Professor Barnett Questioned the Constitutionality of Health Care Law From the Start

Vindication for Challenger of Health Care Law

By SHERYL GAY STOLBERG and CHARLIE SAVAGE

WASHINGTON — When Congress passed legislation requiring nearly all Americans to obtain health insurance, Randy E. Barnett, a passionate libertarian who teaches law at Georgetown, argued that the bill was unconstitutional. Many of his colleagues, on both the left and the right, dismissed the idea as ridiculous — and still do.

But over the past two years, through his prolific writings, speaking engagements and television appearances, Professor Barnett has helped drive the question of the health care law’s constitutionality from the fringes of academia into the mainstream of American legal debate and right onto the agenda of the United States Supreme Court.

“He’s gotten an amazing amount of attention for an argument that he created out of whole cloth,” said one of his many critics, Douglas Laycock, a professor at the University of Virginia Law School. “Under existing case law this is a very easy case; this is obviously constitutional. I think he’s going to lose eight to one.”

On Monday, as the court began three days of arguments, questioning by the nine justices suggested they were ready to review the law now rather than wait until it has fully kicked in. That lays the groundwork for arguments for the challenge championed by Professor Barnett: that Congress’s power to set rules for commerce does not extend to regulating “inactivity,” like choosing not to be insured.

Professor Barnett, who watched Monday from the spectator seats, was not the first to raise the constitutional critique of the health law, but more than any other legal academic, he is associated with it. At 60, he is a fast-talking former Chicago prosecutor who decided to become a lawyer when he was in elementary school, while watching “The Defenders,” a 1960s television drama.

He is a fierce advocate of economic freedom who is accustomed to being a legal underdog. In 2004, in his first (and, he says, probably his last) appearance before the Supreme Court, he argued that Congress could not criminalize the production of home-grown marijuana for personal medical use. There again, critics said he would lose 8 to 1. He did lose, but took satisfaction in the actual vote, 6 to 3.

On Friday evening, after a busy day of press interviews, a moot court hearing and a presentation at the Cato Institute, a libertarian research institution, Professor Barnett sipped a Diet Mountain Dew in his Dupont Circle row house here. If the court strikes down President Obama’s health care law, he was asked, will he have an “I told you so” moment?

“I don’t call it that,” he insisted. “But whatever you want to call it, it’s already happened. When the Supreme Court grants six hours of oral arguments over three days, I don’t have to win that case to know that my challenge is serious.”

The challenge to the individual mandate, the provision requiring nearly all Americans to obtain health insurance, has been raised before; David B. Rivkin Jr. and Lee A. Casey, both lawyers who served in Republican administrations, made the Commerce Clause critique in a Wall Street Journal opinion article in 1993, when Congress was debating President Bill Clinton’s health care initiative, and again in the fall of 2009.

Their argument prompted an online debate. Professor Barnett joined, remembering how another law professor “wrote a very snarky, no-serious-person-would-think-there’s-a-serious-challenge-here” post. He added, “That just sort of got my blood flowing.”

Amid the rise of the Tea Party movement, some Republican lawmakers argued during the legislative debate that the mandate was unconstitutional. With his academic credentials, Professor Barnett helped bolster the mandate’s conservative critics.

“What Randy has done is provide an intellectual and legal framework for explaining why this is not just unpopular, but also unconstitutional,” said Eugene Volokh, a law professor at the University of California, Los Angeles, and founder of a legal blog to which Professor Barnett sometimes contributes. “You can accept or not that framework, but it is a framework that is out there that is being taken seriously in part because it was proposed by a serious guy.”

But some law professors, including some conservatives, are not persuaded. Among them is Charles Fried of Harvard, who served as solicitor general in the Reagan administration and who has repeatedly debated Professor Barnett, said that at most he was giving the idea “something approaching scholarly respectability.”

In his writings and speeches, Professor Barnett uses four words — unprecedented, uncabined (lawyerly jargon for unlimited), unnecessary and dangerous — to describe the individual mandate. But Professor Fried, citing a string of precedents upholding mandatory participation in government programs like Social Security and vaccination initiatives, sees Professor Barnett using an “emotional hook,” not compelling legal analysis.

His words “don’t make much sense,” Professor Fried said, “but the music is there.”

Professor Barnett says he learned early on the importance of being able to communicate with ordinary people, “and not be a pointy-headed intellectual.” He grew up in Calumet City, Ill., a working-class city south of Chicago, where his father owned a handful of laundries.

In high school, Mr. Barnett said he was a “William F. Buckley conservative,” and president of the Student Council and his local Jewish youth group. Most of the town was Polish Catholic; Mr. Barnett was one of four Jews in his graduating class.

“I was sort of odd man out,” he said, “which does inspire people to be independent-minded.”

He discovered libertarianism as a student at Northwestern. Later, as a Harvard law student, he took a class in constitutional law from the liberal scholar Laurence H. Tribe, and found himself disenchanted with the Supreme Court’s interpretation of the Constitution. (Professor Tribe remembers him as “a very talented and creative student.”)

He became a prosecutor and later, a contracts professor. But a 1986 invitation to speak to the Federalist Society, then a fledgling group of conservative lawyers, ignited his interest in the Constitution. He developed a specialty in the Ninth Amendment, a favorite of libertarians, which says that rights not spelled out in the Constitution are “retained by the people.”

Professor Barnett’s work on the health care law fits into a much broader intellectual project, his defense of economic freedom. He has long argued that the Supreme Court went too far in upholding New Deal economic laws — a position that concerns his liberal critics.

Even a close friend and fellow Georgetown law professor, Lawrence B. Solum, says that Professor Barnett is aware of the “big divide between his views and the views of lots of other people,” and that his political philosophy is “much more radical” than his legal argument in the health care case. Professor Barnett, for his part, insists that if the health law is struck down, it will not “threaten the foundation of the New Deal.” But, he allowed, it would be “a huge symbolic victory for limited government.”

If you haven’t cursed out a New York Times reporter … you’re not really a real Republican

Santorum: ‘If you haven’t cursed out a New York Times reporter … you’re not really a real Republican’

Rick Santorum has been working to soften his image in recent days, allowing reporters to follow him on bowling and shuffleboard excursions as he campaigned in Wisconsin over the weekend.

But a heated exchange with a New York Times reporter after a speech Sunday night in which Santorum loudly cursed is giving Mitt Romney’s campaign new ammunition as it seeks to define the former Pennsylvania senator as a hothead.

During a campaign appearance in Racine, Wis., Sunday, Santorum urged attendees to carefully judge Romney’s record, on a series of issues including health care.

“He is the worst Republican in the country to put up against Barack Obama,” Santorum declared.

But asked to expand on his comment by Times reporter Jeff Zeleny after the event, Santorum quickly lost his cool. “What speech did you listen to? Stop lying!” Santorum snapped at Zeleny. “I said he was the worst Republican to run on the issue of Obamacare. That’s what I was talking about.”

The incident, which was captured on video by CBS News, shows Santorum angrily accusing Zeleny of twisting his words. “Quit distorting my words. If I see it, it’s bullshit,” Santorum said, wagging his finger at Zeleny.

Romney aides immediately seized on Santorum’s exchange, forwarding Zeleny’s tweet about the incident and including the hashtag “Tantorum.” (The subsequent Times piece did not include Santorum’s curse word, but rather said that he had used an “expletive.”)

“If he can’t deal now, how will he this fall?” Romney adviser Jim Merrill said on Twitter.

Meanwhile Romney strategist Eric Fehrnstrom, whose analogy about a general election reset being like shaking an Etch A Sketch got Romney into trouble last week, also pounced.  “Mad Men, for real,” he wrote in one of several messages on Twitter about Santorum’s exchange with Zeleny.

But Michael Biundo, Santorum’s campaign manager, took to Twitter to defend his boss. “You’re not conservative till you call out the New York Times at least once,” he wrote.

And hours later, Santorum’s campaign sent out a fundraising email to supporters based on the incident.

“Earlier today, while campaigning in Wisconsin, I criticized Romney and Obama for their outrageous healthcare legislation. Predictably, I was aggressively attacked by a New York Times reporter all too ready to defend the two of them, and all too ready to distort my words,” the message sent under Santorum’s name read. “Let me assure you, I didn’t back down, and I didn’t let him bully me. I think it is high time that conservatives find the courage to expose the liberal press for what they are, a defender and enabler of Romney’s and Obama’s liberal agendas.”

It was a message Santorum repeated during an appearance on Fox News Monday morning.

“If you haven’t cursed out a New York Times reporter during the course of a campaign, you’re not really a real Republican, is the way I look at it,” Santorum said.

The Politics of Demoralization

By ROBERT STACY MCCAIN on 3.26.12 @ 6:08AM

Why do the media magnify Mitt’s “inevitability” mantra?

Before the polls closed Saturday night in Louisiana, I made two safepredictions: First, that Rick Santorum would win big in the state’s Republican presidential primary and second, that the media (specifically including Fox News) would “immediately provide the Team Mitt spin, minimizing the significance of Santorum victory.”

The first prediction actually proved to be an underestimate. Santorum did not merely “win big” in Louisiana, he won huge, exceeding all expectations. The Real Clear Politics average of Louisiana polls had shown him leading Mitt Romney by 13 points, and early exit polls indicated a similar margin of victory. No polling, however, had suggested the possibility that Santorum would win a massive blowout and not even his most ardent supporter had dared to dream the former Pennsylvania senator could carry Louisiana with a 22-point margin of victory and 49 percent of the vote. Furthermore, as one of his state coordinators pointed out Saturday night, if Santorum had gotten about 4,000 more votes to reach 51 percent, he would have automatically gotten all the delegates at stake in the primary. Three non-competitive candidates — former Louisiana Gov. Buddy Roemer, Texas Gov. Rick Perry, and Minnesota Rep. Michele Bachmann — got a combined total of nearly 3,800 votes. Santorum was close to scoring a shutout against Romney, even without considering the 16 percent of the Louisiana vote captured by another non-competitive candidate, former Speaker of the House Newt Gingrich.

Permit me to digress, dear reader, to ask: Is anyone so blind as to be unable to see that Gingrich’s continued campaign now has no purpose other than to deprive Rick Santorum of a one-on-one shot at Romney? We need not resort to the language of psychology — e.g., narcissism, delusions of grandeur, a possible tendency toward megalomania — to say that Newt’s campaign has been obviously doomed for weeks. If this was not obvious to everyone on “Super Tuesday” March 6, when Gingrich placed third in Tennessee andOklahoma, it certainly should have been clear on March 13 when helost Mississippi and Alabama. Along the way, Gingrich has also racked up numerous fourth-place finishes, even in Alaska where he might have been expected to get a boost from Sarah Palin’s endorsement. In many closely contested states, including the crucial primaries Feb. 28 in Michigan and March 6 in Ohio, Gingrich has campaigned just enough to play the spoiler, preventing Santorum from consolidating conservative support and thereby enabling Romney to win narrow victories. And by his repeated criticisms of Santorum, Newt has helped poison the well, demonizing his rival in the eyes of many conservative Gingrich supporters. (Another easy prediction: Comments on this column will be flooded by embittered Gingrichites who have talked themselves into believing that Santorum is an illegitimate usurper, somehow unfairly depriving Newt of his rightful place as the final choice of the “Anybody But Mitt” movement.) Gingrich and his supporters apparently have forgotten that Newt spent all of January and February insisting that stopping the Massachusetts moderate was a vital necessity, requiring conservatives to unite their efforts behind a single anti-Romney candidate.

Now that conservative are indeed beginning to unite (Santorum beat Gingrich by more than 3-to-1 in Louisiana), Newt and his supporters seem surprisingly amenable to accepting the GOP Establishment’s “Roll Over for Romney” consensus, rather than joining Santorum’s conservative crusade. This stubborn reluctance of Gingrich to read the handwriting on the wall was perhaps predictable to anyone who has studied the habits of oversized egos, a familiar quantity in politics. Even more predictable, however, was the media’s eagerness to accept and promote the “inevitability” mantra that for weeks has been quite nearly the only argument Republicans have heard in favor of Romney’s candidacy.

Having campaigned for president almost non-stop since 2007, Mr. Inevitable was always the Republican heir apparent for 2012, given the GOP’s longstanding custom of nominating the “It’s His Turn” candidate, second place in the primary campaign being practically a guarantee for the nomination next time around. Ronald Reagan lost to Gerald Ford in 1976, George H.W. Bush lost to Reagan in 1980, John McCain lost to George W. Bush in 2000, and in each case, the second-place finisher went on to be the next Republican nominee. (The party’s 1996 nominee, Bob Dole, was also a re-run, having finished last in the 1980 primary campaign. Many conservatives felt that Dole’s ’96 running mate, Jack Kemp, had missed his shot at the White House by refusing to mount a primary challenge to the elder Bush in either 1988 or ’92.) By virtue of being runner-up to John McCain four years ago, then, Mitt began the 2012 campaign as the pre-emptive favorite.

In retrospect, the ups and downs of Romney’s “Flavor of the Month” rivals over the past year look almost like an orchestrated spectacle, as if the media and the pollsters had conspired with GOP insiders to create a buzz of artificial excitement around what otherwise might have been a dull and predictable Republican primary campaign. Now, however, the media message seems to be, “Fun time is over. Act like sensible grown-up Republicans and vote for this rich guy of dubious ideological sincerity whom the party establishment wants to shove down your throats.” To do otherwise, it is implied, is to be immature, unrealistic and unserious because (the sensible grown-up Republicans assure us during their frequent appearances on TV panel discussions) Romney is the most “electable” candidate. Skepticism toward this “electability” argument is dismissed by Mitt’s media minions in tut-tutting tones, and woe unto the conservative who predicts that Romney will most likely repeat the pattern of previous establishment favorites and lose in November. The sensible grown-up Republicans who have endorsed Romney condemn such predictions as treasonous pessimism — giving aid and comfort to the Democratic enemy — whereas by contrast the Romneyites expect their own predictions of Mitt’s “inevitability” to be accepted as Neutral Objective Facts. (And don’t you dare accuse them of bias!)

Between his inevitability and his electability, Romney’s advocates would have you believe their man is an unstoppable electoral juggernaut, a lead-pipe cinch to become the next President of the United States, and they’ve managed to sell that proposition with the assistance of journalists who seem suspiciously eager to ignore all evidence to the contrary. So when Santorum won his 11th victory Saturday in Louisiana by a margin much larger than anyone had predicted, the media went out of their way to pretend that this result was neither surprising nor significant. Fox News actually interrupted coverage of Santorum’s victory speech in order to permit their reporter Carl Cameron to provide the pro-Romney angle on the Louisiana vote. Sunday morning, Fox brought on Romney surrogate John Sununu and gave him 10 minutes of airtime to pour cold water on any notion that Santorum’s 22-point margin of victory in Louisiana might portend any meaningful revival of conservative resistance to Mitt.

Santorum’s supporters have complained for weeks that Fox News is in the tank for Romney, an accusation angrily denied by employees of the “Fair and Balanced” network. Their attitude seems to be that it is simply a fact that Mitt is as inevitable as Sununu and his other surrogates say he is, and thus they automatically reject the possibility that Romney’s surprisingly large defeat in Louisiana – twenty-two freaking points! – could signify yet another Santorum surge. The Romney campaign has spoon-fed reporters and commentators a steady diet of delegate-count projections showing their candidate with an insuperable advantage. Very few reporters, however, have taken seriously the Santorum campaign’s contention that Team Mitt is both overestimating its share of delegates already won and prematurely counting delegates as hatched chickens in contests to come. Whether the Romney camp’s estimations of delegates are accurate or not, they convey the impression of a contest already over, although Mitt is still nearly 600 delegates shy of the “magic number” majority of 1,144. The delegate math functions as a self-fulfilling prophecy, and Fox News has been prophesying Santorum’s doom since late February.

Just as Santorum supporters suspect Fox of bias, so too do they see Matt Drudge as squarely in the pro-Romney camp. They cite as an example last week’s ginned-up controversy that erupted when, during a speech in Texas, Santorum gave an awkward version of his oft-reiterated argument that the moderate Romney would be ill-positioned to provide a “clear contrast” to Obama. This gaffe got major play at the Drudge Report, creating the false impression that Santorum had said he would personally prefer Obama to Romney. Santorum went on Fox News the next afternoon and, in an interview with Neil Cavuto, vehemently insisted that he was the victim of an “absurd” and “laughable” distortion, “the hatchet job of all time.” A week earlier, Drudge gave similarly sensational treatment to a Daily Caller story about Santorum’s stated goal of “vigorous” enforcement of federal laws against pornographic obscenity. The article was factually accurate, but misled many readers into believing that Santorum had suddenly announced a plan for an anti-porn crackdown. In fact, the Daily Caller article was based on a position paper that had been on Santorum’s campaign website for weeks, and the article ignored the obviously relevant fact that both Romney and Gingrich had in January joined Santorum in endorsing the anti-pornography platform of a conservative group called Morality in Media. Any reporter who can extract a couple of “controversial” sentences from an hour-long Santorum speech is virtually guaranteed a Drudge headline, offering an incentive for the kind of “gotcha” coverage that makes it seem Santorum’s entire campaign has been nothing but gaffes and blunders.

Thus do the media portray Santorum as both hapless and hopeless. Voters who know only what they learn from TV news coverage of the campaign might be amazed that a candidate depicted as incapable of speaking a coherent sentence has nonetheless managed to win 11 states and 273 delegates. And their amazement would turn to outright disbelief if you told them that, despite all they’ve seen and heard about Romney’s overwhelming lead in delegates, it is still not certain that Mitt is really so inevitable. Yet even a victory as sizeable as Santorum’s Louisiana win is treated by reporters as a minor incident on the road to Romney’s nomination. The New York Timessniffed that the result in Louisiana is “unlikely to change the dynamics of the race.” Two days before Saturday’s primary, theWashington Post contended that Louisiana could be “more fertile ground for Romney than any of the six Southern states where he has lost to this point.” After Romney instead suffered his biggest loss yet, the Post felt obliged to note in the lead paragraph of its story on the Louisiana vote that Santorum’s “odds of beating Mitt Romney in the overall delegate race appear slim,” later adding, “Romney’s other victories, especially a big win Tuesday in the Illinois primary, appear to have cemented his status as the likely nominee.” To these journalists, a 12-point margin for Romney in Illinois was a “big win,” whereas Santorum’s 22-point margin in Louisiana was meaningless. (Republican voters who don’t cooperate with the consensus of the political press corps are manifestly inferior, you see.)

Whatever the intent of the media’s repetition of Mitt’s “inevitability” mantra, the effect is to discourage support for Santorum, to demoralize conservatives by telling them that the fight for the Republican nomination is already over, and to force them into a premature acquiescence in the putative triumph of Romney, despite the fact that this allegedly more electable candidate has so far gotten less than 40 percent of the vote in GOP primaries and caucuses. If you suspect that the intent of this demoralizing message is the same as the effect, you are certainly not alone. Nor are you alone if you remain determined to resist the media’s demand for an unconditional surrender to Romney. There is at least one other conservative willing and able to keep up the fight, and his name is Rick Santorum.

Why the oil markets ignore the Saudis

Commentary: Riyadh’s failure to reverse market trends extends its failure lead the Arab world

JERUSALEM (MarketWatch) — There was something brave about Saudi Arabia’s swift response last week as the May Brent-crude-oil price momentarily soared past $127 a barrel, some 30% higher than the price last fall and only $20 off the historic high registered in summer 2008.

Cairo soccer fans furious over ruling

Cairo soccer fans say the al-Masry team deserves a harsher punishment for the deadly stampede at a soccer game in February. (Video: Reuters/Photo: Getty Images)

The immediate cause of the new energy crunch is obviously the expected plunge in Iranian supplies. Recent reports suggest Iran is already reducing production levels in anticipation of reduced demand in the wake of tightening sanctions.

Under other circumstances the Saudi government might have focused on the financial benefits of rising energy prices, but in this case the political context left the Saudis no choice but to fight the market trend, as they are at odds with Iran no less, in some ways even more, than Israel is.

The Saudi response was resolute, at least verbally. “We are ready and willing to put more oil in the market,” said Oil Minister Ali al-Naimi.

The only problem was that the markets, as they often do in the face of artificial intervention, remained unimpressed. The Saudis therefore intensified the rhetoric.

Rising prices were not justified, said al-Naimi, considering that the global economy, in his view, had yet to emerge from the recession of recent years.

And after saying that the kingdom was ready to raise output to full capacity, the minister quipped that “oil prices today are unjustifiable on a supply-and-demand basis,” an insight that made him reprimand the unruly markets in exasperation: “We really don’t understand why the prices are behaving the way they are.”

Root of the misunderstanding

Where, then, is the root of the misunderstanding between the Saudis and the markets?

One place might be in the state of the global economy. Maybe the Saudis are wrong in assuming that the Great Recession has not ended. Maybe Chinese and Indian demands are returning to the pre-meltdown levels that helped drive prices up more than 500% within half a decade.

Maybe the dissonance is within the energy markets, where not all share Riyadh’s confidence that it can fill in for missing Iranian shipments. Maybe the discrepancy lies within Saudi Arabia itself, where some perhaps doubt that brave rhetoric, even the Saudi oil minister’s, automatically translates into actual deliveries. And maybe the markets doubt Riyadh’s denials early March of terrorist explosions in one of its oil fields

Be all these circumstances as they may, the deeper story here is that for the first time since the Arab upheaval began, the Saudis tried to play leaders and the markets refused to treat them as such.

Saudi Arabia has remained relatively quiet, while the rest of the Arab world has been caught in the worst turmoil since the end of the colonial era.

While Egypt democratized, Iraq split in three, Syria plunged into civil war, Libyans lynched Qaddafi and Yemenis and Tunisian drove their leaders into exile, Saudi Arabia generally managed to keep above the fray.

The kingdom’s invasion and occupation of Bahrain, designed to stem a rebellion by the Shi’ite majority, has also passed relatively quietly, thanks in part to the media’s difficulty in penetrating a well-kept island that is smaller than Hong Kong.

In fact, the upheaval across the Arab world has been bad news from a Saudi viewpoint, and the markets’ cool response to Riyadh’s intervention is but a reflection of this. Not one of the many flashpoints across the Arab world has seen developments go the Saudis’ way.

In Egypt, where Riyadh would be expected to welcome the ouster of generals by fundamentalists, the Saudis actually fear a democratic contagion, as the Egyptians now have a freely elected legislature.

In Libya, the Saudis are witnessing a woefully unpredictable tribal chaos. In Iraq they face an empowered Shi’ite majority that is influenced by Iran, and a secessionist, non-Arab Kurdistan. In Syria, Riyadh’s hope to see the Sunni majority defeat the Assad regime has so far been frustrated.

Then there is non-Arab Turkey, whose threat to invade Syria is to the Saudis no less anathema than Iran’s meddling there. And hovering above all this is Shi’ite and non-Arab Iran, whose quest for Islamic hegemony is seen by the Saudis as an existential threat.

Added up, the Saudi response to the past 16 months of mayhem has been to preserve the previous order, an aim in which it has failed everywhere excepting Bahrain, and there, too, the jury is still out.

Saudis on strategic defensive

The one place where the previous order for now survives, Syria, is the one where the Saudis actually do want it undone. It follows that the Saudi government, by far the most conservative in the Middle East, is on the strategic defensive, generally taking a backseat while the region reshapes itself.

It doesn’t have to be this way. The Saudis have the resources with which to do more than they are currently doing to at least try to actively lead the Middle East where they want it to end up.

For instance, the Saudis have a state-of-the-art American-supplied and -trained air force that can crush Syria’s mostly Soviet-built air force and put President Bashar Assad’s ground forces on the defensive. But Saudi King Abdullah’s call on Assad to resign has not been followed by military action, other than arms shipments to the rebels, which for now appear to be symbolic.

Outsiders would call this attitude caution, prudence and conservatism, but in the Middle East it is called weakness. Indeed, the Saudi response to the entire Middle Eastern mayhem has been to duck and hope for better times.

A bolder regime would have understood that while each Arab rebellion has had its specific characteristics, all had a common denominator of insufficient political freedom and economic opportunity.

A more pro-active Saudi government would have responded to the Arab upheaval by introducing a multibillion-petrodollar plan for regional development and job creation. How such a plan would have impacted commodity markets is a valid question, but it surely would have reinvented labor markets, and therefore buoyed stock markets, both in the Middle East and beyond.

Such an attitude is not known to have crossed even one mind in Riyadh, where hopes are that the upheaval will somehow fizzle by itself, and out of its rubble will emerge new faces with old ideas.

Riyadh’s clumsy market intervention was a financial variation on its political theme of maximum maneuvering in quest of minimum change. The markets’ cool response to this attitude may prove a harbinger of a changing Arab world’s growing hostility to a stubbornly anti-change Saudi Arabia. 

Corruption Could Threaten China’s Power Structure

China’s Wen: corruption could threaten power structure

BEIJING (Reuters) - China could face a threat to its power structure unless it stamps out rampant corruption among officials,Premier Wen Jiabao was quoted as saying on Monday.

The latest statement from Wen, who has long pushed to eradicate corruption, underscores broader worry that, left unchecked, the problem could hurt the legitimacy of one-party rule.

“Wen Jiabao stressed that the greatest danger facing the ruling party is corruption,” Wen was quoted as telling the State Council, or cabinet, in comments reported on the government website.

“If this issue is not resolved, the nature of political power could change.”

Anger over corruption has prompted a raft of “mass incidents,” an official euphemism for protests, worrying officials defending one-party rule and overseeing a smooth transition of power to a younger generation of leaders.

Wen called on senior officials to disclose their personal details, including information on spouses and children.

He said “the use of public funds to buy cigarettes, fine wines and gifts” should be prohibited and pledged to “strictly control the number of celebrations, seminars and forums”.

Wen has stood out among China’s leaders as the most vocal advocate of measured relaxation under party control. As he prepares to leave power, he has called more forcefully – though vaguely – for political reform.

He retires next year, along with President Hu Jintao, after a decade in power. During that time, China has grown to become the world’s second-biggest economy, but one plagued by corruption and a growing income gap.

Critics say Hu and Wen have failed to pursue reform vigorously enough to underpin long-term growth and wealth creation.

Addressing reporters at this month’s annual meeting of parliament, the National People’s Congress, Wen warned that failure to act against graft and income disparity could rekindle the chaos of Mao Zedong’s Cultural Revolution.

Entrepreneurs Don’t Care As Much About Money As They Do….

The Hungry Start-up Game: Why Entrepreneurs Don’t Care About Money

In the research for my new book to be published this fall, Hungry Start-up Strategy: Creating New Ventures with Limited Resources and Unlimited Vision, one of the most surprising things I found is that entrepreneurs are not motivated primarily by money.

Instead of money, successful start-up CEOs hunger to turn their vision of the world into a thriving venture. The March 25thNew York Times features an excellent example of such an entrepreneur, Gilad Elbaz.

Elbaz’s current start-up, Factual, aims to store all the world’s facts. Elbaz had already sold his first start-up, Applied Semantics, to Google (GOOG) for cash and stock that made Elbaz’s net worth soar into the “hundreds of millions [of dollars].”

So in 2009, when he went to Andreesen Horowitz for capital, Elbaz needed to persuade name partner, Ben Horowitz, that Elbaz’s wealth had not sated his start-up hunger.

Elbaz got Horowitz to believe that Factual would yield an attractive return on Horowitz’s investment — or as he told the Times, this was not a “too-rich-to-work-hard” problem. As Horowitz said, “I asked him, ‘Aren’t you too rich to build this company?’ He gave me one of the longest and most thought-out answers I’d ever heard. He thinks this is a chance to change the world — that matters to him more than money,” according to the Times. 

My guess is that Elbaz did not have enough money to finance Factual all by himself or that he had other reasons to hedge his bet. So why did Elbaz need the money and why was he so committed to making Factual succeed? Elbaz told Horowitz that the cash was “an incentive for the engineers” and that he needed to do Factual now, because the 34-year-old Elbaz wanted to ”reach his goal while his mind was still strong enough,” according to the Times.

Still not convinced that entrepreneurs don’t care about money? Of course, they need money to pay people who don’t have enough to quit working for the rest of their lives. But an even better example of an entrepreneur who does not care about money is Jeff Hammerbacher.

After all, Hammerbacher was one of Facebook’s first 100 employees and its first chief data scientist. In 2008, he walked away from the social network — leaving behind shares that would probably be worth plenty now if he had stuck around. Quitting the $100 billion (estimated market valuation) Facebook, he joked to me, was “an egregious act of wealth destruction.”

Hammerbacher is a 2005 Harvard graduate who worked at Bear Stearns and Facebook before starting Cloudera in 2008. A Facebook colleague described Hammerbacher as “scary smart, a maverick, individualistic, dynamic, a sponge when it comes to new ideas and his interests evolve quickly.”

When Hammberbacher started Cloudera, its mission was to apply the computing power he had built at Facebook to solve more important problems. Instead of helping to answer what a group of friends “like” the most on Facebook, Cloudera customers would be able to answer questions such as, “What gene do all these cancer patients share?”

At Harvard, Hammerbacher took a core course on moral reasoning which required him to read philosopher John Rawls’ concept of theVeil of Ignorance. As Hammerbacher described it, Rawls’ idea was that if the moment before you were born, you could decide which part of the world you would be born into, how would you design that world so you would have a fair shot at life?

Hammerbacher’s vision is to build Cloudera to last. As he told me, “The vision is to build an exceptional, standalone enterprise software company respected for its technical depth and expertise.”

Hammerbacher, like Elbaz, has a powerful vision in his mind for what Cloudera could become along with an insatiable drive to turn that vision into a real company. As he said, ”We’d like to help commoditize the infrastructure for analyzing all kinds of data at arbitrary scales, so that companies can derive more business value from the data they generate. DEC, Tandem Computers, and Sun are companies that, in their prime, had cultures similar to the one we’re trying to build.”

It is more than a bit ironic that most successful entrepreneurs don’t care about money. Of course it could be that they do care about it an awful lot more than they are willing to let on publicly.

I don’t doubt that there is plenty of competitiveness driving them — and that they would love to turn their burning vision into a business that would be worth more to them than Bill Gates’ net worth.

But for Elbaz and Hammerbacher, the name of the Hungry Start-up Game, is creating a world that they want to live in. And their careers are a living testimony to the power of Rawls’ Veil of Ignorance.

And they may represent one of the biggest returns on a philosophy course ever.

But, But, But… But China is OUR FRIEND (said the greedy China Investor)

Tough times in the U.S.-China iPad smuggling game

(Reuters) – Early on the morning of March 16, Wong Tat joined a line of about 100 people waiting for the launch of the new iPad in a chilly rain outside an Apple store on the outskirts of San Francisco.

When the doors opened, he was among the first to buy his quota of two iPads — the maximum Apple Inc allows per person. Then, sporting a bright red cap for easy identification, Wong began to direct a stream of people toting their new tablets to a silver Mercedes SUV in the parking lot.

After about two dozen of the neatly boxed iPads had been put in the trunk, the SUV sped to a nearby run-down hair salon and massage parlor. There, the haul of the dozen or so tablets costing about $12,000 was transferred to red, white and blue wholesale bags, which Wong then spirited out the back door into another car.

“They are headed for China,” said Amy, a 30-something hair stylist at the salon who had joined in the pre-dawn operation outside the Apple store. She would not divulge her last name.

The iPads had embarked on the first leg of a journey that would ironically return them to the country where they were assembled in the first place. They may have been stuffed into suitcases and taken by passengers on a flight to China, or possibly flown by courier to the duty-free territory of Hong Kong and smuggled in students’ backpacks across the border into mainland China.

Demand for Apple products, coupled with severe constraints on local supply, has created a thriving black market. A 16-gigabyte iPad bought in San Francisco for $499 — about $540 including tax — can be sold for more than $1,000 in Shanghai the next day. Apple sold more than 3 million of the devices — which now come 4G-ready with a sharper “retina” display — in its first weekend.

“You can pretty much determine when the first iPad arrives in China by monitoring the first flight out from the U.S. on launch day,” said an Apple employee who was not authorized to speak on behalf of the company.

Companies that make iPad accessories, such as cases and speakers, also hire people to wait in line on launch day, a source involved in that business said.

Accessory makers do not get an early peek at Apple products, so they have to scramble as soon as new iPads and iPhones hit the streets to reconfigure assembly lines and craft accessories that fit, he said, speaking on the condition of anonymity.

SERIOUS MONEY

People like Wong, dubbed “huangniu,” or yellow-bull black-market operator in Chinese, have operated richly lucrative businesses. They pay people like Amy — code-named “nurses” because the word “hush” sounds like “helpers” in Chinese — $20 to $30 to stand in line and buy an iPad and iPhone for resale on the black market.

Factor in as little as $12 to ship each device via a Chinese shipping agent, and small wonder Wong and his ilk found it worth their while.

But it’s getting tougher and costlier to smuggle the devices into China as the Chinese customs authority has told some U.S.-based shipping agents not to accept orders of iPads, and warned travelers to declare their gadgets at the border and pay a 10 percent import duty on electronics.

Two small shipping companies that ship to China, BIZ Express and Global Courier Services, said they now refuse iPad shipments. Fremont, California-based BIZ posted a notice on its website this month saying: “Our clearing warehouses have stopped receiving iPad in accordance with a recent customs authority notification.”

UPS and FedEx, the largest U.S. package delivery companies, did not return messages for a comment.

In Shenzhen, across the border from Hong Kong, an online report from the state-owned Guangzhou Daily — a mouthpiece of the local government — said the newest iPad was among 20 taxable goods that should be declared by travelers.

“I stopped carrying iPad a few months ago because now the customs at Shenzhen can be pretty strict,” said a Chinese student in Hong Kong, who declined to reveal his payoff for smuggling.

Furthermore, Apple now simultaneously launches devices in multiple countries, boosting availability and depressing black market prices.

“It’s getting really hard to do this compared to previous years,” said Amy, who wore a dyed red streak in her hair, as she trimmed a young man’s “faux-hawk” hair style in the San Francisco area salon.

An electronics dealer in Oakland, California, said he struggled to break even this year, a far cry from previous iPad releases when he shipped upwards of 1,000 tablets and pocketed profits of $50 to $100 per device sent to his buyer in Hong Kong.

This year, he had no choice but to send 250 iPads via FedEx — which quotes $110 to ship a 2-pound tablet to China — hours after they hit U.S. stores. But the same-day launch of the tablet in 10 territories, including Hong Kong, curtailed demand.

“This whole game is over,” the dealer complained. “There’s an overabundance of supply. The market’s flooded.”

He said he visited only a couple of stores in the San Francisco Bay area for tablets, with the Chinese black-market selling-price falling every day that passes.

WEAR IT WITH PRIDE

Despite that expansion in inventory, demand in China still outstrips supply. Online retail site Taobao.com carried iPad listings last week for as much as $1,100, though $600 to $700 price tags were more common.

IPads and iPhones have become badges of Western chic and status to upwardly mobile Chinese, yet they are usually the last to be able to buy them directly from Apple stores.

Industry sources say smugglers operate out of multiple countries, but mainly in the United States because that is where stores carry the most products.

Last Friday in Hong Kong, stores ran out of the newest iPad within hours. They are now sold via a daily lottery there, while they are still readily available in many U.S. stores.

The Chinese “nurses” are easy to spot — they stroll in, hand over a note describing the model they want and leave as soon as they get it. Whereas an ordinary buyer will often take their gadget out for a test drive before leaving the store and ask sales employees numerous questions.

“Apple has gotten so big that they can flood the market. Before they released it, they probably had been making them for six months and had them sitting in a warehouse. Now they are selling it in Asia and Australia, and it’s out 16 hours before us,” said the Oakland dealer.

Shell Oil Having Difficulty paying for Iranian Oil

Exclusive: Shell scrambles to pay huge bill for Iran oil

The funniest thing to me is I specialize in problems like this and they never called me…. If You can’t Solve The problem You Are Facing…. then you are Facing the wrong problem…but again Shell is OLD SCHOOL and lacks a real  understanding of how to be creative and still legal.

LONDON (Reuters) - Royal Dutch Shell is struggling to pay off $1 billion that it owes Iran for crude oil because European Union and U.S. financial sanctions now make it almost impossible to process payments, industry sources said.

Four sources said the oil major owes a large sum to the National Iranian Oil Co (NIOC) for deliveries of crude, with one putting the figure at close to $1 billion. A debt of that size would equate to roughly four large tanker loads of Iranian crude or about 8 million barrels.

“Shell is working hard to figure out a way to pay NIOC,” said an industry source, who requested anonymity. “It’s very sensitive and very difficult. They want to stay on good terms with Iran, while abiding by sanctions.”

A Shell spokesman declined to comment.

The European Union toughened financial sanctions and placed a ban on Iranian oil imports on January 23, but gave companies until July 1 to wind down their existing business.

With daily contract volumes of 100,000 barrels, Shell ranked as Iran’s second biggest corporate client – along with France’s Total – behind Turkey’s Tupras .

Shell CEO Peter Voser said on March 7 the company would take its final deliveries of Iranian crude “within a matter of weeks”.

Rigorous U.S. and European financial measures, aimed at punishing Iran for its nuclear program have already come into force, making it increasingly difficult to pay for and ship crude from Iran, say oil executives.

“There are big frustrations with the payment route – the U.S. pressure is really working,” said a senior oil source. “It’s now nearly impossible to use the banking system.”

Such financial restrictions were in part behind Total’s decision to stop purchasing Iranian crude at the end of last year, industry sources say. Total also bought about 100,000 barrels per day from Tehran.

Industry sources say some of Iran’s big customers may have been using the Dubai-based Noor Islamic Bank to channel payments to Iran. It is not known whether Shell was processing payments via Noor Islamic Bank.

Diplomats say the bank bowed to pressure from Washington and cut ties with Iranian banks in the United Arab Emirates at the end of last year.

Given the outstanding amount owed in the face of sanctions, senior oil executives say the only way forward is for Shell to ask the British government to help settle the account with Iran.

An approach was made by Shell, sources say, but the company was rebuffed.

A small portion of the Shell debt could be written off through an outstanding payment NIOC owes the company for development of the offshore Soroush/Nowrooz oilfields, say industry sources.

Shell and European rivals such as Total and Italy’s Eni have built longstanding relationships with Iran, OPEC’s second largest exporter, through their work at the country’s oilfields and years of crude oil purchases.

But while they are loath to burn bridges with Tehran, they also cannot afford to put business in the United States and elsewhere in the West at risk.

Romney Preparing to Shake and Etch a New Sketch to Appeal to Independents in the Fall

Can Romney Recover From his Etch A Sketch Moment?

Sometimes they never recover.

To the extent anyone remembers it at all, the 1988 presidential campaign lives on in one indelible image: Michael Dukakisbouncing around in a tank, an oversized helmet on his head and a goofy grin on his face, as if even he knew that he’d just blown his chances to get to the White House. Dan Quayle never recovered from his public misspelling of “potato,” just as Sarah Palin will never recover from Tina Fey’s lacerating parody in 2008.

It’s one of the unwritten corollaries to presidential politics: if you become a joke, people won’t vote for you. 

It would be a cruel irony indeed for Mitt Romney to suffer the same fate at the hands of one of his most loyal aides, Eric Fehrnstrom. If the Obama campaign were smart, it would use some of its millions to hire the best former Saturday Night Live writers out there in an effort to keep the country laughing at the image of Romney as “the Etch A Sketch candidate.”

Much as Michael Dukakis handed George H.W. Bush—who was losing in the polls at the time—a priceless gift, the Romney campaign seems to have done the same for Obama. Read more

—Michael Hirsh

 

NATIONAL JOURNAL’S PRIMARY REPORT

Santorum Wins Louisiana Primary
[National Journal, 3/24/12] Rick Santorum soundly won the Louisiana primary on Saturday, keeping his Southern streak alive. Although he was dominant in most demographic categories, the 20 delegates at stake will likely be split between Santorum and Mitt Romney—doing little to the delegate math and Romney’s impressive lead.

Louisiana Results Suggest a Two-Man Race
[New York Times, 3/24/12] According to the latest results out of the Bayou and other contests, the Republican presidential nomination is a two-person race—but not according to Newt Gingrich and Ron Paul. After his third place finish in Louisiana, however, the delegate math just isn’t adding up for Gingrich, one of his delegates suggested.

Santorum Energizes Supporters in Wisconsin
[Milwaukee Journal-Sentinel, 3/24/12] Next up for the Republican candidates: the Badger State. Another industrial Midwestern state that is a swing state for November, the state’s 37 delegates are up for grabs on April 3. Santorum held rallies across the state on Saturday, and even got a chance togo bowling.

Barbour: Romney’s ‘Moderately Conservative’ Views Will Help in the Fall
[National Journal, 3/24/12] Former Mississippi Gov. Haley Barbour said he was unimpressed with Romney’s inability to wrap up the nomination on Friday, saying the distractions after his big primary wins have harmed his image. He, however, contends that Romney’s “moderately conservative” views will rally support in the fall.

Pennsylvania GOPers: Let Primary Continue 
[Politico, 3/24/12] Party leaders may want the GOP to end soon without any further damage, but that doesn’t mean Republicans on the ground are going to let it. Santorum—along with Gingrich—went home to Pennsylvania on Saturday to attending the Pennsylvania Leadership Conference for a chance to gain support in another delegate powerhouse.

Gingrich: Santorum Has to Win Pennsylvania
[National Journal, 3/24/12] Similar to talk surrounding Romney and Michigan, Gingrich said on Saturday that Santorum has to win in his home state of Pennsylvania to keep his campaign alive. Santorum was on the stump in the Keystone State on Saturday, evoking his PA past and getting nostalgic. He said that his crushing 2006 defeat to now Sen. Bob Casey was a “tremendous gift,” since it allowed him to get some distance from Washington.

Santorum: ‘We’re Still Fighting’
[Wall Street Journal, 3/24/12] After his win in Louisiana, Santorum gave his victory speech not at a grand hall or an arena, but at a sports bar in Green Bay, Wis. “We’re still here, we’re still fighting,” he said defiantly to the small crowd of family, staff and fans.

Kennedy Helped Shape Romney’s Career, and Still Haunts It
[New York Times, 3/24/12] Romney’s relationship with the late Sen. Edward Kennedy has shaped the former Massachusetts governor’s political career—and is still brought up negatively today. From his bitter Senate race to the signing of the health care legislation, Kennedy serves as a constant reminder of Romney’s past.

On the Right, Santorum Has Women’s Vote
[New York Times, 3/25/12] Santorum has a unmistakable voter appeal to conservative women—especially married women. With his picture-perfect family life and strong social convictions, this demographic has been key in some of his primary wins thus far.

Gingrich Calls Obama Comments on Trayvon Martin Shooting ‘Disgraceful’
[National Journal, 3/23/12] Following President Obama’s response to the killing of young Trayvon Martin in Florida, several GOP candidates added their take to the tragedy sans politics. However, Gingrich took a different approach, calling the president’s comments “disgraceful.”

Try as Romney might the Open Mic Gaff by Obama with the Russian President is viewed by most Americans as the way of international politics and Diplomacy.. and CHINA is viewed as more of a threat to the United States than Russia is…

Democrats Salivate Debating Romney on Heath Care Mandate

David Plouffe: Mitt Romney ‘Godfather’ of the Individual Mandate

Obama senior advisor David Plouffe on “This Week” called GOP presidential candidate Mitt Romney the ‘godfather’ of the individual mandate and expressed confidence that The United States Supreme Court would rule President Obama’s health care law constitutional.

“The mandate is an idea supported by the Heritage Foundation, Newt Gingrich, Bob Dole, most famously kind of the godfather of the mandate, Mitt Romney.  So we’re confident that it will be upheld,” said Plouffe. ” Now, as it relates to the Supreme Court, we’re confident that it’s going to be upheld.  You had Democratic and Republican jurists upheld it in lower court decisions, including two very prominent conservative jurists.”

President Obama’s health care law will go in front of The United States Supreme Court Monday. Mitt Romney supported the individual mandate while he was governor of Massachusetts, but has come out strongly against it on a national level.

Higher Taxes Will NOT Induce Rich to Move Elsewhere

Rich Won’t Move Even If State Raises Income Taxes: Report … Lies refuted by Study

Maybe states need not rush quite so fast in the ever-famous race to the bottom.

Being forced to pay higher state taxes doesn’t appear enough of an incentive to get the rich to up and leave town,according to a new paper by Jeffrey Thompson, an economist at the University of Massachusetts at Amherst’s Political Economy Research Institute. That’s because moving is expensive, wealthy people usually have roots in their communities and they often value the public services that they get by paying higher taxes. Thompson cites several recent research studies, including his own, to make his case.

The report will likely come as a relief to states that are coping with budget shortfalls in an anemic economic recovery. State tax revenue has dropped with so many Americans having lost their jobs or taken pay cuts. As a result, even after slashing their budgets, states will face budget gaps totaling $49 billion next year, according to the Center on Budget and Policy Priorities.

How to tax the rich at the federal level has become a hotly contested issue since President Obama recently proposed raising taxes on millionaires, who sometimes pay taxes at a significantly lower rate than middle class earners. The initiative, if enacted, would raise $47 billion in revenue for the federal government, according to a congressional report.

Thompson cited a slew of studies showing that tax changes don’t make rich people leave their states. New Jersey’s 2004 “millionaire tax” did not make wealthy households more likely to leave the state, according to a 2011 paper by Cristobal Young, a Stanford sociology professor, and Charles Varner, a doctoral sociology student at Princeton.

State tax increases also have very little impact on workers’ decision to move, and the highest-income workers are among the least likely to move because of tax increases, according to a 2011 paper by Thompson.

But even those who aren’t attached to a state due to a job are still unlikely to move.More than half of Americans have never lived in a state different from the one they now call home, according to a Pew Research Center study cited by Thompson.

International financial system requires “drastic” reform

By PAUL HANNON

LONDON—The international financial system requires “drastic” reform if future crises are to be avoided, including more regional initiatives to tackle misaligned exchange rates and the wider use of capital controls, the head of a United Nations agency said.

The United Nations Conference on Trade and Development has long been critical of what it calls “financially driven globalization” and warned of its consequences ahead of the 2008 crisis.

Supachai Panitchpakdi, head of the United Nations Conference on Trade and Development, said capital flows don’t translate into real capital formation.

But as the agency prepares for the quadrennial gathering of its 194 government members in Qatar next month, its secretary-general believes many of the flaws in the functioning of the global economy that led to the crisis remain.

“If we do not do something more drastic with the international financial regime, then this will come back,” said Supachai Panitchpakdi in an interview Friday.

UNCTAD’s argument is that uncontrolled capital flows and associated financial speculation have led to the distortion of exchange rates and other key prices—including those for many commodities—which means that many countries aren’t able to pursue the economic policies that are right for sustainable growth.

Mr. Supachai’s comments come as a number of countries, including Brazil, are struggling to counter foreign-exchange moves they believe are damaging their economies. Brazil has recently introduced measures to slow the inflow of short-term portfolio investment, while the central bank has bought dollars in the local market to hold the currency above a level of 1.80 Brazilian reals to the dollar.

“Exchange-rate movements are still very much not really reflecting the flows of trade that we’re seeing,” Mr. Supachai said. “These distortions are no less damaging than tariff increases.”

Mr. Supachai also said that foreign-exchange trade of over $4 trillion daily didn’t appear to be related to any real investment.

“We see a huge amount of capital flows, but we do not see real capital formation,” he said, referring to the creation of capital or goods intended for investment or economic expansion. “Capital formation is not moving up in line with financial flows. There is no correlation.”

Mr. Supachai was deputy prime minister and commerce minister of Thailand from 1997 until 1999, and has first-hand experience of sharp movements in foreign exchange rates. The rapid depreciation of the Thai baht was one of the events that triggered a series of exchange rate and debt crises in Asia during 1997 and 1998.

“We saw in Asia during the 1990s that the misalignment of foreign-exchange rates can have devastating consequences, even more devastating than trade barriers,” Mr. Supachai said.

He believes that global policy makers should focus on maintaining real effective exchange rates at levels that reflect the relative competitiveness of economies. Under this scheme, a country that saw a sharp rise in unit labor costs would be allowed to depreciate its exchange rate to maintain its competitiveness, while one that saw a fall in unit labor costs would have to allow its exchange rate to strengthen.

Mr. Supachai said that this sort of flexibility should also be allowed within a currency union, such as the euro zone. He believes that it is essential for the health of the global economy that the euro zone survives but this can only happen if members are allowed to exit and re-join, and Greece should be the first to take that option.

Now on its second bailout, and in its fifth year of economic contraction, Greece may need to leave the euro zone, Mr. Supachai said.

“There may be a need for a temporary solution, to allow Greece the option of going out,” he said. “Greece must have the option of coming back in. That doesn’t mean the end of the euro zone, it would mean the opposite.”

Euro-zone members insist that once a country has made the decision to join the currency area, it’s irrevocable, since any doubts about that country’s commitment would affect financial stability.

But many economists believe that one of the underlying problems faced by countries like Greece is a loss of competitiveness since they joined the currency area, particularly relative to Germany.

Since consumer prices and wages rose more rapidly in Greece, Ireland, Portugal and others than they did in Germany, they experienced a de facto appreciation in their real exchange rates, leading to widening current account gaps and an increasing reliance on foreign funding.

Eventually, investors became unwilling to provide that funding, and those countries were forced to address their debt problems. As long as they remain inside the euro zone, they can only do that through austerity programs and what are known as “internal devaluations,” essentially cutting wages.

Mr. Supachai said countries will always make big mistakes in their economic policy, and a grouping such as the euro zone needs to be realistic about that fact, allowing countries to exit the block so that they can benefit from currency devaluation and growing exports.

Ever since exchange rates began to fluctuate after the dollar-anchored Bretton Woods system ended in 1971, it has proven difficult to get agreement among nations on whether their own or other currencies are fairly valued.

Some economists have suggested that the World Trade Organization, or a new and equivalent body, should perform that role, identifying exchange-rate misalignments just as the WTO highlights unfair tariff or other trade distorting measures.

A director general of the WTO from 2002 to 2005, Mr. Supachai doesn’t believe that is politically possible. Instead, he believes that a start should be made through regional initiatives, which could then be linked together.

“When countries get into difficulties, it’s usually related to competitors in the same region,” he said, adding that the currency misalignment is often relative to a currency from outside the region, and usually the U.S. dollar.

The model for this kind of regional arrangement is the Chiang Mai initiative, which was launched in 2000 but subsequently expanded to include the 10 members of the Association of Southeast Asian Nations, China, Japan and South Korea. It was intended to give individual members access to a large pool of foreign exchange reserves with which to intervene in the foreign exchange markets, and prevent a repeat of the currency crises of 1997 and 1998.

Mr. Supachai believes more of these regional mutual-assistance agreements—and especially one for Latin America—could help manage exchange rates globally, and lead to fewer misalignments.

“It would help to better manage the distortions,” he said.

The other tool that Mr. Supachai believes should be used more widely is controls on short-term capital flows. He argues that short-term capital flows can place an impossible burden on monetary policy in many developing economies, since any increase in interest rates to tackle high inflation immediately attracts capital flows that lead to an overly rapid appreciation in the exchange rate. “Capital flows are hurting countries so much,” he said. “Withholding taxes on short-term capital flows have proven quite useful.”

Mr. Supachai believes that for so long as the global economy is struggling to overcome the effects of the last financial crisis, it is unlikely to slip into another. But without radical reform of the international financial system, he believes that another crisis is inevitable soon after things return to “normal.”

“The crisis will come when it seems like business as usual,” he said. “When we are all patting each other on the back, that will be the beginning.”

Romney Foolishly Calls Russia and NOT China our No. 1 Geopolitical Foe

Mitt Romney Says Russia Is No. 1 Geopolitical Foe

Maybe it is because of his friends’ investments in China.. or that China has been a monetary Profit  boon for “Investors” but we seem to me  taking our eye off the ball when it comes too China and the Military build up and aggressive stances n places like Sudan and Syria that belie our interests… I think Romney has  either intentionally understated or has no real understanding of the Chinese problem for the USA in coming years… 

SAN DIEGO - Mitt Romney said today that Russia - not Iran orNorth Korea - is the United States’ “number one geopolitical foe,” adding that Russia “always stands up for the world’s worst actors.”

Romney’s remarks came during an interview with CNN’s Wolf Blitzer, during which he spoke about the comments made byPresident Obama early today that were caught by an open microphone. During a conversation about missile defense, Obama told Russian President Dmitri Medvedev that he’d have more “flexibility” after the election.

Romney said he was “very concerned” about the president’s remarks, especially because they were made to a Russian leader.

“Russia is not a friendly character on the world stage and for this president to be looking for greater flexibility where he doesn’t have to answer to the American people in his relations with Russia is very, very troubling, very alarming,” he said. “I am very, very concerned.

“This is to Russia,” Romney said. “This is without question our number one geopolitical foe.

“They fight every cause for the world’s worst actors. The idea that he has more flexibility in mind for Russia is very, very troubling indeed,” he said.

When pressed by Blitzer as to whether he truly believed Russia was a bigger foe than Iran or China, Romney sought to clarify his remarks, but did not back away from his argument.

“I’m saying in terms of a geopolitical opponent, the nation that lines up with the world’s worst actors, of course the greatest threat that the world faces is a nuclear Iran, and nuclear North Korea is already troubling enough, but when these terrible actors pursue their course in the world and we go to the United Nations looking for ways to stop them, when [Syrian President] Assad, for instance, is murdering his own people, we go to the United Nations and who is it that always stands up for the world’s worst actors?” Romney asked.

“It is always Russia, typically with China alongside, and so in terms of a geopolitical foe, a nation that’s on the Security Council, that has the heft of the Security Council, and is of course a massive security power – Russia is the geopolitical foe and the idea that our president is planning on doing something with them that he’s not willing to tell the American people before the election is something that I find very, very alarming,” he said.

Are Schools Overstepping by Monitoring Students Social Media?

Sweary tweet gets student expelled from school, but should his account have been monitored in the first place?

An expletive-laden tweet has seen a student expelled from his high school in Indiana. Austin Carrollmade the mistake of posting a fairly well-known phrase to his personal Twitter account as a joke, but it included liberal use of the third in George Carlin’s “Filthy Words” list. You know, the one beginning with F.

So how did his school find out? Did his teachers follow him, or was it thanks to a complaint made by a fellow student who was offended by the tweet?

Neither actually, as the school revealed it monitors all tweets made by students, and claims Austin posted the message in question during school hours via a school computer. He denies this however, saying it was made during his own time and on his own computer.

An article published in an online local newspaper suggests this wasn’t the first time Carroll had been in trouble for posting messages on Twitter that the school deemed “obscene,” or for other disruptions; proving there’s always more to this type of story than initially meets the eye.

Social network monitoring

However, his expulsion isn’t what’s interesting here — it’s the fact that the school actively tracks its student’s Twitter accounts, then acts on messages it deems inappropriate. Plus, if it tracks Twitter activity, does it also monitor Facebook and other sites too?

A wide range of tools for monitoring social networking activity are available, some of which primarily track a company’s brand and reactions to media campaigns, while others ensure athletes aren’t about to bring down the team or fix a future game.

Most of these work without password access to the accounts, and certainly in the case of Mr. Carroll, his Twitter account was publicly viewable.

While the thought of anyone “spying” on our online activities is unpleasant, is a school checking its students social networking activities always a breach of privacy or worse, our freedom of speech? Schools will no doubt argue that it’s not, and could potentially allow them to do some good, such as identify cases of online bullying or genuine illegal activity.

Schools — and employers too — are aware they can gain considerable insight into our personalities by seeing how we communicate online. It was recently revealed that the University of North Carolina has a section in its handbook recommending there be a designated person for checking sports team members’ online activities, and warns that other teachers may also be watching too.

Online etiquette training

Of course, watching publicly available activity is very different from requesting passwords to accounts, an activity of which Facebook takes a particularly dim view, but the two are linked in a one way — how we conduct ourselves online.

As our online lives become more complex and further entwined with our “real life,” especially for anyone at school or college, perhaps instead of spying on activities and waiting to pounce on a problem or alleged indiscretion, a preferable alternative should be for schools to educate about how to behave online.

Social media expert Dr. William J. Ward, A.K.A. DR4WARD, has long pushed for some form of social media etiquette training, primarily in the workplace, but his theories apply just as well to schools too.

If it was explained to young people — by someone who knows what they’re talking about and is independent from the school system — that posting everything that pops into their heads, no matter whether it’s a “joke” or not, isn’t always a good thing; then situations such as Carroll’s may not arise quite so frequently.

How Will the Affordable Care Act Affect You?

Monday the Supreme Court began hearing three days of arguments as to the constitutionality of several  provisions of the Affordable Care Act (ACA), passed two years ago this month.

Here are the four key issues the hearing will address:

• The Anti-Injunction Act: Should the legality of the individual mandate — which requires nearly all Americans without coverage to buy individual health insurance policies or pay a fine – even be considered now? Or must the case be deferred until 2015 because of the 1867 Anti-Injunction Act, which says taxpayers can’t challenge a levy’s legality before they actually pay the tax?

• Next come arguments about what many consider the central issue: Does Congress have the authority to require people to buy health insurance?

• If the Court declares the individual mandate unconstitutional, what happens to the law’s hundreds of other provisions? Do they all become invalid, or are some of them “severable”?

• Does the law’s expansion of Medicaid (which would cover many more poor people) violate states’ sovereignty by requiring them to spend more of their own money or forfeit all of the federal Medicaid money they now get?

• Assuming the Court allows the law to stand as it is now, here’s a review of how a variety of people could be (and, in some cases, already are) affected by the health-care overhaul: