Insider Report
Headlines (Scroll down for complete stories):
1. Obama Accused of Treating Israel 'Like a Punching Bag'
2. Roger Ailes Penning Autobiography
3. GOP Bill Considers Drug Cartels 'Terrorist Insurgency'
4. Beijing's Pollution Shortens Lives by 5 Years
5. Report: 'Flippers' Spurred Housing Collapse
6. States Luring Firms From High-Tax Illinois
1. Obama Accused of Treating Israel 'Like a Punching Bag'
Jewish-American conservatives have taken out a full-page ad in leading newspapers urging the Obama administration to "stop blaming Israel first."
The ad by the Emergency Committee for Israel (ECI) ran Thursday in The New York Times, Miami Herald and several other papers.
Under the headline "Why does the Obama administration treat Israel like a punching bag?" the ad cites the recent exchange between President Obama and French President Nicolas Sarkozy complaining about Israeli Prime Minister Benjamin Netanyahu. The ad states that Secretary of Defense Leon Panetta blames Israel for "the failure of talks with the Palestinians," citing his remark at a forum calling on Israel to "get to the damn table."
The ad also quotes Secretary of State Hillary Clinton, who charged Israel with discrimination against women, and U.S. envoy to Belgium Howard Gutman, who recently linked the rise of anti-Semitism in the Arab world to the unsolved Palestinian-Israeli conflict.
Following the quotes, the ad states: "Enough with the cheap shots. It's time for the Obama Administration to stop blaming Israel first."
In remarks reported by the Israeli newspaper Haaretz, ECI director Noah Pollak said: "In a month that has seen Islamists come to power in Egypt, rocket attacks on Israel from Gaza and Lebanon, progress on the Iranian nuclear program, and the continued slaughter of civilians in Syria, the Obama administration has chosen to repeatedly condemn the only liberal democracy in the region: Israel."
The ad ran a day before President Obama's appearance at a conference of 6,000 Jewish-Americans in Washington sponsored by the Union for Reform Judaism.
Obama's 51 percent approval rating among Jews in a recent Gallup poll is higher than his national average — 48 percent — but the lowest among Jews in his three years in office.
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2. Roger Ailes Penning Autobiography
Fox News chief Roger Ailes, the architect of the network's amazing rise to national prominence, is reportedly writing his autobiography.
And his decision to pen his life story "suggests that he may be thinking of stepping down following this presidential election, when his contract expires in summer 2013," Gabriel Sherman writes in New York magazine.
Ailes' agent, Washington super-lawyer Bob Barnett, is working out the details with HarperCollins, which is owned by Rupert Murdoch, CEO of Fox's parent News Corp. Several sources have told Sherman that Ailes would receive an advance of $3 million to $4 million.
The book is being co-authored by Fox News contributor Jim Pinkerton, who worked with Ailes on George H.W. Bush's 1988 presidential campaign and was the ghost writer for Michele Bachmann's book "Core of Conviction."
"Nothing is official yet," Pinkerton told Sherman.
But an Ailes autobiography "could have serious implications for both Fox News and the future of the Republican Party," Sherman observes.
"For one, it would be difficult for Ailes to publish an unvarnished, tell-all autobiography while still running Fox News. How would the Fox talent or Rupert Murdoch feel if Ailes put into print what he really thinks about them?"
The cover story of Newsmax magazine's November issue, "The Most Powerful Man in the News," explored how Ailes single-handedly changed the way Americans get their news, building an audience that felt politically alienated by what they perceived to be the liberal bias of the big three networks.
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3. GOP Bill Considers Drug Cartels 'Terrorist Insurgency'
House Republicans are sponsoring a bill that would acknowledge Mexican drug cartels as a threat to national security and treat them as terrorists.
GOP Rep. Connie Mack of Florida introduced H.R. 3401, the "Enhanced Border Security Act," in order to "secure the U.S.-Mexico border, stop criminal access to U.S. financial institutions, and work with Mexico to implement counterinsurgency tactics to undermine the control of the drug cartels in the country," according to CNS News.
The bill would also double the number of Border Patrol agents and call for the construction of "tactical double layered fencing" to help secure the border.
"A terrorist insurgency is being waged along our Southern border," Mack said on Thursday as the bill came before the Western Hemisphere subcommittee of the House Foreign Affairs Committee, where he serves as chairman.
"The term terrorist insurgency may be strong. But it is based upon unchallenged facts.
"Drug traffickers and criminal organizations have combined efforts to work across borders, unravel government structures, and make large profits from diverse, illegal activity. The near-term result: schools, media and candidates all controlled by criminal organizations. In other words, total anarchy."
Rep. Michael McCaul, R-Texas, said: "I believe that the drug cartels are acting within the federal definition of terrorism, which basically says to intimidate a civilian population or government by extortion, kidnapping or assassination. That is precisely what the drug cartels do. They extort.
"They decapitate people on a daily basis. They burn people alive. Throw people in acid baths. If that's not intimidation, if that's not terrorizing a civilian population, I don't know what is."
Since 2006, 34,600 people have died as a result of Mexican drug cartel violence, the U.S. government reported earlier this year. But McCaul says the number is now higher, asserting that "50,000 Mexican people have been killed, brutally, at the hands of these drug cartels, more than the American deaths in Iraq and Afghanistan combined."
According to CNS News, the Act's counterinsurgency strategy would provide an assessment of the terrain, population, ports, financial centers, and income-generating activities of the cartels, evaluate the capabilities of Mexico's law enforcement, and coordinate with relevant federal agencies to deal with the operations of the cartels within the United States.
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4. Beijing's Pollution Shortens Lives by 5 Years
Air pollution in the Chinese capital Beijing has become so heavy that the lifespan of residents is being shortened by as many as five or six years, according to a report.
Chinese officials seek to downplay the problem, but emissions from coal-fired power plants, industrial emissions and motor vehicle exhaust fumes in and around Beijing are literally choking the city of 20 million people.
During one recent spell of particularly heavy pollution, hundreds of inbound and outbound flights were canceled due to poor visibility, long stretches of highways were shut down, stores sold out of face masks, and residents were urged to avoid any outdoor activity.
A report in the English-language China Daily said the lung cancer rate in Beijing has increased by 60 percent in the past 10 years even though the smoking rate did not change.
Avraham Ebenstein of the Hebrew University of Jerusalem has conducted a study of pollution in Beijing and said: "We estimate about five to six years of foregone life expectancy over the long haul for living in Beijing relative to [China's] southern cities."
And Steven Andrews, an American environmental consultant who published a report on the website China Dialogue, said that "if Beijing's fine particulate concentration even reached the polluted levels of Los Angeles, life expectancy may increase by over five years."
Chinese officials routinely report that the pollution levels are safe because they take into account only large particles, up to 10 microns in diameter, and don't include fine particles, which make up much of the city's pollution, The New York Times reported.
But gauges at the American Embassy in Beijing do measure those fine particles, and the embassy reports that the air was unhealthy more than 80 percent of the time in the last two years — while Beijing officials claim good or excellent air quality 80 percent of the time.
An NPR correspondent who lives in Beijing had an expert analyze the air inside her residence and found that the amount of fine particulate matter was five times higher than the level considered safe by the U.S. Environmental Protection Agency, and in America would be considered to be verging on "hazardous."
Chinese officials have blamed climatic conditions for what they describe as "heavy fog," according to NPR.
But it is telling that a Chinese manufacturer said more than 200 of its expensive air purifiers are in the homes and offices of China's top leaders.
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5. Report: 'Flippers' Spurred Housing Collapse
Blame for the housing crisis of recent years has mostly been directed at subprime mortgages, over-eager lenders and home buyers purchasing properties they ultimately could not afford.
But a new report asserts that significant blame must be shared by investors who speculated on properties they intended to "flip" — buy and sell quickly at a profit — rather than live in.
On the website of the Federal Reserve Bank of New York, four co-authors write that they "present new findings from our recent New York Fed study that uses unique data to suggest that real estate 'investors' — borrowers who use financial leverage in the form of mortgage credit to purchase multiple residential properties — played a previously unrecognized but very important role" in the housing crisis.
According to that study, more than a third of all home purchase lending in the United States at the peak of the housing boom in 2006 was made to people who already owned at least one house.
In the four states where housing prices have had the biggest downturn — California, Florida, Nevada and Arizona — the investor share was nearly half, 45 percent.
In those four states, investors owning three or more properties accounted for nearly 20 percent of all mortgage originations, nearly triple their share in 2000. Overall, investors' share of home purchases roughly doubled between 2000 and 2006.
And in the years following the bursting of the housing bubble, investors were responsible for more than a third of delinquent balances in the four states.
The authors point out that because "flippers" did not plan to own the properties they bought for very long, they were most interested in loans with small down payments and were therefore willing to accept mortgages with higher interest rates.
"Investors were far more likely than owner-occupants to use nonprime credit to make their purchases," the authors observe.
But when housing prices began to tumble and flippers could no longer recoup their investment, they were saddled with high interest loans they could not afford to pay. Many simply walked away from their properties, allowing them to go into foreclosure and adding to the supply of vacant homes on the glutted market.
"We conclude that investors were much more important in the housing boom and bust during the 2000s than previously thought," the authors conclude.
Referring to new regulations in China limiting the number of homes an individual can own, intended to rein in soaring housing prices in major cities, the authors add: "Effective regulation of speculative borrowing, like what is being attempted in China today, may be needed to prevent this kind of crisis from recurring."
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6 States Luring Firms From High-Tax Illinois
States considering an increase in corporate or income taxes would do well to study the recent move by Illinois to boost state revenue — which illustrates the dangers posed by high taxation.
In January, Illinois raised corporate taxes from 7.3 percent to 9.5 percent, and increased the personal income tax rate from 3 percent to 5 percent.
The hikes were prompted by a public pension liability estimated at $80 billion. Only 51 percent of Illinois' pension liabilities are funded, the lowest percentage in the nation.
"Although the tax hikes are theoretically temporary — and start to expire in 2015 – both the rises and the continued failure of politicians to get to grips with the budget crisis are starting to worry businesses," The Economist observes.
Due to the high taxes, Illinois-based companies are considering a move out of the state and are demanding tax breaks to remain. In May, Motorola Mobility was offered $100 million in financial incentives to keep its corporate headquarters, and 3,000 jobs, in Illinois. Navistar, a truck and engine company, has received $65 million in incentives.
Now Sears, one of the state's largest employers, says it will move 6,000 jobs out of Illinois unless the state extends tax incentives set to expire in 2012. Two Chicago-based financial exchanges are also threatening to depart.
The result is that hikes intended to raise revenue are becoming self-defeating — the state could be compelled to spend the additional tax revenue in order to convince companies to remain in the state.
And now "the vultures are circling," The Economist notes.
Ohio has offered Sears $400 million to move there, and Indiana has an ad campaign tempting Illinois businesses by asking if they are "Illinoyed" by the higher taxes.
Illinois' corporate tax rate is now higher than all but six states.
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