.

Krauthammer saw the implication that Israel's creation was due to the Holocaust, a detail I did not see; here is the mini=paragraph I think CK had in mind:

America's strong bonds with Israel are well known. This bond is unbreakable. It is based upon cultural and historical ties, and the recognition that the aspiration for a Jewish homeland is rooted in a tragic history that cannot be denied.

The "tragic history" could as easily have meant the Roman expulsion of Jews from the Holy Land in 135 AD.  That said, CK's WP column today debunks "the settlements myth" once and for all, though Team 'Bam is not listening:

....As Secretary of State Hillary Clinton imperiously explained the diktat: "a stop to settlements -- not some settlements, not outposts, not natural-growth exceptions."

What's the issue? No "natural growth" means strangling to death the thriving towns close to the 1949 armistice line, many of them suburbs of Jerusalem, that every negotiation over the past decade has envisioned Israel retaining. It means no increase in population. Which means no babies. Or if you have babies, no housing for them -- not even within the existing town boundaries. Which means for every child born, someone has to move out. No community can survive like that. The obvious objective is to undermine and destroy these towns -- even before negotiations.

To what end? Over the past decade, the U.S. government has understood that any final peace treaty would involve Israel retaining some of the close-in settlements -- and compensating the Palestinians accordingly with land from within Israel itself.

CK also notes who really is responsible for the plight of the Palestinians that 44 calls "intolerable":

In his much-heralded "Muslim world" address in Cairo yesterday, Obama declared that the Palestinian people's "situation" is "intolerable." Indeed it is, the result of 60 years of Palestinian leadership that gave its people corruption, tyranny, religious intolerance and forced militarization; leadership that for three generations rejected every offer of independence and dignity, choosing destitution and despair rather than accept any settlement not accompanied by the extinction of Israel.

That's why Haj Amin al-Husseini chose war rather than a two-state solution in 1947. Why Yasser Arafat turned down a Palestinian state in 2000. And why Abbas rejected Olmert's even more generous December 2008 offer.

In the 16 years since the Oslo accords turned the West Bank and Gaza over to the Palestinians, their leaders built no roads, no courthouses, no hospitals, none of the fundamental state institutions that would relieve their people's suffering. Instead they poured everything into an infrastructure of war and terror, all the while depositing billions (from gullible Western donors) into their Swiss bank accounts.

Read all of CK's column to capture in full the disjunction between reality and the rituals of Mideast diplomacy--which Bush 43 tried to break and 44 is now re-establishing.

Daniel Pipes sees a "rapid and harsh"turn against Israel with the change of administrations, with potential severely adverse consequences for the US & Israel:

EVEN IF one ignores the folly of focusing on Jerusalemites adding recreation rooms to their houses rather than Iranians adding centrifuges to their nuclear infrastructure and even if one overlooks the obvious counterproductivity of letting Abbas off the hook - the new US approach is doomed.

First, Netanyahu's governing coalition should prove impervious to US pressure. When he formed the government in March, it included 69 MKs out of the Knesset's 120 members, well over the 61 minimum. Even if the US government succeeded in splitting off the two parties least committed to Netanyahu's goals, Labor and Shas, he could replace them with right-wing and religious parties to retain a solid majority.

Second, the record shows that Jerusalem takes "risks for peace" only when trusting its American ally. An administration that undermines this fragile trust will likely confront a wary and reluctant Israeli leadership.

If Washington continues on its present course, the result may well be spectacular policy failure that manages both to weaken America's only strategic ally in the Middle East even as it worsens Arab-Israeli tensions.

Smybolic of that turn is equating terror and settlements--suicide bombers are far worse than illegal settlements, and in the event Israel offered in 2000 to give up the entire West Bank, an offer spurned by the Palestinians.  Richard Haass, President of the Council on Foreign Relations, said on "Morning Joe" right after the speech that Obama's audience was those in Islam who need support for moderate views.  Policy change will not be in the cards, at least any time soon.  CNN aired this Mideast video clip (2:17) on skeptical Arab Street & hopeful Israeli reaction to 44's address.  CNN also aired real-time online reactions in the Muslim communities (3:54).

Ex-House Speaker New Gingrich said that he saw "a man who's in considerable conflict with himself"--seeking dialogue with Muslims but who cannot help blaming his own country.  The speech was "fundamentally misleading" about reality and the state of the world--a "huge gap between reality & rhetoric" in 44's message.  44 failed to cite enough examples of when America helped Muslims--from various wars to the aftermath of the 2004 Boxing Day tsunami.

Wes Pruden offered in a Tuesday column examples of fantasies rampant in the Arab world, which suggests how hard reaching them with reality will be:

"He will face a nation hardened in its negative view of the United States and its role in the region, and unconvinced that this or any other American president can or will change policy," says James J. Zogby, president of the Arab American Institute. He cites a poll by his brother, John Zogby, that 75 percent of the Egyptians think Mr. Obama isn't a very good president. But why would they? The Egyptians have been feeding for years on propaganda that children here wouldn't swallow. The Egyptians can't get enough of grim fairy tales.

The more the Cairo media peddles the tales, the more voracious the appetite. A decade ago Cairenes rioted over a rumor that Christians were spray-painting crosses in invisible ink on the dresses of young women. Egyptians were told that if you hold a bottle of Coca-Cola to a mirror the iconic Coke script would reveal the threat, printed backwards, "No Muhammad, No Mecca." The grand mufti of Egypt finally issued an official opinion that the Coca-Cola icon was designed in Atlanta "in the state of Georgia" more than a century earlier in English, not Arabic. He could have added that soda pop originated in a sweeter time when few Americans had even heard of either Muhammad or Mecca.

Owners of Cairo taxicabs had to begin refitting their cabs when a rumor erupted that seat belts manufactured in Israel contained an embedded chemical to render Arab men sterile. James F.X. O'Gara, writing in the Weekly Standard, notes that not even the exploding Egyptian birth rate could calm the hysteria....

Mideast maven Robert Satloff lists what 44 said and did not say in a detailed assessment of 44's speech.  His assessment is first-rate and sophisticated, defying easy summary but well worth reading in full (5 pages).  One noteworthy point, exposing an intellectual sin 44 avoided but which I may have committed: Obama did not use the term "Muslim world"; the term implies a unified community, which is emphatically not the case.  Islamists seeking a global caliphate employ this term.  Ruth King is more skeptical of both 44 & the Arabs, in an acid column well worth pondering.

Al-Jazeera (English online) reports "mixed feelings" in the Arab world.  NRO posted a link to more Arab press reaction.  In general, Arabs like the messenger while continuing to dislike American policy.

Former Bush 43 White House press secretary Dana Perino compares 44's speech with a Cairo address by Bush 43 to the World Economic Forum.  Here is the May 18, 2008 full text of 43's speech.  The WSJ editors see "Barack Hussein Bush" in Cairo, noting many Bush ideas expressed in 44's speech.

Bottom Line.  President Obama delivered a message that included laudable soft power appeals for reform in Islam and in Islamic governance that no predecessor could have done as effectively.  But his sentiments posit a false moral equivalence in multiple contexts, trace an historical narrative overly favorable to Islam and unfavorable to the West--although his earlier orgy of serial abject apology was not repeated--and his policies lack a full grip on reality.

In all, probably it was the best we can realistically hope for from 44 at this point.  Argument will not sway him; events may.  What those might be, should they come to pass, is what worries me.

LFTC - Let RIPSAW Rip!

RIPSAW is an unmanned ground vehicle (UGV) built in a garage by two brothers who have day jobs, and may soon be headed to Iraq.  At 60 mph it's far faster than the Army's M-1 Abrams tank, which tops at 42 mph.  It is, however, more lightly armed by far, with a single machine gun.  But it has many potential battlefield uses.  Their $750k creation was built with $1.25M of earmark money--for once, a pet project that does good (credit Maine GOP Senator Susan Collins).  Popular Science Magazine awarded the brothers its Invention Award.

LFTC - Big Apple Imploding

Manhattan Institute scholars own the Big Apple issues.  Steven Malanga sees municipal union militancy & lack of muni-bond market transparency posing potentially grave risks to NYC's financial solvency.  E. J. McMahon warns that NY State's pension fund bomb will soon explode.  Scholar Nicole Gelinas notes that Mayor Mike negotiates union contracts with public sector employees as if the good times are still rolling.  Urban historian Fed Siegel explains how the third big crash of New York City may prove worse than those of the 1930s & 1970s, as runaway spending swallowed up all revenue during good times and with Wall Street moribund, tax revenues are plummeting.  As few as 1,501 people--NYC's 1,5000 wealthiest residents plus the new guy at 1600 Pennsylvania Avenue in DC, may hold the keys to the city's survival.  Those 1,500 New Yorkers can depart for other jurisdictions and escape city tax hikes and service cuts; the guy at 1600 calls Chicago his hometown.

Wednesday NY Governor David Paterson shocked police and firefighters by vetoing a routine measure renewing early retirement pension boosts that have been routinely approved since 1981 on a "temporary" basis; but the bill, which passed by lopsided margins in both legislative chambers, will likely be re-passed to override the governor's veto.

LFTC - Economy: Explosions & Implosions

Economic Inequality.  Two economics mavens debunk the "disappearing middle class" theory of income distribution in America.  The reality is that the top one percent has in the past generation separated itself from even the rest of the top ten percent.  Vast fortunes driven by the Wall Street and technology booms created a class of Gilded Age super-rich.  This has been called, with some overstatement, a "winner take all" society.  Think of the visibility and monetary potential between the gold and silver Olympians.  Finishing 1/00 of a second behind can mean finishing at 1/100th in the post-race fame & money stakes.  Meanwhile, government spending soars and one-sixth of American consumer spending--"benefit spending"--is now funded by taxpayers.

Green Energy.  Hudson Institute scholar Alex Alexiev informs us that European countries hitherto ga-ga over Green economics have sharply pulled back, finding that Green Economics lead to, well, red ink.  George Will sees the Green Bubble imploding on the economic reality of recession.

Corporate Corpulence.  "To Fat to Fail" is pundit Dan Henninger's tart description of Team Obama's corporate economy, symbolized by GM:

After GM's bondholders last weekend refused to answer the bell for another round with Uncle Sam, the White House put out a statement: "As a result, the President has deemed GM's plan viable and will be making available about $30 billion of additional federal assistance to support GM's restructuring plan."

Read that sentence again, slowly. It holds what look like the keywords of the American future: the president, deems, viable, making available, federal assistance, support, restructuring plan.

An utter absence of private sector experience among 44's top advisers and aides is no coincidence:

Without exception, the Obama people with responsibility for the private economy come from a lifetime in politics, public administration or academia.

Besides Mr. Obama himself, the list includes Tim Geithner, Larry Summers, Peter Orszag, EPA's Lisa Jackson (16 years with EPA), Commerce's Gary Locke (zero private experience), or Transportation's Ray LaHood (14 years in the House). The bio for Agriculture's Tom Vilsack says he "has served in the public sector at nearly every level of government." How can the private sector -- especially the world of risk capital, sweat equity and start-ups -- be anything but an abstraction for this group?

Many of Mr. Obama's supporters surely thought this young, dynamic generation of public leaders would elevate the hip, cutting edge of the U.S. economy -- nanotechnology, genomics, robotics, even health and medicine technology. Instead, we've gotten the Old Economy on dialysis. General Motors has been commanded to restart aging UAW factories to output product on behalf of the administration's hybrid-car obsession. Where's the New Economy in any of this?

Systemic Risk: Fed's Ex-Chairman Speaks.  Here is a link to Alan Greenspan's June 3, 2009 address to the American Enterprise Institute on systemic risk.  In an extraordinarily thoughtful--and brief (just over 4 pages) address, AG explains the problems of recognizing and regulating systemic risk, and the unavoidable trade-off between level of risk and potential gain/loss.  He adds a reference to an earlier statement, eerily prophetic:

I noted in January 2000 before an assemblage of the Economic Club of New York, that
“When we look back at the 1990s, from the perspective of say 2010, the nature of the forces
currently in train will have presumably become clearer. We may conceivably conclude from that
vantage point that, at the turn of the millennium, the American economy was experiencing a
once-in-a-century acceleration of innovation, which propelled forward productivity, output,
corporate profits, and stock prices at a pace not seen in generations, if ever.”  I then countered,
“Alternatively, that 2010 retrospective might well conclude that a good deal of what we are
currently experiencing was just one of the many euphoric speculative bubbles that have dotted
human history.”  Finally, I cautioned, “And, of course, we cannot rule out that we may look back
and conclude that elements from both scenarios have been in play in recent years.”  The last
alternative is still on the table.

Bottom Line.  A perfect storm of pubic and private sector failures, coupled with an historic, iconic President and a fawning mainstream media, has laid the foundation for seizure of the commanding heights of the American economy by politicians in Washington, DC.  Barring a tectonic counter-shift within this term--hard to envision but not impossible, coupled with a resurgence within a unified GOP that is even harder to envision--an irreversible Europeanization of the American economy is in store.  Such will be partly socialist (health care) and partly corporatist (public-private enterprises with the public partner given senior status).  Joseph Schumpeter's famous prophecy in his 1942 classic, Capitalism, Socialism and Democracy, may at long last come true: Capitalism will be destroyed by a class of intellectuals created by, and supported by, the prosperity it generates.

LFTC - Obama-Merkel Realities

Der Speigel has a solid article summarizing the frosty relationship between 44 and German Chancellor Angela Merkel, on a range of issues--Afghan & Pakistan conflicts, where German soldiers are not in harm's way; economic policy; and Germany's role in alliance relations, which 44 has put behind that of France.  For their part, the WSJ editors applaud Merkel's position on monetary policy, which 'Bam opposes.

LFTC - Geography & Economic Destiny

The essay below is republished with permission from the consulting firm Stratfor.  It maps geography to economic factors, showing how the United States, Russia, China & countries in Europe have seen their economies profoundly skewed by raw geographic factors.  Read this intriguing essay.

The Geography of Recession

By Peter Zeihan

June 2, 2009

The global recession is the biggest development in the global system in the year to date. In the United States, it has become almost dogma that the recession is the worst since the Great Depression. But this is only one of a wealth of misperceptions about whom the downturn is hurting most, and why.

Let’s begin with some simple numbers.

As one can see in the chart, the U.S. recession at this point is only the worst since 1982, not the 1930s, and it pales in comparison to what is occurring in the rest of the world. (Figures for China have not been included, in part because of the unreliability of Chinese statistics, but also because the country’s financial system is so radically different from the rest of the world as to make such comparisons misleading. For more, read the China section below.)

But didn’t the recession begin in the United States? That it did, but the American system is far more stable, durable and flexible than most of the other global economies, in large part thanks to the country’s geography. To understand how place shapes economics, we need to take a giant step back from the gloom and doom of the current moment and examine the long-term picture of why different regions follow different economic paths.

The United States and the Free Market

The most important aspect of the United States is not simply its sheer size, but the size of its usable land. Russia and China may both be similar-sized in absolute terms, but the vast majority of Russian and Chinese land is useless for agriculture, habitation or development. In contrast, courtesy of the Midwest, the United States boasts the world’s largest contiguous mass of arable land — and that mass does not include the hardly inconsequential chunks of usable territory on both the West and East coasts.

Second is the American maritime transport system. The Mississippi River, linked as it is to the Red, Missouri, Ohio and Tennessee rivers, comprises the largest interconnected network of navigable rivers in the world. In the San Francisco Bay, Chesapeake Bay and Long Island Sound/New York Bay, the United States has three of the world’s largest and best natural harbors. The series of barrier islands a few miles off the shores of Texas and the East Coast form a water-based highway — an Intercoastal Waterway — that shields American coastal shipping from all but the worst that the elements can throw at ships and ports.

(click image to enlarge)

The real beauty is that the two overlap with near perfect symmetry. The Intercoastal Waterway and most of the bays link up with agricultural regions and their own local river systems (such as the series of rivers that descend from the Appalachians to the East Coast), while the Greater Mississippi river network is the circulatory system of the Midwest. Even without the addition of canals, it is possible for ships to reach nearly any part of the Midwest from nearly any part of the Gulf or East coasts. The result is not just a massive ability to grow a massive amount of crops — and not just the ability to easily and cheaply move the crops to local, regional and global markets — but also the ability to use that same transport network for any other economic purpose without having to worry about food supplies.

The implications of such a confluence are deep and sustained. Where most countries need to scrape together capital to build roads and rail to establish the very foundation of an economy, transport capability, geography granted the United States a near-perfect system at no cost. That frees up U.S. capital for other pursuits and almost condemns the United States to be capital-rich. Any additional infrastructure the United States constructs is icing on the cake. (The cake itself is free — and, incidentally, the United States had so much free capital that it was able to go on to build one of the best road-and-rail networks anyway, resulting in even greater economic advantages over competitors.)

Third, geography has also ensured that the United States has very little local competition. To the north, Canada is both much colder and much more mountainous than the United States. Canada’s only navigable maritime network — the Great Lakes-St. Lawrence Seaway —is shared with the United States, and most of its usable land is hard by the American border. Often this makes it more economically advantageous for Canadian provinces to integrate with their neighbor to the south than with their co-nationals to the east and west.

Similarly, Mexico has only small chunks of land, separated by deserts and mountains, that are useful for much more than subsistence agriculture; most of Mexican territory is either too dry, too tropical or too mountainous. And Mexico completely lacks any meaningful river system for maritime transport. Add in a largely desert border, and Mexico as a country is not a meaningful threat to American security (which hardly means that there are not serious and ongoing concerns in the American-Mexican relationship).

With geography empowering the United States and hindering Canada and Mexico, the United States does not need to maintain a large standing military force to counter either. The Canadian border is almost completely unguarded, and the Mexican border is no more than a fence in most locations — a far cry from the sort of military standoffs that have marked more adversarial borders in human history. Not only are Canada and Mexico not major threats, but the U.S. transport network allows the United States the luxury of being able to quickly move a smaller force to deal with occasional problems rather than requiring it to station large static forces on its borders.

Like the transport network, this also helps the U.S. focus its resources on other things.

Taken together, the integrated transport network, large tracts of usable land and lack of a need for a standing military have one critical implication: The U.S. government tends to take a hands-off approach to economic management, because geography has not cursed the United States with any endemic problems. This may mean that the United States — and especially its government — comes across as disorganized, but it shifts massive amounts of labor and capital to the private sector, which for the most part allows resources to flow to wherever they will achieve the most efficient and productive results.

Laissez-faire capitalism has its flaws. Inequality and social stress are just two of many less-than-desirable side effects. The side effects most relevant to the current situation are, of course, the speculative bubbles that cause recessions when they pop. But in terms of long-term economic efficiency and growth, a free capital system is unrivaled. For the United States, the end result has proved clear: The United States has exited each decade since post-Civil War Reconstruction more powerful than it was when it entered it. While there are many forces in the modern world that threaten various aspects of U.S. economic standing, there is not one that actually threatens the U.S. base geographic advantages.

Is the United States in recession? Of course. Will it be forever? Of course not. So long as U.S. geographic advantages remain intact, it takes no small amount of paranoia and pessimism to envision anything but long-term economic expansion for such a chunk of territory. In fact, there are a number of factors hinting that the United States may even be on the cusp of recovery.

Russia and the State

If in economic terms the United States has everything going for it geographically, then Russia is just the opposite. The Russian steppe lies deep in the interior of the Eurasian landmass, and as such is subject to climatic conditions much more hostile to human habitation and agriculture than is the American Midwest. Even in those blessed good years when crops are abundant in Russia, it has no river network to allow for easy transport of products.

Russia has no good warm-water ports to facilitate international trade (and has spent much of its history seeking access to one). Russia does have long rivers, but they are not interconnected as the Mississippi is with its tributaries, instead flowing north to the Arctic Ocean, which can support no more than a token population. The one exception is the Volga, which is critical to Western Russian commerce but flows to the Caspian, a storm-wracked and landlocked sea whose delta freezes in the winter (along with the entire Volga itself). Developing such unforgiving lands requires a massive outlay of funds simply to build the road and rail networks necessary to achieve the most basic of economic development. The cost is so extreme that Russia’s first ever intercontinental road was not completed until the 21st century, and it is little more than a two-lane path for much of its length. Between the lack of ports and the relatively low population densities, little of Russia’s transport system beyond the St. Petersburg/Moscow corridor approaches anything that hints of economic rationality.

Russia also has no meaningful external borders. It sits on the eastern end of the North European Plain, which stretches all the way to Normandy, France, and Russia’s connections to the Asian steppe flow deep into China. Because Russia lacks a decent internal transport network that can rapidly move armies from place to place, geography forces Russia to defend itself following two strategies. First, it requires massive standing armies on all of its borders. Second, it dictates that Russia continually push its boundaries outward to buffer its core against external threats.

Both strategies compromise Russian economic development even further. The large standing armies are a continual drain on state coffers and the country’s labor pool; their cost was a critical economic factor in the Soviet fall. The expansionist strategy not only absorbs large populations that do not wish to be part of the Russian state and so must constantly be policed — the core rationale for Russia’s robust security services — but also inflates Russia’s infrastructure development costs by increasing the amount of relatively useless territory Moscow is responsible for.

Russia’s labor and capital resources are woefully inadequate to overcome the state’s needs and vulnerabilities, which are legion. These endemic problems force Russia toward central planning; the full harnessing of all economic resources available is required if Russia is to achieve even a modicum of security and stability. One of the many results of this is severe economic inefficiency and a general dearth of an internal consumer market. Because capital and other resources can be flung forcefully at problems, however, active management can achieve specific national goals more readily than a hands-off, American-style model. This often gives the impression of significant progress in areas the Kremlin chooses to highlight.

But such achievements are largely limited to wherever the state happens to be directing its attention. In all other sectors, the lack of attention results in atrophy or criminalization. This is particularly true in modern Russia, where the ruling elite comprises just a handful of people, starkly limiting the amount of planning and oversight possible. And unless management is perfect in perception and execution, any mistakes are quickly magnified into national catastrophes. It is therefore no surprise to STRATFOR that the Russian economy has now fallen the furthest of any major economy during the current recession.

China and Separatism

China also faces significant hurdles, albeit none as daunting as Russia’s challenges. China’s core is the farmland of the Yellow River basin in the north of the country, a river that is not readily navigable and is remarkably flood prone. Simply avoiding periodic starvation requires a high level of state planning and coordination. (Wrestling a large river is not the easiest thing one can do.) Additionally, the southern half of the country has a subtropical climate, riddling it with diseases that the southerners are resistant to but the northerners are not. This compromises the north’s political control of the south.

Central control is also threatened by China’s maritime geography. China boasts two other rivers, but they do not link to each other or the Yellow naturally. And China’s best ports are at the mouths of these two rivers: Shanghai at the mouth of the Yangtze and Hong Kong/Macau/Guangzhou at the mouth of the Pearl. The Yellow boasts no significant ocean port. The end result is that other regional centers can and do develop economic means independent of Beijing.

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With geography complicating northern rule and supporting southern economic independence, Beijing’s age-old problem has been trying to keep China in one piece. Beijing has to underwrite massive (and expensive) development programs to stitch the country together with a common infrastructure, the most visible of which is the Grand Canal that links the Yellow and Yangtze rivers. The cost of such linkages instantly guarantees that while China may have a shot at being unified, it will always be capital-poor.

Beijing also has to provide its autonomy-minded regions with an economic incentive to remain part of Greater China, and “simple” infrastructure will not cut it. Modern China has turned to a state-centered finance model for this. Under the model, all of the scarce capital that is available is funneled to the state, which divvies it out via a handful of large state banks. These state banks then grant loans to various firms and local governments at below the cost of raising the capital. This provides a powerful economic stimulus that achieves maximum employment and growth — think of what you could do with a near-endless supply of loans at below 0 percent interest — but comes at the cost of encouraging projects that are loss-making, as no one is ever called to account for failures. (They can just get a new loan.) The resultant growth is rapid, but it is also unsustainable. It is no wonder, then, that the central government has chosen to keep its $2 trillion of currency reserves in dollar-based assets; the rate of return is greater, the value holds over a long period, and Beijing doesn’t have to worry about the United States seceding.

Because the domestic market is considerably limited by the poor-capital nature of the country, most producers choose to tap export markets to generate income. In times of plenty this works fairly well, but when Chinese goods are not needed, the entire Chinese system can seize up. Lack of exports reduces capital availability, which constrains loan availability. This in turn not only damages the ability of firms to employ China’s legions of citizens, but it also removes the primary reason the disparate Chinese regions pay homage to Beijing. China’s geography hardwires in a series of economic challenges that weaken the coherence of the state and make China dependent upon uninterrupted access to foreign markets to maintain state unity. As a result, China has not been a unified entity for the vast majority of its history, but instead a cauldron of competing regions that cleave along many different fault lines: coastal versus interior, Han versus minority, north versus south.

China’s survival technique for the current recession is simple. Because exports, which account for roughly half of China’s economic activity, have sunk by half, Beijing is throwing the equivalent of the financial kitchen sink at the problem. China has force-fed more loans through the banks in the first four months of 2009 than it did in the entirety of 2008. The long-term result could well bury China beneath a mountain of bad loans — a similar strategy resulted in Japan’s 1991 crash, from which Tokyo has yet to recover. But for now it is holding the country together. The bottom line remains, however: China’s recovery is completely dependent upon external demand for its production, and the most it can do on its own is tread water.

Discordant Europe

Europe faces an imbroglio somewhat similar to China’s.

Europe has a number of rivers that are easily navigable, providing a wealth of trade and development opportunities. But none of them interlinks with the others, retarding political unification. Europe has even more good harbors than the United States, but they are not evenly spread throughout the Continent, making some states capital-rich and others capital-poor. Europe boasts one huge piece of arable land on the North European Plain, but it is long and thin, and so occupied by no fewer than seven distinct ethnic groups.

These groups have constantly struggled — as have the various groups up and down Europe’s seemingly endless list of river valleys — but none has been able to emerge dominant, due to the webwork of mountains and peninsulas that make it nigh impossible to fully root out any particular group. And Europe’s wealth of islands close to the Continent, with Great Britain being only the most obvious, guarantee constant intervention to ensure that mainland Europe never unifies under a single power.

Every part of Europe has a radically different geography than the other parts, and thus the economic models the Europeans have adopted have little in common. The United Kingdom, with few immediate security threats and decent rivers and ports, has an almost American-style laissez-faire system. France, with three unconnected rivers lying wholly in its own territory, is a somewhat self-contained world, making economic nationalism its credo. Not only do the rivers in Germany not connect, but Berlin has to share them with other states. The Jutland Peninsula interrupts the coastline of Germany, which finds its sea access limited by the Danes, the Swedes and the British. Germany must plan in great detail to maximize its resource use to build an infrastructure that can compensate for its geographic deficiencies and link together its good — but disparate — geographic blessings. The result is a state that somewhat favors free enterprise, but within the limits framed by national needs.

And the list of differences goes on: Spain has long coasts and is arid; Austria is landlocked and quite wet; most of Greece is almost too mountainous to build on; it doesn’t get flatter than the Netherlands; tiny Estonia faces frozen seas in the winter; mammoth Italy has never even seen an icebreaker. Even if there were a supranational authority in Europe that could tax or regulate the banking sector or plan transnational responses, the propriety of any singular policy would be questionable at best.

Such stark regional differences give rise to such variant policies that many European states have a severe (and understandable) trust deficit when it comes to any hint of anything supranational. We are not simply taking about the European Union here, but rather a general distrust of anything cross-border in nature. One of the many outcomes of this is a preference for using local banks rather than stock exchanges for raising capital. After all, local banks tend to use local capital and are subject to local regulations, while stock exchanges tend to be internationalized in all respects. Spain, Italy, Sweden, Greece and Austria get more than 90 percent of their financing from banks, the United Kingdom 84 percent and Germany 76 percent — while for the United States it is only 40 percent.

And this has proved unfortunate in the extreme for today’s Europe. The current recession has its roots in a financial crisis that has most dramatically impacted banks, and European banks have proved far from immune. Until Europe’s banks recover, Europe will remain mired in recession. And since there cannot be a Pan-European solution, Europe’s recession could well prove to be the worst of all this time around.

Tell STRATFOR What You Think

LFTC - Index 6/4/09

4 posts: (1) The President's Cairo Speech--Wobble Watch; (2) Obama Dithers, Nuclear Dangers Gather--Us v. Them; (3) China: Tiananmen Square + 20--Us v. Them; (4) Gitmo: Cheney's Hill Turns; Colorado's Invite--The Home Front.

LFTC - The President's Cairo Speech

The Speech 44 Gave.  What follows are my contemporaneous notes.  I will review the full June 4 Cairo speech text later today and make necessary corrections tomorrow, if needed.  (Praise to the NY Times for posting the text promptly, before the White House did.)

He acknowledged the many contributions of Muslims to world civilization and rejected stereotypes.  He called upon Muslims to reject crude stereotypes of Americans.  He noted his middle name--Hussein.  His personal story is not unique.  The nearly 7 million Muslims in America today have incomes higher than the American average.  Freedom of religion includes over 1,200 mosques in the US, some in every state.  The US has gone to court to protect the right of female students to wear the headscarf and veil.  America is not and will never be at war with Islam.  We will however confront the violent extremists.  It is my first duty as President to protect the American people. We did not pursue al-Qaeda by choice; we went by necessity.  Let us be clear.  Al-Qaeda killed 3,000 people (6/5 correction) that day.  The victims had done nothing to harm anybody.  These are not opinions to be debated; they are facts to accepted.  We would gladly bring all our troops home if the extremists would not follow us.  No one should tolerate the extremists, who have killed more Muslims than those of other religions.  The Holy Quran teaches that those who kill innocents have killed all mankind; the person who saves innocents saves all mankind.

Iraq was a war of choice, and the Iraqi people are better off without Saddam, but America must use diplomacy to resolve differences whenever possible.  Thomas Jefferson said: "I hope that our wisdom will grow with our power, and teach us that the less we use our power the greater we will be."  He reiterated his Gitmo/torture tropes.  Re Israel and Palestinians, he referred to the Holocaust--explicitly, including the 6 million dead.  "Denying that fact is baseless, it is ignorant, it is hateful."  Threatening Israel with destruction is "deeply wrong."  But the Palestinians have suffered for 60 years, too.  Their situation is "intolerable."  These are two people with legitimate aspirations.  He called violence "a dead end" and said that shooting rockets and blowing up old women on a bus is not courage.  Palestinians should press for change peaceably and honor past agreements, and recognize Israel's right to exist.  Israel must also recognize Palestinian rights to exist and must dismantle the settlements.  Iran has the right to access peaceful nuclear power if it complies with the Nuclear Nonproliferation treaty.  He noted Iran's sponsorship of terrorism.

Re democracy, no system can or should be imposed by one nation upon any other.  But governments should reflect the will of their people.  We will accept peaceful election outcomes  all peoples yearn for certain things: the ability to speak your mind, to have a say in how you are governed; rule of law, equal administration of justice; transparency.  But legitimate democracies are only those who respect the rights of all their peoples; those who use democracy to gain power but govern undemocratically are not legitimate.  Muslims must not define their faith by rejecting the faith of others--including that of the Copts in Egypt.  A woman who is denied an education is denied equality.  It is no coincidence that countries where women are allowed an education are more prosperous.  Women can choose to live their lives in traditional ways--but it should be their own choice.  The US will promote economic and social partnerships--including online communities--with the Muslim world.  There is one rule that lies at the heart of every major religion: that we do unto others as we would have them do unto us.

More Mideast Matters.  A TAS article notes the growing split between radical and moderate forces, with the ground shifting against the West in key places like Lebanon and Qatar.  Turmoil grows in Egypt, with the Arab Street not charmed by our President's soft power outreach.  Re the Palestinians, 53 members of Israel's Knesset (120 members) sponsored a bill to make Jordan the Palestinian state and give it suzerainty over the West Bank.

Bottom Line.  My quick take is that President Obama did as well as might be expected.  He stuck to policy choices already made, both good and bad.  He reiterated certain diplomatic tropes that grate, and his equivalence between Israel and the Palestinians is, on the facts, untrue--but it is an obligatory diplomatic obeisance (albeit President Obama genuinely subscribes to it).  His "both sides" approach poses a false equivalence in many areas, but such may be necessary for his soft power to plant certain unpalatable thoughts in the Islamic world.  He did not embark upon another Apology Tour.  He confronted Holocaust denial squarely.  He trumpeted America's right to defend itself and pursue extremist Muslims; he urged the right for women in the Islamic world to be free to choose whether to live traditionalist or modern lives.  His speech was well-received, and probably could not have been made by any other American president and been as well received.

LFTC - Obama Dithers, Nuclear Dangers Gather

WSJ columnist Bret Stephens warns that Team Obama is flirting with nuclear disaster, which can come in various forms.  (This week's accidental government disclosure of detailed civilian nuclear site data is hardly reassuring.)  Stephens notes that while Team Obama declines to modernize America's aging nuclear arsenal (of questionable reliability), and offers more deep cuts to Russia, while words alone are used with North Korea, the North conducts tests that are quite possibly a proxy for Iran's nuclear arsenal-to-be.  Testing long-range missiles and warheads is in the tradition, Stephens writes, of nuclear club members helping others join.

Washington Post pundit Anne Applebaum suspects that China is pushing North Korea's provocations to test President Obama.  AA is likely right because, as she notes, China could topple the North easily, were it so inclined.  One thing that may focus our President's attention more urgently on this matter is this Heritage Foundation chart showing the effect on Seattle of a small--2/3 the power of the Hiroshima bomb--nuclear air-burst.  (An air-burst maximizes blast and thermal lethal area coverage, but reduces radioactive fallout debris, vis-a-vis a ground-burst.)  One person thinking about the threat from North Korea, however, is Alaska Governor Sarah Palin, who urged the Obama administration to rescind planned cuts in missile defense, and deploy additional interceptors protecting the West.

LFTC - China: Tiananmen Square + 20

Claudia Rosett, who as a WSJ journalist was in Tiananmen Square when on the night of June 4, 1989, Beijing troops moved with tanks into the great square and started shooting.  She remembers that fateful, terrible day.  CR adds further harrowing detail and writes that progress in China will be measured by when its leaders no longer fear remembrance of June 4, 1989.  A similar theme is struck by a Chinese emigre to America who was a leader of the Tiananmen protest, was jailed after the crackdown and later forcible exiled.

China expert Gordon Chang details China's efforts to bury the events of that day in a Orwellian Memory Hole.  But Nancy Pelosi sees no evil anymore--at least, publicly--in China, whose human rights policy she once assailed.  The WSJ editors note China's skepticism that America will return from the prospective 13 to 15 percent deficit share of GDP to 3 percent, after Team Obama's programs are implemented.  China will be foremost among those financing the deficit, and Geithner's selling task was uphill, to say the least.

Last night I attended a reception at China's newly-opened Embassy compound here in DC, which features: (a) stunning modern architectural design, featuring skylights and dazzling geometric patterns; (b) a huge cocktail reception room, plus lord knows how many more, perhaps even bigger.  The ambassador was charming, and the staff all smiles, dinner buffet of better quality than many.  Talk was about the coming tours of a major arts organization, Chinese food and the paucity of good Chinese restaurants in DC, and so on.  No mention was made of the monstrous events of June 4, 1989; any such utterance would have been considered blasphemous.  At embassy receptions in DC one checks one humanitarian concerns at the door.

Yet we cannot isolate China as if it were North Korea.  Our economies are intertwined--perhaps dangerously so.  But we must not simply ignore human rights matters, either.  Time and place may dictate what we say.  Yesterday the Obama administration issued its harshest condemnation of human rights and the Tiananmen coverup since taking office.  (Watch the 2:18 video in the Washington Times link; it features one activist who  lost part of one leg to a bullet that night.)  I can write today of China's horrid human rights record; I wrote last August of how China ignored its commitments to the International Olympic Committee on human rights.  (The IOC, true to form, could have cared less.)  Peace and security in Asia cannot come to pass without progressive democracy in the region's--the world's--most populous nation.

LFTC - Gitmo: Cheney's Hill Turns; Colorado's Invite

The Washington Post reports that then-VP Cheney personally sat in on four 2005 CIA Hill briefings on interrogations.  Thomas Joscelyn notes that the Yemeni detainee who committed suicide this week at Gitmo was a committed jihadist who sought to advance his cause by doing so.  Good riddance.  One former interrogator explains why interrogation tactics are unlikely to work now:

From well before 9/11, Al Qaeda had our play book, they knew how to beat our interrogations from the start and they knew how to beat our system. They had an insider who fed them our interrogation manuals. And mainly because we are an open society. We have and abide by the Freedom of Information Act (FOIA) and therefore we give our enemies information about how to beat us. President Bush understood this concept. He knew we had to lock down the information or they would continue to beat us. It’s extremely frustrating to watch as information is selectively released for political reasons rather than National Security reasons.

The knowledge Al Qaeda possessed, Chapter 17 of the Al Qaeda Training Manual, has been well documented and reported yet seems to be overlooked in the current arguments. The insider was Ali Mohammed, a former Egyptian army officer that had worked with the US Army in an exchange program. He later enlisted in the US Army and was assigned to a Special Forces unit at Ft Bragg and was even used as an instructor at the John F Kennedy Special Warfare Center and School. He later became an FBI informant but was secretly a double agent and was supplying the terrorist network with information on how to beat our system. The terrorists that had been trained in Afghanistan throughout the 90’s knew how to beat our interrogations. They told stories meant to confuse and trip up our interrogators. And it worked. Our interrogations were relatively unsuccessful until we understood that concept.

To build on that concept, the terrorists knew how to beat our judicial system as well. Chapter 18 0f the Al Qaeda Training Manual instructs them to claim torture. It instructs them to seek out groups that will listen to them and accuse us of abuse whenever possible. The captured terrorists seek media attention and they know that our media will pick up on those stories and essentially become a tool for the enemy. I believe our media has the best of intentions but end up as the pawns of our enemy while trying to report the news. They also do not respond well to criticism rather that accepting the responsibility. Very much like our current politicians. They are more concerned about themselves than for America. That is unfortunate.

The LA Times reports that residents in Florence, Colorado have no problem if Gitmo detainees join the nearly 500 prisoners at the local supermax prison, which already houses three prominent al-Qaeda terrorists.  Supermax prisons are considerably harsher than Gitmo, and there would be poetic justice in sending Gitmo detainees bitching about their current lockup to real maximum security prisons.  The problem is not that they are likely to escape, but instead that a gaggle of human rights activists, meida morons and lawyers will descend upon America's supermax facilities and launch a crusade to make them less harsh.

On a lighter note, CNN reported this week that doctors have coined the term "cell phone elbow" to users who develop nerve damage from excessive crooked-arm cell conversations.  Let Gitmo detainees get cell phones to go with their laptop and satellite TV access, and await the first tort lawsuit filed in our Kafkaesque, Byzantine, infuriatingly capricious legal system.

LFTC - Index 6/3/09

5 posts: (1) Gitmo:Obama Channels Cheney--9/11, 3/11 & N/11; (2) Barack of Araby, Binyamin of Judea--Wobble Watch; (3) Tale of Two Judges: Sonia...and Robert Bork--The Home Front; (4) Sunspots & Climate: Is 1859 Our Future? Or 2059?--"It's the Earth Stupid!"; (5) The President Gets New Intel Agency Dope--The Home Front.  N.B., Here is my latest podcast clip (18:00) from "The Rick Amato Show", aired live at 1:05 - 1:23 AM EST this morning; topics: Obama & Mideast, Judge Sotomayor, North Korea, the President learns in public about an obscure intel agency, and a flashback to Sarah Palin, the 2008 campaign & media double standards.

LFTC - Gitmo: Obama Channels Cheney

Last Friday, the Justice Department filed a legal brief in Kyemba v. Obama, the case involving 14 of the 17 Uighurs (Turkic Muslims from western China) who were apprehended in Pakistan after attending a terrorist training camp (not run by al-Qaeda, but by a Turkic group, a fact I have missed in the past) and since then held at Guantanamo.  The brief, filed by Solicitor-General Elena Kagan, channels the arguments made by the Bush administration and publicly defended recently by former VP Dick Cheney.  It essentially argues that the US cannot legally admit the Uighurs into the United States, as they are aliens who attended terrorist training and thus are ineligible under the Real ID Act of 2005, for which then-Senator Obama and 98 of his colleagues voted to pass.

The detainees are being held as non-combatants, housed in Gitmo's toniest facilities, with VCRs & DVDs, a/c, and other amenities.  The administration argues that by releasing them from combatant-level detention, there is no habeas corpus issue remaining.  At issue now is only whether the Executive Branch must admit them into the US of A.  Team Obama takes the position--exactly like the preceding administration--that no alien, ever, has a Constitutional right to be admitted to American residency, and that the Executive Branch has exclusive jurisdiction of whether to admit aliens; in other words, the courts have no jurisdiction to hear such an appeal.  The US is trying to get other countries to take these guys, and has had zero success.

Terrorist training camp graduates and no country wants them?  Wonder why?

Also complicating 44's "I'll close Gitmo within a year" mantra is a new USA Today/Gallup poll showing that Americans by 2 - 1 oppose closing Gitmo and by 3 - 1 oppose admitting Gitmo detainees into the United States.  Not letting some 240 Gtimo detainees, many of whom are "the worst of the worst" into the US of A?  Wonder why?

LFTC - Barack of Araby, Binyamin of Judea

Today begins President Obama's 5-day Saudi Arabia, Egypt (bypassing Israel) + France, Germany trip.  In a Monday June 1 BBC pre-trip interview (16:04) President 44 made a number of key points: (1) while the US cannot impose its values on the rest of the world, the principles of democracy, rule of law, freedom of speech, and freedom of religion are not simply Western principles, but rather have universal application; (2) rejected the "clash of civilizations" as being inevitable; (3) noted the myth of a "monolithic" Muslim world, citing diverse national as well as religious identities; (4) called Israel-Palestinian diplomacy "a long, hard slog"--ironically, the exact words Bush 43 Defense Secretary Donald Rumsfeld used after the fall of Saddam; (5) suggested Arab gestures might help the process; (6) rejected the idea of imposing sanctions against Israel for expanding settlement population; (7) said that Iran should get until the end of 2009 to show responsiveness to efforts to end its quest for nuclear weaponry; (8) Iran has "legitimate energy needs" but shares an interest with the world in avoiding a nuclear arms race; (9) sidestepped the suggestion that Iran be treated like Japan, which has a high stockpile of plutonium but does not reprocess it (Japan could rapidly do so).

But 44 made one disquieting remark, that Egyptian President Hosni Mubarak " has sustained peace with Israel, which is a very difficult thing to do in that region."  If 44 meant that radical elements in Egypt make peace hard, that is one thing.  But if 44 meant that Israel makes it hard to keep a peace, such is scary; no country is easier to make peace with thant Israel, whose citizens are sick of six decades of war.

Scholar Joshua Muravchik notes encouraging election results in the recent Kuwaiti parliamentary election.  Mideast maven Robert Satloff questions President Obama's choice of an Arab venue to address a diverse Muslim world despite the fact that most Muslims worldwide are non-Arab:

[W]hen Obama arrives in Cairo, he will be surprised to find he has two strikes against him.

First, there's the fact that he continually refers to "the Muslim world," which horrifies many Muslims who know this as the language of Al Qaeda and other radical Islamists, an unintentional echo of the concept that Muslims are really best viewed as members of a single, transnational community of believers rather than loyal citizens of their various nation-states.

And second, there's the fact that he chose an Arab capital to deliver a message to the world's Muslims, thereby feeding the suspicion among the 900-million-plus non-Arab Muslims that America only views them through an Arab lens, one that represents less than a quarter of the world's Muslim population. (Too heavy an emphasis on Israeli-Palestinian peace would reinforce this; Obama should steer clear of too much "peace process" talk.)

Ralph Peters fears the worst, but asks more of "Bam:

For all the American left's blather about human rights and freedom, the Obama administration has turned its back on democracy, women's rights and the most basic social and political liberties in the Arab world.

But presenting a rhetorical welfare check to the collapsed civilization of the Middle East won't advance our interests -- or those of the average Arab.

I can't alter his speech, but I ask our first multi-racial president to bear in mind two things during the brief flight between Cairo and Riyadh: The Arabs of the Arabian Peninsula and Egypt were the earliest, greatest and most tenacious enslavers of black Africans. And the Saudis are the leading sponsors of religious hatred in the world today.

Who owes whom an apology?

The Jerusalem Post reports on Israeli PM Binyamin Netanyahu's defense of expanding Israeli settlements.  The New York Times details how Israel is expanding settler populations within existing setttlements, thus avoiding illegal building in new settlement areas:

The Israeli population of the West Bank, not including East Jerusalem, has tripled since the Israeli-Palestinian peace effort started in the early 1990s, and it now approaches 300,000. The settlers live among 2.5 million Palestinians in about 120 settlements, which much of the world considers a violation of international law, as well as in dozens of outposts erected without official Israeli authorization. Israel argues that the settlement enterprise does not violate the law against transferring populations into occupied territories.

According to the newly disclosed data, about 58,800 housing units have been built with government approval in the West Bank settlements over the past 40 years. An additional 46,500 have already obtained Defense Ministry approval within the existing master plans, awaiting nothing more than a government decision to build.

JP columnist Herb Keinon explains the full extent of the Obama-Bibi recasting of the Bush-Sharon understanding on Israeli settlements:

And right now in Jerusalem, America's willingness to uphold its part of various deals is being questioned, amid real concern inside the government that Obama is eroding understandings about settlement construction that flowed from George W. Bush's famous letter to Ariel Sharon in 2004, the letter that Sharon waved to the public as the compensation Israel was getting for disengagement from Gaza.

And what was the payback enshrined in that letter: a closer strategic relationship with the US based on three cardinal points:

-- That the US will "preserve and strengthen Israel's capability to deter and defend itself, by itself, against any threat or possible combination of threats."

-- That the US is strongly committed to Israel's security and well-being as a Jewish state, and that a realistic, just and fair solution to the Palestinian refugee issue will have to be found "in a future Palestinian state, and the settling of Palestinian refugees there, rather than in Israel."
That "in light of new realities on the ground, including already existing major Israeli populations centers, it is unrealistic to expect that the outcome of final-status negotiations will be a full and complete return to the armistice lines of 1949, and all previous efforts to negotiate a two-state solution have reached the same conclusion."

-- Subsumed under this third point were understandings, encapsulated in letters between then-secretary of state Condoleezza Rice and Sharon's top adviser Dov Weisglass, that settlements in the major blocs would be treated differently than those outside the security barrier, and that a natural-growth freeze would not apply to these settlements.

But now US Secretary of State Hilary Clinton has come along and said there can be no construction anywhere, and there are those in Jerusalem wondering whether ditching these understandings means that the Bush letter itself is no longer seen as binding by the new administration.

The JP also reports that Israeli Defense Minister Ehud Barak announced that Israel will refuse cooperation with a UN probe of events during the Gaza War last winter.  The UN's extreme, consistent anti-Israel bias was given as the reason.

Bottom Line.  Stay tuned.

LFTC - Tale of Two Judges: Sonia...and Robert Bork

The Washington Times reported recently that Judge Sonia Sotomayor has seen 3 of 5 decisions that went to the Supreme Court reversed.  Given that she has rendered about 3,000 opinions in her 17 years on the federal bench, the sample is, to be sure, a small one.  The Supreme Court, for its part, reverses lower court rulings more often than other appeals panels.  But consider this historical nugget from the 1980s: Judge Robert Bork authored 400 opinions in the 5 years (1982 - 1987) he sat on the US Court of Appeals, DC Circuit; not a single one was reversed by the Supreme Court.  Yet Judge Bork was smeared as a radical judge outside the judicial mainstream, and lost his confirmation battle. 

Judge Bork rejected the idea of that one's gender or ethnicity determines to a significant extent one's perspective, the identity-politics principle that lies at the core of Judge Sotomayor's jurisprudential philosophy.  (NRO's Rich Lowry shreds the White House's laughable assertion that Sotmomayor's "Ltaina" remark was taken out of context--to the contrary, it was squarely in context.)  President Obama's 2005 speech explaining why he would vote against confirmation of Judge John Roberts as Chief Justice shows why he chose Sotmomayor.  Sotmomayor will, on the odds, be luckier in 2009--partly due to polling results showing huge Hispanic support for her--than was the good judge in 1987.

LFTC - Sunspots & Climate: Is 1859 Our Future? Or 2059?

An international panel sponsored by the National Oceanographic & Atmospheric Administration (NOAA) now predicts a low sunspot cycle peak for Solar Cycle 24, peaking in 2013--the lowest since Cycle 16 peaked in 1928.  Cycles last 9 to 14 years.  The scientists were surprised by how long sunspot activity has been low--since 2007  Seems their various models conflicted as to predictions.

Oh, not to worry: Even given a low sunspot activity cycle, intense geomagnetic storms are possible.  Here is a little on the 1859 monster geomagnetic storm:

"Even a below-average cycle is capable of producing severe space weather," points out Biesecker. "The great geomagnetic storm of 1859, for instance, occurred during a solar cycle of about the same size we’re predicting for 2013."

The 1859 storm--known as the "Carrington Event" after astronomer Richard Carrington who witnessed the instigating solar flare--electrified transmission cables, set fires in telegraph offices, and produced Northern Lights so bright that people could read newspapers by their red and green glow. A recent report by the National Academy of Sciences found that if a similar storm occurred today, it could cause $1 to 2 trillion in damages to society's high-tech infrastructure and require four to ten years for complete recovery. For comparison, Hurricane Katrina caused "only" $80 to 125 billion in damage.

Here is another article (with a link to the full Academy panel report, for purchase only) with more on the awesome power of a severe geomagnetic storm--which, in 2009, would hit a society utterly dependent upon electric power, not at all the case in 1859.

Still worried about global warming in 2100?  (If you are, watch this AP video clip (1:20) of the world's mot powerful array of lasers, unveiled last week at Livermore Laboratory in California--the world's first net gain controlled fusion energy experiment--thus peaceably crossing the "fusion ignition" threshold (hitherto crossed--but hardly peaceably--only by hydrogen bombs).  Then read this Washington Post article on the super-laser.  The ultimate goal--still decades away, perhaps mid-century, say, 2059--is to transit the world to the inexhaustible, clean power of the sun--not in silly agglomerations of chintzy solar panels gobbling up miles of real estate, but in fusion thermonuclear reactors.

LFTC - The President Gets New Intel Agency Dope

Politico scored a beaut the other day: President Obama learned about the existence of a small intelligence agency while at a downtown Washington DC burger joint last Friday, yakking with an employee of the agency who was a customer at the same time.  Enjoy the video (9 minutes, the intel clip starts at 5:45 into the video).  To be fair, the National Geospatial-Intelligence Agency is an obscure shop within the vast intel community, specializing in gathering and interpreting satellite imagery.  A rookie President with neither defense not intel background cannot be expected to know this.  Still, it shows how immense an enterprise the former community organizer now must run.  It has been, is and will continue to be, a learning experience--the ultimate in on-the-job training for the job that Bill Clinton said no one is truly prepared for as of Inauguration Day.

LFTC - Index 6/2/09

3 posts: (1) Gitmo: Laptops Too! What Next?--Us v. Them; (2) "Government Motors": Death of the Private Corporation--The Home Front; (3) Chrysler: Judge Body-Slams Senior Creditors, Constitution--The Home Front.

LFTC - Gitmo: Laptops Too! What Next?

Before getting to GM & Chrysler, we take a brief detour to Gitmo again.

If Gitmo TV (discussed in yesterday's LFTC) is not enough, get this: The Miami Herald reports the latest Gitmo Folly: Some Gitmo detainees are getting--in addition to five satellite TV channels--laptops.  Gitmo administrators have ordered about 20 laptop computers for use to train detainees about to be released--including the 17 Uighurs--Muslims from western China who trained in al-Qaeda terrorist camp and were picked up by US forces--that a federal judges has ordered be released.  Each designated detainee will have internal "intranet" access only, not access to the public Internet.  Each will learn how to e-mail, and get language instruction in the language of the country that agrees to take him.

Hmmm, what else can we do for Gitmo's inmates?

Cellphones wired for detonating bombs

Blackberries for high-end business calendar management--scheduling TV interviews

High-definition sets for displaying porno flicks

iPods for downloading prayer music

Laser range-finders for painting target aircraft

Stinger missiles for covering airport take-offs & landings

uranium-enrichment classes in Iran

missile-launching camp in North Korea

THE PROSPECTS ARE ENDLESS, AS TEAM 'BAM OPENS UP NEW FRONTIERS IN DETAINEE TREATMENT.

But Team Obama is doing something else, writes "lawfare" maven Jack Goldsmith: using "rendition" of detainees to foreign governments who need not worry about the ACLU, idiot judges and intrusive news organizations.  A legal hurdle for President 44 in releasing Gitmo detainees is the REAL ID Act of 2005, which prohibits any foreigner from entering the USA who "has engaged in a terrorist activity . . . is a member of a terrorist organization . . . endorses or espouses terrorist activity or . . . has received military-type training . . . [from] a terrorist organization."  Senator Barack Obama and 98 of his 99 colleagues voted for this law.  As noted above, a District Court judge ordered the release of the 17 Uighur Gitmo detainees who have received terrorist training, without noting this law--despite the Bush administration lawyers citing it; a federal appeals panel reversed, and the case has been appealed to the Supremos.  Stay tuned.

  Quiz query of the day: How many satellite channels and laptops does a detainee get in an Egyptian or Afghan prison?

LFTC - "Government Motors": Death of the Private Corporation

Death of an American Legend.  On June 1, 2009 America's most famous manufacturing corporation died--and the great era of private corporate enterprise with it.  Founded in 1908, having attained the 50-million car sale mark in 1954, employed over 600,000 workers a generation ago, GM--the world's largest corporation for 77 years--is gone.  Valued at $93 per share as recently as late 1995, trading last Friday at 75 cents a share, GM stock will be deleted from the Dow Jones Industrial Average, which index it joined in 1925.  (So will zombie bank Citigroup; computer networking giant Cisco Systems and Travelers' Insurance will supplant them in the DJIA.)

The company was profiled in 1946 by Peter Drucker, supreme managerial intellectual of the post-World War II generation, in his classic Concept of the Corporation.  Therein Drucker noted in the preface GM's pivotal role in (a) shaping the very idea of private enterprise in America; (b) that corporations like GM stimulated the rise of labor unions and big government.

Drucker wrote of GM's role as to free enterprise:  "It does not exclude government regulation or government limitation of business; but it sees the function of government in setting the frame within which business is to be conducted rather than in running business enterprises."  Such, Drucker noted, did not exclude government-run "natural monopolies"--the Tennessee Valley Authority is the classic example.  (pp. 16-17, Mentor ed. 1983)

Of labor unions and regulation, Drucker wrote: "If we look upon the two other new social institutions of basic importance that have emerged in her society during the last half-century, the labor union and the administrative government agency, we see that they are nothing but social responses to the phenomenon of modern Big Business and of the corporation."  (p. 21, Mentor ed. 1983)

GM's Bankruptcy Filing.  A New York Times front-pager details the bankruptcy filing's terms.  A Washington Post front-pager adds more detail.  (Here is the 122-page GM bankruptcy petition filing made 8 AM Monday, in a New York federal district courthouse.)  GM New will be 60 percent US government-owned, 17.5 percent Canadian government-owned, 12.5 percent UAW-owned and 10 percent owned by the bondholders.  Bondholders can get up to a 25 percent stake in GM New, if the stock value hits $15B--it is $700M now; care to bet on a more than 21-fold GM New asset-value increase?  (Here is the New York federal bankruptcy court website with all GM & Chrysler documents.)  Taxpayers, already on the hook for $20B bailout funds, will kick in another $30B in credit lines.

The WP story notes that while Team Obama's deal favored the UAW at the expense of senior creditors, so did the Bush deal cut late last year.  Those creditors, owed $27B by GM, will have their 10 percent equity interest valued at $2B in New GM--a haircut of nearly 94 percent.  The UAW, owed $20B by GM, will have its stake of 17.5 percent valued at $3.5B, plus notes & preferred stock valued at $9B.  Claims by secured senior creditors that they are being shafted at the expense of junior creditors--the UAW asserts--are answered by stating that in an outright liquidation GM, with $82.3B in assets and $172.8B in debts, would have nothing left to pay off senior creditors.  But this is because GM would have to pay the government first, as the government bailout put Uncle Sam ahead of senior creditors.  Forty percent--2,400--of GM's 6,000 dealers will close.  GM will cut 21,000 union employees, and close 12 to 20 plants.

True, the government says it wishes to exit the car business ASAP--the President saying as much in his video appearance yesterday (14:52):

What we are not doing -- what I have no interest in doing -- is running GM.  GM will be run by a private board of directors and management team with a track record in American manufacturing that reflects a commitment to innovation and quality.  They -- and not the government -- will call the shots and make the decisions about how to turn this company around.  The federal government will refrain from exercising its rights as a shareholder in all but the most fundamental corporate decisions.  When a difficult decision has to be made on matters like where to open a new plant or what type of new car to make, the new GM, not the United States government, will make that decision.

In short, our goal is to get GM back on its feet, take a hands-off approach, and get out quickly.  (Emphasis added.)

Here are the President's full-text June 1 remarks and the associated White House fact sheet.

Yet in reality, our government's chances of recouping its $50B investment are better if it holds onto its stake longer.  But how realistic is this?  GM, valued at $56B in 2000, would have to hit $80B for the government's 60 percent stake to break even.  That said, which politician will sell early to set GM free, and explain a financial write-down to taxpayers, most of whom are enraged at all the bailout money flowing to large corporations and financial wizards?  A WSJ editorial (which gave the asset numbers in this paragraph) explains further why political hands-off GM New is a pipe dream, on all the odds:

Every decision the feds have made since December suggests that nonpolitical management will be impossible. First they replaced Mr. Wagoner -- whom they are nonetheless still paying -- with the more pliable Fritz Henderson as CEO and Kent Kresa as Chairman. The latter are good at playing Washington but unproven in making popular cars. Then Treasury bludgeoned the bond holders in both Chrysler and GM to take pennies on the dollar, which will not make creditors eager to lend to the companies in the future.

There's also the labor agreement that the UAW approved last week, which goes some way toward reducing costs but probably not enough to make the new, smaller GM competitive. The new agreement simplifies some work rules and job descriptions but makes no reductions in hourly pay, pensions or health care for active workers. The agreement must also be renegotiated in two years by an Obama Administration running for re-election and weighing the need to keep Big Labor happy against the risks to taxpayer-shareholders. Who do you think wins that White House debate?

The Administration's concessions to the UAW also restrict the company's ability to import smaller, more fuel-efficient cars that it already makes overseas. UAW President Ron Gettelfinger boasted on PBS's "NewsHour" last week that "we, quite frankly, put pressure on the White House, the [auto] task force, the corporation" to bar small-car imports from overseas. GM is also selling its Opel operation in Europe as part of this restructuring, and the Washington Post reports that one of Treasury's sale conditions is that Opel's new owners must stay out of the U.S., and even out of China, where GM's business is strong.

This is raw trade protectionism. It is also textbook cartel behavior and would be an antitrust violation if practiced by a business. But the benefits for GM are illusory because the import limits mean the company will have to spend even more to retool its domestic plants to make the little green cars that President Obama and Congress are demanding. No one knows if Americans will buy such cars, even if GM can make them competitively in the U.S.

The Administration promises to wield a light ownership hand, but it's only a matter of time before Congress starts to micromanage GM's business judgments. Every decision to close a plant will be second-guessed, much like a military base-closing. And what about buying parts from foreign suppliers? Will those also be banned when Mr. Gettelfinger demands it, even if the costs are lower? GM's managers and directors will have one eye on enhancing shareholder value, but the other on pleasing their political minders in Washington.

Another WSJ editorial notes that President Obama called Detroit Mayor Dave Bing to reassure him that GM will keep its corporate HQ in Detroit.  If HQ location is one of "the most fundamental corporate decisions" in 44's view, lots of other calls will, it seems, be made at 1600 Pennsylvania.  Former software CEO and now Manhattan Institute scholar Jim Manzi says US manufacturing is history.

AEI scholar Philip Levy explains how political favoritism for UAW-guided GM can damage US trade policy, and not just in the automotive sector, but spill over into other vital trade sectors.  In the auto sector, China may not be happy--holding the world's largest overseas American dollar-denominated assets, a mere $2 TRILLION--with this part of the GM bankruptcy Agreement:

Actually, no. GM had recently informed Congress that it planned to produce roughly 50,000 subcompacts per year in China to sell in the U.S market in the near future. However, on Thursday, UAW President Ron Gettelfinger said that GM had agreed not to import the cars from China and to produce them in the United States instead as part of its deal with the UAW.

This change opens up an enormous set of problems for the United States that will stretch well beyond the automotive sector. The United States has commitments under the World Trade Organization for its tariffs on cars; it's supposed to avoid quantitative restrictions altogether. This latest policy switch looks very much like a government-mandated reduction in auto imports from China. A particularly sophistic trade lawyer might try to argue that this is just part of a labor deal, not an explicit U.S. government policy. But the UAW is currently receiving only what the Treasury Department decides it should get. Further, under current plans, the U.S. government will soon be a majority owner of GM. That will make it difficult for the government to dissociate itself from GM policies.

Ralph Nader, for whom GM has had affection like that of the Afghans for Russians, laments that the UAW not getting more, and tort lawyers not getting even more.  Ralph, it seems, cares for everyone but senior bondholders.  Pundit David Brooks sees a cultural quagmire in the making, with the public sector's stifling bureaucratic culture now superimposed upon GM's own stodgy corporate behemoth culture.  Automotive maven Paul Ingrassia sees timid management and coddled unions at the core of GM's fall.

Bottom Line.  GM was the quintessential industrial age manufacturing corporation of the 20th century.  Its takeover by two governments symbolizes the end of an era, one in which private enterprise took pride of place in directing the commanding heights of the American economy.  GM's mid-20th century CEO, Charles E. Wilson, may not quite have said that what was good for GM was also good the country, but symbolically many people of that time thought so.  Polling shows most voters opposed to a GM bailout, even if the result is GM's demise.  "Government Motors" will see to it that domestic workers displace foreign workers, union interests displace outside investor interests, worker pension fund coffers will be filled with money from taxpayers, and that regardless of the size of the government stake it will be the senior partner.  Even if the government stake falls from 60 to 6 percent, it will call the shots on crucial decisions.  Government suzerainty over "the most fundamental corporate decisions" means political criteria will dominate economic criteria.  There are lots of phrases to describe this state of affairs, but free market capitalism is not one of them.  GM's demise as a private entity symbolizes this fateful transition to a new domestic economic order, in which Washington politicians are the ultimate private-economy CEOs.

LFTC - Chrysler: Judge Body-Slams Senior Creditors, Constitution

The Washington Post reported that the Chrysler bankruptcy judge approved the government - Chrysler plan in its entirety, dismissing all claims by creditors who claimed that junior debt was given precedence over senior creditor rights.  In his May 31 In re Chrysler Document 3073 opinion (47 pages--link may go to top page, and if so look for homepage under Chrysler documents and Judge Gonzalez recent opinions), Judge Arthur Gonzalez accepted the government - Chrysler arguments that these creditors shoved aside were not essential to the restructuring of the enterprise.  (Here is the New York federal bankruptcy court website with all GM & Chrysler documents.)

Among creditors appealing are Indiana pension funds.  George Will notes that Indiana Governor Mitch Daniel's calls this "shock and awe statism" by Team Obama.

State governments, too, are expected to accept Washington's whims, but plucky Indiana is being obdurate. Gov. Mitch Daniels, alarmed by what he calls the Obama administration's "shock-and-awe statism," is supporting state Treasurer Richard Mourdock's objection to the administration's treatment of Chrysler's creditors, which include the pension funds for Indiana's retired teachers and state police officers and a state construction fund. Together they own $42.5 million of Chrysler's $6.9 billion (supposedly) secured debt.

Compliant, because dependent, banks bowed to the administration's demand that they accept less than settled bankruptcy law would have given them as secured creditors. Next, the president denounced as "speculators" remaining secured creditors, who then folded and accepted less on the dollar than an unsecured creditor -- the United Auto Workers union -- is getting. This raw taking of property from secured investors penalized those "speculators" -- retired Indiana teachers and state police officers who, Mourdock says, are being "ripped off by the federal government."

He is asking a court to declare that the Obama administration's actions have violated "more than 100 years of established law by redefining 'secured creditors' to mean something less" and that the actions violate the Fifth Amendment protection against the seizure of private property. Furthermore, he says, the government is guilty of "misuse" of the Troubled Assets Relief Program, which gives the Treasury authority only to aid financial institutions, not industrial companies.

Will began his column with this neat example of his trademark archness: "Epiphanies are a dime a dozen among congressional Democrats as they discover urgent new reasons to experience the almost erotic pleasure of commandeering other people's money."

LFTC - Index 6/1//09

3 posts: (1) Gitmo TV--Us v. Them; (2) North Korea Ka-Booms "Kumbaya!" & Vindicates Biden--Us v. Them; (3) Is Sonia Supreme?--The Home Front.  (N.B., Today the General Motors bankruptcy terms will be announced.  LFTC will post on this Tuesday, June 2.)

LFTC - Gitmo TV

I go away for a few days, with special non-time-sensitive posts for LFTC readers last week, and what happens?  North Korea sets off another nuclear bomb.  President Obama announces his Supreme Court pick.  And I turn the TV on Sunday and find out that five satellite stations have been approved for access by........terror detainees at Guantanamo.  Yep, Gitmo, with your tax dollars at work.  What do they get?  One channel--unfiltered--is English language al-Jazeera.  So we are paying for radical Islamic voices to reach the sensitive souls we house there, whom virtually no one anywhere wants in their country.

LFTC: North Korea Ka-Booms "Kumbaya!" & Vindicates Biden

A Wall Street Journal editorial summarizes the path taken by North Korea in response to President Bush's stepped-up efforts at diplomatic engagement after the North detonated its first nuke in October 2006, and its contemptuous responses to President Obama's no-doubt equally sincere diplomatic overtures.  Instead of "Kumbaya Obama-Not-Bush!" Pyongyang chose "$#%^ &*#!"  Claudia Rosett fears that the North's test was for the Iranian program.

There is a sliver lining in all this: President 44 is getting a fast reality education data dump--although 44's May 25 statement after North Korea announced its test suggests that the lesson has yet to sink in.  Ralph Peters thinks 'Bam is not educable.  I disagree.  What Solzhenitsyn called "the pitiless crowbar of events"--his 1978 reference to what would wake up, eventually, the Carter administration (turned out to be Russia's 1979 invasion of Afghanistan)--will eventually wake up "Bam.  The scary part is just what events will accomplish the trick.

44 is being "tested" as VP Joe Biden predicted last October would happen within his first 6 months.  Arnaud de Borchgrave sees further nuclear threat tests in 44's future.  Two top experts recommend several steps 44 can take versus the North.  44 will have to reverse field to follow them.  Ex-CIA agent Robert Baer suggests we accept a nuclear Iran and use the threat of total economic sanctions to deter use of weapons; such an embargo makes sense before a nuclearizing event, or to bring down a regime, less so after, as how a nuclearized state contemplating its imminent demise will act is not knowable in advance, with nuclear war scenarios possible by definition.

Nuclear policy maven Graham Allison sees Iran's acquisition of the full knowledge of how to enrich uranium for nuclear weapons as a milestone beyond possibility of reversal.  He proposes that we get Russia & China aboard and warn Iran that severe consequences would follow an Iranian nuclear threat.  Iran, of course, would likely ignore any mere warning.  And why would Russia or China fear a nuclear Iran whose status would weaken America's standing in the Mideast?  Alas, the logic is that with Iran possessing the knowledge to build weapons, regime change is the only security guarantee.  This, barring a miracle, will not happen.

Bottom Line.  North Korea has begun the process of ending Barack Obama's illusions about how one deals with the world's most dangerous regimes.  What we do not know is just what kind of shock it will take to drive home the lesson that illusions are desperately dangerous in matters of nuclearizing states.

LFTC - Is Sonia Supreme?

Given the balance of votes in the Senate, it seems unlikely that President Obama's nomination of liberal appeals judge Sonia Sotomayor can be derailed.  In replacing David Souter she will fill one of the four liberal seats.  With 17 years on the federal bench and a few thousand opinions, to say nothing of speeches, Sotomayor is the opposite of Souter, of whom Teddy Kennedy feared might be "a Bork without a paper trail."  Farther than the truth about Souter that was Teddy no one proved to be.

"A Latina Judge's Voice" (prints at 8 pages) is a speech given by Sotomayor in 2001, and expresses her view of how her heritage and background endow her with superior qualifications as a judge.  She goes on for pages with detailed numbers on the percentage of women and various minority groups on the various federal courts.  And then come these nine closing paragraphs:

"That same point can be made with respect to people of color. No one person, judge or nominee will speak in a female or people of color voice. I need not remind you that Justice Clarence Thomas represents a part but not the whole of African-American thought on many subjects. Yet, because I accept the proposition that, as Judge Resnik describes it, "to judge is an exercise of power" and because as, another former law school classmate, Professor Martha Minnow of Harvard Law School, states "there is no objective stance but only a series of perspectives - no neutrality, no escape from choice in judging," I further accept that our experiences as women and people of color affect our decisions. The aspiration to impartiality is just that--it's an aspiration because it denies the fact that we are by our experiences making different choices than others. Not all women or people of color, in all or some circumstances or indeed in any particular case or circumstance but enough people of color in enough cases, will make a difference in the process of judging. The Minnesota Supreme Court has given an example of this. As reported by Judge Patricia Wald formerly of the D.C. Circuit Court, three women on the Minnesota Court with two men dissenting agreed to grant a protective order against a father's visitation rights when the father abused his child. The Judicature Journal has at least two excellent studies on how women on the courts of appeal and state supreme courts have tended to vote more often than their male counterpart to uphold women's claims in sex discrimination cases and criminal defendants' claims in search and seizure cases. As recognized by legal scholars, whatever the reason, not one woman or person of color in any one position but as a group we will have an effect on the development of the law and on judging.

"In our private conversations, Judge Cedarbaum has pointed out to me that seminal decisions in race and sex discrimination cases have come from Supreme Courts composed exclusively of white males. I agree that this is significant but I also choose to emphasize that the people who argued those cases before the Supreme Court which changed the legal landscape ultimately were largely people of color and women. I recall that Justice Thurgood Marshall, Judge Connie Baker Motley, the first black woman appointed to the federal bench, and others of the NAACP argued Brown v. Board of Education. Similarly, Justice Ginsburg, with other women attorneys, was instrumental in advocating and convincing the Court that equality of work required equality in terms and conditions of employment.

"Whether born from experience or inherent physiological or cultural differences, a possibility I abhor less or discount less than my colleague Judge Cedarbaum, our gender and national origins may and will make a difference in our judging. Justice O'Connor has often been cited as saying that a wise old man and wise old woman will reach the same conclusion in deciding cases. I am not so sure Justice O'Connor is the author of that line since Professor Resnik attributes that line to Supreme Court Justice Coyle. I am also not so sure that I agree with the statement. First, as Professor Martha Minnow has noted, there can never be a universal definition of wise. Second, I would hope that a wise Latina woman with the richness of her experiences would more often than not reach a better conclusion than a white male who hasn't lived that life.  (Italics mine.)

"Let us not forget that wise men like Oliver Wendell Holmes and Justice Cardozo voted on cases which upheld both sex and race discrimination in our society. Until 1972, no Supreme Court case ever upheld the claim of a woman in a gender discrimination case. I, like Professor Carter, believe that we should not be so myopic as to believe that others of different experiences or backgrounds are incapable of understanding the values and needs of people from a different group. Many are so capable. As Judge Cedarbaum pointed out to me, nine white men on the Supreme Court in the past have done so on many occasions and on many issues including Brown.

"However, to understand takes time and effort, something that not all people are willing to give. For others, their experiences limit their ability to understand the experiences of others. Other simply do not care. Hence, one must accept the proposition that a difference there will be by the presence of women and people of color on the bench. Personal experiences affect the facts that judges choose to see. My hope is that I will take the good from my experiences and extrapolate them further into areas with which I am unfamiliar. I simply do not know exactly what that difference will be in my judging. But I accept there will be some based on my gender and my Latina heritage.

"I also hope that by raising the question today of what difference having more Latinos and Latinas on the bench will make will start your own evaluation. For people of color and women lawyers, what does and should being an ethnic minority mean in your lawyering? For men lawyers, what areas in your experiences and attitudes do you need to work on to make you capable of reaching those great moments of enlightenment which other men in different circumstances have been able to reach. For all of us, how do change the facts that in every task force study of gender and race bias in the courts, women and people of color, lawyers and judges alike, report in significantly higher percentages than white men that their gender and race has shaped their careers, from hiring, retention to promotion and that a statistically significant number of women and minority lawyers and judges, both alike, have experienced bias in the courtroom?

"Each day on the bench I learn something new about the judicial process and about being a professional Latina woman in a world that sometimes looks at me with suspicion. I am reminded each day that I render decisions that affect people concretely and that I owe them constant and complete vigilance in checking my assumptions, presumptions and perspectives and ensuring that to the extent that my limited abilities and capabilities permit me, that I reevaluate them and change as circumstances and cases before me requires. I can and do aspire to be greater than the sum total of my experiences but I accept my limitations. I willingly accept that we who judge must not deny the differences resulting from experience and heritage but attempt, as the Supreme Court suggests, continuously to judge when those opinions, sympathies and prejudices are appropriate.

"There is always a danger embedded in relative morality, but since judging is a series of choices that we must make, that I am forced to make, I hope that I can make them by informing myself on the questions I must not avoid asking and continuously pondering. We, I mean all of us in this room, must continue individually and in voices united in organizations that have supported this conference, to think about these questions and to figure out how we go about creating the opportunity for there to be more women and people of color on the bench so we can finally have statistically significant numbers to measure the differences we will and are making."

The nominee's defenders will try to put all sorts of context-saving interpretations on this speech.  I can only urge LFTC readers, if not satisfied with my 9 paragraphs excerpted, to take a few minutes and read the entire speech.  This was a major address at a major event, not a casual utterance.  It is a statement of her deeply-held beliefs on a major topic of concern.

Washington Post columnist Ruth Marcus, no righty she, says that efforts to explain away the judge's Latina remark do not hold water.  George Will, perhaps the finest non-lawyer analyst on Supreme Court matters, pegs the Latina lady as an "identity justice" candidate.  Will excerpts a telling quote from Thurgood Marshall, the African-American lawyer (a great one) and Supreme Court Justice (an energetic liberal activist) and wonder if the nominee accepts it: "You do what you think is right and let the law catch up."  In an earlier column Will reported crisply on the April oral argument in a case involving reverse discrimination against white firefighters in New Haven, Connecticut; white job applicants with higher test scores were denied promotions (fixed 1 PM, 6/1).  Will notes that Chief Justice John Roberts asked a pointed question about whether New Haven could hire whites with lower exam scores than blacks and not get sued.  Here is the April 22, 2009 Supreme Court oral argument transcript in the New Haven firefighter case, Ricci v De Stefano.

Terry Eastland, highly expert in judicial matters, shreds 44's "empathy" criterion for picking judges.  Michael Barone wonders if the judge's style--and lack of intellectual heft--will impair her ability to influence other Supremes, should she win elevation.  Put another way, would she be a mere vote, like the Justice, David Souter, she may replace; or would she provide the influential voice to sway others, that 44 wants?  If she is just a vote, trading her for Souter is mostly a wash.

Charles Krauthammer notes that Judge Sotomayor was one of the appeals judges who ruled against the white applicants, and argues for GOP senators making the case against Sotomayor on principle.  CK then says the GOP should vote to confirm Sotomayor--solely on the grounds that Presidents are entitled to appoint Justices who reflect their views.  Nice, but a symbolic losing vote against Sotomayor is needed if the party is to explain to voters why her style of judging is unacceptable.  Voters draw broad, not nice, distinctions, and procedural arcana sail by the vast majority.  Jed Babbin at Human Events adds that Sotomayor is a member of the National Council of La Raza (the race"), a radical leftist Hispanic activist group that leads the cause of legalizing illegal immigration.

LA Times columnist Gregory Rodriquez illustrates the absurd thicket of racial politics, noting that most Hispanics identify themselves not as "Latino"--or "Latina" as Sotomayor does--but by country of origin; he adds that with 65 percent of Hispanics living in the US being of Mexican descent, the all-encompassing label Latino/Latina helps smaller Hispanic groups like Puerto Ricans, who are 10 percent of American Hispanics, and Cubans, who are 4 percent, but may not help the Mexican majority.  GR fears that elevating a Puerto Rican to Associate Justice may make elevation of a Mexican-American to the Supreme Court less likely in the future--the Hispanic slot having been seen as filled.  Can anything else better illustrate the insanity and incoherence of a racial spoils system?

WSJ pundit Kim Strassel dredges up history President 44 would rather forget: 44's statements about Clarence Thomas, as to ethnicity and legal qualifications:

The president, after all, had taken great pains to explain that this is more than an American success story. Rather, it is Judge Sotomayor's biography that uniquely qualifies her to sit on the nation's highest bench -- that gives her the "empathy" to rule wisely. Judge Sotomayor agrees: "I would hope that a wise Latina woman with the richness of her experiences would more often than not reach a better conclusion [as a judge] than a white male who hasn't lived that life," she said in 2001.

If so, perhaps we can expect her to join in opinions with the wise and richly experienced Clarence Thomas. That would be the same Justice Thomas who lost his father, and was raised by his mother in a rural Georgia town, in a shack without running water, until he was sent to his grandfather. The same Justice Thomas who had to work every day after school, though he was not allowed to study at the Savannah Public Library because he was black. The same Justice Thomas who became the first in his family to go to college and receive a law degree from Yale.

By the president's measure, the nation couldn't find a more empathetic referee than Justice Thomas. And yet here's what Mr. Obama had to say last year when Pastor Rick Warren asked him about the Supreme Court: "I would not have nominated Clarence Thomas. I don't think that he was a strong enough jurist or legal thinker at the time for that elevation."

In other words, nine months ago Mr. Obama thought that the primary qualification for the High Court was the soundness of a nominee's legal thinking, or at least that's what Democrats have always stressed when working against a conservative judge. Throughout the Bush years, it was standard Democratic senatorial practice to comb through every last opinion, memo, job application and college term paper, all with an aim of creating a nominee "too extreme" or "unqualified" to sit on the federal bench.

There is more in KS's excellent column.

Bottom Line.  What to make of this?  First, Judge Sonia Sotomayor regards all choices as purely relative in principle, in that they are determined by one's perspectives.  Second, she sees women and minorities a better at surmounting their biases because of their life experiences--being discriminated against, etc.  Third, despite her genuflection to all choices being purely relative in principle, she trusts herself to choose better in practice than would white males.

Which leaves one question for me: Does Judge Sotomayor believe that her perspective as a Latina gives here superior insight into how to decide cases involving al-Qaeda detainees, all of whom allege unfair treatment?