Why the U.S. Kneels

December 3, 2009 by · Leave a Comment 

By Philip Weiss

Gideon Levy in Haaretz tells America to stop sucking up to Israel. He leaves out the root cause. You can’t just tell the Americans to make better policy without dealing with the Israel lobby and, barring wider outrage among Americans, issues of Jewish identity.

Levy: Before no other country on the planet does the United States kneel and plead like this. In other trouble spots, America takes a different tone. It bombs in Afghanistan, invades Iraq and threatens sanctions against Iran and North Korea. Did anyone in Washington consider begging Saddam Hussein to withdraw from occupied territory in Kuwait?

But Israel the occupier, the stubborn contrarian that continues to mock America and the world by building settlements and abusing the Palestinians, receives different treatment. Another massage to the national ego in one video, more embarrassing praise in another.

Now is the time to say to the United States: Enough flattery. If you don’t change the tone, nothing will change. As long as Israel feels the United States is in its pocket, and that America’s automatic veto will save it from condemnations and sanctions, that it will receive massive aid unconditionally, and that it can continue waging punitive, lethal campaigns without a word from Washington, killing, destroying and imprisoning without the world’s policeman making a sound, it will continue in its ways.

Illegal acts like the occupation and settlement expansion, and offensives that may have involved war crimes, as in Gaza, deserve a different approach. If America and the world had issued condemnations after Operation Summer Rains in 2006 – which left 400 Palestinians dead and severe infrastructure damage in the first major operation in Gaza since the disengagement – then Operation Cast Lead never would have been launched.

It is true that unlike all the world’s other troublemakers, Israel is viewed as a Western democracy, but Israel of 2009 is a country whose language is force. Anwar Sadat may have been the last leader to win our hearts with optimistic, hope-igniting speeches. If he were to visit Israel today, he would be jeered off the stage. The Syrian president pleads for peace and Israel callously dismisses him, the United States begs for a settlement freeze and Israel turns up its nose. This is what happens when there are no consequences for Israel’s inaction.

When Clinton returns to Washington, she should advocate a sharp policy change toward Israel. Israeli hearts can no longer be won with hope, promises of a better future or sweet talk, for this is no longer Israel’s language. For something to change, Israel must understand that perpetuating the status quo will exact a painful price.

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California Dodges Bullet with Budget Deal–for Now

July 23, 2009 by · Leave a Comment 

By Peter Henderson and Jim Christie

SAN FRANCISCO (Reuters) – California’s state budget deal is a bet its economy, the world’s eighth-largest, will rebound — but that’s not likely to happen soon.

Governor Arnold Schwarzenegger and top lawmakers agreed Monday to close a $26 billion budget gap, largely with $15 billion in spending cuts, with many pushed into future years.

“They are waiting for the economy to bail them out,” said Chris Ryon, a fund manager at Thornburg Investment who sees “a lot of risk” for investors in California debt.

The budget deal would let the state start traditional borrowing again, although state officials were waiting for the legislature to pass the deal before saying when they will tap the debt market.

Meanwhile, the state is still paying its way with IOUs and must contend with the financial effects of double-digit unemployment and foreclosures dominating its housing market.

“Unemployment, unfortunately, probably hasn’t peaked yet,” said Nuveen Investments fund manager Paul Brennan, who views the budget as a bet that better times are around the corner.

California’s revenues rely heavily on personal income taxes and tend to swing strongly. Google Inc’s initial public offering helped fuel a bumper year for taxes, so if the state economy recovers, revenue could grow quickly.

But economist Steve Levy says California’s economy likely will remain weak for some time and the state government’s main problem will persist — that its citizens and government can not agree on the level of public services to provide.

“We are a state in gridlock, in disagreement,” said Levy, director of the Center for the Continuing Study of the California Economy.

Lawsuits Ready

Around the state, uncertainty greeted the budget agreement. Its details were sparse while rank-and-file lawmakers reviewed the deal for potential votes in the state Assembly and Senate by Thursday.

But opposition formed quickly to some of the plan’s proposals, such as taking roughly $4 billion from cities and counties for state needs. The Los Angeles County Board of Supervisors, for instance, voted Tuesday to sue the state to stop proposed cuts to the county’s share of the state highway tax and community redevelopment funds.

The California State Association of Counties said it would mull a lawsuit as well and San Jose Mayor Chuck Reed told Reuters that his city, the 10th-largest in the nation, also is “committed to participating in a lawsuit” to keep the state from grabbing its money.

“They are probably in violation of the (state) Constitution in taking our redevelopment funds, in violation of the law in taking our highway users tax,” Reed said.

In addition to concerns about losing money to the state, county officials fear losing state aid for health and human service programs they must provide.

“Make no mistake, under this budget scenario counties cannot uniformly ensure the delivery of critical health, public safety and other vital local services,” said Paul McIntosh, executive director of the California State Association of Counties.

To Buy or Not

Once a budget is signed, state finance officials will decide on the kind of short-term debt the state will need to sell to raise money for cash-flow purposes.

Until then, plans for selling either revenue anticipation notes or revenue anticipation warrants are on hold, said State Treasurer Bill Lockyer.

Nevertheless, the budget deal came just in time, Lockyer told Reuters, and he sees lawmakers endorsing it. “Most of them understand we’re getting real close to the edge of the cliff here and we’d better wrap it up quickly.”

Standard & Poor’s analyst Gabriel Petek said the deal averted a certain downgrade next month by his rating agency, which has the state’s general obligation debt at A and CreditWatch with negative implications. “That was the trajectory it was on,” Petek said.

Investment analysts were split over the budget agreement and whether to buy California’s existing or new debt.

Dick Larkin, director of credit rating analysis at Herbert J. Sims Co Inc, said he suspects the agreement will end up deferring hard decisions about the state’s finances and a budget deficit will reemerge. “This is a pretty crappy budget to try to make the case to borrow billions of dollars over the next three months,” Larkin said.

Tom Tarabicos, a financial adviser at Wells Fargo Financial Advisors, said the deal failed to sway him from his dim view of California’s finances and their effect on the state’s bonds.

“This appears to me to be just a short-term reprieve,” Tarabicos said. “We’re going to maintain our distance.”

By contrast, Ken Naehu, head of fixed income at Bel Air Investment Advisors in Los Angeles, said the agreement should end speculation over whether California would not make payments on its debt service to bondholders.

Naehu said debt service payments were never in doubt as they are the state’s No. 2 payment priority as required by law and because the state’s revenues, albeit weak compared with a year earlier, were strong enough to support them.

“Why in the world would you cut your arm off and not make debt service payment when it’s such a small part of the budget?” Naehu said.

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