Egyptian – American Relations Deteriorating

TheNew York Times reported on the deteriorating relationship between the United States and its former ally, Egypt.  This week Egyptian government prevented six Americans from leaving the country.  They are members of nongovernmental organizations including Sam LaHood, director of the International Republican Institute.  The action against the Americans was in response to President Obama’s warning that the United States might halt its annual $1 billion military aid unless Egypt took more democratic steps.

It was slightly less than a year ago that the Obama Administration backed the demonstrators in Cairo that were calling for the ouster of longtime American ally, Hosni Mubarak.  It is evident that the results of the so-called “Arab Spring” in Egypt were not as Obama and the State Department desired.  Now, a former ally has become an adversary.

When Barack Obama was running for the presidency he promised to improve America’s stature throughout the world.  One of his first actions as president was a speech in Cairo to the Muslim world.  He also went on a worldwide tour apologizing for past American actions.  These rather bizarre actions could be justified if the world became a safer or America was more respected.  With the opposite happening, the failures of Obama’s foreign policy are quickly approaching those of his economic mismanagement.

Spain Misses Deficit Number

Earlier this month it was reported that Spain will overshoot its targeted budget deficit by nearly $20 billion.  Spain’s deficit target of 6% of GDP was a commitment it made to the European Union.  Instead, their deficit will be 8% for 2011.  Missing the target in theory requires Spain to take austerity measures that include budget cuts and tax increases.

Spain is not the only European country to miss the prescribe targets.  Previously, Greece, Portugal and Italy missed their deficit targets.  It is this lack of fiscal responsibility that the has created to the ongoing European sovereign debt crisis.  For too long member countries made fiscal promises that they had no intention to keep.  However, the piper must be paid and this has worldwide economic consequences.

The conundrum for Europe is that even if the affected countries install the required austerity measures necessary to bring them into compliance with Europe’s regulations, it will be an additional drag on their economies.  Cutting government spending and raising taxes are contractive forces.  However, not meeting the debt to GDP ratio will cause the bond markets to increase the cost of borrowing for the affected countries, increasing their debt ratios even further.

In Europe, there are no good solutions, only some less painful than others.  The choices are difficult, especially in democracies that have created so many dependent citizens.  This reality has led to significant economic news during the first month of 2012 including:

• The Wall Street Journal reported that even though Spain has a huge housing glut, some of its banks are investing in building still more houses in order to avoid writing off bad loans.  This is an example of unintended consequences of government interventions and bailouts that will ultimately result in still larger financial problems down the road.

• France and eight European countries suffered ratings downgrades.

• Earlier this month Germany sold €3.9 billion (Euros) six-month bonds with a negative yield of 0.0122%.  In other words people paid German to take their money.  This bit of illogic shows the depth of the growing fears in Europe for sovereign and commercial banks debt.

• The price of gold increasing by over 7% in January.

• German Chancellor Angela Merkel stated her country’s unwillingness to spend more to bail out weaker European countries.  The end-game for Europe’s turmoil can only be temporary help up by German money.  Without it, the sovereign debt crisis in Europe will come to a head in a matter of months, if not weeks.

• The Federal Reserve announced yesterday that they will keep short-term interest rates close to zero “at least through late 2014,” longer than previously indicated.  With this announcement Fed is stating its concern for the economy into the future.

As this Blog has proffered previously, the economic problems facing many countries today is not liquidity; the problem all of the bailouts and governmental interventions attempt to address.  The real problem is one of excess debt, both in the private and public sectors.  This debt must be paid back, often referred to as deleveraging.  It will be a lengthy and painful process.  Unfortunately none of the politicians running for the White House, or the man currently occupying it, is honest enough to share this reality with the electorate.  To them the prize of the Office is just too alluring.

Islamic Militants Stop Food Shipments to Starving Somalians

The Wall Street Journal reported that the Islamic militant group Al-Shabaab stopped shipments of food to about a quarter of a million hungry people in Somalia.  One convoy with 3,500 tons of perishable food has been held up for over a month.

While man’s inhumanity to fellow men has been carried out in the name of all religions throughout history, modern Islamists with causes are matriculating to the use of violence against fellow men in ever-growing numbers.  Yet the Progressives of the world refuse to ask why.

FHA to Continue Insuring Houses for Flippers

“Flippers” is a term that became synonymous with the housing bubble.  During the overheated market that was mainly caused by artificially low interest rates set by the Federal Reserve, investors often purchased homes and within a few months sold them at higher prices.  This speculating accelerated the increase in housing values until the bubble burst, when the excess inventory of houses accelerated the downturn.

The FHA (Federal Housing Administration) is the government arm that insures many of today’s mortgages.  It was created to help make home mortgages more affordable, part of the government’s plan to promote homeownership for Americans.  The FHA previously determined that flippers did not fit in this mission and would not insure mortgages for houses resold within 90 days.  However, the FHA waived this rule in early 2010 in an effort to prop up the housing market.  This waiver was set to expire this month, but has since been extended by the FHA.

The FHA’s meddling has not stopped the downward spiral of housing prices.  However, that has also not stopped Acting Federal Housing Administration Commissioner Carol Galante from claiming: “This extension is intended to accelerate the resale of foreclosed properties in neighborhoods struggling to overcome the possible effects of abandonment and blight.”  Typical of governmental bureaucrats; when a program fails, just do it again.

Almost every time the government intervenes in the market it has promised positive results that have not materialized.  In the housing market it has made over three years of massive interventions that failed.  In addition, these interventions are creating unintended consequences that will cause even more serious issues in the future.  It remains to be seen how long the American people will continue to allow these failed policies to be repeated by the knuckleheads in Washington.

Joe Paterno; a Legend Passes

With the passing of Joe Paterno, it is the end of an era for much more than Penn State and its football program.  Joe Paterno was a throwback to an era when loyalties to one’s employer and country were more than just personal conveniences.  This was evidenced by the over five decades Coach Paterno stayed with one employer, Penn State University, where he lived modestly and donated millions to the University.

Yes, the end of Joe Paterno’s coaching days at Penn State were tainted by the Jerry Sandusky scandal.  However, the fact that Paterno was shown not to be perfect does not detract from the significant good he brought to his University, its football players, and the greater world.

Recently, one of Joe Paterno’s over 5,000 football players that he mentored at Penn State, Mike Guman, gave an interview with his thoughts about Coach Paterno (posted below).  In a few minutes, Guman who also played in the NFL, elegantly speaks for many of us Penn State alumni as he expresses how Paterno was much more than a football coach.

Joe Paterno touched many lives and the world is a much better place because of him.  History will remember with kindness the man who many in recent years referred to as “Joe Pa”.

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Cougar Mascot Latest Mascot Victim of Political Correctness

The Canyons School District in Utah has decided that their student’s choice of the cougar for their schools mascot is inappropriate as it might offend some women.  Why?  Because the beast found in Utah may attack women while jogging?  No, because Hollywood and the hip generation have used the poor critter as a symbol of older gals with fixed faces and tummy tucks chasing younger men.

Yikes, political correctness has taken yet another step closer to book burning!  It is no wonder our children come out of school ill-prepared for the rigors of life or a modern economy.

Government Orders Providers to Provide No Co-Pay Birth Control

The Hill has reported on yet another governmental intrusion in the markets and the people’s private affairs, this one with significant religious implications.  Last week the Obama Administration ordered that beginning in August, healthcare plans must cover birth control without deductibles or co-pay charges to recipients.

This decision is wrong on so many levels.  On the economic side, it will add additional cost for employer supplied healthcare plans.  This will result in increased co-pays for many workers and worse, cause some companies to drop healthcare coverage altogether, both actions offsetting the financial benefit desired by the government.  It will further coerce companies to move employment outside the United States to offset the rising cost of U.S. based employees.

In addition, the new governmental mandate is being forced on religious entities that offer healthcare coverage to their employees.  This governmental intrusion into the freedom of religion is clearly unconstitutional,  In addition, already some of the religious institutions for which birth control goes against their basic tenants have indicated they will either drop their healthcare coverage altogether, or close their doors, in response to the intrusion.  This will not only kill jobs, but also lessen the supplied services to some of the neediest of society.  But that is in keeping with the Progressives’ goals; move power to the government as it fills the vacuum.

In responding to the furor created by the birth control mandate, Health and Human Services Secretary Kathleen Sebelius said: “I believe this proposal strikes the appropriate balance between respecting religious freedom and increasing access to important preventive services.”  It is remarkable how Progressives treat pregnancy more like a disease than a special event in the human existence.  It is also remarkable how they define balance.

Progressives are pleased with the growing governmental intrusions in all aspects of society since most of the actions have been pointed at pet Liberal causes in recent years.  This is a short-sighted approach for what comes around, goes around.  When the reactionaries gain power, as they always do after Leftist intrusions fail, the Right will have its day and use the governmental to further their aims.  This should be of little comfort to any American that believes in the priority of the Constitution, either on the Left or the Right.

NHTSA Shows Bias in Chevy Volt Safety Comments

Less than a month ago General Motors informed all Chevy Volt owners to take their cars to their dealers to have repairs done.  This action was taken after the vehicles proved prone to fires.

In May, 2011, MGA Research was testing a Volt.  After a side-impact crash, the Volt was stored in a garage and caught fire a few days, destroying other cars parked near it.  It was determined that the fire was caused by the car’s leaking coolant damaging a circuit board that controlled its lithium-ion batteries.  The government’s NHTSA (National Highway Traffic Safety Administration) was able to duplicate the fire condition that occurred at MGA Research, prompting the recall by GM.

Curiously, the NHTSC issued a statement supporting the Volt last week indicating: “Based on the available data, NHTSA does not believe that Chevy Volts or other electric vehicles pose a greater risk of fire than gasoline-powered vehicles.”  The Chevy Volt has been a failure in the market before the fire hazard was announced.  As a result, NHTSA’s statement will have little effect on its already dismal sales figures.  However, the fact that President Obama has been a Volt advocate and the government owns 32% of GM brings into question NHTSA’s motivations in watering down the Volt’s current safety problems.

Bad Intelligence Led to Yemen Drone Strike

The Wall Street Journal reported that bad intelligence led to the killings of six innocent civilians in a US drone attack in Yemen.  It seems that some Yemenis fed the bad intelligence to the U.S. that led to a May 25, 2010 drone attack that took out some fellow Yemenis they had grudges against.

It is telling that when George W. Bush authorized waterboarding on a handful of known terrorists bent on killing Americans that the Leftist press created headlines for months.  However, when President Obama authorizes the use of drones for assassinating terrorists that leads to the killing of innocents, it receives almost no press.  It makes a strong statement as to the perverted logic and morals of Progressives.

Obama Refuses to Release his College Transcripts

Realclearpolitics.com has reported on yet another refusal by President Obama to honor the transparency promise made while running for the presidency.  Reporter Ed Henry asked White House Press Secretary Jay Carney about Obama’s refusal to release his college transcripts in the following interchange:

Ed Henry, FOX News: “I don’t know how many years, maybe you do, George Romney released of his college transcripts, but Republicans like to complain that the President has not released his college transcripts.  What is the stated reason for that?”

Jay Carney, White House: “I would refer you to the campaign.  I think we’ve answered this a bunch.  The tradition of releasing income tax records for serious potential nominees, and nominees of the two parties is well established.  It’s not a law.  But it’s well established.  It’s one this President abided by when he was a Senator.  It’s one numerous Republicans and Democrats have abided by and we think it’s a good idea.”

Henry’s response was a clear effort to deflect from the question as he morphed the discussion from one of Obama’s college transcript to that of tax returns.  That’s the typical Washington two-step.

It is curious as to why President Obama refuses to release his college transcripts.  Either he is attempting to hide information or believes that the public does not have a right to the information.  Neither speaks well for the transparency that he so often promised when seeking