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Canadian David Warren philosophizes in the Ottawa Sun and often sees the United States America more clearly than many who live and write within our borders.

He is pessimistic about the revolution that is unfolding under Obama's direction and foresees the emerging of a new America that can't be stopped with full Democratic control of Congress and the White House.

In the middle of this economic mess, the U.S. politicians are debating not one, but two new programs of unprecedented size, without the slightest understanding of the economic consequences. One is a vast new "health care" plan, to be sold almost entirely on emotion, with President Obama's snake-oil skills. The only thing clear about it, is the intention of the people behind it: to effectively nationalize the U.S. medical system, by making every part of it report to government bureaucracies. This is what we did in Canada in the 1960s, and we've spent the decades since trying to persuade ourselves that waiting rooms are natural.

The other is the "cap and trade" legislation. At a time when it has become all but obvious that the "global warming" scare was an imposture, the U.S. government is going to war against carbon fuels, through a program that can only kill jobs, both directly and through outsourcing of American economic activity to places with lower environmental standards; while igniting protectionist trade wars over the latter.

Can it be stopped?

I don't think they can. For not only has the Democrat party - committed in the main to the "second American revolution" I began to sketch above - control of the White House and both Houses. The Republican party is pulling itself apart. Only half of it is willing to fight: the other half thinks the only way back to power is to accommodate this revolution.

He sees no solution, only disaster ahead.

July 5, 2009

The New America

By David Warren

The Dow has been tanking again, and new figures show the U.S. economy shedding jobs at an accelerating rate. One might criticize the U.S. government for the first trillion or two of "stimulus" spending, by observing that it hasn't worked. But that would be too easy.

Yes, it was crazy, in the middle of a crisis created by debt, to see how far they could run up debt. It was crazy to shore up nearly worthless assets, in the face of irresistible market forces. At a time when the entire investment system desperately needs to be de-leveraged, it was crazy to oil the gears.

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While the Obama administration is focused on windmills and solar power, China is betting that oil will be the dominant energy fuel for many, many years. As a consequence, it is doing all it can to nail down future supplies.

Brazil is a prime Chinese target: It not only is the biggest single source of iron ore in the world and the second largest exporter of foodstuff, its national oil company Petrobras has discovered perhaps the biggest new oil field found anywhere in the world in many years offshore Brazil that promises to vault Petrobras and Brazil into the top tier of oil producers.

Some may rightfully grumble that China by entering into huge contracts for future supply is interfering with the global system of free trade. What China ties up never enters into the world trading system. That means less world oil for the United States and other nations to compete for, thus guaranteeing higher prices for what's left.

Brazil is launching a multi-year offshore oil development program estimated to cost $175 billion. As a result, rating agencies have sniffily dropped Brazil's bond rating to the lowest investment grade. No worry. China is stepping up.

To finance much of this development, Brazil has turned to China. With the active support of the Chinese government, many Chinese banks are lining up to extend loans to Brazil's energy sector. Right now, there is an agreement for a Chinese consortium to lend Petrobras $10 billion. In exchange, Petrobras will eventually ship 200,000 barrels of oil per day to Chinese refineries. There are more such long-term finance supply deals in the works. . . .
The Chinese are looking well ahead into the rest of this century, and even into the 22nd century. They want to ensure their future access to a diverse global supply chain, as well as win entrée into resource-rich regions of the world for Chinese industries and support firms. . . .
Why are the Chinese receiving such a warm welcome in Brazil? According to Sergio Gabrielli, CEO of Petrobras, "The U.S. has a problem. There isn't someone in the U.S. government that we can sit down with and have the kinds of discussions we're having with the Chinese."

The present U.S. administration isn't interested in oil. The U.S. has untapped reserves that could make the U.S. independent of oil and gas suppliers outside the Western Hemisphere. But it is denying itself development of those reserves -- the only country in the world to be doing so.

It isn't even interested in oil resources in our hemisphere that it can help develop for its own future purchase potential.

Also, the U.S. has plunged itself so deeply into debt to expand government programs it has no money to invest in strategic opportunities that arise elsewhere, even in relatively friendly places such as Brazil. (Brazil, as the largest exporter of ethanol in the world, is annoyed that it cannot economically sell to the United States since the Democratic Congress maintains the 50 cents per gallon tariff on foreign ethanol imports, which kills imports from Brazil.)

For those who think oil will be of no interest ten years from now, what is happening in Brazil is of no consequence.

Brazil's National Commitment to Energy - Bankrolled by China Jun 12th, 2009 | By Byron King

Brazil is making a national commitment to develop energy resources located far offshore in the South Atlantic. Indeed, no nation has ever advanced such an ambitious plan for long-term comprehensive offshore development. And it's being bankrolled by China.

Much of Brazil's South Atlantic development will require drilling wells in waters up to two miles deep, through four-five miles of rock beneath the seabed. The prize at the end will be oil deposits with reserves estimated in the tens of billions of barrels. With access to this offshore bounty, Brazil expects to take its place among the first ranks of energy-producing nations in the world.

Brazil's state-controlled national oil company (NOC), Petroleo Brasileiro SA (Petrobras) plans to spend over $175 billion in the next five years just on offshore development. The immense investment involves buying and building dozens of new drill ships and seagoing platforms, along with many dozens more support and servicing vessels. Petrobras will lay thousands of miles of pipelines on the seafloor, connecting massive complexes of subsea equipment that will sit atop hundreds of oil wells.

To finance much of this development, Brazil has turned to China. With the active support of the Chinese government, many Chinese banks are lining up to extend loans to Brazil's energy sector. Right now, there is an agreement for a Chinese consortium to lend Petrobras $10 billion. In exchange, Petrobras will eventually ship 200,000 barrels of oil per day to Chinese refineries. There are more such long-term finance supply deals in the works.

The Chinese government has established strategic guidelines for its national firms. That is, the Chinese government has set goals for Chinese firms to supply China's long-term needs for energy and other natural resources. The Chinese are looking well ahead into the rest of this century, and even into the 22nd century. They want to ensure their future access to a diverse global supply chain, as well as win entrée into resource-rich regions of the world for Chinese industries and support firms.

Why are the Chinese receiving such a warm welcome in Brazil? According to Sergio Gabrielli, CEO of Petrobras, "The U.S. has a problem. There isn't someone in the U.S. government that we can sit down with and have the kinds of discussions we're having with the Chinese."

In other words, there is a new geopolitics of oil at work. In the olden days, it would have been large international oil companies (IOCs) like Exxon Mobil, Shell and BP walking into a room to meet with the Brazilians. The IOCs were the only game in town. They controlled the financing and the technology for large developments.

But today, the biggest deals begin with a political understanding at the top, hammered out between the highest levels of the respective governments. This top-down political deal making cuts out the IOCs, except where they have technical expertise that can be hired on a contract basis.

In essence, we are witnessing the end of the post-World War II economic construct of the world's financial system. That construct always had a Western bias. But the 2008 crash of the Western business and financial model has changed everything. It has left a barren worldwide financial landscape for large development projects. Most traditional Western financing is simply not available for large projects. And as French author Francois Rabelais (1494-1553) once noted, "Nature abhors a vacuum."

Thus has the Western financial crisis handed well-capitalized, government-backed Chinese banks and industrial firms an unmatched competitive advantage. With the traditional credit markets dry, Chinese banks have transformed into key lenders for the resource developments that will fuel the next generation of humanity. Indeed, for now, the Chinese are the world's ONLY lenders for large resource development projects.


What does ignorant protectionism result in?

A weaker America.

Dimon rails against foreign worker rules

By Francesco Guerrera in New York

Financial Times May 20, 2009

Rules preventing US banks from hiring foreigners are a "complete and utter disgrace" and could prompt overseas governments to retaliate against American expatriates, Jamie Dimon, chief executive of JPMorgan Chase, warned on Tuesday.

Mr Dimon told his company's annual shareholder meeting that the provisions, which apply to lenders in receipt of government aid, had forced JPMorgan's executives to "look 40 or 50 overseas [graduates] in the eye" and tell them their job offers had been rescinded.

"We should be able to go to colleges and give jobs to kids without regard to where they were born," he added. "The worst thing that can happen . . . is that foreign governments will tell Americans they cannot have jobs over there."

Mr Dimon's outspoken comments highlight one of the key reasons - alongside restrictions on executive pay - why several lenders are eager to repay the funds received under the troubled asset relief programme (Tarp) last year.

Other large banks, including Goldman Sachs and Bank of America have attacked the rules, which make it difficult for banks receiving taxpayers' funds to apply for H1-B visas for skilled immigrants if they have recently made US workers redundant.

Mr Dimon said JPMorgan expected a number of banks to be allowed to repay Tarp in the next few weeks, as reported by the Financial Times on Tuesday. Government officials say an announcement on the first wave of Tarp repayers is likely to come on June 8.

When America came into being its chief enemy of course was England. But another enemy arose that caused grief to Americans for years, indeed, decades.

Muslim pirates operating from the North African coast were intercepting British and American ships and seizing passengers and crew members for slavery and ransom. For several years the American government actually budgeted blackmail money to pay the Muslim pashas to lay off, but each year the demands get getting bigger, making up about 20% of the young nation's budgeet

Debates raged in Congress and a famous cry was uttered in 1798 by a fed-up Congressman Representative Robert Goodloe Harper , "Millions for defense, but not one cent for tribute! John Adams wanted to keep paying, saying if we starting fighting them it would never end. (He, of course, was right; the 1400 year battle to conquer the non-Muslim world continues.)

However, Thomas Jefferson had had enough and commissioned the building of the first ships of the U.S. Navy, one of which is the U.S.S. Constitution, which is still listed as an active ship of the Navy while at dockside in the Charlestown shipyard in Boston. Naval battles were fought (which included the Constitution), Marines (established 1775) landed (on the shores of Tripoli) and the Muslim piracy and tribute ended finally about 1815.

Now Muslim pirates are at it again. They have been operating for a few years off the coast of Somalia. As they have taken ships and hostages and been rewarded with ransom money, they have grown bolder with faster boats, "mother" ships and more deadly weapons and have ventured farther out to sea. A few days ago they seized a Saudi supertanker with 2 milliion barrels of oil and a crew of 25 and are demanding $2 million to release the ship and crew. A Internatiional Maritime Bureau official says the situation is out of control. Here's a report of one of the Indian patrol ships taking on a mother ship and sinking it.


Ship traffic from the Mediterranean goes through the Suez Canal, across the Red Sea and out the Gulf of Aden to the north of Somalia. Tankers come down through the Arabian Sea to the east of Somalia, some going to the Mediterranean, some to Asia and others to the U.S. and European Atlantic ports. The Somali pirates are well-postioned to intercept them all.

Do notice nobody ever identifies who the pirates are; They are all Muslims performing their historic role. Robbing caravans is akin to seizing ship cargo and passengers. Since the Prophet Mohammad robbed caravans and took slaves to make a living, it's okay under Islam for today's Muslims to do the same.

Indian navy sinks suspected pirate "mother" ship

By SAM DOLNICK, Associated Press Writer
November 19, 2008

NEW DELHI – The ship, operating off the coast of Oman in the lawless waters of the Gulf of Aden, was crewed by heavily armed men, some carrying rocket-propelled grenade launchers. Behind it were a pair of speedboats — the sort pirates often use when they launch attacks on merchant ships in these violent seas.

What followed, officials said Wednesday, was a rare victory in a sea war against Somalia-based piracy that has become increasingly more violent, and where the pirates are ever more bold.

A patrolling Indian navy frigate quickly identified the vessel as a "mother ship" — a mobile attack base used to take gangs of pirates and smaller speedboats into deep water — and ordered it to stop and be searched.

"They responded on the offensive and said that they would blow up the Indian naval ship," Commander Nirad Sinha, a navy press officer, told reporters in New Delhi. Then the pirates opened fire.

Navy officials wouldn't say how long the battle Tuesday lasted, but the frigate, the INS Tabar, is a 400-foot war machine, carrying cruise missiles, surface-to-air missiles and six-barreled 30 mm machine guns for close combat, according to the Web site

By the time the battle was over, the mother ship had sunk — the Indian gunfire sparked fires and a series of onboard blasts, possibly due to exploding ammunition — and the speedboats were racing into the darkness.

One was later found abandoned. The other escaped. An unknown number of people died on the mother ship, a navy statement said.

It's not the first success. Last week, Indian navy commandos operating from a warship foiled a pirate attempt to hijack a ship in the Gulf of Aden. The navy said an armed helicopter with marine commandos prevented the pirates from boarding and hijacking the Indian merchant vessel.

Across the Gulf of Aden, though, news was far more grim for shippers.

Separate bands of pirates seized a Thai ship with 16 crew members and an Iranian cargo vessel with a crew of 25.

These days, pirates appear to be attacking ships at will in the region, said Noel Choong of the International Maritime Bureau's piracy reporting center in Malaysia.

"It's getting out of control," Choong said.

A multicoalition naval force, which includes the Indian presence, has increased patrols in the region, but the seizures Tuesday raised to eight the number of ships hijacked this week alone, Choong said. Since the beginning of the year, 39 ships have been hijacked in the Gulf of Aden, out of 95 attacked.

"There is no firm deterrent, that's why the pirate attacks are continuing," Choong said. "The criminal activities are flourishing because the risks are low and the rewards are extremely high."

The pirates used to mainly roam the waters off the coast of Somalia, where there has not been a stable, functioning government in nearly 20 years. But now they are targeting ships far further out at sea.

Choong said 17 vessels remain in the hands of pirates along with more than 300 crew members, including a Ukrainian ship loaded with weapons and a Saudi supertanker carrying $100 million in crude.

The supertanker, the MV Sirius Star, was anchored Tuesday close to Harardhere, the main pirates' den on the Somali coast, with a load of 2 million barrels of oil and 25 crew members.

Asked about reports that a ransom had been demanded, Saudi Foreign Minister Prince Saud al-Faisal said Wednesday in Rome that the owners of the tanker "are negotiating on the issue."

"We do not like to negotiate with pirates, terrorists or hijackers," but the owners of the tanker are "the final arbiter" on the issue, he said.

Pirates have generally released ships after ransoms were paid.

The vessels patrolling the dangerous seas include three NATO warships in the Gulf of Aden. The U.S. Navy's Bahrain-based 5th Fleet also has ships in the region.

But U.S. Navy Commander Jane Campbell of the 5th Fleet said naval patrols simply cannot prevent attacks given the vastness of the sea and the 21,000 vessels passing through the Gulf of Aden every year.

White House press secretary Dana Perino said Wednesday that President George W. Bush has been briefed on the issue of piracy and that the United States was working with other members of the U.N. Security Council to see if there are actions that can be taken to fight and prevent piracy more effectively.

"The safety and well-being of the crew is of paramount importance in preventing or dealing with issues of piracy," Perino said. "One of the things that's clear is that piracy is something that is affecting ... many more waters than any of us would have known about."

The Gulf of Aden connects to the Red Sea, which in turn is linked to the Mediterranean by the Suez Canal. The route is thousands of miles and many days shorter than going around the Cape of Good Hope off the southern tip of Africa.

The Thai boat, which was flying a flag from the tiny Pacific nation of Kiribati but operated out of Thailand, made a distress call as it was being chased by pirates in two speedboats but the phone connection was cut.

Wicharn Sirichaiekawat, manager of Sirichai Fisheries Co. Ltd. told The Associated Press the ship, the Ekawat Nava 5, was headed from Oman to Yemen to deliver fishing equipment.

"We have not heard from them since, so we don't know what the demands are," Wicharn said. "We have informed the families of the crew but right now, we don't have much more information to give them either."

Of the 16 crew members, Wicharn said 15 are Thai and one is Cambodian.

Later in the day, Thai Foreign Ministry deputy spokesman Voradet Veeravekin said Thai officials in Kenya were trying to make contact with the vessel.

"Based on previous cases, we believe they were held for ransom. We are optimistic that we will be able to negotiate for their release once we can contact the ship," he told the AP.

The Iranian carrier, the Delight, was flying a Hong Kong flag but was operated by the Islamic Republic of Iran Shipping Lines.

On Tuesday, a major Norwegian shipping group, Odfjell SE, ordered its more than 90 tankers to sail around Africa rather than use the Suez Canal after the seizure of the Saudi tanker.

"We will no longer expose our crew to the risk of being hijacked and held for ransom by pirates in the Gulf of Aden," said Terje Storeng, Odfjell's president and chief executive.

Obama isn't even president, but Canada and Colombia aren't taking any chances, they've started free trade discussions with Europe. After all, Pelosi blocked a vote on the Colombia free trade agreement (and Obama supports her) and Obama proclaimed he's going to unilaterally change NAFTA, which affects Canada and Mexico.

Michael Barone has called Pelosi's twisting of House rules to prevent a vote on the Colombia free trade agreement the most despicable act of this Congress. And Obama supports her action.

Along with all of Obama's plans that will sink the American economy, add protectionism.

Free trade came up in the McCain/Obama debate Wednesday night. Stephen Spruiell argues this important matter does not get the attention it deserves. It is incredible that Obama and the Democratic Congress have refused to approve the free trade agreement with Colombia, our closest ally in Latin America. McCain said it was an unconscionable position. Obama claimed Colombia was killing union officials. Not true. Obama follows the line of the unions that all free trade agreements are bad in defiance of all evidence and the near universal statements of economists.

Obama opposes the Colombia deal because organized labor opposes it, and his fealty to the AFL-CIO on that and every other issue should be causing more concern than it is. Whether workers will retain the right to a secret ballot in union elections is a question that the next president will almost certainly decide, and Obama has already come out in favor of taking that right away.

Americans are on the verge of electing the most anti-trade, pro-union candidate of the last three decades, but these issues have received scant attention compared to Obama’s tax plan. Obama’s redistributionist approach to taxes is important to highlight, but his protectionism is also a form of redistribution: It would force consumers to pay higher prices for certain goods in order to benefit favored domestic industries. Joe the Plumber was the star of Wednesday night’s debate, but tax policy is not the only way Barack Obama seeks to “spread the wealth.”

We reported in July on Democratic Speaker of the House Pelosi twisting House rules to prevent a required up-or-down vote on the Colombia free trade agreement from taking place. Michael Barone termed her action the most shameful act of the current Congress. It remains so, for Pelosi, the Democratic Congress and Obama.

HIstory has shown that protectionism is a recipe for disaster. Even the Democrat economist Paul Krugman in his sane days said, "A country serves its own interests by pursuing free trade regardless of what other countries may do.”

Colombia has been battling drug dealers for decades. Under President Uribe, Colombia, a close ally of the United States, has made tremendous progress against FARC, the principal enemy of a safe Colombia. With the help of the United States, a spectacular undercover operation by the Colombian army succeeded in rescuing hostages held by FARC for years. Among them was Chatham native Thomas Howes, who was serving as a contractor in the fight against the drug traffickers.

Despite the close cooperation of the U.S.and Colombia in seeking to end the flow of drugs from Colombia into the United States, Democrat Speaker of the House Nancy Pelosi has blocked a vote on the Free Trade Agreement negotiated by the Administration with Colombia, an agreement that will create jobs for the United States and make permanent favorable trade terms for our ally Colombia.

John McCain has called on the House to end its obstruction and to vote to approve the Colombia Free Trade Agreement. Political analyst Michael Barone has called Pelosi's twisting of House rules to keep the Agreement from getting a vote on the floor the "one truly shameful act" of this Congress. Obama supports Pelosi.

No wonder this Democratic Congress has an approval rating of only 9%. People are disgusted.

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