The Real State of the Union

I watched Mitch Daniels’ response to the pathetic state of the union address by Barack Obama – and then I fell asleep. It was boring, uninspiring, and unwatchable.

Here’s what Mitch Daniels should have said.

“Good evening, my fellow Americans. I’m not going to take an hour of your time, or half an hour of your time, or even fifteen minutes of your time. I’m going to take less than ten minutes to explain the state of our union, how we got here, and how we get out.

“My fellow Americans, the state of our union is critical. We are so deeply in debt that within the decade, we will be spending more in interest on the debt than we will on our military budget. That’s just the interest, not the actual debt. By 2015, we will be paying for the entire Chinese military budget, since we owe them so much money. What have we gotten for all this cash? We certainly haven’t gotten jobs – nearly half of all working-age Americans are either unemployed, underemployed, or have dropped out of the labor force entirely. The real unemployment rate is somewhere near 11 percent, not 8.5. The economy, to put it politely, stinks, and we all know it.

“Spending vast quantities of money hasn’t given our children a good education, either. Thanks to the teachers unions, which effectively bribe politicians all over the country to keep bad teachers employed and tenured, American children rank 14^th in the industrialized world in reading, 17^th in science, and 25^th in math. There are plenty of jobs available in America, in places like Silicon Valley – but we don’t have enough qualified people to fill them, because our education system has been bought and paid for by the greedy and perverse teachers unions. And while President Obama talks about everybody needing to stay in school and go to college, if our schools are terrible, all we’re doing is prolonging their ignorance.

“And all that money we’re spending isn’t making the world safer, either. China is building up its military. Russia is actively undermining us. Both those countries are extending their spheres of influence in South America. Our allies like Britain and France are rightly angry at us – and our treatment of Israel has been utterly shameful. In the Middle East, Iran is developing nuclear weapons and threatening to shut down the Strait of Hormuz, and we’re pretending that the international community is united behind us, even as Russia and China stonewall all action; Libya and Egypt and Tunis have fallen to Islamists; the Jew-haters in the Palestinian Authority and Hamas have been emboldened; Bashar Assad is murdering his own people en masse; Iraq is spiraling back into chaos; Pakistan is a disaster zone; and in Afghanistan, we’re now negotiating with the same folks we toppled after they provided Osama Bin Laden safe haven. Yes, Bin Laden is dead. But pretending that killing Bin Laden solved the Islamist threat is worse than wrong. It’s reprehensible, because it gives us the same sense of false security that led to 9/11 in the first place. Meanwhile, we slash the military budget.

“And things are slated to get worse. In the next year, if re-elected, President Obama will allow the Bush tax rates to expire; he will vastly increase the burdensome regulations that kill business; Obamacare will kick in, destroying our healthcare system.

“Yes, this is President Obama’s fault. It’s the fault of his radical leftist Democrat allies in the Congress and in the states; it’s the fault of spineless Republicans who cave every time they’re tested.

“But ultimately, this is a republic. We elected these corrupt, incompetent, petty would-be tyrants and appeasers. Want to know why our government is out of control? It’s because for close to a century, we’ve lived out of control. We’ve railed against big spending, unless that spending went to our home district. We’ve bashed Congress, then sent the same corrupt and useless officials back to Washington, D.C. We’ve talked about entrepreneurialism, then given the green light to labor unions that stifle innovation, regulators who protect us against a booming economy, and legislators who make their living by pandering to those who don’t work or pay taxes in the first place. We’ve claimed that we care about a moral foreign policy, then shied away from victory. Worst of all, we’ve pretended to care about the Constitution, then called for a government that ignores all Constitutional restraints in the name of “getting things done.” And the “things” our government gets done have cut the heart out of American liberty.

“We are now a nation on the brink. We can leap forward into the abyss, or we can move away from the cliff. What we cannot do is stand still. The winds are blowing, and we are swaying on the precipice.

“Now is a time for clarity. It’s easy to ignore reality when the chasm seems far away. But now when we look down – and it’s a long fall to civilizational irrelevance – the choice becomes clear. We can close our eyes and jump; we can listen to a President who wants to push us from behind, a Congress that nudges us toward the drop, and a media that is desperate to see us take the plunge headlong into the dark night of national decay. Or we can fight back.

“And we will fight.

“Because we are a nation of fighters. We will not be talked down to; we vow not to heed the words of the so-called experts who expect us to defer to their superior knowledge. They say that the business of running the country should be left to the experts – we say that we are the experts, and we can run our own damn lives, thank you very much. They say trust us – and we say, no, you paternalistic, arrogant fools. You trust us.

“This will be a battle for the soul of America. And we will win.

“This fight won’t be easy. It’s going to be ugly and it’s going to be dirty and it’s going to be chaotic. It will be messy. We won’t all be President Obama’s soldiers, as he fascistically suggested we should be, and we won’t be shills for either party. We won’t be taken in by politicians who tell us they’re going to save us, then tell us to take a leap of faith with them. We’ll rely on ourselves, and on the Constitutional system that protects us. The greatest system ever devised by man. The system that guarantees our right to be free from government, not some phantom right to be taken care of by government. The system that celebrates the friction of free people making free arguments, not a forced unanimity that ends in chains. The system that builds on the individual, not the collective.

“For too long, we’ve been made to feel that if we do what’s best for ourselves and our families, we can’t do what’s best for the country. The truth is precisely the opposite. Freedom to act in accordance with traditional American values, on behalf of those we love, is the essence of America’s greatness. That greatness doesn’t come from building the Hoover Dam or the national highway system. It comes from us sitting with our families around the dinner table, enjoying the fruit of our labors, celebrating the future of our children. And that future will be bright, so long as we regain the confidence in ourselves that has always made America a light unto the nations.”

Assad contains Syrian uprising for now, with credits for Russia and Iran

Ten months after the Syrian people launched an uprising against its ruler, Bashar Assad, if not yet safe in the saddle, has recovered the bulk of his army's support and his grip on most parts of the country

Protesters have mostly been pushed into tight corners in the flashpoint towns and villages, especially in the north, hemmed in by troops and security forces loyal to the president.

Monday, Jan. 30, Syrian forces were close to purging the suburbs and villages around Damascus of rebel fighters. The operation began Sunday with 2,000 troops backed by tanks and armored personnel carriers. Six soldiers were killed when their vehicle blew up on a roadside bomb near Sahnaya, east of the capital.

The rebel Free Syrian Army and opposition groups continue to report heavy fighting in the Damascus area, and especially the international airport where they claim to have prevented Assad's wife and children from fleeing the country. However, military watchers do not confirm either the fighting or the Assad family's attempted flight.

While both sides spin propaganda, the extreme hyperbole of opposition claims attests to their hard straits and the Syrian president's success in weathering their efforts and the huge sacrifices in blood paid by the people (estimated at 8,000 dead and tens of thousands injured) to oust him.
Having got rid of the Arab League monitoring mission, which gave up in despair of halting the savage bloodbath, Assad will shrug off the Arab-Western backed motion put before the UN Security Council Tuesday, Jan. 30, calling on him to step down and hand power to his vice president Farouk a-Shara. He will treat it as yet another failed effort by the combined Arab-Western effort to topple his regime.

The conflict is not over. More ups and downs may still be to come and there are signs of sectarian war evolving. But for now, Assad's survival is of crucial relevance in seven Middle East arenas:
1. The Tehran-Damascus-Hizballah bloc is strengthened, joined most recently by Iraq;

2. Iran chalks up a first-class strategic achievement for counteracting the US and the Saudi-led Gulf Arab emirates' presentation of the Islamic regime as seriously weighed down under by the crushing burden of crushing international sanctions imposed to halt its drive for a nuclear bomb.
3. Hizballah has won a chance to recover from the steep slide of its fortunes in Lebanon. The Pro-Iranian Lebanese Shiite group stands to regain the self-assurance which ebbed during Assad's hard times against massive dissidence, re-consolidate its bonds with Tehran, Damascus and Baghdad and rebuild its political clout in Beirut.

4. It is hard to calculate the enormous extent of the damage Saudi Arabia and Turkey have suffered from their colossal failure in Syria. The Palestinians too have not emerged unscathed.
Saudi Arabia, Qatar and their security agencies, which invested huge sums in the Syrian rebellion's removal of the Assad regime, were trounced by Syria's security and intelligence services and the resources Iran provided to keep Bashar Assad afloat.
The Arab League, which for the first time tried its hand at intervening in an Arab uprising by sending observers into Syrian trouble spots to cut down the violence, watched impotently as those observers ran for their lives. Assad for his part first accepted than ignored the League's peace plan.
Turkey, too, after indicating its military would step across the border to support the Syrian resistance and giving the FSA bases of operation, backed off for the sake of staying on good terms with Iran.
5. Russia and China have gained credibility in the Middle East and points against the United States by standing up for Assad and pledging their veto votes against any strong UN Security Council motions against him. Moscow's arms sales and naval support for the Assad regime and China's new military and economic accords with Persian Gulf emirates have had the effect of pushing the United States from center stage of the Arab Revolt, held in the Egyptian and Libyan revolutions, to the sidelines of Middle East action.
6. The Syrian ruler has confounded predictions by Israel's Defense Minister Ehud Barak that he can't last more than a few weeks. His survival and the cohesion of his armed forces have contributed to the tightening of the Iranian military noose around Israel.

The Syrian army was in sustained operation for almost a year without breaking and suffered only marginal defections. It is still in working shape with valuable experience under its belt in rapid deployment between battlefronts. Syria, Iran and Hizballah have streamlined the cooperation among their armies and their intelligence arms.
7. The Palestinian rivals, Fatah and Hamas, have again put the brakes on the on-again, off-again reconciliation after it was galvanized by Hamas' decision to create some distance between Iran and the embattled Syrian regime. Seeing Assad still in place, Hamas' Gaza prime minister Ismail Haniyeh will visit Tehran this week and Meshaal may delay his departure from the Syrian capital.

The Man Behind Gingrich’s Money

The trip to Jordan by a group of United States congressmen was supposed to be a chance for them to meet the newly crowned King Abdullah II. But their tour guide had a more complicated agenda.

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Sheldon Adelson and his wife, Miriam, who is from Israel, have given $17 million in support of Newt Gingrich in recent years.

Related

• Times Topic: Sheldon Adelson

• A Big Check, and Gingrich Gets a Big Lift (January 10, 2012)

• The Caucus: Miriam Adelson Donates $5 Million to a Pro-Gingrich 'Super PAC' (January 23, 2012)

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Sam Morris/Las Vegas Sun, via Associated Press

Sheldon Adelson, right, showed a model of the Venetian, his Las Vegas hotel, to a visiting Russian official, Mikhail Shvydkoi, in 2000.

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Gali Tibbon/Agence France-Presse — Getty Images

Sheldon Adelson, left, met with President Shimon Peres of Israel after giving the charity Birthright Israel nearly $30 million in 2007.

The guide was Sheldon Adelson, a Las Vegas casino magnate who helped underwrite trips to the Middle East to win support for Israel in Congress. On this occasion in 1999, as the lawmakers enjoyed a reception at the Royal Palace in Amman, Mr. Adelson and an aide retreated to a private room with the king.

There, the king listened politely as Mr. Adelson sat on a sofa and paged through his proposal for a gambling resort on the Jordan-Israel border to be called the Red Sea Kingdom.

“This was shortly after his father, King Hussein, died, and he was grateful to me,” Mr. Adelson explained later in court testimony, recalling that he had lent his plane when the ailing monarch sought treatment in the United States. “So they remembered.”

The proposal never went anywhere — Mr. Adelson later said he had feared that a Jewish-owned casino on Arab land “would have been blown to smithereens.” But his impromptu pitch to the Jordanian king highlights the boldness, if not audacity, that has propelled Mr. Adelson into the ranks of the world’s richest men and transformed him into a powerful behind-the-scenes player in American and international politics.

Those qualities may also help explain why Mr. Adelson, 78, has decided to throw his wealth behind what had once seemed to be the unlikely presidential aspirations of Newt Gingrich. Now, in no small measure because of Mr. Adelson’s deep pockets, Mr. Gingrich is locked in a struggle with Mitt Romney heading into Florida’s Republican primary on Tuesday.

Mr. Adelson, by some estimates worth as much as $22 billion, presides over a global empire of casinos, hotels and convention centers whose centerpiece is the Venetian in Las Vegas, an exuberant monument to excess with canals, singing gondoliers and acres of slot machines. That fortune is a wellspring of financial support for Mr. Gingrich, who has benefited from $17 million in political contributions from Mr. Adelson and his wife, Miriam, in recent years, including $10 million in the last few weeks that went to a “super PAC” supporting him.

The question of what motivates Mr. Adelson’s singular generosity toward the former House speaker has emerged front and center in the campaign. People who know him say his affinity for Mr. Gingrich stems from a devotion to Israel as well as loyalty to a friend. A fervent Zionist who opposes any territorial compromise to make way for a Palestinian state, Mr. Adelson has long been enamored of Mr. Gingrich’s full-throated defense of Israel.

In December at an event in Israel for a charity he supports, Mr. Adelson made a point of endorsing Mr. Gingrich’s assertion that the Palestinians have no historic claim to a homeland.

“Read the history of those who call themselves Palestinians and you will hear why Gingrich said recently that the Palestinians are an invented people,” Mr. Adelson said at the event for Birthright Israel, which takes young Jews on trips there.

Mr. Adelson is hardly a household name. He avoids the limelight and rarely speaks to the press, remaining something of an enigma. He declined to be interviewed for this article, but he and his wife issued a statement saying friendship and loyalty are “our motivation for helping Newt.”

Through interviews and a review of Mr. Adelson’s testimony in legal disputes with former associates, a portrait emerges of a formidable and determined striver who lifted himself out of childhood penury in working-class Boston. He has a sentimental streak — on one of his first trips to Israel, he wore the shoes of his late father, a cabdriver from Lithuania who was never able to visit there — and he has given hundreds of millions of dollars to Jewish causes, medical research and injured veterans.

But his rise has not been without controversy. The Justice Department is investigating accusations by a former casino executive that Mr. Adelson’s operations in Macao may have violated federal laws banning corrupt payments to foreign officials. Also, a Chinese businessman accused Mr. Adelson of reneging on an agreement to share profits from the Macao project.

Mr. Adelson also has a reputation for irascibility and has left a trail of angry former business associates. Even his two sons sued him at one point, accusing him of cheating them, though they lost. He filed a libel suit against a Las Vegas newspaper columnist, John L. Smith, who eventually had to declare bankruptcy, and he waged a bitter court battle with a former employee whom he accused of spreading lies about him.

Nevertheless, his concern for his image was apparent in a deposition he gave in a court case, which also hints at the risk for Mr. Gingrich in accepting so much financial help from Mr. Adelson.

Complaining that negative things said about him were winding up in news articles, Mr. Adelson said his charitable donations had “been rejected a couple of times” because of the bad publicity: “Nobody ever says in such an article: ‘Oh, he’s a very nice guy. He helps old ladies across the street. He pets dogs behind the ears. He’s a hugely charitable person. He gives away hundreds of millions of dollars.’ ”

Early Ambition

Mr. Adelson likes to recount how his first business breakthrough came when, at age 12, he bought a newsstand in downtown Boston, eventually parlaying his earnings into a brief teenage career operating candy machines.

After high school, he had stints working as a mortgage banker, running a business packaging toiletries for hotels and operating a charter travel company. But he hit the jackpot with a computer trade show, Comdex, which he started in Las Vegas in 1979. Comdex became the signature annual event for the computer industry, attracting more than 200,000 visitors at its peak.

Jason Chudnofsky, who knew Mr. Adelson growing up in Dorchester, Mass., and became chief executive at Comdex, said his friend always had outsize ambition. He recalled Mr. Adelson’s telling him decades ago that one day they would be “talking to ministers” and heads of state.

“He was thinking big even back then,” Mr. Chudnofsky said.

Big thinking led Mr. Adelson to set his sights on a project that would transform both the Las Vegas casino trade and his own life in ways that seem to have surprised everybody but him.

In 1988, Mr. Adelson and his partners bought the historic Sands Hotel and Casino and built a convention center to accommodate their thriving trade show. Eight years later, after they sold Comdex for $862 million, Mr. Adelson used his profits on a risky new venture: tearing down the aging Sands and spending $1.5 billion to develop a lavish hotel and casino modeled after Venice.

Accepted wisdom had it that building both a hotel-casino and a convention center was a money loser. Mr. Adelson proved otherwise. As his reputation as a successful developer grew, he explored opportunities for overseas expansion. But his attempts to build a casino in Israel met resistance despite his connections, according to court records.

“I went to see the chief rabbi,” Mr. Adelson testified in 2009 in a lawsuit he brought against a former employee. “There was no chance the religious bodies were going to allow a casino in Israel.”

He turned his attention to Asia. China in 1999 reclaimed the former Portuguese colony of Macao, and a few years later ended a casino monopoly that had existed for many years. Mr. Adelson’s company, the Las Vegas Sands Corporation, bid for one of the licenses offered by the Chinese and won, leading to the opening of the $240 million Macao Sands in 2004.

The resort was so successful that its first-year profits exceeded the cost of the project, according to industry analysts. Mr. Adelson, who was also building a casino in Singapore, was riding high. But with so much money on the line, disputes arose with former associates looking for a share of the profits.

He was sued by a Hong Kong businessman, Richard Suen, who said he had been promised a “success fee” for introducing Mr. Adelson and his team to Chinese officials. A jury awarded Mr. Suen $44 million, but the award was overturned on appeal and the case sent back for a retrial, which is still pending.

In his suit, Mr. Suen asserted that while visiting Beijing in 2001, Mr. Adelson had been asked to use his influence in Congress to derail a human rights resolution that Chinese officials feared could complicate their bid to host the Olympic Games. Mr. Adelson acknowledged calling several congressmen, including Tom DeLay, who was the House majority whip at the time, but he and Mr. DeLay denied undermining the bill, which died in committee.

Still, a Sands executive testified that he had relayed a message to the Chinese taking credit for it.

The most damaging accusations have been made by a former Sands executive, Steve Jacobs, who sued after being fired in 2010. He alleges that he was pressed to exert “improper leverage” with Macao government officials to get approvals needed by the company, which Sands officials have denied. His assertions are now the subject of the federal investigation.

Passion for Israel

When Mr. Adelson appeared at the Birthright event in December and spoke approvingly of Mr. Gingrich, he had earned his place on the stage by virtue of his donations to the organization — more than $100 million in all.

He is also the single largest donor to Yad Vashem, Israel’s Holocaust memorial and museum, with gifts totaling $50 million. Mr. Adelson’s generosity to Jewish causes is especially striking given that for most of his life he was relatively uninvolved in that world.

Mr. Adelson’s business partners in his early days at Comdex were all much more active in Jewish affairs. But friends say Mr. Adelson experienced something of an awakening after his first visit to Israel in 1988, when he was in his mid-50s.

“He fell in love with the country,” said Ted Cutler, an early business partner.

This coincided with his divorce from his first wife, Sandra. Not long after his trip, he encountered a friend, Sara Aronson, at a Boston restaurant. Mr. Adelson talked excitedly of Israel and mentioned that he was interested in meeting Israeli women, Ms. Aronson recalled.

Ms. Aronson introduced him to her best friend, Dr. Miriam Ochshorn, a divorced physician from Israel in her 40s who was completing a fellowship in addiction medicine at Rockefeller University in New York. As it turned out, Mr. Adelson’s two sons from his previous marriage both struggled with drugs. One would die in 2005.

After the couple married in 1991, Mr. Adelson’s visits to Israel became so frequent that he told friends he was contemplating settling there. His increasing wealth gave him the means to make a lasting imprint on causes important to him and his wife, including the establishment of drug treatment centers in the United States and Israel.

He also became one of the biggest donors to the American Israel Public Affairs Committee, the powerful pro-Israel lobby, and joined its executive committee.

Friends point out that his staunch Zionist beliefs are consistent with his take-no-prisoners personality. They also said the views of his wife, who had lived through so much tumult in Israel, including the 1967 war, undoubtedly helped shape his.

Over time, Mr. Adelson made his conservative views felt not only within the committee, but also in Israel. He started a free daily newspaper in 2007, Israel Hayom, that is widely viewed as supportive of Prime Minister Benjamin Netanyahu, a close friend who shares his hawkish outlook.

Ehud Olmert, who was prime minister from 2006 to 2009, got a taste of the newspaper’s treatment of politicians who fall short of Mr. Adelson’s expectations. He and Mr. Adelson had been friendly, he said, but grew distant after Mr. Olmert tried to negotiate a two-state solution with Mahmoud Abbas, the president of the Palestinian Authority.

“Once, after I was already prime minister, he asked to come see me with his wife, Miri,” Mr. Olmert recalled in a telephone interview. “He already had his newspaper, and every day it attacked me viciously.

“Toward the end of our meeting, I asked him, ‘Aren’t you ashamed of what your paper is doing to the prime minister?’ ” Mr. Olmert said, referring to himself. “He said, ‘I don’t read Hebrew.’ And Miri said, ‘I do, and I must tell you that we are very aggressive against him.’ ”

Mr. Olmert added that he had heard from senior American officials that Mr. Adelson had advocated firing Condoleezza Rice as secretary of state and getting rid of Mr. Olmert because both were “betraying Israel.”

Shared Conservatism

As Mr. Adelson was experiencing his awakening on Israel, Mr. Gingrich was ascending the Republican ranks. He was also endearing himself to stalwart supporters of Israel.

In early 1995, newly elected as speaker of the House, Mr. Gingrich caused a stir when he called for moving the United States Embassy from Tel Aviv to Jerusalem. He later backed legislation endorsing the move. It was at a reception celebrating the measure that Mr. Gingrich first met Mr. Adelson, according to an associate of Mr. Adelson.

From then on, Mr. Adelson was among a cadre of pro-Israel advocates with whom Mr. Gingrich had regular interactions. The casino magnate also frequently lent his Gulfstream jet to Mr. Gingrich for cross-country trips, a former Gingrich adviser recalled.

Beyond Israel, the two men shared a conservative philosophy on matters important to Mr. Adelson’s businesses, including limiting the ability of labor unions to deduct money from members’ paychecks for political activities.

Mr. Gingrich also backed legislation sought by casino owners in 1998 to preserve tax deductions beneficial to the industry. That same year, Mr. Adelson hosted a Republican fund-raiser at one of his Las Vegas venues, headlined by Mr. Gingrich, and donated $300,000 to the party for the midterm elections.

Getting Involved

In 2006, when Mr. Gingrich began laying the groundwork for a possible run for the presidency, Mr. Adelson provided $1 million in seed money for his political committee, American Solutions for Winning the Future. Mr. Adelson donated an additional $2 million the next year; his contributions to the group have totaled more than $7 million.

During the 2008 election cycle, Mr. Adelson became recognized as a top-tier donor to the right and a moneyed villain to the left. He was the primary financier of a conservative nonprofit group, Freedom’s Watch, which trumpeted plans to spend as much as $200 million on the presidential election. Those plans, however, fizzled as internal problems paralyzed the organization, with Mr. Adelson micromanaging the group’s efforts, Republican operatives familiar with the organization said at the time. The group still spent about $30 million through early 2008, almost all of which came from Mr. Adelson, according to the operatives.

Today, the Venetian and the adjoining Sands Convention Center have become default destinations for Republican events in Las Vegas.

“I call it the Republican headquarters on the Strip,” said Jon Ralston, the political columnist for The Las Vegas Sun.

The Venetian will also be the official headquarters hotel for Saturday’s Nevada presidential caucuses. And in deference to observant Jews, the Clark County Republican Committee has scheduled a special caucus on Saturday night at the Adelson Educational Campus, a Jewish school financed by the Adelsons, six hours after the rest of the state is done caucusing.

When it came time to picking sides for this year’s Republican presidential nomination, Mr. Adelson made clear to friends early on that if Mr. Gingrich decided to run, he would back him. When Mr. Gingrich’s campaign faltered, friends who supported other candidates put pressure on Mr. Adelson to stay out of the race.

Nevertheless, Mr. Adelson made an initial $5 million contribution to Winning Our Future, a pro-Gingrich super PAC, before the South Carolina primary, which proved pivotal in Mr. Gingrich’s victory there.

Fred Zeidman, a Texas energy executive active in Jewish and Republican circles, said he talked to Mr. Adelson early last week, before it became public that Mrs. Adelson, 66, had also donated $5 million to the super PAC. Mr. Adelson told his friend that he was going to give more money and seemed to signal that he was willing to keep it flowing.

“I think what he’s trying to say is, ‘Newt ain’t going away, and I’m going to make sure of it,’ ” Mr. Zeidman said.

Reporting was contributed by Adam Nagourney from Las Vegas, Ethan Bronner and Isabel Kershner from Israel, and Keith Bradsher from Hong Kong.

US sets May as tentative date for clash with Iran. Floating SEALs base for Gulf

A hurried decision not to de-commission the USS Ponce helicopter marine carrier after duty in Libya - but to refit it for deployment by May in the Persian Gulf as a floating base for commando teams - was confirmed by the US Pentagon and Navy Sunday, Dec. 29. This transportable floating base will expand the commandos' range in coastal areas, support counter-measure against mines which Iran has threatened to plant in the Strait of Hormuz in reprisal for the US-EU oil embargo. The SEALs will also take on Iran's menacing fleet of military speedboats. debkafile reports Tehran operates four different kinds of these craft in the Persian Gulf:
1. Small, fast vessels, each armed with a small missile for striking tankers and coastal oil targets around the Gulf region, such as export terminals. Earlier this month, Tehran claimed to have developed stealth cruise missiles capable of disabling aircraft carriers with a single shot.
2. Small, extra-fast boats armed with torpedoes. Iranian publications claim several such boats are capable of stealing up on US aircraft carriers and large warships from several directions without being detected and cause serious damage.
3. Floating bombs for kamikaze missions. These fast boats cannot be deflected after locking in on target, whether on sea or shore, and explode on contact.
Iran used these floating missiles piloted by suicide squads to attack oil tankers in the Gulf in November 1987. Since then, their naval tacticians have upgraded this fleet with the technology gained from the British Bladerunner 51, a model of which Iran purchased some years ago.
Since early January, the Pentagon has reported four cases harassment by Iranian military boats sailing close to American warships in the Persian Gulf.
4. Boats carrying teams of Iranian marine frogmen trained for secret suicide underwater missions: One member of the boat's three-man crew dives close to the targeted ship and attaches a magnetic bomb to its hull.
Iran has scattered hundreds of speedboats of different types around uninhabited islands off the Iranian mainland, tucking them out of sight in well-hidden inlets and bays. The US commando teams based on the Ponce platform will have the task of ferreting out and destroying this fleet.
The US Defense Department aims to get the Ponce ready for its new mission as a floating commando base with all possible speed. To save time, the US military published one no-bid contract for the engineering work, waiving normal procurement rules on the grounds that any delay presented a "national security risk."
The contract carries pointers to the timeline expected in Washington for a military confrontation to erupt between the United States and Iran, as well as the form it may take, say debkafile's military sources.
The target date for deploying the commando platform in the Persian Gulf in four or five months indicates Washington is preparing for military clashes to blow up with Iran in the late spring or early summer.
But according to debkafile's Iranian and military sources, the Iranian administration has expressed its determination to respond instantly to any diplomatic or military move or action of an offensive nature against the Islamic Republic. And so confrontation may come earlier than anticipated.
Sunday, the Iranian parliament was due to vote on a motion to cut off oil supplies to Europe in response to the EU embargo declared last week. Tehran has made it clear it has no intention of standing idle until US and European oil sanctions go fully into effect on July 1 and is fully aware that EU nations are not set up to forego 400,000 barrels of oil a day right now.
Saudi Arabia, which pledged to make up the shortfall arising from oil sanctions against Iran, will not have the missing quantities on stream until around May – at about the same time as the Ponce and its complement of SEAL commandoes are due to take up position in the Persian Gulf. Tehran may decide not to wait until then and opt for letting its speedboats loose to try and pre-empt American and European plans.

Argentina nabs Iranian-Hizballah cell, aborts third Habad attack

Argentina has captured a three-man Iranian-Hizballah cell and is hunting for the rest of the network, according to exclusive debkafile sources. Its counter-terror police were a step ahead of attacks plotted against several of the 10 Habad centers in the country, part of a worldwide joint terrorist offensive against Israeli and Jewish targets. Two strikes were thwarted earlier this month in Thailand and Azerbaijan.
The three-man cell was captured in the Argentine resort town of San Carlos de Bariloche, 1,680 kilometers from Buenos Aires, a favorite starting-point for Israeli backpackers touring Patagonia and the Andes. The town is situated on the banks of Lake Naheil Huapi, a major tourist attraction of the Rio Negro district which is famous for its beauty.

Argentina's anti-terrorist Federal Special Operations Group, known as T4, waylaid the three terrorists on tips from US and Israeli intelligence. In their possession were incriminating documents and maps.
Habad hospitality centers and Jewish institutions in the country were then shut down and given extra security guards, as was the Israeli embassy in the capital.

In 1992, the embassy was attacked by Iranian terrorists killing 29 people and injuring 242. debkafile's intelligence and counter-terror sources reveal that one of the things the investigation seeks to discover this time is whether the captured Iranian-Hizballah cell was given a safe house, guidance and aid by family members of World War II Nazi criminals who won sanctuary in Argentina.. At the time of the Israeli embassy bombing twenty years ago, the Iranian and Hizballah terrorists were suspected of working hand in glove with local pro-Nazi elements. Argentina, Germany and Israel never confirmed this.

However, San Carlos de Bariloche is known as a post-1945 Nazi haven. Two books by British writers published in 2011 even claimed that Adolf Hitler and Eva Braun had managed to escape from Berlin and reach safety in this region. This rumor was always denied.
The terror alert Buenos Aires declared this week was also communicated to Chile, Peru, Uruguay and Mexico, in case additional Iranian-Hizballah teams were heading for Israeli and Jewish targets there too.

The plot Argentina foiled after Thailand and Azerbaijan indicates that Iranian intelligence and Hizballah's special security arm are in the midst of a worldwide terror offensive against Israel and Jews. Habad centers were picked out because their doors are always open to travelers, easily identifiable and accessible. They are often packed with large numbers of Jewish and Israeli visitors. The attackers are therefore assured of a big splash in the international media – if they pull off an attack.
In November 2008, Lashkar e-Taiba, the Pakistani arm of al Qaeda, seized Habad House in Mumbai and murdered eight Israelis and American Jews before blowing the building up. The rabbi's small child was the only survivor, rescued from the captured building by his Indian nanny.
In Bangkok, a member of the Iranian-Hizballah terrorist team, on his way with at least two confederates to blow up the Habad center after holding its occupants hostage and killing them, was captured two weeks ago, thwarting the attack. Then, on Jan. 19, Azerbaijani authorities nailed an Iranian intelligence-Hizballah cell in Baku in time to save the local Habad community center in the city.

Joint Iranian-Hizballah terrorist tentacles have already reached into three continents for an all-out drive to reach their prey – so far without success, owing to the cooperation among counter-terror agencies which remain on sustained high alert.

Judge to Rule AGAINST Obama Eligibility in Georgia? Developing…

For those who have long contested the validity of Barack Obama’s eligibility to run for President of the United States, the legal hearing in Georgia earlier today was the first true and legitimate forum upon which to prove that case. The question remains though – now what?

The evidence and arguments raised by the ineligible proponents were compelling. They included the following as entered into the legal record:

-Barack Obama Sr. was not a United States citizen at the time of Barack Obama’s birth. This claim is substantiated not only be Barack Obama’s own words, but immigration documents as well.

-Barack Obama Sr’s non-citizen status would potentially disqualify Barack Obama from holding the office of U.S. President if the following definition is applied:

Read more in News

« Summary of Legal Challenge Facing Barack Obama Eligibility

DOJ Official Who Took the 5th Resigning – Issa Goes After Another… »

To be a natural born citizen, one must have 2 parents who, at the time of the birth in question, be citizens of the United States. As Obama’s father was not a citizen, the argument is that Obama, constitutionally, is ineligible to serve as President.

-The Democratic National Committee’s own election certification language never indicated the eligibility status of Barack Obama – while the RNC language did. The discrepancy has never been fully explained by those involved. (Nancy Pelosi etc.)

-Barack Obama’s Social Security number appears to be fraudulent – or if not, legal representatives for Obama have yet to explain the discrepancy:

The number used or attached to Obama in 1979, sows that Obama was born in the 1890. This shows that the number was originally assigned to someone else who was indeed born in 1890 and should never have been used by Obama.

-A document imaging expert indicated the following regarding the released image of Barack Obama’s birth certificate:

The birth certificate, posted online by Obama, is suspicious. States white lines around all the type face is caused by “unsharp mask” in photo shop. Testifies that any document showing this, is considered to be a fraud.

-Information pertaining to Mr. Sotoroe who adopted Barack Obama, has been redacted from immigration records – a highly unusual occurrence.

It should be noted that Barack Obama’s legal representatives simply ignored this morning’s hearing. Such an act is an obvious attempt to dismiss the claims of those who testified in the matter as some silly sideshow undeserving of any attention.

That tone will surely change though if Judge Michael Malihi’s impending ruling gives any legal support for the eligibility claims issued in court today. The courage to make such a ruling would be considerable, and would certainly face immediate and aggressive legal challenge by the Obama administration.

…Game On?

_______________________

UPDATE: Rumors now circulating there will be a default judgement against Barack Obama – that he will NOT be allowed on the Georgia ballot.

If true…GAME ON indeed.

Azerbaijan foils Iranian-Hizballah terror strike against Israel targets and Habad

A Hizballah cell backed by intelligence from Tehran and external Iranian terror cells in Turkey, Bulgaria, Georgia and Armenia, was captured in Baku on Jan. 19 by Azerbaijan's National Security Ministry (MNS) officers as it was about to launch a series of attacks on the Israeli embassy, Chief Rabbi Shneor Segal and Rabbi Mati Lewis at the Habad center and visiting Israel personages.

debkafile's counter-terror sources disclose that two of the Hizballah cell members live permanently in Baku. The third, who resides in Tehran, was recruited by Iranian intelligence to lead the Hizballah operation, which was the first joint Iranian-Hizballah terrorist attack ever discovered.
In its sights too were the former Israeli chief of staff Gaby Ashkenazi who was due to visit to the Azerbaijan capital and several local high officials who work with the United States and Israel. They were suspected by Tehran of helping the US and Israel set up an attack on Iran from Azerbaijan.

The two Habad figures are Israeli-born heads of the Jewish community in Baku and the Ohr Avner Chabad Jewish Day School,
The cell was rounded up just weeks after a Hizballah terrorist strike against the local Habad center was preempted in Bangkok, thanks to Thai-Israeli counter-terror cooperation. There, Hizballah had intended to take hostages and blow up the Habad headquarters, aping al Qaeda's 2009 outrage in Mumbai.
Israel's Chief of Staff, Lt. Gen. Benny Gantz had this to say Tuesday, Jan. 24: "We stand guard over the nation's security in near and distant arenas. Our borders appear calm. But at the very time that our enemies in the north avoid striking us for fear of painful punishment, Hizballah and other hostile elements are making every effort to bring off savage terrorist attacks against Israelis and the Jewish people in far places."

The general added: "I advise them not to test our resolve."
Gantz was referring to the constant Hizballah efforts to avenge the assassination of Imad Mughniyeh, the terrorist group's special security chief, on Feb. 12, 2008 in Damascus, and Iran's threats following the death of the Iranian nuclear scientist Prof. Mostafa Ahamdi-Roshan on Jan. 11 in Tehran.

Hizballah and Iran both attributed the attacks to Israel.
Our sources can identify the Hizballah terror cell's Baku chief as an Iranian Azeri by the name of Balaqardash Dadashov and the two local operatives as Rasim Aliyev and Ali Huseynov. Found in their possession were guns and explosives said to have been delivered to them by smugglers from Iran, although debkafile's counter-terror sources say they entered Azerbaijan from Armenia.
The operation leader Balaqardash arrived from Tehran with a file full of photos of the targeted Israeli figures, plans of the buildings to be attacked, and maps as well as $9,300 to cover the costs of the preparations. Each of the terrorists was promised a fee of $150,000.

America and the Arab Spring

A year ago this week, on January 25, 2011, the ground began to crumble under then-Egyptian president Hosni Mubarak's feet. One year later, Mubarak and his sons are in prison, and standing trial.

This week, the final vote tally from Egypt's parliamentary elections was published. The Islamist parties have won 72 percent of the seats in the lower house.

The photogenic, Western-looking youth from Tahrir Square the Western media were thrilled to dub the Facebook revolutionaries were disgraced at the polls and exposed as an insignificant social and political force.

As for the military junta, it has made its peace with the Muslim Brotherhood. The generals and the jihadists are negotiating a power-sharing agreement. According to details of the agreement that have made their way to the media, the generals will remain the West's go-to guys for foreign affairs. The Muslim Brotherhood (and its fellow jihadists in the Salafist al-Nour party) will control Egypt's internal affairs.

This is bad news for women and for non-Muslims. Egypt's Coptic Christians have been under continuous attack by Muslim Brotherhood and Salafist supporters since Mubarak was deposed. Their churches, homes and businesses have been burned, looted and destroyed. Their wives and daughters have been raped. The military massacred them when they dared to protest their persecution.

As for women, their main claim to fame since Mubarak's overthrow has been their sexual victimization at the hands of soldiers who stripped female protesters and performed "virginity tests" on them. Out of nearly five hundred seats in parliament, only 10 will be filled by women.

The Western media are centering their attention on what the next Egyptian constitution will look like and whether it will guarantee rights for women and minorities. What they fail to recognize is that the Islamic fundamentalists now in charge of Egypt don't need a constitution to implement their tyranny. All they require is what they already have - a public awareness of their political power and their partnership with the military.

The same literalist approach that has prevented Western observers from reading the writing on the walls in terms of the Islamists' domestic empowerment has blinded them to the impact of Egypt's political transformation on the country's foreign policy posture. US officials forcefully proclaim that they will not abide by an Egyptian move to formally abrogate its peace treaty with Israel. What they fail to recognize is that whether or not the treaty is formally abrogated is irrelevant. The situation on the ground in which the new regime allows Sinai to be used as a launching ground for attacks against Israel, and as a highway for weapons and terror personnel to flow freely into Gaza, are clear signs that the peace with Israel is already dead - treaty or no treaty.

EGYPT'S TRANSFORMATION is not an isolated event. The disgraced former Yemeni president Ali Abdullah Saleh arrived in the US this week. Yemen is supposed to elect his successor next month. The deteriorating security situation in that strategically vital land which borders the Arabian and Red Seas has decreased the likelihood that the election will take place as planned.

Yemen is falling apart at the seams. Al-Qaida forces have been advancing in the south. Last spring they took over Zinjibar, the capital of Abyan province. In recent weeks they captured Radda, a city 160 km. south of the capital of Sana.

Radda's capture underscored American fears that the political upheaval in Yemen will provide al- Qaida with a foothold near shipping routes through the Red Sea and so enable the group to spread its influence to neighboring Saudi Arabia.

Al-Qaida forces were also prominent in the NATO-backed Libyan opposition forces that with NATO's help overthrew Muammar Gaddafi in October. Although the situation on the ground is far from clear, it appears that radical Islamic political forces are intimidating their way into power in post-Gaddafi Libya.

Take for instance last weekend's riots in Benghazi. On Saturday protesters laid siege to the National Transitional Council offices in the city while Mustafa Abdul-Jalil, the head of the NTC, hid inside. In an attempt to quell the protesters' anger, Jalil fired six secular members of the NTC. He then appointed a council of religious leaders to investigate corruption charges and identify people with links to the Gaddafi regime.

In Bahrain, the Iranian-supported Shi'ite majority continues to mount political protests against the Sunni monarchy. Security forces killed two young Shi'ite protesters over the past week and a half, and opened fired at Shi'ites who sought to hold a protest march after attending the funeral of one of them.

As supporters of Bahrain's Shi'ites have maintained since the unrest spread to the kingdom last year, Bahrain's Shi'ites are not Iranian proxies. But then, until the US pulled its troops out of Iraq last month, neither were Iraq's Shi'ites. What happened immediately after the US pullout is another story completely.

Extolling Iraq's swift deterioration into an Iranian satrapy, last Wednesday, Brig.-Gen. Qassem Suleimani, the commander of Iran's Revolutionary Guards Corps Jerusalem Brigade, bragged, "In reality, in south Lebanon and Iraq, the people are under the effect of the Islamic Republic's way of practice and thinking."

While Suleimani probably exaggerated the situation, there is no doubt that Iran's increased influence in Iraq is being felt around the region. Iraq has come to the aid of Iran's Syrian client Bashar Assad who is now embroiled in a civil war. The rise of Iran in Iraq holds dire implications for the Hashemite regime in Jordan which is currently hanging on by a thread, challenged from within and without by the rising force of the Muslim Brotherhood.

Much has been written since the fall of Mubarak about the impact on Israel of the misnamed Arab Spring. Events like September's mob assault on Israel's embassy in Cairo and the murderous cross-border attack on motorists traveling on the road to Eilat by terrorists operating out of Sinai give force to the assessment that Israel is more imperiled than ever by the revolutionary events engulfing the region.

But the truth is that while on balance Israel's regional posture has taken a hit, particularly from the overthrow of Mubarak and the rise of the Muslim Brotherhood and the Salafists in Egypt, Israel is not the primary loser in the so-called Arab Spring.

Israel never had many assets in the Arab world to begin with. The Western-aligned autocracies were not Israel's allies. To the extent the likes of Mubarak and others have cooperated with Israel on various issues over the years, their cooperation was due not to any sense of comity with Jewish state. They worked with Israel because they believed it served their interests to do so. And at the same time Mubarak reined in the Muslim Brotherhood and Hamas because they threatened him, he waged political war against Israel on every international stage and allowed anti-Semitic poison to be broadcast daily on his regime-controlled television stations.

Since Israel's stake in the Arab power game has always been limited, its losses as a consequence of the fall of anti-Israel secular dictatorships and their replacement by anti-Israel Islamist regimes have been marginal. The US, on the other hand, has seen its interests massively harmed. Indeed, the US is the greatest loser of the pan-Arab revolutions.

TO UNDERSTAND the depth and breadth of America's losses, consider that on January 25, 2011, most Arab states were US allies to a greater or lesser degree. Mubarak was a strategic ally. Saleh was willing to collaborate with the US in combating al- Qaida and other jihadist forces in his country.

Gaddafi was a neutered former enemy who had posed no threat to the US since 2004. Iraq was a protectorate. Jordan and Morocco were stable US clients.

One year later, the elements of the US's alliance structure have either been destroyed or seriously weakened. US allies like Saudi Arabia, which have yet to be seriously threatened by the revolutionary violence, no longer trust the US. As the recently revealed nuclear cooperation between the Saudis and the Chinese makes clear, the Saudis are looking to other global powers to replace the US as their superpower protector.

Perhaps the most amazing aspect to the US's spectacular loss of influence and power in the Arab world is that most of its strategic collapse has been due to its own actions. In Egypt and Libya the US intervened prominently to bring down a US ally and a dictator who constituted no threat to its interests. Indeed, it went to war to bring Gaddafi down.

Moreover, the US acted to bring about their fall at the same time it knew that they would be replaced by forces inimical to American national security interests. In Egypt, it was clear that the Muslim Brotherhood would emerge as the strongest political force in the country. In Libya, it was clear at the outset of the NATO campaign against Gaddafi that al-Qaida was prominently represented in the anti-regime coalition. And just as the Islamists won the Egyptian election, shortly after Gaddafi was overthrown, al-Qaida forces raised their flag over Benghazi's courthouse.

US actions from Yemen to Bahrain and beyond have followed a similar pattern.

In sharp contrast to his active interventionism against US-allied regimes, President Barack Obama has prominently refused to intervene in Syria, where the fate of a US foe hangs in the balance.

Obama has sat back as Turkey has fashioned a Syrian opposition dominated by the Muslim Brotherhood, and the Arab League has intervened in a manner that increases the prospect that Syria will descend into chaos in the event that the Assad regime is overthrown.

Obama continues to speak grandly about his vision for the Middle East and his dedication to America's regional allies. And his supporters in the media continue to applaud his great success in foreign policy. But outside of their echo chamber, he and the country he leads are looked upon with increasing contempt and disgust throughout the Arab world.

Obama's behavior since last January 25 has made clear to US friend and foe alike that under Obama, the US is more likely to attack you if you display weakness towards it than if you adopt a confrontational posture against it. As Assad survives to kill another day; as Iran expands its spheres of influence and gallops towards the nuclear bomb; as al- Qaida and its allies rise from the Gulf of Aden to the Suez Canal; and as Mubarak continues to be wheeled into the courtroom on a stretcher, the US's rapid fall from regional power is everywhere in evidence.

Originally published in The Jerusalem Post.

Posted on January 24, 2012 at 2:42 PM

© 2012 Caroline Glick

Barak slams EU oil embargo's delay to July. Israel's hand ever near trigger

military option

Israel's Defense Minister Ehud Barak

The new round of sanctions will not stop Iran's pursuit of a nuclear weapon, said Israel's Defense Minister Ehud Barak in a radio interview Tuesday, Jan. 24, stressing that Israel's hand was always near the trigger. His comments aimed at cooling the optimistic notes emanating from Washington, Europe and some Israeli circles Monday after the European Union foreign ministers approved an oil embargo against Iran from July 1 and froze its central bank's assets. The US then applied sanctions to Iran's third biggest bank, Bank Tejerat.
Barak said that because Iran had not stopped developing a nuclear weapon Israel had not removed any options from the table. We say this "very seriously," he stressed.
Monday, Prime Minister Binyamin Netanyahu greeted the European sanctions by saying that they were positive but would not stop or interrupt Iran's drive for a nuclear weapon.

The defense minister agreed that the Europeans had started out in the right direction. But he saw no reason to hold off until July before the oil embargo went into effect or to delay a boycott on transactions by Iran's central bank. Oil shortfalls can be made up within weeks, Barak pointed out, from Saudi Arabia's huge reserves, from the oil produced by Libya and from expanded Iraqi production.

debkafile's sources report that, seen from Israel, Obama administration and the European Union are holding sanctions off until summer to give US, European and Iranian back-channel emissaries using Turkey's good offices enough space to get nuclear negotiations resumed.
Iran is being offered to chance to repeat the old tricks, say Israeli sources, after repeatedly and successfully pulling them off in the last seven years, of sitting the world powers down for talks while carrying on blithely with plans for the first Shiite Muslim nuke. The extra six months will be a useful grace time for Iran to secrete its nuclear facilities in fortified underground bunkers.

According to the same old scenario, when July comes around, the US and European powers will seek to postpone sanctions so as not to jeopardize the talks with Iran.

Barak's words about the sanctions not being tough enough and "too far off" reflected his government's belief that the oil embargo cannot gain enough momentum by July to seriously upset the Iranian economy; another six months would be needed, so taking the new sanctions drive up to early 2013.
The Netanyahu government was also disappointed by President Barack Obama imposing sanctions on Iran's third largest bank – not its central bank. This left Tehran with enough leeway to activate bilateral financial mechanisms for dodging the oil embargo and financial penalties in conjunction with the governments which have opted out of the US-EU sanctions and continue to trade with Iran.

Sunday, debkafile reported exclusively that Tehran, New Delhi, Moscow, Beijing and Ankara were already transacting oil deals through those mechanisms.
In another part of his interview, the Israeli defense minister said Iran had climbed down over its first threat to shut the Strait of Hormuz to US aircraft carriers. Heeding the US pledge to use its might to guarantee free passage through the strait, Tehran let the USS Abraham Lincoln escorted by British and French warships pass through Jan. 22 without incident.

Barak was convinced the Iranians would not make good on their current threat to close the strait if its oil transactions were embargoed. And if they tried, it would not be for long because American and European fleets would reopen to Hormuz so that one-fifth of the oil shipped to world markets would leave for its destinations.

In the defense minister's view, therefore, Iran is in no position to hold the world's oil markets to ransom.

Buffett’s Railroad Among Winners From Keystone Denial

Warren Buffett’s Burlington Northern Santa Fe LLC is among U.S. and Canadian railroads that stand to benefit from the Obama administration’s decision to reject TransCanada Corp. (TRP)’s Keystone XL oil pipeline permit.

With modest expansion, railroads can handle all new oil produced in western Canada through 2030, according to an analysis of the Keystone proposal by the U.S. State Department.

“Whatever people bring to us, we’re ready to haul,” Krista York-Wooley, a spokeswoman for Burlington Northern, a unit of Buffett’s Omaha, Nebraska-based Berkshire Hathaway Inc. (BRK/A), said in an interview. If Keystone XL “doesn’t happen, we’re here to haul.”

The State Department denied TransCanada a permit on Jan. 18, saying there was not enough time to study the proposal by Feb. 21, a deadline Congress imposed on President Barack Obama. Calgary-based TransCanada has said it intends to re-apply with a route that avoids an environmentally sensitive region of Nebraska, something the Obama administration encouraged.

The rail option, though costlier, would lessen the environmental impact, such as a loss of wetlands and agricultural productivity, compared to the pipeline, according to the State Department analysis. Greenhouse gas emmissions, however, would be worse.

If completed, Keystone XL would deliver 700,000 barrels a day of crude from Alberta’s oil sands to refineries along the Gulf of Mexico, crossing 1,661 miles (2,673-kilometers) over Montana, South Dakota, Nebraska, Kansas, Oklahoma and Texas.

Tanker Car Bottleneck

Investors such as John Stephenson, who helps manage $2.7 billion for First Asset Management Inc. in Toronto said he anticipated the project would move forward next year. Pipeline shipping costs remain lower than rail, and a lack of readily available tanker cars may create a bottleneck.

The availability of tank cars may create a temporary “hiccup” in transport capacity, according to Tony Hatch, an independent railroad analyst in New York. Rail cars are “a pretty hot commodity,” as a result of demand from oil producers in North Dakota, he said.

Rail car production is already at a three-year high as manufacturers such as Greenbrier Cos Inc. (GBX) and American Railcar Industries Inc. (ARII) expand to meet demand for sand used in oil and gas exploration, according to Steve Barger, an analyst at Keybanc Capital Markets Inc. in Cleveland, citing Railway Supply Institute statistics.

‘Long-Term Solution’

Rail-car suppliers can add capacity, Hatch said.

“Railroads are not just a stopgap while we wait for a pipeline,” Hatch said in an interview. “They are potentially part of the long-term solution.”

Railroads are being used in North Dakota (STOND1), where oil producers have spurred a fivefold increase in output by using intensive drilling practices in the Bakken, a geologic formation that stretches from southern Alberta to the northern U.S. Great Plains. During 2011, rail capacity in the region tripled to almost 300,000 barrels a day as higher production exceeded what pipelines handle, according to the State Department report on Keystone XL.

Shipping oil using tank cars on rail costs about $3 more a barrel than pipeline transport, using prices in North Dakota, a differential “unlikely” to slow the development of oil sands crude if no pipeline is build, the State Department said. The gap is shrinking as larger storage terminals are built, the agency said.

‘Ready to Haul’

Burlington Northern carries about 25 percent of the oil from the Bakken, said Krista York-Wooley, the railroad spokeswoman. The company can carry higher volumes from North Dakota or Alberta, she said.

Canadian Pacific Railway Ltd. (CP)’s shipments from North Dakota climbed to more than 13,000 carloads last year from about 500 in 2009, Ed Greenberg, a spokesman, said in an e-mail. The Calgary- based company has a similar plan in western Canada.

“With an extensive rail network and proven expertise in moving energy, CP offers a flexible option for transporting crude oil and other energy-related products to and from key locations in North America,” Vice President Tracy Robinson said in an e-mail. “Rail is scalable, allowing CP to effectively keep pace with the shipping needs of producers.”

Oil Sands

Canadian National Railway Co. (CNR), the biggest Canadian railroad based on annual sales, considers Alberta’s oil sands a chance to expand its business, according to company filings.

“CN continues to work closely with customers in Alberta to capitalize on oil-and-gas related opportunities,” the Calgary- based company said. “CN sees potential for the outbound movement of oil sands products such as bitumen and synthetic crude to refineries in the U.S. Gulf Coast region, or eventually through West Coast ports to offshore markets.”

Imperial Oil Ltd. (IMO), a Calgary-based unit of Exxon Mobil Corp. (XOM), will consider “various transportation options” for oil sands exports, according Pius Rohlheiser, a spokesman. Cenovus Energy Inc. (CVE) uses railroads to bring in dilutants needed to mix with heavy crude before it can be shipped by pipeline, and to export oil from the Bakken formation in Canada, according to Jessica Wilkinson, a spokeswoman.

Environmentalists’ Opposition

Environmental groups such as the Natural Resources Defense Council have campaigned to stop Keystone XL because leaks could threaten drinking water supplies and processing Alberta crude produces more greenhouse gas emissions than conventional oil.

Railroads too present environmental issues. Moving crude on trains produces more global warming gases than a pipeline, the State Department said.

Union Pacific Corp. (UNP), based in Omaha, Nebraska, anticipated an increase in rail traffic with or without Keystone, Chief Executive Officer Jim Young said in an interview.

“We would have been involved with moving the pipe and a lot of the construction business in building it,” Young said. “On the other hand, if you don’t build any pipeline capacity, you’re going to be moving a lot of crude by train.”

It will take five to eight years before oil sands production outstrips existing export capacity, the State Department said.

Tank car utilization is at “record levels” fueled by demand from oil and natural gas producers, according to Doug Reece, director of marketing for Oakville, Ontario-based Procor Ltd., a rail-car leasing company. The soonest new cars will be available is 2013, he said.

“In western Canada, shippers and third parties are investing in the necessary infrastructure and we see strong growth ahead,” Reece said in an e-mail. “We are having regular dialogue with customers about their potential needs, as collaboration and fleet planning have become critical.”

Rail allows shippers to reach different markets and capture better prices at refineries, said John Mims, a transportation analyst at Friedman Billings Ramsey & Co. in Arlington, Virginia.

“It’s a good secular growth story for the railroads,” Mims said in an interview.“They’re playing an increasing role, especially as you see this push back from a regulatory standpoint on the pipelines.”

To contact the reporter on this story: Jim Efstathiou Jr. in New York at jefstathiou@bloomberg.net

To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net

the $10 trillion global black market is now the world’s fastest growing economy,

A recent article at Foreign Policy noted that the $10 trillion global black market is now the world’s fastest growing economy, and that in 2009, the OECD concluded that half the world’s workers (almost 1.8 billion people) were employed in the shadow economy.

By 2020, the OECD predicts the shadow economy will employ two-thirds of the world’s workers. This new economy even has a name: ‘System D’.

According to an IMF economic study, black market, also called the shadow, underground, informal, or parallel economy, "includes not only illegal activities but also unreported income from the production of legal goods and services, either from monetary or barter transactions. Hence, the shadow economy comprises all economic activities that would generally be taxable were they reported to the tax authorities."

The IMF study also outlined the the potentially serious consequences of worlds fastest growing economy:

• The growth of the shadow economy can set off a destructive cycle. Transactions in the shadow economy escape taxation, thus keeping tax revenues lower than they otherwise would be. If the tax base or tax compliance is eroded, governments may respond by raising tax rates—encouraging a further flight into the shadow economy that further worsens the budget constraints on the public sector. (On the other hand, at least two-thirds of the income earned in the shadow economy is immediately spent on the official economy, resulting in a considerable positive stimulus effect on the official economy.)
• A prospering shadow economy makes official statistics (on unemployment, official labor force, income, consumption) unreliable. Policies and programs that are framed on the basis of unreliable statistics may be inappropriate and self-defeating.
• A growing shadow economy may provide strong incentives to attract domestic and foreign workers away from the official economy.

Based on an estimate by BusinessWeek, “[G]iven US GDP of $14.26 trillion, the world’s largest, that could still be as much as $1.2 trillion in taxable income that slips through Uncle Sam’s fingers each year."

In fact, shadow economy is part of the contributory factors to the current Euro crisis in the context of reduced government tax revenue and driving up consumer price levels. The IMF study showed in the 21 OECD countries in 1999–2001, Greece and Italy had the largest shadow economies, at 30% and 27% of GDP, respectively. In the middle group were the Scandinavian countries, and at the lower end were the United States and Austria, at 10% of GDP, and Switzerland, at 9%.

More importantly, the rise of System D highlights the inadequacy of global governments policies, processes, red tapes, and bureaucracies. This infographic lays out everything about the black market, how it affects our economy and our culture.

Israeli family doctors fear Internet medicine is causing a dramatic change for the worse

A range of medical services are now available at the click of a mouse, perhaps changing the role of the family physician forever.

By Dan Even

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Turning to journalist Gideon Reicher in a new commercial video clip by the Clalit health maintenance organization, a cartoon character smiles and says, "I didn't rush and I didn't run around." The clip, starring Hamudi, one of the HMO's mascots, presents new digital services offered by Clalit to its insurees - making it possible to use the Internet to renew prescriptions, and to request referrals to specialists, a variety of permits, consultation with experts and personally adapted medical advice. The HMO plans to expand the service so that, in half a year's time, insurees will be able to see their entire personal medical file online, including hospitalization in Clalit hospitals.

The online service has been in operation for more than half a year, but only now, after the commercial, are doctors in the field complaining that it is causing a dramatic change for the worse in doctor-patient relations in the country's largest HMO, which insures 3.9 million people. The Israel Association of Family Physicians has been voicing serious concerns in recent weeks. The family doctors are afraid the service is downgrading their professional status.

"Notice how they're marketing us," a senior family doctor warned recently in correspondence among association members. "You no longer have to go to the doctor - the clerk in the branch will do what you ask via the Internet. Do you feel comfortable with such a method of advertising doctors/clerks? What has happened to the relationship between a doctor and his patient, when we're being marketed this way?"

Another doctor said, "It's true that the service makes it possible to ask patients to come [to the clinic], but isn't it a waste of our time? Isn't it better for us to invest it in treating patients? In consultations? Isn't it a shame to have all the unnecessary 'arguments' with patients that Hamudi promised them?"

A third protested the separation between staff in clinics and those engaged in administration, computerization and marketing in the HMO. "Has any of them recently visited a clinic and seen the overcrowding? How can you market 21st-century medicine to patients when the workload doesn't even make 1980s medicine possible? Do they want loads of customers? Make the experience of visiting a clinic more tolerable."

One of the doctors even called on the others to consider refusing to cooperate with the step, "to refuse to work contrary to medical considerations and our conscience," as he put it. A family doctor summed up by saying that "this campaign and others continue to destroy the image of the expert family doctor, which was created with great effort - the doctor who specialized for years and is a professional in his field and provides good medical care for his patients - and to advance the image of the 'general practitioner,' who did not specialize in family medicine, and to whom you go only to receive referrals, that's his job, isn't it? It's really very sad."

The Association of Family Physicians recently began a reexamination of the service. At a recent conference, they presented a position paper explaining the functions of the family doctor. The paper, which was written by the association's secretary, Dr. Michal Shani, says that "there is room for online work alongside a family doctor, as well as for the use of various technologies," but the association believes there should be limitations.

The association's chairman, Prof. Shlomo Vinker, says that "Internet medicine is good when it's done in moderation. What makes me uncomfortable is the services that are unsuited to the Internet - for example, if someone asks the doctor to recommend him for a fitness club or for advice about heart palpitations."

In certain cases the association agrees that Internet medicine can be promoted - for example, when a patient whom the doctor knows well asks for an extension of a prescription, or a patient who received a two-day sick leave needs another day, there's no reason not to do this online rather than making these patients wait in line at the clinic.

'Medicine has to change'

The Association of Family Physicians wants to enable doctors in the field to decide for themselves whether or not to join the online service. "There are doctors who want to see the patient for everything and we have to respect that," says Vinker. "If that doesn't suit the patient, he can almost always transfer to another doctor."

The Clalit doctors committee claims to have forms that enable doctors to remove themselves from Internet service, and that several family doctors have asked recently to be removed from the new online service. But the Clalit administration explains that online medicine is essential and that there are even plans to expand it in the near future.

"There are many changes in the technological age, with exposure to the Internet and to social networks, so there's no choice - the change has to come to medicine as well," says Clalit's deputy director and director of its community health division, Dr. Orit Jacobson. "It's like in gynecology - until three or four years ago not every gynecologist had a sonogram machine, and today the device is essential in every gynecology clinic. So if there were doctors who had difficulty using it, we taught them. In online medicine, too, if there are doctors who find the change difficult, we'll support them."

Jacobson says, "We have to suit the service to a new generation that wants quick answers and quick service. Medicine is no different from other services, such as those of an electric company or a bank. In medicine we're more cautious, but it's important to make information available to the patient as much as possible. Why can you get forms on the Internet today from any government institution, and only in medicine will people have to continue visiting the clinic and waiting in line? In such a situation the patient will also develop greater responsibility for his health."

The Internet services at Clalit have undergone several upheavals. "At the moment we're offering only specific services, such as renewing a prescription or requesting an urgent house call," says Jacobson. "With these services, too, the doctor has the option of asking the patient to come to the clinic. For example, in order to renew a prescription, the doctor has to look at the patient's medical file and if he sees anything out of the ordinary in a laboratory test, or if the patient hasn't visited him for a long time, there's no automatic renewal. But the doctor has an obligation to say, 'I'm not renewing the prescription, come for a checkup.' We fully support a doctor who decides for justified reasons not to respond to an insuree's request."

Increasing workload

In the wake of opposition, the HMO administration has decided at this point not to include sick-leave requests in the services offered via the Internet. Jacobson says, "This is a process that we plan to expand gradually, and we definitely intend to offer sick-leave permits in the future."

An additional expansion is planned in half a year, when Clalit insurees will be able to see their computerized medical files. According to Jacobson, "We have a large number of insurees who have been under our care for 50 and 60 years. It's not possible that there's no mistake in some file. We prefer to go with an open process, to take responsibility and to ask patients to peruse the files and to check whether there's a mistaken diagnosis. It's a step that's being taken in the interest of transparency."

It's hard to avoid mentioning the financial aspect of the move. The Internet service is likely to lead to a significant increase in online requests to Clalit doctors, which will increase their workload. The doctors are asking for suitable compensation. "A doctor can receive another 30 requests at the end of a workday from various places - via the Internet, phone calls and people who have 'popped in' to the clinic," says Vinker. "The question is whether he has to stay after hours."

As opposed to rival HMO Maccabi, which relies on independent doctors who receive payment according to the number of patients coming to the clinic, in Clalit most doctors are salaried and receive payment according to the number of patients listed for each doctor. That is why a change in the system should not affect their paycheck. "In the context of the salary agreement with the doctors, whose implementation begins in February," says Jacobson, "additional time is allotted after office hours to respond to Internet and other requests."

Dr. Baruch Itzhak, head of a committee of community health doctors in Clalit, says the committee is working in coordination with the Association of Family Physicians regarding the contents of online medicine. "We support Internet medicine, when it's done in the right dosage and with the proper structure," he says. "It must be restricted to matters that don't require physical contact with the patient, without undermining privacy and the Patients' Rights Law, and there is agreement between us and the Israel Medical Association that the use of online medicine is up to the doctor's judgment."

The truly dismal state of the union

There is one person — one American among the 300 million of us — who is not to blame for the state of the union. Everyone else, each of you, in some small or large way, bears some share of the blame, but not this guy. Not one little bit.

This guy is Barack Obama. He is not the least bit to blame for the dismal state of the U.S. economy. George W. Bush is, for sure, and that evil Dick Cheney, oh, no doubt. House Speaker John A. Boehner — evil, too — is, of course, to blame. But guess what? So is Senate Majority Leader Harry Reid, House Democratic Leader Nancy Pelosi, and every Democrat in the House and Senate.

Now, President Truman made it very clear: The buck stops with him. No passing the buck for that guy. But Mr. Obama blames everyone but himself. Mr. Bush, he says, left the nation in a ditch, a deep ditch, and he's been digging out since he took office. And Congress? Those guys are just plain awful, he says. So mean. Wah, they won't do anything I want done! Mr. Obama feels so sure about it that he's basing his re-election campaign on bashing Capitol Hill.

But with the president delivering his State of the Union speech to Congress Tuesday night, let's pause here to take as hard look at the real state of America, by the numbers, using only cold, hard facts.

The unemployment rate when Mr. Obama was elected was 6.8 percent; today it is 8.5 percent — at least that's the official number. In reality, the Financial Times writes, "if the same number of people were seeking work today as in 2007, the jobless rate would be 11 percent."

In addition, there are now fewer payroll jobs in America than there were in 2000 — 12 years ago — and now, 40 percent of those jobs are considered "low paying," up 10 percent from when President Reagan took office. The number of self-employed has dropped 2 million to 14.5 million in just six years.

Regular gasoline per gallon cost $1.68 in January 2009. Today, it's $3.39 — that's a 102 percent increase in just three years. (By the way, if you're keeping score at home, gas was $1.40 a gallon when George W. Bush took office in 2001, $1.68 when he left office — a 20 percent increase.)

Electricity bills have also skyrocketed, with households now paying a record $1,420 annually on average, up some $300.

Some 48 percent of all Americans — 146.4 million — are considered by the Census Bureau either as "low-income" or living in poverty, up 4 million from when Mr. Obama took office; 57 percent of all children in America now live in such homes.

Since December 2008, a month before Mr. Obama took office, food-stamp use has increased 46 percent. Total spending has more than doubled in just four years to a record high of $75 billion. In 2011, more than 46 million people — about one in seven Americans — got food stamps. That's 14 million more than when Mr. Obama took office.

Median household income has dropped nearly 7 percent in the last six years, taking inflation into account. What's more, nearly 20 percent of males age 25 to 34 now live with their parents.

Low- and middle-income Americans 65 and older now hold more than $10,000 in credit card debt, up 26 percent since 2005. The average age of the American car is 10 years; in 1990, it was 6.5 years old (by the way, in 1985, Americans bought 11 million cars; in 2009, less than half that, 5.4 million).

On the macro side, America's annual budget has jumped to $3.8 trillion — and yet the United States brings in only about $2.1 trillion in revenue. The U.S. trade deficit for 2011 was $558 billion. America's total public debt stands at $15.23 trillion; in January 2009, the debt was $10.62 trillion. Mr. Obama is on pace to borrow $6.2 trillion in just one term — more debt than was amassed by all presidents from Washington through Bill Clinton combined. The debt is rising by $4.2 billion every day — $175 million per hour, nearly $3 million per minute.

So, America, that is the State of Your Union. But remember, Mr. Obama had not one thing to do with it. So don't blame him when you go to the polls. Blame everyone else, especially yourself.

• Joseph Curl covered the White House and politics for a decade for The Washington Times. He can be reached at jcurl@washingtontimes.com.