The John Batchelor Show

Tuesday 27 August 2013

Air Date: 
August 27, 2013

Photo, above: The Arleigh Burke-class guided missile destroyer USS Hopper (DDG 70), equipped with the Aegis integrated weapons system, launches a RIM-161 Standard Missile (SM) 3 Block IA during exercise Stellar Avenger while under way in the Pacific Ocean July 30, 2009. The missile successfully intercepted a sub-scale, short-range, ballistic missile that was launched from the Kauai Test Facility, Pacific Missile Range Facility at Barking Sands in Kauai, Hawaii. The exercise is the 19th successful intercept of 23 at-sea firings using the Aegis Ballistic Missile Defense program, including the destruction of a malfunctioning satellite above the Earth’s atmosphere in February 2008. (DoD photo courtesy of U.S. Navy/Released) 


Co-host: Larry Kudlow, The Kudlow Report, CNBC; and Cumulus Media radio

Hour One

Tuesday  27 August  2013 / Hour 1, Block A: Larry Kudlow, in re: cautiously bullish: Lew Lehrman, possible 3% next year.  Summers and Yellin: what would they do differently?  It'll take 3, 4, 5 years to [get out]; inflation, which has not materialized, might develop. Every time you change chairmen, something happens.  Crash of Asian currencies: a real issue. Indonesia (gigantic) and India (gigantic), plus Brazil, UAE and Qatar – we sell a lot of goods to each of these (China's yuan isn’t plunging); if those mkts shut down, it'd damage out companies, so the emerging mkts do matter.    Germany, Netherlands, not even France: coming out the their double-dip recession; ECB will be very loose for several years – a banking collapse or a currency collapse in Europe will not happen.

Tuesday  27 August  2013 / Hour 1, Block B: James Pethokoukis, NRO & columnist & AEI, in re:  A writer's (Mr Gordon) theory that, for thousands of years, humans had no major economic leap forward; then the US did suddenly in a major flowering for a while, rather by accident; however, Facebook is not a new combustion engine and henceforth our new normal is, effectively, a sort of stagnation. 

James Pethokoukis disagrees: capitalism, the commerce class, great innovation - all these created this glorious flowering; rewarding success, allowing people to keep the fruits of their labor and allowing people to be celebrated for their accomplishment. The guild didn't shut you down.  Why didn't the US  have its Tiger decade?  Might be because we taxed and regulated it all away.  LK asked Lew Lehrman today: Obamacare, or Facebook and fracking?   He said the second with a regime change in Washington.    JP: The presidet hasn’t even been to North Dakota – an energy revolution as huge as the dvpt of the Internet.  On all his jobs panels no one has represented this world; for the third century of the US, we'll need this new world.  Recall Soylent Green – Hollywood can prognosticate only a horrid, grim reality; is it the same for academe?We'll a ve billions of brilliant people coming n line – need to foresee this and encourage the brilliance.

JACKSON HOLE: ECB Council Members Split in Jackson Hole Over Rate Cuts – Policy makers still can’t rule out lowering the benchmark rate from the record low of 0.5 percent, Central Bank of Cyprus Governor Panicos Demetriades said in an Aug. 24 interview in Jackson HoleWyoming. By contrast, Bank of Austria Governor Ewald Nowotny said on Aug. 22 he doesn’t see “many arguments now for a rate cut” after the recent “stream of good news.”   [more

Price Gains of Stocks in the S&P Outpace Profits by the Fastest Rate in 14 Years – The benchmark gauge for U.S. equities has risen 14 percent relative to income over the past 12 months to 16 times earnings, according to data compiled by Bloomberg. Valuations last climbed this fast in the final year of the 1990s technology bubble, just before the index began a 49 percent tumble. The rally that started in March 2009 has now outlasted the average gain since 1946, the data show.  [more]

Tuesday  27 August  2013 / Hour 1, Block C: Steven Malanga,, in re: Justice has been joined by six states – some have spent up to a billion dollars on teir airports  - "infrastructure" – but the airline industry is in turmoil, having trouble making money, so the locals are upset because they’re not making money off the investments. US Airways at Pittsburgh has gone bust twice,  partly because it had to pay $20 mil PA for rent.  Pittsbourgeois feel betrayed. Conflicts between cities, which want to spend big, and he airlines, struggling for survive.  Clearly, state AGs fear that if the huge merger goes through, they'll reduce the number of hubs Of course, govts have overbuilt airports, convention centers, et al., have invested taxpayers's money into an industry that's going south. States join the feds in the suit vs the merger. Regulatory capture?  A lot of ec dvpt folks at state and local levels speak of the problem "We need to re-regulate airlines so market forces cant undercut them."  Yike.  Is that supposed to keep the airlines in the pink?  In the Sixties, airlines had to keep to certain routes, thus considered a stable envt – and held very high prices!  Giuliani wanted to privatize airports. These are powerful political interests. DOJ: "Better for the consumer for these two airlines to be separate" – but naturally if one or both fail, that won’t be better for the consumer.

The Real Reason Pols and Bureaucrats Oppose Airline Mergers, When the federal government moved last week to block the merger of American Airlines and US Airways on antitrust grounds, officials in several states joined the federal suit. Not surprisingly, states that opted to try and block the merger included cities where the airlines now operate airport hubs. Local regulators may claim they oppose these mergers on the grounds that they'll reduce competition and boost fares. But what really worries officials in many hub cities is that they've made huge investments in airports and continue to see their traffic disappear as the industry consolidates. Some cities and states have spent hundreds of millions of dollars building or retooling airports to be hubs, where most traffic is not local but involves transfers, only to see that business evaporate quickest. As jobs disappear and revenues to support airport debt shrinks, these huge municipal infrastructure outlays, . . .  [more]

Government subsidy of airports and the overbuilding and higher fares that have resulted: examples from recent column plus others that go to the heart of government intervention and "investment' in the market and why, subsequently, government then wants to protect its investment by regulation.  For instance, in some of the cities in these pieces, the Left has suggested that the solution to the problem of airports left without airline tenants after big building programs is to re-regulate the airline industry again. The reasoning is since airports are public facilities that require long-term investment, they shouldn't be subject to an industry that has to respond to changing market conditions. [more]

Tuesday  27 August  2013 / Hour 1, Block D: Avik Roy, Manhattan Institute, in re: Occam's Razor prevents us from thinking too conspiratorily. They itemized in a letter to the feds: the reinsurance fee (tax where employers are taxed for ObamaCare exchanges: Delta will be taxed $10 mil to insure other people); then fees to insure children under age 26 - $14mil PA extra for Delta; and the individual mandate from 2014, another $14mil; all together equal $38 mil from three provisions; plus a few others. The individual, or nongroup, market. The Cadillac tax (nondeductible excise tax: caps the value of the exclusion): the great inefficiency is employer-paid insurance, which has been tax-deductible as personal was not. [Google: "cadillac tax" + "avik roy"] Delta makes only a billion each year – where will they get a hundred mil? Note Erik Erickson of RedState. 

Delta Air Lines: Next Year, Our Health Care Costs Will Increase by ‘Nearly $100 Million’   We know that Obamacare will significantly increase the cost of individually-purchased health insurance in nearly every part of the country. But we’ve generally assumed that disruptions in the market for employer-sponsored health insurance will be less severe. In particular, large employers who self-insure should be exempt from most of Obamacare’s most onerous regulations. It turns out, however, that even America’s largest companies face higher costs due to the health law. A recently-leaked letter from Delta Air Lines to the Obama administration states that the “cost of providing health care to our employees will increase by nearly $100,000,000 next year,” much of it due to Obamacare.  [more]

Hour Two

Tuesday  27 August  2013 / Hour 2, Block A: Jeff Mason, Reuters, in re: Thirty months of civil war, mass death and depredations. Said to have been a chem. attack on civilians east of Damascus.  What do we actually know about the White House and its communications to the planet? Today, the president telephoned David Cameron, UK PM, to discuss Syria. No specifics given beyond "great concern" over the alleged chemical attacks, which the WH is sure occurred. "Little doubt," "undeniable," said Kerry – but there's no independent investigation of that use – no UN confirmation. WH cites TV and video.      Before the pres goes overseas (Sweden and Russia on Tuesday), will he address the US?  If there's a military action under way, probably.   WH atmosphere is serious and tense; Fri road trip was on higher education, but thereafter it's been all Syria all the time.  No timetable discussion. Confirmation of force movements, redeployments, to give the president the option of strikes.  Ground forces? No ground forces, no boots on the ground in Syria. Blockades (an act of war)?  No public indication.   UN inspectors said to have been turned back in East Damascus by sniper fire.  Jay Carney: Any response would not be aimed at regime change. U.S. points finger at Assad over Syria gas attack      Kerry: Syria guilty of a "moral obscenity"

Tuesday  27 August  2013 / Hour 2, Block B: Paul R. Gregory, & Hoover:   The Chinese Can't Stage a Decent Show Trial  (See darkness at Noon, 1940; not Bukharin but Rybashov.)  Compare the shortfall, the weak soup served in China as they prosecute Bo Xilai – their Bukharin.  Violated  1. The charge needs to be serious (Bo stole under $5mil, which is chump change to Chinese political thieves); 2. have an airtight confession - Bo has denied all charges and they have no leverage over him, since his wife is jailed for life and son is in the US with a huge bank account); 3. control of media – but transcripts have gone out over Weibo.

Guess they haven’t read their Stalin.   Chinese can’t accuse him of his real crime: being a high flyer becoming too big for his britches and too closely in league with the military. Stalin would have shot him, but the Chinese leadership can't because this suggests an unstable Party, so they charge him with pantywaist crimes. Families of the Standing Committee are billionaires - self-dealing, which is what the Party does; 90 billionaires who've stolen the fruits of the country. 

Bukharin had little stomach for violence, so there would have been no Great Terror; had Bukharin won out, Russia would be a lot like Francois Hollande's France.

Tuesday  27 August  2013 / Hour 2, Block C:  Robert Zimmerman,, in re:  The competition heats up: A FAA waiver granted to SpaceX for its next launch outlines the details of the company’s effort to recover the first stage for reuse. The first stage will coast after stage separation, and then perform an experimental burn with three engines to reduce the entry velocity just prior to entry. Prior to landing in the water, it will perform a second experimental burn with one engine to impact the water with minimal velocity. The second stage will coast and then perform an experimental burn to depletion.  Elon Musk has said that they will be experimenting with bringing the first stage back safely with each launch of the upgraded Falcon 9 rocket. This waiver now gives us the plan for the first launch. It also shows that they are also considering recovery of the second stage as well.

        More water on the Moon: Scientists using data from India’s Chandrayaan-1 space probe have detected new evidence of water inside one lunar crater. What makes this detection important is that this particular water was not placed there by the solar wind or asteroids. Its chemistry suggests it seeped upward from deep within the Moon’s interior.

Tuesday  27 August  2013 / Hour 2, Block D: Michael Ledeen, FDD, in re: Everybody sees that Assad is a surrogate for the ayatollahs. Why not go to the source, support a domestic opposition to the regime that in fact is in charge of the Assad regime?  In today's WSJ, "Obama has to act in Syria because he knows it’s all about Iran; and if Assad were to fall, that'd be a terrible blow to Iran; and Iran is trying to control as much territory as possible in Iraq in order to be able to stage from there if needed." Does launching Tomahawks encourage . . .  Pres Obama launching vs Assad is the same mistake as Bush made in Iraq?  We just go on and on; that's presidential history since 1979. None has had the courage to come to grips with the fact that the central problem has been Iran, which genuinely intends to destroy the US. Its frail regime is held up by terror, by arrests in the night; why to the presidents hesitate? Because their intell community keeps saying the same wrong thing it said about the USSR at the end: that the regime is strong, there's nothing we can do. This is a major error and wholly inaccurate.  Carney keeps saying that regime change is not the US intention; so Assad survives, it’ll be a humiliation to the US, will encourage our enemies and discourage our friends. When the missiles fly, do the ayatollahs smile?  Depends on where they land; Khamenei will have responses [activate surrogates worldwide] with no fingerprints

 The Road to Damascus Starts in Tehran It’s Middle East Groundhog Day all over again.  The discussion of What To Do About Syria is a replay of What to Do About Saddam:  it’s all about the wrong war in the wrong place at the wrong time in the wrong way.  When the intel and military “experts” say, as they have been saying for many months, “there is no good outcome in Syria,” they’re talking about that war, the wrong war.  We invaded Iraq in the name of the War Against Terror, which President George W. Bush defined as a war against terrorist organizations and the states that supported them.  That should have made Iran the focus of our strategy, since Tehran was (and still is, now more than ever) the world’s leading sponsor of terrorism.  Nothing would have so devastated the jihadis as the fall of the Iranian regime, which–then as now–funded, trained, armed and gave sanctuary to terrorist groups from al-Qaeda and Hezbollah to Islamic Jihad and Hamas.  Unless we defeated Iran, it would not be possible for Iraq to have decent security, no matter how total the defeat of Saddam and the Baathists, and how well-intentioned the successor government.  As you can plainly see.

Hour Three

Tuesday  27 August  2013 / Hour 3, Block A:   Bill Whalen, Hoover Institution Advancing a Free Society, in re: 10 Years After California's Recall, Lessons Learned   The current governor of California, older than the pharoahs; there'll be a Brown in Sacramento for all time to come.  But the earlier Brown recall: do you want to recall the governor? If so, replace him with whom? Schwarzeneggger took 48% of the vote and won.  In his first year, he took drivers' licenses from immigrants and a bunch of other deeds; in 2005, the Dems no longer were afraid of him and defeated him.

Tuesday  27 August  2013 / Hour 3, Block B: Reza Kahlili, author, A Time to Betray, in re: Iran. Music; The Bomb Run, Stanley Kubrick.  Will we? Secy of State speaking of war; four Arleigh Burke-class destroyers, and Ticonderoga-class cruisers, air wings, all in the Med. Abt 45 Tomahawk missiles per ship; plus two cruisers in the Red Sea.  USN tries to be secretive about moving ships around, but can't do that through the Suez Canal. There's a lot of talk going on; we need facts about the chem. weapons attack; I have no confirmation of this. Reza Kahlili on voice modulator:  A lot of info from Teheran, first that they think it's propaganda; that at most several missiles will be launched, but they're making serious threats: should this be for changing the regime or balance of power then Israel, Saud Arabia, Jordan, Lebanon, Turkey, are all on the table.   Possibility that Assad will grow stronger, very dangerous situation, Iran believes that US hasn’t he stomach to engage. Confusion among Iranian leadership: at first condemned use of chem. weapons, then denied it ("US is inventing it all At UN General Assembly, Rouhani will carry a big smile and shake a lot of hands – but remember that it’s all to delay, to add time for nuclear development, This could all come to  a head by the time he arrives in New York

Tuesday  27 August  2013 / Hour 3, Block C: Christopher Harmer, Senior Naval Analyst at the Institute for the Study of War [understandingwar {dot}org] (1 of 2), in re: Read this Backgrounder on our website.   U.S. Navy warships are positioned for a strike against Syria using long range Tomahawk Land Attack Missiles (TLAM). [TLAM can hit air fields: evolutionary upgrades to the missile have rendered it much more effective as it's grown bigger, more capable, more robust, can crater a medium-sized target such as a runway. Syria doesn’t have time to do such repairs. Doing a small punitive strike with no strategic value is worse than doing nothing. We need to be either consequentially involved or not at all.].  Such an attack could cause varying degrees of limited damage to the Assad regime’s ability to use more chemical weapons or continue effective operations against the opposition. It cannot eliminate the regime’s military or chemical weapons capabilities, however, nor cause more than a temporary degradation in regime operations.  Such a strike will be ineffective unless it is part of a coherent, properly resourced effort towards achieving clearly-articulated U.S. strategic aims in Syria. Those aims should include helping the moderate and more secular elements of the opposition defeat both the Iranian-backed Assad regime and the al Qaeda-affiliated extremists who threaten to hijack the rebellion.  Limited TLAM strikes alone will not accomplish such aims.

The United States seems to be preparing to take direct military action in Syria. The U.S. Navy has repositioned several ships to the Eastern Mediterranean since the Assad regime used chemical weapons against civilian targets in and around Damascus. Although the use of chemical weapons against the civilian population is horrific, and every effort should be made to dissuade the Assad regime from using them again, recent comments from anonymous senior officials that a potential strike against Syria would be “punitive” are alarming. A strike taken to punish leaders does not constitute a strategy or even a sound military objective.  Secretary of Defense Chuck Hagel and Chairman of the Joint Chiefs General Marty Dempsey have rightly raised questions about the utility of military action without a comprehensive, stated U.S. policy in Syria. General Dempsey clearly identified the strategic error of taking tactical action in the absence of comprehensive policy in his letter to Senator Levin, Chairman of the Senate Armed Services Committee, when he stated “Too often, these options are considered in isolation. It would be better if they were assessed and discussed in the context of an overall whole-of-government strategy for achieving our policy objectives in coordination with our allies and partners." 

One can easily take this argument too far and allow the uncertainty inherent in war to paralyze decision-making. It is not necessary to know exactly how the conflict will go or precisely how it will end to decide to take action in order to shape events in a more desirable (or less undesirable) direction. But it is necessary to articulate the desired objective clearly. The fall of the Assad regime is one clear objective. Depriving Assad of the ability to use or proliferate chemical weapons is another. Punishing Assad for using chemical weapons is not. If the U.S. is going to become militarily involved in Syria—and there are good arguments for doing so, as well as important cautions— then President Obama absolutely must explain clearly and cogently what it is he is trying to achieve.  This ISW backgrounder will review the recent use of chemical weapons in Syria and the initial U.S. military response to that action as discerned from the repositioning and availability of certain ships and weaponry in the eastern Mediterranean. It is important to understand what the weapons systems currently being visibly mobilized in the Mediterranean can and cannot do. It is even more important, however, to decide what needs to be done in order to achieve a clear objective.

Tuesday  27 August  2013 / Hour 3, Block D: Christopher Harner, Institute for the Study of War (2 of 2).

Hour Four

Tuesday  27 August  2013 / Hour 4, Block A: Legitimate Target: A Criteria-Based Approach to Targeted Killing (Terrorism and Global Justice) by Amos Guiora  (1 of 4)

Tuesday  27 August  2013 / Hour 4, Block B: Legitimate Target: A Criteria-Based Approach to Targeted Killing (Terrorism and Global Justice) by Amos Guiora  (2 of 4)

Tuesday  27 August  2013 / Hour 4, Block C: Legitimate Target: A Criteria-Based Approach to Targeted Killing (Terrorism and Global Justice) by Amos Guiora  (3 of 4)

Tuesday  27 August  2013 / Hour 4, Block D: Legitimate Target: A Criteria-Based Approach to Targeted Killing (Terrorism and Global Justice) by Amos Guiora  (4 of 4)

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