For the week 8/30-9/3

Wall Street…9.6%

9.6%, we learned on Friday, is the official unemployment rate today, the data for August showing further job losses, though President Obama quickly strode out with his most unimpressive economic team and correctly pointed out that private sector growth has grown 8 months in a row, though this figure is far less than what you’d see in a normal recovery. It’s just that the 9.6%, a tick up from the previous month’s 9.5% because more people hit the pavement looking for work, is an absolute killer come the Nov. 2 election. The Democrats have one more payroll number, Friday, Oct. 1 (September’s report) and it’s a virtual certainty that the unemployment rate will be at least 9.5% when voters, far more Republicans than Democrats, hit the polling stations.

What was to be the “summer of recovery,” in Vice President Biden’s own words, has turned into a summer of woe, or discontent. As the Wall Street Journal’s editorial board opined:

“The greater than 4% growth and less than 8% unemployment envisioned by the president’s economic team are nowhere to be seen. Almost everything that is supposed to be up – the economic growth rate, the stock market, bond yields – is down. And almost everything that is supposed to be down – unemployment-insurance claims, new mortgage delinquencies – is up.”

All the president and the likes of Senate Majority Leader Reid and Speaker Pelosi can do these last 8 weeks is rail against the “obstructionist” Republicans for not passing a small business bill, or further stimulus (should the Democrats decide to go that route…with the president unveiling something new this coming week), while Republicans will be content to sit back and run out the clock. When confronted as to what they would do, they’ll counter, “Well we certainly don’t want to have more of the same…more spending, more debt…” while pretty much evading the question aside from the mantra they wouldn’t raise taxes.

The White House is flailing away. If it wasn’t so tragic it would be almost funny, like a Monty Python episode. There was the president, disturbingly trying to link the end of the combat mission in Iraq to the economy in his address to the people on Tuesday. “To strengthen our middle class, we must give all our children the education they deserve, and all our workers the skills that they need to compete in a global economy. We must jump-start industries that create jobs, blah blah blah.”

Personally, I wasn’t really listening. Instead I was looking at the pictures of his family behind him, thinking it all seemed kind of goofy. No offense to the kids, and Michelle, but as I’ve said before I really couldn’t give a damn about them. [NBC News aired another stupid piece on the Obama family, Friday.] I just want a good leader. And while you can give Obama credit for steering through some big legislation in his first 20 months in office, except for financial services reform the people can’t stand it! 

It’s why as part of a USA TODAY/Gallup poll, Sally Free, 61, a Democrat from Chillicothe, Ohio, told the paper, “All of that stuff they [the Democrats] did, it hasn’t done one thing for me. I’m the middle class. I’m the one that pays all the taxes. I think they work for me, and I’d fire them if I could.”

Well for now, Sally, you can only fire one, your congressman, should that be your choice, but the rest of us can collectively do our part as well.

But what will we be saying next year at this time, assuming a change in at least the House of Representatives? USA TODAY revealed that one in six Americans are now tapping into anti-poverty programs, with more than 50 million on Medicaid. And this is before the new health care law adds about 16 million more, beginning in 2014. 

More than 40 million people get food stamps, an increase of nearly 50% during the downturn, according to government data as of May. President George W. Bush rightly deserves his share of the blame for the mess he left Obama, but 20 months in it’s on you, Mr. President. And of course the federal price tags for the programs involved are just exploding the deficit even further. That’s what depresses the hell out of a lot of us. There’s just no end in sight. Any dividends from declining war costs are being sopped right back up.

PIMCO’s Mohamed El-Erian summed it up for Bloomberg this week.

“This country has very weak safety nets. It is built on the assumption that our labor markets are very flexible, that if you lose your job in California you move somewhere else, you get another job, and what we’re seeing is structural unemployment.”

We need to stimulate more demand, but at the same time consumers continue to deleverage. At least economist Richard Berner of Morgan Stanley says we are reducing debt and rebuilding our savings faster than expected, so maybe we’re closer to that time when spending will pick up again, sooner than later.

But for that to happen, it’s still about housing and jobs. As the data have shown, there’s little cause for optimism.

Before I get to the other economic news on the week, though, some of which was good, including internationally, another troubling item. Americans are getting squeezed even while trying to do the right thing in reducing debt and increasing savings.

Take a survey by the nonprofit Henry J. Kaiser Family Foundation and the Health Research and Educational Trust.

While overall, premium growth for healthcare insurance has risen slightly this year to 3%, “the average worker with a family plan was hit with a 14% premium increase, pushing the bill to nearly $4,000 a year.” No wonder why we hate Obamacare. But to be fair, since 2005, “workers’ contributions to insurance premiums have shot up 47%, far outpacing the 18% increase in wages over the same period, according to the survey.”

Small businesses, and large ones as well, can’t afford to pay the high cost of insurance and they can easily say, hey, unless you pick up a greater share (if the employer even pays any of it these days) I’ll have to lay you off and/or I go out of business.

You won’t believe this but my own insurance plan came up for renewal and they are asking for a 19% increase! 19%! Of course no one is helping me out…I’m healthy yet I’m being asked to shell out $9300 a year now! [I will come up with an alternative…I have to…just need to carve out some time to work on it this coming week and I’ll report back to you the results.]

And this was also a week that, around the world, saw us enter a new food crisis. These come and go, depending on global harvests, natural disasters and such, but the drought and fires in Russia that destroyed a big chunk of its wheat crop, coupled with devastating flooding in Pakistan and China, has had a rippling effect on some food prices worldwide. But before the scaremongers get to you, understand that the price of wheat is still almost 40% below its peak in June 2008. It’s just that governments are having a hard time dealing with shortages, perceived or otherwise. Mozambique, not in all honesty that I care about this place, had food riots this week claiming seven lives and it’s a harbinger of things to come. During the 2007-08 crisis, which saw wheat, corn and rice hit record highs, you had riots across Africa. 

Of greater concern, though, is China’s leaders are scared to death that rising food prices there could lead to massive civil unrest so Beijing is calling on local governments to do more, like produce more veggies and fruit.

So this all bears watching. I’ll have more on the inflation issue next time because I want to review my rant on the topic from a month ago, but it’s still a fact you need to separate the official data, that fixed income markets respond to, from the facts such as rising healthcare costs that further impede the ability of the average American to make ends meet.

As for the week’s other data, July personal income and consumption were up, 0.2% and 0.4%, respectively, basically in line, while August’s employment report noted wages gained 0.3%, which is good. Factory orders ticked up 0.1% in July, while construction spending declined 1.0%.

But manufacturing data, overall, as represented by the Chicago PMI and the national ISM for Aug. were solid. 56.7 for Chicago [50 being the dividing line between growth and contraction], down from July but still strong, while the ISM reading of 56.3 was outstanding vs. expectations of 52.8.

And just as importantly, the Purchasing Managers Index (PMI) in China for August came in at 51.7, a slight tick up from July when many were worried the number had rolled over. HSBC, which does its own calculations independent of the government’s readings, said the Aug. PMI increased from a worrisome 49.4 in July to 51.9, so the two confirmed that China is hanging in there…no double-dip.

In fact, this week’s data in both China and the U.S. certainly tell us that for now, there will be no double-dip in either, just as your editor has been telling you, but I’m eager to see where we are 2-3 months from now. I just maintain that in China the government will engineer a soft landing (barring unforeseen civil disturbances), while the U.S. will continue to feel like a recession, but muddle through when it comes to the official data.

One other item on China, though. I do not see a crash in real estate prices there. A solid 15-20% correction? Very possibly. A crash? No way. But, the condition of the smaller banks there, even with a correction, is worrisome. We just don’t have any clarity. The big institutions should be fine.

In the 16-nation eurozone, a combined service sector-manufacturing index came in at 55.1 for August, down from July but still solid. The European Central Bank’s Axel Weber said the “recovery remains on track.” Yeah, Axel, but at 1.4% to 1.8% for the year, into 2011, not exactly zippity-do-da territory. Germany’s retail sales, for example, fell in July for a second month, though its jobless rate remained steady at 7.6%. We’d have joyful food fights here over a figure that low.

Elsewhere, the U.K.’s PMI for Aug. was 54.3, a little worse than expected. And Spain’s deficit reduction plan seems to be working, a good thing.

But I got a kick out of the happy talk from some European officials concerning the sovereign debt crisis that has been temporarily averted due to the joint IMF/EU bailout program for the likes of Greece. This week the IMF said default in Greece and Ireland was unlikely. Paulo Mauro, author of an IMF paper on the topic, said, “Markets are overestimating the risk of default.”

To which I’d counter, not so fast, Paulo. 1.5% growth in the EU region is simply muddling through after the crash, and in all likelihood it means that Germany and France continue to carry the main share of the load while the others suffer. It also totally ignores that the austerity programs put in place by the governments haven’t begun to bite yet. One of Britain’s large food retailers, the Co-operative Group, warned the austerity drive there “would erode consumer confidence and ensure that the economy would continue to ‘bump along the bottom.’”  It’s just common sense. So Paulo, y’all ain’t out of the woods yet.

Lastly, Australia’s second quarter GDP was up an impressive 1.2% over Q1, the best performance in 3 years, with July retail sales up strongly. It seems a certainty that the Reserve Bank of Australia will be hiking its short-term interest rate, now 4.5%, again by year end. Notice that figure…4.5%…up 150 basis points from last October to May. And the economy is still going gang busters. So memo to our own Federal Reserve. Don’t be afraid to hike rates! Give us savers something, for crying out loud! 2%. A measly 2%!

Meanwhile, India’s second quarter GDP came in at 8.8%, better than expected. Car sales here are so brisk they have a waiting list. [Aussie car sales for the month of August also rocked, despite their election uncertainty.]

But Canada’s Q2 GDP, up 2.0%, was weaker than expected.

Street Bytes

–The Dow Jones had its worst month of August since 2001 and as a USA TODAY piece pointed out, the average investor has abandoned stocks in droves, pulling out $245 billion from stock mutual funds since the beginning of 2008; this while bond fund inflows are close to $616 billion over the same period of time. And according to a Scottrade study, the most conservative investors are the 18 to 45 age group after two of the worst periods for stock returns in just the past ten years.

But at least for now we aren’t Japan. The benchmark Tokyo Nikkei index first peaked on 12/29/89 at 38915. Almost 21 years later, the Nikkei sits at 9100, having fallen 7.5% in August.

For the week, our own markets rejoiced at our better than expected manufacturing data, as well as that from China, with the Dow Jones ending a three week losing streak, up 2.9% to 10447 and back to positive on the year. The S&P 500 and Nasdaq each gained 3.7%, though both remain fractionally lower for 2010. Another contributing factor for the advance, aside from those earlier stated above, was that same store sales figures for August were up 3.3% for major retailers vs. an expectation for an increase of just 2.5%; not that we were all dancing in the streets over this information, but it was better than the alternative.

–U.S. Treasury Yields

6-mo. 0.18% 2-yr. 0.51% 10-yr. 2.70% 30-yr. 3.78%

The 10- and 30-year pulled back (yields up) on the stronger economic data, though don’t bother me with bubble talk in Treasuries until the 10-year is around 3.25%, which would be a likely sign that the economy has reemerged from its stall. [Granted, anyone having bought the 10-year at 2.50% would have taken a substantial hit.]

–Appearing before the Financial Crisis Inquiry Commission, Fed Chairman Bernanke said:

“If the crisis has a single lesson, it is that the too-big-to-fail problem must be solved,” adding in the case of Lehman Brothers it was impossible for the Fed to rescue it from bankruptcy in 2008 because Lehman lacked sufficient collateral to secure a loan. Bernanke then added, “We should not imagine…that it is possible to prevent all crises. To achieve both sustained growth and stability, we need to provide a framework which promotes the appropriate mix of prudence, risk-taking and innovation in our financial system.”

–The FDIC said that 829 of the nation’s 7,800 banks were on its “problem list” at the end of June, up from 775 at the end of the first quarter. 118 have failed this year, compared to 140 for all of 2010. But I have downplayed this for two years now because this is a case where the system works and depositors have been protected. What the FDIC is telling you, however, is that credit remains tight, though some types of loans are showing a small bit of improvement. It’s also a case of the ability of the larger banks, who received the lion’s share of the government support, to swamp the smaller ones.

–Harrisburg, Pa., missed a $3.29 million payment on its general-obligation debt, somewhat roiling the muni market, overall, as it provides some needed uncertainty to the latest mantra that all munis are safe.

–Junk bond issuance in August totaled $23 billion, a record for the month, as investors looked for some kind of return on their money. And, hey, even the junkier companies have improved balance sheets these days. They may only have six employees, but that’s besides the point.

–In keeping with Intel’s ratcheting down its revenue forecast for the current quarter, tech researcher Gartner Inc. cut its 2010 projection for worldwide PC shipments, saying the second half will be weaker than it originally thought.

–U.S. auto sales tumbled 21% in August over last year’s cash-for-clunkers fueled pace. A few weeks ago I said one of the big negative surprises this fall would be declining car sales and a halt to hiring at U.S. automakers so we’ll see what happens in September and October. For now, Toyota’s August sales fell 34%, Honda’s were off 33%, Nissan’s down 27%, General Motors’ declined 24.5%, and Ford’s fell 11%, but Chrysler’s were up 7% compared to last August, mainly because it sold like 30 cars in 2009, making for an easy comparison.

–Meanwhile, in China, auto sales for August rose a far-greater-than-expected 56% from year ago levels. GM’s sales in the country were up 19% and Ford’s up 24%. For the first eight months of the year, GM vehicle sales in China were 1.57 million, while Ford’s were 368,000. As Ronald Reagan would have said…not bad, not bad at all.

–Royal Bank of Scotland is laying off another 3,500 (mostly back-office), bringing to almost 27,000 the number of jobs cut here in less than two years. The U.K. government owns 70% of RBS following its bailout of the bank.

–For the archives, the S&P/Case-Shiller real estate index of 20 major metropolitan areas showed a 4.2% increase in prices for the second quarter over a year ago, but this survey is so dated, plus it was influenced by the expiring housing tax credit, that its authors know prices are headed back down.

–BP’s costs for the oil spill have hit $8 billion, while the company announced it would increase asset sales to as much as $30 billion over 18 months to pay for further cleanup costs and future liabilities. The blowout preventer was hauled up from the bottom to be used as evidence in ongoing litigation.

–Gold approached its all-time settlement high of $1,257 this week, ahead of what is supposed to be a traditionally strong period for physical demand from the likes of India, whose booming economy one would think would lead to even more gold purchases for their wedding and festival seasons. [Here in the U.S., grooms are increasingly scooping up trinkets at those arcade games with the shovel, hoping they find something that looks like gold to give their prospective brides.]

A survey of 29 analysts, traders and investors by Bloomberg found that the median expectation is for gold to rise to $1,500 next year. 

–Citigroup announced plans to increase its workforce in China from 4,500 to 12,000 in the next three years. Said the head of operations in the region for Citi, “We have aggressive consumer banking expansion plans and want to open branches as fast as regulators in China will let us.” Citi is also expanding in Hong Kong and Taiwan.

–SAP’s Co-CEO Bill McDermott on prospects for the enterprise software company in China.

“The potential here is just thrilling, so we want to treat China as if it’s a second home. If you look at this market, the fantasy of what we could be in, this market will exceed anything that a CFO could put on a spreadsheet, so let’s go for the big dream.” China will provide “limitless growth,” he said in an interview with Bloomberg.

–Edward Schumacher-Matos is working on a book on the economics of immigration and in a story for the Washington Post, he asked Stephen C. Goss, the chief actuary of the Social Security Administration to weigh in and Goss said that by 2007, the Social Security trust fund had “received a net benefit of somewhere between $120 billion and $240 billion from unauthorized immigrants,” as Schumacher-Matos writes.

“That represented an astounding 5.4% to 10.7% of the trust fund’s total assets of $2.24 trillion that year. The cumulative contribution is surely higher now. Unauthorized immigrants paid a net contribution of $12 billion in 2007 alone, Goss said.”

–Hewlett-Packard won the bidding war for storage systems maker 3Par as Dell declined to match HP’s $33-a-share offer. On Aug. 13, 3Par stock closed at $9.65. Ya think they overpaid?

–Burger King is discussing a sale of the company to a private-equity firm, 3i Group PLC. When given a choice between BK and McDonald’s, I always go for the latter. But enough about me. Shares in BK had been languishing in the $16-$17 range, but finished the week at $23.50.

–Shares of Research in Motion Ltd., maker of the BlackBerry, traded as high as $71 as recently as May 3rd, but finished the week at $44.75 as reception for its new smartphone has been underwhelming, while at the same time, surveys have found declining interest from its corporate base as they opt for rivals such as Apple’s iPhone. Sanford Bernstein did a study of 200 companies in the U.S. and U.K. and found that 74% now let their employees use devices other than BlackBerrys.

–Apple announced a new line of iPods, along with its latest attempt at Apple TV, which has yet to catch on with the mainstream, while Google said its YouTube video site would be launching pay-per-view service of its own by the end of the year.

–Prepare to be grossed out…or quickly skip to the next item.

As reported by Andrew Zajac and P.J. Huffstutter of the Los Angeles Times:

“Federal officials investigating conditions at the two Iowa mega-farms whose products have been at the center of the biggest egg recall in U.S. history found filthy conditions, including chickens and rodents crawling up massive manure piles and flies and maggots ‘too numerous to count.’

“Water used to wash eggs at one of the producers tested positive for a strain of salmonella….

“Food safety experts said conditions described in the reports are some of the worst they’ve seen in decades.”

“Barns with dozens of holes chewed by rodents that mice, insects and wild birds used to enter and live inside the barns;

“Manure built up in 4- to 8-foot-tall piles below the hen houses, in such quantities that it pushed pit doors open, allowing rodents and other wild animals access.”

I mean, hell, this is no better than conditions in the Middle Ages, for cryin’ out loud.

–According to a congressional newsletter The Hill, Sen. John Kerry has the highest net worth among lawmakers, $188.6 million, Kerry deriving much of his worth from wife Teresa’s ketchup packets. No. 2 is California Republican Congressman Darrell Issa, worth at least $160 million; Issa having made his fortune in the car-alarm business before being elected in 2000. So when you wake up in the middle of the night because a neighbor’s alarm accidentally went off, fire off a nasty e-mail to Issa. No. 3 is California Democratic Congresswoman Jane Harman, whose $152 million wealth comes from her 91-year-old husband, the head of Harman International Industries, making Ms. Harman, at some point, a good catch…I’m just sayin’.

–Sign of the times, as reported by Hilary Kramer of the New York Post:

“In this economy, it’s not uncommon for whole neighborhoods to be on the market. But Rumson, NJ, a leafy bedroom community of 7,200 residents [Ed. including Bruce Springsteen…and some unemployed Wall Streeters], nonetheless stands out: It has 100 homes for sale – all for more than $1 million.” Some of them have been on the market for as long as
1 ½ years.

–In a new tell-all book, Steven Ratner, the president’s former point man on the auto task force, described Treasury Secretary Tim Geithner as being “organized and low-key, although given to occasional bursts of profanity and odd fits of giggling.” I’m guessing Geithner’s giggling is due to the occasional thought that crosses his mind… ‘I can’t believe they actually gave me this job!’ He-he-he.

–Good story in the Los Angeles Times concerning Timothy Barnett, who has been charged with 23 felonies – including theft from the elderly, identity theft and real estate fraud – “for allegedly tricking five people into unknowingly granting him title to their homes.” Barnett has pleaded not guilty.

But what makes this case so interesting is that the previously convicted felon is being targeted under California’s three-strikes law. If convicted, it would be one of the first times that a white-collar criminal could face life in prison.

It’s about freakin’ time, sports fans! Good luck, California! Screw the bastard…and let the word go forth nationwide that such premeditated acts deserve penalties as harsh as those given some violent criminals.

–Ferrari recalled all of the 458 Italia cars it made this year, following a string of reports where the cars caught fire. The 458 typically costs $260,000. Incidents were reported in California, Paris, Switzerland, China and one other unnamed location. Ferrari said the problem was traced to adhesives in the wheel-arch assembly. 

–Happy 80th birthday to Warren Buffett, who shows no signs of slowing down, and it should be noted he loves cheeseburgers, for all you vegans out there. [Sorry, cheap vegan shot.] From 1965 to 2009, the book value of Buffett’s Berkshire Hathaway has increased at a compound annual rate of 20.3%, vs. 9.3% for the S&P 500. Buffett’s longtime partner Charlie Munger, by the way, is 86, and some of us would love to hear more from this irascible fellow, seeing as he’ll say anything that’s on his mind because at this stage he really couldn’t give a [hoot.]

–My portfolio: Six straight days my China play has closed at the exact same price. I still have my natural gas/storm holding but that may last just two more weeks or so, and I’d like to visit my uranium position in Texas but doesn’t look like I’ll have the time. Otherwise, I am down to just three or four other pieces of flotsam that could have been carried off in Earl’s backwash, for all I care.

–So about five weeks ago, my old Dell laptop went haywire while I was on the road, but it wasn’t a surprise nor a big deal. As I said at the time I needed to replace it. I had a 2-year-old Dell lying around, never used, set it up and took it to Ireland. As soon as I arrived, plugged it in and it worked like a charm. I left it running while I then went to play golf and when I returned, it was dead. The tech expert at my hotel couldn’t figure out what happened.

So today I pick up my new Acer. That’s it. No more freakin’ Dells. I have given them a ton of business…a ton…and at least three of the PCs just went bad for no reason. At least the little old laptop did yeoman work, but that’s the thing. It was a much older model, and more reliable.

Foreign Affairs

Afghanistan: Suddenly, this week the main story is a run on Kabul Bank, the biggest in the country that handles the paychecks for soldiers, police and teachers. It started when two executives were ousted after it was discovered that Kabul Bank was largely insolvent, thanks to a previously undisclosed mammoth portfolio of real estate assets in places like Dubai where values have crashed. President Karzai’s brother is a major shareholder and the president was forced to urge depositors not to withdraw their money, this as the brother called for a U.S. bailout. Goodness gracious. Imagine the civil unrest that could be developing very shortly (though it does need to be pointed out only 5% of Afghans have bank accounts), yet as key as the bank is to many of the citizens, understand it is also the bank of choice for the Taliban, so as Karl Malden might have observed of Washington’s predicament, “What can it do? What should it do?”

Meanwhile, Defense Secretary Robert Gates, in theater, continued to back Karzai, as does General David Petraeus; this as Karzai canned the chief prosecutor who was investigating his administration for massive corruption. Yes, the United States is in a box. One of those disappearing penny boxes, you might say.

On the ground, the U.S. lost 20 soldiers in a 4-day period, and losses for the month were 55 vs. a high of 66 for the war in July.

Iraq: As everyone celebrated the end of the U.S. combat mission here (that is except many Iraqis, who while they wanted us to leave, nonetheless know our presence in massive numbers helped keep them safe), most are in agreement that the Iraqi security forces being left in charge are adequate, but the massive corruption in the Iraqi government, let alone the inability to establish a new leadership hierarchy since the March 7 vote, is a killer. Gen. Ray Odierno, who turned over the command of the remaining American forces, said it would be three to five years before we knew if the Iraq war was a success or not and that will indeed prove to be the case, though I’d move the timetable up to two years. But this week was a time for reflection.

“The (initial) victory was swift. But the occupation was chaotic. The insurgency appeared to take Washington by surprise, and no wonder: The Pentagon was squabbling with the State Department; soldiers had no instructions and didn’t speak the language. The overall impression, in Iraq and everywhere else, was of American incompetence – and, after Abu Ghraib, of stupidity and cruelty as well. Two years ago, a German Marshall Fund poll showed that vast numbers of our closest friends felt that the ‘mismanagement’ of Iraq – not the ‘invasion’ of Iraq – was the biggest stumbling block for allies of the United States.

“No wonder, then, that America’s ability to organize a coalition has also suffered. Participation in the Iraq war cost Tony Blair his reputation and the Spanish government an election. After an initial swell of support, the Iraqi occupation proved unpopular even in countries where America is popular, such as Italy and Poland. Almost no country that has participated in the coalition derived any economic or diplomatic benefits from doing so. None received special American favors – not even Georgia, which sent 2,000 soldiers (a lot for Georgia) and received precisely zero U.S. support during its military conflict with Russia. It will be a lot harder to get any of the ‘coalition of the willing’ to fight with us again, and indeed ‘Iraq’ is part of the reason there is so little enthusiasm for Afghanistan and why it is so difficult to put organized pressure on Iran.”

Graeme Lamb / London Times [General Lamb having been Deputy Commanding General of the Multinational Force in Iraq under General Petraeus]

“(I) have never doubted, before the conflict or since, that, without our intervention, Iraq did not have the faintest hope of a better life and future. Under the ageing Saddam – and his intended legacy of disaster or disorder delivered by either one of his deranged and psychopathic sons, Uday and Qusay – there would have been no hope for a better life and future for the Iraqi people.

“Now many would expect a retired British general to say as much. However, those who have worked with me know that, if I was nothing else in my 38 years of service to this nation, I was always to a fault, without fear nor favor, a straight-shooter, be that with gun or word. Now retired, I have no restriction on my opinion….

“What if we had done nothing? From where I stood, Iraq would have continued to decline, rapidly becoming a failed state. This would have resulted in its people, its spiritual leadership and its natural resources being caught in a far bloodier maelstrom of conflicting interests within the region. To have done nothing would, I believe, have seen us at some point forced into a situation far more dangerous and beyond control.

“So was it worth it collectively? It was not without great cost in blood and treasure. But this nation has, with its coalition partners and the Iraqi Armed Forces and civilians, delivered to the Iraqi people the freedom to choose. That simple right of choice is a most worthy aim.”

“Iraq is (now) much more open to the world thanks to America’s intervention. Travel is unrestricted, imports are plentiful, Internet connections have gone up from 4,500 to 1.6 million and the number of mobile phones have risen from 80,000 to 20 million.

“Yet freedom is still not universal in Iraq. Women and gays suffer discrimination, and there is little they can do about it. Across Iraq the rule of law is usually a distant aspiration rather than a solid achievement. Justice is no longer arbitrary, but judges can still be bought and the pace of trials is often glacial.

“These gains have come at a terrible cost. About 150,000 Iraqis as well as almost 5,000 American and allied soldiers lost their lives. More than 2 million Iraqis fled the country, many of them desperately needed professionals who are building new lives elsewhere. They despaired of a country in which many residents still don’t have access to basic services. Although American taxpayers have spent more than $700 billion, drinking water is scarce, health care and education are inadequate, electricity is available only for a few hours a day and petrol often runs out. Many say life is harder than ever.

“This lack of services has crippled the economy. Manufacturers cannot survive without power; this condemns the non-oil private sector to irrelevance. The Americans have tried to boost business by financing the construction of markets across the country. They also gave seed money to entrepreneurs. But about half the Iraqi workforce is still without a full-time job. The Iraqi government is barely able to collect taxes and spending is financed almost entirely from oil money….

“It is clear that Iraqis will for many years be plagued by corruption, insurgents, meddling neighbors, and their own stubborn politicians. Ending America’s ‘combat mission’ is a gamble – and gambles can be lost.”

As for President Obama’s Oval Office speech on Tuesday, what was that all about?! It was a mess. Oh, some conservatives, even, defended it, calling it a neocon moment when Obama said “we must project a vision of the future that is based not just on fears, but also on our hopes – a vision that recognizes the real dangers that exist around the world, but also the limitless possibility of our time.” Yeah, that sounds good, but let’s see how he handles Afghanistan and his deadline there, let alone U.S. reaction should Iraq erupt all over again.

Israel / Palestine: Every U.S. president has to try at least once to bring peace to the Middle East, and this is Barack Obama’s first, and easily last, attempt. Because while the first direct talks between Israeli and Palestinian leaders in two years have begun, with Palestinian President Mahmoud Abbas and Israeli Prime Minister Benjamin Netanyahu vowing to meet every two weeks, there is zero chance of success.

For starters, Hamas, which killed four Jewish settlers in the West Bank as a signal prior to the meeting in Washington, does not believe Abbas can negotiate for them, while Abbas said talks really can’t proceed much further unless Israel ends all settlement construction and lifts the blockade on Gaza. Egyptian President Hosni Mubarak, also on hand along with Jordan’s King Abdullah II, echoed Abbas. Israel must keep its current freeze on settlements in place.

But Netanyahu has said the 10-month moratorium on West Bank building, which ends Sept. 26, will not be extended. Instead, he says Israel needs extensive security guarantees. “Peace must be anchored to security.”

King Abdullah reiterated a common refrain of his, the “price of failure (this time around) will be too high for all.”

As for his part, President Obama wants an agreement between the two, and then he wants peace treaties with Syria and Lebanon.

But the fact is Netanyahu cannot remain in power if he gives in on the expiration of the settlement moratorium as his right-wing partners will abandon him in droves, while you would think Abbas is not long for this world, especially if he’s seen giving in too much to Israel.

And so it is that I doubt I’ll be writing much about these negotiations.

[Meanwhile, in Lebanon, my friend Michael Young of the Daily Star may have been right when he was a lone scribe writing that the UN prosecutor for the Special Tribunal for Lebanon, Daniel Bellemare, is not that close to issuing indictments in the case involving the 2005 assassination of former prime minister Rafik Hariri; Bellemare saying on Wednesday in a surprise acknowledgement, “Let me state clearly that the indictment has not been drafted yet. I will only file the indictment when I am satisfied there is enough evidence.” And in a mildly positive development, Israeli and Lebanese army officers met to lay out guidelines for avoiding another border clash. One last item, and one I’ll cover further next time, but Sheikh Nasrallah of Hizbullah said he wasn’t interested in calls to disarm Beirut, led by the merchants, following deadly armed clashes in the city the other week. Very interesting things are happening in this beautiful place that is also a ticking time bomb.]

Iran: The home of opposition leader Mehdi Karroubi was attacked on Thursday by the Basij militia (comprised of village idiots), which is loyal to Iran’s supreme leader, Ayatollah Ali Khamanei. According to Karroubi’s son, the Basij “broke Karroubi’s windows, spread dye over his house and tore down the building’s surveillance cameras,” while the police stood by and did nothing. Karroubi’s guards fired into the air to scare off the attackers, as he and his family holed up in a safe room. Authorities wanted to keep Karroubi from attending a rally on Friday that he had organized. The son said it was clearly an assassination attempt.

Pakistan: The news cameras have largely moved on and so it’s been difficult getting the true story on the aftermath of the catastrophic flooding here. At least the government hasn’t been toppled, yet, but the Taliban has threatened to attack foreign aid workers, and with hundreds of targets we shouldn’t be surprised to hear of some tragedies, seeing as how the Taliban slaughtered ten such workers recently in Afghanistan.

But one encouraging item. At least 45 suspected militants were killed in airstrikes by the Pakistani military, though at the same time, Pakistan has halted talks with U.S. military officials after a Pakistani delegation sent to Washington had to go through “unwarranted” airport security checks.

Talk about yet another screw-up. Of course you have to check the group, but that should have occurred before they boarded their flight, and then upon arrival the delegation would have been prescreened, etc. I mean it was our CENTCOM that invited them!

[Meanwhile, over 90 were killed in separate bomb attacks in Quetta and Lahore at week’s end.]

China:  North Korea’s Kim Jong-il took a trip to Beijing and the surrounding area to meet with Chinese leaders and he brought along his youngest son, Kim Jong-un (or so it’s rumored). What a special moment, the younger, unemloyed Kim expected to be presented as the North’s new leader over the coming weeks.

China praised its ties with Pyongyang, while the elder Kim said, “We were deeply impressed and greatly encouraged to see for ourselves the resourceful and hard-working Chinese people in the region.” What a suck-up. And Kim said he hoped for an early resumption of the six-party talks on his country’s nuclear weapons program, which China is pushing as well in a three-step process that would start with bilateral talks between North Korea and the United States. But few expect the six-party negotiations to resume anytime soon.

Meanwhile, the Chinese navy began artillery exercises in the Yellow Sea, days before the U.S. and South Korea hold naval maneuvers of their own in the same body of water.

While on the Taiwan front, Taipei said it planned to deploy its own cruise missiles by the end of this year, even as commercial ties with the mainland have been improving. Lin Chen-yi, chief of Taiwan’s General Staff said, “Although tensions between Taipei and Beijing have eased substantially, the Chinese Communists have not renounced the use of force against Taiwan.”

Separately, China blasted a U.S. plan to supply Taiwan’s air force with a more advanced radar system, even though Washington still has not gone ahead with a sale of F-16 fighter jets to the island, as Taipei has requested for years now. And for its part, Washington is increasingly concerned with the many contacts between retired Taiwanese generals and mainland authorities. ‘Sup with that? Evidently, the contacts have been so frequent, Washington is demanding an explanation.

Russia: As forecast years ago, Prime Minister Vladimir Putin has made no bones in recent weeks about wanting to return to the presidency in 2012 and he’s stepped up his attacks on the opposition. One popular square for political protesters has been fenced off by Moscow city authorities, but Putin said he was unaware of its closure, using an old Soviet Communist Party expression:

“Believe me, I don’t know about that…I give you my honest word as a party member.”

Putin also issued this call in dealing with protesters. 

“You will be beaten upside the head with a truncheon. And that’s it.”

To which opposition leader Boris Nemtsov said, Putin shows himself to be “dishonest, ignorant and evil.”

But Putin still receives a 78% approval rating from the people. [Medvedev’s is 73%. This week he ordered a halt to the construction of a highway through the Khimki forest, a rare victory for environmentalists, though some say much of the forest was already chopped down!]

And in Chechnya, a vicious gun battle broke out when militants attempted to storm the home of President Ramzan Kadyrov, but Kadyrov’s security detail beat them back, leaving at least 19 dead. Kadyrov is one of the truly awful people on the planet, not that I’m taking sides in this one, the rebels being disciples of the likes of al-Qaeda.

France:  I have long warned to beware growing nationalism, and scapegoating of immigrants, and French President Nicolas Sarkozy is facing a firestorm of criticism in some quarters over his crackdown against illegal Roma (Gypsy) camps; 50 of which have been destroyed since July. Full disclosure: I am not a fan of the Roma myself, especially the ones I’ve found in Paris. So without knowing all the details, I support Sarkozy, to an extent. But there is a fine line here and Pope Benedict XVI, speaking in French to make sure the message was received, called on Catholics to respect human diversity. But 2/3s of the French people approve of Sarkozy’s campaign as he sets the stage for his 2012 reelection bid, while the images of campers being crushed by power shovels are troubling to many.

The Roma were also targeted, it would seem, in an attack by a gunman in Bratislava, Slovakia, which left seven dead, while in Germany, a member of its Bundesbank, Thilo Sarrazin, came under fire for remarks against both Jews and Muslims, saying of the latter that Muslim immigrants aren’t capable or willing to integrate into western societies, adding, “I do not need to accept anyone who lives on handouts from a state that it rejects, is not adequately concerned about the education of their children and constantly produces new, little headscarf-clad girls.” Yikes. Imagine a Fed board member saying that stuff.

And lastly we had the story of 100 Russian skinheads attacking a music festival, though I haven’t ascertained exactly what the motive was in this one.

Overall, though, the right-wing has been making gains across Europe, a fact Sarkozy is obviously trying to tap into. Belgium, Netherlands, Hungary…to name a few others…have seen significant gains for parties representing these constituencies.

Britain: Along the lines of the above, authorities here are voicing increasing concern over up to 800 “potentially violent radicals” who are currently in British prisons and due to be released over the next 5 to 10 years, according to a think tank. Also over the coming years, Britain and France are looking to share the use of their aircraft carriers in an effort to maintain military power during an era of cost-cutting. The big impediment to the program is the loss of thousands of shipyard jobs, but the move would make it easier for Britain to scrap or downgrade one of the two replacement carriers currently under construction at a cost of over $6 billion. British Prime Minister David Cameron and President Sarkozy are supposed to outline plans at a November summit, according to the London Times. An intriguing idea, fraught with controversy.

But all of Britain was talking this week of former prime minister Tony Blair’s new memoir, wherein among other things he described Gordon Brown as a “strange guy” who lacked political instinct “at the human gut level” adding: “Political calculation, yes. Political feelings, no. Analytical intelligence, absolutely. Emotional intelligence, zero.”

Blair also acknowledged he didn’t anticipate the role of al-Qaeda or Iran in the aftermath of the Iraq war.

And Blair said he used alcohol at the end of a stressful day, though I’ve seen some pretty hilarious commentaries on this topic, such as Blair whimpering about having a gin and tonic and glass or two of wine at dinner, hardly the stuff of future AA meetings. And, heck, look at Churchill!

Australia: It would appear that Prime Minister Julia Gillard will muster enough seats to stay in office following the incredibly close election here. Gillard’s Labor party has 74 of 76 needed seats, with the coalition at 73 and three independents yet to announce as I go to post. Should Gillard prevail, her plan on levying heavy new taxes on the mining industry would go forward.

Japan:  As David Pilling of the Financial Times points out, since Junichiro Koizumi quit in 2006, Japanese leaders have averaged fewer than 12 months in office apiece, with another vote, and another change, slated for Sept. 14. Aside from being deeply unsettling for the populous, it greatly hurts Japan’s international image. And overall, “A loss of confidence in leadership can be extremely debilitating. Countries need a sense of direction. Japan’s politicians are merely going round in circles.”

Chile: What an awesome human interest story here with the 33 trapped miners now entering week five. I love how the Chilean government requested a team from NASA for advice on keeping the miners healthy. But these poor guys could still have another 3 to 4 months. God help and keep them alive because it could be a real shot in the arm for the world that last week before they are brought to the surface, potentially at Christmas time.

Mexico: Alas, no peace on Earth, good will to all men from Mexico as 8 were killed at a bar in Cancun, of all places; though I hasten to add the victims were all locals and the bar was evidently 3 miles from the hotel zone. And another mayor was gunned down in the border state of Tamaulipas, the second in the region in the past two weeks.

But soldiers killed 27 suspected drug cartel members in the same state, which is always good to see, though at the same time the government fired 10% of the federal police force, or 3200, in an attempt to make inroads into the massive corruption sweeping the force.

New Zealand: Awful earthquake on the South Island (though with no deaths at last word), but then on Saturday, nine were killed in a skydiving accident.

Ireland: I have a lot to say on this place following my 18th trip, but I’m running out of time and I want to give this topic the proper treatment, so next week the full and very bloody story of the Irish boom…and bust.

Random Musings

–With Republicans needing a net gain of 39 seats to secure control of the House of Representatives, or 10 seats to control the Senate, there were some interesting poll numbers this week.

According to the latest USA TODAY/Gallup survey, among voters supporting Republican candidates, nearly half say they’re motivated by a desire to defeat the Democrats. Yet by 2-1, they would rather go for someone new than a current GOP member of Congress. And only a third approve of the job congressional Republicans are doing, the same as that for Democrats. So it’s no guarantee that should Republicans win, the public’s mood will change any. A pox on both their houses is the operative description of Election 2010.

But for now, by 49-43, those surveyed prefer a GOP candidate over a Democrat. [Ed. A daily Gallup tracking poll called it 51-41, the widest margin Gallup has ever recorded.] Far more importantly, however, 2/3s of Republicans are “extremely motivated” to vote, compared with less than half of Democrats.

Another big hindrance for Democrats, by a 56-39 margin, Americans disapprove of the Democrats’ healthcare legislation. That’s fatal for the donkeys.

Meanwhile, President Obama’s approval rating in this survey is 43%, but 46% in a separate Gallup Poll. 50 is a key mark for mid-term elections and avoiding big losses for the incumbent’s party.

“So now it transpires that a key money-man behind the proposed…mosque is a one-time supporter of a group shut down by the feds because it was a front for Hamas.

“No wonder the mosque’s principal man, Feisal Abdul Rauf, refuses to discuss the project’s finances.

“Or, for that matter, refuses to speak harshly of Hamas – an Iranian cat’s-paw that’s long been one of the deadliest Islamist terrorist organizations operating in the Mideast.

“It was reported last night [Wednesday] that Hisham Elzanaty – an Egyptian-born businessman from Long Island – provided a big chunk of the $4.8 million needed to buy the building that will be demolished to make way for the mosque.”

Elzanaty once donated thousands to the Holy Land Foundation, which has ties to Hamas. So it’s no surprise that, according to a Quinnipiac University poll, 71% of New Yorkers oppose the project.

“At a forum in Dubai on Tuesday, Rauf appeared to call the 71%…‘extremists.’

“ ‘The battlefront…is not between Muslims and non-Muslims,’ he said. ‘It is between moderates [and] extremists and radicals of all faith traditions.’

“We’d guess 71% of New Yorkers would include a representative cross-section of ‘all faith traditions.’

“(The) militant proponents of the World Trade Center mosque are guilty of a poorly concealed provocation. They dare Americans to appear anti-Islamic and intolerant or just to roll over.

“But the opposition to what they propose is no more anti-Islamic or intolerant than to protest a Shinto shrine at Pearl Harbor or Nanjing would be anti-Shinto or even anti-Japanese. How about a statue of Wagner at Auschwitz, a Russian war memorial in the Katyn Forest, or a monument to British and American air power at Dresden? The indecency of such things would be neither camouflaged nor burned away by the freedoms of expression and religion. And that is what the controversy is about, decency and indecency, not the freedom to worship, which no one denies.

“Although there is of course no question of reciprocity – no question whatever of a church in Mecca or anything even vaguely like it – constitutionally and if local codes applied without bias allow, there is unquestionably a right to build. Reciprocity or not, we have principles that we value highly and will not abandon. The difficulty is that the principles of equal treatment and freedom of religion have, so to speak, been taken hostage by the provocation. As in many hostage situations, the choice seems to be between injuring what we hold dear or accepting defeat. This, anyway, is how it has played out so far.

“The proponents of the mosque know that Americans will not and cannot betray our constitutional liberties. Knowing that we would not rip the foundation from the more than 200 years of our history that it underpins, they may imagine that they have achieved a kind of checkmate.

“Their knowledge of the Constitution, however, does not penetrate very far, and perhaps they are not as clever as they think. The Constitution is a marvelous document, and a reasonable interpretation of it means as well that no American can be forced to pour concrete. No American can be forced to deliver materials. No American can be forced to bid on a contract, to run conduit, dig a foundation, or join steel….

“This small and symbolic crisis is not a test of constitutional liberties, for in regard to the question at hand the Constitution allows discretion. It is rather a test of how far America can be pushed, and America is not at all as powerless as it has been portrayed.

“That is because the street in front of the mosque that the Constitution says can be built can be filled with people who can effectively protest it because the Constitution says that they are free. Those who do not fear to do so need only go there and stand upon their convictions, their beliefs, their reason, their laws, their history, and what is in their hearts.”

–On the issue of Barack Obama’s religion, disturbingly, 24% believe he is Muslim, according to a Newsweek survey. 61% in the same survey have a ‘very’ or ‘mostly favorable’ opinion of Muslim Americans, vs. 21% who have a ‘very’ or ‘mostly unfavorable’ opinion.

–Maureen Dowd / New York Times…on Obama’s Oval Office makeover:

“The recession redo, paid for by the nonprofit White House Historical Association, was the latest tone-deaf move by a White House that was supposed to excel at connection and communication. Message: I care, but not enough to stop the fancy vacations and posh renovations.

“As Obama himself said in February 2009 when he released his first budget: ‘There are times where you can afford to redecorate your house, and there are times where you need to focus on rebuilding the foundation.’

“It might have been wise, given America’s slough of despond, to hark back to a time when presidents just went to work and took their office pretty much as they found it, without the need to make a personal statement. As the former White House curator Rex Scouten once told me, in the era from Taft to Truman, the green rug in the president’s office was changed only once, when it wore out, to a new green rug.

“The new cream-of-wheat colored rug is made of 25% recycled wool and features 100% recycled quotes around the border that have significance for President Obama….

“The first thing the once inspirational orator should embroider around the rug, the maxim that sums up so much of what’s wrong with the administration now, is the immortal line from ‘Cool Hand Luke’: ‘What we’ve got here is failure to communicate.’

“Sidetracked by the mosque fight and now admirably plunging into brokering a Middle East peace, Obama clearly needs a reminder about what really counts as the Democrats prepare to get their clocks cleaned. The rug should quote James Carville’s famous admonition: ‘It’s the economy, stupid!’….

 “And for all of us who have that sinking feeling that the economic rug is being pulled out from under us, the president might stitch in the famous warning from ‘Jaws’ : ‘We’re going to need a bigger boat.’”

–I am quoting the following at length because it best encapsulates my own feelings on the topic. Kathleen Parker, conservative, in her Washington Post column on Glenn Beck’s “Restoring Honor” gathering on the Mall last weekend.

“(It) was right out of the Alcoholics Anonymous playbook. It was a 12-step program distilled to a few key words, all lifted from a prayer delivered from the Lincoln Memorial: healing, recovery and restoration.

“Saturday’s Beckapalooza was yet another step in Beck’s own personal journey of recovery. He may as well have greeted the crowd of his fellow disaffected with:

“ ‘Hi. My name is Glenn, and I’m messed up.’

“Beck’s history of alcoholism and addiction is familiar to any who follow him. He has made no secret of his past and is quick to make fun of himself. As he once said: ‘You can get rich making fun of me. I know. I’ve made a lot of money making fun of me.’

“Self-mockery – and cash – seems to come easily to him.

“Any cursory search of Beck quotes also reveals the language of the addict:

“ ‘It is still morning in America. It just happens to be kind of a head-pounding, hung-over, vomiting-for-four-hours kind of morning in America.’

“ ‘I have not heard people in the Republican Party yet admit that they have a problem.’

“ ‘You know, we all have our inner demons. I, for one – I can’t speak for you, but I’m on the verge of moral collapse at any time. It can happen by the end of the show.’

“Indeed. After the hangover comes admission of the addiction, followed by surrender to a higher power and acknowledgment that one is always fallen.

“These may be random quotes, but they can’t be considered isolated or out of context. For Beck, addiction has been a defining part of his life, and recovery is a process inseparable from the Glenn Beck Program. His emotional, public breakdowns are replicated in AA meetings in towns and cities every day.

“Taking others along for the ride, a.k.a. evangelism, is also part of the cure. The healed often cannot remain healed without helping others find their way. Beck, who vaulted from radio host to political-televangelist, now has taken another step in his ascendancy – to national crusader for faith, hope and charity.

“It’s an easy sell. Meanwhile, Beck has built a movement framed by two ideas that are unassailable: God and country. Throw in some Mom and apple pie, and you’ve got a picnic of patriotism and worship.

“Yes, Mother Superior made an appearance. Sarah Palin, whom Beck sainted a few months ago during an interview in which he declared her one of the few people who can save America, came to the Mall not to praise politics but to honor our troops.

“Palin is the mother of a soldier, after all, and God bless her, and him, and all those who have served. Unassailable. As Palin said, whatever else you might say about her, she did raise a combat soldier: ‘You can’t take that away from me.’

“Who you? Oh, that’s right, The Media. Never mind that Beck is one of the richest members of the media. Or that Palin has banked millions primarily because The Media can’t get enough of her. But what’s an exorcism without a demon? And who better to cast into the nether regions than the guys lugging camera lights?

“Covering all his bases, Beck invoked the ghost of the Rev. Martin Luther King Jr., who stood in the same spot 47 years ago to deliver his most famous speech. Where King had a dream, Beck has a nightmare: ‘It seems as darkness begins to grow again, faith is in short supply.’

“Really? When did that happen? Because it seems that people talk about God all the time these days. Even during the heyday of Billy Graham, most Americans could get through 16 or so waking hours without feeling compelled to declare where they stood on the deity.

“And the darkness? Creeping communism brought to us by President you-know-who. Conspiracy theories and paranoia are not unfamiliar to those who have wrestled the demon alcohol.

“Like other successful revivalists – and giving the devil his due – Beck is right about many things. Tens of thousands joined him in Washington and watch him each night on television for a reason. But he also is messianic and betrays the grandiosity of the addict.

–As for Palin, she is headlining the Sept. 17 Ronald Reagan Dinner in Iowa, a rather obvious look into her future plans…plus she has a new book coming out in November!

But I do have to note a comment of Palin’s at the Mall last Saturday.

In restoring America, she said, “You have the same steel spine and moral courage as Washington and Lincoln and Martin Luther King. It will sustain you, as it sustained them.”

Give me a freakin’ break. What the heck does this mean? Does she really know America? Does she know her history? It’s pretty tough for a nation of idiots (OK, the 24% who think Obama is Muslim) to all have the same qualities as three of the five best leaders of all time.

“I don’t read some of it because I know that those who are impotent and limp and gutless, and then they go on, they’re anonymous, they’re sources that are anonymous and impotent, limp and gutless reporters take anonymous sources and cite them as being factual references.” [New York Post]

She really said this…to Sean Hannity on his radio program. There’s even more but my brain hurts and I’m afraid I’ll pop a vessel and have a stroke. 

–Not to be outdone, President Obama, in a piece for Smithsonian magazine titled “Why I’m Optimistic.”

“When I was sworn into office, I had a chance to request objects from some of America’s finest museums to put on display in the White House. One of my requests was for patent models from the Smithsonian National Museum of American History: Samuel Morse’s 1849 design for a telegraph register; Henry Williams’ 1877 design for a steamboat wheel; and John A. Peer’s 1874 design for a gear-cutting machine.

“They rest on the bookshelves in the Oval Office, and I see them every day. For me, they are a reminder of what has always defined America’s people: our spirit; a restless searching for the right solution to any problem; an inclination to dream big dreams, and an insistence on making those dreams come true; an enduring faith, even in the darkest hours, that brighter days lie ahead. That is the genius of America. And that’s why, even though I can’t predict what will happen over the next 40 years, I am – and always will be – full of hope about what the future holds.”

America hasn’t done anything since we went to the moon, except for the Hubble telescope, which is really the last great achievement of mankind. Look at President Nixon’s “War on Cancer.” We’ve made some progress, but much of it is related to diet and the campaign to quit smoking! In technology, the Internet is great for sports, music videos, and news, but Apple’s products haven’t advanced civilization one iota, though admittedly some of them have dulled the pain. And from time to time it needs to be pointed out that our technological advances of just the past ten years have gotten us nothing but a gigantic financial bubble owing to the ability to put together packages of securities, and trade them, that we were not heretofore able to do (at least easily). That’s it. Look at China. Tremendous growth. One of the great stories of the last 20 years…an exploding middle class…hundreds of millions rising up from poverty. A good thing. But look where much of this growth originates. Basic stuff like infrastructure… building roads, bridges, airports and such…along with the factories to supply and/or process the raw materials. It’s not like China invented anything (to the contrary, they just rip the West off).

So no, I see zero reason to be optimistic, Mr. President. And I haven’t even touched on the geopolitical outlook, though in a sense you have a preview from my comments on nationalism in Europe above. Hardly cause for a hip-hip-hooray and a whipping out of the finest premium beer in the cabinet.

–NBC’s Brian Williams asked President Obama if it was fair to call the BP oil disaster his Katrina.

That’s a lie. But it’s probably true the end result isn’t something that will hurt Democrats at the polls. It just won’t help, either.

–George Will cites some rather troubling stats from a report out of the Educational Testing Service titled “The Black-White Achievement Gap: When Progress Stopped,” for his Washington Post column.

Most of the progress in closing the gap in reading and mathematics “halted for those born around the mid-1960s, a time when landmark legislative victories heralded an end to racial discrimination.”

“Only 35% of black children live with two parents, which partly explains why, while only 24% of white eighth-graders watch four or more hours of television on an average day, 59% of their black peers do. (Privileged children waste their time on new social media and other very mixed blessings of computers and fancy phones.) Black children also are disproportionately handicapped by this class-based disparity: By age 4, the average child in a professional family hears about 20 million more words than the average child in a working-class family and about 35 million more than the average child in a welfare family – a child often alone with a mother who is a high school dropout.”

The ETS report says: “It is very hard to imagine progress resuming in reducing the education attainment and achievement gap without turning these family trends around – i.e., increasing marriage rates, and getting fathers back into the business of nurturing children.” And: “It is similarly difficult to envision direct policy levers” to effect that.

–A study out of the Pew Hispanic Center shows that, owing to the nation’s economic downturn and increased border enforcement, the number of illegal immigrants in the U.S. has dropped for the first time in 20 years, a whopping 8%, to 11.1 million from a peak of 12 million in 2007.

–I was watching Bill O’Reilly early in the week to catch up on what he considers to be important, and his panel of buxom lawyers went way overboard in basically convicting the two men arrested at Amsterdam’s airport after officials found suspicious items in their checked luggage back here. I’m glad authorities on both sides of the Atlantic expressed concern, but it turned out the men were innocent. No matter…they were smeared on O’Reilly (especially one of the two whose name and picture never should have been released).

But guess what? I broke the law myself and should have been treated as a terror suspect more than these two! I haven’t had a chance to comment on my trip to Ireland since I posted last week’s column hours before I left on a Wednesday, but here goes.

I checked my big suitcase and golf clubs at the Continental desk, leaving me with my laptop case. I went through security and met my friend Pete. After the obligatory bon voyage beer, we sit down near the gate, I go into one of the pockets of the case for my cellphone, and…horror! I had left a pair of scissors, 8 ½ inches with a big blade, in my laptop, and not the suitcase I normally place them in. The reason why I bring scissors is for cutting out newspaper articles for my columns.

But Newark Airport security didn’t spot them! I told Pete, “Look, there are cameras on us, so I’m not taking them out, but reach into that pocket.” He was shocked. Needless to say, I should have been detained for a few hours of questioning, and probably missed my flight, before my explanation was accepted. I would have totally understood. I was an American idiot in that moment.

So how secure does this make you feel? I’m guessing because it was behind the cellphone, with the computer power chord on the other side, that this is why they weren’t seen…or it was just a dumb-ass TSA agent.

–Under a pilot scheme in Ireland, up to 10,000 of the unemployed here will be forced to work in the community for their benefits, such as helping out in after-school and childcare services, sports clubs, services for older people and environmental projects…a terrific idea. I’ll take sports clubs, unless it involves doing the laundry and/or cleaning the bathrooms. Maybe a beer vendor (but only when it’s sunny).

–Here’s some good news…Gulf beaches have been deemed safe for sea turtle hatchlings. It seems the move to transport the eggs to the east coast of Florida has ended because the waters the turtles would waddle into from their traditional nesting grounds on the west coast of Florida and Alabama are safe enough. The mission off the east coast, incidentally, went great, or as one involved in the move put it, “the relocation was very successful. We’ve heard reports of 94% hatching success for one nest. And the hatchlings are vigorous, swimming off into the Atlantic.”

Of course that was a few weeks ago, putting them by this past Monday or Tuesday…right into the path of Hurricane Earl! 

–Speaking of Earl, we obviously dodged a bullet. But in the wall-to-wall coverage, the one thing I found interesting is that 48 hours before a projected landfall, the National Hurricane Center forecast has an average error of 100 miles…which is why you can never let down your guard. [And kudos to the weather folks for nailing the storm track on this one.]

–From Army Times: “More soldiers have been incapacitated by illnesses transmitted from bugs than by combat, according to an Army Public Health Command fact sheet released in 2009.” So the Army has been treating new uniforms with Permethrin to keep away insects for 120 days or until the uniforms have been washed 50 times.

–Speaking of insects, the bedbug infestation sweeping parts of the country is in large part due to our wanderlust, yet I’m increasingly ticked off that in the news stories talking about the situation, they never mention a simple step everyone should be taking. When you are in a hotel…put your bag up on the racks provided. Don’t leave them on the floor. I guarantee that would stop the monsters from finding refuge in your suitcase at least 50% of the time.

–Swedish prosecutors reopened an investigation into an allegation of rape against WikiLeaks founder Julian Assange. Dear Lord…

–But wait…there is no God…or so concludes the increasingly irritating Professor Stephen Hawking, who writes He had no hand in creating the Universe.

Citing the 1992 discovery of a planet orbiting a star other than our Sun, Hawking observes in a new book, “That makes the coincidences of our planetary conditions – the single Sun, the lucky combination of Earth-Sun distance and solar mass – far less remarkable, and far less compelling as evidence that the Earth was carefully designed just to please us human beings.”

Hawking adds: “Because there is a law such as gravity, the universe can and will create itself from nothing…Spontaneous creation is the reason there is something rather than nothing, why the universe exists, why we exist. It is not necessary to invoke God to light the blue touch paper and set the universe going.”

Yoh, Stephen. It wasn’t necessary to bring God back into the debate, by my way of thinking.

So the Archbishop of Canterbury, Rowan Williams, fired back:

“Belief in God is not about plugging a gap in explaining how one thing relates to another within the Universe. It is the belief that there is an intelligent, living agent on whose activity everything ultimately depends for its existence.

“Physics on its own will not settle the question of why there is something rather than nothing.”

Lord Jonathan Sacks, the Chief Rabbi, wrote: “Science is about explanation. Religion is about interpretation…The Bible simply isn’t interested in how the Universe came into being.”

Ibrahim Mogra, a leading imam in Britain, said: “If we look at the Universe and all that has been created, it indicates that somebody has been here to bring it into existence. That somebody is the almighty creator.”

However, if you’re talking about whether God is happy with what we’ve done since we were given the opportunity, that’s a different story. He is clearly disgusted, and we shouldn’t be in the least bit surprised if He pulls the plug without notice. ‘I’m moving on,’ He’ll muse. ‘These people are idiots.’ [And then some of us may get to Heaven and look around and go, ‘Where’s God?’ And a banker will greet us, and he’ll go, ‘See your quarters over there? They’re in foreclosure.’]

—

Pray for the men and women of our armed forces, and all the fallen. When I was in Shannon Airport, coming home on Sunday, there were about 150 American soldiers in the waiting area. I asked one if they were coming or going and he said they were coming off two weeks of R&R in the States. I was struck by how quiet they all were. Lost in thought, no doubt still tired. And what a great looking group of men and women. God love ‘em.

God bless America.

—

Gold closed at $1251
Oil, $74.60

Returns for the week 8/30-9/3

Dow Jones +2.9% [10447]
S&P 500 +3.7% [1104]
S&P MidCap +4.4%
Russell 2000 +4.3%
Nasdaq +3.7% [2233]

Returns for the period 1/1/10-9/3/10

Dow Jones +0.2%
S&P 500 -0.9%
S&P MidCap +5.5%
Russell 2000 +2.9%
Nasdaq -1.6%

Bulls  29.4
Bears 37.7 [Source: Chartcraft / Investors Intelligence…ratio 41.7/27.5 three weeks ago]

Forgot to mention last time that your editor defeated Dr. Bortrum in a rematch of our par-3 contest, but it was a sloppy victory as both played poorly…kind of like my play in Ireland last weekend.