Wednesday, June 30, 2010

Press Briefing

Jul 01, 2010

10th Anniversary of Ukraine Women's Fund, by Melanne Verveer, Ambassador-at-Large for Global Women's Issues. Kyiv, Ukraine

Remarks at Enough Project Panel on Conflict Minerals, by Robert D. Hormats, Under Secretary for Economic, Energy and Agricultural Affairs. Remarks as Prepared for Delivery. Washington, DC

The Global Jobs Competition Heats Up - In a new study, corporate leaders say the U.S. business environment is losing its edge when compared countries like China, India and Brazil

India’s strategic advantage over China in Africa

Hastings College of the Law, Christian Legal Society case - The Supreme Court's 'Subsidies': The Justices erode freedom of association

Statement from the President on the Passage of Financial Reform

Kagan's Commerce Show-and-Tell - Hints about her views on ObamaCare

Indo Pak Rapprochement: Unexplored Option of Military to Military Engagement

Libertarians: RomneyCare Unleashed Adverse Selection, As Will ObamaCare

U.S.-Saudi Arabia Fact Sheet

Teacher Tenure Breakout - The new D.C. contract could be a national reform model

Libertarians On Immigrants and Crime: Perception vs. Reality

G-20 leaders don't agree with the president that more spending will revive the economy. Nor do most Americans.

Research on global financial stability: the use of BIS international financial statistics

New Industry Study: Kerry-Lieberman to Destroy Up to 5.1 Million Jobs, Cost Families $1,042 per Year, Wealthiest Americans to Benefit

Vice President Biden's Visit With General Petraeus

The Dodd-Frank Financial Fiasco - The bill all but guarantees bailouts as far as the eye can see, while failing to address real problems like Fan and Fred and our outdated bankruptcy code

CBO: The Long-Term Budget Outlook

Obama’s Oil Spill To-Do List

Espionage History and the 'Russian 10' - The arrest of 'sleeper agents' on U.S. soil is the stuff of spy novels, not the Cold War

Gun Shy - Four Supreme Court justices make the case against constitutional rights

The Rise and Fall of Bear Stearns

Clinton-Obama: The back story

Tuesday, June 29, 2010

Press Briefing

Jan 30, 2010

India, Buddhism and Geopolitics in Central Asia: Regaining Centrality

The Road to Kabul Runs Through Islamabad - Pakistani leaders are desperate to broker a deal with Karzai and the Haqqani network. Petraeus understands why.

The Boris and Natasha Show - Stealing American secrets is standard Putin procedure

The Bucyrus Travesty - A tale of two loan guarantees

Briefing by Senior Administration Officials on the President's National Space Policy Via Teleconference

Why Obamanomics Has Failed - Uncertainty about future taxes and regulations is enemy No. 1 of economic growth

‘Not since FDR has a president done so much to transform a country’

Right now, the U.S. path leads from debt to deflation to stagflation. There's got to be a better way.

The White House - Elena Kagan's Strong Support of the Military

The Bailout Tax - The latest reason to oppose Dodd-Frank

National Space Policy

Price Transparency in Health Care: Will it Bend the Cost Curve?

Kagan’s clerkship with Thurgood Marshall a huge asset

The Dodd-Frank Assault on Economic Recovery

Monday, June 28, 2010

Press Briefing

Jun 29, 2010

WH: Elena Kagan's Opening Testimony

Sarbox Survives - A modest victory for Presidential power

The Supreme Court's Gun Showdown - Privileges or Immunities Clause

The White House Blog - President Obama on the Loss of Senator Robert Byrd: "A Voice of Principle and Reason"

King of Pork—and Proud of It - Robert Byrd made the most of his time in the Senate

The President's Plan to Increase Spectrum - Technology & the Economy

Panetta's Bomb - Now the CIA tells us Iran is going nuclear, and sanctions won't work

Cutting Waste by Reforming IT

Afghanistan: Eyes Wide Shut - Federal President's ambivalence toward the war is energizing our enemies and undermining our allies

The White House Blog - Improved Access to Preventive Care for Seniors

Five Gun Salute - The High Court's four liberals are holding out to overturn Heller

IMF Analsyt Study: Currency Hedging for International Portfolios. By Jochen M. Schmittmann
Summary: This paper examines the benefits from hedging the currency exposure of international investments in single- and multi-country equity and bond portfolios from the perspectives of German, Japanese, British and American investors. Over the period 1975 to 2009, hedging of currency risk substantially reduced the volatility of foreign investments at a quarterly  investment horizon. Contrary to previous studies, the paper finds that at longer investment horizons of up to five years the case for hedging for risk reduction purposes remained strong.In addition to its impact on risk, hedging affected returns in economically meaningful magnitudes in some cases.

The End of Community Banking - Creditworthy borrowers will be denied loans as small banks devote more and more energy to regulatory compliance

White House Open For Questions: Energy and Climate Legislation with Heather Zichal

Stopping the Slick, Saving the Environment: A Framework for Response, Recovery, and Resiliency

U.S., Pakistan Hold Strategic Dialogue on Health Issues

Will Elena Kagan Defend the Rule of Law?

Press Briefing

Jun 28, 2010

EPA Bans Human "Guinea Pig" Studies

Krugman: The Third Depression

Canada: Land of the Free - At the G-20 summit in Toronto this weekend it will lead the charge against new bank taxes and for spending restraint. Who says our neighbor is boring?

The German Experiment - The government sets a premium price on solar and other alternative power sources. The policy offers lessons in ways to encourage the use of renewable energy.

Generation Gap - The Kerry-Lieberman energy bill would enervate America

Why Friedrich Hayek Is Making a Comeback - With the failure of Keynesian stimulus, the late Austrian economist's ideas on state power and crony capitalism are getting a new hearing

WaPo on Kagan: A Supreme conversation

Kagan's Commerce Clause - Can Congress compel Americans to do anything?

The White House Blog - A Cause for Hope

On S Korea Trade Agreement: Smart trade

Korean Trade Epiphany - Federal President discovers the benefits of an agreement he has disdained for three years

Forbes on Hillary Clinton As Accidental Supply-Sider - She's right about Brazil's growth. She's wrong about its tax rates

Petraeus and Obama's Uncertain Trumpet - There is a mismatch between the general's Afghan mission and the president's summons to his countrymen

The White House Blog: Keeping Up with the G8 and G20

Triumph of the Regulators - The Dodd-Frank financial reform bill doubles down on the same system that failed

Weekly Address: Finishing the Job on Wall Street Reform

The Kevin Rudd Lesson - Australia's prime minister fell because he threatened the nation's economic prosperity

In 2009, U.S. Led the Rest of the World in Increases of Oil and Natural Gas Production; China Recorded the Greatest Increase in Energy Consumption and Emissions

Saturday, June 26, 2010

Press Briefing

Jun 26, 2010

Shaping a Common Vision of Security between Russia and the United States. By Rose Gottemoeller, Assistant Secretary,

Bureau of Verification, Compliance, and Implementation. Ploughshares Fund-PIR Centre Conference. Moscow, Russia

Do Developed and Developing Countries Compete Head to Head in High-tech? By Lawrence Edwards, Robert Z. Lawrence
NBER Working Paper No. 16105
Concerns that (1) growth in developing countries could worsen the US terms of trade and (2) that increased US trade

with developing countries will increase US wage inequality both implicitly reflect the assumption that goods produced

in the United States and developing countries are close substitutes and that specialization is incomplete. In this

paper we show on the contrary that there are distinctive patterns of international specialization and that developed

and developing countries export fundamentally different products, especially those classified as high tech.

The Great Danes: Cultural Values and Neoliberal Reforms
The paper examines the relationship between civic values and neoliberal reforms. It shows that countries with more

idealistic (or civic-minded) cultural attitudes also have more neoliberal economic policies. In addition, countries

with more idealistic cultural values moved most rapidly toward market reforms after 1980. In less civic-minded

cultures, rent-seeking special interest groups blocked reform, even as the superiority of the neoliberal economic

model became increasingly apparent.

Humanoid Robot Justin Learning To Fix Satellites

Jobs and Financial Regulation Reform: A Preliminary Look

DLC: Ban the Gerrymander

Libertarian: Rethinking jobless benefits

Conservatives: Halting the Explosive Growth of Welfare Entitlements

Thursday, June 24, 2010

Press Briefing

Jan 25, 2010

On BPA: Speak Up, Science & Industry -- or Forever Hold Your Peace

Obama Is Missing in Action on Gay Rights - Ted Olson is on the right side of history. When will the president step up?

Ambassador Eikenberry Receives First Honorary Degree From National Military Academy of Afghanistan

A Weakened U.S. Goes to the G-20 - In Toronto, summiteers will be courting China—not the U.S.—as the world's pre-eminent source of dollar financing

Petraeus's Opportunity - His selection reassures our Afghan allies that the U.S. will not begin substantial troop reductions until the Afghans can handle the insurgents on their own

The Roundtable's Great Awakening - Big business discovers President Obama's 'hostile environment.'

Breakthrough in Capturing Lost Energy in Solar Cells - "Hot carrier" solar cells could be twice as efficient as today's

Why It's Safer to Drill in the 'Backyard' - Texas has had 102 oil and gas well blowouts since the start of 2006, without catastrophic consequences

The White House Blog - Reset with Russia Continues

Repeal ObamaCare: Yes We Can

Policies of Scarcity in a Land of Plenty

Conrad Black's Revenge - The Supreme Court reins in a vague and often abused law

Assistant Secretary Brimmer Speaks With Students at John Cabot University. By Esther Brimmer, Assistant Secretary, Bureau of International Organization Affairs. Rome, Italy

No Rush to Judgment on New START

Wednesday, June 23, 2010

Press Briefing

Jun 24, 2010

Using Comparative Effectiveness Research to Improve the Health of Priority Populations

BIS Annual Reports 1931 to 1996

War Is No Place for Libel Law - A federal court slaps down a novel claim from a Sudanese business bombed by the U.S. in 1998

A Missed Opportunity on Financial Reform - How could Fannie Mae and Freddie Mac have escaped Congress's attention?

U.S. Assistance in Response to the Current Humanitarian Crisis in the Kyrgyz Republic and Uzbekistan

Democrats and the McChrystal Fiasco - They politicized generals during the Bush administration and fomented distrust between civilian and military leaders

The White House Blog - The Secret Life of White House Bees

The Family Business Revenue Act - A tax on the wealthy becomes a tax on mom and pop

Al Gore & D Blood: Toward Sustainable Capitalism - Long-term incentives are the antidote to short-term greed

Volcker and Derivatives - The end game for financial reform

President Obama on LGBT Pride Month: Extraordinary Progress, But Hard Work Left to Do

The Petraeus Hail Mary - Obama makes a wise choice, but the general needs more support

How the UN Can Contribute to International Cooperation on Climate Change. By Maria Otero, Under Secretary for Democracy and Global Affairs. NY-Alesund Symposium, Svalbard, Norway

Federal Presidents’s Leadership Vacuum

It's Time America Had a Fat President

Tuesday, June 22, 2010

Press Briefing

Jun 23, 2010

Implementing the Affordable Care Act

The "government needs to be removing itself from the private sector"

The White House Blog - The Affordable Care Act -- Benefits and Weights Being Lifted

$100,000 Is Plenty for Deposit Insurance - Raising the cap will enhance the ability of weak banks to expand their deposit base and cause trouble for the FDIC

America and the Middle East in a New Era

Obama's Moratorium, Drilled. WSJ Editorial
A federal judge instructs the White House on the rule of law
WSJ, Jun 23, 2010

As legal rebukes go, it's hard to get more comprehensive than the one federal judge Martin Feldman delivered yesterday in overturning the Obama Administration's six-month moratorium on deep water drilling in the Gulf of Mexico.

In a remarkably pointed 22-page ruling, the judge made clear that even Presidents aren't allowed to impose an "edict" that isn't justified by science or safety.

Oil-services companies brought the case, which is supported by the state of Louisiana, arguing that the White House ban was "arbitrary and capricious" in exceeding federal authority, and Judge Feldman agreed. He noted that even after reading Interior Secretary Ken Salazar's report on safety recommendations (which included the ban), and Mr. Salazar's memo ordering the ban, "the Court is unable to divine or fathom a relationship between the findings and the immense scope of the moratorium."

Quite the opposite, said the judge, "the Report makes no effort to explicitly justify the moratorium." It does "not discuss any irreparable harm that would warrant a suspension of operations" and doesn't provide a timeline for implementing proposed safety regulations. There is "no evidence" that Mr. Salazar "balanced the concern for environmental safety" with existing policy, and "no suggestion" that he "considered any alternatives." The feds couldn't even coherently define "deep water." Ouch.

As these columns have argued, the judge said that the illogic of the moratorium is that "because one rig failed and although no one yet fully knows why, all companies and rigs drilling new wells over 500 feet also universally present an imminent danger." Because this will cause "irreparable harm" to jobs and to domestic energy supplies, such a sweeping ban couldn't stand.

The judge also went out of his way to express "uneasiness" over the Administration's claim that its safety report (which recommended the ban) had been "peer reviewed" by experts. Those experts have since publicly disavowed the ban, explaining that the ban was added to the report only after they had signed off on an earlier draft. White House green czar Carol Browner dismissed their complaints, saying "No one's been deceived or misrepresented."

But Judge Feldman directly contradicted Ms. Browner, describing the report's claim of "peer review" as "factually incorrect." Moreover, the Administration's "hair-splitting explanation" of what the experts did or didn't support "abuses reason, common sense, and the text at issue."

The judge's other public service was to list the environmental groups that had joined the Administration's defense against the suit. They included the Natural Resources Defense Council, whose president, Frances Beinecke, has been appointed by President Obama to his deep water drilling commission. Ms. Beinecke ought to resign.

The Administration says it will appeal, but the thorough-going nature of the judge's ruling suggests the Administration will need a much better legal and substantive case to prevail. It would do better to use the ruling as an excuse to drop its purely political ban and stop compounding the spill's damage to the people and economy of the Gulf.

Bosnia and Herzegovina: Promoting Security By Destroying Conventional Weapons

Orszag Adieu - The 'cost curve' bent the budget director

Geithner & Summers: Our Agenda for the G-20 - Countries should work to stabilize debt levels, enact new financial regulation, and reduce their dependence on fossil fuels

Blowouts Will Not Always Be Prevented - We are curiously unwilling to acknowledge known risks

Why McChrystal Has to Go - It is intolerable for military officers to mock senior political officials, including ambassadors and the vice president

Fire McChrystal Pronto

IER Statement on Court Order Overturning Obama Admin. Deepwater Drilling Ban

The White House Blog: Building Regional Energy Innovation Cluster

Daddy Was Only a Donor - A new study paints a troubling portrait of children conceived by single mothers who chose insemination

China Currency 2.0: Yes, Change Really Is Coming

Conservatives: Time to Dump the Afghanistan Timeline

Moral Hazard and China's Banks - Beijing could face its own banking crisis unless more market discipline is introduced

Moral Hazard and China's Banks. By VICTOR SHIH
Beijing could face its own banking crisis unless more market discipline is introduced.WSJ, Jun 22, 2010

Some policy makers in Beijing have taken to crowing that their economic model is superior to the West's because China didn't suffer a banking crisis. They're wrong in at least one critical respect: moral hazard. In China, just as in the West, banks and businesses have grown accustomed to gambling with other people's money on the assumption that the government will bail them out if they lose.

The key fact governing most credit and investment decisions today is that everyone believes the central bank would bail out any financial institution, large or small. The central government has consistently repaid depositors in the event of bank closures. The promise is different from, and worse than, traditional deposit insurance in that banks don't pay a premium for the benefit—it just happens.

This causes ripples throughout the financial system. Depositors and investors are at ease with placing much of their savings into financial institutions because of the central bank's blanket guarantee, allowing these institutions to provide ample liquidity to firms. The guarantee also minimizes the chance of a panic, thus enforcing everyone's confidence in the system.

Two other regulations help bolster a deceptive sense of security. First, the China Banking Regulatory Commission imposes a large basket of prudential targets on all banks, including capital-adequacy ratio, debt-asset ratio and nonperforming-loan ratio requirements, as well as a long list of lending rules. Furthermore, the Communist Party sends inspectors to monitor the banking regulators.

The guarantee and intrusive regulations make the system less secure, not more. Given the ultimate backstop, profits from risky behavior can be so high that banks are willing to share some of the spoils with corrupt regulators who can help them circumvent bothersome rules. In one recent case, the vice president of the China Development Bank was convicted of receiving bribes to grant loans against regulations. In another case, a banker in southern Guangdong province bribed local police to arrest an auditor evaluating the bank branch's books.

This kind of behavior would be difficult in a system with a freer media and an independent judiciary. But China's system depends mainly on top-down monitoring, where a borrower need only elicit the help of a powerful official. As an added benefit, if the loan fails, borrowers can work with banks to roll over loans with the regulators' full blessing.

As a consequence, financial-system risks build up over time at an unknown pace. Small crises are not allowed to emerge to inform the public of accumulating systemic risks—unlike in the United States, where a growing number of small bank failures can serve as a canary in a coal mine.

The only way to avert a future crisis of confidence is to tackle moral hazard. First, the central bank's blanket guarantee should be removed from small financial institutions that engage in reckless lending. Depositors must learn to be suspicious of banks doing the bidding of ambitious local authorities.

Second, while it may be difficult to take similar steps for large banks because of systemic risks, these institutions should be required to disclose when large-scale borrowers restructure or roll over major loans. Instead of only reporting the identities of the largest borrowers overall, listed banks should disclose the identities of their largest borrowers in every province or even city so that investors can conduct their own due diligence.

Third, regulators also need to rethink the incentives their rules create. The current system of imposing target caps on nonperforming loans encourages bankers and local regulators to collude to hide them. These targets should be scrapped in favor of higher capital-adequacy ratios and much stricter restrictions on borrowers' ability to roll over loans or to convert short-term loans into long-term loans. If losses arise, banks should be encouraged to simply recognize them and move on.

China's moral hazard problem manifests itself somewhat differently from that in the West, but the end result is the same: If all financial institutions are perceived as too big to fail, while misguided regulations give a false impression of safety, plenty of bankers and investors will be happy to take advantage.

Mr. Shih is a professor of political science at Northwestern University and the author of "Factions and Finance in China: Elite Conflict and Inflation" (Cambridge University Press, 2008).

Monday, June 21, 2010

Press Briefing

Jan 22, 2010

Resolving the financial crisis: are we heeding the lessons from the Nordics?, by Claudio Borio, Bent Vale and Goetz von Peter. Bis Working Papers No 311

A Battle Against the Odds - How tribal leaders helped the U.S. in Iraq—and the lessons for Afghanistan

An Update from the President on the BP Oil Spill

Moral Hazard and China's Banks - Beijing could face its own banking crisis unless more market discipline is introduced

Iran's Democratic Manifesto - Mousavi has issued a clear call for democracy, the separation of mosque and state, and a gentler foreign policy

The Sotomayor Precedent - Obama's nominee joins the Ninth Circuit, loses three times

Live Video: Secretary Clinton To Deliver Remarks Celebrating LGBT Pride Month

Colombia Speaks - But will the Federal President listen?

The White House Blog - The President's Record on Border Security

The Antidrilling Commission - The White House choices seem to have made up their minds
 "Under my Administration, the days of science taking a back seat to ideology are over. . . To undermine scientific integrity is to undermine our democracy. . . I want to be sure that facts are driving scientific decisions, and not the other way around."
            —President Obama, April 27, 2009

A Negotiated Solution for Afghanistan? - Whatever his other weaknesses, President Karzai is not about to surrender to the Taliban at the peace table

UN Convention Against Transnational Organized Crime, by Elizabeth Verville, Deputy Assistant Secretary, Bureau of International Narcotics and Law Enforcement Affairs. Remarks at a High-level Meeting of the UN General Assembly, NYC

A Visit Inside Turkey's Islamist IHH - A journalist's trip to the headquarters of the extremist group that sponsored the Mavi Marmara

Farewell to the Shadow Shoguns

The Obama Speech We're Waiting For: Fannie Mae and Freddie Mac need to get the BP treatment

Iran and the European Moment - The Continent has no more excuses not to act against Tehran

Decks are stacked against China keeping its stake in Korea game

Can 'Pashtunistan' end the Af-Pak war?

Firms paid to shut down wind farms when the wind is blowing - Britain's biggest wind farm companies are to be paid not to produce electricity when the wind is blowing

Press Briefing

Jan 21, 2010

Chomsky's Nightmare: Is Fascism Coming to America?

Time to Stand Up to the National Standards Agenda

Churchill's Stogie Up In Smoke

On Eric Jaffe's The King's Best Highway - The Lost History of the Boston Post Road, the Route that Made America

WH Blog: President Obama Breaks Ground on 10,000th Recovery Act Road Project; Let the Summer of Recovery begin!

Think Globally, Sue Locally - The plaintiffs bar goes international and focuses on trashing a corporation's image

On the Precautionary Principle: The Gulf disaster rehabilitates a discredited idea - The 'Paralyzing' Principle

Pakistan's Medieval Constitution - It is the only Muslim nation to explicitly define who is or is not a 'Muslim'

The China Currency Syndrome - World leaders would do better to worry less about imbalances and more about whether their own nations are pursuing policies that contribute to global prosperity

U.S. Will Contribute Additional $60 Million to United Nations Relief and Works Agency for Palestine Refugees

ObamaCare and the Independent Vote - Voter opposition hasn't changed, and it could be decisive in November

Ending Lobbyist Appointments to Agency Boards and Commissions

Capital-Control Comeback - As money flows to Asia, politicians play King Canute

Celebrex: Something to Celebrate

Federal President Weekly Address: Republicans Blocking Progress

Conservatives: Married Fathers-America’s Greatest Weapon Against Child Poverty

Saturday, June 19, 2010

Press Briefing

Jan 19, 2010

Why Pakistan Must Change Its Priorities - ISI and the Taliban

Adjustments to the Basel II market risk framework announced by the Basel Committee

Free eBook: Cult of the Presidency - America's Dangerous Devotion to Executive Power

The Vanity Tax - The trouble with the government's new tax on indoor tanning services

Surfing the Chinternet - What hides behind the "Great Firewall" of China?

Why is the United States Always the Supplicant? Part of the answer, no doubt, is our uninhibited displays of eagerness

US Helps Drought-Affected Niger With First Award Under the Emergency Food Security Program

On NASA's comments to EPA Fears of Formaldehyde

Scoop: KUKA's youBot Mobile Manipulator Unveiled

EPA Foments Baseless Fear of Formaldehyde

Keep Your Junk Science Off My Salt

How 'Protectionist' Became An Insult - As Congress dawdles on trade agreements, the harsh results of the Smoot-Hawley tariff should not be forgotten

Friday, June 18, 2010

The Trouble With Teacher Tenure - We can't make progress if bad teachers have jobs for life

The Trouble With Teacher Tenure. By TIMOTHY KNOWLES
We can't make progress if bad teachers have jobs for life.WSJ, Jun 18, 2010

Colorado did right by its kids recently when Gov. Bill Ritter signed into law groundbreaking education reform to overhaul teacher tenure and evaluation. The bill elicited an outcry from many teachers. But the many states now considering similar measures must not be cowed by the firestorm.

As a former teacher, principal and district leader, I've devoted my life to providing children with the excellent education they deserve. And in my 23 years on the job, there are two things I've learned for certain.

First, teachers have a greater impact on student learning than any other school-based factor. Second, we will not produce excellent schools without eliminating laws and practices that guarantee teachers—regardless of their performance—jobs for life.

Nearly everyone in public education has a story that illustrates the Kafkaesque process of trying to remove a tenured teacher. Mine involves a teacher in Boston who napped each day in the back of the room while students copied from the board. Despite repeated efforts, the district failed to fire him.

Such anecdotes are reinforced by hard data. An award-winning study of Illinois school districts over an 18-year period found an average of two tenured teachers out of 95,000 were dismissed for underperformance each year. Nationally, between 0.1% and 1% of tenured teachers are dismissed annually, according to the Center for American Progress.

It's not news that students suffer when very low-performing teachers are allowed to remain in the classroom. But teachers suffer too. In a forthcoming article, my colleague Sara Ray Stoelinga of the University of Chicago Urban Education Institute illustrates how teacher tenure creates perverse practices in schools across Chicago. In interviews with 40 principals, 37 admitted to using some type of harassing supervision—cajoling, pressuring or threatening—to get teachers to leave in order to circumvent the byzantine removal process mandated by the union contract. One principal plotted to remove a teacher who had trouble climbing stairs by assigning her to a fourth-floor classroom. Another reassigned a teacher who had been teaching eighth-graders for 14 years to a first-grade classroom.

This pathological status quo feeds upon itself: The more difficult it is for principals to address underperformance, the more likely they are to use informal methods to do so. This fuels labor's argument that management is capricious, strengthening their case for increased employment protection.

This cycle leads to what educators call "the dance of the lemons"—the practice of shuffling underperforming teachers from school to school. It's easier to push a teacher to a school down the street than it is to push them out of the profession.

The effect that bad teachers have on relationships among teachers and principals might be the most corrosive aspect of tenure laws. In the book "Organizing Schools for Improvement," University of Chicago researchers showed that the quality of adult relationships in a school profoundly affects student achievement. Analyzing more than a decade's worth of data from Chicago Public Schools, they found that schools where adults demonstrate a shared sense of responsibility for student learning are four times more likely to make substantial gains in reading than schools without strong professional ties. Schools where principals set high standards and involve teachers in decision making are seven times more likely to make substantial improvements in math than schools weak on such measures. But cooperative relationships are difficult to maintain when principals must use underhanded methods to remove ineffective teachers, and when bad teachers undermine staff morale.

The good news is that the majority of teachers are not interested in protecting colleagues who don't belong in the classroom. Last summer the American Federation of Teachers surveyed its members, asking: "Which of these should be the higher priority: working for professional teaching standards and good teaching, or defending the job rights of teachers who face disciplinary action?" According to Randi Weingarten, the union's president, "by a ratio of 4 to 1 (69% to 16%), AFT members chose working for professional standards and good teaching as the higher priority." She elaborated: "Teachers have zero tolerance for people who . . . demonstrate they are unfit for our profession."

The time has come to eliminate tenure. We are facing monumental challenges in our quest to provide all students with an education that will prepare them to compete in a globalized economy. By removing one of the main sources of friction between labor and management, we can focus on the substantive issues: training, evaluating and rewarding teachers to make teaching a true profession.

Mr. Knowles is the director of the University of Chicago Urban Education Institute.

Thursday, June 17, 2010

Press Briefing

Jan 18, 2010

New START and implications for National Security Programs. By Hillary Clinton, Secretary of State. Opening Statement Before the Senate Armed Services Committee Hearing on the New START. Washington, DC

U.S. Assistance in Response to the Current Humanitarian Crisis in the Kyrgyz Republic and Uzbekistan. US State Dept

The Trouble With Teacher Tenure - We can't make progress if bad teachers have jobs for life

Good Jobs and a Level Playing Field in the Next Recovery

The Gulf Spill Record - Here's the rest of the story on USA Today's "Oil spills escalated in this decade."

The White House Blog: A New Process and a New Escrow Account for Gulf Oil Spill Claims from BP

BP at first sounded arrogant and now is so obsequious it won't even stand up for its legal rights

New York and the New England Journal of Medicine. By Peter R. Orszag, Director, OMB

Reforming Main Street - A trial-lawyer bonanza gets air-dropped into the financial bill

Greenspan: U.S. Debt and the Greece Analogy - Don't be fooled by today's low interest rates. The government could very quickly discover the limits of its borrowing capacity.

New York and the New England Journal of Medicine. By Peter R. Orszag, Director, OMB

In Medical Malpractice Reform, States Should Shirk the Washington Way

U.S. Treasury Department Targets Iran's Nuclear and Missile Programs. Bureau of International Security and Nonproliferation

Cisneros Rewriting HUD History

Missile Defense: We've committed to developing proven technologies, and the new START Treaty won't stand in our way. By M Flournoy, Under Sec of Defense for Policy & A Carter, Under Sec of Defense for Acquisition, Technology & Logistics

Rahming Through a Lame Duck Climate Bill?

Expert: Obama speech too 'professorial' for his target audience

An Offer BP Couldn’t Refuse

The Water Cost of Carbon Capture

Cisneros Rewriting HUD History

Cisneros Rewriting HUD History

Posted by Tad DeHaven, Cato, June 17, 2010 @ 1:50 pm

In a recent speech to real estate interests, former Clinton HUD secretary Henry Cisneros preposterously claimed that the recent housing meltdown “occurred not out of a governmental push, but out of a hijacking of the homeownership process by some unscrupulous interests.”
The only criticisms Cisneros could muster for the government’s housing policies over the past 20 years were that regulations weren’t tough enough and it should have focused more on rental subsidies.

The reality is that Cisneros-era HUD regulations and policies directly contributed to the housing bubble and subsequent burst as a Cato essay on HUD scandals illustrates:
  • Cisneros’s HUD pursued legal action against mortgage lenders who supposedly declined higher percentages of loans for minorities than whites. As a result of such political pressure, lenders begin lowering their lending standards.
  • On Cisneros’s watch, the Community Reinvestment Act was used to pressure lenders into making more loans to moderate-income borrowers by allowing regulators to deny merger approvals for banks with low CRA ratings. The result was that banks began issuing more loans to otherwise uncreditworthy borrowers, while purchasing more CRA mortgage-backed securities. More importantly, these lax standards quickly spread to prime and subprime mortgage markets.
  • The Clinton administration’s National Homeownership Strategy, prepared under Cisneros’s direction, advocated “financing strategies, fueled by creativity and resources of the public and private sectors, to help homebuyers that lack cash to buy a home or income to make the payments.” In other words, his policies encouraged the behavior that he now calls “unscrupulous.”
  • Cisneros’s HUD also put Fannie Mae and Freddie Mac under constant pressure to facilitate more lending to “underserved” markets. It was under Cisneros’s direction that HUD agreed to allow Fannie and Freddie credit toward its “affordable housing” targets by buying subprime mortgages. Fannie and Freddie are now under government conservatorship and will cost taxpayers hundreds of billions of dollars.
Cisneros now serves as the executive chairman of an institutional investment company focused on urban real estate. Might that explain why Cisneros is now a fan of subsidizing rental housing?
“Unscrupulous” would be a good word to describe the millions of dollars Cisneros has made in the real estate industry following his exit from government.
From the Cato essay:
In 2001, Cisneros joined the board of Fannie Mae’s biggest client: the now notorious Countrywide Financial, the company that was center stage in the subprime lending scandals of recent years. When the housing bubble was inflating, Countrywide and KB took full advantage of the liberalized lending standards fueled by Cisneros’s HUD. In addition to the money he received as a KB director, Cisneros’s company, in which he held a 65 percent stake, received $1.24 million in consulting fees from KB in 2002.
When Cisneros stepped down from Countrywide’s board in 2007, he called it a “well-managed company” and said that he had “enormous confidence” in its leadership. Clearly, those statements were baloney—Cisneros was trying to escape before the crash. Just days before his resignation, Countrywide announced a $1.2 billion loss, and reported that a third of its borrowers were late on mortgage payments. According to SEC records, Cisneros’s position at Countrywide had earned him a $360,000 salary in 2006 and $5 million in stock sales since 2001.

Wednesday, June 16, 2010

Missile Defense: We've committed to developing proven technologies, and the new START Treaty won't stand in our way

The Way Forward on Missile Defense. By M Flournoy, Under Sec of Defense for Policy & A Carter, Under Sec of Defense for Acquisition, Technology & Logistics
We've committed to developing proven technologies, and the new START Treaty won't stand in our way.
WSJ, Jun 17, 2010

Ballistic missile defenses have matured from a Cold War idea to a real-world necessity. Threats today from ballistic missiles are real, present and growing. Iran and North Korea have extensive inventories of these weapons that threaten their neighbors. Both are working on longer-range missiles capable of posing a direct danger to the United States in the coming years. Iran's continued pursuit of an illicit nuclear program and North Korea's rash intimidation after sinking a South Korean navy ship are but the most recent reminders of the real need for effective U.S. missile defenses.

To counter Iran's ballistic missile program, President Obama announced a phased adaptive approach for European missile defense last September—a move unanimously welcomed by our NATO allies. The first phase begins next year with the deployment of radars and ship-based systems in southern Europe. Romania and Poland have agreed to host land-based defenses for the second and third phases.

A similar phased adaptive approach is being applied to missile defenses in the Middle East and East Asia. While the details of the deployments and host-country arrangements will differ by region, the common thread is significant improvement in ballistic missile defense capabilities, meant to protect our deployed forces overseas and our allies and partners.

In a departure from past approaches, we are no longer building systems anchored in one place and wedded to current threat assessments. We know that the capabilities of potential adversaries do not always progress according to intelligence assessments. Our program must adapt accordingly in the face of evolving and unpredictable threats.

We are also making continued progress in improving our ability to defend the U.S. homeland from ballistic missile attack. By the fall, the U.S. will have 30 deployed ground-based interceptors in Alaska and California, with eight more missile defense silos near completion.

The U.S. is committed to a "fly before you buy" approach supported by a rigorous and independently-monitored testing program. An essential element of that program, and a key capability for the phased adaptive approach, is the Standard Missile 3 (SM-3) interceptor. The SM-3 version deployed on Navy ships today has hit—within inches—its exact target in nine out of 10 tests. The accuracy of these tests has been confirmed in a variety of ways: by fiber-optic grids that can precisely indicate the point of impact on the target; by images taken from the interceptor in the very last moment before impact (images not available to the public for security reasons); by data from highly accurate radars and airborne sensors; and by extensive rocket sled tests and computer simulations on the ground. All these verification sources confirm that when a missile warhead was hit, it was destroyed. These results have been validated by an independent panel of experts with access to all of the classified and unclassified test data.

Missile defenses have become a topic of some discussion in the context of the Senate's consideration of the New START Treaty with Russia. The fact is that the treaty does not constrain the U.S. from testing, developing and deploying missile defenses. Nor does it prevent us from improving or expanding them. Nor does it raise the costs of doing so. We have made clear to our Russian counterparts that missile defense cooperation between us is in our mutual interest, and is not inconsistent with the need to deploy and improve our missile defense capabilities as threats arise.

U.S. ballistic missile defenses are effective, affordable and increasingly adaptable. These capabilities are critical to protecting U.S. citizens, our forces abroad, and our allies from real and growing threats.

Press Briefing

Jan 17, 2010

The White House Blog: More Support for Curbing Special Interest Influence in Our Elections

Conservative: The Bad News About ObamaCare Keeps Piling Up - It's now obvious that many millions will lose the coverage they have.

At Last, Financial Reform - Barney Frank helps prevent another crisis in the credit markets

A Stealth Attack on Capital Gains - Congress has proposed a discriminatory 'enterprise value tax' on hedge funds and other partnerships. It is a threat to any business or industry that politicians decide is no longer popular

The President's Meeting with BP Executives: "An Important Step Towards Making the People of the Gulf Coast Whole Again"

Pakistan-U.S. Strategic Dialogue Energy Working Group Meets in Islamabad

The President's Animosities - Since when was the American idea us versus them?

Remarks by Secretary of State Hillary Rodham Clinton, USAID Administrator Raj Shah, and Secretary of Agriculture Tom Vilsack
2010 World Food Prize Laureate Announcement Ceremony, Ben Franklin Room, Washington, D.C.

Crude Politics - The drilling experts speak out on the Obama deepwater moratorium

United States identifies science and innovation as critical drivers to end global hunger

Conservatives on the oil spill and federal president: A Crisis of Competence

U.S. Engagement With The International Criminal Court and The Outcome Of The Recently Concluded Review Conference. By Harold Hongju Koh, Legal Advisor, & Stephen J. Rapp, Ambassador-at-Large for War Crimes Issues, State Dept
Washington, DC, June 15, 2010

Libertarian: Obama's Vision Deficit on Display

The way Mr. Obama sees life in XXI century America: a tooth-and-fang world of private interests in constant struggle against the benevolent goals of government

The President's Animosities. By DANIEL HENNINGER
Since when was the American idea us versus them?WSJ, Jun 17, 2010

The oil company formerly known as British Petroleum is starting to look kind of beaten up. So it goes when a business finds itself tossed into the ring with the current president of the United States.

"We will make BP pay," Mr. Obama said Tuesday night.

There is a mood in the land that BP is getting what it deserves. Maybe so. But players in the political game who've found it convenient to join the president in the BP bear-baiting should not delude themselves that BP is a free hit. In politics, nothing happens in isolation.

The beating Mr. Obama is giving BP isn't the exception. It's the rule when this president finds himself in tension with the private sector. I can't recall any previous president with this depth of visceral, antibusiness animosity.

Amid the BP crisis, the president traveled to Carnegie Mellon University to give what was billed as a major speech on the economy. In its entirety, the speech is a guided tour through Mr. Obama's mind. The pundits carping yesterday that the president's oil-spill apologia was limp—even as BP gave him $20 billion in tribute—should check out this one.

That Pittsburgh speech wasn't just about "the economy," but the way Mr. Obama sees life in 21st century America: a tooth-and-fang world of private interests in constant struggle against the benevolent goals of government. All of this described in a tone that is extraordinary for a president.

"As November approaches," the president said, "leaders in the other party will campaign furiously on the same economic arguments they've been making for decades." They gave "tax cuts . . . to millionaires who didn't need them. They gutted regulations and put industry insiders in charge of oversight."

Mr. Obama believes that "if you're a Wall Street bank or an insurance company or an oil company, you pretty much get to play by your own rules, regardless of the consequences for everybody else." Al Gore campaigned hard against these same targets, but never with such ill will.

Americans, he says, want to compete but can't "if the irresponsibility of a few folks on Wall Street can bring our entire economy to its knees." A president is not some backwater pol running for sheriff. But his explanation of the financial crisis—the whole economy brought down by "a few" on Wall Street—is a scenario found nowhere outside a James Bond movie.

He punched out WellPoint and other insurers verbally for months until they dropped and the Democrats passed the president's health-care bill. And they'd better stay down. No longer, said Mr. Obama, would it be possible for people to be "thrown off" their coverage for reasons "contrived" by an insurance company.

He complains his predecessor left him with projected deficits of $8 trillion caused by unpaid-for tax cuts, a familiar analysis, except that Mr. Obama adds that the cuts were "skewed to the wealthy."

When in the Carnegie Mellon speech Mr. Obama turns from what he called "the dangers of an unfettered market" and discusses government—"only government has been able to do what individuals couldn't do and corporations wouldn't do"—he is virtually delirious with joy.

Of his proposed research and experimentation tax credit he says, "The possibilities of where this research might lead are endless." Regenerative medicine, educational software, intelligent prosthetics. "Imagine all the workers and small business owners and consumers who would benefit from these discoveries."

He then identifies what stands in the way of "a better future." It's that "there will always be lobbyists for the banks or the insurance industry that don't want more regulation; or the corporation that would prefer to see more tax breaks . . ." A president seeking tax breaks to the horizon for green industries wouldn't say this, unless whacking "corporations" was just too much fun.

The agenda Mr. Obama described at Carnegie Mellon is so vast you'd think he'd at least enlist the private sector's help. But there's nothing in the speech's enumerations to suggest any desire to have them along on these projects. If they contribute or comply, it will be out of intimidation. It's all him or the government or its "investments."

Some might say that instead of being a cheerleader for business, Mr. Obama is simply a tough-minded public official holding well-shod feet to the fire. I don't buy it. His tone and vocabulary, in use since he took office, goes beyond public policy. It sounds personal. Too personal for a president.

Populism in the United States is a trickier proposition than in, say, South America. Here, the private sector isn't automatically a suspect proposition. Bill Clinton played the populism card as well as anyone. Harry Truman and JFK had famous fights with big steel. But none of these Democratic presidents routinely pistol-whipped private interests in the language this one does. No previous president assembled a Cabinet with not one member from the private sector, as now.

The worldview in this White House is distinct and unusual. It wasn't a voting issue in 2008. The opposition should make it an issue in 2012, and this November. Since when was the American idea us versus them?

Press Briefing

Jan 16, 2010

The New START Treaty, by Rose Gottemoeller, Assistant Secretary, Bureau of Verification, Compliance, and Implementation.
Opening Statement before the Senate Foreign Relations Committee, Washington, DC

Russia Rises While Kyrgyzstan Burns - The violence highlights Moscow's power in a country with an important U.S. military base

Libertarians: Guns and Free Speech - The NRA sells out to Democrats on the First Amendment

U.S. Priorities on sub-Saharan Africa. By Johnnie Carson, Assistant Secretary, Bureau of African Affairs
Remarks for the Diplomacy Briefing Series Conference, Washington, DC

Hungary Goes for Growth - Glimmers of policy hope on the Continent

Good Business in the Global Landscape. By Maria Otero, Under Secretary for Democracy and Global Affairs
Ronald Reagan Building, Washington, DC

A Smart Response to China’s ‘Indigenous Innovation’ Policies. By Dieter Ernst

EPA Paints Rosy Picture of American Power Act

Government to the Economic Rescue - Historians will look back at this time and say the three-pronged strategy of TARP, fiscal stimulus and bank stress testing kept us out of the abyss

Captains of Subsidy - Famous CEOs plead for more energy cash from Washington

BP Doesn't Deserve a Liability Cap - The best way to deter future spills is to expose drillers to the full costs of any mistake and not let any company without proper insurance near an oil derrick

Oil Talk - Obama is trying to link the Gulf gusher to his moribund green agenda

Susan Rice Accepts Possibility of International Investigation of U.S. Military

Libertarian: Obama vs. BP (and You) - The government holds a company's stock price hostage

The White House Blog - Keeping the Plan You Like

Conservatives: "Side Effects: Obamacare Adds to the Ranks of the Uninsured"

Lifetime Learners: One Student at a Time

The Obama Energy Tax Game Plan

The White House Blog - Cooking as a Way of Life

Conservatives: Don't Repeal "Don't Ask/Don't Tell" - Don't sacrifice unit cohesion for a social experiment

Press Briefing

Jan 16, 2010

Good Business in the Global Landscape. By Maria Otero, Under Secretary for Democracy and Global Affairs
Ronald Reagan Building, Washington, DC

A Smart Response to China’s ‘Indigenous Innovation’ Policies. By Dieter Ernst

EPA Paints Rosy Picture of American Power Act

Government to the Economic Rescue - Historians will look back at this time and say the three-pronged strategy of TARP, fiscal stimulus and bank stress testing kept us out of the abyss

Captains of Subsidy - Famous CEOs plead for more energy cash from Washington

BP Doesn't Deserve a Liability Cap - The best way to deter future spills is to expose drillers to the full costs of any mistake and not let any company without proper insurance near an oil derrick

Oil Talk - Obama is trying to link the Gulf gusher to his moribund green agenda

Susan Rice Accepts Possibility of International Investigation of U.S. Military

Libertarian: Obama vs. BP (and You) - The government holds a company's stock price hostage

The White House Blog - Keeping the Plan You Like

Conservatives: "Side Effects: Obamacare Adds to the Ranks of the Uninsured"

Lifetime Learners: One Student at a Time

The Obama Energy Tax Game Plan

The White House Blog - Cooking as a Way of Life

Conservatives: Don't Repeal "Don't Ask/Don't Tell" - Don't sacrifice unit cohesion for a social experiment

Tuesday, June 15, 2010

Press Briefing

Jan 15, 2010

PM: Statement on Saville Inquiry about the Bloody Sunday events, Jan 2972

Trafficking in Persons: Ten Years of Partnering to Combat Modern Slavery

It's Time to Nationalize Fannie and Freddie - Any solution that allows private companies to have a special relationship to government is destined to fail

Immigration: What Would Reagan Do? - The Gipper repeatedly declared that openness to immigration represents adefining aspect of our national identity

Who's the Enemy in the War on Terror? - The U.S. is at war with violent Islamist extremism, and the Obama administration does moderate Muslims no favor by refusing to recognize this

Latest BIS Quarterly Review discusses financial turbulence

Afghan Staying Power - The President needs to speak up for his war strategy

The United States and Africa: Partnering for Progress

Obama's Political Oil Fund - In its Gulf spill panic, the White House runs roughshod over the rule of law

China's high saving rate: myth and reality, by Guonan Ma and Wang Yi
BIS Working Papers No 312, June 2010
The saving rate of China is high from many perspectives - historical experience, international standards and the predictions of economic models. Furthermore, the average saving rate has been rising over time, with much of the increase taking place in the 2000s, so that the aggregate marginal propensity to save exceeds 50%. What really sets China apart from the rest of the world is that the rising aggregate saving has reflected high savings rates in all three sectors - corporate, household and government. Moreover, adjusting for inflation alters interpretations of the time path of the propensity to save in the three sectors. Our evidence casts doubt on the proposition that distortions and subsidies account for China's rising corporate profits and high saving rate. Instead, we argue that tough corporate restructuring (including pension and home ownership reforms), a marked Lewis-model transformation process (where the average wage exceeds the marginal product of labour in the subsistence sector) and rapid ageing process have all played more important roles. While such structural factors suggest that the Chinese saving rate will peak in the medium term, policies for job creation and a stronger social safety net would assist the transition to more balanced domestic demand.

The Government Bailouts Must End

Monday, June 14, 2010

Jordan's Nuclear Ambitions Pose Quandary for the U.S.

Jordan's Nuclear Ambitions Pose Quandary for the U.S. By Jay Solomon
WSJ, Jun 14, 2010

SAWAQA, Jordan—The Kingdom of Jordan is in a sprint to become the Arab world's next nuclear power. And America wants to help it succeed.

King Abdullah II says he wants to reduce Jordan's dependence on energy imports by developing nuclear energy.

U.S. and Jordanian officials are negotiating a nuclear-cooperation agreement that would allow American firms to export nuclear components and know-how to the Mideast country, America's closest Arab ally in the volatile region.

The Obama administration views Jordan as a key potential partner in its global program to promote the nonmilitary use of atomic energy—part of a broader plan to increase pressure on other Middle East countries, particularly Iran and Syria, to bring transparency to their own nuclear programs.

"I believe nuclear energy in Jordan will be done in such a way where it is a public-private partnership so everyone can see exactly what's going on," Jordan's King Abdullah II said in an interview. "If we can be the model of transparency, it will push others."

But it's a partnership that puts the Obama administration in a bind: It is trying to make good on its pledge to promote greater civilian use of atomic energy, without angering Israel and risking a Mideast arms race.

The deal has catches for the Jordanians, too: The U.S. is demanding that Amman not produce its own nuclear fuel. That's a right Jordan enjoys as a signatory to the United Nations key nonproliferation treaty—and is reluctant to surrender, thanks to its recent discoveries of big deposits of uranium ore.

The U.S. last week pushed through the United Nations a fourth round of economic sanctions against Iran in a bid to curtail its advancing nuclear work. Tehran says its program is purely for civilian purposes, a charge challenged by the U.N. and the West. U.S. officials worry the Arab states, fearing the Iranian threat, could one day seek to develop atomic weapons themselves.

Senior Jordanian officials say Amman can't renounce its right to produce nuclear fuel under the Nuclear Nonproliferation Treaty, both for strategic and economic reasons. They say that if Jordan cuts a side agreement with the U.S. on this point it would undermine the integrity of the treaty. They also say such an agreement would limit Jordan's ambition to become a "regional nuclear fuel supply and export center."

Failure to reach consensus on this point, U.S. and Jordanian officials acknowledge, could kill the cooperation deal.

"We believe in the universality of the NPT," said Khaled Toukan, the head of the Jordan Atomic Energy Commission. "We do not agree on applying conditions and restrictions outside of the NPT on a regional basis or a country-by-country basis."

[Known recoverable resources of uranium, 2008, in thousands or metric tons]

Jordan is among a slew of Arab countries, including Egypt, the United Arab Emirates and Bahrain, that are seeking to become among the first Mideast countries to develop a civilian nuclear-power industry. Israel is the lone country in the region believed to possess atomic weapons, but it hasn't moved to build nuclear power plants.

Jordan's nuclear ambitions are driven by economics. Wedged between Israel and oil giants Saudi Arabia and Iraq, the kingdom is 95% dependent on imported oil and has among the world's smallest reserves of potable water.

But the discovery of at least 65,000 tons of uranium ore in the deserts outside Amman in 2007 has led King Abdullah to order a drastic reshaping of his nation's economic strategy.

French and Chinese geologists are combing southern, central and eastern Jordan in search of additional uranium deposits. In addition to fueling its own plants, Jordan hopes to use its projected four nuclear power plants to begin exporting electricity to neighbors including Iraq and Syria by 2030 and to commercially mine and export uranium. Even if it doesn't process any nuclear fuel itself, Jordan could still produce and export electricity by buying the fuel for its reactors on the international market.

"Now that we have a raw material, people are coming for the first time in our history and knocking on our door," King Abdullah said in the interview.

U.S. officials say they recognize Jordan's desire to achieve energy independence. They praise Jordan's early outreach to the U.N.'s nuclear watchdog, the International Atomic Energy Agency, and Amman's willingness to allow international inspectors unhindered access to its growing nuclear infrastructure.

But U.S. negotiators are unwavering in their insistence that Amman commit to purchasing its reactor fuel from the international market to guard against its potential internal diversion for military purposes. Iran's insistence on producing its own nuclear fuel stands at the center of its current conflict with the West.

U.S. officials argue if Jordan doesn't surrender its rights to produce fuel, it raises proliferation risks. Countries with the complete nuclear fuel cycle—from mining uranium to processing it into fuel—can convert their civilian plants for military applications. Under terms of the U.S. agreement, Jordan could mine the ore but not convert it into fuel for nuclear power.

Such fears could hamstring Washington's ability to win necessary Congressional approval for a nuclear cooperation agreement with Jordan. Last year, Congress approved a similar deal with the United Arab Emirates only after the country agreed to buy its nuclear fuel overseas.

Jordan could pursue its nuclear ambitions without the U.S., but would face steep diplomatic and financial hurdles. Still, Amman is aggressively pressing forward: In March, it purchased a research reactor for a northern Jordanian university and is in talks with four international consortia to buy its first nuclear power plant.

Those moves are stoking tensions with neighboring Israel.

In the interview, King Abdullah said Israel has been pressuring countries like South Korea and France not to sell nuclear technologies to Jordan. He said Israel's "underhanded" actions have helped bring Jordan-Israeli relations to their lowest point since a 1994 peace agreement.

"There are countries, Israel in particular, that are more worried about us being economically independent than the issue of nuclear energy, and have been voicing their concerns," King Abdullah said. "There are many such reactors in the world and a lot more coming, so [the Israelis must] go mind their own business."

Israeli officials denied any effort to undermine Amman's nuclear procurement efforts.

Jordan's fixation on nuclear power is rooted in its near total dependence on imported oil.

When global oil prices spiked above $100 a barrel in 2007, Amman was forced to spend the equivalent of 20% of its total economic output on energy. That bill could rise sharply over the next decade, say Jordanian officials, as electricity demand is projected to double.

Energy shortages have also threatened Amman's ability to address its severe water deficiency with power-hungry desalination plants near the Red Sea.

The oil-price shock led King Abdullah and his ministers in 2007 to fashion a new energy strategy. The project calls for Jordan to draw 10% of its energy from solar and wind by 2020; 30% from natural gas; and 14% from oil shale. The strategy foresees a special role for nuclear power: 30% of Jordan's overall energy needs by 2030.

The center of Jordan's uranium push is the desolate Bedouin village of Sawaqa, an hour south of Amman. Here the French nuclear-power giant, Areva SA, is partnering with Jordanian mining firms and geologists to try to transform the area into a major center for uranium production.

An encampment of rowed housing units, a cafeteria and sheds used to store and test mineral samples stands amid central Jordan's barren, gravely landscape. A lone camel occasionally meanders past the walled site.

Jordanian geologists have explored the Sawaqa area for decades, confirming sizable deposits of phosphates and oil shale. But the joint Areva-Jordanian camp's general manager, Gilles Recoche, has been tasked to ensure the uranium ore found here and nearby can be mined on a commercially viable scale. He then hopes to process the ore on-site into the powdery substance known as yellowcake, which can in turn be processed into the low-enriched uranium used to power nuclear reactors.

On a recent afternoon outside the Sawaqa camp, Mr. Recoche and his Jordanian colleague, Allam Saymeh, walked through a dug-out excavation trench with gamma-radiation guns.

Moving through the narrow sandy passage, they point out the yellow stains on the trench's rock walls that indicate uranium ore. They then pass their guns over the yellow markings to gauge the grade of the uranium—anything over 100 particles-per-million is judged to have commercial prospects.

"This project is my child," said the 52-year-old Mr. Saymeh, noting that he'd explored the areas around Sawaqa since the 1980s.

Jordan's government is also putting in place the bureaucracy and infrastructure to run its nuclear program. Parliament has passed laws establishing the country's first nuclear regulatory body and the Atomic Energy Commission.

Amman has signed nuclear-cooperation agreements with eight countries, including France, China and Russia. Negotiations have begun with such companies as Russia's Rosatom Corp. and Seoul's Korea Electric Power Corp. to construct Jordan's first power reactor.

The nuclear program's point man is Mr. Toukan, a Massachusetts Institute of Technology-trained nuclear scientist and a former education minister. As chairman of the country's Atomic Energy Commission, the 55-year-old has broad powers, overseeing everything from choosing the reactor's construction site to negotiating the cooperation agreement with the U.S. He views Jordan's nuclear program as providing the base for a scientific resurgence across the Middle East.

A focal point is the nuclear-engineering department at the Jordan University of Science and Technology in the northern city of Irbid. Here, Mr. Toukan's agency contracted in March with a South Korean consortium to build Jordan's first 5-megawatt research reactor, which could break ground later this year.

Students and teachers on the expansive palm-tree-lined campus talk excitedly of the research reactor's arrival. The nuclear-engineering department is only three years old, with just 100 students.

"Right now, we have nothing practical to work on here," says Abtihal Almalahim, a 21-year old junior and one of the program's female candidates. The reactor's arrival "will make our study a lot more real."

A key to achieving King Abdullah's ambitions, however, remains the cooperation agreement with the U.S., say Jordanian officials.

[Jordan's energy sources, 2007]

They say it could prove difficult to secure some of the core technologies for their nuclear infrastructure without the Obama administration's seal of approval. The U.S. is a leading player in the Nuclear Suppliers Group, a Vienna-based body aimed at controlling the flow of nuclear technologies internationally. Many reactors from France, Japan and Canada contain significant U.S. components and would require Washington's approval for a sale.

Mr. Toukan nearly concluded a nuclear-cooperation pact with George W. Bush's administration in 2008, according to Jordanian and American officials. It got sidelined in the final months of Mr. Bush's term as Washington aggressively pushed forward and completed a separate nuclear deal with the United Arab Emirates, which does not have its own uranium reserves and agreed to purchase all its reactor fuel from international suppliers.

The Obama administration views the U.A.E. deal as a model for its nonproliferation drive. American experts say it would be virtually impossible for the Emirates or any other nation to develop atomic weapons without the ability to produce highly enriched uranium at home.

The White House has good reason to stick to its guns in its talks with Jordan: the U.A.E., in its agreement with the U.S., won the right to negotiate a new deal if another Mideast country concludes a nuclear pact with the U.S. on more favorable terms.

King Abdullah, is pushing ahead. He met one-on-one with President Obama during Washington's nuclear security summit in April to discuss regional peace and nonproliferation issues, according to Jordanian officials.

The king also instructed his foreign minister to formally reprimand Israel's ambassador to Jordan over the charges that Israel has been seeking to block the sale of the South Korean or French reactors to Jordan.

On the outskirts of the port city of Aqaba, just miles from the Israeli resort city of Eilat, international contractors have been conducting feasibility studies to gauge whether the site can house Jordan's first nuclear-power reactor. Aqaba also lies close to a seismic fault line. Israeli officials have publicly voiced concerns about a reactor being situated so close to the fault.

"We are way ahead of Israel" when it comes to securing new reactor technology, King Abdullah said. "And if you have the private sector involved in nuclear power, it's difficult to do anything sinister."

Sunday, June 13, 2010

Press Briefing

Jan 14, 2010

Banks and financial intermediation in emerging Asia: reforms and new risks, by Madhusudan Mohanty and Philip Turner
BIS Working Papers No 313, June 2010
The conventional view is that microeconomic reforms after the 1997-98 Asian financial crisis have greatly strengthened banking systems in Asia. Banks have become better capitalised, external exposures have been reduced and credit risk has been managed more effectively. But this conventional view does not take enough account of the macroeconomic background. A sharp rise in domestic savings, combined with the recent large-scale sterilised intervention and easy monetary policy, has led to very easy financing conditions for banks. Bank credit expanded. Banks have accumulated a large stock of government bonds. How these conditions will change and how this will affect banks in Asia is uncertain. Supervisory authorities therefore need to be sure that the present very liquid position of most banking systems in Asia does not allow significant (but so far only latent) increases in market and credit risk to go undetected.

Obama's Foreign Policy Success - He has repaired our alliances, isolated Iran, unnerved Chávez, and he is systematically destroying al Qaeda in a way Bush never did

David Souter's Bad Constitutional History - The former justice's logic would justify Plessy v. Ferguson

The White House Blog - A New Health Care Survey and the Affordable Care Act

The Gulf Spill, the Financial Crisis and Government Failure - Both Republicans and Democrats fail to see the limits of centralized regulation in a modern market economy

State Dept: Anniversary of Iran’s Disputed Presidential Election

California Union Rebuke - Voters rebel against project labor deals that raise costs

How to prevent huge teacher layoffs. By Christina D. Romer

Hillary on Honduras - An education in Latin democracy

The White House Blog - Focusing on the Gulf

Lula's Dance With the Despots - The president of Brazil is preserving his country's unfortunate image as a resentful, Third-World ankle-biter

America's Municipal Debt Racket - State and local borrowing as a percentage of U.S. GDP has risen to an all-time high of 22% in 2010

Politicizing the Fed - Congress seeks more control over the 12 regional banks

Saturday, June 12, 2010

Press Briefing

Jan 12, 2010

The White House Blog - "The President of the United States of America believes in you"

Hillary for Defense? - The president may also want her for veep to rally the base in 2012

Iran's Revolution Has Only Just Begun - The shrinking number of loyalists around the Ayatollah Khamenei are shaken by their failure to break the will of the opposition

Turkey, Hamas and the PKK - Erdogan's double standard on terrorism

Crashing Real Estate - Is this really the time for a tax increase on commercial property?

Cutting the Pentagon Budget - Reductions in military spending are both necessary and possible

Administration Modifies “Peer-Reviewed” Report After it was Reviewed by Scientists

Statement by the Press Secretary on the Visit of President Medvedev of the Russian Federation to the White House

Prolonging Education’s Race to the Bottom

"Hands off my plastic stuff!"

One year later, women at forefront of Iranian democracy movement

Past ability to execute "indicates the degree to which we can provide the kinds of support and good service that the American people expect"

Friday, June 11, 2010

Past ability to execute "indicates the degree to which we can provide the kinds of support and good service that the American people expect"

Past ability to execute "indicates the degree to which we can provide the kinds of support and good service that the American people expect"
WSJ, Jun 11, 2010

Byron York writing in the Washington Examiner, June 6:

It's not mentioned much now, but in the late summer of 2008, a major hurricane, Gustav, was in the Gulf of Mexico and headed toward New Orleans, threatening a replay of the disastrous Katrina experience. On September 1, 2008, Barack Obama, fresh from his Roman-colonnade speech on the final night of the Democratic convention in Denver, talked to CNN's Anderson Cooper about Gustav and the Gulf. The question: As president, could he handle an emergency like that? Obama pointed to the size of his campaign and its multi-million dollar budget as evidence of his executive abilities. "Our ability to manage large systems and to execute, I think, has been made clear over the last couple of years," Obama said. That executive ability, he added, "indicates the degree to which we can provide the kinds of support and good service that the American people expect."

Thursday, June 10, 2010

Press Briefing

Jan 11, 2010

Palm-Size NMR - The portable but powerful magnet could be used to find archaeological artifacts or to detect contamination in products

An Energy Strategy for Grown-Ups - Wind power is not a realistic substitute for oil

Global Financial Industry Leaders Support Constructive Dialogue to Secure Financial Sector Stability and Economic Growth
The IIF study compares a projected economic growth scenario without the introduction of new bank regulatory reforms with one that sees reforms coming into effect with the capital and liquidity calibration as currently projected. Mr. Sands said, “The analysis suggests that rapid implementation of the Basel Committee proposals would have a significant negative impact on economic growth and job creation. Specifically, in the core G-3 (the United States, the Euro area & Japan), the analysis indicates that GDP by 2015 would be 3% lower than it would otherwise be, which implies under reasonable assumptions, that some 9.7 million fewer jobs would be created over this five year period than would otherwise be the case.

The Gulf Spill and the Limits of Science - TV has fueled unrealistic expectations of a quick fix

How the West Can Help Iran's Green Movement - Please do not barter away our democracy for nuclear weapons negotiations with the current unworthy leaders in Tehran

The Rise of Chinese Labor. WSJ Editorial
Wage hikes are part of a virtuous cycle of development.

The recent strikes at Honda factories in southern China represent another data point in an emerging trend: Cheap labor won't be the source of the Chinese economy's competitive advantage much longer.

The auto maker has caved and given workers a 24% pay increase to restart one assembly line. Foxconn, the electronics producer that has experienced a string of worker suicides, has also announced big raises. This is all part of the virtuous cycle of development: Productivity increases, which drive wages higher, forcing businesses to adjust, leading to more productivity growth.

The supply of Chinese migrant workers from the countryside, once thought to be endless, is running dry, and that is giving workers leverage to demand bigger pay packets. The brief drop-off in orders brought on by the global financial crisis provided a respite, as did a recent drought in southwest China that spurred extra migration to the coastal factory zones. But shoe manufacturers are the canary in the coal mine. An American industry association recently polled its members and found that 88% saw a labor shortage in China, and almost as many had experienced late deliveries as a result.

While higher wage costs could mean more expensive sneakers for consumers and squeezed profit margins for the big brands, it has some silver linings. For instance, tamping down protectionism.

New York Senator Charles Schumer is again threatening to impose punitive tariffs on Chinese goods unless there is progress toward revaluing the yuan. The Senator says that currency manipulation holds down the cost of Chinese labor, at the expense of "millions" of American jobs. If wages rise in southern China regardless of the fixed exchange rate to the dollar, it undercuts the protectionist claims.

Jobs are hardly going to flood back to the U.S. merely because final assembly costs in China rise by 20%—just as they didn't after the yuan appreciated by 21.2% from 2005-08. More likely, some labor-intensive operations will shift to the likes of Vietnam or Bangladesh.

However, rising wages would hasten the long-awaited "rebalancing" of the Chinese economy toward greater consumption. The high savings rate has been a function of profits being reinvested by both private and state-owned companies, not the savings decisions of households, whose income has lagged behind the stunning GDP figures. Government spending and bank lending have been geared toward investment, which remains the main driver of growth. Greater spending power for individual Chinese would make for more sustainable growth and also encourage imports, lessening the trade surpluses that cause tension with the U.S.

Some investors may question to what extent Beijing is encouraging workers to be more assertive in demanding higher wages from foreign companies to favor local producers, as competition for the domestic market heats up. However, the trends that are making labor more costly will ultimately force all employers to adjust, including less efficient state-owned enterprises.

No doubt the government would prefer that foreign firms go first, which is reflected in the fact that state-owned media have been allowed some freedom to report on the Honda strikes. But as China leaves behind the era of cheap labor, the quality of management will become ever more critical to success in the marketplace. That should favor foreign companies honed by global competition, and drive China's next round of state-owned-enterprise reform.

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