November 8th, 2010
As President Obama prepares for the G20 summit in South Korea this week, Sarah Palin is challenging the Federal Reserve’s monetary policy, which will likely be a key issue at the talks. On Monday, in a keynote address at a trade-association convention in Phoenix, Palin will urge Fed chairman Ben Bernanke to “cease and desist” his “pump priming.” The United States, she says, “shouldn’t be playing around with inflation.”
Here are snippets from Palin’s prepared remarks obtained by National Review Online:
I’m deeply concerned about the Federal Reserve’s plans to buy up anywhere from $600 billion to as much as $1 trillion of government securities. The technical term for it is “quantitative easing.” It means our government is pumping money into the banking system by buying up treasury bonds. And where, you may ask, are we getting the money to pay for all this? We’re printing it out of thin air.
The Fed hopes doing this may buy us a little temporary economic growth by supplying banks with extra cash which they could then lend out to businesses. But it’s far from certain this will even work. After all, the problem isn’t that banks don’t have enough cash on hand – it’s that they don’t want to lend it out, because they don’t trust the current economic climate.
And if it doesn’t work, what do we do then? Print even more money? What’s the end game here? Where will all this money printing on an unprecedented scale take us? Do we have any guarantees that QE2 won’t be followed by QE3, 4, and 5, until eventually – inevitably – no one will want to buy our debt anymore? What happens if the Fed becomes not just the buyer of last resort, but the buyer of only resort?
All this pump priming will come at a serious price. And I mean that literally: everyone who ever goes out shopping for groceries knows that prices have risen significantly over the past year or so. Pump priming would push them even higher. And it’s not just groceries. Oil recently hit a six month high, at more than $87 a barrel. The weak dollar – a direct result of the Fed’s decision to dump more dollars onto the market – is pushing oil prices upwards. That’s like an extra tax on earnings. And the worst part of it: because the Obama White House refuses to open up our offshore and onshore oil reserves for exploration, most of that money will go directly to foreign regimes who don’t have America’s best interests at heart.
We shouldn’t be playing around with inflation. It’s not for nothing Reagan called it “as violent as a mugger, as frightening as an armed robber, and as deadly as a hit man.” The Fed’s pump priming addiction has got our small businesses running scared, and our allies worried. The German finance minister called the Fed’s proposals “clueless.” When Germany, a country that knows a thing or two about the dangers of inflation, warns us to think again, maybe it’s time for Chairman Bernanke to cease and desist. We don’t want temporary, artificial economic growth bought at the expense of permanently higher inflation which will erode the value of our incomes and our savings. We want a stable dollar combined with real economic reform. It’s the only way we can get our economy back on the right track.
Related News On National Review:
November 8th, 2010
AS a schoolboy in Jakarta, Barack Obama attended Muslim prayer sessions with his classmates against the wishes of his mother.
By Anne Barrowclough
The US President's former grade three teacher said that Mr Obama - who was known as "Barry" when he attended the Menteng One school in Jakarta - studied the Koran and went to classes on Islam, despite the objections of Ann Dunham, a Catholic.
The teacher's recollections will add to speculation about Mr Obama's links to Islam during his much-anticipated visit to Indonesia, the world's most populous Muslim nation, as part of his ten-day tour of Asia.
His middle name, Hussein, and the fact that his stepfather was a Muslim, have combined to perpetuate rumours about Mr Obama's religious leanings. The number of Americans who think that he is a Muslim has grown since his inauguration to one in five.
Mr Obama moved to Indonesia with his mother and Indonesian stepfather, Lolo Soetoro, when he was 6, and lived there for four years. In his memoirs he recalled his time in the country as the "bounty of a young man's life" and there is affection and pride among Indonesians for the boy who ended up as President of the United States.
The teacher, Effendi, who taught at Menteng One for 29 years, remembers Mr Obama as a "fat, curly-haired, curious boy". The school had an international mix of pupils, including Christians, Hindus, Buddhists and Muslims.
Mr Obama attended classes on Islam while the Christians attended classes on Christianity, said Effendi. Barry, he said, was alone among the pupils in that he insisted on attending both.
"His mother did not like him learning Islam, although his father was a Muslim. Sometimes she came to the school; she was angry with the religious teacher and said 'Why did you teach him the Koran?'" said Effendi.
"But he kept going to the classes because he was interested in Islam. He would also join the other pupils for Muslim prayers."
Questions over Mr Obama's religion were fuelled, in part, by comments about his Muslim roots made by Hillary Clinton during the Democratic party leadership campaign.
The conservative American media took the speculation further by claiming that Mr Obama attended a madrassa - Islamic school - as a child. Mr Obama's former classmates, however, have dismissed the claims as nonsense.
The US President - who has cancelled a scheduled trip to Indonesia twice before - may be stymied again by air traffic disruption caused by an ash cloud emitted from Mount Merapi.
The volcano has been erupting since October 26, killing at least 117 people.
Mr Obama is due to arrive in Jakarta tomorrow after three days in India.
A third cancellation would not be welcomed in Indonesia, where some offence has already been taken at the brevity of the visit.
The homecoming anticipated so keenly by Indonesians has been reduced to less than 24 hours; the shortest amount of time he will spend in any country on the Asia itinerary.
Pupils at Menteng One, who have been rehearsing songs and dances for more than a year, will be particularly disappointed.
Their headmistress has not yet had the heart to tell them that Mr Obama will not, after all, visit their school.
"When I told them in March that he had cancelled his trip again some of the children cried and asked why?" HJ Hasimah said. "I don't know what I will tell them this time."
Related News Items:
November 8th, 2010
An analysis by a liberal think tank found that half of the more than 100 new Republican Congress members are skeptics on global warming. (Chicago Tribune / February 28, 2007)
The still-evolving efforts reveal a shift among climate scientists, many of whom have traditionally stayed out of politics and avoided the news media. Many now say they are willing to go toe-to-toe with their critics, some of whom gained new power after the Republicans won control of the House in Tuesday's election.
On Monday, the American Geophysical Union, the country's largest association of climate scientists, plans to announce that 700 climate scientists have agreed to speak out as experts on questions about global warming and the role of man-made air pollution.
The effort by John Abraham is separate from the Geophysical Union's.
John Abraham of St. Thomas University in Minnesota, who last May wrote a widely disseminated response to climate change skeptics, is also pulling together a "climate rapid response team," which includes scientists prepared to go before what they consider potentially hostile audiences on conservative talk radio and television shows.
"This group feels strongly that science and politics can't be divorced and that we need to take bold measures to not only communicate science but also to aggressively engage the denialists and politicians who attack climate science and its scientists," said Scott Mandia, professor of physical sciences at Suffolk County Community College in New York.
"We are taking the fight to them because we are … tired of taking the hits. The notion that truth will prevail is not working. The truth has been out there for the past two decades, and nothing has changed."
During the recent campaigns, skepticism about climate change became a rallying cry for many Republican candidates. Of the more than 100 new GOP members of Congress, 50% are climate change skeptics, according to an analysis of campaign statements by the Center for American Progress, a liberal think tank.
Prominent Republican congressmen such as Darrell Issa of Vista, Joe L. Barton of Texas and F. James Sensenbrenner Jr. of Wisconsin have pledged to investigate the Environmental Protection Agency's regulation of greenhouse gas emissions. They say they also intend to investigate the so-called Climategate scandal, in which thousands of e-mails of leading climate scientists were hacked and released to the public last year.
Climate change skeptics argued that the sniping in some e-mails showed that scientists suppressed research by skeptics and manipulated data. Five independent panels subsequently cleared the researchers involved and validated the science.
"People who ask for and accept taxpayer dollars shouldn't get bent out of shape when asked to account for the money," said James M. Taylor, a senior fellow and a specialist in global warming at the conservative Heartland Institute in Chicago. "The budget is spiraling out of control while government is handing out billions of dollars in grants to climate scientists, many of whom are unabashed activists."
Ongoing public interest in Climategate has prompted the scientists to act.
The American Geophysical Union plan has attracted a large number of scientists in a short time because they are eager to address what they see as climate misinformation, said Jeffrey Taylor, research fellow at the National Center for Atmospheric Research in Colorado and manager of the project.
Still, the scope of the group's work is limited, reflecting the ongoing reluctance among many scientists to venture into politics.
A rapid-response team, however, is willing to delve into politics. In the week that Abraham and others have been marshaling the team, 39 scientists agreed to participate, including Richard Feely, senior scientist with the National Oceanic and Atmospheric Administration; Kevin Trenberth, head of the Climate Analysis Section at the National Center for Atmospheric Research; and Michael Oppenheimer, professor of geosciences and international affairs at Princeton University.
"People who've already dug their heels in, we're not going to change their opinions," Mandia said. "We're trying to reach people who may not have an opinion or opinion based on limited information."
Other LA Times Articles:
November 8th, 2010
* Obama says U.S. low growth or no growth danger to world * China says U.S being irresponsible over QE
* Obama says U.S. low growth or no growth danger to world
* China says U.S being irresponsible over QE
* Russia says G20 should have been consulted by Fed
* Trichet: c.bankers insist no currency weakening sought
(Adds Trichet, Geithner)
NEW DELHI, Nov 8 (Reuters) - U.S. President Barack Obama defended the Federal Reserve's policy of printing dollars on Monday after China and Russia stepped up criticism ahead of this week's Group of 20 meeting.
The G20 summit has been pitched as a chance for leaders of the countries that account for 85 percent of world output to prevent a currency row escalating into a rush to protectionism that could imperil the global recovery. [ID:nSGE6A703T]
But there is little sign of consensus.
The summit has been overshadowed by disagreements over the U.S. Federal Reserve's quantitative easing (QE) policy under which it will print money to buy $600 billion of government bonds, a move that could depress the dollar and cause a potentially destabilising flow of money into emerging economies.
"I will say that the Fed's mandate, my mandate, is to grow our economy. And that's not just good for the United States, that's good for the world as a whole," Obama said during a trip to India.
"And the worst thing that could happen to the world economy, not just ours, is if we end up being stuck with no growth or very limited growth," he said.
European Central Bank President Jean-Claude Trichet said all participants at a meeting of the world's central bankers in Basel, Switzerland had insisted they were not pursuing weak currency policies.
"We're attached to avoiding excessive volatility. It's very counterproductive for global growth and global stability," he told a news conference.
CHINA, RUSSIA ATTACK FED MOVE
Washington has frequently criticised China, saying it deliberately undervalues its currency to boost exports.
China says the United States, via the Fed, is engaged in the same thing that it stands accused of, and some emerging nations have already acted to curb their currencies' rise.
Resentment abroad stems from worry that Fed pump-priming will hasten the U.S. dollar's slide and cause their currencies to shoot up in value, setting the stage for asset bubbles and making a future burst of inflation more likely.
"As a major reserve currency issuer, for the United States to launch a second round of quantitative easing at this time, we feel that it did not recognise its responsibility to stabilise global markets and did not think about the impact of excessive liquidity on emerging markets," Chinese Finance Vice Minister Zhu Guangyao said on Monday. The Fed's quantitative easing policy was unveiled last week to jeers from emerging market powerhouses from Latin America to Asia. Russia renewed its assault on Monday.
"Russia's president will insist .... that such actions are taken with preliminary consultations with other members of the global economy," said Arkady Dvorkovich, a Russian official who is preparing the country's position in Seoul. [ID:nLDE6A70V6]
Bank of Japan Deputy Governor Hirohide Yamaguchi said on Monday that it too was ready to boost its asset-buying scheme if it saw clear signs of a downturn. Worth 5 trillion yen ($62 billion), it is so far just a tenth the size of the Fed's. [ID:nTOE6A700Y]
U.S. DROPS KEY DEMAND
India is Obama's first stop in a 10-day trip to Asia that will include Indonesia and Japan.
He will arrive in Seoul for the Nov. 11-12 summit weakened by a crushing congressional election defeat for his Democratic Party and under fire from all sides. Germany described U.S. economic policy as "clueless" last week. [ID:nLDE6A40JH]
The U.S. has already all but dropped its centrepiece proposal for the G20 -- a measure that would cap current account balances at 4 percent of gross domestic product, something economists said was clearly aimed at China.
At the weekend, U.S. Treasury Secretary Timothy Geithner backed away from the numerical target that had been rejected by China, Germany, Japan and others in a sign that global financial power had slipped from U.S. hands. [ID:nnN06143046]
On Monday, he was putting on a brave face, saying China was supportive of the G20's framework for rebalancing the global economy, and that he expected broad consensus on it at the summit. [ID:nN08133419]
The risk of a negative outcome in Seoul appears to be increasing, or at the very least, an agreement that merely papers over the huge gaps and allows countries to pursue their own economic policies whether it be intervening in currency markets like South Korea and Japan or printing dollars.
"Judging by the critical response of emerging market governments to QE, the likelihood of a ceasefire in the currency war is slim," RBC Capital markets said in a report published on Monday. (Writing by David Chance and Mike Peacock; editing by Stephen Nisbet)
Related news From Reuters:
November 7th, 2010
Republicans may expand the majority in the U.S. House they won in the Nov. 2 election by picking up seats among nine Democratic-held districts where the results remain too close to call.
Over the weekend, the re-election of Representative Tim Bishop, a four-term Democrat from New York’s Long Island, was thrown into doubt after a fresh count of ballots, according to Republican challenger Randy Altschuler. Eight other contests for Democratic-held seats also haven’t been decided, with just hundreds of votes separating the candidates in some races, according to the Associated Press.
“It’s expected that Republicans will hold on and pick up a total of 63 or 64 seats, though recounts can occasionally produce a surprise,” said Larry Sabato, director of the University of Virginia’s Center for Politics.
Republicans gained at least 60 seats in the House that will be installed in January, the biggest swing in the party’s favor since 1938. Republicans also picked up six seats in the Senate, trimming the Democrats’ control in that chamber to 53-47.
Democratic incumbents suffered from voter concerns about the growth of the federal government and an economy that has yet to recover fully from the recession that began under President George W. Bush, a Republican.
Republicans including Representative Eric Cantor of Virginia, the party’s second highest leader in the House, have said the election results signify support for cutting government spending and rolling back the health-care overhaul signed by President Barack Obama.
Additional gains for Republicans in some of the undecided contests are to be expected, said Jennifer Duffy, political analyst at the Cook Political Report, a Washington-based publication that tracks political races.
“Given how historic Democrats’ losses in the House were last week, nothing about this list is surprising,” she said in an e-mail.
In California, Representative Jerry McNerney, a Democrat elected four years ago when his party won control of the House and Senate, leads by 421 votes, or 0.2 percent, according to preliminary tallies released by the California Secretary of State.
Democratic incumbent Jim Costa, who represents part of California’s San Joaquin Valley, is trailing challenger Andy Vidak by less than two percentage points, according to the AP.
There are similar close races in Illinois, Texas, Kentucky, Virginia, Washington and New York, the AP reported.
New York Race
New York Representative Daniel Maffei, whose district includes Syracuse, is lagging behind Republican challenger Anne Marie Buerkle in another tight race.
In New York’s Suffolk County, where Democrat Bishop initially led by 3,400 votes, Altschuler had a 392-vote lead after election officials took a closer look at the results, the Republican said on his Facebook page. Altschuler also said that more than 9,000 absentee and military ballots have yet to be counted.
“Our effort will not conclude until each and every vote is counted,” he wrote.
To contact the editor responsible for this story: Mike Tackett at firstname.lastname@example.org