Sunday, February 1, 2009

Russia's Drive for Global Economic Power: A Challenge for the Obama Administration

Russia's Drive for Global Economic Power: A Challenge for the Obama Administration. By Ariel Cohen, Ph.D., and Lajos F. Szaszdi, Ph.D.
Heritage, January 30, 2009

Full text w/references here

Until the recent global financial crisis, Russia's eco­nomic revival during the presidency of Vladimir Putin had helped to restore the country's standing as a major player in the world arena. Yet, prosperity has come with some unintended consequences. Russia's inva­sion of Georgia was fueled by Russia's economic growth and newfound wealth.

This economic comeback is largely the result of Russia's oil and natural gas exports, coupled with the high prices that other Russian commodities have enjoyed in world markets. With the seventh-largest oil reserves and the largest gas reserves in the world, and as the leading exporter of oil and gas, the Kremlin is using its energy exports, revenue from arms and met­als sales, and investments abroad in the mining and energy sectors to extend Russia's influence worldwide.

The interruption of gas supply to Ukraine and the rest of Europe in January 2009 resulted in the worst energy crisis in Europe since the Arab Oil Embargo of 1973, and once again raised questions about Russia's reliability as an energy supplier.[1] In the recent past, Russia has already prevented Caspian oil and gas sup­plies from flowing freely to the European markets; has threatened to disrupt oil exports that pass through Georgian territory when it invaded Georgia last August; has acquired, and is in the process of acquiring, major European energy companies, as well as pipelines, refin­eries, and other assets in more than a dozen countries. Moscow is also targeting the strategic Middle Eastern oil sector and is displacing Western energy companies operating in OPEC founding member Venezuela.

Beyond that, Russia has dominant global posi­tions in the strategic and precious metals sectors including titanium, platinum, and other precious metals used in aerospace industries, electronics, and military and automotive production. A major Krem­lin-connected oligarch owns the world's largest alu­minum company and has been accused of corrupt practices in the U.S., Germany, Nigeria, and Guinea, while the Russian banking sector is tied in with organized crime.

Moscow's expanding business interests have made Europe highly--and dangerously--dependent on Russian oil, gas, and raw materials. Russia currently supplies two-thirds of Europe's imported natural gas--42 percent of total European consumption; Central and Eastern European countries depend on Russian gas for more than 90 percent of their needs. By 2030, Europe will import 84 percent of its gas needs.[2] Europe has not developed alternative sources of gas, and has rejected nuclear power and coal. Since natural gas is supplied by pipelines controlled by Gaz­prom, the Russian state gas monopoly, these countries cannot easily turn to other suppliers. Thus, Europe has tied itself to dependence on a commodity supplier with a track record of geopolitical intimidation as opposed to a free-market relationship.

Severe repercussions for Europe's national secu­rity dependence on Russian energy are widely rec­ognized by the European Union and individual countries. Europe has now "stepped up its attempts to reduce its exposure to potential Russian blackmail over energy supplies," reports Ian Traynor in The Guardian. The European Commission unveiled "an ambitious strategy aimed at weakening Russian giant Gazprom's domination of Europe's gas imports." "We must not sleepwalk into Europe's energy dependence crisis," said Jose Manuel Barroso, EU Commission President.[3] Russia is trying to replicate this model in other areas as well, such as electricity and raw-materials exports by state-owned corporations, as demonstrated below.

Russia also aims to become a major energy sup­plier and provider of raw materials to countries of the Asia-Pacific region, including China, Japan, South Korea, and the United States. Such a goal, if accomplished, will greatly enhance Russian lever­age in the Pacific Rim.


Controlling Eurasia

Russia's war with Georgia was as much about Moscow's plans to annex South Ossetia and Abkha­zia as it was to reassert economic domination of the Caucasus by force and prevent additional oil and gas pipelines from being built outside Russian con­trol. Russia sent the signal by temporarily control­ling the cargo port of Poti and Georgia's main highway and railway line and by threatening the safety--and thus the viability--of current and future oil and gas pipelines that bypass Russia.

The Russian invasion and partial occupation had the intended effect of persuading Kazakhstan to drop its investment plans for Georgia. The Kazakh state oil and gas company KazMunaiGas announced in September that it would abandon its plan to build an oil refinery in the Georgian port of Batumi, and not long before that, the Kazakh gov­ernment also announced it would not build a grain-export terminal in the port of Poti. This ter­minal would have enabled Kazakhstan to export part of its grain production through an alternative route, bypassing Russia.[4]

For years, Russian energy policy was a crafty tool of power projection in Eurasia. Russian state-con­trolled entities like Gazprom used mysterious, eco­nomically useless affiliates to ensnare local political leaders in corruption, thus co-opting them. Exam­ples include Rosukrenergo (with Ukraine) as well as Gazprom-Zeromax in Uzbekistan. Energy deals are used to entangle the local regimes, ensuring their political dependence on Moscow.

Moscow has not only used its resources and eco­nomic prowess to exert its influence in the former Soviet states of Eurasia. Russia's neo-corporatist state[5] is also pursuing an anti-American agenda and challenging the existing global economic system. It seeks control or influence of sectors that are of par­amount importance to American and European security, such as special materials like platinum, titanium, and other rare metals; defense technolo­gies, such as the European aircraft manufacturer EADS; and energy resources and infrastructure, such as U.S. Getty, Spain's Repsol, Germany's Ruhr­gas, refineries, and a slew of companies in Germany, Hungary, Bulgaria, Poland, Serbia, Slovakia, and elsewhere. Russia seeks to establish platforms from which it can more easily conduct industrial and classic espionage, money laundering, and other covert activities, and increase political dependency through corruption. Moscow is also seeking influ­ence in the developing world, as well as challenging the independence and security of Europe, including major powers like Germany and Italy, as well as Ukraine and Georgia, in which the United States has national security interests.


The Tools for Global Cooperation

The U.S. should cooperate with its friends and allies on combating excessive dependency (beyond 25-30 percent) on Russian strategic raw materials and energy exports, such as oil, gas, coal, and elec­tricity. What is needed is a global security system for tracking investment activities by Russia and other anti-Western governments in industries and sectors with defense and security implications.

One of those tools is the Committee on Foreign Investment in the United States (CFIUS). CFIUS is an inter-agency committee of the United States government that reviews the national security implications of foreign investments in U.S. compa­nies or operations. Chaired by the Secretary of the Treasury, CFIUS coordinates representatives from nine U.S. agencies including the Departments of Defense, State, Commerce, and Homeland Security.

The U.S. Treasury recently published final rules to strengthen security reviews of foreign invest­ments in U.S. businesses. As the former Treasury Secretary Henry Paulson put it, the final regulations are intended to "strengthen the CFIUS process in a manner that reaffirms America's longstanding policy of openness to investment, consistent with the pro­tection of our national security."[6] The regulations clarify that transactions in which a foreign entity acquires less than a 10 percent stake in a U.S. busi­ness are not automatically exempt from a CFIUS review. Under the new procedures, a foreign inves­tor in a U.S. business considered "critical infrastruc­ture" is encouraged to consult with the CFIUS panel before filing a formal notice. This is a wise step in improving oversight of investments in critical infra­structure, resources, and financial systems on which our nation and our alliances depend.

The U.S. should also increase cooperative effortsamong the international intelligence and law enforcement agencies and independent experts to keep track of how the Russian state and oligarchs may be laundering money and engaging in corrup­tion and unfair competition. The Obama Adminis­tration should encourage, without dictating investment decisions,U.S. and other multinational companies to compete with Russian companies like Gazprom for pipeline and energy projects, as well as promote alternative market-based sources of energy and unconventional sources of fuels worldwide to counter any over-dependency on energy from coun­tries such as Russia, Iran and Venezuela, which overtly seek to counter the West's economic and military strength.


Russia's Economic March

The geo-economic and geopolitical implications of Russia's economic power projection abroad can­not be overstated: As the Russian state's main source of revenues, and as a foreign policy arm, it enables the Kremlin to extend Russia's influence on a global scale. Moscow exercises economic--and political-- influence over countries that depend on its resources. Russian exports and investment projects are an instrument for establishing and developing strategic relationships through the export of com­modities, arms, and nuclear technology.[7]

Since Vladimir Putin became president in spring of 2000, the Kremlin has backed the formation of "national champions" of the economy, state- or pub­licly owned corporate giants that are subservient to the government. Initially, the amalgamation of com­panies into big conglomerates was intended to help Russian companies compete successfully at home and abroad. But the massive corporations favored by the Kremlin soon became instruments of the Russian state's policy to dominate the national econ­omy and to project its power abroad through a trade-based foreign economic policy.

These state and private corporate players are subject to the instructions of the government in both business and geopolitical priorities. So impor­tant are such strategic sectors like oil and gas or the military-industrial complex that, together with the big corporations that dominate these sectors-- Gazprom, Rosneft, LUKoil, and Rostekhnologii (Russian Technologies)--they constitute one of the pillars of the Russian state, along with the other pil­lars of power: the military, the intelligence services, the police and law-enforcement agencies, and the government bureaucracy.

Indeed, the Kremlin has been using energy exports as a tool of its foreign policy. The most noto­rious example of this practice is cutting off or threat­ening to cut off oil and gas exports to any country that adopts policies that go against Russia's national interests. A recent example was the September 1, 2008, announcement to reduce the flow of gas to the European Union, reportedly announced by the Russian gas monopoly Gazprom soon after the 27 EU member countries agreed to halt negotiations with Russia for a new partnership agreement. The EU measure came in response to Russia's war against Georgia in August.

In another example of the use of energy exports as a tool of foreign policy, Prime Minister Vladimir Putin, in a veiled threat to Europe, urged on the eve of the same EU meeting that the construction work on the East Siberia-Pacific Ocean (ESPO) oil pipe­line, destined to export crude to the Asia-Pacific region markets, be accelerated.[8] The message was clear: If Europe does not want to buy Russian oil, Moscow can sell it to China, South Korea, and Japan. Currently, Europe imports from Russia a third of the oil and 40 percent of the natural gas it consumes.[9]

This is no coincidence, since Russia's global pos­ture is directed by now-Prime Minister Putin and his associates--KGB veterans. As Putin's former economic adviser Andrey Illarionov described it, the Russian Federation is being run as a corpora­tion.[10] Today, this "Russia Inc." operates essentially with a hierarchical structure in which Prime Minis­ter Putin is the equivalent of the CEO and chairman of the board, with President Dmitry Medvedev as a member and chief operating officer. While Presi­dent Medvedev is a civilian, Putin and many of his close allies are alumni of the Russian intelligence community. In a study conducted in 2006 by the Center for the Study of Elites at the Russian Acad­emy of Sciences,of 1,016 senior government offi­cials and elected members of Parliament, 26 percent belonged to the KGB or the post-Soviet intelligence agencies. That proportion grew to 78 percent when individuals with "unexplained gaps in résumés, unlikely career paths or service in organizations affiliated with the KGB" were included.[11]

More than five years ago it was suggested that up to 6,000 active duty and reserve members of the Russian intelligence community occupied positions of influence in the state.[12] It can be concluded that the alumni of the Russian intelligence apparatus control the state by controlling the government's civilian bureaucracy, the military, and the country's main economic sectors. As Daniel Treisman, profes­sor of political science at the University of Califor­nia, Los Angeles, pointed out, in Russia "the security forces' takeover of corporate boardrooms is coming to define Putin's regime,"[13] during his pres­idency and premierships.

Moscow business insider Oleg Shvartsman sug­gested that the goal of the members of the Russian intelligence services who occupy senior positions in the corporate world is to gain wealth for them­selves in addition to global power for Russia through business expansion abroad. There have been revelations by a businessman managing the assets of members of the Presidential Administra­tion from the so-called "siloviki" (men of power). These are officials with links to the FSB (the Federal Security Service and the main successor to the KGB) and SVR (the Foreign Intelligence Service, formerly the KGB's First Main Directorate) through the obscure Finansgroup company which claims assets worth around $3.2 billion.[14] Thus, huge amounts of money in the hands of the former members of the Russian intelligence apparatus could be employed for personal use, while vast state revenues can be directed to fund clandestine operations and other state activities.

Massive money laundering operations through the Bank of New York[15] and Republic Bank of New York are well documented and were the subject of congressional hearings.[16] According to publications in the Russian media, the Austrian Raiffeisen bank is reportedly involved in suspicious activities in the Russian gas sector and other questionable business transactions with ties to intelligence services.[17] Back in 2004, Czech counterintelligence sources revealed that the SVR invested "huge sums in local real estate, hotels, casinos, and entertainment com­plexes" in the Czech Republic, probably in order to obtain front companies for intelligence operations, to strengthen the SVR's (and the Russian state's) influence in the country, and possibly as alternative sources of funding outside of the regular control of the Russian leadership.[18]

It is little wonder that earlier last year U.S. Attor­ney General Michael Mukasey cited Russia and other Eurasian nations as places where "organized crimi­nals control significant positions in the global energy and strategic-materials markets. They are expanding their holdings in those sectors, which corrupts the normal functioning of these markets and may have a destabilizing effect on U.S. geopolitical interests."[19]He revealed that the U.S. government has re-assem­bled its Organized Crime Council to combat a new "hybrid criminal problem" involving alliances between foreign intelligence agencies and criminal groups. Mr. Mukasey said law-enforcement officials have "grave concern" about "so-called "iron triangles' of corrupt business leaders, corrupt government officials and organized criminals."[20]


Beyond Personal Wealth

The Russian leadership's ambition surpassed the drive for self-enrichment a long time ago. Putin and then-Defense Minister Sergey Ivanov meant every word when they set the goal for Rus­sia to become a world energy superpower. In 2006, Vladislav Surkov, Deputy Head of the Pres­idential Administration, aide to President Putin and ideological chief of Putin's regime, declared that "the idea of Russia as an energy superpower is…fully consistent" with the country becoming competitive economically.[21] Yet, ever cautious, at that year's Valdai Club meeting, President Putin rejected the idea that Russia wanted to become an "energy superpower," assuring the audience that his government wanted instead to provide stable energy supplies to world markets.[22]

A key instrument in the dream of Russia as an energy superpower is Gazprom, the world's largest gas company and Russia's state-owned gas monop­oly. Gazprom was the Kremlin's principal tool in the two gas supply interruptions to Europe, which were triggered by the gas prices disputes between Mos­cow and Kyiv.[23] Gazprom is rated as the company with the highest capitalization in Russia.[24] It is intended to become the core of a gas counterpart to OPEC, and its close energy ties with Iran, which has the second-largest gas reserves on earth, threaten market access and competitiveness, especially in the liquefied natural gas (LNG) sector, and as a result, stability of the world economy.

The recent agreement between Russia, Iran, and Qatar to form a "Gas Troika" (in the works for at least a year and a half) that would meet several times a year, could lead to unfair business practices, such as "the exchange of information about prices, devel­opment schedules and investment plans."[25] Russia, Iran, and Qatar hold 56 percent of global gas reserves, and the Iranian oil minister declared in October of last year that the three countries have reached an agreement on the formation of a "gas OPEC."[26] Less than a week later, Alexei Miller, Gaz­prom's deputy chairman of the board of directors and chairman of the management committee, said that the Gas Troika could become a formal organi­zation in November of 2008.[27] Later, Anatoly Yanovsky, deputy energy minister, disclosed that at a December 23 summit in Moscow, 16 gas-produc­ing countries, including the host nation, plan to sign a charter establishing an "organization of gas exporting countries."[28]


A Perfect Storm.

The international financial cri­sis has seemingly put a stop to Russia's dynamic efforts to expand its economic interests worldwide. Prime Minister Putin wrongly blamed the U.S. exclusively for the meltdown, which since May has affected Russia's stock exchanges, the RTS and the MICEX, with Russia's indexes losing thus far as much as 70 percent of their value.[29]

Several observers pointed out that the Russian invasion of Georgia made the financial problem worse, triggering a further outflow of capital out of fear of instability. Other problems have combined to create a perfect financial storm against Russia: Inter­national banks called loans of powerful oligarchs who before the crisis and their loss in value used their company shares as collateral for foreign loans; and oil prices and those of other commodities fell, including metals, causing grave financial damage to Russian state financing.[30]

Russia's financial benefits accruing from foreign trade are altering its international behavior. In early August 2008, the Russian government's Reserve Fund and National Welfare Fund held the equiva­lent of $162 billion, while its hard currency and gold reserves summed their highest point on August 8--the day Russian forces invaded Geor­gia--with more than $597 billion, the third-largestreserves in the world after China and Japan.[31] By December 5, Russia's hard currency and gold reserves were down to $437 billion, yet they lost $31 billion in one week from October 17 to 24, and $17.9 billion in the week of December 5.[32] These reserves are expected to continue to decline as the Russian government uses them to rescue the national economy from the effects of the interna­tional financial crisis, and if oil prices remain below $70 a barrel.[33]

The effects of the financial crisis in Russia have left many Russian companies and banks unable to repay their foreign loans without state intervention. Thus, the Russian Central Bank has provided liquidity to Russia's state development bank, Vnesheconombank (VEB): $50 billion to help enterprises in financial trouble pay their foreign creditors. This situation is allowing the Russian gov­ernment to take over failing banks and acquire stakes in struggling companies, strengthening the power and influence of the state.[34]

The crisis has also caused Russia's most powerful billionaire businessmen, with close links to the Kremlin, to incur combined losses of up to $230 billion. The one with the highest losses according to Forbes is Oleg Deripaska, who, until the crisis, was the wealthiest man in Russia and who had lost more than $16 billion by early October of an esti­mated $28 billion fortune before the crisis. Deri­paska is the owner of RUSAL, the largest aluminum and alumina producer in the world.[35] Other exam­ples include Roman Abramovich, who by the third week of October lost over $20 billion after his shares in steelmaker Evraz plummeted. The owner of steel producer Novolipetsk Steel (NLMK), Vladimir Lisin, lost $22 billion by early October, and the fortune of Severstal's Alexei Mordashov went down from $21.2 billion by March 2008 to $5.3 billion by early October.[36] LUKoil's owner Vagit Alekperov's value of his 20 percent stake in the oil company fell from $19.5 billion to $7.2 bil­lion by early October.[37]

All these private-sector companies with close Kremlin ties are involved in international trade and investment activities, serving as sources of tax reve­nues and hard currency for the Russian state, and as tools of the Kremlin to expand Russia's influence worldwide. The Kremlin might use this opportunity as well to try to gain controlling stakes of private companies that are in financial trouble, thus expand­ing the state's commanding role in the national econ­omy and in the long term give it further resources and power, enabling foreign adventurism.

Despite the fact that it will be cancelling plans for more drilling and oil refining, private oil company LUKoil still intends to buy a 30 percent stake in Repsol, the Spanish national oil company, as well as a refinery in Sicily, and is putting together a $1 bil­lion loan for that purpose.[38] It seems that the national corporate champions, such as LUKoil or Gazprom might see their expanding investment plans at home or abroad shelved due to lower oil prices, yet this is likely to be a temporary setback, depending on how quickly the international finan­cial markets in general and foreign investor confi­dence in Russia in particular recover.

Yet, Russian businesses are feeling the brunt of the crisis. The abysmal loss of value of Russian banks and companies' shares has led Bloomberg to declare the stocks of Russian companies as the cheapest in the world. Indeed, there seem to be fears in Russian nationalist circles that the low value of Russian com­panies' stakes could lead to free-for-all acquisitions of Russian stocks by Western financial interests. To avoid this outcome, the Russian state, through its banks like VEB and institutions like the Deposit Insurance Agency, is providing the loans and guar­antees needed by Russian banks and companies in distress. It is also using them to take control of failed banks.[39] But even the Russian state itself could go broke if the price of oil continues to fall.


Budgetary Woes

This petroleum windfall is also being used to win the loyalty of some European politicians. Such arrangements benefit Russian energy interests, as in Germany with regard to the Nord Stream gas pipe­line consortium chaired by former chancellor Ger­hard Schroeder for an annual compensation of 1,000,000 euros (about $1,270,000 in U.S. dol­lars).[40] Nord Stream also hired the Finnish prime minister as a consultant, triggering concerns in Europe about spreading corruption.[41] An extremely expensive project, the Nord Stream pipeline would reach from Russia along the Baltic Sea bottom to Germany, bypassing the Baltic states and Poland and denying them transit revenue, with spurs to the Netherlands and France. In Bulgaria, Hungary, Ser­bia, and Austria, the planned--and even more expensive--South Stream gas pipeline would stop the EU- and U.S.-backed Nabucco gas pipeline, which bypasses Russia. The cooperation of Schroeder and Hungarian Prime Minister Ferenc Gyurcsany is key in implementing Russian projects that undermine Europe's security of energy supply.

The anti-competitive practices of Russian compa­nies are spreading in the West and are undermining the rule of law as well as sound economic practices and business ethics. Gazprom, Rosneft, and their subsidiaries negotiate and make energy deals with foreign energy companies.[42] Such opaque business partnerships are shrouded in secrecy, politicize the energy business, and are devoid of free and fair com­petition. Worse, the opaque nature of such agree­ments between state energy companies leaves an ample margin for corrupt practices that violate both the law and business ethics. One notorious example are the allegations made against the Austrian Raiffeisen bank, which has been accused by the Rus­sian press of participating in a money laundering scheme that sent capital out of Russia and that involved senior Russian government officials with links to oil companies and ties to the FSB.[43]


What Russia Wants: "New World System"

Russia needs its oil price to be at least $70 a bar­rel in 2009 to avoid falling into budget deficits.[44] Its recent talks with OPEC may be directed at coordi­nating efforts to reduce oil production and thus rais­ing the price of oil, a goal also pursued in earnest by OPEC members Iran and Venezuela, whose national budgets depend on $70 a barrel to balance their budgets.[45] The budget deficit may also constrain some foreign policy tools Russia uses.

Attending an OPEC meeting in Vienna in Septem­ber 2008, Russian Deputy Prime Minister Igor Sechin, a friend of Putin's, said that "OPEC is one of Russia's key partners on the global oil market" and that "it is very important for us to create mechanisms of regular dialogue" with the oil exporting organization.[46]

With Russia and OPEC responsible for a combined total of 51 percent of the world's oil,[47] Moscow's cooperation with OPEC to coordinate oil prices and production quotas would be a requisite for the further expansion of Russia's influence in the world. Even though the idea of Russia joining OPEC has been rejected by Russian officials, one of LUKoil's vice pres­idents declared recently that Russian membership of OPEC "will be only good for Russia" for "the future of the Russian industry and [oil] price stability."[48] Coop­eration with OPEC and the formation of a gas cartel are consistent with one of the objectives enunciated in the recent Foreign Policy Concept of the Russian Fed­eration, which announced that Russia "strengthens strategic partnership with the leading producers of energy resources."[49]

Russia aims to challenge the current interna­tional financial system dominated by the U.S. and Western industrialized countries. At the St. Peters­burg Economic Summit in 2007, President Putin called for a new world economic framework based on regional alliances, relegating Bretton Woods-era global institutions like the International Monetary Fund and the World Bank to the sidelines. He demanded that the new system reflect the rising power of emerging market economies like Russia, China, India, and Brazil, as well as the decline of the established powers: the United States, Japan, and Western European countries.[50]

Moscow is establishing "favorable political con­ditions for diversifying Russia's presence in the world markets through expanding the export range and geography of foreign economic and investment links of Russia."[51] At the same time, the Kremlin is promoting a multilateral, state-driven approach to the international economic and financial system to regulate the free markets globally, and using the ruble as the dominant currency in the Common­wealth of Independent States.

Speaking at the recent conference on the interna­tional financial crisis in Evian, France, Russian Pres­ident Medvedev said that "the formation of new financial centers and strong regional currencies will act as new stability factors" in the face of the crisis. While suggesting that the current international U.S.-based "unipolar economic model" is inefficient, Medvedev alluded to the "multi-polar nature of the world and the complexity of globalization." Medvedev is proposing that "the global financial architecture be changed, the role of the current inter­national institutions be reviewed, and new ones cre­ated to guarantee stability."[52] "It will take years to shape a new world system," Medvedev said.[53]

Another goal seems to be replacing the dollar in Russia's international trade transactions. Putin has proposed this goal to his Chinese counterpart Wen Jiabao for bilateral trade between Russia and China, which was estimated to reach $50 billion in 2008.[54]

Russia is following a multilateral approach to challenge the current international financial and trading system, as part of its overall strategy of pur­suing a multilateral world system, through the Shanghai Cooperation Organization,[55] OPEC, a new gas OPEC, or new international financial bod­ies that would include China, India, EU member states, and challengers of the established interna­tional order such as Iran and Venezuela.

Influencing the international prices of oil and gas would be key for the economic recovery of the country as well as for funding military and indus­trial modernization and economic development programs at home.

Before the international financial crisis hit Rus­sia, an increasing share of its resources had been directed at the rearming of the military with modern weapon systems, and at increases in funding of the Ministry of the Interior, and of the security and intelligence services, such as the FSB domestic secu­rity service, the SVR foreign intelligence service, the GRU military intelligence, and the Border Guards under FSB supervision. Before the crisis, the Krem­lin planned to raise defense spending by 50 percent over three years, deploy an army rapid reaction force at a high level of operational readiness, and construct new nuclear-powered ballistic missile submarines.[56] It remains to be seen if the govern­ment's financial stabilization efforts at home will reduce spending in defense as well as activities of the Ministry of Foreign Affairs and of Russian gov­ernment propaganda and information warfare.


Arms Exports Boost Russia's Power

Russia is also a major world weapons exporter. The Kremlin aims to forge long-lasting military rela­tions and strategic partnerships with foreign coun­tries through the export of arms. Russia's military exports extend to Europe, the Middle East, Central Asia, South Asia (primarily India), the Far East (mainly China), Southeast Asia, Africa, and Latin America. To further centralize government control over the production of the military-industrial complex, the Kremlin has created an industrial behemoth, Rostekhnologii (Russian Technologies), which agglomerates 426 state enterprises. These include the defense export enterprise Rosoboronex­port, the aircraft manufacturing, non-ferrous met­als, and shipbuilding conglomerates to name just a few. Russia's titanium exports corporation, VSMPO- Avisma, vital for Airbus and Boeing, is now con­trolled by Rostekhnologii, which is planning to develop it into one of the largest non-ferrous-metals companies in the world.[57] Rostekhnologii will cen­tralize the planning and production of the various enterprises under its umbrella. It could also attempt to marshal together its various resources and coor­dinate its efforts to become a formidable competitor in the international market for arms, metals, and aerospace technology.


What the Obama Administration Should Do

If Russia were a friendly Euro-Atlantic power, the United States would be no more concerned about its economic activity than about that of France. Rus­sia's use of state-dominated businesses to enhance its geopolitical posture and gain dominance over U.S. allies' energy supply, however, should raise deep concerns in the Obama Administration and in European capitals. Free-market competition is and should remain a fundamental principle of U.S. trade policy; but America and its allies have a duty to their citizens to monitor, and, where necessary, prevent, any country's anti-market, political, covert, or illicit efforts to undermine our markets or our security, which Russia increasingly is aiming to do.

For example, Russian's growing control of Eur­asian energy resources and exports to Europe through non-market means is both strategically and economically burdensome, as well as dangerous. To better ensure that the U.S. and its allies have access to the energy that fuels their economies and their militaries, to prevent Russian domination in strate­gic sectors, and to counter corrupt and criminal activities of Russian corporations and tycoons, the Obama Administration should take early action to:

  • Ensure that CFIUS has the resources and sup­port it needs to conduct its investigations accord­ing to the law. The U.S. should urge its allies to develop similar institutions and processes to perform their own national security evaluations and screenings.
  • Increase cooperation among U.S. and allied intelligence services, law enforcement agencies, and independent experts to track Russian state and oligarch money laundering activities, cor­ruption, and unfair competition practices. The Obama Administration should make the collec­tion of actionable intelligence on questionable Russian activities by U.S. and allied law enforce­ment agencies a priority. Such intelligence is critical in gathering evidence necessary for achieving convictions in courts of law. Such intelligence includes, for instance, Russian banks providing credit card support for child pornography Web sites. The U.S. should exer­cise leadership in expanding international coop­eration among law enforcement agencies to prevent and stop complex trans-border crimes, such as money laundering, and those that involve current or former Russian government officials; oligarchs with close ties to Russia's political leaders; intelligence operatives; and persons with ties to organized crime. When U.S. laws--such as the Patriot Act (especially Section 312, proceeds of foreign corruption), the For­eign Investment and National Security Act of 2007 (FINSA), the Defense Production Act of 1950 (DPA), money laundering laws, the For­eign Corrupt Practices Act, G-8 anticorruption initiatives, and similar laws in allied jurisdic­tions--are violated by Russian entities, the U.S. and its allies should not hesitate to vigorously prosecute the offenders and confiscate, through appropriate court proceedings, illegally laun­dered funds and properties acquired with ille­gally procured funds, and aggressively deny visas to those government and business figures involved in the illicit activities.
  • Encourage U.S. and other multinational compa­nies to compete in economically viable energy and infrastructure projects overseas through free-trade, diplomatic and security support, and regulatory and tax policies that will enhance free competition without government-directed investment decisions. U.S. companies should be encouraged to compete for the Libyan and Trans-Saharan gas pipelines, Turkmenistan's gas fields, and other geopolitically significant ventures, which Russia is targeting in India, Southeast Asia, Africa, and Latin America.
  • Promote market-viable alternative energy sources and unconventional sources of fuels worldwide to counter strategic dependency on Russian, Iranian, and Venezuelan oil. This should be accomplished through deregulation and trade and tax policies that encourage innovation and investment to develop, and through commercial­izing new sources of energy that best meet the needs of individual regions and nations. Western economies will be better off by expanding the supply of transportation fuels and reducing their Russian energy imports, thus reducing the influx of revenue into Kremlin coffers.
  • Expand security cooperation with Russia's energy-exporting neighbors and other countries that Russia is targeting for energy cooperation, including train-and-equip programs for military and security forces protecting pipelines, and officer corps education in U.S. military colleges. The U.S. should make use of NATO's Partnership for Peace program.

Conclusion: The Way Forward

Russia is being run as a corporation by the former senior members of the Russian intelligence community who strive to maximize profits and power, expanding global corporations for exports of raw materials and weapons. America's European allies and the newly independent states of Eurasia have already been subjected to Russia's heavy-handed policies and corrupt practices aimed at increasing their energy dependency, as well as a flurry of efforts to acquire critical infrastructure such as ports, pipelines, refineries, and energy dis­tribution networks.

The Kremlin has made clear that it intends to diminish America's standing as a world leader by promoting a "multipolar" world, and using its mili­tary, economic, and "soft" power to re-establish Rus­sia as America's near-peer competitor. The lower energy profits accruing to Moscow from the current global economic downturn can play a role in miti­gating Russia's anti-status quo foreign policy, and slow down the growth and modernization of its armed forces. But the U.S. should not rely on these developments. The U.S. should develop compre­hensive policies to handle Russia's economic power projection that is aimed at undermining American allies, power, and security interests, employing a mix of commercial, national security, intelligence, and diplomatic means.

Ariel Cohen, Ph.D., is Senior Research Fellow in Russian and Eurasian Studies and International Energy Security and Lajos F. Szaszdi, Ph.D., was a Consultant in the Douglas and Sarah Allison Center for Foreign Policy Studies, a division of the Kathryn and Shelby Cullom Davis Institute for International Studies, at The Heritage Foundation.

Afghanistan: major reduction in poppy cultivation in is now in reach

UN Secretary-General''s Special Representative for Afghanistan: major reduction in poppy cultivation in is now in reach
UN, New York, Feb 1 2009 11:10AM

Opium cultivation in Afghanistan is set to shrink this year, which could deal a major blow to the illicit drug industry, the top United Nations official to the war-torn country said today.

Since 2002, poppy production had increased every year until a small reduction last year, but a major reduction in is now in reach, the Secretary-General''s Special Representative for Afghanistan, Kai Eide, told journalists in Kabul.

At a press conference announcing the release of a new UN report, the Opium Rapid Assessment Survey, Mr. Eide said, "This year could be a turning point."

"There could be a reduction in each and every province in the country, and the number of poppy-free provinces could grow beyond 20 [of the country''s 34 provinces]," he added.

Similar to previous years, opium cultivation this year is expected to be virtually confined to the seven most unstable provinces in the south and south west of Afghanistan, where production has also been significantly reduced.

"Since this industry is so intimately linked to crime, corruption, and food insecurity, the effects could be wide-ranging, and very positive," said Mr. Eide.

In the south and south-west, the drop-off in opium cultivation is explained by high wheat prices, low opium prices and a lack of water in the face of severe drought, according to the report produced by the UN Office on Drugs and Crime (UNODC).

In other parts of the country, the report attributes pressure from government authorities, food scarcity and effective pre-planting information campaigns for the decline in poppy cultivation.

Mr. Eide warned that "we could face a backlash instead of further progress" if the Government and donors do not take advantage of the window of opportunity presented by this year''s decrease in production.

"Governors need additional resources to enable them to demonstrate that reduction in poppy production leads to development today. They have huge responsibilities, but few resources," he said.

Highlighting the contribution made by the United States and the United Kingdom to the Good Performance Initiative, Mr. Eide urged other donors to support the effort.

The Special Representative called for other measures to break the country''s dependency on the illegal crop, including an increase in direct agricultural assistance to farmers and involving local community and religious leaders in the fight against poppy production.

"The survey shows that where such assistance was given, the communities tend to stoppoppy production.

As you are aware, agriculture has been a neglected sector. Both the government and donors must make sure that agriculture becomes a priority not only in rhetoric but in the allocation of resources.

How to Export an Awakening: Afghanistan, viewed from Iraq

How to Export an Awakening, by Daveed Gartenstein-Ross & Joshua D. Goodman
Afghanistan, viewed from Iraq.
The Weekly Standard, Feb 09, 2009, Volume 014, Issue 19

The United States needs a new military strategy in Afghanistan. In 2008, NATO casualties rose to an all-time annual high of 294, 155 of them U.S. soldiers. Roadside bombs and kidnappings doubled last year. Underscoring the gravity of the situation, the chairman of the Joint Chiefs of Staff, Admiral Michael Mullen, warned the House Armed Services Committee in September, "I'm not convinced we're winning in Afghanistan."

In October, General David Petraeus--best known for revamping American strategy in Iraq--inherited responsibility for Afghanistan when he assumed command of CENTCOM (whose purview stretches from Egypt and the Horn of Africa all the way through Central Asia). None knows better than he that U.S. progress in Iraq over the past two years owes much to the rise of the "Awakening" movement, an alliance of Sunni tribesmen, Iraqi nationalists, ex-Baathists, and others united by the goal of driving al Qaeda from their country. Petraeus oversaw U.S. forces' work in partnering with, protecting, and spreading the Iraqi Awakening. Now he has presented a plan to U.S. allies to spur a similar movement among Afghans.

Despite some objections (notably from Canadian defense minister Peter MacKay), the United States will almost certainly try to replicate the Iraqi Awakening's achievements in Afghanistan in the coming year. How? In considering this question, there is no better place to start than a 47-page memorandum written by Sheikh Ahmad Abu Risha, the leader of Iraq's Awakening movement, and submitted to the American embassy in Kabul last spring.

Abu Risha prepared his memo at the request of Christopher Dell, the U.S. deputy chief of mission in Afghanistan. Though it is not publicly available (we obtained a copy from U.S. military sources) and has received little media attention beyond an account by Eli Lake in the now-defunct New York Sun, the plan it outlines is likely to take on greater importance over the coming year. The memo provides a cogent analysis of the situation in Afghanistan, as well as pertinent suggestions for replicating the Awakening's success there.

Abu Risha reviews several challenges in Afghanistan. The country is beset by warlords and their followers, who "are accustomed to living freely without the rule of law." There is great distrust of Hamid Karzai's government, which some Afghans believe is conspiring with the United States in "Americanizing and changing the identity of the Afghan people." This distrust is magnified by the country's living conditions: The economy is poor, with wages low and unemployment high. Despite improvements, the government has been unable to provide adequate education and health care.

These internal factors are compounded, in Abu Risha's view, by a military picture unfavorable to the United States. He argues that "military attacks by air against Taliban locations will cause the loss of many civilian lives," and so are likely to generate hostility to U.S. and NATO forces.

Abu Risha argues, nevertheless, that there are parallels between Afghanistan today and Iraq's Anbar Province in 2006 and 2007. Most important, al Qaeda and affiliated groups in Afghanistan have created a "climate of terror" similar to what they created in Anbar, where "they murdered anyone who opposed or criticized their actions and behavior." As in Anbar, he believes, an Awakening could help Afghanistan reverse its present deadly course.

Abu Risha outlines some preconditions for success. First and foremost is the need for a strong leader. In Anbar, this was the late Abdul Sattar al-Rishawi, Abu Risha's brother, assassinated in late 2007. Such a figure must have "charisma, outstanding leadership elements and courage," he should be "a man of honor, tolerant and persistent," and he should be "a center of trust" with "a political family background." Abu Risha emphasizes, however, that NATO should not try to establish new leadership in Afghanistan, but should work within the tribes' existing hierarchies. "This is a nation," he writes, "that does not accept changes or give up control easily without a fight."

Sterling Jensen, who participated as an Army contract linguist in the U.S. government's engagement with the Iraqi tribes as the Anbar Awakening was taking shape in the fall of 2006, agrees that Abdul Sattar's leadership was critical. "The Americans didn't make the Awakening," Jensen says. "They didn't make Sheikh Ahmed or Sheikh Abdul Sattar. You can influence some [local leaders'] thinking, but it's going to be the Americans recognizing these kinds of leaders, and supporting them."

Militarily, Abu Risha recommends giving Afghan leaders "the flexibility to develop and build military forces" similar to the Awakening and Sons of Iraq militias in Iraq. (The Sons of Iraq program, initiated and paid for by the U.S. military, consisted of the formation of paramilitary organizations in an effort to spread the Awakening beyond Anbar.) In his view, this can help Afghan fighters take the lead against religious militants, while NATO forces scale back their own activities. "Keep U.S. forces' and NATO forces' movement in Afghan cities limited," Abu Risha writes, "to only fight when needed, and control the Taliban insurgency and their expanded activities." He suggests that scaling back U.S. and NATO activity will diminish public hostility to their mission.

Abu Risha sees Pakistan as a second front as long as al Qaeda's senior leadership is ensconced in Pakistan's tribal areas. Islamic militants now routinely launch their attacks on Afghanistan from these tribal areas. Abu Risha encourages the United States to "help and support Pakistan in the fight against terrorism," and argues that an Afghan Awakening will depend in part on "strong and influential figures in Pakistan."

There are not only military but also political dimensions to Abu Risha's strategy. He recognizes Afghanistan's predominantly conservative religious practice and argues that "it is important not to infuriate influential public leaders, particularly the community religious leaders, mosques' preachers, mosques' imams, . . . and Islamic leaders in the tribal areas." Abu Risha favors active dialogue with religious leadership and institutions. He believes the influence religious figures and institutions have on Afghan tribal leaders warrants engagement with them.

Indeed, Abu Risha believes that an Afghan Awakening should be as politically inclusive as possible. He argues that, as a general rule, to do battle against Afghan parties "will cost the military more money than to include these political parties in the process." He recognizes, however, that there are limits to inclusion and writes that NATO forces should combat parties that "fight the American project."

To facilitate an Afghan Awakening, Abu Risha makes a concrete offer to U.S. and NATO forces. In his memorandum, he proposes sending a delegation of three to five Iraqi Awakening leaders to Afghanistan "to explain and clarify the essential requirements to implement and succeed in the experiment." He suggests having these Iraqis "participate in organizing different conferences in Afghanistan to share the ideology and the success" of Iraq's Awakening.

It will be interesting to see which of these ideas the United States pursues. While there are no guarantees that an Awakening strategy will work in Afghanistan, there are precious few alternatives.

Daveed Gartenstein-Ross is director, and Joshua D. Goodman is deputy director, of the Center for Terrorism Research at the Foundation for Defense of Democracies.

Saturday, January 31, 2009

California's 'Green Jobs' Experiment Isn't Going Well?

California's 'Green Jobs' Experiment Isn't Going Well, by Stephen Moore
WSJ, Jan 31, 2009

Gov. Arnold Schwarzenegger was all smiles in 2006 when he signed into law the toughest anti-global-warming regulations of any state. Mr. Schwarzenegger and his green supporters boasted that the regulations would steer California into a prosperous era of green jobs, renewable energy, and technological leadership. Instead, since 2007 -- in anticipation of the new mandates -- California has led the nation in job losses.

The regulations created a cap-and-trade system, similar to proposed federal global-warming measures, by limiting the CO2 that utilities, trucking companies and other businesses can emit, and imposed steep new taxes on companies that exceed the caps. Since energy is an input in everything that's produced, this will raise the cost of production inside California's borders.

Now, as the Golden State prepares to implement this regulatory scheme, employers are howling. It's become clear to nearly everyone that the plan's backers have underestimated its negative impact and exaggerated the benefits. "We've been sold a false bill of goods," is how Republican Assemblyman Roger Niello, who has been the GOP's point man on environmental issues in the legislature, put it to me.

The environmental plan was built on the notion that imposing some $23 billion of new taxes and fees on households (through higher electricity bills) and employers will cost the economy nothing, while also reducing greenhouse gases. Almost no one believes that anymore except for the five members of the California Air Resources Board (CARB). This is the state's air-quality regulator, which voted unanimously in December to stick with the cap-and-trade system despite the recession. CARB justified its go-ahead by issuing what almost all experts agree is a rigged study on the economic impact of the cap-and-trade system. The study concludes that the plan "will not only significantly reduce California's greenhouse gas emissions, but will also have a net positive effect on California's economic growth through 2020."

This finding elicited a chorus of hallelujahs from environmental groups. The state finally discovered a do-good policy that pays for itself. Californians can still scurry around in their cars, heat up their Jacuzzis, and help save the planet. But there was a problem. The CARB had commissioned five economists from around the country to critique this study. They panned it.

Harvard's Robert Stavins, chairman of the federal Environmental Protection Agency's economic advisory committee under Bill Clinton, told me that "None of us knew who the other reviewers were, but we all came up with almost the same conclusion. The report was severely flawed and systematically underestimated costs." Another reviewer, UCLA Prof. Matthew E. Kahn, a supporter of the new regulations, criticized the "free lunch" aspect of the report. "The net dollar costs of each of these regulations is likely to be much larger than is reported," he concluded. Mr. Stavins points out that if these regulations are a net boon for businesses and the economy, "why would you need to impose regulations like cap and trade?"

The Sacramento Bee, which has editorialized in support of the new regulations, was aghast at CARB's twisted science. We have to "be candid about the real costs of the transition," a cautionary editorial advised. "Energy prices will rise, and major capital investment will be needed in public transit and new transmission lines. Industries that are energy intensive will move elsewhere."

The green lobby has lectured us for years that global warming is all about the sanctity of science. Those who question the "scientific consensus" on catastrophic atmospheric changes are belittled as "deniers." Now, in assessing the costs, the greens readily cook the books and throw good science out the window. "To most of the most strident supporters of this legislation," says Mr. Niello, "the economic costs don't really matter anyway, because we are supposedly facing an environmental apocalypse."

Mr. Schwarzenegger fits into that camp. He recently declared: "I recommend very strongly that we move forward . . . . You will always have people saying this will lose jobs."

Meanwhile, the state is losing jobs, a lot of them. California's unemployment rate hit 9.3% in December, up from 4.9% in December 2006. There are now 1.5 million Californians out of work. The state has the fourth-highest housing foreclosure rate in the nation, has lost more businesses than any state in recent years, and is facing a $40 billion deficit. With cap and trade firmly in place, the economic situation is only likely to get worse.

Other states are plundering the Golden State's industries by convincing businesses to pick up stakes and move out before the cap-and-trade earthquake hits. Governors and Washington politicians who want to reduce their "carbon footprint," but are worried about the more immediate crises of cascading unemployment, unbalanced budgets, and the housing-market collapse, would be wise not to follow California's lead. Green policies have a tendency to push states into the red.

Mr. Moore is senior economics writer for the Wall Street Journal editorial page.

Conservative views on BHO's executive orders & unions

Obama pays his union dues, first installment. By Scott Johnson
PowerLine Blog, Jan 31, 2009

The New York Times reports that President Obama signed three executive orders pleasing to unions. The Times quotes Obama directly addressing the union officials at the White House ceremony: "Welcome back to the White House." The Times summarized the substance of the orders in one paragraph:

The orders Mr. Obama signed, which union officials say will undo Bush administration policies that tilted toward employers, make it more difficult for federal contractors to discourage union activities. And when a federal contract changes hands, the new contractor will be required to offer jobs to workers who were employed by the earlier contractor.

And that's that, as far as the Times is concerned. It seems highly doubtful that Times reporter David Stout has bothered to read the orders or ask anyone what kind of sense they make. Interested readers will have to look elsewhere for addtional information.

The orders have been posted here by Carter Wood at the Manhattan Institute's PointofLaw.com site. Wood's Saturday morning update notes:

Judging by the metadata of one file, one of the regulations was written by the SEIU's legal counsel, or associate general counsel, Craig Becker -- although he may have gone to work for the Administration. (See this Shopfloor.org post.) Remember all those headlines from eight years ago along the lines of "White House lets business lobbyists write the law?"

What sense do these orders make? The Times frames the story as Obama taking a swipe at Bush, consistent with Obama presentation of them at the White House ceremony. Times reporter David Stout is discreetly silent about Obama's debt to organized labor. The orders are Obama's downpayment on the debt.

The orders are couched in terms of government economy. Unions are of course well known for their contribution to economic efficiency. Mickey Kaus actually took the trouble to track down the text of the order requiring a contractor to retain the old workers when a federal contract changes hands, to borrow the Times's formulation. Kaus quotes from the order:

The Federal Government's procurement interests in economy and efficiency are served when the successor contractor hires the predecessor's employees. A carryover work force reduces disruption to the delivery of services during the period of transition between contractors and provides the Federal Government the benefits of an experienced and trained work force that is familiar with the Federal Government's personnel, facilities, and requirements.

Kaus displays a bad attitude toward the order. You might say he doesn't take it at face value:

[W]hat if the contract got switched because the previous work force, you know, sucked? ... P.S.: For example, the Obama administration itself can be seen as having won a new contract to perform the same Federal services, at the same location, as the previous contractor, the Bush Administration. Did Obama keep all of Bush's employees in order to reduce "disruption" and enjoy "the benefits of an experienced and trained work force that is familiar with the Federal Governments ... facilities"? I don't think so! ...

Kaus aptly calls the orders "the labor payoff of the day." It's a point that seems to have escaped the Times.

Conservative views on Samantha Power, self-proclaimed "genocide chick"

Soft Power Comes to Washington, Part Two. By Paul Mirengoff
PowerLine blog, January 30, 2009 Posted by Paul at 11:35 PM

Samantha Power's substantive views on foreign policy, including her stridently anti-Israel positions and attitude, make her a poor choice for the senior foreign policy position President Obama has bestowed upon her. Yet there has always been reason to suspect that Obama shares many of these positions, including quite possibly her antipathy towards Israel. At a minimum, I think it's fair to say that Obama wants Power's views to be part of the discussion he hears. And as president, that's his prerogative.

But there's a second objection to Power that has nothing to do with her substantive views. Power's book tour of last March -- "The Book Tour From Hell" -- strongly suggests that she lacks the maturity, judiciousness, and seriousness to hold a senior position in the field of foreign affairs.

During the course of the tour, as I observed at the time, Power took on something of a "rock star" persona. As I also cautioned, it was difficult, at least initially, to tell whether (or to what extent) this was Power's doing. One could easily imagine that the British press was projecting this image on to Power, given her gender, physical appearance, and close relationship to the ultimate rock star, Barack Obama.

Before long, though, it became apparent that Power was, indeed, on a "rock star" trip. As I wrote:

She seemed to cultivate an "edgy" image, using the "f" word during interviews and making candid off-the-cuff negative assessments of Secretary Rice and Gordon Brown (never mind the comment about Hillary Clinton which arguably should have been kept off-the-record by the interviewer), along with vaguely offensive remarks such as "so much of [the discussion] is about: 'Is [Obama] going to be good for the Jews?'" Most telling of all, perhaps, was her self-proclaimed status as "the genocide chick."

The comment in which she expressed her disappointment with England's head of state [sic] -- "I am confused by what's happened to Gordon Brown. I thought he was impressive" -- by itself showed her to be loose cannon. And calling Hillary Clinton a "monster" was too much even for Obama at the time. If, as Obama concluded, Power was too much of an embarrassment to continue to play a role in the campaign, what sense does it make to give her a senior position in the government? Does Obama take campaigning more seriously than he takes governance? It speaks poorly of Obama that he values Power's views, and just as poorly that he deems her temperamentally suited for anything other than perhaps an informal advisor's role.

Former NASA Supervisor says Hansen ‘Embarrassed NASA’ & ‘Was Never Muzzled’

James Hansen’s Former NASA Supervisor Declares Himself a Skeptic
Says Hansen ‘Embarrassed NASA’ & ‘Was Never Muzzled’
House, Environment & Public Works Committee, Minority blog, Jan 27, 2009

Washington DC: NASA warming scientist James Hansen, one of former Vice President Al Gore’s closest allies in the promotion of man-made global warming fears, is being publicly rebuked by his former supervisor at NASA.

Retired senior NASA atmospheric scientist Dr. John S. Theon, the former supervisor of James Hansen, NASA’s vocal man-made global warming fears soothsayer, has now publicly declared himself a skeptic and declared that Hansen “embarrassed NASA” with his alarming climate claims and said Hansen was “was never muzzled.” Theon joins the rapidly growing ranks of international scientists abandoning the promotion of anthropogenic global warming fears. [See: U.S. Senate Minority Report Update: More Than 650 International Scientists Dissent Over Man-Made Global Warming Claims & See Prominent Scientist Fired By Gore Says Warming Alarm ‘Mistaken’ & Gore laments global warming efforts: 'I've failed badly' - Washington Post – November 11, 2008]

“I appreciate the opportunity to add my name to those who disagree that global warming is man-made,” Theon wrote to the Minority Office at the Environment and Public Works Committee on January 15, 2009. “I was, in effect, Hansen's supervisor because I had to justify his funding, allocate his resources, and evaluate his results. I did not have the authority to give him his annual performance evaluation,” Theon, the former Chief of the Climate Processes Research Program at NASA Headquarters and former Chief of the Atmospheric Dynamics & Radiation Branch explained. [Note: Here are the results a Google Scholar search on Theon. - Theon's complete written correspondence to EPW reprinted at the end of this report. ]

“Hansen was never muzzled even though he violated NASA's official agency position on climate forecasting (i.e., we did not know enough to forecast climate change or mankind's effect on it). Hansen thus embarrassed NASA by coming out with his claims of global warming in 1988 in his testimony before Congress,” Theon wrote. [Note: NASA scientist James Hansen who runs NASA's Goddard Institute for Space Studies (GISS) has created worldwide media frenzy with his dire climate warnings, his call for trials against those who dissent against man-made global warming fear, and his claims that he was allegedly muzzled by the Bush administration despite doing 1,400 on-the-job media interviews - See: Don’t Panic Over Predictions of Climate Doom - Get the Facts on James Hansen & UK Guardian: NASA scientist calls for putting oil firm chiefs on trial for 'high crimes against humanity' for spreading doubt about man-made global warming – June 23, 2008 & NYT's Revkin chides Hansen for promoting sea level claims that are at upper boundary of what is 'even physically possible' (Note: Headline re: Revkin and Hansen corrected)]

Theon declared “climate models are useless.” “My own belief concerning anthropogenic climate change is that the models do not realistically simulate the climate system because there are many very important sub-grid scale processes that the models either replicate poorly or completely omit,” Theon explained. “Furthermore, some scientists have manipulated the observed data to justify their model results. In doing so, they neither explain what they have modified in the observations, nor explain how they did it. They have resisted making their work transparent so that it can be replicated independently by other scientists. This is clearly contrary to how science should be done. Thus there is no rational justification for using climate model forecasts to determine public policy,” he added.

“As Chief of several of NASA Headquarters’ programs (1982-94), an SES position, I was responsible for all weather and climate research in the entire agency, including the research work by James Hansen, Roy Spencer, Joanne Simpson, and several hundred other scientists at NASA field centers, in academia, and in the private sector who worked on climate research,” Theon wrote of his career. “This required a thorough understanding of the state of the science. I have kept up with climate science since retiring by reading books and journal articles,” Theon added. (LINK) Theon also co-authored the book Advances in Remote Sensing Retrieval Methods.


Hansen 'is a political activist who spreads fear'

Award-winning NASA Astronaut and Physicist Walter Cunningham of NASA’s Apollo 7 also recently chastised Hansen. “Hansen is a political activist who spreads fear even when NASA’s own data contradict him,” Cunningham wrote in an essay in the July/August 2008 issue of Launch Magazine. “NASA should be at the forefront in the collection of scientific evidence and debunking the current hysteria over human-caused, or Anthropogenic Global Warming (AGW). Unfortunately, it is becoming just another agency caught up in the politics of global warming, or worse, politicized science,” Cunningham wrote.

[Note: Theon joins many current and former NASA scientists in dissenting from man-made climate fears. A small sampling includes: Aerospace engineer and physicist Dr. Michael Griffin, the former top administrator of NASA, Atmospheric Scientist Dr. Joanne Simpson, the first woman in the world to receive a PhD in meteorology and is formerly of NASA, Geophysicist Dr. Phil Chapman, an astronautical engineer and former NASA astronaut, Award-Winning NASA Astronaut/Geologist and Moonwalker Jack Schmitt, Chemist and Nuclear Engineer Robert DeFayette was formerly with NASA’s Plum Brook Reactor, Hungarian Ferenc Miskolczi, an atmospheric physicist with 30 years of experience and a former researcher with NASA's Ames Research Center, Climatologist Dr. John Christy, Climatologist Dr. Roy W. Spencer, Atmospheric Scientist Ross Hays of NASA's Columbia Scientific Balloon Facility]

Gore faces a much different scientific climate in 2009 than the one he faced in 2006 when his film An Inconvenient Truth was released. According to satellite data, the Earth has cooled since Gore’s film was released, Antarctic sea ice extent has grown to record levels, sea level rise has slowed, ocean temperatures have failed to warm, and more and more scientists have publicly declared their dissent from man-made climate fears as peer-reviewed studies continue to man-made counter warming fears. [See: Peer-Reviewed Study challenges 'notion that human emissions are responsible for global warming' & New Peer-Reviewed Scientific Studies Chill Global Warming Fears ]

“Vice President Gore's and the other promoters of man-made climate fears' endless claims that the 'debate is over' appear to be ignoring scientific reality,” Senator James Inhofe, Ranking Member of the Environment & Public Works Committee.

A U.S. Senate Minority Report released in December 2008 details over 650 international scientists who are dissenting from man-made global warming fears promoted by the UN. Many of the scientists profiled are former UN IPCC scientists and former believers in man-made climate change that have reversed their views in recent years. The report continues to grow almost daily. We have just received a request from an Italian scientist, and a Czech scientist to join the 650 dissenting scientists report. A chemist from the U.S. Naval Academy is about to be added, and more Japanese scientists are dissenting. Finally, many more meteorologists will be added and another former UN IPCC scientist is about to be included. These scientists are openly rebelling against the climate orthodoxy promoted by Gore and the UN IPCC.

The prestigious International Geological Congress, dubbed the geologists' equivalent of the Olympic Games, was held in Norway in August 2008 and prominently featured the voices of scientists skeptical of man-made global warming fears. Reports from the conference found that Skeptical scientists overwhelmed the meeting, with '2/3 of presenters and question-askers hostile to, even dismissive of, the UN IPCC' ( See full reports here & here ] In addition, a 2008 canvass of more than 51,000 Canadian scientists revealed 68% disagree that global warming science is “settled.” A November 25, 2008, article in Politico noted that a “growing accumulation” of science is challenging warming fears, and added that the “science behind global warming may still be too shaky to warrant cap-and-trade legislation.” More evidence that the global warming fear machine is breaking down. Russian scientists “rejected the very idea that carbon dioxide may be responsible for global warming”. An American Physical Society editor conceded that a “considerable presence” of scientific skeptics exists. An International team of scientists countered the UN IPCC, declaring: “Nature, Not Human Activity, Rules the Climate”. India Issued a report challenging global warming fears. International Scientists demanded the UN IPCC “be called to account and cease its deceptive practices.”

The scientists and peer-reviewed studies countering climate claims are the key reason that the U.S. public has grown ever more skeptical of man-made climate doom predictions. [See: Global warming ranks dead last, 20 out of 20 in new Pew survey. Pew Survey: & Survey finds majority of U.S. Voters - '51% — now believe that humans are not the predominant cause of climate change' - January 20, 2009 - Rasmussen Reports ]

The chorus of skeptical scientific voices grow louder in 2008 as a steady stream of peer-reviewed studies, analyses, real world data and inconvenient developments challenged the UN’s and former Vice President Al Gore's claims that the "science is settled" and there is a "consensus."

On a range of issues, 2008 proved to be challenging for the promoters of man-made climate fears. Promoters of anthropogenic warming fears endured the following: Global temperatures failing to warm; Peer-reviewed studies predicting a continued lack of warming; a failed attempt to revive the discredited “Hockey Stick”; inconvenient developments and studies regarding rising CO2; the Spotless Sun; Clouds; Antarctica; the Arctic; Greenland’s ice; Mount Kilimanjaro; Global sea ice; Causes of Hurricanes; Extreme Storms; Extinctions; Floods; Droughts; Ocean Acidification; Polar Bears; Extreme weather deaths; Frogs; lack of atmospheric dust; Malaria; the failure of oceans to warm and rise as predicted.

You can check Theon’s complete written correspondence to EPW here.

BHO: weekly address

Moving forward
White House blog, Saturday, January 31st, 2009 at 4:45 am

In the weekly address, President Barack Obama addressed the latest economic news and urged the passing of an America Recovery and Reinvestment Plan.

He also announced that Treasury Secretary Timothy Geithner is preparing a new strategy for reviving our financial system -- which will not only ensure that CEOs aren't abusing taxpayer dollars, but also get credit flowing and lower mortgage costs.

Watch the address and read the full text below.

http://www.whitehouse.gov/blog_post/moving_forward/

Address to the nation

This morning I'd like to talk about some good news and some bad news as we confront our economic crisis.

The bad news is well known to Americans across our country as we continue to struggle through unprecedented economic turmoil. Yesterday we learned that our economy shrank by nearly 4 percent from October through December. That decline was the largest in over a quarter century, and it underscores the seriousness of the economic crisis that my administration found when we took office.

Already the slowdown has cost us tens of thousands of jobs in January alone. And the picture is likely to get worse before it gets better.

Make no mistake, these are not just numbers. Behind every statistic there's a story. Many Americans have seen their lives turned upside down. Families have been forced to make painful choices. Parents are struggling to pay the bills. Patients can't afford care. Students can't keep pace with tuition. And workers don't know whether their retirement will be dignified and secure.

The good news is that we are moving forward with a sense of urgency equal to the challenge. This week the House passed the American Recovery and Reinvestment Plan, which will save or create more than 3 million jobs over the next few years. It puts a tax cut into the pockets of working families, and places a down payment on America's future by investing in energy independence and education, affordable health care, and American infrastructure.

Now this recovery plan moves to the Senate. I will continue working with both parties so that the strongest possible bill gets to my desk. With the stakes so high we simply cannot afford the same old gridlock and partisan posturing in Washington. It's time to move in a new direction.

Americans know that our economic recovery will take years -- not months. But they will have little patience if we allow politics to get in the way of action, and our economy continues to slide. That's why I am calling on the Senate to pass this plan, so that we can put people back to work and begin the long, hard work of lifting our economy out of this crisis. No one bill, no matter how comprehensive, can cure what ails our economy. So just as we jumpstart job creation, we must also ensure that markets are stable, credit is flowing, and families can stay in their homes.

Last year Congress passed a plan to rescue the financial system. While the package helped avoid a financial collapse, many are frustrated by the results -- and rightfully so. Too often taxpayer dollars have been spent without transparency or accountability. Banks have been extended a hand, but homeowners, students, and small businesses that need loans have been left to fend on their own.

And adding to this outrage, we learned this week that even as they petitioned for taxpayer assistance, Wall Street firms shamefully paid out nearly $20 billion in bonuses for 2008. While I'm committed to doing what it takes to maintain the flow of credit, the American people will not excuse or tolerate such arrogance and greed. The road to recovery demands that we all act responsibly, from Main Street to Washington to Wall Street.

Soon my Treasury Secretary, Tim Geithner, will announce a new strategy for reviving our financial system that gets credit flowing to businesses and families. We'll help lower mortgage costs and extend loans to small businesses so they can create jobs. We'll ensure that CEOs are not draining funds that should be advancing our recovery. And we will insist on unprecedented transparency, rigorous oversight, and clear accountability -- so taxpayers know how their money is being spent and whether it is achieving results.

Rarely in history has our country faced economic problems as devastating as this crisis. But the strength of the American people compels us to come together. The road ahead will be long, but I promise you that every day that I go to work in the Oval Office I carry with me your stories, and my administration is dedicated to alleviating your struggles and advancing your dreams. You are calling for action. Now is the time for those of us in Washington to live up to our responsibilities.

Friday, January 30, 2009

Libertarian views on global warming: "Al Gore’s Climate of Extremes"

Al Gore’s Climate of Extremes, by Patrick J. Michaels
Planet Gore/NRO, Friday, January 30, 2009

Ho-hum. On January 28, in the midst of a pelting sleet storm, Al Gore told the Senate Foreign Relations Committee that the end is nigh from global warming.

He told the Senate that “some scientists” predict up to 11 degrees of warming in the next 91 years (while failing to note that the last 12 have seen exactly none), and that this would “bring a screeching halt to human civilization and threaten the fiber of life everywhere on earth”. Hey folks, this is serious!

Besides having a remarkable knack for scheduling big speeches on remarkably cold or snowy days (it’s known as the “Gore Effect” in journalistic circles), Gore has been incredibly ineffective in bringing his message home.

According to the New York Times, Gore told the Web 2.0 Summit in San Francisco last November, “I feel, in a sense, I’ve failed badly. . . . [T]here is not anything anywhere close to an appropriate sense of urgency [about global warming]. This is an existential threat.”

And fail he has. The Pew Foundation recently asked Americans to choose which of 20 prominent issues is of most importance. They included the economy, crime, education, and, of course, global warming, which came in dead last.

Gore’s failure is his own fault. He gained a reputation for exaggeration during his 2000 campaign, and he’s unable to shake it—because he’s proud of it, saying that it’s just fine to emphasize extreme global warming scenarios because they get people’s attention. Telling people you’re exaggerating isn’t exactly the way to get street cred. In Washington on January 28, his campaign continued.

The fact is that the “fiber of life” can be found on this planet over a range of 140°F, from Antarctica to the Death Valley. People actually live in these places. The average temperature of the planet is about 61°, a temperature at which Homo sapiens au naturel will die from hypothermia. So ask yourself if raising the temperature 11 (impossible) degrees will indeed bring civilization to a “screeching halt.”

It’s not like the press is very vigilant, either. A couple of years ago, he got a free pass on Larry King Live (May 22, 2007) after making at least seven exaggerations or outright misstatements on climate change in less than a minute.

Gore fielded a call asking “what issues caused by climate change globally are likely to affect the United States security during the next ten years?” He responded, “you know, even a one-meter increase, even a three-foot increase in sea level would cause tens of millions of climate refugees.”

In ten years? The United Nations’ Intergovernmental Panel on Climate Change (IPCC), hardly an apolitical body (the IPCC’s “lead authors” are all appointed by their governments), gives an average sea-level rise of 1.25 inches in the next ten years for its “midrange” temperature scenario. Never mind that it hasn’t warmed since 1997 and that sea-level rise is clearly slowing as a result.

Gore went on: “Today, 49 percent of America is in conditions of drought or near-drought”, and that “the odds of serious droughts increase when the average temperatures go up.”

That’s a testable hypothesis. The history of U.S. drought back to 1895 is readily available from the National Climatic Data Center in Asheville, North Carolina, as is the history of global temperature. Although surface temperatures have risen about 1.4 degrees since 1900 (with maybe half of that a result of emissions of carbon dioxide), there’s no similar trend in U.S. drought. Gore had to know that.

In the same minute, he droned on about how in a hotter world, “agriculture in the United States would be greatly affected.”

Thanks, Al, for another assertion subject to analysis. The slight rise in surface temperature was accompanied by a 500 percent increase in United States yield of corn (that’s the amount we produce per acre). How could any possible warming in ten years put a dent in that? The IPCC projects about 0.3 degrees of warming per decade now, or about a fifth of the total warming of the last 100 years. That’s going to “greatly affect” agriculture?

People notice these exaggerations. They see that food is still on the table (despite the government’s attempt to burn it up as ethanol). They know the country isn’t particularly dry, nor particularly wet. They can go to the beach and see that the ocean isn’t notably higher than it was before.

In other words, Gore’s lack of penetration is a result his own exaggerations. He’s created a climate of extremes that people are simply tired of, which is why his issue ranks dead last. He’s right. He’s failed.

— Patrick J. Michaels is senior fellow in environmental studies at the Cato Institute and author of the forthcoming Climate of Extremes: Global Warming Science They Don’t Want You to Know.

Does The Ledbetter Law Benefit Workers, Or Lawyers?

Does The Ledbetter Law Benefit Workers, Or Lawyers? By Stuart Taylor Jr.
Democrats and the media have distorted the facts underlying the new equal-pay law.
National Journal, Saturday, Jan. 31, 2009

This has been a good week, and may be a good year, for lawyers, civil-rights groups and others who think that America needs many more lawsuits to combat what they portray as pervasive job discrimination against women, minorities, the elderly, and the disabled.

Things are not going so well for those of us who fear that the Lilly Ledbetter Fair Pay Act, which President Obama co-sponsored as a senator and signed on Thursday, and other job discrimination bills in the congressional pipeline may be bad for most workers and may benefit mainly lawyers.

These measures seem likely to make it harder than ever for employers to defend themselves against bogus (as well as valid) discrimination claims, effectively adding to the cost of each new hire.

This would be justified if job discrimination were indeed pervasive. But the evidence suggests otherwise. Study after study has, for example, cast grave doubt on what appears to be the myth that sex discrimination in the workplace remains rampant more than 40 years after Congress adopted one law broadly banning job discrimination and another requiring equal pay for women and men doing equal work.

Congressional Democrats, liberal groups, and the media have thoroughly distorted the facts underlying the Ledbetter law to advance their agenda of opening the door wide to all manner of job-discrimination lawsuits.

The new law will virtually wipe out the 300-day time limit (180 days in Alabama and some other states) during which employees can file claims of discrimination under Title VII of the 1964 Civil Rights Act. Disgruntled employees will now be free to wait many years before hauling employers into court for supposedly discriminatory raises, promotions, or any other actions affecting pay.

The longer the wait, the more difficult it will be for the employer to contest an employee's one-sided and perhaps false account of the case, because key witnesses may have retired or died and records such as performance evaluations may have been discarded.

Indeed, some of the Ledbetter law's vague language could be construed as opening the doors for people to sue a company even years after retiring, on the theory that each new pension check is too small because of some claim of discrimination by some long-since-departed (or dead) supervisor.

This law represents an overreaction to a May 2007 Supreme Court decision, Ledbetter v. Goodyear Tire & Rubber Co., that provoked an explosion of ill-informed media outrage and propelled the losing party, retired Goodyear employee Lilly Ledbetter of Alabama, to a speaking role at last year's Democratic National Convention.

The 5-4 decision reasonably (if debatably) held that the 180-day time limit for Ledbetter to file her Title VII claim had started running with the most recent act of intentional discrimination that affected her pay in the ensuing years. Ledbetter had argued -- and the new law now provides -- that the 180-day clock should restart with each new paycheck.

For this, the conservative majority was widely reviled as having denied any remedy to Ledbetter, because employees often don't know what their co-workers are paid and thus might not learn that they are victims until more than 180 (or 300) days after the supposed discrimination occurred.

But some critical facts -- ignored by the media and Congress -- belie their portrayal of the case, as detailed in my June 9, 2007, column.

First, Ledbetter waited more than five years after learning that she was paid substantially less than most male co-workers to file her Title VII claim for back pay, compensatory, and punitive damages. Second, by that time a key supervisor -- whom she belatedly accused of holding down her pay raises after she rejected his sexual advances -- had died. Third, Ledbetter chose not to pursue a claim under the Equal Pay Act of 1963, which has a much longer time limit (three years) than Title VII but does not (yet) provide for big-bucks damage awards.

Fourth, her years of poor performance evaluations, plus repeated layoffs that affected her eligibility for raises, convinced a federal magistrate judge (although not the jury) that her relatively low pay did not prove sex discrimination. Maybe Ledbetter was a victim of discrimination, as the jury found. Maybe not. The evidence is too stale to allow for a confident conclusion -- which is one reason the justices ruled against her.

That said, it would have been reasonable for Congress to amend Title VII by specifying (as some lower courts have held) that the clock does not start running until the employee is or should be aware that she is earning less than co-workers.

Instead, Congress chose to shift the balance dramatically against employers by effectively eliminating time limits for filing all manner of discrimination claims that have some impact on pay.

Another bill that may reach President Obama is the House-passed Paycheck Fairness Act. Its confusingly worded amendments to the Equal Pay Act of 1963 seem designed -- or at least likely -- to force pay raises for women who have never been victims of anything that most people would call discrimination.

The bill would, for example, expose an employer to liability for paying a woman less than a man in a similar job unless the employer can convince a jury that the differential is "job related" and "consistent with business necessity" -- and also that no "alternative employment practice exists that would serve the same business purpose."

What's that parade of nebulosities supposed to mean? I think it would invite judges and juries to go beyond providing remedies for real discrimination and to play Robin Hood by second-guessing justifiable pay disparities. It would force some employers who are entirely innocent of sex discrimination to settle unwarranted lawsuits.

An employer that has long paid higher salaries to employees with more experience or better scores on written tests of their job-related skills might be hit for a big damage award for failing instead to provide special training for inexperienced women or to use a different test.

A very big damage award, perhaps: The Paycheck Fairness Act would allow unlimited awards of both compensatory and (in cases of "reckless indifference") punitive damages. Other proposals likely to emerge during this Congress would eliminate the current caps on damages in Title VII lawsuits as well.

Worse, the Paycheck Fairness Act would allow lawyers to include masses of women who have little or no interest in suing in class-action lawsuits, excepting only those who go to the trouble of "opting out." This is a formula for lawyer-generated lawsuits to extort millions of dollars from companies without proving that they ever intentionally discriminated against anyone.

One of the myths underlying this bill is that, as then-Sen. Hillary Rodham Clinton of New York said on January 8: "It is disgraceful that... women in this country still earn only 78 cents on the dollar" earned by men.

No, it's not disgraceful. Nor is it true that "in many instances, the pay disparities can only be due to continued intentional discrimination or the lingering effects of past discrimination," as stated in the findings attached to the Paycheck Fairness Act.

Labor Department data and academic studies show that much of the male-female pay differential is explained by such factors as disproportionate child-rearing and caregiving responsibilities.These cut into women's working hours and motivate many to sacrifice higher pay for shorter hours and the flexibility to take career breaks.

The data also demonstrate that women who work 40 hours a week make 88 percent as much as men who work 40 hours. Economics professor June O'Neill of Baruch College reported in a 2003 article that the female-to-male wage ratio rises to 95 percent when other data -- on child-related factors, demographics, academic majors, work experience, and occupational characteristics -- are also taken into account. The "gender gap can be explained to a large extent by nondiscriminatory factors," O'Neill concluded.

"Men and women generally have equal pay for equal work now -- if they have the same jobs, responsibilities, and skills," wrote Diana Furchtgott-Roth of the conservative free-market Hudson Institute. She added, in a January 21 commentary published by Reuters, that the 5.9 percent unemployment rate for adult women is lower than the 7.2 percent for adult men.

This is not to suggest that sex discrimination is no longer a serious problem. I worry that my two daughters may run into the barriers that still lurk in some unknown percentage of workplaces. But I worry more that they and their peers will have a harder and harder time finding jobs in the first place if the government burdens employers with lawsuits that make it more and more expensive to bring in new hires.

In White House Blog: "Shameful"

Shameful
White House, Thursday, January 29th, 2009 at 9:21 pm

$18 billion.

That’s what Wall Street bankers pulled down in bonuses over the past two months, according to a report from the New York State comptroller -- even as many of these institutions received billions in taxpayer dollars.

"That is the height of irresponsibility. It is shameful," President Obama said today, following a meeting with Vice President Joe Biden, Treasury Secretary Tim Geithner, and the rest of the economic team.

Read the President’s full remarks below.

REMARKS BY THE PRESIDENT AFTER MEETING WITH THE VICE PRESIDENT AND THE SECRETARY OF THE TREASURY
The White House, Oval Office
January 29, 2009

THE PRESIDENT: Well, it's good to see you guys. I just had a terrific conversation with my Secretary of the Treasury, the Vice President, as well as the rest of our economic team, about the steps that we need to move forward on -- not only on the economic recovery and reinvestment package, but also on making sure that we begin the process of regulating Wall Street so that we can improve the flow of credit, banks start lending again, so that businesses can reopen, and that we can create more jobs -- but also to make sure that we never find ourselves in the kind of crisis that we're in again, that we've seen over the last several months.

And Secretary Geithner is hard at work on this process. We expect that even as the reinvestment and recovery package moves forward -- as I said, that's only one leg of the stool, and that these other legs of the stool will be rolled out systematically in the coming weeks so that the American people will have a clear sense of a comprehensive strategy designed to put people back to work, reopen businesses and credit flowing again.

One point I want to make is that all of us are going to have responsibilities to get this economy moving again. And when I saw an article today indicating that Wall Street bankers had given themselves $20 billion worth of bonuses -- the same amount of bonuses as they gave themselves in 2004 -- at a time when most of these institutions were teetering on collapse and they are asking for taxpayers to help sustain them, and when taxpayers find themselves in the difficult position that if they don't provide help that the entire system could come down on top of our heads -- that is the height of irresponsibility. It is shameful.

And part of what we're going to need is for folks on Wall Street who are asking for help to show some restraint and show some discipline and show some sense of responsibility. The American people understand that we've got a big hole that we've got to dig ourselves out of -- but they don't like the idea that people are digging a bigger hole even as they're being asked to fill it up.

And so we're going to be having conversations as this process moves forward directly with these folks on Wall Street to underscore that they have to start acting in a more responsible fashion if we are to together get this economy rolling again. There will be time for them to make profits, and there will be time for them to get bonuses -- now is not that time. And that's a message that I intend to send directly to them, I expect Secretary Geithner to send to them -- and Secretary Geithner already had to pull back one institution that had gone forward with a multimillion dollar jet plane purchase at the same time as they're receiving TARP money. We shouldn't have to do that because they should know better. And we will continue to send that message loud and clear.

Having said that, I am confident that with the recovery package moving through the House and through the Senate, with the excellent work that's already been done by Secretary Geithner in consultation with Larry Summers and Paul Volcker and other individuals, that we are going to be able to set up a regulatory framework that rights the ship and that gets us moving again. And I know the American people are eager to get moving again -- they want to work. They are serious about their responsibilities; I am, too, in this White House and I hope that the folks on Wall Street are going to be thinking in the same way.

United States Humanitarian Support to Palestinians

United States Humanitarian Support to Palestinians
Media Note, Office of the Spokesman, US State Dept
Washington, DC, January 30, 2009

President Barack Obama has authorized the use of $20.3 million from the U.S. Emergency Refugee and Migration Assistance (ERMA) Fund to address critical post-conflict humanitarian needs in Gaza. U.S. Government support for humanitarian assistance to Palestinian refugees and conflict victims now totals nearly $120 million in FY 2009, including nearly $60 million in Gaza.

Of the $20.3 million in new ERMA funds, $13.5 million will go to the U.N. Relief and Works Agency for Palestine Refugees in the Near East (UNRWA), $6 million to the International Committee of the Red Cross (ICRC), and $800,000 to the U.N. Office for the Coordination of Humanitarian Affairs (OCHA). These organizations are distributing emergency food assistance, providing medical assistance and temporary shelter, creating temporary employment, and restoring access to electricity and potable water to the people of Gaza.

Today’s contribution to UNRWA augments the $85 million the United States contributed in December 2008 toward UNRWA’s 2009 appeals. Of that amount, $25 million supported UNRWA emergency operations in West Bank and Gaza. The remaining $60 million supported UNRWA’s services for 4.6 million Palestinian refugees in the region, including Gaza. UNRWA is the largest provider of humanitarian aid in Gaza, providing 70 percent of the population with emergency food assistance, essential healthcare, and primary education. We are working to develop a longer-term reconstruction/development effort with international partners.

Furthermore, today’s contribution to ICRC complements the $9.7 million the United States provided earlier this month for ICRC’s activities for victims of conflict in the Middle East, with particular attention to its critical programs in Gaza. U.S. support of the ICRC buttresses the organization’s efforts to supply Gaza’s hospitals and clinics with urgently needed medical equipment, as well as to rehabilitate damaged water pumps and sanitation systems.

Finally, the U.S. contribution to OCHA supports its essential coordination activities for the Humanitarian Country Team, comprised of UN Agencies and non-governmental organizations providing humanitarian assistance in Gaza.

In addition to our contributions to UNRWA, ICRC, and OCHO, to date, USAID has provided more than $3.7 million for emergency assistance to Gaza. Food, milk powder, blankets, plastic sheeting, and other nonfood items have been distributed to beneficiaries, and the distributions are continuing. This assistance is distributed to beneficiaries through USAID’s implementing partners under six recently awarded grants ($250,000 each) to Mercy Corps, American Near East Refugee Aid (ANERA), CHF International, Relief International, Catholic Relief Services, and CARE International. Food distributions are done through USAID’s grant to the World Food Program (WFP).

The U.S. reiterates its support for humanitarian actors responding to emergency needs in Gaza and encourages other states to provide urgently needed funding to UNRWA, ICRC, WFP and other international and non-governmental organizations providing this lifesaving care to civilians in Gaza.

2009/087

Washington Post Editorial: Guns in Virginia

Guns in Virginia. Washington Post Editorial
Lawmakers should close the gun show loophole.
Washington Post, Friday, January 30, 2009; A18

THE VIRGINIA Senate has an unprecedented opportunity today to begin to reverse the state's abysmal record on gun regulation.

For years, state lawmakers have defeated bills requiring vendors at gun shows to conduct background checks of would-be buyers. Yet such legislation squeaked by the Senate Courts of Justice Committee by an 8 to 7 vote this week and is poised for a vote in the full Senate. Politicians of both parties, including self-described gun rights advocates, should endorse this modest bill.

Licensed gun dealers in Virginia are required to conduct background checks on buyers, including those to whom they sell at gun shows. Yet, according to the Virginia State Police, up to 35 percent of vendors at the scores of gun shows throughout the state are unlicensed and thus are under no obligation to perform the checks. This makes no sense, and the public is put at risk because felons or the mentally ill are not screened out if they attempt to purchase guns.

The Senate bill would close this loophole by requiring that even unlicensed vendors -- often hobbyists who do not make their living from gun sales -- conduct these checks. To facilitate compliance, the bill calls for the gun show promoter to ensure that those who already hold federal licenses to sell firearms will conduct checks on behalf of unlicensed vendors. The bill does not require background checks for those purchasing antique guns or for those who have concealed-weapons permits.

Gun rights advocates won a stunning victory last year before the U.S. Supreme Court when a majority of the justices determined that the Second Amendment bestows an individual right to keep and bear arms. Before this ruling, many advocates worried that gun control activists would use regulation to effectively ban gun ownership. Those worries should have been put to rest by the court's decision. There is no longer any legitimate reason for lawmakers to resist sensible provisions to ensure that only law-abiding citizens exercise this right. And the bill to require background checks by all vendors is but a minor inconvenience that respects gun-ownership rights while keeping weapons out of the hands of potentially dangerous people.

Tennekes on Real Climate

Real Climate Suffers from Foggy Perception, by Henk Tennekes
Climate Science, January 29, 2009 @ 7:00 am

Excerpts:

Roger Pielke Sr. has graciously invited me to add my perspective to his discussion with Gavin Schmidt at RealClimate. [...]

A weather model deals with the atmosphere. Slow processes in the oceans, the biosphere, and human activities can be ignored or crudely parameterized. This strategy has been very successful. The dominant fraternity in the meteorological modeling community has appropriated this advantage, and made itself the lead community for climate modeling. Backed by an observational system much more advanced than those in oceanography or other parts of the climate system, they have exploited their lead position for all they can. For them, it is a fortunate coincidence that the dominant synoptic systems in the atmosphere have scales on the order of many hundreds of kilometers, so that the shortcomings of the parameterizations and the observation network, including weather satellite coverage, do not prevent skillful predictions several days ahead.

A climate model, however, has to deal with the entire climate system, which does include the world’s oceans. The oceans constitute a crucial slow component of the climate system. Crucial, because this is where most of the accessible heat in the system is stored. Meteorologists tend to forget that just a few meters of water contain as much heat as the entire atmosphere. Also, the oceans are the main source of the water vapor that makes atmospheric dynamics on our planet both interesting and exceedingly complicated. For these and other reasons, an explicit representation of the oceans should be the core of any self-respecting climate model.

However, the observational systems for the oceans are primitive in comparison with their atmospheric counterparts. Satellites that can keep track of what happens below the surface of the ocean have limited spatial and temporalresolution. Also, the scale of synoptic motions in the ocean is much smaller than that of cyclones in the atmosphere, requiring a spatial resolution in numerical models and in the observation network beyond the capabilities of present observational systems and supercomputers. We cannot observe, for example, the vertical and horizontal structure of temperature, salinity and motion of eddies in the Gulf Stream in real time with sufficient detail, and cannot model them at the detail that is needed because of computer limitations. How, for goodness’ sake, can we then reliably compute their contribution to multi-decadal changes in the meridional transport of heat? Are the crude parameterizations used in practice up to the task of skillfully predicting the physical processes in the ocean several tens of years ahead? I submit they are not.

Since heat storage and heat transport in the oceans are crucial to the dynamics of the climate system, yet cannot be properly observed or modeled, one has to admit that claims about the predictive performance of climate models are built on quicksand. Climate modelers claiming predictive skill decades into the future operate in a fantasy world, where they have to fiddle with the numerous knobs of the parameterizations to produce results that have some semblance of veracity. Firm footing? Forget it!

Gavin Schmidt is not the only meteorologist with an inadequate grasp of the role of the oceans in the climate system. In my weblog of June 24, 2008, I addressed the limited perception that at least one other climate modeler appears to have. A few lines from that essay deserve repeating here. In response to a paper by Tim Palmer of ECMWF, I wrote: “Palmer et al. seem to forget that, though weather forecasting is focused on the rapid succession of atmospheric events, climate forecasting has to focus on the slow evolution of the circulation in the world ocean and slow changes in land use and natural vegetation. In the evolution of the Slow Manifold (to borrow a term coined by Ed Lorenz) the atmosphere acts primarily as stochastic high-frequency noise. If I were still young, I would attempt to build a conceptual climate model based on a deterministic representation of the world ocean and a stochastic representation of synoptic activity in the atmosphere.”

From my perspective it is not a little bit alarming that the current generation of climate models cannot simulate such fundamental phenomena as the Pacific Decadal Oscillation. I will not trust any climate model until and unless it can accurately represent the PDO and other slow features of the world ocean circulation. Even then, I would remain skeptical about the potential predictive skill of such a model many tens of years into the future.

PPI on health savings accounts

Judgment Day for Health Care Consumerism. By David B. Kendall, PPI's senior fellow for health policy
Progressive Policy Institute, Jan 29, 2009

Conservative thinkers have touted medical savings accounts (later called health saving accounts) as the answer to the woes of U.S. health care. Twelve years after their first enactment in 1997, it's time to assess their success.

The judgment of two health care economists is that they have failed to solve the problem, yet they have not proven as bad as it their critics feared. Writing in Health Affairs, health economists James Robinson and Paul Ginsburg show how they have melded into the existing dysfunctional market dominated by managed care. They have ended up complementing managed care rather than replacing it.

A typical health savings account combines a high-deductible health insurance plan with a tax-free account for any money that a consumer doesn't use for health care. Initially, the idea was that patients would choose health care services directly from providers without any interference from an insurance company. Instead, most such plans use a network of doctors with whom insurance companies pre-negotiate prices and review the use of costly services.

Health savings accounts were supposed to put patients in charge of their health and health care, but instead employers and employees have opted for management services for chronic diseases. They have also incorporated prevention programs that provide employees with support services to encourage healthy habits.

Even with these embellishments, health savings accounts and similar programs have not grown large enough to change the entire health care marketplace. They have not proven popular enough to be a foundation for the kind of overhaul that health care needs. But they have contributed to the knowledge about what can and cannot reform health care.

Here is Robinson and Ginsberg's conclusion:

Health care should be consumer driven for reasons of both efficiency and ethics. When in possession of adequate information and faced with appropriate incentives, consumers make better choices for their own health than does any third party, be that third party motivated by the most praiseworthy of intentions. Moreover, as a matter of ethics, it is the patient and consumer, not the physician or insurer or employer or regulator, who should be vested with the right to make tradeoffs in the emotionally and sometimes spiritually charged domain of health care. That said, one must acknowledge that consumers often need support if their choices are to promote their well-being and constraint when they are spending other people's money. Health care is complex at best and not infrequently rife with nontransparent, anticompetitive, and even fraudulent behavior on the part of the many self-interested agents. Individual consumers can benefit from some of the efforts by governmental and employer sponsors, health insurance plans, provider organizations, and medical management programs. Consumers need others to create meaningful products and processes from which they can choose -- bundles of products and services that can be measured, priced, purchased, and used not only by the highly educated and motivated individual but by those who are sick and scared, of only modest means and financial sophistication.

Consumerism has a role in reform, but it won't work as an overriding ideology. It will take public action to enable private solutions that can truly solve the cost, quality, and access problems in U.S. health care. That's the platform that health care reform needs in 2009.

For more information:
Consumer-Driven Health Care: Promise And Performance, by James C. Robinson and Paul B. Ginsburg, Health Affairs, January 27, 2009

Thursday, January 29, 2009

Conservative views: Opportunities exist to work with President Obama on space security

Securing Space, by Eric Sayers & Jeffrey Dressler
Opportunities exist to work with President Obama on space security.
Weekly Standard, Jan 29, 2009

As Washington remains engulfed in discussion over expected foreign policy shifts on hot-button issues like Iran and Afghanistan, one critical policy area that is primed for far-reaching modifications, yet receiving little attention, is the future of U.S. space security.

Critics of the Bush administration charge that his approach was as unproductive as it was controversial. The U.S. National Space Policy of 2006, including its dismissal of any legal regime to limit U.S. action in space; the January 2007 Chinese anti-satellite (ASAT) test targeting a weather satellite; and the February 2008 intercept of a damaged U.S. spy satellite have contributed to, or are the product of, an unnecessarily hostile approach to space security that has only served to make us less safe.

Thus, it's likely that the Obama administration will make a significant departure from the policies the Bush administration pursued. While recognizing the strategic importance of space, President Obama has chosen to offer the solution of an international treaty banning space weapons, or at the very least a discussion of "rules of the road" for space, as the solution for securing the nation's space assets. The feasibility of this policy and its desirability for U.S. interests has been widely questioned, perhaps most succinctly by the work of Ashley Tellis of the Carnegie Endowment for International Peace. Although Tellis and others contend that this approach would be detrimental for U.S. security, elections have consequences and the direction President Obama chooses on space issues will be his to chart.

Those who may not agree with the approach the administration is likely to take would do well to identify and bolster support for programs that align with Obama's principles and can still play a beneficial role in securing America's access to space. Prominent amongst such initiatives are defensive-minded space systems, including the Operationally Responsive Space (ORS) program that aims to provide low-cost, miniaturized satellites that can be used to surge U.S. satellite capabilities or reconstitute those that have been damaged or destroyed.

President Obama recognizes that space is "critical to our national security and economy." This is an accurate and widely held view. The strength of America's military is reliant upon a constellation of satellites and corresponding ground installations that provide imagery, navigation, signal intelligence, communications, and early warning for missile launches. America's economy is similarly interconnected with a constellation of civilian satellites. However, as the military has placed a greater emphasis on networking the warfighter with the battlefield environment over the past two decades, this reliance has developed into a vulnerability.

Both the 2008 Annual Report to Congress on the Military Power of the People's Republic of China and the recently-released report of the U.S.-China Economic and Security Review Commission cite how the People's Liberation Army (PLA) views America's dependence on space assets as its "soft ribs," a strategic weakness to be exploited in an effort to undermine the foundations of American military strength. The U.S.-China Commission determined that the extent of China's anti-satellite capabilities are "significant," to include not just direct-ascent weapons like that used in China's ASAT test of January 2007, but also the development of co-orbital direct attack weapons, directed energy lasers, and various technologies designed for electronic "denial-of-service" attacks.

Preserving America's military advantages, therefore, requires ensuring unfettered access to space. If China continues to develop asymmetric capabilities to target U.S. space assets, without the United States taking the necessary steps to dissuade and deter these actions, it will only increase China's likelihood of prevailing in a short-duration, high-intensity war. Such an outcome would be disadvantageous for the U.S.-Taiwan security relationship, specifically if the United States develops a sense of hesitancy that jeopardizes the credibility of cross-Straits deterrence. Additionally, a more capable PLA will enhance the confidence of Chinese leadership, increasing the chance of a political-military miscalculation by China in the Straits.

Whether or not President Obama will follow through on his broad promise to seek "a worldwide ban on weapons that interfere with military and commercial satellites" is an open question. At the very least, he has been forthright in announcing his opposition to the weaponization of space. Complicating this commitment, however, is the broad range of military and civilian space assets that can be qualified as a "space weapon." The most effective direct-ascent ASAT weapon the U.S. has in its arsenal is the Standard-Missile 3 -- demonstrated by the successful February 2008 shoot-down of an American spy satellite. The dual-use of this weapon will also pose a serious dilemma for getting a space treaty off the ground without also requiring America to forgo its missile defense capabilities. Therefore, whatever the outcome of an international space regime, the utility of the SM-3 and other ASAT weapons as a traditional deterrence mechanism vis-à-vis Chinese ASAT weapons is likely to be downplayed by the Obama administration.

While these unfortunate policy prescriptions are a cause for concern, hope may lie in the possible defensive space measures that President Obama seems poised to embrace. His campaign website and new White House website encouragingly discuss "accelerating programs to harden U.S. satellites against attack" and "establishing contingency plans to ensure that U.S. forces can maintain or duplicate access to information from space assets." One of the most promising initiatives for achieving these duel objectives is Operationally Responsive Space (ORS). ORS seeks to rapidly deliver short-term capabilities to the warfighter that serve to augment space-based national security assets through the use of low-cost Tactical Satellites. The ORS Office, stood up in 2007 at the Kirtland Air Force Base in New Mexico, now stands at the forefront of an effort to revolutionize the way the U.S. builds and deploys satellites.

The standard process by which the military continues to construct satellites emphasizes large, time-consuming programs that maintain a slow generational turnover of 15 to 20 years, preventing an important military asset like space to be exploited at the operational level. Alternatively, miniaturized satellites enjoy both nimble and adaptive qualities. Compared to traditional stand-alone satellite, micro satellites can continuously be outfitted with the latest technological upgrades and be sent to replace their outdated counterparts. More importantly, they can be used to help increase capabilities to meet the demands of combatant commanders. Indeed, the ORS Office is working right now on an ambitious 24 month timetable to supply U.S. Central Command with a satellite to meet an identified gap in intelligence, surveillance, and reconnaissance (ISR) assets. Should this effort succeed, it will be a telling example of what the future holds for operationalizing the power of space.

Perhaps the greatest advantage of ORS is the capacity it offers to reconstitute satellites quickly and cheaply. If the administration remains reluctant to pursue active mechanisms for ensuring deterrence in space, ORS could be employed as part of an array of defensive systems to help guarantee U.S. access to space by dissuading and deterring the development and use of Chinese ASAT technologies. If the United States retains the ability to replenish satellite constellations on an as-needed basis, the benefits provided by costly ASAT weapons would be greatly diminished for the PLA.

Of course, this may have the unintended consequence of compelling PLA planners to devote resources to denial-of-service weapons or acquire even more direct-attack weapons in an effort to overwhelm America's reconstitution capabilities. Thus, it will be necessary to develop a multifaceted defensive regime to build reserve micro satellites and stockpile cheap launch vehicles like the Minotaur, harden existing and future satellites against electromagnetic pulse and jamming, and further integrate satellite capabilities with allies.

Considering the benefits of ORS, reports that the budget for the ORS Office may be slashed between fiscal year 2011 and 2014, are highly discouraging. More recent reports now have funding being restored in 2012, but with a likely tightening of defense budgets in the years ahead, the outlook for a program already being targeted to pay Department of Defense's bills is bleak.

Although the level of confidence President Obama is prepared to place in diplomatic solutions to preserve space access is a serious concern, there remains ample opportunity to secure his support in other vital areas. As the administration begins to formulate its policies on space security, the utility and broad support for the ORS concept should make it a core element of its strategy. Remedying the ORS budgeting shortfall before the fiscal year 2010 budget is submitted would be a strong statement to China that the administration is invested in securing America's space assets. While only part of the solution, establishing such a precedent will be a step towards ensuring that the advantages the military procures from space can be further refined and enhanced in the coming decades.

Eric Sayers is a national security research assistant at The Heritage Foundation in Washington D.C. Jeffrey Dressler is an intern at The Heritage Foundation.

NY Soda Tax: All Politics, No Science

NY Soda Tax: All Politics, No Science. By Elizabeth M. Whelan, Sc.D., M.P.H.
American Council on Science and Health, Jan 29, 2009

Aiming to combat the obesity epidemic in New York, Gov. David Paterson has recommended an 18% tax on sugar-sweetened soft drinks and a few other sweetened beverages. Unfortunately, the proposed tax is inconsistent with the facts about what causes obesity. It also sets an alarming precedent for taxing foods deemed "bad" by government officials -- further increasing the cost of living in the state -- particularly for the least affluent citizens.

•First, there is no scientific basis for singling out sugar-sweetened soda and certain fruit drinks as a primary underlying cause of obesity. So many Americans these days far exceed their ideal weight because they consume too many calories from all types of foods and beverages -- and do not dedicate sufficient effort to burning calories through exercise. Sugar-sweetened sodas don't make you fatter than eating too much meat, bread, potatoes, or anything else. The old adage "for every complex problem there is a simple solution -- and it never works" comes to mind here. It is always easier to zero in on one alleged villain and assume the problem is solved.

•Second, taxing soda sets up a precedent for taxing myriad foods considered "bad" by popular wisdom. Can we expect taxes next on cake, cookies, candy, and pizza? If food with high sugar or fat content is "bad" and deserving of punitive regulatory action, to be consistent will we tax orange juice (very high in sugar) and avocados (a plentiful source of fat)? Should we tax everything except tofu and spinach?

•Third, when the soda tax is examined closely -- given that it will have zero net effect on reducing obesity -- it must be perceived as another attempt to raise revenue for a financially strapped state. The Governor estimates that the soda tax will bring in $404 million the first year and $539 million annually after that. What's not to like about that if you are trying to balance a budget? But the bad news is that this influx of cash has nothing to do with fighting obesity and enhancing health.

There is, however, some good news about the proposed soda tax: Polls show that New Yorkers oppose this useless and regressive tax by nearly a 2:1 margin. Presumably, citizens recognize that obesity is a very serious health risk -- requiring serious solutions, not quick, ineffective regulatory fixes.

Dr. Elizabeth M. Whelan is President of the American Council on Science and Health (ACSH.org, HealthFactsAndFears.com).