Category Archives: Nation/World

Bookstore marvels at Amazon.com’s dubious success

Westminster Theological Seminary’s bookstore almost went out of business last Christmas, largely because they have a hard time competing with Amazon.com’s prices, which are so low that even Amazon itself can’t make a profit. In a recent email to their customers, they lamented:

Our great challenge is that we continue to exist in an environment where Amazon — the industry leader — is allowed by Wall Street to function without regard for their short-term profitability. Some of you may be aware that Amazon recently reported a $7 million loss on $15.7 billion of revenue. Next quarter, they are forecasting a loss of between $65 and $440 million. Despite this, their stock is up about 20% this year, indicating investor willingness to sustain Amazon’s loss-leading business model. As I ponder economic history, I can’t name another 21-year old company with which Wall Street has been this patient.

Amazon’s results show that, despite their buying power, technology, management skill, and income from non-book products and services, they are unable to post a profit given their current pricing model. This reality is made all the more striking given that competitive forces like Borders and independent bookstores have gone out of business while Barnes & Noble and other retailers struggle to carve out an existence.

Small bookstores and online commerce rivals aren’t the only ones puzzled by Wall Street. Recent articles in Forbes and The Guardian also show surprise that investors continue to have seemingly unwavering faith in Jeff Bezos, despite little or no explanation from him for the losses. Will this bubble ever burst? Whether it does or doesn’t, what will the long-term effect be on consumers?
And what can consumers do about it? Well, take out life insurance. Visit https://www.lifecoverquotes.org.uk/average-life-insurance-cost-uk for more information. Even when you have an easy job, it is worth having insurance, one is not exempt from going through some tragedy.

Candidate Obama vs. President Obama on presidential power

After listening to President Obama’s speech this afternoon regarding Syria, I read an article in the newspaper. I imagine the national pundits have already made note of the contradiction I discovered, but I don’t listen to a lot of talk radio, so it struck me as a profound about-face.

Here’s what Candidate Obama told the Boston Globe in December 2007 (which was quoted in an AP story I read in the Journal Star this morning):

The President does not have power under the Constitution to unilaterally authorize a military attack in a situation that does not involve stopping an actual or imminent threat to the nation.

But today, President Obama had something different to say (emphasis mine):

Now, after careful deliberation, I have decided that the United States should take military action against Syrian regime targets. […] Yet, while I believe I have the authority to carry out this military action without specific congressional authorization, I know that the country will be stronger if we take this course, and our actions will be even more effective.

So Candidate Obama believed the President does not have the power to authorize military action unilaterally, but President Obama does believe the President has the authority to take military action unilaterally. What has changed since 2007? Well, obviously, Obama is now President! It appears that the power of the Presidency has changed Obama’s mind.

Pretzel logic reigns supreme on court

The 5-4 decision released yesterday by the Supreme Court on the Affordable Care Act would be comical if it didn’t have such far-reaching consequences. Here we have a majority of the supposedly preeminent minds in American jurisprudence using the most tortured logic imaginable to uphold the ACA as constitutional.

The whole thing hinges on this question: If you don’t buy health insurance, you will be required to pay an extra amount of money to the IRS; is that amount of money a “tax” or a “penalty”? The answer to that question affects two things:

  1. Whether the Anti-Injunction Act bars the suit, and
  2. Whether the Affordable Care Act is constitutional.

The Anti-Injunction Act says that “no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court by any person … so that those subject to a tax must first pay it and then sue for a refund.” So if the consequence of not purchasing health insurance is a tax, the suit is thrown out, and the court has no further comment on its merits. But if it’s a penalty, then the Anti-Injunction Act does not apply and the court can rule on the merits of the case.

However, when it comes to whether the ACA is constitutional, having a penalty for failure to purchase health insurance would make the Act unconstitutional because the Congress has no enumerated power to require individuals to purchase anything. But if it’s merely a tax, the Congress would have the power under their taxing authority to impose it (provided it’s not a “direct tax,” but that’s a subject for another time).

It would appear to any reasonable observer that there are only two possible outcomes: Either the consequence of failing to purchase health care is a “penalty” — in which case the Act is unconstitutional — or it’s a “tax” — in which case the suit is barred and there can be no ruling on its merits. The seeming nail in the coffin for the ACA is that fact that the Act itself calls the consequence a “penalty” in no uncertain terms.

But thanks to the ingenious invention of the majority of the court, the Government can have it both ways! Yes, remarkable as it may seem, the court found that the Act provides a “penalty” for purposes of the Anti-Injunction Act, but a “tax” for purposes of the Constitutional question.

…Congress did not intend the payment to be treated as a “tax” for purposes of the Anti-Injunction Act. The Affordable Care Act describes the payment as a “penalty,” not a “tax.” That label cannot control whether the payment is a tax for purposes of the Constitution, but it does determine the application of the Anti-Injunction Act. The Anti-Injunction Act therefore does not bar this suit. […]

The Affordable Care Act describes the “[s]hared responsibility payment” as a “penalty,” not a “tax.” That label is fatal to the application of the Anti-Injunction Act. It does not, however, control whether an exaction is within Congress’s power to tax. In answering that constitutional question, this Court follows a functional approach, “[d]isregarding the designation of the exaction, and viewing its substance and application.”

So the “functional approach” is applied to the Constitutional question, but Congress’s “intent” is applied to the Anti-Injunction Act question. The logical gymnastics boggle the mind.

It only gets worse if you actually read the whole ruling (read it here). A plain reading of the Act makes it clear that the “shared responsibility payment” is a “penalty” by any definition, yet the majority of the court takes pains to try to paint it as a tax from a “functional” standpoint. But their explanation exceeds all limits of credulity. To quote the court’s dissenters, “to say that the Individual Mandate merely imposes a tax is not to interpret the statute but to rewrite it.” That amounts to the judicial branch imposing a tax where one did not previously exist. They conclude: “Imposing a tax through judicial legislation inverts the constitutional scheme, and places the power to tax in the branch of government least accountable to the citizenry.”

Whether or not the next election results in a new president and/or Congressional majority that will repeal the health care act, the precedent set by the court in this case is troublesome. It appears that future unconstitutional acts passed by Congress will not be struck down by the Court when challenged, but rather rewritten by the Court and magically converted into constitutional acts. That prospect is truly frightening in its implications.

Peoria Hosts Event In Observance of the 10th Anniversary of 9/11

I don’t know if you’ve heard, but Sunday will be the 10th anniversary of the 9/11 terrorist attacks. There have been one or two stories in the news about it recently. The City of Peoria is having a big remembrance event downtown tomorrow, the day before the anniversary. Here’s the press release:

Peoria, Illinois – The City of Peoria’s 9/11 Remembrance Event will be held at O’Brien Field on September 10, 2011, from 10:00 until 11:15 a.m. This special service, which is free and open to the public, is a tribute not only to those individuals who lost their lives on that fateful day, but to the men and women who continue to risk their lives to keep our nation safe. The gates of O’Brien Field will open at 9:00 a.m., and spectators will be greeted with performances by The Peoria Ballet, Pulses of Hope, and the Richwoods Gospel Choir. Vehicles will be displayed along Jefferson Street as we showcase first responders from the military, police, fire, and medical services.

We are pleased to welcome Vice Admiral Robert S. Harward, Deputy Commander, U.S. Central Command (USCENTCOM) as the guest speaker for our 9/11 Remembrance Event. Vice Admiral Harward commanded troops in Afghanistan and Iraq for over six years since September 11, 2001, where he last served as the commander of the Combined Joint Interagency Task Force (CJIATF) 435.

Due to the power outages experienced in Southern California, the Navy Parachute Team (Leap Frogs) will be unable to perform at the event. The Leap Frogs’ originate from San Diego, California, and the power outage prevented their flight from taking off this morning.

CityLink will run Park and Ride shuttles from Evergreen Square (in front of Lenscrafters – 801 W. Lake Avenue) to O’Brien Field, starting at 9:00 a.m. The shuttle will return riders to Evergreen Square immediately following the event.

Everyone is encouraged to show their pride by wearing red, white, or blue to the event.

Guest Editorial: Distractions

Editor’s Note: This post was submitted by my father-in-law (and faithful Chronicle reader) Lee Tallman. All comments on this post will be forwarded to him.

During the period of the Roman Empire, gladiatorial contests and executions were held in the coliseum. Their purpose was to entertain the public, and divert its attention from the activities of the government. Today, in the United States, the attention of the public is diverted by the public battles between the Republican and Democratic parties. As in ancient Rome, the contests today have little to do with the activities of government.

The government of the United States serves the interests of important industries: insurance and banking, pharmaceuticals and agriculture, energy and defense (collectively the small businesses about which politicians are so passionate.) These industries provide the promotional campaigns that ensure the election of favored candidates. Members of both political parties participate. Successful candidates are expected to support legislation that is favorable to sponsoring industries. Lobbying organizations provide second careers for retiring politicians.

OSAMA BIN LADEN IS DEAD (Updated)

If you don’t have the TV or radio on, you’ll find most programming has been preempted for a special news report: Osama bin Laden has been killed. President Obama is expected to make the official announcement soon.

UPDATE: Here is a transcript of President Obama’s address, delivered Sunday night:

THE PRESIDENT: Good evening. Tonight, I can report to the American people and to the world that the United States has conducted an operation that killed Osama bin Laden, the leader of al Qaeda, and a terrorist who’s responsible for the murder of thousands of innocent men, women, and children.

It was nearly 10 years ago that a bright September day was darkened by the worst attack on the American people in our history. The images of 9/11 are seared into our national memory — hijacked planes cutting through a cloudless September sky; the Twin Towers collapsing to the ground; black smoke billowing up from the Pentagon; the wreckage of Flight 93 in Shanksville, Pennsylvania, where the actions of heroic citizens saved even more heartbreak and destruction.

And yet we know that the worst images are those that were unseen to the world. The empty seat at the dinner table. Children who were forced to grow up without their mother or their father. Parents who would never know the feeling of their child’s embrace. Nearly 3,000 citizens taken from us, leaving a gaping hole in our hearts.

On September 11, 2001, in our time of grief, the American people came together. We offered our neighbors a hand, and we offered the wounded our blood. We reaffirmed our ties to each other, and our love of community and country. On that day, no matter where we came from, what God we prayed to, or what race or ethnicity we were, we were united as one American family.

We were also united in our resolve to protect our nation and to bring those who committed this vicious attack to justice. We quickly learned that the 9/11 attacks were carried out by al Qaeda — an organization headed by Osama bin Laden, which had openly declared war on the United States and was committed to killing innocents in our country and around the globe. And so we went to war against al Qaeda to protect our citizens, our friends, and our allies.

Over the last 10 years, thanks to the tireless and heroic work of our military and our counterterrorism professionals, we’ve made great strides in that effort. We’ve disrupted terrorist attacks and strengthened our homeland defense. In Afghanistan, we removed the Taliban government, which had given bin Laden and al Qaeda safe haven and support. And around the globe, we worked with our friends and allies to capture or kill scores of al Qaeda terrorists, including several who were a part of the 9/11 plot.

Yet Osama bin Laden avoided capture and escaped across the Afghan border into Pakistan. Meanwhile, al Qaeda continued to operate from along that border and operate through its affiliates across the world.

And so shortly after taking office, I directed Leon Panetta, the director of the CIA, to make the killing or capture of bin Laden the top priority of our war against al Qaeda, even as we continued our broader efforts to disrupt, dismantle, and defeat his network.

Then, last August, after years of painstaking work by our intelligence community, I was briefed on a possible lead to bin Laden. It was far from certain, and it took many months to run this thread to ground. I met repeatedly with my national security team as we developed more information about the possibility that we had located bin Laden hiding within a compound deep inside of Pakistan. And finally, last week, I determined that we had enough intelligence to take action, and authorized an operation to get Osama bin Laden and bring him to justice.

Today, at my direction, the United States launched a targeted operation against that compound in Abbottabad, Pakistan. A small team of Americans carried out the operation with extraordinary courage and capability. No Americans were harmed. They took care to avoid civilian casualties. After a firefight, they killed Osama bin Laden and took custody of his body.

For over two decades, bin Laden has been al Qaeda’s leader and symbol, and has continued to plot attacks against our country and our friends and allies. The death of bin Laden marks the most significant achievement to date in our nation’s effort to defeat al Qaeda.

Yet his death does not mark the end of our effort. There’s no doubt that al Qaeda will continue to pursue attacks against us. We must –- and we will — remain vigilant at home and abroad.

As we do, we must also reaffirm that the United States is not –- and never will be -– at war with Islam. I’ve made clear, just as President Bush did shortly after 9/11, that our war is not against Islam. Bin Laden was not a Muslim leader; he was a mass murderer of Muslims. Indeed, al Qaeda has slaughtered scores of Muslims in many countries, including our own. So his demise should be welcomed by all who believe in peace and human dignity.

Over the years, I’ve repeatedly made clear that we would take action within Pakistan if we knew where bin Laden was. That is what we’ve done. But it’s important to note that our counterterrorism cooperation with Pakistan helped lead us to bin Laden and the compound where he was hiding. Indeed, bin Laden had declared war against Pakistan as well, and ordered attacks against the Pakistani people.

Tonight, I called President Zardari, and my team has also spoken with their Pakistani counterparts. They agree that this is a good and historic day for both of our nations. And going forward, it is essential that Pakistan continue to join us in the fight against al Qaeda and its affiliates.

The American people did not choose this fight. It came to our shores, and started with the senseless slaughter of our citizens. After nearly 10 years of service, struggle, and sacrifice, we know well the costs of war. These efforts weigh on me every time I, as Commander-in-Chief, have to sign a letter to a family that has lost a loved one, or look into the eyes of a service member who’s been gravely wounded.

So Americans understand the costs of war. Yet as a country, we will never tolerate our security being threatened, nor stand idly by when our people have been killed. We will be relentless in defense of our citizens and our friends and allies. We will be true to the values that make us who we are. And on nights like this one, we can say to those families who have lost loved ones to al Qaeda’s terror: Justice has been done.

Tonight, we give thanks to the countless intelligence and counterterrorism professionals who’ve worked tirelessly to achieve this outcome. The American people do not see their work, nor know their names. But tonight, they feel the satisfaction of their work and the result of their pursuit of justice.

We give thanks for the men who carried out this operation, for they exemplify the professionalism, patriotism, and unparalleled courage of those who serve our country. And they are part of a generation that has borne the heaviest share of the burden since that September day.

Finally, let me say to the families who lost loved ones on 9/11 that we have never forgotten your loss, nor wavered in our commitment to see that we do whatever it takes to prevent another attack on our shores.

And tonight, let us think back to the sense of unity that prevailed on 9/11. I know that it has, at times, frayed. Yet today’s achievement is a testament to the greatness of our country and the determination of the American people.

The cause of securing our country is not complete. But tonight, we are once again reminded that America can do whatever we set our mind to. That is the story of our history, whether it’s the pursuit of prosperity for our people, or the struggle for equality for all our citizens; our commitment to stand up for our values abroad, and our sacrifices to make the world a safer place.

Let us remember that we can do these things not just because of wealth or power, but because of who we are: one nation, under God, indivisible, with liberty and justice for all.

Thank you. May God bless you. And may God bless the United States of America.

New York Times and George Will have different answers to state crises

Yesterday I read George Will’s column in the Journal Star (here’s the same article in the Washington Post), and then the New York Times editorial. They both happened to be on the same subject: States in crisis, with Illinois in the limelight.

The New York Times says the Feds should step in and give more money (emphasis added):

A state or city unable to make its bond payments would send harmful ripples through the financial system that could cause damage even to healthier governments. But if states act quickly to deal with their revenue losses and address their debt — and receive sufficient aid from Washington — there is still time to avoid a crisis.

…[F]ederal stimulus money — which has been keeping many states afloat — is largely scheduled to expire. Renewing a portion of that aid would be one of the most effective ways to assist the economy.

And they think states and cities should raise taxes on the rich — something they criticize the federal government for being unwilling to do.

In contrast, Will says the Feds shouldn’t give another penny to states or cities that have brought this all on themselves, unless they’re willing to reform.

San Francisco voters defeated Proposition B [which would have required city employees to contribute up to 10 percent of their salaries to their pension plans, and to pay half the health-care premiums of their dependents]. If they now experience a self-inflicted budgetary earthquake, there is no national obligation to ameliorate the disaster they, like many other cities and states, have chosen.

Furthermore, any existing aid they receive should come with strings attached, he says:

[Rep. Devin] Nunes’s bill [H.R. 6484] would require [states and municipal governments] to disclose the size of their pension liabilities – and the often-dreamy assumptions behind the calculations. Noncompliant governments would be ineligible for issuing bonds exempt from federal taxation. Furthermore, the bill would stipulate that state and local governments are entirely responsible for their pension obligations and the federal government will provide no bailouts.

Nunes’s bill would not traduce any state’s sovereignty: Each would retain the right not to comply, choosing to forfeit access to the federally subsidized borrowing that facilitated their slide into trouble.

Tough love, as it were. I’m more inclined to agree with Will. The problem with the New York Times’ solution is that it doesn’t do anything to deal with the root problem. In fact, it exacerbates it. Extending stimulus benefits to states and municipal governments without requiring any change in the way they operate will only help them slide into insolvency quicker and result in bigger losses. Will’s suggestion requires reform if federal benefits are to continue and mitigates losses to taxpayers and investors alike.

Bleak Friday: China and Russia renounce U.S. dollar

This doesn’t bode well:

At a joint press conference in St. Petersburg, Russian President Vladimir Putin and Chinese Premier Wen Jiabao announced their countries’ agreement Thursday to allow their currencies to trade against each other in spot inter-bank markets and online trading platforms like VT markets, thereby formally renouncing the U.S. dollar….

Despite the avowed assurance of not challenging the U.S. dollar, the trade pact between Russia and China will actually result in the undermining and marginalization of the U.S. dollar’s “petro-currency” status.

According to the International Energy Agency, China is the largest consumer of energy, and now the largest automobile market in the world, with an expected rapid increase in oil consumption. Concomitantly, Russia is the second biggest oil exporter and the biggest natural gas exporter in the world.

Add to this global energy picture the two countries’ phasing out of dollar usage for trading energy commodities, and there would indeed be a significant downgrade of the status of the U.S. dollar.

The Chinese Xinhua news agency reports that Russian trade with China was $45.1 billion this year. It won’t be in dollars anymore. Also, this:

Russia’s Prime Minister said Friday he was confident in the euro despite Europe’s swelling debt crisis and criticized the dollar’s dominance as a world reserve currency….

“We have to get away from the overwhelming dollar monopoly. It makes the world economy vulnerable,” he told a gathering of business leaders in Berlin through a translator….

Asked about the possibility of Russia one day adopting the euro as a currency, Putin did not rule out such an option. “The rapprochement of Russia and Europe is inevitable,” he said.

In his call to reduce the dollar’s dominance in the world economy, Putin noted an agreement signed this week with China to use their respective currencies, the ruble and yuan, for bilateral trade in the future.

Deutsche Bank AG’s chief executive Josef Ackermann echoed those comments, saying “I think it is completely accurate that we have to reduce the currency system’s dependence from one dominant currency such as the dollar.”

Cat’s growing presence in China — Is it a good thing? Part 2

In a previous post, we looked at potential pitfalls in efforts to access China’s markets. Specifically, it appears that access comes with a high cost: supplying Chinese competitors with proprietary technology. Another example of this was recently exposed in the Wall Street Journal:

When the Japanese and European companies that pioneered high-speed rail agreed to build trains for China, they thought they’d be getting access to a booming new market, billions of dollars worth of contracts and the cachet of creating the most ambitious rapid rail system in history.

What they didn’t count on was having to compete with Chinese firms who adapted their technology and turned it against them just a few years later.

Today, Chinese rail companies that were once junior partners with the likes of Kawasaki Heavy Industries Ltd., Siemens AG, Alstom SA and Bombardier Inc. are vying against them in the burgeoning global market for super-fast train systems. From the U.S. to Saudi Arabia to Brazil and in China itself, Chinese companies are selling trains that in most cases are faster than those offered by their foreign rivals.

Caterpillar recently announced it’s building another large engine factory in China, expanding its presence there. How long will it be before we start seeing Chinese companies competing head-to-head with Caterpillar — using Cat’s own technology against them?