Thursday, June 18, 2009

New Bisphenol A Study is of Very Limited Relevance to Human Health

New Bisphenol A Study is of Very Limited Relevance to Human Health. By Steven G. Hentges
ACC, Jun 18, 2009

The following statement can be attributed to Steven G. Hentges, Ph.D. of the American Chemistry Council’s (ACC) Polycarbonate/BPA Global Group. Dr. Hentges’ comments are in regard to a study from researchers at North Carolina State University (NCSU) and the National Institute of Environmental Health Sciences (NIEHS). The study, "Neonatal bisphenol-A exposure alters rat reproductive development and ovarian morphology without impairing activation of gonadotropin releasing hormone neurons," was funded by NIEHS and published online June 17 by the journal Biology of Reproduction. The study was co-authored by Heather B. Patisaul and Heather B. Adewale of NCSU and Wendy N. Jefferson and Retha R. Newbold of NIEHS.

ARLINGTON, VA (June 17, 2009) – “The American Chemistry Council (ACC) and its member companies have long-supported research to advance scientific understanding about chemicals and promote public health. To achieve these goals with limited resources, including limited use of laboratory animals, study designs should be based on sound scientific principles and data so as to be directly relevant to human health. This new study fails to meet these basic study design principles and practices.

“It is a continuing disappointment to see that researchers – including scientists from National Institute of Environmental Health Sciences (NIEHS) – conduct studies that involve injection of laboratory animals with bisphenol A (BPA). This experimental technique has recently been acknowledged by the NIEHS to have very limited value for assessing human health effects since people are orally exposed to BPA, not by injection. It is well-known that BPA is efficiently metabolized and rapidly eliminated from the body after oral exposure.

“The researchers also state, incorrectly, that their study is significant because it used a dose equal to the EPA reference dose for BPA, which is a science-based lifetime daily intake level determined to be safe by EPA. However, the EPA reference dose is specifically applicable only to oral exposure, not to injection exposure. Consequently, this study does not call into question the validity of the EPA reference dose.

“Although the researchers correctly note that ‘the research was done on rats, making it difficult to determine its applicability to humans...’, the study is of very limited relevance to human health, according to the NIEHS guidelines, due to these inherent study design flaws.

“Eleven regulatory bodies around the world have recently assessed the science on bisphenol A (BPA) and uniformly determined that BPA is safe for use in food contact products. In February, the U.S. Food and Drug Administration (FDA), in regard to their ongoing review, stated: ‘With regard to BPA generally, based on all available evidence, the consensus of regulatory agencies in the United States, Canada, Europe, and Japan is that the current levels of exposure to BPA through food packaging do not pose an immediate health risk to the general population, including infants and young children.’ ”

Learn more about BPA.

Views from India: Why Manmohan Singh is in Yekaterinburg?

Talking Heads: Why Manmohan Singh is in Yekaterinburg? By P. Stobdan
IDSA, June 16, 2009

Prime Minister Manmohan Singh is attending a slew of Russian hosted high profile meetings including those of the SCO and BRIC in Yekaterinburg which would be viewed keenly by most international watchers. The SCO, keenly nurtured by Russia and China as an exclusive nucleus, had hitherto excluded those with observer status from its core deliberations. The forum became popular as an embryonic counterpoise to the United States after 2005 when it bluntly issued a quit notice to the US from Central Asia and decided to salvage an assortment of autocrats being ostracized by the West. Since then, even Iran has been seeking shelter under the SCO auspices.

Why has Russia changed the summit format this time around to include Iran, India, Pakistan and Mongolia in the core deliberations? While it reflects the changing international realignment, the spin now emerging clearly indicates that Russia is counter-strategizing to deal with global issues or at the least it is unwilling to concede the challenges being posed by NATO. The rift with the trans-Atlantic alliance continues as Moscow has rejected the idea of exerting pressure on Iran over its nuclear programme in exchange for the US abandoning its planned missile defense system in Eastern Europe. For its part, NATO has not abandoned its quest to bring Ukraine and Georgia within its fold. The standoff over Georgia also continues.

It is also clear that Russia’s showdown with Georgia has changed the rules of the game. Moscow had lost diplomatic face not only in Europe but also in Asia. Many of Russia’s friends including SCO members were incensed by its adventurism towards former-republics, including the way in which it had been using gas as an instrument for arm-twisting. China and the Central Asian states were wary of Russia’s action and as such they did not endorse Moscow’s call for recognizing Abkhazia and South Ossestia during the last SCO summit in Dushanbe. The adroit Chinese were certainly not keen to pick a fight at the risk of ruining relations with the West. Moscow has also perhaps realized that it is fast losing influence in the Eurasian space, especially given that the global meltdown has made Central Asian states more dependent on China. The former Soviet republics are relying more on Chinese driven institutions than moribund organization led by Russia. Unlike Russia, China has showed no inclination for prematurely confronting the West. Instead, it was cautious about admitting Iran into the SCO as a full member and may have moderated Central Asian behavior to the chagrin of Moscow.

It is against the backdrop of this trend of Russia losing economic, political and cultural attractiveness vis-à-vis China that we should see Moscow’s attempt to bring India fully into the Eurasian space. Another reliable partner is Russia’s old trusted ally - Mongolia. India’s inclusion is also linked to the global financial crisis. Both Russia and China have been attempting to evolve a fresh financial architecture, including a proposal for a new global currency to replace the dollar as a way to preempt another financial meltdown. Russia hopes that Brazil, India and China would join hands as part of the BRIC forum to push the idea further.

The SCO meeting would be significant especially since it is being held against the backdrop of the new American Af-Pak Plan and Obama’s attempt to muster the support of regional powers to make his Afghan policy a success. The SCO, under Russia’s presidency, has been talking about Afghanistan more seriously than before mainly because the focus of geopolitics has shifted from Iraq to Afghanistan – Russia’s traditional backyard. In fact, the high profile March 2009 Conference in Moscow clearly set the stage for the SCO to play a stepped-up role, when it announced a roadmap to deal with increasing security concerns emanating from Afghanistan. It called for comprehensive cooperation against terrorism, drug trafficking and organized crime. The Russians suspect that the global economic downturn may have had an impact on the Taliban as well and thus strengthen the drugs trade. But SCO efforts are being hampered by the NATO presence in Afghanistan. The Russians claim that Afghan opium production increased 44 times after NATO and US troops were deployed in the region and since the withdrawal of Russian border guards from Tajik-Afghan border in 2005.

Moscow has shown willingness to provide transit routes for NATO shipment across Russia and Central Asia to Afghanistan. But this is being downplayed by the US which prefers to rely upon Pakistani supply routes. Attempts would be made by the SCO to bring Afghanistan within its fold this time. As the US intends to deal with and not confront the Taliban, Moscow fears that there will be a power vacuum in Afghanistan upsetting the existing balance. Some SCO declarations may come as music to Indian ears, since they would be a contrast to the NATO’s military approach and are likely to insist upon Pakistan stopping terrorism emanating from its soil. For New Delhi, the SCO may provide a useful platform to counter the negative fallout for Indian interests emerging from the Af-Pak plan. India had earlier pushed for a policy that integrates development projects in Afghanistan with security initiatives and has also insisted that there are no ‘good’ or ‘bad’ Taliban.

It is also likely that Russia is once again trying to use its leverage to soften India with regard to ongoing tension with Pakistan. Putin made a failed attempt earlier to bring together Vajpayee and Musharraf at a similar summit held in Almaty in 2002. Vajpayee did not relent.

The SCO carries a range of ambitious goals under its charter as letter of intent, including the development of an energy club, an inter-bank consortium, and cultural centres to set up an SCO university. But all in all, its strength is slightly exaggerated. The grouping suffers from nebulous internal contradictions. Everyone plays a game under the SCO template. There are internal discords and competing interests. Behind the SCO façade both China and Russia are competing for energy deals with Central Asian states. And like in Africa, Chinese firms are buying resource mines by befriending the region’s corrupt regimes, and in the process is fuelling corruption and undermining a host of environmental and labour standards.

The importance of India is occasionally aired by the SCO members, but in reality Russians and Central Asians only pay lip service while China effectively scuttles anything positive involving India in the Eurasian space. Decades of Indian efforts for an energy deal with Central Asian states remain frustrated. Except on security issues there is little that India can achieve in the SCO. The danger is that though the SCO is not a military block, it is increasingly getting securitized due to stepped-up co-operation to fight terrorism through intelligence consultations and large-scale military exercises. Many have dubbed it as an Asian NATO.

There is nothing wrong in Manmohan Singh attending the Yekaterinburg meeting even if it is a low diplomatic parade. It is also alright if the Prime Minister wants to dispel the myth that he only cares for Washington. In any event, India stands to gain by being courted by other centres of power rather than placing all its eggs in the American basket.

Prof. P. Stobdan is Senior Fellow at the Institute for Defence Studies and Analyses, New Delhi

Too Big to Fail, or Succeed: Everyone will want to become big enough to enjoy 'systemic risk' protection

Too Big to Fail, or Succeed. By Peter J Wallison
Everyone will want to become big enough to enjoy 'systemic risk' protection.
The Wall Street Journal, Jun 18, 2009, page A17

In a speech at the White House yesterday, President Barack Obama outlined what he envisions for future regulation of the financial system. He called his plan "a new foundation for sustained economic growth . . . a transformation on a scale not seen since the reforms that followed the Great Depression." Indeed it is.

His plan, if adopted, will fundamentally change the nature of our financial system and economy. The underlying concerns and assumptions are clear, and they are made clearer by considering other ways that his administration has dealt with the consequences of competition -- particularly the faux bankruptcies of General Motors and Chrysler and the impending change in antitrust policy. Although the president said in his speech that he supports free markets, these initiatives confirm that the administration fears the "creative destruction" that free markets produce, preferring stability over innovation, competition and change.

According to the administration white paper circulated prior to the president's speech, the Federal Reserve would be authorized to create a special regulatory regime -- including requirements for capital, leverage and liquidity -- for any firm "whose combination of size, leverage, and interconnectedness could pose a threat to financial stability if it failed." In addition, if a large financial firm is failing, the Treasury is to be given the power -- in lieu of bankruptcy -- to appoint a conservator or receiver to "stabilize" it.

Designating particular financial firms for this kind of special regulatory treatment clearly signals to the markets that these institutions are too big to fail. It will reduce the perceived risk of lending to them, enabling them to raise funds at lower cost than their smaller competitors.

In other words, the administration's plan would create what are essentially government-sponsored enterprises like Fannie Mae and Freddie Mac in every sector of the financial economy -- insurers, securities firms, finance companies, bank holding companies, and hedge funds -- where these specially regulated firms are to be designated. The result will be devastating for competition. Larger firms will squeeze out smaller ones and aggressive small companies will have less opportunity to overcome the government-backed winners.

Moreover, the administration's proposal to provide a special bailout mechanism for large firms confirms the likelihood that these firms will never be closed down or liquidated. Citing the market turmoil that followed Lehman's collapse, the administration will argue that failures like this are "disorderly." But failure comes from risk-taking -- the very source of our economy's strength -- and it is ultimately risk-taking and its consequences that the administration's plan is intended to prevent.

The turmoil following Lehman's failure occurred because market participants expected, after the rescue of Bear Stearns, that any larger firm would also be rescued. When Lehman wasn't, all market participants were required to recalibrate the risks of dealing with all others, causing a freeze-up in lending and hoarding of cash. Lehman's failure itself did not cause any substantial losses, and within two weeks of its bankruptcy filing Lehman's trustee sold its brokerage, investment banking, and investment management businesses to four different buyers.

Contrast this with AIG, the administration's paradigm, which was saved by the government because it was allegedly too big to fail. That firm is gradually wasting away under government control, with the taxpayers footing the bill.

The administration's fear of competitive outcomes is not reflected solely in financial-sector policies. Consider General Motors and Chrysler. They were defeated in the marketplace. Simply put, they failed to build automobiles enough Americans wanted to buy.

Their disappearance would not have threatened the stability of the financial system, although it would undoubtedly have been disruptive for suppliers, dealers and employees. Yet the administration wouldn't allow them to fail, either. Despite all the talk about credit priorities, the fundamental point is that the administration used taxpayer money to overturn the market's verdict. If we want a preview of what the administration will do with the resolution authority it wants for large financial companies, we need look no further.

The same pattern with regard to competitive markets can be seen in the Justice Department's new antitrust policy. Christine Varney, the new assistant attorney general in charge of antitrust policy, has said that U.S. policy should be more like Europe's. Until now, U.S. antitrust policy has tried to protect competition. Europe attempts to protect competitors. Protecting competitors means blunting the skills of superior players, allowing inferior managers and business models to remain in business and thus preventing better managements and business models from emerging. Again, stability wins out over change and progress.

The president has said on several occasions, including in yesterday's speech, that "I've always been a strong believer in the power of the free market." But his administration's prescriptions tell a different story. In AIG, GM, Chrysler, Fannie Mae and Freddie Mac we can see the future that the administration envisions for our economy -- a sclerotic and unchanging structure of big companies working with, protected by, and relying on big government.

Mr. Wallison is a senior fellow at the American Enterprise Institute.

On the New CCSP Report

Obama's Phil Cooney and the New CCSP Report. By Roger Pielke, Jr
Prometheus, Jun 16, 2009

Imagine if an industry-funded government contractor had a hand in writing a major federal report on climate change. And imagine if that person used his position to misrepresent the science, to cite his own non-peer reviewed work, and to ignore relevant work in the peer-reviewed literature. There would be an outrage, surely . . .

The Obama Administration has re-released a report (PDF) first issued in draft form by the Bush Administration last July (still online PDF). The substance of the report is essentially the same as last year's version, with a bit more professionalism in the delivery. For instance, the photo-shopped picture of a flood appears to be removed and the embarrassing executive summary has been replaced by something more appropriate.

This post is about how the report summarizes the issue of disasters and climate change, including several references to my work, which is misrepresented. This post is long and detailed, which is necessary to support my claims. But stick with it, or skip to the end if you've seen the details before (and long-time readers will have seen them often), there is a surprise at the end.

Here is the relevant paragraph of the CCSP report, found on p. 105:

While economic and demographic factors have no doubt contributed to observed increases in losses,346 these factors do not fully explain the upward trend in costs or numbers of events.344,347 For example, during the time period covered in the figure to the right, population increased by a factor of 1.3 while losses increased by a factor of 15 to 20 in inflation-corrected dollars. Analyses asserting little or no role of climate change in increasing the risk of losses tend to focus on a highly limited set of hazards and locations. They also often fail to account for the vagaries of natural cycles and inflation adjustments, or to normalize for countervailing factors such as improved pre- and post-event loss prevention (such as dikes, building codes, and early warning systems).348,349
Lets take it sentence by sentence.

Sentence #1

While economic and demographic factors have no doubt contributed to observed increases in losses,346 these factors do not fully explain the upward trend in costs or numbers of events.344,347Reference 346 is to a paper I co-authored:

Pielke, Jr., R. A., Gratz, J., Landsea, C. W., Collins, D., Saunders, M., and Musulin, R., 2008. Normalized Hurricane Damages in the United States: 1900-2005. Natural Hazards Review, Volume 9, Issue 1, pp. 29-42. (PDF)

In that paper we did indeed conclude that economic and demographic factors have contributed to losses related to hurricanes. In fact, we concluded that these factors accounted for all of the increase in hurricane losses over the period of record:

The lack of trend in twentieth century normalized hurricane losses is consistent with what one would expect to find given the lack of trends in hurricane frequency or intensity at landfall.

The CCSP report however, says the opposite, that these factors do not explain the upward trend in costs or numbers of events. To support this claim they provide two citations. Lets consider each in turn, first #344:

Mills, E., 2005: Insurance in a climate of change. Science, 309(5737), 1040-1044.

If you go to Mills, and I have, you will find that it is a commentary that does not offer any new research. Instead, its assertion that societal factors cannot explain the increase in disaster losses is based on a further reference; here is what Mills says:

Global weather-related losses in recent years have been trending upward much faster than population, inflation, or insurance penetration, and faster than non-weather-related events

You will see in my comprehensive discussion of Mills that he relied on two sources to support this claim. The first source actually refers to the second, so there is only one source. That one source is a 2000 Munich Re report, which for reasons I explain in the previous link does not actually support its claim.

But more problematically, why is a report characterized by Science Advisor John Holdren as being the "most up-to-date, authoritative, and comprehensive" analysis relying on a secondary, non-peer source citing another non-peer reviewed source from 2000 to support a claim that a large amount of uncited and more recent peer reviewed literature says the opposite about?

The second citation referred to is #347:

Rosenzweig, C., G. Casassa, D.J. Karoly, A. Imeson, C. Liu, A. Menzel, S. Rawlins, T.L. Root, B. Seguin, and P. Tryjanowski, 2007: Assessment of observed changes and responses in natural and managed systems. In: Climate Change 2007: Impacts, Adaptation and Vulnerability. Contribution of Working Group II to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change [Parry, M.L., O.F. Canziani, J.P. Palutikof, P.J. van der Linden, and C.E. Hanson, (eds.)]. Cambridge University Press, Cambridge, UK, and New York, pp. 79-131.

Which is of course Chapter 1 of the 2007 IPCC AR4 WGII report. That report relied on a single study to make the following claim (at p. 110):

A global catalogue of catastrophe losses was constructed(MuirWood et al., 2006), normalised to account for changes that have resulted from variations in wealth and the number and value of properties located in the path of the catastrophes . . . Once the data were normalised, a small statistically significant trend was found for an increase in annual catastrophe loss since 1970 of 2% per year.

Muir-Wood (2006) is of course the white paper prepared in advance of the Hohenkammer Workshop on disaster losses that I organized along with Peter Hoeppe (of Munich Re) in 2006. I called the IPCC out on this cherrypicking/misrepresentation when the report was first released. Even though Muir-Wood et al. (2006) found no trends from 1950, and more importantly the Hohenkammer Workshop resulted in a consensus finding that such attribution was not possible, the Muir-Wood et al. study has been cherry-picked by the IPCC and before that the Stern Review and now, indirectly, again by the CCSP.

So to summarize: sentence one is not supported by the citations provided, which lead in both cases to selectively chosen non-peer revied sources, and the citations that are peer reviewed on this subject come to an opposite conclusion and are ignored.

Sentence #2

For example, during the time period covered in the figure to the right, population increased by a factor of 1.3 while losses increased by a factor of 15 to 20 in inflation-corrected dollars.That figure appears to the right and its problems are many.

That figure appears to the right and its problems are many.

1. The figure includes a major earthquake and 9/11.
2. The figure and the text neglect the effects of increasing wealth.
3. Published peer reviewed studies show no long-term trends in flood or hurricane losses once adjusted for societal change, yet those data are included.

Sentences #3 and #4

Analyses asserting little or no role of climate change in increasing the risk of losses tend to focus on a highly limited set of hazards and locations. They also often fail to account for the vagaries of natural cycles and inflation adjustments, or to normalize for countervailing factors such as improved pre- and post-event loss prevention (such as dikes, building codes, and early warning systems).348,349

I have to think that that the third sentence is referring to at least some of my work. Places that have been looked at include the United States for floods, hurricanes, and tornadoes (I'll ignore other studies outside the US since this CCSP report is referring only to the US). So what does that leave remaining? Not much.

The fourth sentence cannot be referring to my work, since it explicitly considers variability, inflation, and mitigation. Strangely enough that sentence is supported (reference #348) by a letter to Science (PDF) that I wrote on the Mills (2005) paper. In that letter I stated:

Presently, there is simply no scientific basis for claims that the escalating cost of disasters is the result of anything other than increasing societal vulnerability.

So it is strange to see it cited suggesting something that it does not.

Finally, #349 goes to a new paper by Mills which can be found here in PDF. Mills 2009 offers nothing related to the subject of this sentence, so it is strange to see it cited as a source here.

How can we explain how such a patently bad paragraph full of misrepresentations appeared in a U.S. government report?

One answer might lie in the fact that Evan Mills was a co-author of the report (p. 159). Do you think that had anything to do with it? His list of consulting clients is positively Phil Cooney-esque. Here are a few businesses and organizations that he lists under Consulting & Advising in his resume:

* Armstrong/Energyn (US)
* Barakat, Howard & Chamberlin, Inc. (US)
* Better Energy Systems (UK)
* Ceres (US)
* CMC Energy Services (US)* Integrated Process Technologies (US)
* Investment Research, Inc. (US)
* Teton Energy Partners (US)

So a person responsible for misrepresenting science in a government report has ties and presumably financial interests with companies that have an interest in climate policy outcomes? No, couldn't be. Could it?

For those wanting a more rounded picture of extremes in the United States, here is what an earlier CCSP report concluded about extreme events in the United States, but which was uncited by this new CCSP report in this paragraph:

1. Over the long-term U.S. hurricane landfalls have been declining.
2. Nationwide there have been no long-term increases in drought.
3. Despite increases in some measures of precipitation (pp. 46-50, pp. 130-131), there have not been corresponding increases in peak streamflows (high flows above 90th percentile).
4. There have been no observed changes in the occurrence of tornadoes or thunderstorms
5. There have been no long-term increases in strong East Coast winter storms (ECWS), called Nor’easters.
6. There are no long-term trends in either heat waves or cold spells, though there are trends within shorter time periods in the overall record.

'Public Option': Son of Medicaid

'Public Option': Son of Medicaid. By Daniel Henninger
Lard atop lard that only a politician or bureaucrat could love.
The Wall Street Journal, Jun 18, 2009, page A15

In his speech on health care to the American Medical Association, President Obama explained why the U.S. has "failed" (yet again) to provide comprehensive reform that "covers everyone." He had a list of the failing people, who "simply couldn't agree" on reform: doctors, insurance companies, businesses, workers, others. And "if we're honest," he said (ergo, disagreeing with this is dishonest) we must add to the list "some interest groups and lobbyists" who have used "fear tactics."

It seems to me, if we're honest, that one other contributor to the health-care morass should have been on the president's list: Congress. Indeed a close reading of Mr. Obama's speech suggests he holds the political class innocent insofar as he blames everyone else but them. Can this be true?

Back before recorded history, in 1965, Congress erected the nation's first two monuments to health-care "reform," Medicaid and Medicare. Medicaid was described at the time as a modest solution to the problem of health care for the poor. It would be run by the states and "monitored" by the federal government.

The reform known as Medicaid is worth our attention now because Mr. Obama is more or less demanding that the nation accept another reform, his "optional" federalized health insurance program. He suggested several times before the AMA that opposition to it will consist of "scare tactics" and "fear mongering."

Whatever Medicaid's merits, this federal health-care program more than any other factor has put California and New York on the brink of fiscal catastrophe. I'd even call it scary.

Spending on health and welfare, largely under Medicaid, makes up one-third of California's budget of some $100 billion. In New York Gov. David Paterson's budget message, he notes that "New York spends more per capital ($2,283) on Medicaid than any other state in the country."

After 45 years, the health-care reform called Medicaid has crushed state budgets. A study by the National Governors Association said a decade ago that because of "new requirements" imposed by federal law -- meaning Congress -- "Medicaid has evolved into a program whose size, cost and significance are far beyond the original vision of its creators."

In his speeches, Mr. Obama makes the original vision of his "public option" insurance plan sound about as simple as driving through toll booths with an electronic pass on your windshield. It's going to be all about "best practices" with patients "reimbursed in a thoughtful way," as if the federal government is about to become just another big Google.

Medicaid is a morass. Since the program's inception, Congress has loaded it up every few years with more notions of what to cover, shifting about 43% of the ever-upward cost onto someone else's tab, mainly the states. A 1988 congressional mandate requires local schools to pay for schooling and related services for disabled children, but because Congress underfunds its mandates, the states pay the rest through Medicaid.

The list of add-ons is endless, and there's little about it that is thoughtful. Why shouldn't one think that, as with Medicare and Medicaid, the Obama Public Option in time will become an impossible fog for patients to navigate? But unto eternity the program's administrative complexity will provide work for bureaucrats, Members of Congress, their staffs, lobbyist spouses and the "health-care" establishment of foundations and economists.

Oh, and the courts. The fact that this is a public program ensures not just congressional meddling but also makes it vulnerable to litigation. Over time, the Sotomayors of the federal bench will make it bigger. One piece of California's incredible budget mess flows from a federal judge's 2006 decision to seize control of the state's prison-health system and make the state pay billions for new health spending imagined by his appointed federal overseer.

Medicaid alone didn't put California and New York on the brink. Add in spending on public education and you've accounted for about 60% of their budgets. This drives the deficits and gets all the ink, but not least among the casualties of bigness is the idea of governance.

The elected legislatures of California, which holds 36.7 million American citizens, and New York, with 20 million, are essentially falling apart as governing bodies. The whole country has witnessed the spectacle of the comic "coup" in New York's Senate in Albany the past two weeks.

With collapse comes a truth: The bigger the government, the smaller the politicians. As mandated entitlements grow, the spending "crowds out" the need or obligation to think or to govern. Legislators with nothing very real to do become lazy, slack and corrupt. They become Albany. Or Sacramento. Or Trenton.

Mr. Obama's plan is intended to "guarantee" health insurance for all. Whatever the truth of that, its outlays -- larded atop Medicaid, Medicare and Social Security -- guarantee that Congress will become more like the states' clown shows. But they are expensive clowns.

In his speech, Mr. Obama said the cost of the Public Option won't add to the deficit: "I've set down a rule for my staff, for my team -- and I've said this to Congress -- health-care reform must be, and will be, deficit-neutral in the next decade." If we're honest, that means tax increases are inevitable. Sounds scary to me.

Congress and the IMF's Power Grab

Congress and the IMF's Power Grab. By Judy Shelton
There are better ways to promote international economic stability
WSJ, Jun 18, 2009

A sad spectacle played out in Washington this week as House Democrats pushed through a $106 billion supplemental appropriations bill to fund our troops in Iraq and Afghanistan that also provides a whopping $108 billion in expanded credit to the International Monetary Fund (IMF). The bill, which will soon be voted on in the Senate, also permits the IMF to sell $13 billion in gold for the chief purpose of establishing a permanent endowment for itself.

The Obama administration went to great lengths to get the IMF its billions. Last week, congressional leaders received a letter that made a firm connection between global economics and global security. "We know from the 1930s that a protracted global economic slump can foster undesirable and unforeseeable reactions to hardship and adversity," it stated. "Financial hardship and poverty breed desperation, which helps terrorist networks to attract new recruits with messages of hate, violence and intolerance."

The letter then urged Republicans and Democrats to support the president's request for IMF funding. "We believe that the current instability poses a significant risk to the long-term prosperity and security of the United States." It was signed by Secretary of State Hillary Clinton, National Security Adviser James Jones, and, most notably, Secretary of Defense Robert Gates.

Whoa! Clearly the implication was that a vote against the IMF funds would be a vote against national security. But does such a claim make sense? To answer that we must first seriously consider: 1) the impact of international financial instability on global security, and 2) whether the IMF is a force for good in establishing a stable financial foundation for economic prosperity.

The era of the 1930s is invoked often these days, usually to compare today's economic recession with the Great Depression years triggered by the U.S. stock market crash on Oct. 29, 1929. The international impact was exacerbated as countries grew protectionist and turned inward, erecting tariff barriers against imported goods and engaging in competitive currency devaluations. Monetary nationalism and the breakdown of international trade worsened the downward global economic spiral, paving the way for Adolf Hitler to come to power in hard-hit Germany and leading to World War II.

Certainly, it was recognition of the damaging economic impact of currency chaos and its worrisome political implications that drove U.S. Treasury Secretary Henry Morgenthau to ask his deputy, Harry Dexter White, to begin devising a plan for coordinated monetary arrangements among the U.S. and its allies. It was Dec. 14, 1941, one week after the attack on Pearl Harbor. The goal was to lay the groundwork for a more hopeful future for the Allied nations. Instead of returning to the beggar-thy-neighbor policies of the 1930s, they could look forward to a stable postwar international monetary system that would provide a foundation on which to rebuild their economies and attain new levels of prosperity.

Ultimately, the plan was developed into the Bretton Woods agreement of 1944 -- which established the IMF to operate a gold-exchange standard. White had decided early on that maintaining stable exchange rates was a separate task from providing cheap loans to Allied countries. A different organization -- the International Bank for Reconstruction and Development (later called the World Bank) -- was designated to perform that function.

The IMF carried out its exchange-rate duties for the next quarter century, permitting foreign central banks to redeem excess dollars at the fixed conversion rate of $35 per ounce of gold. The period from 1947 to 1967, known as the "Bretton Woods era," marked the emergence of a new world economic order based on solid money and increasingly free competition in the international marketplace.

The system came under pressure in the late 1960s as the U.S. began to inflate its money supply to accommodate growing fiscal strains. A liberal agenda of increased spending for social programs coincided with an escalation of the Vietnam War. The U.S government borrowed money to pay for it all, forcing other nations to absorb some of the inflationary impact through their own fixed-exchange rates with the dollar.

The Bretton Woods system ended on Aug. 15, 1971, when President Richard Nixon "closed the gold window" -- i.e., denied the convertibility privilege and thus delinked the dollar from gold. Since then, in the absence of a monetary anchor, exchange rates have been left to "float." Today, the dollar's residual role as key global reserve currency reflects the waning credibility of the U.S. government in carrying out responsible fiscal and monetary policies. Which is why China, Russia, Brazil and other developing nations are now calling for a new global reserve currency to provide an alternative to the dollar. And why the IMF funding provision in the current wartime supplemental bill needs to be closely examined.

Officials concerned about global security are right to recognize that financial instability breeds discontent and fosters social resentment that can challenge ruling interests and topple whole regimes. The question is whether short-term fixes -- in the form of emergency loans to a flailing government, the sort of assistance the IMF is prepared to offer -- provide a solid foundation for economic growth.

Just as overdone fiscal "stimulus" undermines confidence in future prosperity due to its inflationary consequences, it makes no sense to throw money at struggling nations without providing the hope of a more permanent solution that will enable them to meaningfully participate in the global marketplace. Money meltdown occurs when governments face overwhelming gaps between revenues and expenditures; foreign investors abandon the currencies as they race to the exits, leaving bereft citizens with worthless paper.

Putting out financial fires has become the specialty of the IMF, and the temporary respite offered through emergency loans may mitigate immediate damage to certain vulnerable countries, especially those exposed to contagion from neighbors. But the IMF is not capable of fulfilling its original mandate to oversee a stable international monetary system because there is no international monetary system. And the IMF's desire to sell gold to obtain windfall profits to fund its own permanent endowment was never envisioned under the Bretton Woods Articles of Agreement.

That agreement offered the countries fighting World War II the prospect of a more stable world. All the IMF is offering our dangerous world is the prospect of lurching from one short-term economic fix to the next.

Ms. Shelton, an economist, is author of "Money Meltdown: Restoring Order to the Global Currency System" (Free Press, 1994).

Tom Goldstein' op-ed on Sotomayor on TNYT

Today’s New York Times Op-Ed on Judge Sotomayor. By Roger Clegg
Bench Memos/NRO, Tuesday, June 16, 2009

The New York Times today has an op-ed by Tom Goldstein about Judge Sotomayor’s decisions involving race.

Mr. Goldstein “conclude[s] that Judge Sotomayor does not allow bias to infect her decision-making.” It’s not a persuasive op-ed.

Let me note at the outset that others, including our own Ed Whelan, have earlier noted some problems with Mr. Goldstein’s methodology. Let me note also that others, including The Washington Post, have counted the cases involved differently than Mr. Goldstein.

Mr. Goldstein’s discussion in today’s op-ed begins and ends tendentiously, lamenting that “many of us remain incapable of having a conversation about ethnicity that does not devolve into charges of racism,” that “critics have latched onto [Judge Sotomayor’s] decision” in the New Haven firefighters case to “infer … that Judge Sotomayor must be biased against whites”; he calls this “hysteria” and ends with another lament, of “[u]nsubstantiated charges of racism.” It’s ironic that the op-ed, which implicitly calls for a white lab-coat, calm and disinterested review of the facts, should bracket its discussion with such name-calling.

Mr. Goldstein’s discussion of a narrow range of cases also completely ignores the fact that some of the suspicion of Judge Sotomayor, and the fear that she might be influenced by race, ethnicity, and sex in her opinions, is fueled by the fact that, in her talk and writing off the bench, she has said that judges are influenced by race, ethnicity, and sex in their opinions, and seems to think that this is perfectly fine. So it’s not unreasonable for the judge’s critics to be looking especially hard for problems in her decisions.

Nor is it very persuasive to argue, as Mr. Goldstein does, that such fear can be refuted by statistics showing that, in percentage terms, most of Judge Sotomayor’s decisions are not problematic. Suppose the shoe were on the other foot, and a conservative judge had just a couple of decisions that the Left objected to in, say, the abortion area — would that be the end of the matter? The answer, of course, is that it would not — and I’m not hypothesizing here: We know from past experience that is not. Nor should it be: A bad decision in a particularly difficult and sensitive case can reveal a lot about what kind of a justice a judge will be, when her cases will almost all be difficult and sensitive.

On the court of appeals, on the other hand, we would not expect that all or even most decisions would be problematic. No doubt most cases are so clear-cut, one way or the other, that judges on both ends of the spectrum will agree on their disposition. What’s more, saying that a panel is unanimous doesn’t mean that the decision was not problematic (the panel might have been composed of all activists); saying that some of those panels included “a Republican-appointed judge” does not avoid that problem (there are plenty of activist Republican-appointed judges — like, say, Earl Warren and William Brennan, not to mention David Souter and Judge Sotomayor herself, who was, technically, a Republican-appointed district judge).

I have not “reviewed every single race-related case” on which Judge Sotomayor has ruled, but I know of at least three disturbing ones. There’s the New Haven case, of course; and Hayden v. Pataki¸ in which, Mr. Goldstein acknowledges, “she concluded that felon disenfranchisement laws are [racially] discriminatory and violate the Voting Rights Act”; and Brown v. City of Oneonta, which Ed discusses here.

Oh, and by the way: Mr. Goldstein is looking only at decisions in one area. So he’s not considering her decisions on property rights, the Second Amendment, etc., which have also come in for criticism.

In this regard, I should also note that one of the cases that Mr. Goldstein (and the Washington Post, in an article last week) cites as supposedly reassuring involved a policeman who was fired for mailing out racist and anti-Semitic fliers. Judge Sotomayor, in dissent, wanted to rule against the police department — just as the ACLU's New York affiliate had urged the court to do. So, sure, her position favored a bigoted policeman, but she also wanted to use an aggressive interpretation of the First Amendment to tie the hands of the police department. Thus, this decision is hardly evidence of non-activism, which is the real issue. And in that regard, pace Mr. Goldstein’s op-ed, the fact that Judge Sotomayor doesn’t urge judges “to disregard the plain language of any statute or to invent exceptions to statutes” obviously doesn’t mean that she isn’t doing so.

There is, in sum, plenty for the Senate Judiciary Committee to be concerned about.

Reagan's reaction on Poland events - Solidarnosc, Solidarity

Does Obama care?. By Scott Johnson
Powerline blog, June 17, 2009

Barack Obama's muted and ambivalent response to the events in Iran raises the question whether he cares about the fate of freedom in Iran, and what his attitude toward the Iranian regime is. Does he identify with the regime or its opponents? Does he care?

Ronald Reagan's reaction to the imposition of martial law in Poland provides an instructive contrast with Obama's muted reaction. On arriving in office, John O'Sullivan writes in The President, The Pope and the Prime Minister, Reagan had impressed upon his aides that he wanted to be kept well informed on Polish developments. "Less than two weeks after his inauguration," O'Sullivan relates, "Reagan met with his senior foreign policy advisers to discuss how to undermine Communist power in Poland and discourage Soviet intervention."

When the Communist government of Poland declared martial law to crush Solidarity on December 12-13, 1981, more than 4,000 Solidarity activists were arrested, Lech Walesa was interned and Solidarity itself was outlawed. Steven Hayward reminds us in his forthcoming The Age of Reagan: The Conservative Counterrevolution: 1980-1989, "the fact that the Soviets had the Poles do their own dirty work provided enough of a fig leaf for Western leaders to downplay the matter."

Western leaders spoke up to express their understanding of the government's crackdown on Solidarity. They all but supported it.

Not Ronald Reagan: "Ronald Reagan," Hayward recounts, "was livid over Poland." Ed Morrissey notes that Reagan immediately reacted to the imposition of martial law by publicizing his conversation with Pope John Paul II the next day:

The President. "Your Holiness, I want you to know how deeply we feel about the situation in your homeland."

"I look forward to the time when we can meet in person."

"Our sympathies are with the people, not the government."

Reagan elaborated his views three days later at a press conference:

All the information that we have confirms that the imposition of martial law in Poland has led to the arrest and confinement, in prisons and detention camps, of thousands of Polish trade union leaders and intellectuals. Factories are being seized by security forces and workers beaten.

These acts make plain there's been a sharp reversal of the movement toward a freer society that has been underway in Poland for the past year and a half. Coercion and violation of human rights on a massive scale have taken the place of negotiation and compromise. All of this is in gross violation of the Helsinki Pact, to which Poland is a signatory.

It would be naive to think this could happen without the full knowledge and the support of the Soviet Union. We're not naive. We view the current situation in Poland in the gravest of terms, particularly the increasing use of force against an unarmed population and violations of the basic civil rights of the Polish people.

Violence invites violence and threatens to plunge Poland into chaos. We call upon all free people to join in urging the Government of Poland to reestablish conditions that will make constructive negotiations and compromise possible.

Certainly, it will be impossible for us to continue trying to help Poland solve its economic problems while martial law is imposed on the people of Poland, thousands are imprisoned, and the legal rights of free trade unions -- previously granted by the government -- are now denied. We've always been ready to do our share to assist Poland in overcoming its economic difficulties, but only if the Polish people are permitted to resolve their own problems free of internal coercion and outside intervention.

Our nation was born in resistance to arbitrary power and has been repeatedly enriched by immigrants from Poland and other great nations of Europe. So we feel a special kinship with the Polish people in their struggle against Soviet opposition to their reforms.

The Polish nation, speaking through Solidarity, has provided one of the brightest, bravest moments of modern history. The people of Poland are giving us an imperishable example of courage and devotion to the values of freedom in the face of relentless opposition. Left to themselves, the Polish people would enjoy a new birth of freedom. But there are those who oppose the idea of freedom, who are intolerant of national independence, and hostile to the European values of democracy and the rule of law.

Two Decembers ago, freedom was lost in Afghanistan; this Christmas, it's at stake in Poland. But the torch of liberty is hot. It warms those who hold it high. It burns those who try to extinguish it.

Over the two weeks following the imposition of martial law Reagan convened meetings of the National Security Council about the Polish crisis almost daily. Hayward quotes Richard Pipes's description of "an emotionally charged atmosphere inspired largely by Reagan's mounting fury." Reagan derided the "chicken littles" in Europe.

Turning to archival sources, Hayward finds Reagan at the December 22 NSC meeting declaring that this was "the last chance of a lifetime to go against this damned force." Reagan expressed his disgust in an indignant message to Brezhnev via the hotline on December 23: "[N]othing has so outraged our public opinion as the pressures and threats which your government has exerted on Poland to stifle the stirrings of freedom." On December 23 Reagan also gave his eloquent speech condemning the Polish crackdown. Reagan declared:

I want emphatically to state tonight that if the outrages in Poland do not cease, we cannot and will not conduct "business as usual'' with the perpetrators and those who aid and abet them. Make no mistake, their crime will cost them dearly in their future dealings with America and free peoples everywhere. I do not make this statement lightly or without serious reflection.

What prevents Barack Obama from making a similar declaration? Does he care?