RUTHFULLY YOURS

I am not an economist, so the following observations should be considered in the context that they represent only the thoughts of a casual observer. But I have read, as have most of you, Milton Friedman’s explanation of inflation, that it “is always and everywhere a result of excess money growth.” The monetary base has expanded exponentially – from $949 billion in September 2008 to $3.9 trillion in March 2014, according to data from the St. Louis Fed. Can inflation be far behind?

It has long seemed commonsensical when looking at markets to take note of extremes, especially when one’s analytical capabilities are as limited as mine. The extraordinary high prices people were paying for technology stocks in the late 1990s was such an example, as was the complacency that descended on equity markets in late 2006 when the first signs of the mortgage problems were beginning to sprout.

Today, when we look at markets, the extremes appear to be in interest rates, where an investor gets paid a measly 2.55% for holding Ten-year Treasuries, versus almost 4% at the height of the financial crisis in 2008 and 7.8% twenty years ago; in the extraordinary increases in the Fed’s balance sheet over the past five years from under a trillion dollars to $4.2 trillion today, and in the $2.5 trillion of idle reserves sitting on bank balance sheets, up from just over $800 billion just before the credit crisis.

These are extraordinary changes, the consequences of which have yet to be felt. (And, of course, we will only know their full effects in hindsight.) But they are worth considering. Treasury rates are lower than they have been at any point during my 47 years on Wall Street, other than last summer when they were 100 basis points lower. According to Sidney Homer’s A History of Interest Rates, at no point did Treasury rates in the U.S. get as low as they did last July when the rate on the Ten-year momentarily dipped under 1.4%. Counter intuitively, rates have fallen as Treasury borrowings have increased. Between 2006 and 2013, combined Federal budget deficits have amounted to $6.7 trillion. One reason rates have stayed low – probably the principal reason – is that the Federal Reserve has financed over $3 trillion of those borrowings.

Aggressive central banks and low interest rates are not just U.S. problems. Spanish and Italian bonds are now priced to yield 2.9% and 3.0% respectively, making U.S. Treasuries look relatively cheap. Bonds have been in a bull market for over thirty years. Perhaps that bull run ended last summer. I don’t know. The only conclusion one can safely conclude is that there is an unhealthy level of complacency in bond land, with expectations favoring deflation, not inflation.

I will confess to a little despair over the relatively mild reception that has greeted the evidence, now conclusive and irrefutable, that the Internal Revenue Service, under the direction of senior leaders affiliated with the Democratic party, was used as a political weapon from at least 2010 through the 2012 election. It may be that the American public simply does not care about the issue; it is always difficult, if not impossible, to predict what issues will seize the electorate’s attention, or to understand why after the fact. It may be that the public does not understand the issue, in which case a brief explanation of the known facts may be of some use.

Here is what happened. In the run-up to the 2012 election, senior IRS executives including Lois Lerner, then the head of the IRS branch that oversees the activities of tax-exempt nonprofit groups, began singling out conservative-leaning organizations for extra attention, invasive investigations, and legal harassment. The IRS did not target groups that they believed might be violating the rules governing tax-exempt organizations; rather, as e-mails from the agency document, the IRS targeted these conservative groups categorically, regardless of whether there was any evidence that they were not in compliance with the relevant regulations. Simply having the words “tea party,” “patriot,” or “9/12” (a reference to one of Glenn Beck’s many channels of activism) in the name was enough. Also targeted were groups dedicated to issues such as taxes, spending, debt, and, perhaps most worrisome, those that were simply “critical of the how the country is being run.” Organizations also were targeted based on the identity of their donors. Their applications were delayed, their managements harassed, and the IRS demanded that they answer wildly inappropriate questions, such as the content of their prayers. When an internal review threatened to expose the fact that, in the words of the IRS’s inspector general, the agency was “using inappropriate criteria to identify organizations applying for tax-exempt status,” Ms. Lerner staged an event at a tax-law conference at which she used a planted questioner to preemptively disclose the issue on her own terms, and the agency began claiming that the tea-party targeting, while regrettable, was the work of a few misguided agents at a satellite office in Cincinnati. In fact, the direction came from Washington and was, in the words of the agency’s own e-mails, “coordinated with” a senior manager there, Rob Choi, director of rulings and agreements. This began at the behest of Democratic officeholders, including Senator Carl Levin of Michigan, who requested that the IRS disclose to him information about tea-party groups that it would have been illegal for the IRS to disclose. It subsequently emerged that IRS officials had intentionally misled members of Congress and investigators about the matter.

Haggling over the price
This week, Iran could have nuked Tel Aviv without Israelis noticing. A bigger bombshell was the sentencing of former Prime Minister Ehud Olmert — and a long list of co-defendants — convicted of taking bribes and breach of trust.
The reason that this caused such a stir was not merely due to the fact that a former prime minister received a stiff sentence for his part in the “worst corruption case in the country’s history.” By now, Israelis have grown accustomed to politicians going to jail.
The phenomenon is considered both a mark of Cain and a source of pride. On one hand, there is shame in leaders whose hubris and greed outweigh their civic responsibilities. On the other, there is something uplifting about an egalitarian society with a legal system that does not treat members of the upper echelons differently from average citizens.
Indeed, it is the latter that has caused Arabs throughout the Middle East, regardless of their level of hostility to Jews and the State of Israel, to envy Israeli democracy.
No, the shock elicited by the sentence stemmed from the disbelief that Olmert would actually serve time. For decades, a cloud of suspicion — culminating in a number of police investigations and trials — has been hanging over his head. Yet the seasoned statesman, who has been a member of Knesset, a minister, the mayor of Jerusalem and the prime minister, has always been acquitted.
This, rightly, has been his claim to innocence. Rumors, after all, do not constitute proof of dirty dealings. Since Olmert’s conviction in March, then, the view of the public has been that the worst punishment he would receive is the inability to make a political comeback. In Israel, where neither age nor electoral failure nor disgrace prevents a politician from popping up like a jack-in-the-box every time he is pushed down, such an outcome seemed harsh enough.
In addition, Olmert has continued to enjoy the political support of much of the media, particularly the newspaper Yedioth Ahronoth. His push toward massive Israeli territorial withdrawals and other major concessions on behalf of Palestinian statehood has kept him relevant in academia and on the lecture circuit.

The Democrats and their media acolytes who are pushing back against a full investigation of the Benghazi scandal are in full circle the wagons mode. They are trying to make investigating this scandal into some sort of late night joke against Republicans, but instead are looking more desperate by the day.

Many Americans do not believe the Obama administration’s account of what happened leading up to and during the September 11, 2012 attack. They smell a cover up. According to a Rasmussen poll earlier this month, 59 percent feel it is unlikely the administration has revealed all of the details surrounding the tragic attack.

“Seventy-two percent continue to believe that it is important to find out exactly what happened in the Benghazi matter, with 46 percent who say it is ‘Very Important.’ Twenty-five percent consider more information about the Benghazi case unimportant, up from 19 percent in January, but that includes just 7 percent who say it is ‘Not At All Important,’” said Rasmussen.

Distrust of the Obama administration was stoked by the recent revelation of an e-mail written by then-White House Deputy Strategic Communications Adviser Ben Rhodes showing White House involvement in concocting the bogus anti-Muslim video explanation for the killings. The purpose of this intervention by the White House was to prepare then-UN Ambassador Susan Rice for her Sunday TV show appearances on September 16, 2012, with the goal of pushing the video narrative even though senior officials at the State Department and intelligence personnel on the ground knew early on that a pre-meditated terrorist attack was the real cause.

White House Press Secretary Jay Carney made a fool of himself yet again when he tried to claim with a straight face that the Rhodes e-mail had nothing to do with Benghazi. It’s all old news anyway, he intoned.

Bill Clinton has tried to blunt criticism of his wife’s conduct as Secretary of State by saying that the State Department’s own Benghazi investigation, which was led by retired Adm. Mike Mullen and former U.S. diplomat Thomas Pickering, “looked into what was wrong. They gave 29 recommendations. She took ‘em and started implementing them.”

That may be true, but Bill conveniently left out the fact that Hillary’s hand-picked Accountability Review Board failed to interview her. When she finally appeared before Congress to testify, Hillary responded to questions with a question of her own: “What difference at this point does it make?”

I’ve been predicting that Russia would not send its army into eastern Ukraine, but stand back and let the country dissolve into chaos. The crisis erupted because the country is dead flat broke, after nearly $200 billion in aid over the past twenty years, most of it stolen. All the huffing and puffing about a new Hitler seizing a new Sudetenland in preparation for a Drang nach Westen is beside the point. The center ring of this bathetic circus has shifted to Beijing, where Vladimir Putin is negotiating the terms of a new Sino-Russian deal. This isn’t a fusion of the two countries by any means, but rather a cautious, self-interested alignment of interests. The Indian journalist M.K. Bhadrakumar, a former ambassador to Turkey and several Central Asian Republics, has a useful assessment on his blog today. Bhadrakumar is a sympathetic and canny observer of Russian policy.

The highlight of the two-day state visit by Russian President Vladimir Putin to China on Tuesday is probably going to be the signing of the long-awaited 30-year mega gas deal. The Russian media have been speculating such a strong possibility. The Chinese official remarks, however, remain cautiously optimistic and flag that the “main difference”, namely, over the price of gas, “still lingers.” To be sure, it is a political call now for the Kremlin.
Russia took a tough stance in the recent years insisting that the price of gas should be linked to the price of oil, which is the formula it maintains in dealings with Europe. With the passage of time, China’s negotiating stance (which rejected such a linkage), has strengthened.
Time worked in China’s favor. Beijing has been in no tearing hurry to conclude the deal while it kept lining up LNG supplies from other sources — Qatar and Australia — and kept up the momentum of overseas upstream investments, including in Canada, as well as boosting further supplies from Turkmenistan and other Central Asian countries.
China is also estimated to have the world’s largest source of shale gas. On the contrary, Russia’s negotiating hand has weakened. A ‘Look East’ strategy for energy exports is increasingly a matter of compulsion rather than of choice, as the United States pushes for Europe’s diversification of energy imports to reduce high dependence on Russia.

Sudanese doctor Meriam Yahya Ibrahim, 27, a graduate of the University of Khartoum Medical School, is the beautiful wife of an American citizen, Daniel Wani, originally from South Sudan. Their 20-month old son, Martin, whose sweet smile shines from a recent photograph, is soon to be joined by a baby brother or sister, as Ibrahim is nine months’ pregnant. Soon after Ibrahim and Wani were wed, in December 2011, Wani applied to his government, the United States government, for a spousal visa to bring his wife to America. If there were justice in the world, today the Wani family would be awaiting the birth of a new baby while enjoying the gradual coming of spring in New Hampshire.

There is, however, no justice in the world. Wani and Ibrahim remained in Khartoum and waited for Ibrahim’s visa to be approved, but up until today, this American citizen has not received permission to bring home his wife – and now also his son, who is by virtue of his father a U.S. citizen. “I have tried to apply for papers to travel to the USA with my wife and child, but the American Embassy in Sudan did not help me,” Wani told Morning Star News. And on Thursday, May 15, Ibrahim was sentenced to be hanged for apostasy.

Ibrahim has been a Christian her whole life. She was brought up, first in western Sudan, and then in Khartoum, in the Ethiopian Orthodox faith of her Ethiopian mother. But she had the misfortune of having a Sudanese Muslim father. Even though her father abandoned the family when she was 6 years old, in the eyes of Shariah, she is a Muslim. Therefore, she is an apostate for not practicing Islam. Unbelievably, she and little Martin, have been incarcerated since February at Omdurman Women’s Prison in Khartoum.

While Ibrahim was waiting for the U.S. government to grant her a spousal visa, Amnesty International, which is highlighting Ibrahim’s case, says that a distant relative accused her of adultery and reported her to the authorities in August 2013. Ibrahim’s marriage to Wani, a South Sudanese Christian, is not recognized under Shariah. Ibrahim then attempted to defend herself by explaining that she was not a Muslim. This past February she provided to the court her marriage certificate that listed her as a Christian, and the location of the wedding as a church in Khartoum. But this resulted in the young wife and mother being charged with apostasy. The charges fall under Sudan’s Shariah-based Criminal Code, Articles 126 (apostasy) and 146 (adultery). The apostasy sentence carries a punishment of flogging – 100 lashes.

“The idea that tens of millions of Americans could be, in effect, turned into anti-Americans seemed insane. But it happened, didn’t it?”

In Silent Revolution: How the Left Rose to Political Power and Cultural Dominance, historian and political scientist Barry Rubin answers that question in convincing style and considerable detail. What happen was a “break from all American history” and “an ideological defacing of liberalism” on the part of the “Third Left,” the heir to both the Old Left of the 1920s-1950s and the New Left of the 1960s and 1970s.

As Rubin sees it, the Third Left took over liberalism, portrayed its only opponent as reactionary right-wing conservatism and claimed that their radicalism represents all that is good in America and a correction to all that is evil. The new radicalism also claims a monopoly on truth and a right to fundamentally transform America. This altered approach, Rubin explains, “was one of an unprecedented degree of statism, an imperial presidency that went far beyond Richard Nixon’s dreams: record high levels of government regulation, taxation and debt.” It was “a different system from the one through which America achieved success and prosperity. Yet the fact that such changes were occurring was everywhere denied even as it was happening.”

The timing was also significant. Across the globe, regimes following the Old and New Left’s model were collapsing. At the very moment in human history when it became obvious that the far left’s ideas had failed and that statist big government, ever-higher-regulation policies did not work, it became possible for the first time ever to convince Americans that these things were precisely what the country needed. And at the very time in human history when Western civilization and liberal capitalism were so obviously the most successful in history – recognized as such in the Third World and most of all in formerly Communist China – a camouflaged radical movement convinced many of those benefitting from the system that their own societies were in fact evil and failed.

According to Rubin, it became possible to convince Americans their society had failed because the Third Left “put its emphasis on infiltrating the means of idea and opinion production.” The Third Left shunned the factories and focused on foundations, NGOs, popular culture, publishing and journalism. Reporters “routinely used politically charged language that would have gotten them fired in earlier times” and mass media were out to “protect the image of anyone on the left side.” Rubin cites the portrayal of Ted Kennedy, involved in the death of Mary Jo Kopechne, and Bill Clinton of Monica Lewinsky fame, as heroes on women’s rights while others who had done nothing were “accused of waging a war on women.” Likewise, Rubin notes that Time magazine ridiculed Arianna Huffington when she was a conservative in 2001 but in 2006, when she turned to the far left, the same publication extolled her. “Such lessons put across the point that those who cooperated with the Third Left would be rewarded; those who crossed it would be destroyed.”

Frontpage Interview’s guest today is Pamela Geller, the President of the American Freedom Defense Initiative (AFDI), publisher of PamelaGeller.com and author of The Post-American Presidency: The Obama Administration’s War on America and Stop the Islamization of America: A Practical Guide to the Resistance. Follow her on Twitter here. Like her on Facebook here.

FP: Pamela Geller, welcome to Frontpage Interview.

Geller: Thank you, Jamie.

FP: I understand that the Muslim author Reza Aslan has said that he wanted to “make hate babies” with you. Can you please give us the details?

Geller: Jamie, it was on a Reddit thread. Reza was taking questions, and one Reddit user asked him: “Hello Reza, I have an excellent start up question for you. You and Pamela Geller are stuck on an island, what happens?”

Aslan answered: “Are we stuck forever? If so, then I guess it’s time to make some hate babies Pam.”

The person who asked the question, “benalmy,” was thrilled by this display of hatred and savagery, and wrote back: “oh dude you are awesome!” Another commented: “By expressing his ability to hate a woman and still wish to have sex with her, he becomes very relatable to reddit’s users.” And it was true: “scruba” wrote: “Reza, you’re my hero,” and “btn pshr” added: “omg this is amazing, I can’t even…” “Squishie 5413” wrote: “This is the best response I’ve ever seen.”

Only one commenter, “wanweilin,” at the very end of the thread, dared to challenge Aslan and state the obvious: “Sounds like rape. Appropriate for treatment for an infidel.”

We know there is a term for this: “hate-f**k.” And the Left has a field day with it to humiliate and slander conservative women. Vile.

Kay Hagan (D) Incumbent
http://www.hagan.senate.gov/
http://www.ontheissues.org/senate/kay_hagan.htm **

Thom Tillis (R) Challenger
http://thomtillis.com/
ISSUES

GOVERNMENT
Under the Obama Administration, big government handouts and bailouts have increased while millions of Americans have lost their jobs. Thom knows that big government doesn’t create jobs—the private sector does. Government has simply become too big, too expensive, and too intrusive in our lives and businesses. In the Senate, Thom will work to shrink the size of our federal government to its core Constitutional role so the private sector can thrive.. In the Senate, Thom will be a stalwart conservative reformer, pushing at every opportunity for the tough decisions it will take to balance the budget every year by cutting spending, and reducing our outrageous $17 trillion national debt.
HEALTHCARE
ObamaCare is a cancer on our national economy and it threatens the quality of every American’s health care. It is paralyzing business expansion, displacing families from the health coverage they have now, raising costs, and threatening the federal treasury for all future years. ObamaCare is ridden with policies that are bad for families, bad for seniors, bad for businesses, and bad for the economy. Thom will fight in the Senate for full repeal of ObamaCare, for defunding ObamaCare, and he will work to implement private sector solutions to reduce healthcare costs for North Carolinians.
IMMIGRATION
Our porous border threatens our national security and undermines our rule of law. Thom believes we must provide border patrol agents with the additional resources, personnel, and technology needed to effectually protect us and keep out those who want to do us harm, those who are transporting narcotics, and those who would break our laws. Thom opposes amnesty and he believes Congress should solve our border security crisis now before it even debates any other changes to our immigration laws.
REGULATIONS
North Carolina families and businesses are suffering greatly as a result of costly and excessive federal government regulation. These unnecessary regulations drive up the cost of everyday purchases such as groceries and cripple small businesses with additional costs and uncontrollable red tape. As a businessman who led the reform movement that swept the North Carolina Capitol, Thom has made regulatory reform his signature crusade. As a result, the state legislature recently passed an extensive regulatory overhaul measure that will free North Carolina businesses of numerous government regulations that hinder economic growth and job creation. In Washington, Thom will continue his fight for regulatory reform to get our oppressive government out of our families and small businesses.

Senator Mike Johanns (R) Is retiring in 2014

Ben Sasse (R) Won the Republican Primary in Nebraska and has a great chance to win the election in November.
https://www.sassefornebraska.com/

ISSUES
HEALTHCARE
He opposes ObamaCare not just because:
• it was passed by a dishonest legislative gimmick
• it is based on a premise that Government can successfully plan 18% of our economy
• it puts bureaucrats between patients and doctors
• it infringes on religious liberty and forces people of conscience to pay for abortion
• its information technology systems won’t work, and will likely lead to massive data leaks of Americans’ confidential financial and health data
…though all those things are true.

He’s also against it for a much more basic reason: Ben opposes ObamaCare because he rejects the worldview underlying it. It’s a worldview that says:

“If there’s a problem, only the Federal Government can solve it.”

“Fake budget projections are fine, it’s OK to hide the truth from the American people because “DC knows what America needs and the ends justify the means”

“The Executive branch has the authority to just fill in parts of the law that are unfinished, grant special waivers to politically connected friends, and change parts of the law that are politically inconvenient.”

“The American people need Government to care for them and permanent dependency isn’t just an acceptable outcome, it’s a goal of this Administration.”

This does not work. Republicans must be ready with conservative solutions to the crisis Obamacare has caused. Otherwise we will be forced into a single-payer system.

Real health care reform can only be achieved through patient-centered health policy solutions, not more bureaucracy. The health care sector was a mess before Obamacare—not because we didn’t have enough government, but because we already had too much.
JOBS AND ECONOMY
Ben knows that the government does not create jobs – businesses and local communities create jobs. The way to get a real economic growth agenda is by rolling back the regulatory state and letting job creators go to work.
One area where over-regulation has been most obvious is the energy sector. The Keystone XL pipeline should have been approved years ago. Ben believes that we need an all-of-the-above energy policy. This approach would lower energy prices, create as many as three million jobs, and reduce our dependence on the Middle East.
When government gets out of the way, America can compete – and win – in any industry. We’ve got the people; we’ve got the talent; and most of all we have the work ethic – the will to create something lasting for our families and our neighbors– if we can just get the federal government out of the way, and let our people build.

IMMIGRATION
The Federal Government’s primary responsibility is to protect Americans from enemies foreign and domestic. The American people are not safe unless we know who is entering and leaving our country. Neither Party has been willing to get serious about border security, dating back to the mid-80s when a Republican president agreed to amnesty in exchange for promises of securing the border later. It never happened.

President “You can keep your doctor” Obama refuses to lead on this issue because he is more concerned about turning Texas into a Democrat state than he is about solving the problem. Republicans must not make a deal with President Obama. We must secure the border. End of story.
FOREIGN POLICY
A strong America is a more prosperous and secure America, and American leadership makes for a safer and more peaceful world. But President Obama’s policies have done more to weaken our nation than anyone since Jimmy Carter. Under the Obama Administration, America’s global standing has deteriorated to dangerous levels. Our adversaries don’t fear us and our friends don’t trust us. Russia’s attack on Ukraine shows the folly of President Obama’s naive, liberal worldview that international aggression is out of date. Dictatorships like China and North Korea have become emboldened by Obama’s lead-from-behind weakness. His passivity on Syria has led to a dramatic increase in the number of jihadist terrorists, and on his watch Iran is closer to a nuclear weapon than ever before. Restoring America’s credibility means strengthening our alliances, deterring our enemies, and leading the world from the front.