Yesterday afternoon, California started paying its bills with IOUs. You heard that right. The state with the world’s 8th largest economy is broke, and they’re leaning on banks to cash the IOUs for them with a promise of paying the banks 3.5% interest when the government settles up with them.

Saying that California operates like a banana republic is an insult to banana republics everywhere.

This month, the People’s Republic of California will issue over $3 billion in these “registered warrants", the first time the state has had to function this way in 27 years. According to the WSJ, “The scrip will be issued to taxpayers, vendors, local governments and others the state can’t pay because it doesn’t have enough cash. Bondholders will be paid principal and interest as usual, when due, state officials have said.”

In the meantime, Governor Arnold Schwarzenegger, largely to blame for this mess for his early cave-in to Democrats and unions after they beat him on some ballot initiatives in 2005. His response was to hire a Democrat as his chief of staff. (To be fair, Susan Kennedy, while quite liberal does have some free-market leanings.)

Now, in what is almost certainly too little and absolutely too late, the Governator is getting the fiscal responsibility religion, forcing state workers to take “furlough Fridays” and suggesting cutting the state’s guaranteed funding levels for education (a great idea that Colorado should heed as soon as possible.) Those things, while I decent start, will hardly dent California’s $26 billion budget deficit.

According to Reuters, “Spending cuts will fall hard on state workers – some losing jobs and others losing pay through furloughs – and on recipients of state aid, including local government agencies already stretched by rising jobless and homeless rates.” I say it’s about time. California, probably even more than the federal government, has a bloated public sector and out-of-control welfare system which are sucking the lifeblood from their economy. The FIRST people that budget cuts should target are state workers, in part because the state’s workforce is far too large and with the added benefit of reducing the cash going to extremely destructive (of the private sector) unions.

For a little more “inside baseball” on California’s budget process, this page of THIS Reuters article (the article’s second page) is much better than one normally expects from that source.

My wife and I have on occasion spoken of where we might live if the day comes that we move from Colorado. I have said without fail that California is a political and economic disaster and I want no part of it. Unfortunately, current events are proving me right. Can you imagine how you’d feel if you worked for the state and got a paycheck in the form of an IOU? Even Hugo Chavez would be embarrassed to do that.

This IBD editorial hits the nail on the head in summarizing the economy’s reaction to the Democratic takeover of government and their planned anti-growth agenda:
see “Stop The Madness That’s Killing Jobs", IBD Op-Ed, 7/2/09
http://www.ibdeditorials.com/IBDArticles.aspx?id=331426820577468

Please spend the 6 minutes to watch this explanation of the likely impacts of cap-and-trade…and pass the link around to your friends.

(H/T Delta Mike)

Starting Monday, a company called Javelin Funds has launched the first Shariah-compliant ETF (exchange traded fund), essentially a tradeable basket or index of 100 companies, based on – wait for it – the Dow Jones Islamic Market International Titans index maintained by Dow Jones & Co.

The index is made up of 100 companies outside the US whose practices are compliant with Sharia, meaning that “Excluded are companies engaged in the following lines of business: alcohol, tobacco, pork-related products, financial services, defense/weapons and entertainment. Also excluded are companies for which the following financial ratios are 33% or more: debt divided by trailing 12-month average market capitalization; cash plus interest-bearing securities divided by trailing 12-month average market capitalization; and accounts receivables divided by trailing 12-month average market capitalization.”

Here’s some other interesting information from Dow Jones:

The Dow Jones Islamic Market Indexes were introduced in 1999 as the first indexes intended to measure the global universe of investable equities that pass screens for Shari’ah compliance. With more than 100 indexes, the series is the most comprehensive family of Islamic market measures and includes regional, country, and industry indexes, all of which are subsets of the Dow Jones Islamic Market Index. An independent Shari’ah Supervisory Board counsels Dow Jones Indexes on matters related to the compliance of index-eligible companies.

There are currently more than 150 licensees with more than US$7 billion in assets benchmarked to the Dow Jones Islamic Market Indexes.

On another page, I found the list of the Shari’ah Supervisory Board members:

Shaykh Abdul Sattar Abu Ghuddah (Syria)

Dr. Abu Ghuddah is a senior Shari’ah Advisor to Albaraka Investment Co. of Saudi Arabia. He holds a PhD in Islamic Law. Dr. Abu Ghuddah has published many books on Islamic Financial transactions. He was an advisor for Islamic Law Encyclopeadia (Kuwait Awqaf Ministry). Dr. Abu Ghuddah is a member and chairman of several reputed Islamic Shari’ah Boards.

Shaykh Nizam Yaquby (Bahrain)

Mr. Yaquby is a member of the Islamic supervisory boards for several Islamic institutions, including the Arab Islamic Bank and the Abu Dhabi Islamic Bank. His work has appeared in the following publications: Risalah Fi al–Tawbah, Qurrat al–’Ainayn fi Fada il Birr al–Walidayn, Irshad al–’Uqala’ila Hukun al–Qira’h min al–Mushaf fi al–Salah, Tahqia al–Amal fi Ikhraj Zakat al–Fitr bi al–Mal.

Shaykh Dr. Mohamed A. Elgari (Saudi Arabia)

Dr. Elgari is an associate professor of Islamic Economics and the director of the Center for Research in Islamic Economics at King Abdulaziz University in Saudi Arabia. He is an expert at the Islamic Jurisprudence Academy (OIC), Economics. He is also an advisor to several Islamic financial instituitons worldwide and the author of many books on Islamic banking.

Shaykh Yusuf Talal DeLorenzo (United States)

Mr. DeLorenzo is considered a leading Islamic scholar in the United States. He has translated over twenty books from Arabic, Persian, and Urdu for publication in English and has been commissioned to prepare a new translation of the Qur’an. Mr. DeLorenzo compiled the first English translation of legal rulings issued by Shari’ah supervisory boards on the operations of Islamic banks. since 1989, Mr. DeLorenzo has served as secretary of the Figh Council of North America. He is also a Shari’ah consultant to several Islamic financial institutions and was an advisor on Islamic education to the government of Pakistan.

Shaykh Dr. Mohd Daud Bakar (Malaysia)

Dr. Bakar is currently a member of the Shari’ah Advisory Council of many financial institutions in Malaysia and around the world, including the Central Bank of Malaysia, Securities Commission of Malaysia, International Islamic Financial Market in Bahrain, Accounting and Auditing Organization for Islamic Financial Institutions in Bahrain and HSBC (Malaysia).

Are you kidding me? These guys are consultants to Dow Jones? Just a year ago, Dow Jones quietly removed one Sheik Muhammad Taqi Usmani from this Board. Apparently Usmani’s calls for Muslims to kill or enslave non-Muslims was inconvenient for Dow Jones’ brand image. The odds that one or more of the other Board members don’t have close ties to terrorist organizations borders on zero.

Yes, it might be argued that someone will do the business if DJ doesn’t, but even a dyed-in-the-wool capitalist must consider whether helping people who have sworn to kill you make money and spread their philosophy is wise.

It has been argued – and it makes sense to me – that Sharia finance is the jihadists’ nose into the tent of the world economy. Usmani’s participation is just one piece of evidence to bolster that reasonable assumption. Or HERE is one thing the Shariah-compliant profits might be buying. (Make sure you click on that link!)

There’s a very interesting (and not short at 62 minutes) presentation entitled “Sharia-complaint Finance: Benign? or Beligerent?” which I strongly recommend to anyone really interested in the subject. You can find it HERE.

I will research contact information for the CEO of Dow Jones & Company and update this note with that information when I have it. I will encourage you to contact him, as I will, to let him know that his company’s actions are aiding and abetting the most dangerous enemy this world has seen since Hitler – and possibly more dangerous than that. One would think that since the well-known conservative, Rupert Murdoch, now owns Dow Jones after its purchase by Murdoch’s News Corp., there should be at least a few sympathetic ears in the corporation. That said, I suffer no illusion that any amount of public outcry, much less the little that I can help muster, will cause them to get out of the Shariah-compliant finance business. All I can do is to avoid Dow Jones products as much as I can (difficult, given the importance of the Wall Street Journal) until they stop helping our sworn enemies.

If there is a bright side to all this, it’s that only $7 billion is so far indexed to these Dow Jones travesties. Let’s all do what we can to keep that number from getting bigger…not that we can do very much.

One of the most prolific (and one of my favorite) writers about economics and markets is John Mauldin. All the more remarkable is how much of his work is available for free (check out investorsinsight.com and frontlinethoughts.com.) In his “Outside the Box” letter, John generally passes along an article by someone else which he finds particularly interesting (and he’s usually right.)

This week’s “Outside the Box” is very appropriate material for my blog, fitting in well to the issues of political economy which are important to me (and I hope to my readers.)

Here’s the letter…and again I encourage you to check out John’s other offerings….

A 20-Year Bear Market?

By David Galland, Casey Research

In November of 1997, my partner and co-editor of The Casey Report, Doug Casey, wrote an article titled “Foundations of Crisis,” which leaned heavily on the research of Neil Howe and the late William Strauss.

Howe and Strauss have written many books on how generations determine the course of history and how they will shape America’s future. Their forecasts on a wide variety of indicators have turned out to be amazingly accurate. They were among the first to predict (back in the late 1980s) the rise of Boomer-driven culture wars and the simultaneous rise of Gen-X-driven free agency and distrust of government. And they were completely alone back then in predicting, for the post-X “Millennial Generation” (a label they coined), a decline in youth crime and risk taking and an increase in youth civic engagement that would first become apparent around the year 2000. Guess what? For the last ten years, everyone has been noticing exactly these trends among teens and 20somethings.

Howe and Strauss also made extensive predictions, based on generational aging, on how America’s entire social mood would likely change, in dramatic fashion, during our current 2000-2010 decade. To quote Doug’s prescient 1997 article, which was reprinted in Outside the Box late last year…

“… an excellent case can be made the U.S. is approaching another time of secular crisis, a Fourth Turning, with an expected due date of 2005 – seven years from now – plus or minus a few years in either direction.

The Stamp Acts catalyzed the American Revolution, the election of Lincoln catalyzed the Civil War, the Crash of ‘29 catalyzed the Depression/WW II era. What might precipitate the elements now floating in solution? The answer is practically any random event that’s sufficiently traumatic. Any of the theses of current disaster/action novels and movies will do nicely. Perhaps the accidental or intentional release of a super plague vector. The crashing of an airliner into the Capitol during a joint session. An all-out assault on the IRS computers by an armed group – or perhaps the computers just melting down due to the Year 2000 Problem. Perhaps a financial disaster that cascades into the Greater Depression. In any of these, or a hundred other scenarios, the federal government would almost certainly act precipitously and with a heavy hand, which would bring on a whole other set of consequences.

There’s no way of telling where the Crisis will lead, or how it will end. That’s going to depend not only on exactly who’s in control, but what they do, who they’re up against, and a hundred other variables we can’t even anticipate.

One thing that seems certain is that real crisis brings out strong leadership. Because of its age and size, it will come from the Boomer generation, and it will be in the mold of Roosevelt or Lincoln – both very dangerous precedents. The boomers in elderhood will be dogmatic, harsh, puritanical, and quite willing to burn down the barn in order to destroy whatever rats they see. Admix that attitude to a time resembling the Revolution, the Civil War, or WW II, overlain with today’s ethnic strife, urbanization, financial overextension, and powerful, compact new weaponry in the hands of foreign fanatics out to teach the Great Satan a lesson and it’s a real witch’s brew.

As eye-opening as Doug’s predictions were, they brought us only to the onset of the current crisis. Consequently, we thought it both timely and important to check back with the source of much of the research he relied on. And so it was that I spent several hours talking with Neil Howe, co-author of the seminal work on generational cycles, The Fourth Turning, and, just recently, the subject of the DVD “The Winter of History.” Howe is not just an historian, but also a Washington DC-based economist and demographer. While our conversation covered a great many topics, the overriding focus was on how things are likely to unfold from here.

Many bullish readers won’t be thrilled to hear Howe’s latest findings about the future, but given his predictive track record, dismissing them out of hand could be a costly mistake.

The summary outlook, according to Howe, is that we are in the very early stages of a 20-year period of economic and institutional upheaval – an era denominated by a crisis during which we’ll likely witness the tearing down and reconstruction of many aspects of society as we know it.

As individuals, understanding Howe’s views and taking some reasonable precautions makes a lot of sense. As investors, those views also have the potential to make us a lot of money.

Following is my high-level recap of my long conversation with Neil Howe, along with some general thoughts on the investment implications of a 20-year bear market.

Remember the Sixties?

If you’re old enough – or possess even a rudimentary sense of history – think back to the 1950s, with roller-skating waitresses, crew cuts, and nuclear families of the sort represented by the iconic Leave it to Beaver. Fathers worked, while many mothers stayed home. Life had a certain predictable quality and, as far as anyone knew, would continue along the same lines for time immemorial.

But then something happened… the 1960s. Literally no one saw it coming. It was as if someone had flipped a switch that electrified America and, quickly, the world. Most everything changed, and a society accustomed to conformity was blown away with a fierce individualism expressed with long hair, sex, drugs, and rock and roll, topped off with civil disobedience and bloody riots in the streets.

What happened?

According to Neil Howe, in the mid-1960s, generational change pushed society around a dramatic corner as idealistic, individualistic young Baby Boomers (born 1943 to 1960) rebelled against the midlife leadership of their G.I. Generation parents (born 1901 to 1924).

These periods of transitions are part of a larger cyclical pattern made up of four distinct eras, or “Turnings,” each lasting approximately 20 years. It can be helpful to think of the four turnings as you might think of the four seasons, repeating predictably in their own natural rhythm. A full cycle of turnings takes place over a period of about 80 to 90 years – roughly the span of a long human life. A new turning begins as a new youth generation comes of age, bringing a new social ethic that compensates for the excesses of the midlife generation then in power.

While we don’t have the space here to go into the full details of Howe’s research, it’s important to the topic at hand that we quickly recap the Four Turnings.

The First Turning is referred to by Howe as a High. As this follows a period of crisis, one of the hallmarks of a First Turning is a heightened sense of community and collective optimism, driven in part by the fact that the society has just come through a difficult and challenging time. Consequently, during First Turnings, societal institutions tend to be strong while individualism is weak. The post-World War II “High” of the mid-1940s through early ’60s is the most recent example of a First Turning.

The Second Turning, called an Awakening, typically starts out feeling like the high tide of a High, with signs of progress and prosperity everywhere. But just as everything seems to be going along swimmingly, large swaths of society begin to chaff under the social conformity of the High, beginning to gravitate to more individualistic pursuits and demanding that their personal interests come first. You may recognize the “Consciousness Revolution” of the mid-1960s through early 1980s, correctly, as the Second Turning.

Next up, the Third Turning, which Howe calls an Unraveling, is much the opposite of a High. To wit, individualism dominates, while institutions are increasingly weak and discredited. Quoting Howe on the Unraveling…

“This is a time when social authority feels inconsequential, the culture feels exhausted, and people feel bewildered by the number of options available to them. It is a time of celebrity circuses and a tremendous amount of freedom and creativity in our personal lives, but very little sense of public purpose.

The most recent Third Turning began in the mid-’80s with Morning in America, and continued through the ’90s. Previous periods of Unraveling in American history were also decades of cynicism and bad manners. Think of the 1920s, the 1850s, the 1760s. And history teaches us that the Third Turnings inevitably end in Fourth Turnings.

Finally, there is the Fourth Turning, called a Crisis. The recent Third Turning appears to be winding down, and we are currently on the cusp of a Fourth Turning. This is a time of great turmoil, when society’s basic institutions are torn down and rebuilt, and seemingly insurmountable problems are addressed. During Fourth Turnings, America engages in a struggle for its very survival and redefines its identity as a nation. Large wars are often a part of this process. The American Revolution, Civil War, Great Depression, and World War II were all features of past Fourth Turnings.

In sum, Howe’s research has shown that, with remarkable predictability, history is not a straight line extending toward a better and brighter (or increasingly awful) future, but rather a repeating cycle of the four distinct social eras. These four turnings have recurred with remarkable consistency throughout Anglo-American history, as Neil Howe outlines at length in Generations and The Fourth Turning. It is therefore no accident that America has experienced great cataclysms or “Crises” about every 80 years. Travel back eighty years from Pearl Harbor Day, and you land in the middle of the Civil War. Eighty years before that takes you to the Revolutionary War. If the rhythms of history hold, America is now poised to enter another Fourth Turning.

Bad News, Potentially Good News

You don’t need me to tell you that the United States and in fact the world are now facing a plethora of intractable problems. The world’s former powerhouse economy, the U.S., is now the world’s largest debtor nation – and by a wide margin. The nation has trillions in unpayable liabilities coming due on Social Security and Medicare, to name just two of many broken government programs weighing on the country. And our much vaunted democracy is increasingly dysfunctional – rotten to the core, truth be known – thanks largely to entrenched special interests and a voting public clamoring for their own piece of the pie, while trying to hand the bill off to somebody else.

Meanwhile, the economy – despite rigorous jawboning by the government and its many friends in the large banking institutions – is in serious trouble, with the housing market buffeted by tsunami-like waves of defaults, foreclosures, overvaluations, historic levels of personal debt, and tight credit that has left the U.S. government as the sole lender in many markets.

Bernanke and his ilk may see green shoots, but what they’re really seeing is the deep, green sea rising up once again to bury the economy.

That’s the bad news.

The potentially good news, if you credit Howe’s research, is that the Crisis we’re now entering will change pretty much everything. While this change will entail a great deal of pain and a reduced standard of living for a large number of people, by the time the Crisis subsides, society will have pretty much remade itself in ways that no one can predict at this point.

Put another way, today’s intractable problems will be solved… one way or another.

What’s Next

When discussing what’s likely to follow next, Neil Howe turns to his generational profiles and points out that the rising societal power today belongs to the generation he calls the Millennials, individuals born between 1982 and 2004. They are a “Hero” generation, just like the G.I. Generation that coped so well with the turmoil of the Great Depression and World War II – the last Fourth Turning. Coddled as children, the G.I.s were ultimately called upon to help society through a dark and dangerous period and rose to the occasion. Again, quoting Howe on the Millennials…

“These are today’s young people, who are just beginning to be well known to most Americans. They fill K-12 schools, colleges, graduate schools, and have recently begun entering the workplace. We associate them with dramatic improvements in youth behaviors, which are often underreported by the media. Since Millennials have come along, we’ve seen huge declines in violent crime, teen pregnancy, and the most damaging forms of drug abuse, as well as higher rates of community service and volunteering. This is a generation that reminds us in many respects of the young G.I.s nearly a century ago, back when they were the first boy scouts and girl scouts between 1910 and 1920.

Unlike the Baby Boomers, who are largely individualistic and anti-establishment, the Millennials are good team players. We hear a lot these days about working together for a common cause, volunteerism, and the need for stronger government institutions, largely because these are the new priorities of the Millennial Generation.

As you may recall, out of the devastation of World War II, a spate of transnational political and economic institutions were born, including the United Nations, the World Bank, the World Health Organization, and the International Monetary Fund. By the time the current Fourth Turning is over, expect more of the same – but probably even bigger and more ambitious.

What Does This Mean to You?

Most importantly, if Howe is right, this crisis is far from over. In fact, when I asked him where we are today on a scale from 1 to 10 – with 10 representing as bad as the crisis will get – he replied that we are at either 2 or 3. In other words, the worst is very much yet to come. And, per above, he expects this period of turmoil to take 20 years to play out. Thus, if nothing else, you may want to continue approaching matters of personal finance cautiously.

Secondly, if you’re the type of individual that tends to get steamed up by larger and more intrusive government programs, you may want to take a few deep breaths and resolve yourself to the fact that this phenomenon is likely to get far worse before we see a return to celebration of individual rights. (And the cycle shows that we will see such a return – about 40 to 50 years from now, when the next Second Turning comes around.)

If it is any consolation, the Millennial Generation places a great deal of weight on teamwork and the notion of doing things “smart.” That doesn’t mean, of course, that the various programs that are kicked off in an attempt to fix the many problems now confronting society will in fact turn out to be technically smart. But they will almost certainly be better thought out than some of the numbskull initiatives we’ve seen over the last 20 years.

You can also take some comfort in the fact that Millennials are builders, not destroyers. By contrast, the individualistic Boomers that dominate today’s aging political class are world-class dissenters, radio talk show aficionados always ready to scrap it out for their beliefs. Millennials want to skip the philosophical debate and get straight to fixing things.

Other insights about Fourth Turning periods gained from my conversation with Neil Howe…

* Government grows powerful, and sweeping new legislation is enacted. The old 1990s rule was: just compete and stay off the state’s radar screen. The new 2010s rule will be: better have a presence in Washington so you’re not dealt out of the “new” new deal. One political party tends to dominate. The Democrats under FDR during the last Fourth Turning offer a good example. While Neil Howe doesn’t think it will necessarily be the Democrats this time around, they are certainly in the pole position at this point.

* While public history speeds up, personal life slows down. Families will spend more time together, like in the old Frank Capra movies. Ever more households will be multi-generational, a trend now spurred by Boomers with large, empty McMansions and Millennials without jobs. There will be a blanding of the pop culture, with the entertainment of the young (put Miley Cyrus or “High School Musical” on fast forward) increasingly regarded as tamer than the entertainment of the old.

* Innovation tends to stagnate, while a few new technologies will be chosen to be adopted on a large scale. We will see the equivalent of canals or railroads or interstates being built across America. To borrow from Carlotta Perez’ four-stage description of technological revolutions, we are moving from the “innovation” to the “implementation” stage.

* New laws and regulations will do less to referee a free market and more to pursue one or another national priority. They will increasingly favor the large producer over the retail buyer, investment over consumption, planning over risk, debt over equity. Businesses will hustle to reposition themselves. Anti-trust legislation will weaken.

* The authority and obligations of community will strengthen at all levels, from local to national and possibly beyond (if our alliances prove durable). Personal reputation and membership will matter more. A “new localism” will reshape town and urban planning. A global slide toward national or regional protectionism will loom as a real danger.

* It is too early to tell whether the crisis will ultimately be inflationary or deflationary, though we at Casey Research come down on the side of inflation for the simple reason that the government possesses the means to inflate. Due to the gold standard, that was not the case early in the Great Depression.

* In the past, Fourth Turning periods have always resulted in the nation redefining who we are in some essential way. That was certainly the case during the American Revolution, when we transitioned from a British colony into a collection of independent states – and the Civil War, when those states were hammered into a single nation. And, again, after World War II, when the U.S. went from being a relatively isolated nation to a global empire. A wild card, for instance a terrorist nuke going off in a city anywhere on the planet, could similarly take the country, and the world, into unforeseeable new directions.

* Baby Boomers will continue to be respected for their cultural achievements (it’s not a fluke of history that Boomer music and other entertainments are still wildly popular among the young), but will be increasingly ignored in the political debate. The term “senior citizen,” already in decline, will disappear entirely. And if push comes to shove, Boomer’s financial interests – including Social Security – will be subjugated “for the greater good.”

* There will be a growing push to rebuild the middle class. The wealthy and the impoverished alike will both come under pressure thanks to new pro-middle class initiatives. If you are a high-income earner, it’s a certainty your taxes are going up, and likely by a lot. If you want to make a fortune, don’t pursue the niche or the “long tail.” Invent the next big brand that will appeal to Everyman.

Don’t Worry, Be Happy

That is, at best, a sketch of my long conversation with Neil Howe and doesn’t do justice to his research. If nothing else, however, I hope I’ve succeeded in giving you at least some sense of the man and his unique research and encouraged you to think outside the box about the nature of today’s crisis.

A couple of final observations.

First, Neil Howe is not a negative person, nor a professional doomsayer. Rather, he is a social scientist and historian with decades of experience in the social sciences. As you speak to him, you get the sense that he doesn’t view the world through any particular philosophical bias, but rather is simply reporting what his research is telling him about the current players on the global stage, and which act we are currently in.

Secondly, speaking as a Baby Boomer and someone with a lifelong distrust of government and its meddling institutions, talking to Neil left me feeling oddly relaxed – letting go, if you will, of some of the frustration that has been building within me as I watch the nanny state grow more and more bloated.

That is not to say we won’t continue to speak out against government waste and prolificacy. We will. But it seems increasingly clear that we’re now caught up in a powerful trend toward bigger, not smaller, societal institutions – and that these institutions will, over the period ahead, change the world as we know it.

Of course, being active investors, at the same time we raise our voices in protest, we’ll deal with the reality of the situation by strategically positioning our portfolios to profit from the coming changes.

And so, like the Rockefellers and J.P. Morgan during the Great Depression, we’ll make the trend – to matter how negative – our friend. You may want to consider doing so yourself.

It remains amazing to me that anybody argues for government-run health care by saying it will be better and/or cheaper than the admittedly flawed current system. But the admitted flaws are mostly due to government!

See “A Government Healthcare Plan? You Can’t Be Serious“, Matthew Council, American Thinker, 6/29/09
http://www.americanthinker.com/2009/06/a_government_healthcare_plan_y.html

In a 5-4 ruling yesterday, the Supreme Court overturned Supreme Court nominee Sonia Sotomayor’s defining decision, the case of Ricci v DeStefano, in which she ruled that it was OK for the city of New Haven, Connecticut to refuse to use the results of tests for promotion of fire fighters after no blacks passed the tests.

Sotomayor’s ruling was, in my opinion, obviously wrong. In fact, the 5-4 decision somewhat masks the fact that all or nearly all of the Justices disagreed with her handling of the case even if they upheld her decision. As the editors of National Review note, “The only consensus the nine justices found was that the handling of case by Sotomayor’s three-judge appeals-court panel was shoddy. Even the four dissenting justices agreed that the Second Circuit applied the wrong legal standard.” And as the WSJ points out, “In footnote 10 of her dissent, Justice Ginsburg wrote that while she disagreed with the decision to reverse the lower court ruling, there were questions about how it was decided. Based on the lower court’s mistaken focus on intent, she wrote, ‘ordinarily a remand for fresh consideration would be in order.’”

So I don’t know what troubles me more, the fact that Sotomayor ruled the way she did or the fact that 4 Supreme Court justices agreed with her.

Here’s a quote from the WSJ’s take on the case which bears repeating:

Ginsburg opens her opinion by observing that “the white firefighters who scored high on New Haven’s promotional exams understandably attract this Court’s sympathy.” To which Alito replies:

“Sympathy” is not what petitioners have a right to demand. What they have a right to demand is evenhanded enforcement of the law–of Title VII’s prohibition against discrimination based on race. And that is what, until today’s decision, has been denied them.

Of course, Alito hits the nail on the head when it comes to the major question surrounding Sotomayor. She’s said specifically that she does not believe impartial application of the law is possible – and seems to question whether it’s even desirable. Don’t forget that Sotomayor’s decision was obviously racist: whether you want to say it was against whites or for non-whites, it was made on the basis of race. So much for Obama’s claim to represent post-racialism.

Monday’s Supreme Court decision, on the last day of their term, will be great ammunition for believers in the Constitution who want to challenge Sotomayor’s nomination (or for Republicans who just want to challenge her for partisan political purposes.) That said, I don’t think it substantially diminishes her chances of being approved which I believe remain very high if no other smoking gun is found to show her to be unqualified – which she surely is.

Justice Ginsburg’s arguments were remarkably weak, something you’d expect from a partisan leftist law student, for example arguing that Sotomayor’s decision was OK because the white fire fighters had no guarantee of a promotion and because nobody else had been given a promotion. She must have twisted her cerebral cells into knots trying to find a way to claim that invalidating the results of THE test that was to decide promotions simply because not enough minorities passed is somenow not racist.

According to AP’s article about the decision, “Ginsburg said the court should have assessed ‘the starkly disparate results’ of the exams against the backdrop of historical and ongoing inequality in the New Haven fire department. As of 2003, she said, only one of the city’s 21 fire captains was African-American.”

Her rhetoric assumes that “diversity” trumps equal protection, that diversity is a paramount goal in itself, and that diversity would for some reason make the fire department a better place (or at least not worse), which for a place as results-oriented as a fire department is very hard to believe.

Again, it is simply remarkable that 4 Justices could find that Sotomayor’s obvious racist and improper decision was OK. At least she lost, but the closeness of the vote says a tremendous amount about how political our Supreme Court has become – a great tragedy for our nation.

In the long run, unless one of the “conservative” Justices leaves, I expect the Court to be somewhat more aggressive in challenges to “civil rights” legislation as people who fall victim to the tendency of such legislation to penalize whites will argue that society has generally moved past the need or acceptability of such provisions. And they will be right.

In the meantime, the poster child for affirmative action will be elevated to one of the most prestigious and important jobs on Earth, simply because the man who has the right to nominate her was elevated to the most important job on earth for no real reason other than his color.

For those of you who are jarred by that suggestion, ask yourself this: Would a white junior senator from the Midwest with less experience (in government, the private sector, or anything else really) than any other candidate ever get even close to either party’s nomination? Of course not. Really, go through the list of US Senators and ask yourself honestly if any of the 10 or 20 most junior members of the Senate (at least those who have never been a governor) would stand a chance? Again, of course not. Yes, that’s right: Barack Obama is president primarily because he’s black…and that would be fine if he had a clue about the Constitution – but he doesn’t. And now he want’s to poison the most important court in the world by appointing someone with as little understanding of our nation and as much contempt for the vision of the Founders (including, not least, the rule of law rather than feelings or whims) as he has.

In his opinion piece entitled “Global warming bill still contains some smoke and mirrors,” Todd Darling complains about the details of the Waxman-Markey cap-and-trade bill while suggesting that its goals are essentially correct because “Now, with President Obama, White House views on global warming finally are in line with scientific data.”

However, just as a statement that “the debate is over” doesn’t make it so, Mr. Darling’s assertion that the scientific data supports President Obama’s acceptance of man-made “global warming” does not suddenly make the data conform to either Darling’s or Obama’s wishes.

The data and research which argue against Mr. Obama’s views are many, including:

* “average global temperatures peaked in 1998 and since have fallen slightly, even as carbon dioxide levels continue to climb…”
* The Arctic sea ice extent is at about its average level for the last 8 years despite claims of its permanent disappearance. Furthermore, the average arctic temperature was still not above freezing on June 25th, the latest date since records started being kept fifty years ago.
* Recent research is showing the major flaw in all the models used by the UN’s Intergovernmental Panel on Climate Change which predict massive warming: They assume “positive feedback” which does not match what is actually occurring.
* Research shows that incorrect sensor placement (i.e. near heat sources, on black roofs, etc.) may be responsible for much apparent warming. And, in a related story, a faulty ocean sensor earlier this year understated the amount of arctic sea ice by 500,000 square kilometers, roughly the size of California.
* And maybe most importantly, the Obama Administration knows –and attempted to cover up – that there is research from its own employees which is extremely hazardous to Democratic plans to use “global warming” and fear of CO2 as the tool with which to take over much of the American economy: In March of this year, a senior analyst at the EPA was told by his Office Director that he would not forward on the analyst’s comments which the analyst said “present information critical to the justification (or lack thereof) for the proposed endangerment finding.” The Director simply said that the decision had been made (at a political level) and that information which contradicted it would be inconvenient.

One can write, and many have written, page after page of solid science which point to man-made global warming being at best overstated and at worst an outright hoax.

And while a reporter always has a responsibility to get his facts straight, it is particularly important when those facts (or, in this case Mr. Darling’s erroneous declaration) become the basis for citizens to support or oppose some of the most significant legislation, with some of the largest ramifications for our economy and our liberty, of our lifetimes.

Four famous people have died within a few days. I don’t normally write about “famous people” but I thought it might be interesting to ask you, dear reader, which of the following people you’ll miss the most, and why.

Did any of them have an impact on your life, even if superficial, fleeting, etc?

So please cast your vote in the poll over on the right side of this page and post a comment with your thoughts (if you have any)!

Here are the four recently deceased, in the order in which they passed away (links on names are to obituaries):

Ed McMahon



 

Farrah Fawcett



 

Michael Jackson



 

Billy Mays