Category Archives: Industry Jobs Oil Economics

WH Ignoring Iran’s $6Billion for Syria Iraq Terror

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John Kerry, Hillary Clinton, Susan Rice, Tony Blinken, Tom Donilon, Samantha Power, Valerie Jarrett and Barack Obama are but part of the team that knew and ignored the billions for years that Iran used to support Bashir al Assad’s terror in Syria and later Iraq. The Obama regime has been gifting Iran money by lifting sanctions for the sake of humanitarian purposes in Iran when the money was not used for that but rather to support the Assad tyrannical power in Syria. Sanction waivers under the Obama regime regarding Iran have been common since the Iranian nuclear talks began.

Now the question is will this White House and State Department come clean and walk away from the P5+1 Iranian nuclear talks? This betrayal is historic.

Iran Spends Billions to Prop Up Assad

By Eli Lake
Iran is spending billions of dollars a year to prop up the Syrian dictator Bashar al-Assad, according to the U.N.’s envoy to Syria and other outside experts. These estimates are far higher than what the Barack Obama administration, busy negotiating a nuclear deal with the Tehran government, has implied Iran spends on its policy to destabilize the Middle East.

On Monday, a spokeswoman for the U.N. special envoy for Syria, Staffan de Mistura, told me that the envoy estimates Iran spends $6 billion annually on Assad’s government. Other experts I spoke to put the number even higher. Nadim Shehadi, the director of the Fares Center for Eastern Mediterranean Studies at Tufts University, said his research shows that Iran spent between $14 and $15 billion in military and economic aid to the Damascus regime in 2012 and 2013, even though Iran’s banks and businesses were cut off from the international financial system.

Such figures undermine recent claims from Obama and his top officials suggesting that Iran spends a relative pittance to challenge U.S. interests and allies in the region. While the administration has never disclosed its own estimates on how much Iran spends to back Syria and other allies in the Middle East, Obama himself has played down the financial dimension of the regime’s support.

“The great danger that the region has faced from Iran is not because they have so much money. Their budget — their military budget is $15 billion compared to $150 billion for the Gulf States,” he said in an interview last week with Israel’s Channel 2.

But experts see it another way. The Christian Science Monitor last month reported that de Mistura told a think tank in Washington that Iran was spending three times its official military budget–$35 billion annually–to support Assad in Syria. When asked about that earlier event, Jessy Chahine, the spokeswoman for de Mistura, e-mailed me: “The Special Envoy has estimated Iran spends $6 billion annually on supporting the Assad regime in Syria. So it’s $6 billion not $35 billion.”

Either way, that figure is significant. Many members of Congress and close U.S. regional allies have raised concerns that Iran will see a windfall of cash as a condition of any nuclear deal it signs this summer. Obama himself has said there is at least $150 billion worth of Iranian money being held in overseas banks as part of the crippling sanctions. If Iran spends billions of its limited resources today to support its proxies in the Middle East, it would follow that it will spend even more once sanctions are lifted.

The Obama administration disagrees. It says the amount Iran spends on mischief in the region is so low that any future sanctions relief will not make a difference in its behavior. Speaking at a conference this weekend sponsored by the Jerusalem Post, Treasury Secretary Jack Lew said that even as Iran’s economy has suffered from sanctions in recent years, it has been able to maintain its “small” level of assistance to terrorists and other proxies. “The unfortunate truth remains that the cost of this support is sufficiently small, that we will need to remain vigilant with or without a nuclear deal to use our other tools to deter the funding of terror and regional destabilization,” he said.

Shehadi and other experts acknowledged that their figures were estimates, because the Tehran regime does not publicize budgets for its Revolutionary Guard Corps or the full subsidies it provides to allies. Nonetheless, Shehadi says, Iranian support to Syria today is substantial, especially when factoring in the line of credit, oil subsidies and other kinds of economic assistance Iran provides the Syrian regime.

Steven Heydemann, who was the vice president for applied research on conflict at the U.S. Institute of Peace until last month, told me earlier this year that the value of Iranian oil transfers, lines of credit, military personnel costs and subsidies for weapons for the Syrian government was likely between $3.5 and $4 billion annually. He said that did not factor in how much Iran spent on supporting Hezbollah and other militias fighting Assad’s opponents in Syria. Heydamann said he estimated the total support from Iran for Assad would be between $15 and $20 billion annually.

A Pentagon report released last week was quite clear about what Iran hopes to achieve with its spending: “Iran has not substantively changed its national security and military strategies over the past year. However, Tehran has adjusted its approach to achieve its enduring objectives, by increasing its diplomatic outreach and decreasing its bellicose rhetoric.” The report says Iran’s strategy is intended to preserve its Islamic system of governance, protect it from outside threats, attain economic prosperity and “establish Iran as the dominant regional power.”

If Iran ends up accepting a deal on its nuclear program, it will see an infusion of cash to pursue that regional agenda. Shehadi said this fits a pattern for dictatorships in the Middle East: they preoccupy the international community with proliferation issues while, behind the scene, they continue to commit atrocities.

“In the early 1990s, Saddam Hussein was massacring his people and we were worried about the weapons inspectors,” Shehadi said. “Bashar al-Assad did that too. He kept us busy with chemical weapons when he massacred his people. Iran is keeping us busy with a nuclear deal and we are giving them carte blanche in Syria and the region.”

 

EPA to Destroy the Entire Transportation Industry

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The White House climate change, greenhouse emissions and clean air act is about to be completely out of control. The question is where is the Congress and where are you? Remember Barack Obama said in his commencement speech that climate change was the top threat to national security.

Washington (CNN)The Environmental Protection Agency announced Wednesday it will propose a declaration that says carbon emissions from commercial planes contribute to climate change and hurt human health.

EPA also said it was working with the International Civil Aviation Organization, which includes 191 member states, to develop carbon dioxide standards for planes that would impact airlines in the U.S. and across the world.

“The EPA administrator is proposing to find that (greenhouse gas) emissions from certain classes of engines used primarily in commercial aircraft contribute to the air pollution that causes climate change and endangers public health and welfare,” the agency said in a statement, announcing an Aug. 11 hearing on the proposal and a 60-day window for the public to weigh in.

The move was the first step towards regulating air pollution from commercial airlines, but the ICAO standards aren’t expected to be adopted until early 2016. The earliest the EPA would be able to put out a notice of new standards would be in 2017, after President Barack Obama is out of office, and a final rule wouldn’t go into effect until at least 2018.

The future regulation would apply to commercial aircraft and business jets, but not military aircraft, which the EPA does not have jurisdiction over.

Wednesday’s announcement is the latest in a series of moves from the Obama administration geared at combating climate change, which Obama has characterized as an immediate national security threat.

*** WSJ: The Obama administration is planning a series of actions this summer to rein in greenhouse-gas emissions from wide swaths of the economy, including trucks, airplanes and power plants, kicking into high gear an ambitious climate agenda that the president sees as key to his legacy.

And in August, the agency will complete a suite of three regulations lowering carbon from the nation’s power plants—the centerpiece of President Barack Obama’s climate-change agenda.

The proposals represent the biggest climate push by the administration since 2009, when the House passed a national cap-and-trade system proposed by the White House aimed at reducing carbon emissions.

Anticipating the rules, some of which have been telegraphed in advance, opponents of Mr. Obama’s regulatory efforts are moving to block them. Senate Majority Leader Mitch McConnell (R., Ky.), is urging governors across the country to defy the EPA by not submitting plans to comply with its rule cutting power-plant emissions.

Nearly all Republicans and some Democrats representing states dependent on fossil fuels say the Obama administration is going beyond the boundary of the law and usurping the role of Congress by imposing regulations that amount to a national energy tax driven by ideological considerations.

“The Administration seems determined to double down on the type of deeply regressive regulatory policy we’ve already seen it try to impose on lower-and-middle-class families in every state,” Mr. McConnell said in a statement. “These Obama administration regulations share several things in common with the upcoming directives: they seem motivated more by ideology than science, and they’re likely to negatively affect the economy and hurt both the cost and reliability of energy for hard-working American families and small-business owners.”

Two factors are driving the timing of the push this summer. The administration wants to complete it ahead of December’s United Nations summit on climate change, where world leaders will meet in Paris to decide whether to agree on a global accord to cut carbon emissions. The EPA’s regulatory agenda represents nearly everything Mr. Obama is set to offer world leaders on what the U.S. is doing to address climate change.

Secondly, once the EPA rules on emissions by power plants become final, states will have a year to submit plans while lawsuits challenging the rule are expected to be heard by the courts. The administration wants to make sure that its officials can oversee as much of these two developments as possible instead of relying on the next president, especially if it is one of the GOP White House candidates who have expressed opposition to the EPA’s climate agenda altogether.

 

Obamacare = O’boondoggle

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Everything has a consequence and there are many attached to Obamacare, many not in the mainstream knowledge base. Jobs and innovation in the United States is the latest victim of the law. The Supreme Court will decide the fate of the law under the King vs. Burwell case at the end of the month. A description of the case is found here. There are some key facts on the case that need to be known as noted here. Additional destructive consequences still loom in the future.

ObamaCare’s Anti-Innovation Effect

by Scott W. Atlas

Of the many unintended consequences of the Affordable Care Act, perhaps the least noticed is its threat to innovation. Although most discussions center on the law’s more immediate effects on hiring, insurance rates and access to doctors and care, attention should also be paid to its impact on U.S. research and development and health-care technology.

The overwhelming majority of the world’s health-care innovation occurs in the U.S. This includes ground-breaking drug treatments, surgical procedures, medical devices, patents, diagnostics and much more. Most of the funding for that innovation—about 71% of U.S. R&D investment—comes from private industry. A recent R&D Magazine survey of industry leaders in 63 countries ranked the U.S. No. 1 in the world for health-care innovation.

But that environment is changing. According to R&D Magazine and the research firm Battelle, growth of R&D spending in the U.S. from 2012 to 2014 averaged just 2.1%, down from an average of 6% over the previous 15 years. In that same 15-year period, Malaysia, Thailand, Singapore, South Korea, India and the European Union saw faster R&D spending growth than the U.S. China’s grew on average 22% per year.

The recent slowdown in R&D spending in the U.S. is in part caused by weak economic growth since the 2008 financial crisis. But the economy’s weakness itself has been exacerbated by the negative impact of new taxes and regulations under ObamaCare. According to Congressional Budget Office estimates, the new health-care law will levy more than $500 billion in new taxes over its first 10 years to help pay for insurance subsidies and Medicaid expansion. These new taxes include significant levies on key health-care industries, such as manufacturers of medical devices and drugs, and their investors.

As a result, small and large U.S. health-care technology companies are moving R&D centers and jobs overseas. The CEO of one of the largest health-care companies in America recently told me that the device tax his company paid last year exceeded his company’s entire R&D budget. Already a long list of companies—including Boston Scientific , Stryker and Cook Medical—have announced job cuts and plans to open new centers for R&D, manufacturing and clinical trials overseas.

The bureaucrats at the Food and Drug Administration are also hindering medical-technology and drug development. According to a 2010 survey of more than 200 medical-device companies by medical professor and entrepreneur Josh Makower and his colleagues at Stanford University, delays of approvals for new medical devices are now far longer in the U.S. than in many other developed countries. In the European Union—not exactly known for cutting through red tape—it takes on average seven months to gain approval for low- to moderate-risk devices. In the U.S., FDA approval for similar devices takes on average 31 months.

The 2011 PricewaterhouseCoopers Medical Technology Innovation Scorecard found that “the gap between innovation leaders and emerging economies is rapidly narrowing.” And that “although the United States will hold its lead, the country will continue to lose ground during the next decade.” It goes on to say that “China, India, and Brazil will experience the strongest gains during the next 10 years.”

Since the signing of the Affordable Care Act in 2010, private-equity investment in new U.S. health-care startups has also diminished. Annual capital investment has decreased to $41 billion in 2013 from $61 billion in 2011, according to quarterly reports by the accounting and audit firm McGladrey LLP. Similarly, the Silicon Valley-based law firm Wilson Sonsini Goodrich & Rosati reported in its semiannual Life Sciences Reports decreases from the first half of 2010 through the second half of 2013 in deal closings and capital raised for startups in biopharmaceuticals, medical devices and equipment, and diagnostics, with only a slight uptick in health-information systems investment.

Meanwhile, many of the best and brightest who come to the U.S. to study science, technology, engineering and math—the STEM subjects that are so crucial to innovation—are choosing to return to their home countries upon graduation. In 2008, a survey conducted by Vivek Wadhwa and his team of researchers at Duke, Harvard and the University of California found that only 6% of Indian, 10% of Chinese and 15% of European students expected to make America their permanent home. Much of this is Congress’s fault. Lawmakers have been slow to increase limits on H-1B visas for high-skill foreign workers. Pressure has been brought to bear on Congress to take action, but it may be too late for an increase in the visas to have much effect in health care, given the decline in R&D spending that would make use of their talents.

What can be done to reverse these damaging trends? First, strip back the heavy tax burdens that currently inhibit innovation, starting with repealing the Affordable Care Act’s $29 billion medical-device excise tax and the $80 billion tax on brand-name drugs. Change the tax code to add incentives for investment in early-stage medical technology and life-science companies, as well as for philanthropic gifts to academic institutions that promote tech entrepreneurs.

And finally, simplify processes for new device and drug approvals, so that the FDA becomes a favorable rather than an obstructionist environment for these life-saving and cost-saving discoveries. It’s a tall order, especially in today’s Washington. But America’s health—and wealth—depend on it.

*** Obama’s ‘King v. Burwell’ Speech Displayed The Very Ideological Fervor That Led Him To Break The Law

In a case called King v. Burwell, the Supreme Court will soon decide whether it agrees with two lower courts that President Obama is breaking the law by subjecting 57 million employers and individuals to illegal taxes, and spending the illegal proceeds to hide the cost of HealthCare.gov coverage from 6.5 million enrollees. Today the president delivered a speech designed to cow the Supremes into turning a blind eye to the law. Instead, he offered what for some is the missing piece of the King v. Burwell puzzle. He displayed the very ideological fervor that leads powerful people to break the rules.

“We have an obligation to put ourselves in our neighbor’s shoes, and to see the common humanity in each other,” the president said. Yet the president of the United States has an even more important obligation to “take Care that the Laws be faithfully executed.”  It’s right there in Article II, Section 3 of the U.S. Constitution, which President Obama swore to uphold. King v. Burwell is about his failure to meet that obligation.

 

Putin’s Plan for a Military Artic Region

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Despite sanctions against Russia, the Artic is still at risk. The recent G-7 meeting brought more solidarity agreement of sanctions on Russia but only due to Putin’s hostilities against Ukraine and in violation on the Minsk Agreement. The full text of the agreement is here in English. No conversations have taken place with regard to Putin’s operations in the Artic.

Going back to 2103, Putin not only announced his aggressions for the Artic region, he is intensifying operations while there is no mission to stop his objectives. Two years later, he is succeeding.

Russia has been building new ships and preparing to deploy troops along its northern border as melting Arctic ice will make it possible for more commercial traffic to transit the so called Northern Sea route. There is also the potential for large mineral deposits in the region.

“There are plans to create a group of troops and forces to ensure military security and protection of the Russian Federation’s national interests in the Arctic in 2014,” Defense Minister Sergey Shoigu said at the same meeting.

Putin’s declaration highlights several military moves the Russians have made in relation to the Arctic in the last few years.

Nikolai Patrushev, the head of Russia’s Security Council, announced in mid-2012 it would create ten naval bases along its northern coast. In May, Russia announced it would be constructing up to four new ships for duty in the Arctic.

Putin’s remarks follow Canada’s plan to claim Arctic territories — including the North Pole — as sovereign Canadian territory, the country’s foreign minister announced on Monday.

“We are determined to ensure that all Canadians benefit from the tremendous resources that are to be found in Canada’s far north,” John Baird said, according to an Associated Press report.

Last week, Canada made preliminary claims to some Arctic regions and plans to make more.

Russia, of all the eight members of the Arctic Council, has the most naval assets to patrol the surface of the Arctic.

Russia has more than 37 government icebreakers compared to Canada’s six and America’s five, according to a July review from the U.S. Coast Guard.

However Canada is currently constructing a new surface naval force, complete with a collection of ships that would be designed to operate in cold climates.

Under the sea, the U.S. nuclear submarine force remains as the dominant power in the region.

Russia is interested in the Arctic for a number of reasons, though natural resources and pure geopolitical imperatives are the major driving forces behind Moscow’s thinking. The Arctic contains an estimated 30 percent of the world’s undiscovered natural gas and 13 percent of its undiscovered oil reserves, regarded by Moscow as important sources of foreign investment that are critical to the country’s economic development. The Northern Sea Route from East Asia to Europe via the Arctic Ocean provides another economic opportunity for developing infrastructure in northern Russia.

Militarizing the Arctic will be a key imperative for the Russian military throughout 2015 and beyond — alongside modernization in general and bolstering forces in Crimea and the Kaliningrad exclave. According to the Russian Ministry of Defense, Soviet-era bases in the Arctic are being reactivated in response to NATO’s renewed interest in the region.

The airstrip on the archipelago of Novaya Zemlya is being renovated to accommodate modern and next generation fighter aircraft in addition to advanced S400 air defense systems. Part of the Northern Fleet will also be based on the island chain, which is ideally positioned for operations in the Arctic region. The Northern Fleet represents two-thirds of the entire Russian Navy, which is the only navy in the world to operate nuclear-powered icebreaker ships. Great detail can be read here.

ISIS Tactics Include Taxes and Treasures

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With a multi-country coalition, air strikes, ground intelligence gathering, surveillance drones and up to 1000 more troops being deployed to Iraq, the White House has no strategy and blames the Pentagon.

The Pentagon has a division that is assigned to war-gaming and planning in all conditions across the globe that is based on human intelligence, information gathered from diplomatic staff in all embassies, use of software, estimations, locations of military assets, threats from the enemy, money, transportation, secret deals, ordnance positioning and more. The Pentagon always has several strategies that are current and nimble that require dynamic alterations as even minor conditions change. For Obama to blame the Pentagon is childish and misguided.

Despite nine months and $2.44 billion in U.S. airstrikes against the fighters and their oil facilities and smuggling networks, the self-proclaimed Islamic State has proven to be as resilient financially as it’s been militarily.

The group that President Barack Obama dismissed in January 2014 as a junior varsity team last year seized an estimated $675 million from banks, plus $145 million in oil sales and ransom payments and tens of millions more from other commercial enterprises, looting and extortion, according to U.S. Treasury and United Nations figures.

“This isn’t your average terrorist group operating from your average safe haven,” said Juan Zarate, a former assistant secretary of Treasury for terrorist financing and financial crimes who spent years targeting al-Qaeda funding. “They have access to oil in Iraq and Syria; access to major population centers; access to banks, antiquities and smuggling groups — all of that allows them to be more agile and have access to more capital and resources than your average terrorist group.”

“The truth is nobody really knows how much they’re making now,” said Daveed Gartenstein-Ross, a senior fellow at the Foundation for Defense of Democracies. “The U.S. government is getting closer to pegging the group’s finances because of things like last month’s raid in eastern Syria. But no one knows how much they’re getting versus their spending.”

Islamic State “is in some ways a proto-state, in some ways a terrorist organization, in some ways an insurgency and in some ways a transnational criminal group,” he said. Like drug cartels in Colombia and Mexico and al-Qaeda offshoots in Somalia, northern Mali and Yemen, the group is extorting taxes, plundering local resources and taking a cut of commercial enterprises, he said. Read much more detail here.

ISIS has published their objectives on the internet for the world to see and yet operates with unhindered. ISIS is fully functional in an estimated 12 countries while the Obama administration is in neutral to lead the coalition in both offensive and defensive measures. The impact of the coalition is inert.

Egypt, a country working to recover from a power revolution is at particular risk.

From Oren Kessler in part: Egypt’s once-foundering economy is slowly rising from the abyss. President Abdel-Fattah al-Sisi has cut costly fuel and food subsidies, cut red tape on investments, instructed the Central Bank to tackle the black market in foreign currencies and vowed to bring unemployment under 10 percent.

His efforts are beginning to bear fruit. In May, the ratings agency Standard & Poor’s revised Egypt’s country outlook from stable to positive, predicting real GDP growth over the next three years of 4.3 percent – double the average of the four years since the revolution. Meanwhile, the government’s suspension of the capital gains tax sent stocks soaring 6.5 percent in a single day.

Still, no economic turnaround will be complete without a recovery in tourism. The U.S. State Department currently urges citizens to exercise caution in traveling to the country, and advises against any non-essential travel in Sinai, where an insurgency by Islamic State-linked militants has raged since the military ouster of Muslim Brotherhood president Mohamed Morsi in July 2013. At the same time, shadowy pro-Brotherhood groups calling themselves Ajnad Misr (“Soldiers of Egypt”) and the “Popular Resistance Movement” are increasingly targeting the populous mainland, including Cairo, Alexandria and the cities of the Nile Delta. The government accuses the now-banned Brotherhood of responsibility for virtually every attack, but the extent to which the group is actually orchestrating the violence remains unclear.

What is clear is that continued terrorism, particularly against tourists, has the capacity to set back the fragile gains Cairo has made in restoring stability and reviving its economy. For Egypt, persuading visitors to come soak up the country’s sights and sun will require convincing them beyond a reasonable doubt that traveling to the land of the Pharaohs will not be a one-way ticket. More detail here.