How to Freeze the Debt Ceiling Without Risking Default

Posted by osurce, 19th January 2011

DebtPat Toomey
1/19/2011

Regarding the coming Congressional debate over whether to raise the US debt ceiling, Toomey says that under no circumstances is it acceptable for the US to default on its debt. By honoring our debts we benefit from the nearly universal conviction that those who lend to us will always be repaid in full. We should never undermine that conviction. Toomey opposes raising the debt ceiling without regaining control of federal spending. The recent surge in spending, both in absolute dollars and as a percentage of our GDP, has produced record deficits and debt. Congress can address the looming fiscal crisis created by overspending without jeopardizing the full faith and credit of our country–and it should.

Toomey, a Republican, is a US senator from Pennsylvania.

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Mr. Obama, speak up for human rights in China

Posted by osurce, 19th January 2011

Barack Obama and Hu JintaoYang Jianli
1/19/2011

The author makes an appeal to President Obama to consider human rights and the democratization of China when he meets with Chinese President Hu Jintao this week. He suggests that President Obama politely but pointedly ask President Hu about his father’s denunciation by the Communist Party and draw the parallel between Hu’s father and political prisoners like Nobel Peace Prize laureate Liu Xiaobo. Obama could ask why Liu Xia, wife of Liu Xiaobo, remains under house arrest without being accused of any crime (Chinese law makes no provision for imprisonment without cause). Obama could then press Hu toward a more democratic approach to government, which would be in the best interest of the United States, China, and “all humanity,” says Yang Jianli. While the writer understands the potential awkwardness of such an encounter between Obama and Hu, he also recognizes the opportunity.

The writer is president of Initiatives for China and a Harvard fellow. He served a five-year prison term in China, from 2002 to 2007, for attempting to observe labor unrest. He is the liaison to the Nobel Peace Prize Committee on behalf of Liu Xia, the wife of Nobel laureate Liu Xiaobo, who is serving 11 years in prison for his writings.

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Big business is back in business

Posted by osurce, 13th January 2011

US Chamber of Commerce logoDana Milbank
1/12/2011

The US Chamber of Commerce is enjoying renewed influence in Washington after this past November’s elections. Not only did the Chamber support a number of winning candidates across the nation, but corporate interests have returned to prominence among both the legislative and executive branches. Lobbyists have gained key staff positions with incoming Representatives and Senators and the Chamber expects a more business friendly tone in the years ahead.

Milbank writes about political theater in the nation’s capital.

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An American Message for the Chinese President

Posted by osurce, 13th January 2011

President Hu JintaoKelly Currie
1/12/2011

Chinese President Hu Jintao arrives in Washington for a state visit next week as the Obama administration’s thinking on the US-China relationship has evolved. Curry suggests that Obama may give greater prominence to human rights as he recalibrates relations with Beijing. She thinks freedom of expression should be the leitmotif of the summit. The summit provides an opportunity to contrast the weaknesses of the Chinese political system with the strengths of the American one. Aspects of the visit involving freedom of expression should be non-negotiable. If the Chinese side objects, the White House should be willing to cancel events of importance to Beijing’s protocol-obsessed leaders.

Currie is a senior fellow with the Project 2049 Institute.

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When Congress Was Armed And Dangerous

Posted by osurce, 13th January 2011

CongressJoanne B. Freeman
1/12/2011

From the 1830s-1850s, members of Congress wore weapons on the House and Senate floor and often used them, Freeman says. She looks at the history of violence in Washington, including an incident when Senator Henry Foote of Mississippi pulled a pistol on Senator Thomas Hart Benton of Missouri during a debate. Things began to change after the invention of the telegraph, which promised instant publicity of these deeds. Now politicians are considering carrying weapons again to protect themselves against the public. Freeman says we are reminded that words matter and communication should be fruitful and civil.

Freeman, a professor of history at Yale, is at work on a book about violence in Congress.

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Why Teacher Pensions Don’t Work

Posted by osurce, 10th January 2011

TeacherJoel Klein
1/10/2011

Throughout the country public-employee pension plans have been massively underfunded and defined-benefit systems aren’t merely Ponzi schemes. They discourage talented teachers who would prefer front-loaded compensation. Defined-benefit pensions helped bring the once-vibrant US auto industry to its knees. The promised benefits just proved too costly. The same kind of pension is now hollowing out public education. Because there’s essentially no competition in education, however, the effect has been hidden from public view. Today incoming governors–Democrats and Republicans–faced with this dismal equation are looking for a way to undo the damage and get out from under these unsustainable promises.

Klein, former chancellor of New York City’s public schools, is the CEO of News Corporation’s educational division.

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Climate of Hate

Posted by osurce, 10th January 2011

Gabrielle GiffordsPaul Krugman
1/10/2011

Krugman says he is not surprised by the Arizona shooting. He cites an upsurge in political hatred after Bill Clinton’s election that culminated in the Oklahoma City bombing, the frenzied crowds at McCain-Palin rallies, and a Department of Homeland Security internal report in April 2009 that warned that right-wing extremism was on the rise, with a growing potential for violence. The calls for violence in political rhetoric has contributed to this, and this act should not be treated as an isolated event. Decent people should shun those that are purveyors of hate, and it is up to GOP leaders to accept the reality of what’s happening and take a stand against eliminationist rhetoric, otherwise this is just the beginning of the violence.

Krugman is a New York Times columnist.

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Raising the Red Flag on Red Capitalism

Posted by osurce, 10th January 2011

China Stock MarketRick Carew
1/10/2011

The conventional wisdom, propagated by senior businessmen, pundits, and policy makers, holds that the 21st century is China’s for the taking, says Carew. He reflects on a book by Carl E. Walter and Fraser J.T. Howie who argue that China isn’t immune from normal economic laws as its cheerleaders argue. Scratch the surface and China’s economic model is less impressive than it looks. The authors discuss unacknowledged bad loans piling up within China’s system (implying that leaders have misallocated capital), and put its public debt at 76% of GDP. With an aging population and a weak social safety net, China cannot afford a banking crisis in the next decade. If and when one comes, Beijing could regret not creating a more resilient, genuinely capitalist market.

Carew is a former Asia M&A reporter for The Wall Street Journal.

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Friends with Benefits

Posted by osurce, 5th January 2011

William D. Cohan
1/5/2011

Facebook is now considered to be worth more than Time Warner, DuPont, and Goldman’s rival Morgan Stanley. Cohan says it is worth the $450 investment Goldman Sachs pumped into the company. This is because Goldman’s cost of capital is close to zero since, as a bank holding company, it can borrow from the Federal Reserve at negligible interest rates. Any capital gain Goldman Sachs makes would be sheer profit. In addition it will have locked up the role of lead manager of Facebook’s initial public offering when it happens. Cohan also looks at other business deals Goldman has negotiated on its behalf and says it will come out ahead. The loser will be the average investor who will be left holding the bag when Wall Street realizes its performance doesn’t live up to the hype.

Cohan blogs about Wall Street and Main Street for The New York Times.

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