State Of The Union Address 2012, We've Heard It Before

President Obama’s State of the Union address was supposed to be a kinetic affair, but the opening salvo in Obama’s battle to retain the White House was anything but a kinetic affair. While trying to make the case for his reelection, the president was expected to offer a bold new political vision for leading the country. But the remarks he offered last night were as expected, lame, and gave us his usual brand of gimmicks, like class warfare, and outright contradictions that made the soaring oratory of Obama’s 2008 election seem like a distant memory.

Warren Says "Tax The Hell Out Of Me" 

Rather than the politics of renewal, Obama dealt in the politics of envy. At the heart of his speech was the theme of economic unfairness. As the president told it, the rich are not paying their fair share. The result is a “country where a shrinking number of people do really well, while a growing number of Americans barely get by.” The claim came courtesy of billionaire investor Warren Buffet, who has repeatedly bemoaned the fact that he pays a lower tax rate than his personal secretary. So I'll take this Opportunity to debunk this miss-information. 

What might have been simply a tendentious talking point has apparently become the heart of Obama’s reelection campaign, as the president paid symbolic debt to Buffet by seating his secretary, Debbie Bosanek, in the gallery with First Lady Michelle Obama. That set the stage for Obama to voice his support for the so-called “Buffet rule,” which would require Americans making over $1 million a year to pay a minimum tax of 30 percent, my personal tax rate last year was 29.06%, I aint no millionaire and I aint in the top 10% of wage earners.

Capital gains are taxed twice

The idea that secretaries are paying more in taxes than their billionaire bosses is certainly sensational. It’s also, for the most part, false. Under America’s progressive tax structure, the overwhelming majority of high-income earners pay the top rate of 35 percent. True, there are some minor exceptions, such as the case of Buffet. Not unlike Mitt Romney, most of Buffet’s income comes from investments like capital gains and dividends, which are taxed at 15 percent. That might seem to be a lower rate that Buffet’s secretary pays. In reality, however, most investment income is taxed twice. For most high-earners, the 15 percent capital gains tax on investments comes in addition to a corporate tax rate of 35 percent. So altogether, the effective tax rate for investment income in America is a sizeable 44.75 percent. Given that low-income earners pay little to nothing in taxes, it should come as no surprise that, according to the Tax Policy Center, a full 60 percent of Americans pay a lower effective rate than Buffett does. That includes nearly ALL secretaries.

Obama did his best to distort that reality.  He insisted, for instance, that he was simply asking a “billionaire to pay at least as much as his secretary in taxes,” which he called “common sense.” A better description might be “extremely misleading.” Quite apart from the fact that tax rates for the rich are not as low as the president suggests, it’s ludicrous to claim that billionaires are not paying as much in total taxes as their secretaries. Not even Warren Buffet has suggested anything of the sort. It is surely a sign of the shallowness of the president’s domestic policy agenda that he sees stoking class resentment as his best appeal to American voters and it's these poorly informed voters that I'm trying to reach.

And not just class resentment. When not assailing the rich, Obama lashed out at America’s global competitors, most notably China. His affirmations of American greatness were interspersed with crude protectionism that left one to wonder whether he truly believed in America’s ability to succeed in the free market. 


The creation of a Trade Enforcement Unit to monitor Chinese goods entering the United States, applauded his administration for slapping a tariff on Chinese tires, and condemned companies for outsourcing jobs. To be sure, that rant did not prevent Obama from calling for the emergence of “the next Steve Jobs.” That would be the same Steve Jobs whose Apple has long outsourced jobs to China.

Such cognitive dissonance pervaded the president’s address. For instance, he claimed that “my education reform offers more competition, and more control for schools and States,” this even as his administration ended Washington D.C.’s highly successful school voucher program. Elsewhere he touted the promise of “American-made energy” and “American oil production,” without bothering to explain why his administration just last week blocked the Keystone oil pipeline from proceeding.

Most jarring to the ear was Obama’s defiant exclamation of “No bailouts, no handouts, and no cop-outs.” It was a catchy line, save for the fact that it was spoken by the president who extended the bailouts for banks and auto manufacturers, who signed into law a $787 billion stimulus package, and whose budgets have repeatedly included increases in welfare spending – including a 2011 budget request that would have increased welfare spending by 42 percent since 2008. It’s no wonder that Newt Gingrich has gotten applause lines by dubbing Obama the “Food Stamp President.”

Based on Obama’s record, it’s true.

Partly due to the substantive shortcomings of the president’s remarks and partly due to the weakness of the current field of Republican presidential hopefuls, the most compelling part of the president’s address came just after it, when Indiana Gov. Mitch Daniels delivered the Republican response. Striking a contrast with Obama’s class warfare themes, Daniels laid out a vision of real renewal, one where society was divided not into “haves and have nots” but into “haves and soon-to-haves.”

To that end, Daniels endorsed the entrepreneurial spirit to achieve what government policies have not, while also calling for meaningful entitlement reform to restore the country’s financial footing. It may have been President Obama who declared that “America is back.” But it was Gov. Daniels who offered a credible vision to make that something more than another empty promise.

The 2012 Up-In-The-Air Report

We have, in case you've not noticed, a Presidential election brewing throughout most of 2012.  (It already seems this has gone on way too long.)

Iran continues to make itself more and more likely to experience some kind of action being taken against it.  The way in which Iran's leaders are behaving, it seems they wish for such action to be taken against them.  If it isn't threatening the U.S. Navy so far as passing through the Strait of Hormuz, it is the announcement that full scale uranium enrichment is going on under a mountain in southern Iran.  If it isn't testing a new missile that can reach Israel or U.S. military installations, it is finding an American citizen guilty of spying without benefit of anything approaching an open trial as we know open trials.

 Ahmadinejad tours uranium enrichment facility 

Much of the world's oil passes through the Strait of Hormuz and that is being threatened with Iran saying it will close the Strait.  The Strait is quite narrow and could be disrupted by sinking multiple oil carriers.  If nothing else, the economy of the world would be in tough condition.

All this, of course, seems timed to be happening as we work to elect the next President of our country.  I have no way of knowing what the Iranian end-game is, but they are taking delight in what they see as the repeated challenges they issue to us and to our allies.

President Obama will have his hands full with this hot spot but will no doubt be spending a huge amount of his time campaigning.  Any President would be doing the same in all likelihood.  The Republican candidate, whomever that ends up being, will walk a very fine line in the campaign having to give voice to the Iranian issue but also needing to be sensitive to over-stepping onto the President's turf.  Maybe that is what is driving Iran in the direction it is taking.  Maybe Iran thinks we can't have a political free-for-all and fight a battle at the same time.  Maybe Iran thinks the current President will see this as an opportunity to appear strong militarily during the campaign. 


 Maybe Iran thinks our Congress will self-destruct in the process.  Maybe Iran simply plans to enjoy the whole situation thinking that neither the U.S. nor Israel will dare to mount a military strike.

This is a treacherous game they seem intent on playing.  If this part of the world explodes, none of us will win.

EU Applies Squeeze On The Iranian Economy

USS Abraham Lincoln Steams Though The Straits Of Hormuz

The USS Abraham Lincoln aircraft carrier traveled through the Strait of Hormuz on Sunday without incident, as Iran backed down from a previous threat against U.S. ships entering into the Persian Gulf.

U.S. Naval Forces Central Command released a statement that said the USS Abraham Lincoln “completed a regular and routine transit of the Strait of Hormuz."

The Strait of Hormuz

The Strait of Hormuz, a key oil shipping lane, had been the source of high tensions between the United States and Iran in recent weeks, with Iran making several threats. But after the United States essentially called Iran’s bluff, the country moved away from its threats this weekend.

Iran’s threat last month that it would close the Strait of Hormuz altogether and disrupt oil shipping if Western countries followed through on their economic sanctions.

Europe banned the import of Iranian oil today and froze Europe-based assets of the Central Bank of Iran, intensifying an international campaign to choke Iran’s economy and force the radical Islamic government to dispel fears that it is working to develop nuclear weapons.

UK Foreign Secretary, William Hague

The ban, decided by foreign ministers of the 27-nation European Union, is a dramatic escalation of sanctions against Iran, joining with the United States to squeeze the oil earnings and financial transactions that the Tehran government depends on to sustain its citizens and finance its military. The British foreign secretary, William Hague, called the E.U. effort “unprecedented” and said it shows the resolve of European governments to prevent Iran from becoming a nuclear power.






Countries such as Greece and Italy, suffering under crippling debt burdens, are likely to get more time before they have to break their financial ties with Iran, European diplomats said on condition of anonymity. Greece has been buying oil from Iran on credit and earns desperately needed money by refining crude for Balkan neighbors. Italy has arranged for Iranian oil in payment for loans granted by Rome in the past.

But still at issue is Iran’s nuclear program, which it says is for peaceful purposes but the United States and its allies warn is intended to make a nuclear weapon.

The United States implementation of sanctions against Iran’s central bank was designed to target its oil industry, and the European Union is following US on oil embargo against Iran. The idea behind the sanctions is to cripple Iran’s economy in order to convince the country to abandon its nuclear ambitions.

Chineese Built Iranian Oil Tanker

But Iran does have the benefit of its contracts with Asian nations; in particular, about 60 percent of Iran’s 2.2 million barrels a day of exports have been locked into contracts with China, Japan and South Korea. Turkey accounts for an additional 7 percent. Traditionally, European customers have accounted for less than 20 percent of Iranian exports.

Nevertheless, powerful figures in Iran immediately threatened retaliation, according to news agency reports from Tehran. Their defiance, including calls to close the Strait of Hormuz, underlined the high stakes in the West’s confrontation with the Islamic government.

Washington is prepared to engage in war over the Strait of Hormuz at any moment, the Pentagon says. Some observers say the dangerous move is being viewed as a far from worst-case scenario in America, especially by its hawks.

Whenever you're ready Iran

American troops in the Persian Gulf region do not require any build-up for a possible military conflict with Iran, Defense Secretary Leon Panetta said "We are not making any special steps at this point in order to deal with the situation. Why? Because, frankly, we are fully prepared to deal with that situation now," Panetta explained.

The US says it will attack Iran if it tries to block the Strait of Hormuz, a crucial route for regional oil transit. Tehran has threatened to stop traffic through the Strait in response to mounting pressure, including threats, sanctions and particularly an air strike on its nuclear facilities, which Israel and the US say are on the table.

The US Navy has two aircraft carrier strike groups in the region at the moment, presumably performing a routine rotation. US troops are also stationed in a number of nearby countries, including the United Arab Emirates, Qatar, Kuwait and other Gulf nations. 

Minister, Sergey Lavrov

Panetta’s ready-for-war rhetoric was frowned upon by Beijing. China’s foreign ministry spokesman Liu Weimin commented on Thursday that “sanctions and military threats will not help solve the problem but only aggravate the situation.” Russia holds a similar position on the brewing conflict. "What Western states… have been adding as they adopt their additional unilateral sanctions against Iran has nothing in common with the desire to keep the nuclear weapons nonproliferation regime unshaken,” Russia’s Foreign Minister, Sergey Lavrov, warned at his Q&A conference on Wednesday.

Foreign Minister Ali Akbar Salehi

Meanwhile, Iranian Foreign Minister Ali Akbar Salehi has reiterated that Tehran wants talks on the nuclear issue, which Western powers cite as the main motive for sanctions against the country. But, Salehi maintained, it is up to the other parties, particularly the US and EU, to arrange a time and place for a meeting. 

“We want peace and tranquility in the region,” Salehi said during a visit to Turkey. “I am calling to all countries in the region; please don't let yourselves be dragged into a dangerous position.”

Catherine Ashton

At the same time, the EU’s foreign policy and security chief, Catherine Ashton, told journalists such a meeting is not being prepared at the moment.


US President Barack Obama is being pressured by domestic hawks to attack Iran, according to political analyst Igor Khokhlov from the Institute of World Economy and International Relations.

There is a lot of data that both the US and the Israeli military have gotten agreement from Obama that the attack will take place unless Iran totally dismantles its nuclear program. The plans for this attack have been developed since the early years of Obama's administration according to sources at several independent organizations currently monitoring the situation.

Go Ahead, Block The Straits

And while some real concern about the controversial Iranian nuclear program does exist all over the world, including China and Russia, the real objective for the US is regime change in Iran and installing a puppet government in Tehran, analyst believes.


Given the fact that there is a great deal of Israeli influence over US foreign policy, I believe that the real objective is to draw Iran into a full-scale war with the US and its mighty allies. The United States wants to invade Iran and replace the existing anti-American and anti-Israeli government with a new one that would be its ally, Khokhlov said.

What Iran will look like after campaign

Such a conflict would be on a greater scale and result in greater loss of life than the invasion of Iraq or Afghanistan, the expert believes. America does have very little hard and reliable intelligence data about each of the Iranian nuke sites and so their bombing will have to be extensive and long, kind of like a Yugoslavian campaign back 13 years ago, and the areas around the suspected sites will have to be turned into a Lunar landscape, he explained.

The uneasy tension in the region may result in a conflict running amok even against the wishes of the parties involved, warns Philip Giraldi, an ex-CIA officer who is currently the executive director of the Council for the National Interest think-tank. The worst-case scenario would be a world war, he says.

Philip Giraldi

The Iranian currency, the rial, tumbled Monday in blackmarket trading to a new record low against the dollar, news agencies said, as the EU moved to impose an oil embargo and fresh sanctions on Tehran. 


The unofficial rate in central Tehran was around 20,500 rials for the greenback, the official IRNA news agency reported.


The rate showed a 12-percent rise for the US currency since last Wednesday when it was changing hands at 18,000 rials on the blackmarket.

The Tehran government has tried to shore up the rial by imposing a lower rate in banks and currency exchange bureaux, while also banning transactions outside of such outlets, leading to the blackmarket operations.


Last week, Iran's central bank banned the possession of and transactions in foreign currencies, including the dollar, without an official invoice, warning that offenders would be prosecuted.

The bank has introduced a dual rate of 11,300 rials for state business and imports, and 14,000 for Iranian travelers.

But many exchange bureaux have refused to buy or sell dollars at the imposed rates, prompting the operation of a blackmarket despite police efforts to enforce the ban.

In late October, it cost about 12,500 rials to buy a dollar in Tehran.

A rush for gold and other non-currency assets has since taken hold, with the price of gold coins in Iran rising by 25 percent since January 18.

The currency crisis comes at a time when the United States and European countries are ratcheting up punitive measures against Iran to curb its controversial nuclear programme.

Although the Iranian government has insisted there is no connection between the rial's slide and new sanctions, some officials have admitted a "psychological" impact as international sanctions spook ordinary Iranians.

Minister Shamseddin Hosseini

Economy Minister Shamseddin Hosseini and central bank Chief Mahmoud Bahmani have vowed before the Iranian parliament to bring the exchange rate under control.

A sudden acceleration in the slide was seen after US President Barack Obama at the end of December signed into law more sanctions hitting Iran's central bank and targeting foreign firms which do business with the Islamic republic.

A compromise agreement, due to be formally announced later the same day, provides for an immediate ban on importing Iranian crude and a gradual phase-out of existing contracts between now and July 1, diplomats in Brussels said. EU ministers were set to also target the country's central bank, petrochemicals and gold.

The sanctions would make it even more difficult for Iran, OPEC's second largest producer, to be paid in foreign currency for its oil exports, worth more than 100 billion dollars in 2011. Previous rounds of EU and US sanctions targeting Iran's financial system have already caused a shortage of foreign currency.

Libya's New Residence



Al-qaeda In Libya


Al-Qaeda terrorists have established a 200-strong fighting force near the Egyptian border in eastern Libya.

Muammar Gadhafi

The creation of the al-Qaeda unit comes at the same time as the Libyan interim government is threatened by a growing internecine conflict among Libya’s myriad group of armed rebel militias.

The al-Qaeda terrorists, who had arrived in Libya in early 2011 at the time Muammar Gadhafi’s regime was rapidly ceding ground to Libyan rebels were reportedly sent to Libya on personal orders from al-Qaeda leader Ayman al-Zawahiri.

The jihadists are purportedly led by a veteran al-Qaeda fighter known simply as“AA,” a terrorist insurgent who began his terror career fighting Soviet forces in Afghanistan before coming to Britain to recruit Muslims for al-Qaeda In 2005 “AA” had been detained by British authorities as a suspect in the July 2005 London subway bombing that killed 52 people and wounded more than 700 although he was never charged in that attack.

Ayman al-Zawahiri.



By 2009 “AA” had left Britain to fight coalition forces on the Afghan-Pakistan border. The efforts by al-Qaeda operatives to recruit Libyans to the jihadist cause were most recently seen in a December 2011 video the terror group posted on jihadist websites that exhorted Libyans to either “choose a secular regime that pleases the greedy crocodiles of the West…or you take a strong position and establish the religion of Allah.”

Of course, al-Qaeda doesn’t require many jihadist pep talks to convince Libyans to flock to its Islamist banner given that eastern Libya — which was described by the US State Department in 2008 as a “wellspring of Libyan foreign fighters” — has produced and exported a significant crop of al-Qaeda fighters over the years.

Most of these insurgents have been members of the al- Qaeda affiliate, Libyan Islamic Fighting Group (LIFG) Founded in 1995 to wage jihad against the regime of then Libyan leader Muammar Gadhafi, the LIFG officially joined Osama bin Laden’s al-Qaeda network in 2007. Not too surprisingly then, many Libyans with al-Qaeda ties continue to pepper the leading ranks of Libya’s interim government, the ruling National Transitional Council (NTC).

Abd al-Hakim Belhadj


The most notable al-Qaeda alum serving n the NTC is Abd al-Hakim Belhadj, head of the powerful Tripoli Military Council and former emir of the LIFG In addition to having to deal with al-Qaeda in Libya, Libya is also plagued by North Africa’s other al-Qaeda terror group, al-Qaeda in the Islamic Maghreb (AQIM) which has used the chaos in Libya to acquire some of the Gadhafi regime’s most powerful and deadly weapons Their success in this endeavor has prompted one AQIM header to boast that AQIM had been “one of the main beneficiaries of the revolutions in the Arab world. As for our benefiting from the [Libyan] weapons, this is a natural thing in these kinds of circumstances".

While al-Qaeda may have been one of the main recipients of the Libyan uprising to oust Muammar Gadhafi, it is difficult for the NTC to currently make the same claim, given that in addition to battling an al-Qaeda resurgence, it is battling territorial tribal and militia infighting that further continues to destabilize Libya.



Mustafa Abdel-Jalil

One of the most serious and immediate problems facing the interim leaders of the NTC — absent a strong and unified national military force — is  disbanding the disparate armed groups of former revolutionary fighters that are in charge of security in the areas they control. Thrown into that anarchic mix is the still active presence of armed militia brigades that once protected Gadhafi during the uprising. The threat these groups pose to the security of the interim government is being witnessed in the increasing frequency in which these groups are engaging each other in armed conflict. The most recent of these fights took place 50 miles south of the capital of Tripoli when fighters from the town of Gharyan engaged in machine gun and rocket attacks with a militia from al-Asabia, 10 miles to the southwest, an encounter which left several dead and wounded. That firefight had been preceded days earlier in a battle in the center of Tripoli between the militias from Tripoli and those from the Libyan city of Misrata, a confrontation which left at least four fighters dead The severity of that fight led Mustafa Abdel-Jalil, the head of the NTC, to worry it could lead “into a civil war.” That feeling was equally shared by Mohammed al-Grasse, a Misrata military council member, who said “I am not optimistic because blood has been spilled. I feel this looks like a civil war.”

To avoid that fate, the NTC has recently announced plans to spend $8 billion to reintegrate fighters into civil life in an effort, according to Moustafa al-Sagizli, head of Libya’s Warriors Affairs Committee, “to ease their transition from the fighting environment into society to build and develop the country.” According to al-Sagizli, over 200,000 fighters from all over Libya are expected to sign up for the committee’s programs, including those fighting on the front lines and guarding oil fields and other vital facilities. While al-Sagizli may be confident of the program’s potential for success, those soldiers currently serving in the fledgling Libyan national army are less so,  complaining that militia groups were not interested in joining a new national army. As one Libyan soldier said, “The revolutionaries don’t want to join an organized military. They want to keep their current situation.”

In fact, the NTC may be better served to use some of the $8 billion it has earmarked for recalcitrant rebels to instead pay current Libyan army soldiers. In particular, a protest was recently held in the eastern Libyan city of Benghazi by hundreds of Libyan soldiers demanding that they be paid three months’ worth of back wages. Unfortunately, the unsettling prospect of sectarian civil war comes just as the NTC has finally proposed a draft law for electing by June a 200-member assembly to draft a new constitution, the first step to setting up a new government.





So, in a desperate effort to establish a central military authority on the ground to provide security before the June election, the NTC has pushed ahead with its announced efforts in December to have a working army and police force up and running in 100 days, To that end, the NTC, in early January appointed Youssef Mangoush the new military’s chief of staff, a former Special Forces commander under Gadhafi. However, his appointment was met with instant disapproval from two armed groups in eastern Libya which commander-in-chief given his former service to the Gadhafi regime Undeterred by that rebuff, Mangoush said he hopes to train some 25,000 soldiers in the next several months, the first phase in building “a modern army.” While Mangoush did not say when that long-term plan would be complete, the commander of the Libyan national army, General Khalifa Hifter, said it would take at least three to five years.

By that time — with warring militias and a strengthened al- Qaeda presence — that modernized Libyan national army may find there is nothing to left to defend.

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Shovel Ready No More

Broken Before It Was Ever Used

President Obama's rejection of TransCanada Corp.'s Keystone XL pipeline permit this week exposed a split in a core Democratic constituency and handed Republicans a new line of election-year attack.

Unions representing construction workers condemned the move while labor groups including the United Steel Workers, the United Auto Workers and the Service Employees International Union joined with environmental advocates in saying they support Obama's decision. It also prompted swift criticism from congressional Republicans and the party's presidential candidates.

Obama is heading into his re-election campaign with the country trying to rebound from the worst recession since the Great Depression and an unemployment rate that has been stuck above 8 percent for almost three years. The economy will be a prime focus of Obama's State of the Union address on Tuesday.

The jobs promised by the building of the Keystone pipeline were central to union support for the project originally and the focal point of Republican criticism of Obama. 

TransCanada said the 1,661-mile project would carry 700,000 barrels of crude a day from Alberta's oil sands to refineries on the Gulf Coast, crossing six states and requiring as many as 20,000 workers to build.

But the debate over the pipeline long ago shifted from energy and environmentalism to the realm of Washington politics. That's why no one should be surprised that President Obama said no for now on approving the project.

There's too much at stake for a rushed decision, the type pushed at the president by Republicans hungry for a divisive issue to exploit in an election year. In December the GOP insisted on a February decision by the White House on the project as a price for a payroll tax break. It was too much and too fast, and Obama ended the charade with his announcement.

Since the pipeline crosses an international boundary, the plan needed State Department approval, hardly a typical presiding agency for the 1,700-mile-long energy project. The touted benefits such as jobs and energy independence carry appeal but are worth serious scrutiny, as are claims about dangers to wildlife and water supplies. Spills in Montana plus the BP Gulf Coast blowout two years ago have made the public unjustifiably nervous.

The White House is already taking a beating from Obama's likeliest Republican opponents. Mitt Romney called the decision "shocking," and Newt Gingrich said the move was "stunningly stupid."

It's neither. The White House has shown a practical streak on energy issues: working with Detroit on higher-mileage vehicles, and curbing mercury emissions from power plants after lengthy health studies. 

Republicans joined in criticism by the oil and gas industry and the U.S. Chamber of Commerce, saying the President is sacrificing the nation's energy independence and the creation of U.S. jobs to win the election.

Obama blamed Republicans for forcing the action by setting a deadline as part of legislation that temporarily extended a payroll tax cut..

Transcanada ( TRP), the energy giant bidding to build the pipeline, projects the undertaking would create 20,000 jobs in the U.S., including 13,000 positions in construction and 7,000 in manufacturing. That figure, based on a report by a consulting firm hired by Transcanada to assess the project's economic impact, has been widely cited by Keystone backers on Capitol Hill. Other estimates advanced by supporters of the pipeline have been even more optimistic, with the U.S. Chamber of Commerce claiming it could create 250,000 permanent U.S. jobs.

But subsequent analysis suggests that Keystone's job-creating potential is more modest. The U.S. State Department calculated last year that the underground pipeline would add 5,000 to 6,000 U.S. jobs. One independent review of Keystone puts that number even lower, with the Cornel University Global Labor Institute finding that the pipeline would add only 500 to 1,400 temporary construction jobs.

The authors of the September report also said that much of the new employment stemming from Keystone would be outside the U.S. Transcanada itself cast doubt on its employment forecast when a vice president for the company said last fall that the 20,000 jobs Keystone would create were temporary and that the project would likely yield only "hundreds" of permanent positions.