Follow ZeroHedge in Real-Time on FinancialJuice If there’s one country in the world that you might not think would be at the top of the outsourcing list and the place to send orders to be fulfilled from the West, it would probably have to be North Korea. The world’s most closed economy, that Communist dictatorship. It’s the place where doing business would be as volatile as the guy that leads the country in a patriarchal dynasty handed down from his father and in which the Supreme Leader of the Democratic People’s Republic of Korea, Kim Jong-un, is elevated to the rank of demi-god, alive and kicking. But, is the economy of North Korea as closed as we have all seemed to believe for decades now? North Korea and Freedom North Korea is an economy that is more and more closely tied to the economic expansion of China. It might be the totalitarian dictatorship and ultra-communist of the world, but it is getting overspills from the Chinese economy and despite what the West might be saying there are companies that are already outsourcing there. The dictatorship that has come on from the cold? Or the economy that is too good a deal for the West to override and ignore? Maybe a bit of both, six of one and half a dozen of the other. North Korea might be the stalwart enemy of the self-proclaimed democratic West, but it’s the destination for the outsourcers. It’s cheap, it’s high-tech and it’s the new place to be. It’s the Costa del Sol of Spain of the 1970s for the flocking German tourist and the Brits abroad: cheap and an opportunity that can’t be missed, but you’ll certainly come home with a Delhi belly. Data might remain a challenge to collate and whether we can believe what can be found in an economy that chose to try to isolate itself from the world. The economic freedom score is only 1.5 on the 2013 scale. But that is an improvement on the score of 2012 which stood at just 1. The Index of Economic Freedom is an annual ranking that is created by the Wall Street Journal and the Heritage Foundation. Hong Kong is considered to be the freest country economically-speaking in the world yet again in 2013, closely followed by Singapore. Both have a score close to 90 out of 100. The US comes in 10th after Australia, New Zealand, Denmark and Canada to name just a few with a score of 76(down 0.3 on 2012 score). Long gone are the days when the US was up in the top five back in 2005. The type of things that are taken into consideration when calculation the rankings are: Business freedom and the ability to set up a company or start a business. The absence or presence of trade barriers. Fiscal freedom and the tax burden on the population. Property and the right to freely own. Financial freedom or the independence of the banking system and freedom from state control. Corruption and the effects on the economy. Labor freedom and the ability to change jobs, demand redress and obtain legal regulation. North Korea and China Perhaps some of the elements in the list above might be telling signs of the reason why certain economies are not as free as we might think in some places in the world. North Korea might be 177th and last country on the economic freedom index with the wooden spoon presented in great pomp and ceremony (or at least, the famous Korean steel chopsticks). North Korea is supposed to have a level of Gross Domestic Product which amounts to $40 billion, a GDP-growth rate of 8.75% for 2012. GDP per capita stands at $1, 800. Its main export partners are China, accounting for 67.2% of its exports. South Korea, despite all their differences accounts for 19.4% of its exports. It imports roughly the same amount (from china: 61.6% and from South Korea: 20%). China was at the origin of a state development bank in North Korea since the Chinese were fed up with the corruption in the country. Now, that’s pretty rich! But there is an increasingly blurry line that is appearing between state activities and private incoming-generating ones. Today there is a strong demand still for working for the state and securing a government position. But, what has changed according to new research is that it’s not for the same old reasons. Today, it’s because being part of the elite means access to business platforms, a springboard for getting ahead and striking it rich (through corruption perhaps, but a different type of corruption to the purely political kind). North Korea and the West Today there are companies in France, Germany, the Netherlands and not just China that are outsourcing the production of particularly clothes in North Korea. The garment industry has found its outsourcing replacement for Bangladesh that has grown too publicized for its dangerous sweatshops. Moving to North Korea might just mean that nobody will know anything. What goes into North Korea rarely comes out. Some of the clothes that Europeans could be walking around in might just have been made in North Korea, the Hermit Kingdom dictatorship. The comic-book caricature doesn’t hold anymore and North Korea is not as Hermit-like as the West may make us all believe. The investment might most definitely be high-risk, but the returns and yield on that investment might be a way to strike it rich. The masterplan of North Korea seems like it is to woo the West to manufacture there. They couldn’t get us by ideology, so the North Koreans are playing us at our own game now. North Korea may indeed have very little to do (if anything) with the USA, but the rest of the world hasn’t turned its back on the country and it’s far from being hermit-like at all. There are thousands of North Koreans that work in China, thousands that go overseas to study on bilateral exchange agreements with foreign universities and there are companies from the West that are starting to outsource their manufacturing there. Naturally, there’s no suggesting that the economy of North Korea is going to suddenly explode into a market economy ready to embrace capitalism and free-market economics. Liberalism hasn’t arrived in North Korea quite yet. But, there are pockets of what resembles capitalist money-oriented enterprises. It is still a repressed economy and it is military might that embodies the state, the songun policy. But, that is changing and it looks as if the West has something to say in the matter. We are overlooking the dictatorship just as soon as we can and anyhow freedom gets put on the back burner these days where money is concerned. 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Konstantinovsky Palace St. Petersburg, Russia 5:50 P.M. MSK MR. RHODES: I'm just going to do a readout of the meeting between the President and Prime Minister Abe of Japan, and then can take a few questions on that. The President and the Prime Minister began with a discussion of the situation in Syria, building on the conversation they had over the phone earlier in the week. I think the two leaders are in agreement that the use of chemical weapons is unacceptable and demands a strong international response. They agreed to stay in close coordination on the issue as we move forward. And I imagine we'll be continuing to discuss Syria on the margins of the summit with Japan and beyond the summit as well. They discussed a range of alliance issues. On the economic side, they discussed TPP and the importance of concluding an agreement by the end of the year, and they discussed some of the issues that need to be addressed as a part of the effort to reach that agreement by the end of the year and noted the importance of the APEC Summit next month as a milestone on the way to that process. On North Korea, the two leaders underscored their commitment to work together towards the denuclearization of the Korean Peninsula. The President noted the importance of close trilateral cooperation between the United States and Korea and Japan, as well as continued efforts with other members of the six parties, including China and Russia, and the broader international community. They discussed the Senkakus and the President made clear that he was opposed to any effort to resolve the Senkakus issue through coercion and underscored the importance of diplomacy and dialogue, which Prime Minister Abe referenced as his preferred course of action. They also agreed to consult on broader defense issues in the alliance. They agreed to stay in close contact as Japan reviews its own defense posture going forward, and noted the importance of the upcoming two-plus-two meetings with Secretary Kerry and Secretary Hagel meeting their Japanese counterparts. And they discussed the need to continue to move forward to implement our shared plan on the Futenma realignment associated with U.S. forces in Japan. And with that, I can take your questions. Q Did the Japanese sign on to the need for a military response to what happened in Syria? MR. RHODES: Well, again, I don't want to speak for the Japanese; I'll let them speak to their position. What I will say is that the U.S. and Japan were in agreement that there needs to be a response, that the international norm surrounding chemical weapons needs to be upheld. And in the spirit of our alliance, we have -- I think the two leaders have an expectation that we'll be able to reach a shared position on Syria. So, again, it was a productive discussion in that regard, and we welcome Japan’s continued insistence that there be a response to the use of chemical weapons. Q Was there anything that the President was asking Abe for as it relates to Syria? You had talked in the gaggle earlier about looking for political and diplomatic assistance. Is that like the kind of thing he was looking for from him? MR. RHODES: The question was, was the President asking for anything related to Syria. I think that there are two aspects to that, Julie. First, with respect to chemical weapons, I think what we’d like to see are countries coming forward to take the position that we have taken that the use of chemical weapons is unacceptable; that while we have a preference for the U.N. Security Council resolving these issues, the Security Council has been paralyzed, and that, therefore, there needs to be an international response to the use of chemical weapons. And we’ll continue to discuss with Japan and other countries the type of political support that they can express for that position going forward. But the broader situation in Syria -- they did discuss Japan’s continued support on the political and humanitarian side. And I think the commitments from other countries to help deal with the humanitarian crisis, including the refugee crisis, is important, and Japan has been a contributor in terms of helping neighboring countries absorb refugee flows and help provide humanitarian support to the Syrian people. And the Prime Minister expressed his desire to continue to work on those issues with the United States and other countries. And similarly, on the Geneva process, which provides the ultimate pathway towards a political resolution to Syria’s civil war, Prime Minister Abe expressed his strong support for working on behalf of that process going forward. Q A couple on another subject. Is there anything further on Obama’s interaction with Putin? And second, did the President get any additional Syria support so far today? MR. RHODES: With respect to Mr. Putin, they obviously greeted one other at the beginning of the summit as they were coming in. Beyond that, I have no updates on any scheduled interactions between the two of them. I’m sure they’ll be interacting within the context of the summit. And on your second question, the President hasn’t seen other leaders on the matter of Syria since he’s been here other than Prime Minister Abe. So I think we had a good meeting with Prime Minister Abe. We’re encouraged by Japan’s position on Syria. We’re going to continue to consult closely with them. And we’ll let you know -- clearly, the President will have interactions on the margins of the summit that touch on Syria, so we’ll keep you updated on those going forward. But we’re in the early stages here. Peter. Q Has the President been making personal phone calls to members of Congress on the Hill while he’s here? MR. RHODES: It’s my understanding that -- I was asked this morning and I owe you guys a list. So he is going to be doing outreach on the Hill, and we’ll email you guys those calls as we get them compiled. Q A question about Japan. Did the President specifically talk about the military action? And, secondly, do you have a sense that you got support for military action from Japan? MR. RHODES: The President did update Prime Minister Abe on the type of action that we’re contemplating in Syria and the strength of our views that the Syrian regime must be held accountable. Again, we had I think a broad expression of support from the Prime Minister on what we’re trying to do in terms of enforcing an international norm around chemical weapons. Again, I want to let the Japanese government speak to its formal position on these matters, but our general sense was it was a positive meeting and the two leaders will be able to continue to consult closely on these matters going forward. So again, we felt like we had very positive signal from Japan on its commitment to upholding this international norm and to the notion that there’s need to be international response. And I’ll let them to speak to any more details associated with their position. Q (Inaudible.) MR. RHODES: Well, I think, as a general matter, we would like to see public expressions of support from countries that are invested in the international norm prohibiting the use of chemical weapons. So we would like to see on a political and diplomatic level countries insisting that the international norm against chemical weapons be upheld. We’d like to see an acknowledgement that, while the U.N. Security Council is the preferred course of action, that we cannot be paralyzed by the inaction of the Security Council either. And so I think we’ll be working over the course of the next two days on the margins of a summit that is dedicated to economic issues to enlist continued support politically, diplomatically from other countries. Again, as I said earlier today, we would never expect to achieve full consensus among the countries here because Russia just takes a different position on the issue of Syria generally. But in terms, in particular, of our friends, our allies, our partners around the world, we believe it’s important for people to raise their voices on behalf of international norms that countries around the world have signed onto for many years. Q Just a question about the dinner tonight. Can you give any preview of what the President hopes to say about Syria? Putin said in his opening remarks that there would be some discussion over the dinner about Syria, and I’m wondering what the President plans to say and what kind of case he’s going to make to the other world leaders. MR. RHODES: So on Syria, what the President will be saying is the same case he’s been making to the American people he’ll be making here on the world stage when Syria comes up, which is, first of all, that the international norm against the use of chemical weapons is fundamental to global peace and security; that it’s manifested in agreements like the Geneva Protocol and the Chemical Weapons Convention that express a prohibition on the use of chemical weapons; that in order for the prohibition of chemical weapons to mean something, there needs to be enforcement associated with that norm. Secondly, I think he’ll reiterate his very strong confidence that the responsible party for the use of chemical weapons was the Assad regime. We have as high confidence as we can have in terms of the U.S. intelligence community in the evidence that we have seen that points directly to the Assad regime as the responsible party. We also have sarin samples that confirm through physiological evidence that a chemical attack occurred, in addition to the overwhelming abundance of publicly available information that points to a chemical weapons attack. And third, I think the President will speak to the notion that the United Nations has a critical role to play but that the United Nations Security Council has been paralyzed on this issue, so that we’re not interested in simply drawing out a process at the U.N. that is not going to lead to a result. And given the inability to pass any resolution at the Security Council associated with Syria in recent years, including three vetoes and including the inability to even move forward on a resolution that just expressed condemnation generally about the use of chemical weapons, we believe that we can’t use our preferences for the United Nations Security Council as a reason to not take action to enforce this international norm. And then, lastly, I think the President will make the point that we are dealing with the issue of chemical weapons here. The military response that we are currently calling for with Congress is focused on degrading Assad’s capabilities and deterring future use of chemical weapons. But at the same time, we’ve made clear that it’s not intended to resolve all the issues in Syria because, frankly, we don’t think there is a military solution. So even as there may be differences with a country like Russia on the issue of how we respond to chemical weapons, ultimately we’re going to have to reinvest in a political process through Geneva, which is the existing framework, to bring about an end to the Syrian civil war. And in our belief there’s no way that a leader who has killed thousands of his people, including gassing many of them to death, will have legitimacy to lead on the other end of that process, which is why we think Assad needs to go. So I think those are the core points the President has been making and I expect he’ll make the same case here on the international stage. Q Ben, just one question. Most of the allies -- there was a press conference this morning with the European Union and some other leaders in Europe -- are aligned with the U.S. in attacking and criticizing the use of chemical warfare. The difference is how to respond. And the general position that we gather from Europe, except from France, was why don’t we try to get sanctions? Why don’t we try to punish Syria in a different way and so without a military attack? So should that prevail as a line? And should Russia support a resolution with very strong sanctions would the U.S. consider not proceeding with a military attack? MR. RHODES: We believe that the nature of this chemical weapons attack is such a flagrant violation of the international norm prohibiting the use of chemical weapons that it demands a strong response, and in this instance a military response -- albeit a limited military response. This is the case we'll be making to our European allies. We have had political support from them for the notion that the use of chemical weapons is unacceptable and demands a response. We've had expressions of support from a country like France, which has indicated an interest in potentially being a part of an operation. But at the same time, when you talk about sanctions, I think the U.S. and the EU have basically thrown the book at the Assad regime in terms of sanctions. Early in the conflict we moved in a coordinated fashion to cut off Assad from the European and American economies. And I will say that the European efforts in that regard have had a significant impact on the revenues that the Assad regime is able to access. In the past, the United Nations Security Council has failed on several occasions to pass a Chapter 7 resolution imposing any sanctions. So we simply do not foresee the U.N. Security Council acting any differently in this instance, given Russia’s support for the Assad regime. And we do believe that the level of violation committed by Syria merits a response that imposes a deterrent military cost on the regime, because if there’s a sense from Assad that he can use these weapons with impunity, that emboldens him to use chemical weapons, that emboldens future dictators and terrorist groups to use chemical weapons. It risks unraveling the prohibition against the use of chemical weapons, which could put citizens and parties in conflict in the future in far greater harm. And it’s further destabilizing to a region in which the United States has a number of close allies and partners, such as Turkey, Jordan and Israel. Q There is a report that Prime Minister Abe invited officially President Obama to visit Japan. So what is President Obama’s response? MR. RHODES: He did extend that invite, and what the President said -- he always likes to go to Japan. He’s been there twice as President, obviously traveled before, so he would very much like to go to Japan and accept that invitation. It’s just a matter of determining at what point in the future it makes sense to go forward with that visit. So it’s just something that we'll have to work out. Clearly this year, the President has a full schedule in Asia, so we'll look for opportunities in the future to be able to have the President return to Japan and accept that invitation. Q (Inaudible.) MR. RHODES: Until our schedule is done it’s still an open question. I think the President’s intention is to find a time to accept that invitation, though, and that's what he expressed to the Prime Minister. I'll take one more on Japan and then -- yes. Q About economic issue, there is a growing concern among the emerging market economies about the impact by a possible slowdown of U.S. monetary policy, and I think this issue is going to be discussed in the G20 meeting. So how will the USA respond to such a concern? MR. RHODES: Well, I think that what we’ve seen is the U.S. took several steps including our central bank associated with monetary policy as we were seeking to rebound from a grave economic crisis. As we moved on to a firmer footing in terms of economic growth and job creation, you’ve seen adjustments made in those policies. I’d just say a number of things. First of all, obviously the United States government -- the President doesn’t set the policy of the Federal Reserve, so these are not decisions made by the President. Secondly, he believes that there are different things that each country can do here within the G20 framework to invest in economic growth. And what we’ve consistently said is even as we deal with long-term fiscal imbalances, countries can take different types of steps to promote investment or to provide their own investment in growth and job creation. And so we’ll discuss in the G20 session what types of steps can be taken not just in Europe and the United States, but in the emerging economies to promote growth. We’ve also said repeatedly that when you look at emerging economies, increasingly they will have to look within their own borders for demand. That’s part of the rebalancing of global growth that we’ve discussed for four and a half years now, so that there’s steps that can be taken so that emerging economies can find growth not just from consumers in the United States, but from within their borders. The only last comment I’d make is as a veteran of these G20s, in the past, there was criticism of the U.S. position on issues like quantitative easing. I think that what has been demonstrated is we’ve pursued a pro-growth policy, and we believe that that ultimately is good for the global economy, because when the U.S. economy is growing it helps provide momentum more broadly. But, at the same time, we cannot be a substitute for demand that is generated in other countries. Q (Inaudible.) MR. RHODES: Well, look, I haven’t done any vote counts. I think any assessment done at the beginning of this was that there was just a lot of undecided members who wanted to receive more information. We’re very pleased with the trend lines. I think each day what you’ve seen is different members coming out on a bipartisan basis to support an authorization to use military force. You’ve seen a resolution reported out of the Senate Foreign Relations Committee with strong bipartisan support, running the spectrum from a Senator McCain to a Senator Boxer. You’ve seen other important leaders in the House come out in support of an authorization. So what we’re seeing each day is an increasing number of members who are convinced that a military response is necessary. But we’re going to continue to make the case to members. We understand the obligation that we have to provide them with information to explain our thinking, to explain the nature of the military action we’re contemplating. We’ll keep doing that, and we’re confident that we’ll get a resolution passed. Just one more from Peter. Q Has the President in his meetings in Sweden or today gotten feedback from counterparts about the step that he took to hold off on military action until taking this issue to Congress for authorization? MR. RHODES: Not really. I mean, I think leaders of course are aware. As a general matter, they’ve expressed support for the President’s efforts in terms of getting a resolution through Congress. But he hasn’t had detailed discussions with them on our congressional process. I think that the world looks to the United States to lead on these issues. And I think the President made an important point in his press conference yesterday, which is that oftentimes it’s the United States that’s looked to to do things when you have terrible circumstances like we’ve seen within Syria and by necessity, we have to be out front in terms of enforcement on international norms. And were the United States to not play that role, there would be a significant vacuum in the international community. So one thing for Congress to consider is the message that this debate sends about U.S. leadership around the world -- that the U.S. for decades has played the role of undergirding the global security architecture and enforcing international norms. And we do not want to send a message that the United States is getting out of that business in any way. So I think one of the reasons we’re starting to see bipartisan support is that there’s an understanding that this is about the situation in Syria and it’s also about the leadership role that the United States plays in enforcing international norms. And I think you saw that yesterday with the Prime Minister of Sweden saying that he understood President Obama’s need to react precisely because the obligations of the United States in these matters has always gone beyond the type of actions that other nations have taken. We want other nations to meet their responsibilities, too, though, and that responsibility is to stay invested in an international norm that has been constructed over many decades. Thanks, everybody. Q The Pope wrote a letter for peace and against an intervention in Syria. What is the response of the White House on this position? MR. RHODES: I haven’t seen that. I’d have to take a look. Clearly, we always welcome the views of the Catholic Church, which has a longstanding commitment to the promotion of peace. But I’d have to look at the letter itself. Thanks. Q Ben, can you take one more from the file? Can you tell us, has the Brazilian President notified the President or the White House that she is cancelling preparations for a visit to the U.S. over her outrage over the NSA surveillance? MR. RHODES: I’m not aware of that. I know that they’re seeing each other -- I think they’re sitting next to each other, actually, at the G20 session, so I’m sure they’ll have an opportunity to talk. I addressed this earlier today in terms of our commitment to work with them to understand their concerns around the NSA issue. That’s what we’ll continue to do. And we’ll keep you updated on any interaction he has with President Rousseff. END 6:15 P.M. MSK
James S. Brady Press Briefing Room 12:53 P.M. EDT MR. CARNEY: Hello, everyone. It’s very good to see you. Thanks for taking care of Josh in my absence last week. Before I take your questions, I want to say a couple of things. One, and perhaps most importantly, I apologize for keeping you here to miss the opening pitches of the Red Sox versus Yankees game and the Marlins at the Nationals here. I, for one, wish I were at the stadium, because it’s going to be a very exciting season I think for Nationals and Red Sox fans, of which I am one. I’d also like to say something about the fact that this morning, the Senate Judiciary Committee announced its hearing for our D.C. Circuit Court nominee, Sri Srinivasan. As you know, Sri is the Principal Deputy Solicitor General, but you may not know that Sri was born in India and raised in Lawrence, Kansas, eventually becoming an all-star point guard at Lawrence High School. And, of course, he is still recovering today from the loss by his beloved Kansas Jayhawks over the weekend. Sri is of course also a highly respected appellate advocate who has spent a distinguished career litigating before the U.S. Supreme Court and the U.S. Court of Appeals, both in private practice and on behalf of the United States for both Democratic and Republican administrations. He has argued before the Supreme Court 24 times; drafted briefs and several dozen additional cases; and has also served as lead counsel in numerous cases before the federal and state appellate courts. As a testament to how highly regarded he is by members of both parties, 12 former officials from the Solicitor General’s office -- six of them Democrats, six of them Republicans -- all announced their support for Sri today. The signatories of the letter, including Paul Clement, Ted Olson, Ken Starr, and Walter Dellinger, write, “Sri has a first-rate intellect, an open-minded approach to the law, a strong work ethic, and an unimpeachable character. Sri is one of the best appellate lawyers in the country.” The D.C. Circuit, as you know, is often considered the nation’s second-highest court, but it has twice as many vacancies as any other court of appeals, and its workload has increased by over 20 percent since 2005. Sri’s confirmation will be an important first step to filling this court’s four vacancies, and he will be, when confirmed, the first South Asian circuit court judge in history. We also urge the Senate to move swiftly to confirm the 15 additional judicial nominees waiting for votes. Of those 15, 13 were approved out of the Judiciary Committee unanimously; not a single Republican dissent. And four would fill judicial emergencies; six are represented by Republican home-state senators who support their nominations. Now, as I mentioned, the last time I gave an update on our judicial nominees, we have seen some progress lately and we are grateful for that. Since the beginning of the year, the Senate has confirmed nine judicial nominees, and that is good. But it is worth noting that, on average, these nine judges waited 144 days for a floor vote, compared to President Bush’s nominees who waited an average of 34 days for a vote at this point in President Bush’s presidency. And it just underscores the seriousness of the situation; the uniqueness of the delay that we face in getting nominees confirmed; the arbitrariness of the delays when you have a situation where so many of them are voted out of committee unanimously and then never given a floor vote. We urge that the Senate act expeditiously to take up and consider and confirm this particular nomination, but also to move forward on these others. With that, I go to your questions. Q Thanks, Jay. Let’s start with immigration. We got news over the weekend that business and labor had reached a deal on a guest worker program for low-skilled immigrants. Any reaction to the development? MR. CARNEY: Well, I would say broadly that we are encouraged by the continuing signs of progress that we are seeing in the Senate as the Group of Eight and the Senate, more broadly, works on comprehensive immigration reform. We are also encouraged by reports, as you note, of an agreement, or progress at least, between the Chamber of Commerce and labor on that particular aspect of immigration reform. The President’s principles are clear. We are, again, encouraged by the progress. We note comments by Senators Graham, Schumer, and Flake over the weekend about just how far that group has come and how close they are to producing an agreement, and we find that good news. However, we’re not there yet, and this process is still underway in the Senate. Legislation has to be written, drafted, and we will evaluate the specific aspects of that legislation when it is produced. Q And on the path to citizenship, it’s looking like the legislation that’s going to come out in the Senate is going to have a path to citizenship that’s quite a long path -- 13 years or so -- and enough obstacles in it that far fewer than the 11 million illegal immigrants in the country would be eligible for that. Will the President lay down any markers about how clear a path to citizenship he needs to see in the legislation for him to be able to support it? MR. CARNEY: The President has said that, and has made clear in his blueprint, that there has to be an earned path to citizenship and it has to be real. It has to end in citizenship. It also has to require folks getting into the back of the line, as we’ve said, and it is part of a comprehensive approach to immigration reform that includes strengthening border security, continuing that effort; holding employers accountable; and bringing our immigration system into the 21st century. There are four key parts of the President’s blueprint and I think we’ve seen from the progress being made in the Senate by the so-called Group of Eight that those principles are reflected in the work they’ve been doing. I’m not going to, again, judge elements of the Senate legislation before it’s written, before it’s produced, before it’s agreed to. And I can’t -- I’m not going to comment on reports about what may or may not be in it since that hasn’t happened yet. Q Well, so then what does a real path to citizenship mean for him? I mean, would 13 years or 20 years -- what -- MR. CARNEY: Again, I’m not going to speculate about what may or may not be in the bill. It would be counterproductive to speculate and say that this would be unacceptable, this particular, random suggestion, and then, of course, find out that it’s not in the bill at all. So -- and I’m just using that as a general hypothetical, not specific to your question. So I’ll refrain from making those kinds of assessments from here. I would point you to the blueprint that I think is very clear and has been for some time about what the President believes a clear path to citizenship means and where it fits within comprehensive immigration reform. Q And we’ve seen a string of disturbing incidents with prosecutors being killed in Texas and the prison chief in Colorado. Is the White House doing anything extraordinary to help with that investigation, and have federal prosecutors been informed that they could possibly be targeted as well? MR. CARNEY: Well, the White House is not, obviously, involved in an investigation of that nature. I would refer you to the Department of Justice and the FBI for any role they might be playing at this time. I just don’t have anything for you on it. Yes, Jeff. Q Jay, a follow-up on immigration. Are you concerned or is the White House concerned at all that Senator Rubio’s support may be waning? MR. CARNEY: I would point you to comments by three members of the Group of Eight -- Senators Graham, Schumer, and Flake, who made very positive comments about the progress that the group is making. I think it certainly is a fact that legislation hasn’t been completed, a bill hasn’t been produced, so the process continues and is not finished. But two Republican senators are on the record saying, and I think I have it here, Senator Graham saying that, ”conceptually” -- and this is a quote -- “we have an agreement between business and labor, between ourselves, that has to be drafted. It will be rolled out next week. Yes, I believe it will pass the House because it secures our borders and it controls who gets a job.” That was Senator Graham. You also saw positive statements from Senator Schumer -- “I am very, very optimistic that we will have an agreement among the eight of us next week.” These are all welcome signs. We’re not celebrating prematurely. We await the product. We are engaged at a staff level with those who are working on legislation, and continue to hope that it will produce what the President has made clear he believes is essential for fairness, for our middle class, for our economy, and that is comprehensive immigration reform. It’s obviously a top priority of the President. Q Senator Rubio’s voice is especially important in this, right? MR. CARNEY: I won’t speak for any individual senator, so I would direct your questions to him. Q Well, the question is if you’re concerned about where he stands on this -- MR. CARNEY: Again, I would just point you to the statements by a number of members of the Group of Eight about the progress they’re making, how close they are to an agreement. I would also note that work remains to be done in drafting legislation, so I’m not going to get too far ahead of the process and I would -- in terms of the comments that individual senators make about possible concerns they have, I would direct you to their offices. Q Apropos concerns on a separate issue. Are you concerned about the escalating tensions with North Korea? And does the White House believe that the U.S. actions on this are contributing to those tensions in any way? MR. CARNEY: Well, not at all. The United States is committed to maintaining peace and security in the region, as you know. North Korea should stop its provocative threats and instead concentrate on abiding by its international obligations. And pursuit of nuclear and missile programs -- its pursuit, rather, of those programs, does not make it more secure but only increases its isolation and seriously undermines its ability to pursue economic development. I would note that despite the harsh rhetoric we’re hearing from Pyongyang, we are not seeing changes to the North Korean military posture, such as large-scale mobilizations and positioning of forces. Now, we take this seriously. I’ve said in the past. And we are vigilant and we are monitoring the Korean situation very diligently. And as you know, we’re in close, regular contact with our team in Korea; that would be both General Thurman and Ambassador Kim, both of whom are exceptionally well-qualified for the positions they hold. And they are coordinating closely with our South Korean counterparts. The actions we’ve taken are prudent, and they include, on missile defense, to enhance both the homeland and allied security, and others actions like the B-2 and B-52 flights, have been important steps to reassure our allies, demonstrate our resolve to the North, and reduce pressure on Seoul to take unilateral action. And we believe this has reduced the chance of miscalculation and provocation. I would also note -- and I’ve said this consistently, as have other officials -- that this pattern of bellicose rhetoric is not new, it is familiar. And we take it very seriously. We take prudent measures in response to it. But it is consistent with past behavior. Dan. Q Thank you. So just to follow on that -- the fact that this has been going on for quite some time, this kind of rhetoric from North Korea, and that no assets have been moved around that you can tell, is there then the sense that this is more of Kim Jong-un trying to establish his reputation than it is anything else behind the threat? MR. CARNEY: Well, I would reiterate that we haven’t seen action to back up the rhetoric in the sense that we haven’t seen significant changes, as I said, in the North in terms of mobilizations or repositioning of forces, and that is important to note. And what that disconnect between the rhetoric and action means, I’ll leave to the analysts to judge. We simply evaluate it and take necessary precautionary measures, and make clear to North Korea, together with our allies that this provocation behavior, provocative rhetoric only isolates them further; brings them no closer to rejoining the international community of nations -- in fact, moves them farther away from that potential and possibility. So we take steps necessary to make sure that we can protect ourselves and our allies, and we judge both -- we assess the rhetoric and we look very closely at what is happening on the ground. Q On immigration -- does the President consider comprehensive immigration reform a legacy item, as one of his former top advisors, David Axelrod, said on “Meet the Press” over the weekend? MR. CARNEY: The President views comprehensive immigration reform as a priority for the nation. It is something that is necessary because it will be good for our economy; it will be good for our businesses; it will be good for the middle class. And it has been a pursuit, obviously, that both Democrats and Republicans have engaged in for some time now that, at various periods, has enjoyed bipartisan support, this being one of those periods. And the President is focused on working with Congress to get this very important piece of business done on behalf of the American people and the American economy. That’s his priority. And you’ll note that in our approach to this -- and we discussed this early on about the reasons behind it -- we have made clear that we would like to see bipartisan action taken in Congress for legislation to emerge from the Senate, in this case, or in Congress, that’s bipartisan, that has the support of both Democrats and Republicans, that’s written by both Democrats and Republicans, because that allows for the best opportunity for legislation to become law -- legislation that fits the principles the President has put forward. These kinds of big things always require bipartisan action. There are ups and downs in the makeup of the House and the Senate and the party leadership of each body over the years. But, in general, it is usually the case that for big things to get done it requires bipartisan effort, and this is one of those instances. So we have -- the President is absolutely serious about this. He has made clear that he is encouraged by the progress that’s being made in the Senate, and wants to see it continue and to produce a result. But he is absolutely confident that the approach we have taken of having the Senate Group of Eight move forward with bipartisan negotiations and hopefully legislation has been the right approach. Q On the prosecutor shootings, has the President been briefed at all on it? MR. CARNEY: I don’t know. I’m certainly sure he’s aware of it. I don’t know if he’s been specifically briefed on that, but we’ll find out. Q And one more thing. We at CNN and others have reported that Caroline Kennedy will be the President’s pick to be ambassador of Japan. Is she -- what qualifications does she have to put her in a position to deal with some of the tough issues in the region, in particular North Korea? MR. CARNEY: Well, I have no personnel announcements to make, and I have seen no reporting that sources supposed personnel decisions to anyone on the record, from the White House or the administration. So I think I’ll leave it at that. Ann. Q Thank you, Jay. On Wednesday, why is the President going to a police academy in Denver to talk about gun violence so close to -- a couple miles from the Aurora theater? Is he trying to -- does he worry that the violent incidents not only at Aurora, Colorado but in Newtown will fade in importance and urgency for both Congress and state legislatures? MR. CARNEY: Well, I think those of you who were here last week -- on Thursday, I believe it was -- heard the President speak passionately about the need to move forward on legislation that would reduce gun violence, as well as the entire package of proposals the President announced back in January. And he had with him family members of victims of gun violence, including from, I believe, Aurora as well as Virginia Tech and Newtown. And he made that point very clear, that we -- shame on us if just 100 days after Newtown the memory of that would not still be vivid enough to compel us to act, and the same holds true for Aurora. Now, the President will travel to the Denver area, as you noted, on Wednesday, and he will there continue to ask the American people to join him in calling on Congress to pass these common-sense measures. He will also meet with local law enforcement officials and community leaders to discuss the new measures that the state of Colorado has recently put in place, including closing loopholes in the background check system to keep guns out of the hands of criminals and others who should not have access to them. And I think this is -- since that’s one piece of what he’ll be discussing in the Denver area, it’s, again, important to note, and I think it’s important for your viewers and readers to understand, that closing loopholes in the background check system is, as we’ve noted, something that is supported by over 90 percent of the American people, by over 80 percent of gun owners, by Democrats, Republicans, independents, unaffiliated, completely un-political -- all types -- Americans across the board from every region of the country. And it’s also important to note that there is an existing background check system. What needs to be done is action that improves that system, that closes loopholes to an existing system. We’re not talking about creating something that doesn’t exist yet. We’re talking about refining and improving it to ensure that those who should not have weapons cannot obtain them. And this is something that the American people overwhelmingly support. It is something that we believe the Congress should act on. All of these measures should have a vote. Those families the President was with deserve that Congress vote on these measures and not hide behind filibusters. Q Did the President watch the Louisville-Duke game yesterday? And did he reach out to Kevin Ware or -- MR. CARNEY: I am not aware of whether he watched that game or not, and I don’t have any conversations to read out to you. Bill. Q Have you talked to the President since his basketball experience this morning? (Laughter.) MR. CARNEY: What are you saying? (Laughter.) Q I’m asking you if the President has confessed that he feels badly about missing so many shots? MR. CARNEY: Well, I have not spoken to him about that, but the President doesn’t get to practice probably as much as he’d like to. (Laughter.) Having done a few shoot-arounds with him, he’s got a pretty good shot -- pretty good shot. Q He’s got a basketball court right out there to play. MR. CARNEY: Yes, well, these are busy times. Q So on immigration, is he planning to keep his distance from the Gang of Eight so that it doesn’t seem to be influencing, trying to -- MR. CARNEY: I wouldn’t put it that way. I would say that we, as I noted earlier, are engaged at a staff level with those who are drafting legislation. I think the fact that the principles that are evident in the President’s blueprint are reflected in the direction being taken by the Group of Eight says something about both the consensus that has emerged and the President’s leadership on this issue. But it is also the case that we believe, as a matter of strategy, that it should be -- the best course -- and we’ve said this all along -- was not for the President to drop his bill, proposed bill at the outset, but to let and encourage the Senate to move forward in a bipartisan way to try to craft its own legislation. Because his interest is in getting this done and getting it done in a way that keeps true to his principles, principles that are reflected in the efforts underway in the Senate, but also in the bipartisan efforts of the past that had the support of President George W. Bush and others, as well as then-Senator Obama. So we’re engaged. We’re encouraged by the progress being made. And we encourage -- we urge, rather, the Senate to continue to move forward. And hopefully the words of Senators Graham, Flake, and Schumer reflect that that progress will continue and that we’ll see legislation fairly soon. Q It just looks like you may be hanging back so Republicans don’t have a target here. MR. CARNEY: I wouldn’t characterize it that way at all. I think that he’s made clear, we’ve made clear that if the process stalls in Congress, we are prepared to move forward with proposing the President’s bill -- our own legislation, but that the preferred path here is the path that is being taken and traveled along quite quickly, or relatively quickly, and that’s the process that we’ve seen underway in the Senate in particular. Yes. And then Ed. Q A follow-up on that point. Senator Graham, I believe over the weekend, said that once the bill is unveiled next week, they’re going to need the President’s help to get it passed. So given the kind of observation of what the President’s role has been -- the preferred letting the process work its will in the Senate -- how do you envision that changing starting next week, assuming the bill is unveiled? Can you sort of describe the differences between the current -- whatever the current situation is and what you see going forward? MR. CARNEY: Well, I don’t want to get ahead of the emergence of legislation. We hope that takes place and -- Q But assuming it does, though, what -- MR. CARNEY: Well, again, I wouldn’t want to assume that. But I’ll still address your point, and that is to say that the President will continue to be out there urging action on comprehensive immigration reform, making clear what his principles and priorities are. We will continue to work with legislators in the process of both drafting and then pushing for legislation, assuming that it -- or hoping that it keeps with the President’s principles, and what the process produces is a bill that the President could sign and that could get substantial bipartisan support. I think that we have chosen a path that makes a lot of sense, which is having -- giving room for the Senate to make progress in a bipartisan way on this legislation. But I don’t think anybody should be under any illusion that we would not be where we are today, making the progress that we have made, if it weren’t for the fact that the President has made clear, consistently and very publicly as well as privately in conversation with rank-and-file members and leaders in Congress, that this is a top priority for the country and that -- I mean, that’s why we’ve had -- that’s why his blueprint, his views on comprehensive immigration reform have been out there and public for quite some time. So this is a cooperative effort I think that involves more than one leader, requires bipartisan action in Congress, but we are very much engaged. Q But assuming that it’s something that he can support -- obviously, it would be different if it wouldn’t be -- but assuming that, he fully embraces it and -- or are there -- MR. CARNEY: Again, before we know what “it” is, let’s -- I don’t want to get ahead of the process. And we’re encouraged by -- you think it’s a done deal? Q No, I’m kidding. MR. CARNEY: You’ve been around long enough to know that we wouldn’t want to make that assumption. But the fact is there has been significant progress and we’re encouraged by that. And we will assess the legislation when it emerges, and we certainly hope that’s relatively soon. Ed, sorry. Q I want to ask about yesterday’s Easter Mass. The President brought his family over to St. John’s, as a lot of Republican and Democratic Presidents have. But was he surprised, were you surprised that the Reverend León decided to get so political and attack leaders of the religious right, at one point saying that they want, quote, “blacks to be back in the back of the bus.” It seemed sort of odd for Easter. Were you surprised by that? MR. CARNEY: Well, I wasn’t there and I have not spoken with the President. I know that he enjoys going to Easter services with his family. And in keeping with a tradition that dates back many presidencies, he went right across the park here to St. John’s and attended those services. I think it’s been noted that Reverend León has been there for quite some time. He has -- I think he gave the invocation at President George W. Bush’s second inaugural. So, again, I wasn’t there. I don’t have a characterization to make of his comments. The President was just attending Easter services with his family. Q He did speak at President Bush’s inaugural, and also did the benediction at President Obama’s most recent inaugural and said something about loving thy neighbor, et cetera. Do you think this kind of language, though, changes the tone in a positive way? MR. CARNEY: Well, again, this is -- he is not a politician. This is not a senator or a member of Congress or the President. This was a sermon that the -- at a church here that’s been visited by Presidents of both parties for many, many years. And I think -- I just don’t have anything more on it for you. I haven’t talked to the President about it. Yes. Q Jay, thank you. Do you expect the President’s deficit reduction plans on chained CPI, Medicare beneficiaries might be part of his budget that he releases next week? MR. CARNEY: I won’t get ahead of the release of the budget. I want to make that a fun and full experience for all of you. (Laughter.) So I would set that aside. The items that you referred to were part of the offer the President made to Speaker Boehner during the fiscal cliff negotiations -- the offer that I think was widely viewed accurately as meeting Republicans at least halfway on revenue and spending cuts, including cuts from entitlements -- or savings from entitlement reforms. And that offer remains on the table, as we’ve made clear repeatedly since then. So if even prior to the 10th of the month, if Congress were to miraculously reconvene and want to take action on that offer, the offer stands. Q And also, can you talk about what you hope and expect will come out of the President’s dinner with lawmakers next week? MR. CARNEY: The President looks forward to continuing the conversation that he’s been having with groups of lawmakers, individual lawmakers, Republicans and Democrats. This would be the second dinner that he will have had with Republican senators. The President asked Senator Isakson to build a guest list for it, and I don’t have anything more for you on that. The President looks forward to continuing this conversation, to seeing if common ground can be found and where it can be found on the pressing issues of the day, and that includes budget and fiscal issues. It also includes immigration reform and gun violence legislation; how we need to move forward, as the President spoke about on Friday in Miami, on investing in infrastructure for our economy’s future as well as for its present, in terms of job creation; what we need to do to make ourselves more independent when it comes to our sources of energy. These are all priorities that he’s put forward and will discuss with those senators who attend at the next dinner. He looks forward to it. Peter. Q Jay, right now we’re in the middle of the public comment phase -- MR. CARNEY: Does anybody have a score on Red Sox or Nationals? (Laughter.) Q Nationals are winning. MR. CARNEY: Second pitch of the season. Q Yankees 8-0. (Laughter.) Sorry. MR. CARNEY: What are you doing? Come on. (Laughter.) Don’t do that to me. Q I’m from New York, originally. Q Does anybody know Yankees-Red Sox? Q Zero-zero. MR. CARNEY: Zero-zero. Thank you. Q Not that anybody was distracted from the riveting conversation that is the briefing during a ballgame. (Laughter.) With the public comment phase now underway in terms of the draft of the environmental impact statement as it relates to the Keystone Pipeline, I was trying to get a sense -- without any specific scheduling announcements -- when we think we should expect to hear from the President on that. MR. CARNEY: Well, the process, as you know, is run out of the State Department. The timetable depends on that process, and I would refer you to the State Department for what those next steps are and when that process plays out. I don’t have anything -- there is nothing -- I can promise you there is nothing on the President's schedule that relates to that question at this time. Q Understood. Then given just a couple of days ago, I guess Saturday, the EPA classified a new leak that took place in Arkansas with several thousand gallons of crude oil spilling from a ruptured Exxon-Mobil pipeline in that state, the EPA describing it as a "major spill." I'm just curious the President's thoughts on that and, as they relate to considerations right now, even if not immediate, on that topic. MR. CARNEY: I haven't spoken about this incident with the President. We obviously have a system in place where the EPA in this case is the federal on-scene coordinator when you have a spill, an event like this. And they are working with and have been working with state and local officials, as well as the responsible party, as they respond to this incident; in this case, the responsible party is Exxon-Mobil. We obviously take the safety of our many pipelines in this country very seriously. And we have an agency that is dedicated to the task of making sure that those pipelines operate safely, and, in cases like these that -- investigations are undertaken and steps taken to both mitigate the damage and hopefully avoid them in the future. Mara. Q Without asking you to comment on any impending personnel announcements, can you talk in a general way of the President's opinions of Caroline Kennedy's talents and abilities? MR. CARNEY: No. (Laughter.) But it was worth trying. Jon-Christopher. Q In these challenging and rather precarious times with North Korea, we understand that Kim Jong-un has disconnected the so-called "red phone." If the President could speak directly to the leader of North Korea, what would he say to him today? MR. CARNEY: Look, I think the President and the administration judge the rhetoric and actions by the North Korean regime for what they are -- actions and rhetoric that further isolate the regime, that demonstrate a repeated preference for bellicosity rather than tending to the needs of the North Korean people who suffer greatly under a regime that prioritizes nuclear weapons and missile programs over the welfare of their own people. And it has been our position, as well as the position of our allies, that North Korea needs to abide by its international obligations; it needs to do so in order to end its isolation and to better serve its people. Because this kind of rhetoric does not benefit the North Korean people, it does not benefit the North Korean regime, and it only isolates them further. Alexis. Q Jay, the President later this week will be traveling wearing his partisan hat at his party to do some fundraising. Can you describe how the President decided how much he would participate in doing that, especially in the context of a week in which he's going to be trying to build bipartisan support for his agenda, but going out to try to raise money to defeat Republicans? MR. CARNEY: Well, I think he's going to be raising money to try to elect people who he believes share his agenda and his priorities. I think that’s consistent with actions taken by past presidents -- I know it is -- and that’s certainly what he will be doing. But I think he will be out there talking about the things that he believes we need to do to move the country forward. And he both welcomes the bipartisan progress we've seen on some issues, like comprehensive immigration reform, and is engaged in conversations with Republican lawmakers as well as Democrats to try to foster more bipartisan cooperation to get the work of the American people done. And it is simply a fact, as I was saying earlier, that in the world we live in now, no midterm election, or even presidential-year election, is going to change the absolute fact that to get important things done, we need bipartisan cooperation. And that, I predict at great risk, will be the case two years from now just as it today, regardless of who wins what races in 2014. Because that -- to do the kinds of things that we’re talking about -- immigration reform, actions to reduce gun violence, enhancing our energy independence while improving our environment -- these are things that almost all require bipartisan cooperation, and that's what the President is focused on. Q And to follow up, sequestration impact in the Executive Office of the President -- can you give us some data? MR. CARNEY: Let me see what I have for you here. As you know, the White House is one of 11 components of the Executive Office of the President, which is, indeed, as we have said, subject to the sequester. Within the Executive Office of the President, several offices have sent furlough notices to their staff, including to 480 employees of the Office of Management and Budget. In addition, EOP leadership has managed our personnel costs in a variety of ways, including hiring slowdowns and delayed backfilling of open positions. And as the impact of the sequester progresses, furlough and pay cuts remain possibilities -- or additional furloughs, as well as pay cuts, remain possibilities for additional White House employees. Additionally, in order to meet the effects of the sequester, many components of the EOP have significantly scaled back equipment purchases and supply purchases, curtailed staff travel, reduced the use of air cards. And they are reviewing contracts that they have on an ongoing basis to identify opportunities to reduce costs, improve efficiencies without undermining their core mission. It just means that all -- everybody at the White House and the broader EOP is dealing with the consequences both -- in many cases, in their own personal lives, but in how we work here at the White House, which is true across the federal government because of the impact of the sequester. Q Just to follow up, because you can be so specific about the OMB impact, and we assume that federal employees get a 30-day notice if they are going to get a furlough notice, and the fact that you’re not identifying anybody who is working directly in the White House for the President as being identified to that, is that -- MR. CARNEY: The OMB works for the President. It is part of the Executive Office of the President. Q Yes, but we’re talking about -- I’m talking about the West Wing folks who work directly for the President. Those folks -- MR. CARNEY: Again, I just -- I completely take issue with the idea that the OMB doesn't -- Q There are many hundreds of people who work for the President of the United States -- you know what I’m asking you. So my question is, because you haven’t identified those people who have received any furlough notices, you’re saying that cost-effective shifting of dollars and holding down on dollars is for the time being going to prevent anybody from being furloughed? That's what you’re saying? MR. CARNEY: I think I just said that within the Executive Office of the President, a component of that, OMB, there have been 480 employees who have been notified of furloughs. Q Right, but you don't work for OMB. So -- MR. CARNEY: No, but they work for the President, and so do I. Q Yes. MR. CARNEY: I’m not sure -- Q You know exactly what I’m asking. MR. CARNEY: I don't. I don't. Q I’m asking -- okay, the White House -- Q Are those the only furlough notices or are there others? MR. CARNEY: I have no other notices to announce to you. I can tell you that -- Q Why not? MR. CARNEY: As I just said, as the impact of the sequester progresses, furlough and pay cuts remain possibilities for additional White House employees. I think you would find at agency after agency, as they make these assessments and make these budget decisions on a rolling basis, they're having to make decisions about furlough notices and other measures that they have to take, and that is as true here as it is in other federal agencies. Q Well, why can OMB give us a number of 480 and none of the other components -- MR. CARNEY: I’m saying that that's the number I have for EOP, and it’s 480 at OMB. Q So the other 10 components, there is no furlough notices at this point? MR. CARNEY: Again, that's what I have for you, Donovan. I don't have any other furlough notices to announce to you. Q So there haven’t been any? MR. CARNEY: That's what I have, not beyond what I can tell you. That's what I know. Stephen. Q Previously, in times of tension with North Korea, the administration has communicated directly with Pyongyang through various diplomatic channels, including the U.N. Has that happened in the recent weeks? MR. CARNEY: Well, we have -- obviously, there’s been action at the U.N. with our allies at the Security Council, a resolution that passed unanimously with support from both China and Russia, as well as others. I don't have any specific communications with the North Koreans to convey to you. I think it’s pretty clear that they know what the position is that we hold and that our allies hold in terms of both provocative actions and bellicose rhetoric, on the one hand, and then what steps they could take and what they need to do to reduce their isolation and improve the lot of their people. So I don't think there’s -- I think that message has been fully communicated. Q Has the White House -- can you tell us anything about White House contact with China? Has there been specific communications with the Chinese government on this? MR. CARNEY: Well, I can tell you that, in general, whenever we have conversations with the Chinese government and our counterparts, depending on which official we’re talking about, North Korea is frequently a topic. I don't have a specific conversation to provide to you, but that is -- when we’re discussing with our Chinese counterparts areas of national security matters, including North Korea, this comes up frequently. So I wouldn’t be surprised if that's been the case. But I don't -- maybe State has something more for you, but I don't have anything specific. Yes, sir. Q Thanks, Jay. Given the ratcheting up of the tensions on North Korea, can I ask one more? Although, you’ve hit many of your main points. Does U.S. support encompass what we understand was a briefing for the South Korean President, which included plans or a proposal to launch a preemptive strike against the North should what they call an imminent nuclear or a missile attack be detected? Does U.S. support encompass that kind of -- MR. CARNEY: Well, I’m not aware of such a briefing. We obviously have a very close relationship with the Republic of Korea and with the government there, and we have taken measures that I think I noted were designed to be both reassuring to our allies in the region and to make it clear that unilateral action is not necessary. And we continue to work with not just the South Koreans but other allies in the region on this important matter, and to make clear what the actions we’re taking are; what our view is of the rhetoric emanating from North Korea. And we’ll continue to do that as this goes on. Q Thanks, Jay. MR. CARNEY: Last one. Yes. Q For the changing of the North Korean regime -- and North Korean behavior through the years, does South Korea have any preemptive strike against the North Korea? MR. CARNEY: I think I just answered that. And I don't have anything beyond to say that we have a very close relationship with the Republic of Korea; that we have taken some of the actions -- the prudent measures that we’ve taken both on missile defense and with regards to flights by B-2 and B-52 aircraft designed to reassure our allies, to demonstrate our resolve to the North, and reduce pressure on Seoul to take unilateral action. In total, this, we believe, has reduced the chance of miscalculation and provocation in this arena. Q Do you suggest, though, a warning to North Korea -- or the time that could demonstrate -- the bombing to whatever -- airplane strikes. Why not -- a preemptive strike to the North Korea? MR. CARNEY: Why not -- I’m sorry. I don't understand. Why not what? Q Why not the strike to bombing North Korea? MR. CARNEY: Well, I don't think that's a serious question, so I will -- I’ll leave it at the answer I gave. Thank you. END 1:37 P.M. EDT
James S. Brady Press Briefing Room 12:39 P.M. EDT MR. EARNEST: Two quick announcements at the top before we go to your questions. They’re both scheduling announcements, actually. The first is, at 3:00 p.m. today the President will host a swearing-in ceremony for the new director of the United States Secret Service, Julia Pierson. That will be in the Oval Office, and we’ve arranged for a pool to be there to witness it. So that should be pretty good. The second thing is about tomorrow. Tomorrow, the President will hold an event here at the White House where he will stand with mothers who want Congress to take action on common-sense measures to protect children from gun violence. The event will take place in the East Room. And in addition to the mothers on stage with the President, there will be law enforcement officials, victims of gun violence, and other stakeholders. So that will be tomorrow. I don’t know the exact time, but we’ll have more on that on the guidance tonight. So, yes, here in the East Room in the White House. With that, Julie, I’ll let you get us started. Q Thank you. Just a couple things on DOMA. Did the President get any update from the Solicitor General following the oral arguments today? And was there anyone from the White House who was there to witness the arguments, like yesterday? MR. EARNEST: It is my understanding that the President has been kept apprised of the arguments made at the Supreme Court on these issues, both through reading the coverage of you and your colleagues but also based on briefings that he’s gotten from his legal staff here at the White House. It’s also my understanding that the White House officials who attended yesterday are the White House officials also attended today. So that was Valerie Jarrett, Kathy Ruemmler, the Counsel of the White House, and Kathleen Hartnett, who’s an associate counsel here at the White House. Q There seemed to be, in sort of the initial reading of the justices’ questions, a sense that they were also questioning the constitutionality of DOMA. Did the President, in the short period of time that’s passed since it was wrapped up, have any reaction to the proceedings today? MR. EARNEST: I haven’t heard from him about his reaction to the proceedings today. I know that going into the proceedings that he had full confidence in his team at the Justice Department and others who were responsible for preparing the arguments, and had total confidence in the people who were prepared to walk in there and deliver them. But in terms of his reaction for how it played out, I didn’t get one. Q We’re seeing a little bit more from the President, at least publicly this week, on immigration reform -- the interviews today, the event on Monday. Is there a reason why he feels like he needs to be kind of more forthright publicly this week as Congress works its way towards a possible deal? MR. EARNEST: The reason that the President felt like it was important for him to be very public this week, as he has been in previous weeks about immigration reform, is that it remains a top priority of his. This is something that he talked about quite extensively during the campaign; and something since the beginning of this year, when he laid out his principles in a speech in Las Vegas in January, has made clear that this is an important priority, both in terms of the impact that -- reforming in a comprehensive way our broken immigration system because of the impact that it would have on our economy, but also because it’s the President’s view that we need to make sure that everybody is playing by the same set of rules. And by reforming our broken immigration system in a comprehensive way, we can accomplish those two goals. So the President is looking forward to the opportunity that he’ll have to speak with Univision and Telemundo correspondents this afternoon to talk about why that’s such a priority for him. And I think what he’ll also note, though, to be fair, is the progress that’s being made by the bipartisan group of eight senators who are working on this in the United States Senate. Q One of the sticking points right now is this wages for guest workers. Obviously, business and labor are split on this. Has the President done any outreach to labor, to Trumka at AFL-CIO on this? MR. EARNEST: I don’t have any specific calls to read out to you. As you know, the White House staff, throughout this process of negotiations -- bipartisan negotiations have been ongoing -- has been engaged. And they have been engaged both to offer some technical assistance, but also to ensure, or at least to represent the administration point of view, to try to steer the proposal in the direction of the principles that the President had laid out. So we’re pleased with the progress that the groups are making in terms of trying to hammer out an agreement here. And we are also heartened by the fact that Senator Schumer at least has said that he expects that a bill will be filed shortly after the Easter vacation. And if that’s the case, we’re certainly pleased with the progress and looking forward to taking a look at what they have agreed upon. Hey, Steve. Q Josh, what’s the next step in trying to reach a grand bargain with Republicans over the deficit? MR. EARNEST: Well, as you know, Steve, for some time now, the chief impediment to reaching a grand bargain has been the refusal of Republicans to ask the wealthiest and well-connected to pay even a dime more to help us deal with our deficit challenges. I’m sad to report that even months later that that continues to be the case, that we are seeing a group of Republicans in the Congress who are refusing to compromise on this. In fact, you even see some of them that are actually running around the country bragging about their intransigence on this. That's not in the best interest of the country. It’s not in the best interest of our economy. The President has put forward his own plan, a genuine compromise that reflects the balanced approach that the President supports. It would reduce our deficits based on the agreements that we’ve reached over the last 18 months or so. It would reduce our deficits by about $4 trillion, $4.5 trillion over 10 years, and it would reach that deficit reduction by making smart cuts in government spending, by eliciting some savings from reforms to our entitlement programs, and by asking the wealthy and well-connected to pay a little bit more. Q So what happens now then? MR. EARNEST: Well, we are in a place now where it’s difficult for us to reach an agreement when you have a firm block of Republican senators who are refusing to compromise. It’s even more disappointing where -- it’s even more disappointing that the natural compromise that should exist in terms of additional cuts in government spending, some reforms to entitlement programs, both of those -- those are two items that Republicans have long said that they have sought, and asking the wealthiest and well-connected to pay a little bit more. By pursuing that balanced approach, we can reach some significant deficit reduction in a way that's good for the economy. But as long as Republicans are saying we’re not going to ask the wealthiest and well-connected to pay a single dime to reduce our deficit, then it is hard to imagine that we’re going to reach a compromise. Q So basically the process has stalemated then? MR. EARNEST: Well, the process is currently being blocked by Republicans who refuse to consider -- even consider asking the wealthiest and well-connected to pay more. Q So any more meetings planned or any talks about this? MR. EARNEST: Nothing that I have to read out to you right now. The President has -- since December -- has had on the table an updated compromise plan, one that he originally presented to Speaker Boehner in mid-December. The details of that offer are posted on the White House website. They remain on the table. So if there happens to be a critical mass of Republicans in Congress who take a look at that proposal and say, you know what, we actually would like to reach an agreement that would do something significant about our deficit; that would make some strategic cuts to government programs where we can; that would reform entitlements in a way that would protect those programs for the future, but also enjoy some savings that we could pay toward reducing the deficit; and ask the wealthy and well-connected to pay a little bit more, then that would be the outline of compromise. What we need to see is we need to see Republicans who are willing to demonstrate some political courage to do that. Q And quickly on another subject. North Dakota is signing a law banning most abortions. Is this something you’re taking a look at on whether it is constitutional? MR. EARNEST: Well, this is -- it’s a state matter, and so I don't have a specific comment on it. I know that the expectation is -- just from reading the reports, I know the expectation is that there are a number of legal challenges that are likely to be pursued. And I know that many people who know a whole lot more about the law than I do are skeptical that these types of laws will stand up to legal scrutiny like that, but that’s not a decision for us to make. The President’s view on this is pretty clear. He certainly is opposed to measures like that. He believes in protecting a woman’s right to choose. But in terms of if there is a legal process forthcoming, that’s something that will be -- that will wind its way through the process and not something that we’ll -- at least initially -- be involved in. Jim. Q Back on immigration, if we could. Senator McCain in his home state said yesterday that he -- he told some of his constituents that, “I don’t know if we can achieve agreement or not. We’ve been working hard…but I can’t guarantee anything.” Is the White House concerned? And is in fact this push that happened on Monday and then, again, the interviews today, are those linked in any way in a concern that this is stalled at this point? MR. EARNEST: No, in fact, we’re actually encouraged by the progress that’s being made by the bipartisan group of senators who have been working on this for a number of months now. Senator Schumer said just on Sunday that he was optimistic that they’d be able to file a piece of legislation when they got back from the Easter recess. I know that Senator McCain and his Arizona colleague, Senator Flake, are hosting a couple of their Democratic colleagues -- Senator Bennet and Senator Schumer -- in Arizona today, again, to take a look at the border, to take a look at the important investments and commitments that have been made by this administration to securing the border. And we are hopeful that, as they work their way through this process, that we’ll have a bipartisan agreement that reflects many of the principles that the President himself has laid out. We’ll reserve judgment on the product of those discussions until it’s produced, but at this time we are -- we remain encouraged by the progress that they’re making. Q So Sunday’s statement by Senator Schumer would trump yesterday’s statement by Senator McCain that he, in fact, can’t guarantee they will have a bill and that he is, in fact -- couldn’t guarantee anything and he is discouraged? MR. EARNEST: I haven’t seen the exact comments from Senator McCain. I would -- if he’s suggesting that he’s not going to make any guarantees about what happens in Congress two weeks from now, I would actually suggest that he’s quite -- he’s being pretty judicious, because I think it is difficult to predict what exactly happens in Congress. But I think that the vast majority of indications are that this bipartisan group has made a lot of progress. That’s progress that the White House has been involved in, as I mentioned earlier. The White House has offered some technical assistance to them as they’ve been working through drafts of legislation and I know that there are others who are involved in those talks who are interested in ensuring or at least trying to steer that group in the direction of the principles that the President has laid out. And by all indications, they’ve made some important progress. I’m not up here offering any guarantees either. But what I am encouraged by and what the White House is encouraged by are the indications that they’re making some progress and will be prepared in a couple of weeks to file a piece of legislation or around the deadline that they set for themselves a few months ago. Q So, finally, just to be clear here, so the President hasn’t changed his mind about stepping back, letting Congress work this out, and not inserting himself as he did on Monday and as he is a little bit today with the Spanish-language media? That’s not reasserting himself into the process at this point? MR. EARNEST: Well, I’ll let you guys sort of evaluate whether or not the President is asserting himself or inserting himself into the process. The President has beliefs. The President campaigned on and won reelection on a platform of pursuing comprehensive immigration reform early in his second term. That is a promise that the President has followed through on. The reason -- one of the important reasons that immigration reform is such a legislative priority for both sides is because of the public support that the President has marshaled on this issue. So it is natural that the President would be involved in the process of putting together a policy that would finally fix our broken immigration system. But in this case, we have allowed a bipartisan group of senators, at their request, to take the lead in the conversations about a bipartisan compromise in the United States Senate. Those are conversations that we’ve been involved with from the beginning, but we’re pleased that we see this group of eight senators -- Democrats and Republicans -- working together to try to put in place a policy that could pass through the Senate with bipartisan support, could pass through the House with bipartisan support, and would be the kind of legislation that the President could sign. That’s the way that the system is supposed to work. Major. Q I just want to talk to you about North Korea for a minute. And I took seriously what Jay said about the statement. But what I’m trying to get at is if there is any conversation that’s reached the President, or if he’s aligned or put together working groups that view what’s happened in North Korea in the last three or four weeks as materially different the kind of rhetoric and provocations and actions that this government has seen before. Because there are a number of people who are familiar with this issue who do feel increasingly that there is a material difference and that the risks are greater, and that there is something afoot here that is different and possibly more threatening to South Korea and U.S. interests throughout the region than we have seen before. I wanted to ask you if you can tell us anything about whether the administration believes that’s true, if it feels it is materially different, and is doing anything in response to that conclusion. MR. EARNEST: Well, the thing that we have -- it’s difficult to offer you a specific assessment from here. But I can tell you that the White House and this administration, and certainly through the Department of Defense and other agencies and leaders in this government who are responsible for the safety and security of not just the United States of America but also our allies, have been engaged with our international partners to try to deal with this challenge. I mean, what we’ve seen from North Koreans is more bellicose rhetoric and threats that only follow a pattern designed to raise tensions and intimidate others. The North Koreans are not going to achieve anything through these threats and provocations, and they’re only going to further isolate the North Koreans and undermine international efforts to bring peace and stability to Northeast Asia. We remain committed to ensuring that the security of the South Koreans, our allies, are protected, and we have the capability that we need to ensure that the United States and our assets are protected. Q The Treasury Secretary was over in China, had -- was the first civilian leader to see the new Chinese President. Obviously, he has a very good relationship with the President. I’m wondering if there were any conversations or any reports back to the President from the Treasury Secretary, because I have to believe in these conversations North Korea did come up as a general topic. MR. EARNEST: I’m not familiar with the details of the discussions between Secretary Lew and President Xi, so I’d refer you to the Treasury Department for that. Q Right. And can you tell us if there is any different posturing here in the building, on a daily basis or even a weekly basis, about North Korea? MR. EARNEST: What do you mean by posturing? Q Meetings, briefings to the President? MR. EARNEST: No, I’d say no. Q Is anything being lifted up to a higher level of scrutiny, analysis and presentation of that analysis to the President? MR. EARNEST: Well, I can tell you that this is something that is being -- Q Is there a higher level of urgency or curiosity or interest now than there was, say, two months ago? MR. EARNEST: Well, I think that there’s always been a pretty vigilant posture when it comes to North Korea, in terms of monitoring their statements, in terms of monitoring their capabilities, and making sure that we have the resources that we need to protect our interests and our allies. We remain engaged with our international partners in the region who also have a stake in resolving this peacefully. It’s hard for me to compare that to previous instances like this, but I can tell you that this is something that we have been vigilant about for quite some time now. Q But not more so now than throughout the entire administration? MR. EARNEST: Well, I would say at least as vigilant as we have been previously. Ed. Q Josh, I want to ask all of Jim’s questions over again -- (laughter) -- but just to insert gun control instead of immigration reform. Will you guarantee that there’s going to be a big gun control bill that will pass through both chambers? MR. EARNEST: I don’t want to try to stand here and predict the future about what’s going to happen in the Congress, but I can tell you that, in the same way that we’re encouraged by the progress that’s been made in bipartisan fashion on immigration reform, we’re encouraged by the bipartisan progress that's been made in the Senate. There are a number of measures that passed through the Senate Judiciary Committee, last week I believe it was, and we’re going to continue to work with the Senate and with members in both parties, frankly, who are interested in working with the President to put in place measures that would reduce gun violence. As the President himself has said pretty articulately that this is a complex problem, but we shouldn’t let the complicated nature of it prevent us from taking action. And there are some meaningful, common-sense things that we can do to reduce gun violence in our communities at the same time respecting the rights provided by the Second Amendment of the Constitution. Q Today I believe is 100 days since the tragedy at Sandy Hook, and obviously the President -- that may be one reason why he’s having this event here at the White House tomorrow, obviously to mark that. There’s a national day of action tomorrow, as well on this. But a lot of time -- 100 days has passed since the tragedy. The nation’s attention was focused. Obviously, the fiscal cliff and other things have come up. Is he getting more active now, worried that perhaps he’s lost some momentum on this important issue? MR. EARNEST: Well, I think I would slightly disagree with the premise of your question because I think that the President has been engaged on this pretty quickly. And I think -- Q But how many events has he had here at the White House on this in this room, pushing with moms or -- MR. EARNEST: Sure. There have been more than 20 events actually, more than 20 events and interviews and public appearances, between the President and the Vice President’s activities, spread out over 100 days. That's more than one a week. So this is something that the President has been engaged on from the beginning. Putting somebody like the Vice President in charge of this is significant. This is somebody that has a long history with these issues from being the Chairman of the Judiciary Committee and intimately involved in the passage of the first crime bill that included an assault weapons ban. But two days after the tragedy in Newtown, the President spoke pretty eloquently about steps that Congress should take. Three days later, he stood at this podium in this room where he appointed -- or he asked the Vice President to take the lead here, at least initially, in coming up with some ideas. But even in those remarks, he talked about and challenged Congress to pass legislation on banning military-style assault weapons, banning high-capacity magazines, and closing loopholes in the background checks. And that's something that the President said and called on Congress to act on, on December 19th. And since that time, the President has spoken repeatedly about this from weekly addresses. The President had a very eloquent challenge in the State of the Union, where he asked Congress to vote on specific measures that would actually have a tangible impact on reducing gun violence. Q He’s done all that, and yet his own Senate Majority Leader, fellow Democrat Harry Reid, would not include the assault weapons ban in the package of reforms that's coming up. There’s talk about a separate vote on it as an amendment. But despite all of that talk, all of the speeches, all of the meetings, even the Senate Majority Leader is not guaranteeing that they're going to get an assault -- MR. EARNEST: I think because of all the talk of the President and because of his aggressive advocacy of this issue, there will be a vote in the United States Senate on whether or not military-style assault weapons will be banned from the streets of this country. I think there is -- that represents progress. Now, does it mean -- I can't stand here and guarantee that it’s going to pass, but it is a question that 100 senators are going to ask themselves when they wake up in the morning and look themselves in the mirror about whether or not they are going to -- about which side they're going to be on when it comes to voting on a ban on military-style assault weapons. And the President will certainly continue to advocate for senators to support that ban. Peter. Q If I can, I want to ask you a question about what’s happening at 3:00 p.m. today. The President is going to be there with Julia Pierson for the U.S. Secret Service Director. First of all, was she the President’s first choice to be Secret Service Director? MR. EARNEST: The President believes that she’s the right person for the job, absolutely. Q Does that mean she was the first choice? MR. EARNEST: Well, I’m not going to get into that -- to the process here. I don't know that there is even more than one candidate. I mean, Ms. Pierson, as you know, is a 30-year veteran of the United States Secret Service. She’s somebody who has held a variety of leadership roles at the Secret Service from some protective activities to cybercrime, and most recently as the chief of staff of the organization. So this is somebody that has a strong record of leadership at the organization. And she embodies the kind of character and leadership that the President would like to see at the top of that organization. Q Obviously, that organization faces unique challenges right now. The Washington Post reported some information that I just want to get your thoughts on. They spoke to a series of agents that were interviewed in the last couple of weeks that said that Pierson was a “weak candidate about rank-and-file agents because she has spent relatively little time supervising or working high-priority protective details, spending most of her career in administrative jobs.” Is that a concern for the President to have somebody who has more time in the field than behind the desk? MR. EARNEST: No, I think the President believes that Julia Pierson has exactly the kind of experience that we want the person who’s going to lead that agency to have. I guess the other thing I would point you to is that I know that the outgoing director, Mark Sullivan, who I know has a lot of respect across the agency, is somebody who has strongly supported her for candidacy and said that she was exactly the right person for the job. So it’s not just the President who believes that she’s the right person for the job, it’s the outgoing Director of the Secret Service who believes that she has exactly the experience and skills necessary to lead that agency. Q This one -- given the fact that the White House came under a lot of scrutiny in recent weeks or months about what the Cabinet looked like and what some of the top leaders of this top administration looked like and that there weren’t enough women at the time, now we can say that the head of the DEA, the head of the U.S. Marshals Office and now the head of the Secret Service will all be women. Does this represent something significant that America should be taking note of -- that the administration would want to declare with yet another female head? MR. EARNEST: Well, I guess what I would say is that Ms. Pierson got the job because of her 30 years of experience and because the leadership skills that she’s shown throughout her career at the United States Secret Service. The fact that she’s the first woman to lead this agency is notable and I think it’s important, but it’s not the reason she was chosen for the job. She’s chosen for the job because she is the right person at the right time to lead this agency that has a critical law enforcement function -- not just in terms of protecting the President and his family, but also in terms of safeguarding the financial system and other large public events that come under the jurisdiction of the Secret Service. So she’s got a big job but she’s the right person to get it done right. Q And then digressing on one other topic and I’ll tee it up for the next person if they like, but why if the spending cuts are locked into place with the CR, why didn’t the President just veto the CR? Why wasn’t this something worth fighting for to continue his effort? MR. EARNEST: Well, the President does believe that eliminating the sequester is something that’s worth fighting for. The President said that this was bad policy from the beginning. Republicans said it was bad policy from the beginning, at least many of them did. After it passed, though, we unfortunately saw a lot of tea party Republicans say that this was a political victory. I know another one of them called it a homerun. So that’s unfortunate. What the President also believes, though, is we can’t have a situation where Washington careens from one fiscal crisis to another. That is -- that has a terrible impact on our economy. And the truth is what we’ve seen is that we’ve actually seen that our economy is starting to actually get some traction in the recovery from the worst recession since the Great Depression. So we’re starting to make some progress -- whether you look at jobs numbers or consumer confidence, even housing data recently came out to indicate that home values are -- have increased as much as they have in any time in the last eight years. So there’s a lot of progress that’s being made in terms of our economic recovery, and we can’t careen from one fiscal crisis to another because that’s only going to block that progress. What we actually need is we need comprehensive compromise, economic policymaking in this town that actually supports that recovery instead of inhibit it. Brianna. Q A report by the Society of Actuaries says that insurers will have to pay on average 32 percent more for claims on insurance policies, individual insurance policies that they purchase because of Obamacare, and that that’s likely to be passed on to consumers. It says that there will be a dip some places, but some states are going to see really big increases, like 62 percent in California, 80 percent in Ohio and Wisconsin. What do you think about those numbers? MR. EARNEST: Well, I think that you are citing a study that I believe was conducted by a health insurance company that’s critical of the Affordable Care Act. So that part I’m not particularly surprised about. The reason that the Affordable Care Act was put in place was to ensure that we were expanding access to health care for every American, but also because we wanted to actually protect consumers who are repeatedly victimized by insurance companies. So it’s not particularly surprising to me that an insurance company would conduct a study that was critical of a piece of legislation that was promising to hold them accountable for their actions. Q But can you talk about some of the numbers -- I know that there is some contention with the way that they -- sort of what they’ve factored in and what they haven’t factored in. What do you think about that? MR. EARNEST: Well, I know that -- you should check with the Department of Health and Human Services who may have some more detailed information on this. I know that there are some assumptions on there that are spurious at best. But there are a number of things about the Affordable Care Act that at this point are inarguable at this point, if you will. The Affordable Care Act has already saved consumers an estimated $2.1 billion on their health insurance premiums that probably otherwise were it not for the Affordable Care Act would be an additional $2 billion that were paid into the pockets of insurance companies, like that one that funded this study. Once the law takes full effect, it will have the benefit of increasing competition, driving down cost, and result in average premiums that are lower today -- I’m sorry, that will be lower in the future than they are today for the same benefits that are being provided. And that’s an analysis that’s conducted by the nonpartisan Congressional Budget Office. Q Can I ask you about some comments yesterday, made reportedly by your Health and Human Services Secretary, saying that that there will be an increase in premium cost for some Americans as a result of Obamacare? Do you agree with that? MR. EARNEST: I didn’t see those comments. I mean, what I did see yesterday was actually a blog post from the Chairman of the President’s Council of Economic Advisors, who said that each year, from 2009 to 2011, the national health expenditure data shows the real rate of annual growth in overall health spending was between 3 and 3.1 percent, which is actually the lowest rate of growth since reporting began in 1960. Q Will there be increases for some people who are purchasing insurance? Do you concede that? Kathleen Sebelius reportedly has. MR. EARNEST: Well, what I would actually point you to is I would actually point to the results that we’re already seeing from the Affordable Care Act, which is a savings of $2.1 billion, and the analysis from the CBO that actually says in the future we’re going to see rates that are lower for higher benefits. Q Is she wrong? Because she’s talking about people paying more for higher benefits. MR. EARNEST: Again, I didn’t see her comment. I didn’t see her comments. Q On the guest worker program, does the President think it’s necessary for it to be in there to have a viable, comprehensive immigration reform bill that can get bipartisan support? MR. EARNEST: Well, this is something that a variety of parties who have interests in this are working on. And if it’s included in line with the other principles that the President has rolled out -- laid out in terms of what should be included in comprehensive immigration reform, that’s certainly something that we could support. But we’re going to reserve judgment on what that looks like until it’s actually produced. Q What’s more important? Coming to an agreement, or bringing labor along and making sure that they’re included? MR. EARNEST: What the President wants to see is he wants to see a bipartisan agreement in line with the principles that the President has laid out. There is an opportunity for us to fix our broken immigration system in a way that will strengthen our economy and ensure that everybody is playing by the same set of rules. That is the priority, and that’s what the President is looking for. Q How important is the labor sign-on? MR. EARNEST: Well, I mean, we’re in a place right now where we want a piece -- see a piece of legislation that’s in the best interests of the economy and that reflects our nation’s heritage, as a nation of immigrants but also a nation of laws. And we certainly want to build as much support for that as we possibly can, both from Democrats and Republicans as well as from outside organizations that traditionally support Democrats and outside organizations that traditionally support Republicans. Ari. Q During the arguments over DOMA, the justices seemed to have a lot of questions about why the President has decided to continue enforcing a law that he thinks is unconstitutional. The Chief Justice said, “I don’t see why he doesn’t have the courage of his convictions and not enforce the law if he thinks it is unconstitutional.” Can you explain that? MR. EARNEST: Well, there is a responsibility that the administration has to enforce the laws that are on the books, and we’ll do that even for laws that we disagree with, including the Defense of Marriage Act. The argument that we have made before the Supreme Court and the argument that we have made publicly, including in a letter that the Attorney General sent to the Speaker of the House a couple years ago, is the argument that Section 3 -- let me make sure I got that right -- Section 3 of the Defense of Marriage Act is unconstitutional. That is a position, broadly speaking, that a lot of Republicans agree with. It’s not unprecedented for an administration to take that position. That’s the position that’s being argued before the Supreme Court today. It’s a position that has a lot of support from people in both parties. But we’ll see what the outcome looks like from the Supreme Court. Q But President Obama has endorsed signing statements; he’s issued signing statements saying, I believe this law or this part of the law to be unconstitutional so I’m not going to enforce it. So as you say we will enforce laws that we believe to be unconstitutional, he’s also said he won’t enforce some laws that he believes to be unconstitutional. MR. EARNEST: Well, I’m not sure that that’s exactly what the signing statements have said. But in terms of what our legal posture is for these things, I’d refer you to the Department of Justice. They have done the legal analysis required to reach the conclusion that it is unconstitutional. They also are the ones that are responsible for enforcing these laws. So I’m not going to prejudge what the Department of Justice may have to say about this, based on their own analysis. But what I can tell you is that the argument that the administration has put forward before the Supreme Court today is an indication that our lawyers have concluded that Section 3 of the Defense of Marriage Act is unconstitutional. Yes, Roger. Q On the Fiscal ’14 budget, do you guys have a date yet? MR. EARNEST: (Laughter.) What day of the week is this? Is it Wednesday? I’ll see at least -- Q Jay said you would tell. MR. EARNEST: I anticipate we’ll get this question at least two more times before the end of the week. I don’t have a specific date to allow you to mark anything on your calendar just yet, Roger, beyond the week of April 8th. Q But you will give us a date eventually? MR. EARNEST: Eventually, we’ll probably have to, unless we could spread out the budget rollout over the course of five full days, which I think everybody in here would be disappointed about except Roger. (Laughter.) Q Why is it taking so long to set a date? MR. EARNEST: Well, I didn’t say we hadn’t set a date. Q So tell it. MR. EARNEST: I just said I wasn’t going to tell you what date it is. But it’ll be the week of April 8th. Q What’s that about? MR. EARNEST: It’ll be the week of April 8th. Q What’s the big secret? What’s the -- MR. EARNEST: Well, because we’re going to have a planning process and we’re working through it. So it’ll be April 8th. The week of April 8th. (Laughter.) Q One more, Josh. When the President does send up the Fiscal ’14 budget -- MR. EARNEST: Yes, the week of April 8th. (Laughter.) Q -- the week of April 8th, sometime next month -- MR. EARNEST: Sometime next month. Q -- the Pentagon is going to be asking for $8.4 billion to continue development and purchase of the F-35 fighter. That’s a project that’s seven years behind schedule and 70 percent over its initial cost estimates. Does the President support that project? MR. EARNEST: Well, I don’t want to -- because the budget is going to be rolled out in just a couple of weeks, I don’t want to get ahead of what may or may not be included in the budget. So those are the kinds of questions that are perfectly legitimate, and one that we’ll be in a position to answer after the budget has been rolled out. And we’ll have a detailed answer for you at that point. Q He has supported it in the past, right? MR. EARNEST: I don’t have previous years’ budgets in front of me, so I don’t know how to compare them to previous ones. But we can certainly have OMB take a look at that for you. Stephen. Q What kind of level of concern is there or engagement in the White House right now about the situation in Guantanamo Bay? The military says 31 inmates are on hunger strike. Defense lawyers say that number is higher. Is the President concerned about this? Is there any dialogue with the military about this in the White House? MR. EARNEST: Stephen, I can tell you that the White House and the President’s team is closely monitoring the hunger strikers at Guantanamo Bay. For details about what’s actually happening there, I would refer you to the Department of Defense. But I can tell you that the administration remains committed to closing the detention facility at Guantanamo Bay. Progress has been made under this and the previous administration. But given the legislation that progress has put in place it’s clear that it’s going to take some time to fully close the facility. The other thing that I’ve seen from news reports is that there are representatives from the Red Cross that will be visiting the facility sometime this week -- I don’t know if it’s today or tomorrow. That is part of a routine agreement that we have with the Red Cross, where we give them full access so that they can take a look at what’s happening at the prison there. Q Is there any sense that somewhat -- the situation there is the result of the fact that Congress has stopped funding to transfer people who have already been cleared for release? MR. EARNEST: To be honest with you, I wouldn’t want to judge about what these individuals may or may not be thinking or what may be motivating their actions there. So, again, I’d refer you to the Department of Defense. They may have a better assessment there than I do. April. Q Josh, two questions. The Pierson appointment -- what does that do for the Service right now, especially after the Colombian prostitute scandal? MR. EARNEST: How so? Q She’s the first woman to be appointed -- MR. EARNEST: She is. Q Okay, thank you for agreeing. (Laughter.) She’s the first woman to be appointed. But, I mean, there was a prostitute scandal with women, with men, and with prostitutes that are women in Colombia. So, I mean, you asked me, so I’m breaking it down very basic for you -- MR. EARNEST: Okay, I appreciate that. Q -- so you can help me get me an answer. (Laughter.) MR. EARNEST: Well, April, what I can tell you is that Director Sullivan, in the immediate aftermath of the events that you so colorfully described -- Q You asked for it. MR. EARNEST: -- took immediate steps to ensure that the safety of the President had not been affected. The allegations of misconduct were investigated, and swift action was taken against those Secret Service personnel who had engaged in that misconduct. And I know that there were several members of the Secret Service who, as a result of this misconduct, either left the Secret Service or lost their job. So it’s pretty clear that there were -- that Director Sullivan, in the immediate aftermath of this event, took swift action both in terms of investigating what had happened, ensuring that the President’s safety was never jeopardized, and ensuring that new protocols were put in place to reduce the likelihood that something like this would ever happen again. Now, it’s also relevant, it seems to me, that the new director has some leadership experience at the agency. She also has some experience in human resources and training, and would be able to, as she leads the agency, to ensure that the protocols that Director Sullivan has put in place are continued and, if necessary, strengthened. Q Were you trying to send a message with this appointment of a female who has strong leadership in the light of all of this and other allegations? MR. EARNEST: Well, I think the President was pretty direct in the paper statement that we distributed from him yesterday about why she was chosen for the job. And certainly her leadership skills and her character and her 30 years of experience at the United States Secret Service are the reasons why she was chosen. Q And I want to ask you another question. I hope you have it on paper as well. Tomorrow, the President meets with African leaders. Could you give us a readout as to why this meeting -- why now? MR. EARNEST: You’re asking a very good question but I’m not prepared to answer it right now. But if you want to touch base later this afternoon, maybe you and I can record an interview or we can make sure that your listeners are aware just what the President is up to tomorrow. Q I would love to, thank you. MR. EARNEST: Okay, sounds good. Zach. Q Thanks, Josh. A question related to the Affordable Care Act, which you mentioned earlier. First of all, the reduction in health spending, you mentioned earlier, is it the White House’s position that that’s the result of the Affordable Care Act or the administration’s policies? And then, a second question is, the administration requested more funding for ACA implementation, and the CR didn’t get it, of course. Are you concerned that the program is underfunded and it’s going to make it difficult to roll out in full form in about seven months? MR. EARNEST: Well, in terms of the impact that the Affordable Care Act has had on health care costs, I think I’d actually refer you to the Congressional Budget Office, that they’ve actually noted that based on their nonpartisan independent analysis, that once the Affordable Care Act takes effect it will increase competition, drive down costs, and result in average premiums being lower than they are today for the exact same benefits. So I think that is a pretty clear assessment from a nonpartisan group as opposed to a study that was funded by the health insurance industry -- but a pretty clear assessment from a nonpartisan group about what impact the Affordable Care Act is going to have on the budgets of families all across the country. Q Just to clarify -- the slowdown you said earlier from the White House post, that’s not -- is that the result of the Affordable Care Act? MR. EARNEST: I guess I’m not quite sure what you’re referring to. Q I think earlier you said there had been a slowdown in health spending since 2009-2011, in response to Brianna’s question. MR. EARNEST: Oh, yes. Q And I was wondering, are you saying that’s the result of the administration’s policies? Or is that a separate issue? MR. EARNEST: Well, this was an analysis that was conducted by the CEA, so we can maybe get you some more details on that analysis if you’d like. But I do think that it is probably not a coincidence that after the Affordable Care Act was passed, that we have seen growth rates slow to the lowest levels on record. Q And then the second question was, is the ACA underfunded, and is that going to make more difficult the implementation of the program? MR. EARNEST: I do not -- I have not been told. I do not anticipate at all any delay in the successful implementation of the Affordable Care Act. There are some deadlines coming up later this year, and the expectation is that we’ll have these marketplaces set up and ready to roll and begin covering people by January 1st. So there are some important deadlines to be met, and I have no reason to believe that those deadlines won’t be met. Mike. Q Do you have anything on the TennCare decision? The Governor in Tennessee has decided that rather than actually expanding Medicare, as is allowed under the Affordable Care Act, he’s going to take the money and use it to help people purchase insurance on their own. However, in order to do that, he obviously needs permission from the administration, which he doesn't have yet. Have you folks taken a look at that? Are you leaning towards that or against? Or anything you can -- MR. EARNEST: I saw that news right before I came out here. The Department of Health and Human Services is responsible for working with states as they implement the Affordable Care Act, so I’d direct your question to Health and Human Services and they may be able to give you a clearer sense of whether or not they’ll be able to find a workable solution with the state of Tennessee. Q And just very quickly on the budget -- I just got an email here from the Speaker’s office. It says it’s 12 days until you release your budget. Did you tell them when you’re releasing the budget? (Laughter.) MR. EARNEST: Maybe we have a mole. No, we have not told them when we’re going to release the budget. But they’ve been paying attention to the briefings and know that it’s the week of April 8th. Alexis. Q Back to immigration for a second. You brought up Senator McCain and Senator Flake’s and Bennet’s and Schumer’s visit to the border. I just want to clarify -- your impression is that what they're trying to do there is to showcase the achievements of the Obama administration on border security? MR. EARNEST: I don't want to speak for them. I’m not sure what they're planning to showcase. What I was actually observing is what I think they’ll see when they get to the border. What they’ll see is the results of the significant investment and commitment that this administration has made to securing the border. So we’ve -- there are 22,000 personnel on the border. There are -- I’m just going to look for -- these are some good statistics about what they might see while they're there. There are some unprecedented investments in technology and infrastructure that have resulted in the construction of 651 miles of fencing; the deployment of mobile surveillance units, of thermal imaging systems; and more than 125 aircraft, including six unmanned aircraft systems, patrolling the Southwest border. And this is all part of why the border is now more secure than it ever has been. Q Can you give us any information about who from the administration is helping guide them through the Arizona border to give them the field trip? MR. EARNEST: That's a good question. I assume that it’s Border Patrol personnel who will be helping to guide the tour. But in terms of who exactly it is -- Q And then also, to follow up -- because Senator McCain has indicated to the media “how challenging the border is” in interviews, and because also Senator Leahy has also described his concern about the time, the calendar as it’s going along with his committee, I want to get back to the question: Is there a time period in which the President will say, I want to jettison -- I want to add some momentum to this, and I have a bill in my pocket and I’m ready to put it out there? MR. EARNEST: Well, I would point out that Senator McCain has many times expressed his view of the difficulty of trying to secure the border. At the same time, I think that even he has acknowledged in recent months the progress that's been made there in terms of the commitment of resources and the impact that's had on the border. I know that because of our efforts, that apprehensions continue to decrease and seizures actually are increasing. So that’s a pretty good indication that the measures that we’re taking along the border to secure it are having a tangible impact on the law enforcement efforts that are underway there right now. So that part of it is clear. In terms of what impact this has on the legislative process, it’s our view that they’re making progress, and we’re pleased that they’re making progress. The President has also been clear that if that progress stalls, we’ll be prepared to act, and we’ll be prepared to act in a way that will move the process along. But right now there’s not a need for that. Right now we’re in a place where members of the Senate on both sides -- Democrats and Republicans -- are working constructively to try to find some common ground to put in place a policy that will finally fix our broken immigration system, and we’re encouraged by that progress. So, Amy, I’m going to give you the last one. MR. EARNEST: Amy, go ahead. Q There have been a string of senators who have come out and supported gay marriage this week, and I wonder if the President has sort of weighed in on that, and if he feels somewhat responsible for kind of clearing the way for these people to come out. MR. EARNEST: Well, I -- so to speak, I guess. I got asked this question a couple of weeks ago, after Senator Portman made his announcement about his changing view on this issue. I haven’t talked to the President about any of the specific announcements that have been made by other senators in recent days on this issue, but I do think it’s a testament to something I referred to a couple of weeks ago when asked about this. We’re seeing a pretty significant change in this country, where an issue related to equality and fairness is getting more prominence. And I think it is a testament to the character of this country that we are moving in a direction where we will better fulfill some of the founding principles of the country -- in terms of treating everybody fairly and equally. And what’s notable, I think, about this circumstance is it’s happening really fast. We’re seeing history change right before our eyes. That’s a notable event. And I think the President himself, when he talked about his own changing perspective on this issue, acknowledged the rapid nature of that change and how significant it was for the country. But in terms of response to specific changes, I haven’t talked to him about that. So, thanks, everybody. END 1:25 P.M. EDT
Euro zone call notes reveal extent of alarm over Cyprus (Reuters) Stagnant Japan Rolls Dice on New Era of Easy Money (WSJ) Cyprus, European data batters shares and euro (Reuters) UK cuts taxes to revive stagnant economy (FT) "Quality Control" Rat Body Linked to Blackout at Fukushima (NYT) North Korea issues fresh threat to U.S., South probes hacking (Reuters) South Korea Says Chinese Code Used in Computer Attack (BBG) Osborne paves way for Carney to retool Bank of England (Reuters) Carney Gets ‘Escape Velocity’ Mandate With Limiter (BBG) Osborne Pledges Five More Years of U.K. Austerity (BBG) Bernanke Saying He’s Dispensable Suggests Tenure Ending (BBG) Senate Passes Bill to Fund Operations (WSJ) Fed Not Ready to Tighten Policy (Hilsenrath) Overnight Media Digest WSJ * The U.S. Federal Reserve maintained its easy-money policies, but is developing a strategy for winding down its bond-buying program when conditions warrant. * Cyprus was left with narrowing options to rescue its financial-services sector from collapse after lenders rejected an alternative plan to secure a bailout and Russian officials remained cool to a gas-for-cash deal. * Dell Inc CEO Michael Dell needs to persuade it's investors that the prospects for the company he founded in 1984 are anything but rosy if he is to succeed with his plan to take the computer maker private as a Friday deadline for rival bids to buy his firm approaches. * FedEx Corp reported that its quarterly profit plunged 31 percent as its international customers and shippers flocked to slower, cheaper delivery options instead of its premium-priced express service. * Oracle Corp's growth stalled in its latest quarter, as the big technology company sold fewer software licenses and its business in server systems continued to shrink. * Hewlett-Packard Co's board chairman and two outside directors narrowly survived a re-election challenge, a rebuke reflecting shareholder dissatisfaction with a controversial acquisition. * Solar-panel maker Suntech Power Holdings Co Ltd has been forced into Chinese bankruptcy proceedings, sparking questions about how U.S. investors will fare in the decline of one of China's most prominent companies. * As Boeing Co tests fixes to the batteries of its 787 Dreamliners, it now faces the challenge of persuading passengers that the jetliner will be safe to fly when it resumes commercial service. The efforts include sending surveys to frequent fliers, aviation enthusiasts and others to gauge attitudes toward the Dreamliner. * Silicon Valley company Intertrust Technologies Corp, a pioneer in digital copyright protection, on Wednesday sued Apple Inc alleging that Apple infringed 15 of Intertrust's patents. * Container Store CEO Kip Tindell, in an interview with the Wall Street Journal, discussed his vision for the retailer's continued growth, and said it is considering an initial public offering, a move that might put equity into employees' hands. FT Dismal news about the state of the economic recovery took the shine out of George Osborne's growth message with eye-catching tax cuts for business, help for home buyers and a new mandate to the Bank of England to boost the growth. European Union lawmakers agreed to bar bankers in Europe from getting bonuses bigger than their salaries, approving the proposal with only minor tweaks to appease the UK. JPMorgan Chase & Co's board is expected reject calls from some shareholders to strip Jamie Dimon of his chairman title and back the current structure in the wake of the company's "London Whale" trades. PC maker Hewlett-Packard suffered a shareholder protest vote at its annual meeting on Wednesday, but its chairman and members of the board survived calls for their removal. FedEx Corp said it would step up restructuring efforts, cut capacity in Asia and realign its global aircraft network to cut costs and boost earnings as it cut its full-year forecast. Barclays Plc's investment bank head Rich Ricci sold 5.7 million shares for about 18 million pounds after receiving them as part of previously awarded bonuses. Private equity firm BC Partners has held talks with bankers about a possible initial public offering of its UK estate agency business Foxtons. Real estate investment trust American Realty Capital made an unsolicited $5.7 billion offer for Cole Credit Property Trust III, a move that puts in doubt Cole Credit's bid to go public. A group of Suntech Power Holdings Co Ltd lenders want the Chinese solar panel maker's main unit declared insolvent, a sign Beijing's support for the struggling industry is waning. NYT * Despite a healthy increase in U.S. employment in the last few months, the Federal Reserve on Wednesday said it would continue its stimulus efforts by holding down short-term interest rates and buying $85 billion a month in treasuries and mortgage-backed securities. * Banks, including JPMorgan Chase & Co, Goldman Sachs Group Inc and Morgan Stanley, all have provisions that allow acceleration of payments owed to senior executives if they take government jobs, a new study found, creating a debate on Wall Street over whether that is a conflict of interest. * The Cyprus crisis shows that, for all the faults with the financial crisis rescues in the United States, the European Union still finds ways to show us how poorly a bailout could be handled. * With the Federal Home Loan Mortgage Corp suit, banks face billions more in Libor claims. Unlike other plaintiffs, Freddie Mac looks to have a strong case because it dealt directly with many of the banks accused of manipulating the London interbank offered rate. * Some of the United States' largest banks continue to offer payday loans, pitched as advances on direct-deposit paychecks, despite growing regulatory scrutiny and mounting criticism about the short-term, high-cost loans, found a report by the Center for Responsible Lending to be released on Thursday. * Despite Barclays Plc's weak profit and legal woes, top executives at the bank have been richly rewarded in the years since the financial crisis. The bank disclosed on Wednesday that its investment banking head, Rich Ricci, had cashed in $26 million of deferred shares he was awarded as part of his bonus from 2009 to 2011. * Suntech Power Holdings Co Ltd, which became the world's largest producer of solar panels, has been pushed into bankruptcy in a remarkable reversal for what had been part of a huge Chinese government effort to dominate renewable energy industries. * FedEx Corp on Wednesday cut its outlook for the year after its profits slumped by 31 percent in the latest quarter as its customers were increasingly using its cheaper shipping options, even if that meant slower deliveries. In an effort to reduce costs, FedEx said it would retire some older and less efficient airplanes. Canada THE GLOBE AND MAIL * Even before Finance Minister Jim Flaherty gets to work Thursday on his top priority - slaying the C$26 billion ($25.32 billion) deficit by 2015 - it's worth pointing out that he's chasing a moving target. The federal government's current forecast is for a deficit of C$26 billion in the fiscal year that ends this month. But Thursday's budget will contain a new estimate, and based on what we already know about the first nine months, the deficit could come in much lower - perhaps C$20 billion, according to an estimate by the Royal Bank of Canada. * Ontario's new Premier Kathleen Wynne has sent lottery executives back to the drawing board, forcing them to drop a promise of up to C$100 million a year in hosting fees for a Toronto casino. After a meeting with Wynne in her Queen's Park office, top executives of the Ontario Lottery and Gaming Corp withdrew their plan to give a special funding deal to Toronto if city councillors approve a casino. * Canada has cut direct foreign aid to China as part of an overhaul of international assistance spending. It's one of 14 countries that will see their aid either reduced or eliminated by the end of next year as the Canadian International Development Agency slashes C$377 million in aid spending by 2014-2015. Reports in the business section: * Federal Reserve Board chairman Ben Bernanke has opened the door to speculation about his future at the central bank, revealing that he has discussed the matter with U.S. President Barack Obama and indicating that he feels no personal obligation to lead the ultimate unwinding of the Fed's extraordinary bond-buying program. * Increasing dredging requirements resulting from Enbridge's massive oil spill into Michigan's Kalamazoo River in 2010 could push the cleanup bill to almost $1 billion, above and beyond what is covered by the insurance of the company's U.S. affiliate, that unit reported on Wednesday. NATIONAL POST * A bill that would make it illegal to discriminate against transgender Canadians was approved by the House of Commons on Wednesday. The Opposition private member's legislation passed by a vote of 149-137, with the crucial support of 16 Conservatives, including four cabinet ministers. * A privately funded shelter for male victims of domestic abuse - believed to be the only refuge of its kind in the country - has closed. Men's rights advocate Earl Silverman said he can't afford to keep the Men's Alternative Safe House (MASH) running. FINANCIAL POST * BlackBerry Ltd has denied reports that its new mobile operating system is not secure enough for British government work. According to a report by the Guardian, UK's Communications Electronics Security Group (CESG) rejected BlackBerry's new Z10 smartphone after the device's operating system failed security requirements that previous versions of the BlackBerry operating system had passed. * Warren Buffett, the billionaire chairman of Berkshire Hathaway Inc, said investors should bet on the "natural juices" of capitalism in the U.S. even as lawmakers struggle to narrow the budget deficit. People tend to "focus too much on what the government's done, and to give them either credit or blame," Buffett said in an interview conducted by the chief executive officer of Business Wire, the Berkshire subsidiary that distributes press releases. "The real credit belongs to our system." China CHINA SECURITIES JOURNAL -- China Telecom Corp Chairman Wang Xiaochu said the company is in no rush to increase investments to upgrade to the fourth-generation network (4G), but will do so once 4G licenses are awarded. Wang said if 4G networks are required to run China's homegrown technology standard, the company will not rule out renting network space from China Mobile. SHANGHAI SECURITIES NEWS -- China Vanke will not follow the trend of raising house prices considering the harm soaring prices would do to the real estate industry as well as the domestic economy, Vanke president Wang Shi said. CHINA DAILY -- Government departments in China are buying more locally made cars in response to Beijing's call for frugality, carmarkers said. China's Ministry of Industry and Information Technology published last year a catalogue of 400 cars available for official use, most of them made by local companies or by joint ventures with foreign firms. Fly On The Wall 7:00 Am Market Snapshot ANALYST RESEARCH Upgrades Bruker (BRKR) upgraded to Buy from Hold at JefferiesElectronic Arts (EA) upgraded to Buy from Neutral at LongbowHomeAway (AWAY) upgraded to Overweight from Equal Weight at Morgan StanleyLegg Mason (LM) upgraded to Outperform from Market Perform at Wells FargoNestle (NSRGY) upgraded to Buy from Neutral at CitigroupYahoo (YHOO) upgraded to Outperform from Perform at Oppenheimer Downgrades Actuant (ATU) downgraded to Neutral from Outperform at RW BairdBurger King (BKW) downgraded to Underperform from Neutral at BofA/MerrillCTPartners (CTP) downgraded to Market Perform from Outperform at William BlairLife Technologies (LIFE) downgraded to Neutral from Buy at CowenOracle (ORCL) downgraded to Equal Weight from Overweight at EvercoreOracle (ORCL) downgraded to Underperform from Outperform at CLSAWilliams-Sonoma (WSM) downgraded to Hold from Buy at Deutsche BankWisdom Tree (WETF) downgraded to Buy from Conviction Buy at Goldman Initiations 3M Company (MMM) initiated with a Neutral at GoldmanCempra (CEMP) initiated with a Buy at SunTrustCleveland BioLabs (CBLI) initiated with a Buy at CantorDover (DOV) initiated with a Conviction Buy at GoldmanEaton (ETN) initiated with a Buy at GoldmanGenCorp (GY) initiated with an Outperform at OppenheimerGraco (GGG) initiated with a Sell at GoldmanGrainger (GWW) initiated with a Neutral at GoldmanHealthcare Realty Trust (HR) initiated with a Sell at GoldmanHoneywell (HON) initiated with a Buy at GoldmanIllinois Tool Works (ITW) initiated with a Neutral at GoldmanMedical Properties Trust (MPW) initiated with a Buy at GoldmanOmega Healthcare (OHI) initiated with a Conviction Buy at GoldmanParker-Hannifin (PH) initiated with a Sell at GoldmanRockwell Automation (ROK) initiated with a Neutral at GoldmanRoper Industries (ROP) initiated with a Neutral at GoldmanTripAdvisor (TRIP) initiated with an Underweight at EvercoreWestern Gas Equity (WGP) initiated with an Outperform at Wells FargoZoetis (ZTS) initiated with a Buy at Citigroup HOT STOCKS Blackstone (BX) weighing Dell (DELL) bid, looking at CEO candidates, Fortune reportsJ.C. Penney (JCP): May take longer to recover from negative sales trendsGoogle (GOOG) announced Google KeepEricsson (ERIC) issued injunction by NY State Supreme Court in Airvana caseGeneral Moly (GM) said legal work on $665M China-sourced loan suspendedStarbucks (SBUX) CEO Schultz told CNBC shareholders reject ban on political contributionsSupports higher minimum wage, but increase needs to be careful Hewlett-Packard (HPQ) CEO Whitman said firm must invest more in R&DSaid restructuring efforts will be evident in FY14Said 2015 will be a year of accelerationCathay General (CATY) repaid $129M of TARPNicholas Financial (NICK) received unsolicited interest from potential acquirerAvnet (AVT) to acquire RTI Holdings FDA advisory committee voted 5-3 in favor of Abbott's (ABT) MitraClip benefitsAstraZeneca (AZN) said to cut 2,300 SG&A jobs in restructuring EARNINGS Companies that beat consensus earnings expectations last night and today include:IHS (IHS), Clarcor (CLC), Guess (GES), Tilly's (TLYS), Herman Miller (MLHR) Companies that missed consensus earnings expectations include:CTI Industries (CTIB), Acquity Group (AQ), Jabil Circuit (JBL), Tumi (TUMI), Ignite Restaurant (IRG), Pacific Sunwear (PSUN), Oracle (ORCL) NEWSPAPERS/WEBSITES Japan's new central bank governor, Haruhiko Kuroda, begins work today on a feat no one before has managed: reversing nearly two decades of falling prices to lift wages and profits in the world's third largest economy, the Wall Street Journal reports CEOs usually like to boast about their companies, but as a Friday deadline for rival bids to buy Dell (DELL) approaches, Michael Dell finds himself in the opposite position. He needs to persuade Dell investors that the prospects for the company are anything but rosy if he is to succeed with his plan to take the computer maker private, the Wall Street Journal reports The ECB gave Cyprus until Monday to raise billions of euros to clinch an international bailout or face losing emergency funds for its crippled banks and inevitable collapse, Reuters reports Fed Chairman Bernanke said he’s “spoken to the president a bit” about his future and that he feels no personal responsibility to stay on until the Fed concludes its unprecedented policies to stimulate the economy, Bloomberg reports China’s manufacturing is expanding at a faster than expected pace this month as production and orders pick up, helping new Premier Li Keqiang to sustain the recovery. The preliminary reading of a Purchasing Managers’ Index was 51.7 in March, according to HSBC Holdings (HBC) and Markit Economics, Bloomberg reports SYNDICATE Anworth Mortgage (ANH) files to sell $545M in common, preferred stockAviv REIT (AVIV) 13.2M share IPO priced at $20.00California Water (CWT) 5M share Secondary priced at $19.25Cimatron (CIMT) files to sell ordinary shares for holdersEnanta Pharmaceuticals (ENTA) 4M share IPO priced at $14.00ParkerVision (PRKR) files to sell common stockPennantPark Floating Rate (PFLT) to offer 3M shares of common stockStoneMor Partners (STON) files to sell 1.2M common units for limited partners
Thomas Suarez is a typical twelve-year-old working his way through the sixth grade in the South Bay area of Los Angeles. He describes himself this way: "I've always had a fascination with computers and technology." Always for him goes all the way back to the fourth grade, when Thomas decided that he wanted to program something. His first app, Earth Fortune, went live in 2010. It has been rated 127 times and earned a respectable three-star rating in the iTunes App Store. It's a fortune-teller that's kind of cute, a bit like the origami "cootie catcher" we used to play with when we were in grade school, that told arbitrary fortunes to those willing to believe them. But the story here is not the app, it is Thomas himself and the many Thomases yet to come. Young Thomas gave a talk at the Manhattan Beach TEDx conference in October 2011, during which he explained, "My favorite and most successful app is Bustin Jieber, which is a Justin Bieber Whac-A-Mole!" This app was posted just before the holidays in 2010, and while it hasn't earned as many reviews as Earth Fortune, it certainly garnered laughs from the TEDx audience. Bustin Jieber won't change the world. The top review, last time I checked, gave it one star and called it "crap," adding that, "When u take money from me for crap, I'm upset no matter how old u r. Put down the programming books and read up on user experience and usability and then sell something for a dollar." The second review gave it five stars and said, "I just donated $99 cents [sic] for your future games ;-)." While they disagree, both reviewers are taking seriously the fact that Thomas is a twelve-year-old app developer. If you just play his apps, you might be tempted to discount Thomas. You might conclude that the two million views his TEDx video has scored on YouTube or the write-up about Thomas in the Huffington Post are just hype. But the real story is best illustrated with a third review--another five-star rating--which read, "I had $1 left in my iTunes account and decided to spend it on this, just because I'm just like you. I'm 13 and trying to learn iOS/Cocoa development, and this is really encouraging. Thank you." Why did Thomas's talk garner two million video views? Listen to what he says: "A lot of kids these days like to play games. But now they want to make them. And it's difficult, because not many kids know where to go to find out how to make a program. I mean, for soccer, you could go to a soccer team, for violin, you could get lessons for a violin. But what if you want to make an app? Where do you go to find out how to make an app?" Thomas explains how the iPhone SDK (the software development kit that Apple makes available for app developers) "opened up a whole new world of possibilities for me. And after playing with the software development kit a little bit, I made a couple apps, I made some test apps." One of them was Earth Fortune. When he was ready to put his new app up on the app store, he had one last hurdle to clear. "I persuaded my parents to pay the ninety-nine-dollar fee to be able to put my apps on the app store. They agreed, and now I have apps on the app store." And this is the point. The distance between an idea and the digital realization of that idea is now so short--so cheap and so quick--that a bright twelve-year-old can do it. Thomas and his thirteen-year-old reviewer on the App Store have access to the tools. And they have the right mindset, one that compels them to use these tools in disruptive ways. They are the next step in the evolution toward a digitally disruptive economy--a world in which everyone has the tools they need to bring their ideas to the market, test them, refine them, and eventually disrupt something. What tools does Thomas need to pursue his digitally disruptive goals? A computer? Check. An internet connection? Check. A programming language and SDK? Check. A friction-free digital platform for distributing and making money from his innovations? Check. The number of homes in the United States that have a computer with internet access is now better than 77 percent. App Store entry fee is $99. Thomas and a good portion of his generation have access to better tools than Bill Gates (or I) had. Just as millions of kids already grow up playing soccer or learning a musical instrument--comparisons Thomas invoked, very appropriately--millions of kids like Thomas will routinely learn how to engage in digital disruption. And at almost no cost. The right mindset combined with the right tools, continuously adapting and disrupting. Multiply Thomas by millions and you get a sense of why digital disruption is so terrifying. What has changed about invention is this: disruption was previously done to and through physical things, things like the assembly line, the commercial jetliner, the heart transplant, flat-panel LCD screens, and so on. These physical disruptions are just as important as the digital disruptions this book focuses on. But because traditional disruption depended on changing how physical resources were manipulated or combined, the disruptions, though powerful, were rare. They cost a fortune to develop and distribute, a fortune that kids like Thomas Suarez simply would never have. To put this in context, let's look at the seminal work of Harvard Business School's Clayton Christensen, the father of the concept of disruptive innovation. Beginning with his 1997 book The Innovator's Dilemma, Christensen brought the topic of disruptive innovation into the minds and mouths of business practitioners around the world. Clay describes how a disruptive innovation is an advance that creates new market value, in the process disrupting and replacing an existing market. With illustrations from the disk-drive industry and the hydraulic excavator market--both very physical markets--he shows how disruption starts with cheaper or more convenient solutions that gradually move upmarket, eventually destroying stable industries. Clay shows that the traditional disruptive innovations he studies typically take years or even decades to disrupt markets. As his case studies show, physical disruption requires the painstaking manipulation and alignment of physical resources. The resources themselves are often expensive, as is the factory that makes the new product. They can only become profitable by achieving scale, and scale requires massive initial investment to succeed at disruptive prices, and this holds whether you're making a mousetrap, a CD player, or an electric car. This takes time. And it takes money--lots of it. Digital disruption will change that. But not just in software or apps. In fact, the power of digital disruption is that it can disrupt any aspect of any product or service, including processes deep within companies focused on physical things, processes that govern partnerships, data collection, pricing, and the management of labor or capital resources. In fact, digital disruption's power multiplies precisely because it can apply to industries that are not even digital. In this way, digital disruption happens to and through digital things, which then accelerate the disruption of physical things. Take Guy Cramer, who uses digital tools to get better military camouflage designs to governments around the world, faster and way cheaper than other suppliers. Then there's Travis Bogard, head of product strategy at Jawbone, a company that pivoted rapidly from bluetooth headsets to mobile speakers, challenging accepted notions of what consumers want from an audio product and then creating a best-selling speaker in the category it redefined. Dave Dickinson, CEO of Zeo Inc., found a way to rethink expensive ($3,000) studies in sleep labs by offering a hundred-dollar product you can use to analyze your sleep every night, right at your bedside. These disruptors know that digital disruption is far more potent than old disruption, regardless of the industry. These cases, and more like them, will show that digital disruption beats old disruption hands down, no matter the industry. It does this in a straightforward way. Under old disruption, only a very small number of innovative companies can amass the tremendous amount of capital necessary to develop and bring a small number of possible ideas to market. Capital is the first constraint. You can raise capital through bank loans or IPOs or private investment, but as long as you have to spend money to make money, the market can only fund so many innovations. The second constraint is information. Because only a few ideas will make it to capitalization, people keep ideas secret, floating only those ideas that have immediately obvious economic merit. And the only innovators who get funded are those who have access to holders of capital and are willing to jump through whatever hoops investors deem necessary to prove their ideas have merit. But what if it didn't take money to make money? What's terrifying about the digitally disrupted future is that this rhetorical question is already being concretely answered. The mindset of the digital disruptor accelerates every possible process by exploiting digital toolsets that are free for tinkering. Economists talk about trends that reduce barriers to entry. The force of digital disruption doesn't just reduce these barriers, it obliterates them. This allows the disruptor to take new ideas of any size and potential impact and rapidly pursue target customers at almost no cost and in the space of a few days, rather than years. That's the power of digital disruption, and it will happen to every industry on the planet, whether that company makes digital products or not. That's why the rise of millions of digital disruptors like Thomas Suarez, whether they go it alone or choose to disrupt on behalf of massively physical firms like Verizon and Unilever, matters so much. These disruptors will do what they do in whatever industry they find themselves planted, ultimately generating significantly more innovation power into the marketplace. How much more innovation power? I'll make it as simple as possible. Imagine that with all the free tools and platforms available to Thomas Suarez and millions of others like him, we get ten times as many people bringing innovative ideas to market--a highly conservative estimate. Then assume that the average cost to develop and test those ideas falls to one-tenth as much per idea as in the past (also conservative). The result would be one hundred times the innovation power. That means you and your business are facing at least one hundred times the competitive threat. That's two orders of magnitude more innovation power than before. Digital disruption accelerates competing ideas even as it facilitates the entry of a previously impossible number and magnitude of ideas. The cumulative effect is devastating to any company operating under the rules of the prior century. Consider an analogy: what China did to the manufacturing business. China is now poised to overtake the United States as the largest economy in the world. It has achieved this position principally by becoming a low-cost manufacturing center for goods the rest of the world desires. But China's success is not just a function of cheap manufacturing, the way Japan, and later Korea, rose to prominence in the twentieth century. China's success depends on a very fortuitous (for China, anyway) set of circumstances. First, with its population of over 1.3 billion relatively impoverished people, China has a very motivated base of workers who are willing to work very hard for very low wages relative to other parts of the world. Add to that the fact that these workers can expend their efforts to produce and distribute goods using technologies, distribution partners, supply chains, and physical infrastructure, such as international shipping companies and container ships, that China didn't have to pay for because the rest of the world had already seen fit to create them. Meanwhile, the American manufacturing companies that China was competing with had high labor costs and rigid structures that required them to keep working pretty much the way they always had. China leveraged its advantages and its competitors' inability to change. It came in and decimated its manufacturing rivals. Let's condense this. The formula is: People willing to work for nearly nothing, plus a completely developed, relatively friction-free infrastructure for value delivery, equals competitive disruption. People + infrastructure = disruption. That two-step formula is sufficient to explain the rise of China and the subsequent destruction of much of American manufacturing. What's happening now in digital is completely analogous and much faster. Worldwide, there are even more people like Thomas Suarez, willing to work for practically nothing. And like the Chinese, they can take advantage of a digital infrastructure--already built by some of the world's most powerful companies--to launch their work into the world and see what happens. If you thought the impact of the rise of China was tremendous, the rise of digital disruptors--toiling away for free in any country, speaking any language, coding for whatever platform they deem worthy of their time--will be far more comprehensive across more industries at a more rapid pace, just like China's impact on US manufacturing, but across every industry. The friction-free infrastructure that they will leverage includes the Apple App Store, which has already generated 650,000 apps and $5 billion in payments to thousands of developers. This friction-free infrastructure is spreading like a virus to many other domains. Facebook's developer platform is a similarly powerful global outlet for idea generation, generating more than 9 million Facebook apps. If your innovative idea is not one that can be developed in software alone, you have the emerging Kickstarter fundraising platform to pitch and refine your concept, as more than twenty-eight thousand people have done, receiving $274 million in pledges. If your powerful idea is not about a product as much as it is about how to market and communicate an existing idea, you can register as an individual to advertise your site, your app, or your eBook through Google AdSense or Facebook Ads. Want to set up your own shop to sell your own or others' products? You can join 1.3 million sellers on eBay or you can sign up as an Amazon-enabled merchant. These friction-free elements of the digital world are scaling up in every domain, drawing wannabe digital disruptors rapidly into the fold. If people + infrastructure = disruption, then digital innovators + digital infrastructure = digital disruption. Massive digital disruption, at a scale and a pace most are simply not prepared for. Sometimes people make themselves feel better about their lack of preparation by pointing to specific failures along the way, such as the falling stock price of Facebook after its IPO or the inability of Groupon to figure out its business model. But behind them are thousands of others willing to take their places. It's all part of the process. Just as in China, where the occasional failure of a single factory or centrally planned community amounts to a minor glitch in the overall outcome. This will be true of digital disruptors as well. Digital disruptors fail frequently. When I propose that there will be one hundred times the innovation power resulting from the rise of digital disruption, I realize that the majority of those additional ideas will come to naught. Some will fail spectacularly. But if ten times as many people can participate in bringing ten times as many ideas each to market, only one or two percent of those ideas need to succeed in order to completely disrupt your business. And what if their success rates are five times that high? That would be half the success rate of typical venture capital investments. But it would be five times the volume of successful idea generation that you currently experience. That's innovation power defined. Because if you pick any single example of an idea generated through digital disruption, you may or may not be impressed. Thomas Suarez's Bustin Jieber app, for example, may not move society forward. But it does move Thomas Suarez forward--on to his next app, which will certainly be better than the one before. At the rate he's going, he may have twelve more apps under his belt by the time he graduates from high school, or he may have just one more app that is twelve times better. Again, multiply him by millions and you have some sense of what is coming and why it will generate innovation power that should motivate you, hopefully into joining the ranks of the digital disruptors. Excerpted from Digital Disruption: Unleashing the Next Wave of Innovation by James McQuivey. ©2013 by Forrester Research, Inc. Published by Amazon Publishing.
Obama security adviser threatens Pyongyang with 'full range of our capabilities' and urges China to act tough on neighbourThe US has dismissed North Korea's declaration that the 1953 armistice with Seoul is nullified as "bellicose rhetoric" but warned Pyongyang that it will face "the full range of our capabilities" if it were to carry out its threat of a nuclear attack.Barack Obama's top national security adviser, Tom Donilon, on Monday called on China to join in further isolating Pyongyang, following the North Korean military leadership's declaration that the truce with South Korea was void after Seoul and the US kicked off a joint military exercise.The annulment of the treaty also follows the UN security council's imposition of additional sanctions against Pyongyang after it carred out a third atomic bomb test, and threats by Pyongyang to fire nuclear weapons at the US and South Korea in response."North Korean officials have made some highly provocative statements. North Korea's claims may be hyperbolic, but as to the policy of the United States, there should be no doubt: we will draw upon the full range of our capabilities to protect against, and to respond to, the threat posed to us and to our allies by North Korea," Donilon said in a speech to the Asia Society in New York."This includes not only any North Korean use of weapons of mass destruction but also, as the president made clear, their transfer of nuclear weapons or nuclear materials to other states or non-state entities. Such actions would be considered a grave threat to the United States and our allies and we will hold North Korea fully accountable for the consequences."North Korean state media said that joint military exercises involving American and South Korean forces, which began on Monday, had annulled the truce. The armistice never became a fully-fledged peace agreement and therefore North and South Korea technically remain at war."The US has reduced the armistice agreement to a dead paper," it said.The US State Department said the military exercises are held annually. American officials pointed the latest UN sanctions as the real cause of the threats. The US treasury imposed additional measures on Monday against the Foreign Trade Bank of North Korea – the primary handler of hard currency – for its role in the financing of Pyongyang's development of nuclear weapons.State Department spokeswoman Victoria Nuland said it was not immediately clear what the impact of North Korea's claim that the truce is annulled would be – the third time it has made such a statement in recent years."For more than 60 years this agreement has ensured peace and stability on the peninsula. So it is concerning to us when any signatory makes a public statement that they're pulling out of it. But it's not absolutely evident what the impact of that would be," she said.Pyongyang also stopped answering the hotline with South Korea at the border village of Panmunjom, which is generally tested twice a day. It has cut off contact via the hotline at least five times since the 1990s.Donilon said the US would not be deterred by Pyongyang's threats. "The United States will not accept North Korea as a nuclear state. Nor will we stand by while it seeks to develop a nuclear-armed missile that can target the United States," he said.Donilon called for North Korea to return to negotiations, but warned that Washington will not be fooled twice after helping Pyongyang with food and other supplies as part of an earlier agreement to halt nuclear development, only to discover that its communist leaders had gone back on their word."The United States refuses to reward bad North Korean behaviour. The United States will not play the game of accepting empty promises or yielding to threats. As former secretary of defence Bob Gates has said, we won't buy the same horse twice. We have made clear our openness to authentic negotiations with North Korea. In return, however, we've only seen provocations and extreme rhetoric," he said."To get the assistance it desperately needs and the respect it claims it wants, North Korea will have to change course. Otherwise, the United States will continue to work with allies and partners to tighten national and international sanctions to impede North Korea's nuclear and missile programmes."Donilon praised China for backing the latest UN security council sanctions against North Korea, but called on Beijing to further isolate Pyongyang."We believe that no country, including China, should conduct business as usual with a North Korea that threatens its neighbours. China's interest in stability on the Korean peninsula argues for a clear path to ending North Korea's nuclear program. We welcome China's support at the UN security council and its continued insistence that North Korea completely, verifiably and irreversibly abandon its WMD and ballistic missile programmes," he said.But the White House also offered a carrot, with the prospect of substantial economic help if North Korea is serious about abandoning nuclear weapons. Donilon pointed to the transformation in relations with Burma, which had, he said, received billions in debt forgiveness, development assistance and new investment."As he has said many times, President Obama came to office willing to offer his hand to those who would unclench their fists. The United States is prepared to help North Korea develop its economy and feed its people, but it must change its current course," said Donilon."Anyone who doubts the president's commitment needs look no further than Burma, where new leaders have begun a process of reform. Obama's historic visit is proof of our readiness to start transforming a relationship marked by hostility into one of greater co-operation."North KoreaUS foreign policyUnited StatesSouth KoreaNuclear weaponsChris McGrealguardian.co.uk © 2013 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds
James S. Brady Press Briefing Room 12:25 P.M. EDT MR. CARNEY: Happy Monday. Good afternoon. Thanks for being here for your White House briefing. Spring is here early. Q Can we do a briefing outside? MR. CARNEY: We'll see. I like the idea in theory, anyway. I have no announcements to make. You obviously know much of what’s on the President’s schedule this week, including his visits to Capitol Hill on Tuesday, Wednesday, and Thursday to meet with Senate Democrats on Tuesday, House Republicans on Wednesday, Senate Republicans on Thursday and House Democrats also on Thursday. While he’s there he will want to discuss a range of priorities including, of course, conversations he’s been having on budget-related issues, the need to reduce our deficit in a balanced way, but also immigration reform and the progress that's being made on that subject in a bipartisan way, efforts to move forward on actions to reduce gun violence -- also efforts that involve both Democrats and Republicans. Other items that are on his list of priorities include increasing our energy independence, the need to do something about the pace of nominations being confirmed and considered in the Senate -- judicial nominations, in particular -- as well as the need for Congress to take action on cybersecurity. With that, I'll go to Jim. Q Thanks, Jay. So since we are on week two of the charm blitz -- (laughter) -- on Wednesday, as you mentioned, the President is going to the Hill, but he’s also speaking to Organizing for Action, which is the group that grew out of his campaign reelection. And I'm wondering whether there’s potentially a mixed message there. Because last week OFA sent out an email saying that -- calling Republicans obstructionists, blaming them for the sequester, saying if only they had voted for closing tax loopholes the public wouldn't be in this jam. So is there a mixed message there from the President, on the one hand appealing to and speaking to Republicans on the issues you just mentioned, and then going to OFA, potentially a partisan -- a more partisan address? MR. CARNEY: Organizing for Action, as you know, Jim, was established to promote the President’s public policy agenda. It is certainly the President’s position that sequester has been implemented because Republicans made a choice. Rather than go along with a balanced approach to deficit reduction, rather than go along with either a buy-down or the deal that has been on the table since the President tried to negotiate it with Speaker Boehner last year, they said, no way, no how, and the choice they made was to allow sequester to be implemented. Let’s be clear about that. And that is not a position that we’ll take a different view on. It is also the case that sequester is here; it’s being implemented as a result of the choice made on Capitol Hill by Republicans. And it is another reason why we should engage with and move forward -- engage with Republicans and Democrats on the Hill and move forward with at least the potential for bipartisan, balanced deficit reduction that deals with the sequester and the larger goal of more than $4 trillion in deficit reduction over a decade. That's the nature of the conversations the President has been having with Republican lawmakers, including in his dinner with Senate Republicans last week, including in his lunch with Chairman Ryan and Congressman Van Hollen. And I'm sure it will be one of the topics that he raises in his meetings on the Hill this week. So I think that as the President said in his inaugural address, we should not believe that we need to resolve all of our differences before we can move forward on common -- working together, taking action together to achieve results for the American people; meeting on common ground, putting forward solutions that represent compromise, much as the President has put forward solutions that represent compromise, whether it’s on immigration reform or legislation that deals with gun violence or balancing -- getting our fiscal house in order in a way that's balanced so that the burden is not borne solely by seniors and middle-class families. I think there’s a great deal of consistency in what the President has proposed and what he’s been saying for many, many months now. Q Washington is a place of optics, too, and is it diplomatic to be thinking of -- be speaking to a partisan group on the same day that he’s speaking to -- MR. CARNEY: First of all, I think you're misrepresenting the group. As I understand it, as I've read about it, it will not take a position in elections; it’s focused on policy issues. And the President’s policy agenda, which Organizing for Action has been designed to promote, consists of item after item that have had bipartisan support in the past, that should have bipartisan support in the future. I mean, there’s nothing partisan about deficit reduction. In fact, you might even say it’s more of a priority for Republicans than Democrats. And yet the President is pushing for a balanced package that would achieve the goal of over $4 trillion in deficit reduction over a decade. And that includes a proposal that produces significant savings from entitlement reform as well as savings from tax reform. There’s nothing partisan about comprehensive immigration reform. There’s a bipartisan effort underway in the Senate right now -- Democrats and Republicans pushing forward an effort to produce legislation that would achieve that bipartisan goal. In the wake of Newtown, I would argue that there’s nothing partisan about common-sense solutions to reduce gun violence in America. The victims of gun violence aren’t Democrats or Republicans, especially when they’re children. And there ought to be -- and there is -- a path forward to reduce gun violence in America, much as the President laid out, that respects our Second Amendment rights. As you know, nothing the President has proposed, whether it’s executive action or legislative action, would take a single firearm away from a single law-abiding citizen. Q North Korean state media says today that Pyongyang has carried through with its threat to cancel the 60-year-old armistice. This seems to go beyond the typical saber-rattling from North Korea. Is the President alarmed by this development? MR. CARNEY: Well, we are certainly concerned by North Korea’s bellicose rhetoric. And the threats that they have been making follow a pattern designed to raise tension and intimidate others. The DPRK will achieve nothing by threats or provocations, which will only further isolate North Korea and undermine international efforts to ensure peace and stability in Northeast Asia. We continue to urge the North Korean leadership to heed President Obama’s call to choose the path of peace and come into compliance with its international obligations. We have worked in a concerted way with our international partners to put pressure on and isolate North Korea because of its failure to live up to its obligations. As you know, the Security Council passed a resolution with unanimous support just last week in reaction to actions by North Korea. And we will continue that effort. Q Jay, as you pointed out, it’s a big week. The President is going to the Hill. The Senate and the House are also expected to produce their own budgets. Is there some sense that the sequester ship has left the station, left the harbor -- MR. CARNEY: The sequester ship? Okay. Q Yes -- and that these cuts will go into effect no matter what? Or is there still an effort to mitigate the effect of the cuts somehow? MR. CARNEY: Well, it’s still the President’s position, and I believe the position of Democrats on Capitol Hill, that a better alternative would have been and continues to be a piece of legislation that would postpone or push back implementation of the sequester. But that choice was made by Republicans not to embrace that alternative, an alternative that they had embraced at the end of 2012. So our focus now, as the President has said, is on working with Congress in regular order on the budget process, and through that process hopefully produce a bipartisan agreement on deficit reduction -- balanced deficit reduction that couples entitlement reform with tax reform, that achieves the deficit reduction in both ways -- which I would argue, when we talk about using proceeds from tax reform, closing loopholes and ending exemptions for the well-off and well-connected, we should use those proceeds towards the goal of reducing our deficit, not towards funneling them into tax breaks that disproportionately benefit the wealthy. That's the President’s position. That's embodied in his proposal, and that's the approach that he’ll take as we move forward in these conversations. And hopefully we can do that. And the broader deficit reduction achieved -- if it’s achieved -- would eliminate the sequester and then some, and that would be obviously good for the entire country. Q When does the President plan to propose his own budget? And how does he see that fitting in with the budgets that are being proposed by the Senate and the House? MR. CARNEY: Well, I don't have a date certain for you on the President’s budget. It’s being worked on. We are obviously watching Congress for budget proposals that will be put forward in both houses, and we will work with Congress in these conversations, as well as through our budget proposal to try to achieve the very kind of common-sense, mainstream, bipartisan, balanced package of deficit reduction that could do a lot of good for our economy and for the middle class at a time when, as we’ve seen, there’s every reason to believe that the economy is poised to do well in 2013, to grow and to create more jobs, to build on the 6.35 million jobs that have been created in the private sector over the past three years. And it is incumbent upon leaders in Washington to pursue that path of bipartisan, balanced deficit reduction, rather than sort of a partisan path that results in Washington inflicting wounds on the economy, instead of taking action to help the economy and help the middle class. Jim. Q Over the weekend, the Democratic Leader Nancy Pelosi said that raising the eligibility age for Medicare does not save money and it’s not a solution. We know that there’s been a charm offensive aimed at Republicans in recent weeks. Is there one needed for fellow Democrats? MR. CARNEY: The President’s position is one that raising the eligibility age on Medicare is not good policy. It does not save money significantly, especially in the first 10 years, and it would result primarily in cost-shifting to seniors who are very vulnerable at age 65 and 66. That’s the President’s position. We’ve talked about that in recent weeks and months. But it is also his position that we can take other measures within the framework of entitlement reform, measures that are represented in his proposal to the Speaker of the House, measures that are tough choices for Democrats to go along with, tough choices for the President, but he believes they are better policy. They are more effective in the stated goal, which is to reduce the cost of health care, and by reducing the cost of health care, reducing the burden on our long-term fiscal situation. So I don’t think there’s anything inconsistent with what Leader Pelosi said and what the President’s position is. Q So no wooing of Democrats will be necessary? MR. CARNEY: Well, I’m not sure what that means. The President has worked with Democrats, and I think I just made the point that his proposal consists of very tough choices for Democrats. If we take as both fact and conventional wisdom that in Washington it’s a more difficult choice for Republicans to go along with revenue, and Democrats to go along with entitlement savings, the President has put forward proposals with Democratic support that include significant entitlement savings -- building on the entitlement savings he’s already signed into law. Republicans, we’re hoping, will also make tough choices on their parts, and that would include allowing tax reform to produce revenue towards deficit reduction. If we do that, together, we can really do something good for the economy and something good for the American middle class. Q And getting back to OFA, why not do more to decouple the President from this new organization? Some of the people who represent that organization still have email addresses that end with barackobama.com. And what about the appearance that the President will be, at times, meeting behind closed doors with donors? They may not get individual meetings with the President, but they will be getting -- MR. CARNEY: Well, I’m not sure about that. The organization was established specifically to promote President Obama’s policy agenda, so I don’t think there’s any question about the link between the President’s policy proposals on the economy and the middle class and education, on climate change and immigration reform, and this organization. But it is a separate organization. It is voluntarily -- as I understand it, reading the news reports -- disclosing its donors in an effort to be transparent. And as the President does with numerous organizations that support his policy agenda or the political agenda of the Democratic Party, which is not the goal of this specific organization, he will meet periodically with OFA. Q But isn’t that kind of squishy? The organization is him. MR. CARNEY: No, the organization -- look, there are organizations all over Washington and around the country that support policy agendas and policy areas. That’s what this organization does. And I would refer you to them for more details on their efforts. They are not, as I understand it, again, based on news reports, engaged in political campaigning -- winning elections or helping candidates win elections. They’re focused on the policy proposals. The President speaks to the DCCC and the DNC and the DSCC. He’ll speak to other outside organizations that have policy agendas. And that’s entirely appropriate. And the President is pursuing a policy agenda, as I noted earlier, that is inherently bipartisan, that is embraced by a majority of the American people both in general, as we saw in the election, and in the specifics. And the President obviously believes that engaging the American people in our policy debates is very important. That’s what the election was all about. And he believes that when the American people are engaged in these debates, the outcomes of the debates are better for the American economy and for the middle class. Mary. Q Jay, over the weekend, Afghan President Hamid Karzai said the U.S. is encouraging violence in conjunction with the Taliban to prolong the U.S. presence in Afghanistan. He said the Taliban were killing Afghan civilians “in service to America.” What was the President’s reaction to hearing this? MR. CARNEY: I think Secretary Hagel and General Dunford spoke to this yesterday and made clear that any suggestion the United States is colluding with the Taliban is categorically false. Secretary Hagel addressed these questions directly with President Karzai in their meeting. The United States has spent enormous blood and treasure for the past 12 years supporting the Afghan people and ensuring -- in the effort to ensure stability and security in that country. The last thing we would do is support any kind of violence, particularly involving innocent civilians. Q Do Karzai’s comments and this kind of mounting tension harm or impact U.S. plans to withdraw? MR. CARNEY: The President has a policy that has been embraced by NATO, by our allies in the coalition, and we are pursuing that policy. That includes we’ve drawn down the surge forces and we’re winding down our troop presence in Afghanistan as we build up Afghan security forces and turn over security lead to Afghan security forces. And that progress continues. There is no question that there have been a number of difficult security incidents, and there have been comments by President Karzai with which we’ve disagreed. But our policy has not changed. And what’s important to remember is we went into Afghanistan because we were attacked from Afghanistan. We went into Afghanistan -- and the President made sure that we refocused on this goal when he reviewed Afghan policy upon becoming President -- in order to go after those who attacked the United States, go after those who killed Americans, to go after al Qaeda central, which had taken haven in Afghanistan. And that remains the principal objective of our mission in Afghanistan: to defeat -- to disrupt, dismantle and ultimately defeat al Qaeda in the Afghanistan region; to, in service of that goal, build up -- train and build up Afghan security forces so they can take over security for their country; and to provide the space necessary for the Afghan government to increase stability in that country and to allow us to continue to go after al Qaeda, which is, again, our primary objective. Q Can we follow up on that? MR. CARNEY: Let me get through the first row here. John. Q A couple of things. I was just taken aback by your answer to the question about Organizing for Action. You’re saying -- MR. CARNEY: You were taken aback? Q -- it’s no different than -- that the President sees this group as no different than the DSCC or any other group you speak to? MR. CARNEY: I said it’s -- Q I mean, this is a group -- MR. CARNEY: I didn’t say that. I said it’s similar. Q -- that’s planning on coordinating with the White House, is it not? MR. CARNEY: Well, OFA, again -- Q Was legally set up so it could do that, right? MR. CARNEY: -- was set up to promote the President’s public policy agenda. And therefore, as anyone would expect, the President would likely meet with their representatives to discuss his agenda. Any notion, as we’ve talked about, that there’s a price set for a meeting with the President is absurd and wrong. I mean, the comparison here is that the President goes and speaks about his policy agenda to a variety of groups that support that agenda, including the DNC or the DSCC or the DCCC, including other organizations that have policy ideas that are -- Q This group is going to spend money on his behalf to promote his agenda. MR. CARNEY: No, this group is promoting a policy agenda. It is not trying to elect him, obviously, since he’s -- Q No, no, no, but they’re spending money to promote the agenda. MR. CARNEY: Sure. As organizations do all over town and all over the country. They spend money to promote policy ideas. Q But on his behalf, coordinating with the White House. MR. CARNEY: No, on the American people’s behalf. The President believes that the agenda that he’s putting forward obviously is one that would benefit the middle class and benefit the country. The idea that an organization is out there promoting immigration reform -- we heard from a lot of Republicans this weekend about their support for comprehensive immigration reform, much as the President supports comprehensive immigration reform. Would you argue then that this organization is inappropriately somehow supporting their agenda? I think that there really is an issue here that's about the President’s agenda, the President’s policy proposals. The President is out there pushing for his agenda. And he obviously believes that an organization like this is both helpful and appropriate in engaging the American people, engaging those Americans who support this agenda in a way that helps move the process forward. Q And he isn’t concerned that it’s basically increasing the amount of money that is spent on the politics of Washington? I mean, it does increase the amount of money that gets poured into this. MR. CARNEY: Ordinary Americans who contribute to these organizations to help push policy proposals that benefit ordinary Americans should have and need a voice in Washington. There’s no question that there are corporate and other interests that are amply represented in the policy debate in Washington. So a grassroots organization like this is appropriately engaged in this and should have a voice. Q Has the President given up on campaign finance reform? MR. CARNEY: No. I mean, one thing that he’s adamant about, because of -- in the wake of the unfortunate Citizens United decision, is that at the very least, Republicans ought to go along with disclosure. At the very least, let’s pass legislation, the Disclose Act, that would create the kind of transparency that Americans deserve when it comes to financial contributions to political campaigns. Q Is this high on his priority list? MR. CARNEY: It remains a priority. Q Let me ask you a question on the budget. This is sort of a weird time in the Senate -- Democrats are going to put out their budget before you guys put out yours. Are you coordinating with the Senate Democrats? Did they ask for White House input on that budget, one? And two, is a balanced budget the goal of the President? MR. CARNEY: We are engaging with Senate Democrats, with House Democrats, with Senate Republicans and House Republicans, as you know, on budget issues as well as on the broader agenda that we've been talking about -- Q But now that they’re drawing up their budget -- MR. CARNEY: I'm sure there are conversations going on, on that process. We are engaged in our own process. And the President had lunch with Chairman Ryan last week, and I know they talked about his budget, which I believe is going to be released very soon. The broader effort underway here is to try to, through the budget process, achieve a compromise that allows for both entitlement reform and tax reform that produce the savings necessary to achieve that $4 trillion-plus target over 10 years of deficit reduction, to put our economy on a fiscally sustainable path. And that is the President’s goal: deficit reduction large enough to put our economy on a fiscally sustainable path so that the ratio of debt to GDP is below 3 percent for a period of time that would allow, concurrently, through investments and other policy decisions, allow the economy to grow, to become more energy independent, for the middle class to strengthen and grow. I think this is one of the things that -- because I suppose that your question gets at this -- is that the President has always believed that deficit reduction is not a goal unto itself. The whole purpose of deficit reduction should be part of an overall policy objective of strengthening the economy, having it grow faster, having it create more and better jobs for the middle class. And that's the President’s objective. And that's why he has always, throughout these budget debates and going back to when he first took office, made sure that the proposals he’s put forward keep the number-one objective in mind, which is economic growth and job creation, not deficit reduction solely for the purpose of reducing the deficit. Q Is there going to be a goal -- obviously Paul Ryan has got a 10-year target. Is the President going to have a target, whether it’s 10 years, 15, 20, whatever -- MR. CARNEY: The President will have a target for deficit reduction over 10 years, as he has consistently in his budget -- Q But not a target for a balanced budget by x? MR. CARNEY: Well, the President has put forward a budget, but I think that we tend to talk in 10-year windows here when we do budget proposals, both in Congress and with the administration. And it will do -- the President’s budget will achieve what it has in the past, which is through sensible, balanced deficit reduction, bring our deficit and debt into a place where we are on a fiscally sustainable path, where the ratio of debt to GDP is below 3 percent; and to do that in a way that also allows us to invest in our economy so that we’re building infrastructure for the future and we’re increasing our energy independence, and making sure that our kids are being educated so we can compete 25 years from now and not just today. Q Just a quick -- 10-year window means you guys are not -- you won’t have a balanced budget target in a 10-year window? Fair enough? MR. CARNEY: Again, I’m not going to tell you what his budget says. Q You brought up the window, so that’s why -- MR. CARNEY: Right, but I would look to the President’s past budget proposals, the President’s offer to John Boehner, the Speaker of the House, for what his target has been, which is consistent with bipartisan panels that have looked at these issues. Because, again, it should not be deficit reduction for deficit reduction’s sake; the goal here should be economic growth and job creation. Q So, again, what’s the point of the President’s budget other than the fact that he’s required by law to submit it in early February? If he’s not leading, what’s the point of the budget except perhaps to negotiate the differences between the House and Senate? MR. CARNEY: Well, I challenge virtually every premise of your question, Bill. First of all, the President is the only one, right now, with an offer on the table and available online that has been there for months, much to the surprise of -- Q He was supposed to have a budget in February. MR. CARNEY: Well, Bill, he has had a budget that represents the same goals that were represented in his offer to Speaker Boehner, the same kind of balanced deficit reduction that also has within it investments in our economy that allow our economy to grow and create jobs and to expand the middle class. Q Yeah, but it’s not the budget he was supposed to present in February. MR. CARNEY: Bill, I don’t know what your question is here. The President’s -- Q What’s the point of the budget? MR. CARNEY: The point of the budget is the President will outline, again, through the budget process, his priorities, economic priorities and policy priorities, both in deficit reduction and in economic growth and job creation. And his budget will contribute to the process of regular order that we hope will produce bipartisan, balanced deficit reduction, the kind that the American people overwhelmingly support -- deficit reduction that all the data available shows would include both savings from entitlement reform and savings from tax reform, so that senior citizens aren’t asked to bear this deficit reduction on their own, and middle-class families and families who have kids with disabilities, that they’re not stuck with the bill alone; that it asks the well-off and well-connected, through the tax reform process, to give up special loopholes, to give up deductions that only they enjoy in the name of both deficit reduction and economic growth. Q So with House and Senate budgets out there before the White House budget comes out, it’s like a benchmark for negotiations, mainly? MR. CARNEY: Bill, how long have you been covering Washington? Q A long time. MR. CARNEY: Has there ever been a presidential budget that was enacted word for word into law? Q No. MR. CARNEY: Okay, there is a process in Washington of negotiation where the President’s ideas -- Q But they had them in time -- Q Never had anything like this -- MR. CARNEY: Well, I disagree with that. But the President’s ideas are introduced and ideas of Democrats and Republicans are introduced, and hopefully there is an approach taken by leaders and rank-and-file members on Capitol Hill that embraces the idea of cooperation and compromise, that rejects the idea of absolutist positions that only serve the ideological and partisan interests of a small minority of people in the country, as well as on Capitol Hill, and that the result is a product that both reduces the deficit, invests in our economy, helps it grow and create jobs, that doesn't ask any segment of society to bear the burden alone for deficit reduction. I mean, that's the process here and that's the goal. That's why the President has been having these conversations. Q Only time will tell. MR. CARNEY: Ed. Q On OFA, do you plan on letting the press pool in and let cameras show what the President says in this speech on Wednesday? MR. CARNEY: I’m sure there will be press access. We’re working that out now. Q Okay. And in terms of the Taliban, before I believe you said that the comments by President Karzai are “categorically false.” MR. CARNEY: Correct. Q Isn’t there something even stronger you can say beyond that just they're false? I mean, just in terms of after 12 years of U.S. sacrifice, the man is now saying that within the Taliban they are abusing our people. Aren’t the Americans actually -- MR. CARNEY: And that's categorically false, and nobody believes it. And our men and women, for going on 12 years, have sacrificed enormously on behalf of Afghanistan, and they’ve sacrificed enormously in the effort to achieve our goals, which have been to disrupt, dismantle, and defeat al Qaeda; and in service of that goal to build up Afghan security forces so that they can be responsible for that country’s security, and to help stabilize the situation for the Afghan government so that they can be responsible for their own governance. And that has come at enormous sacrifice. And as you know, Ed, when this President came into office, our policy in Afghanistan was adrift. And this President made clear in that campaign in 2008 and after he took office that he would fix that problem, that he would refocus our efforts in Afghanistan and make clear what our objectives were and what they were not. And that has resulted in both the surge in forces, the withdrawal of those surge forces, and the now paced withdrawal of our forces as we turn over security to Afghan security forces. Q And finally on that, on the substance of the paced withdrawal -- I think Mary tried to get at this. General Mattis last week testified on Capitol Hill that his recommendation for the President is 13,600 U.S. forces beyond 2014 when that ends. Where is the President in deciding all of this? And how does it impact it when your so-called partner on the ground, Karzai, is saying these awful things? That's got to impact these negotiations, doesn't it? MR. CARNEY: Well, we deal with, in these negotiations, with the Afghan government, and the President will review the options for post-2014. What is a fact is that we will draw down our forces and end this war as the President promised. Future security agreements are subject to negotiation, and the President will work on that. Mara and then April. Q I have an OFA question and a budget question. On OFA, how does the President or you judge their success so far in advocating for his agenda? They failed to head off the sequester, and I know that gun background checks, which is another thing they’ve focused on, is encountering a lot of obstacles in the Senate. MR. CARNEY: Nobody said that any of the issues that the President has taken up are easy. If they were -- if comprehensive immigration reform or reducing gun violence in America were easy, they would have been done. And there’s no question that Republicans made a definitive choice, basically reversing a position from last year when the worst possible thing in the world would be the implementation of the sequester to a position where various members were calling it a “home run” or a “victory for the tea party” to have the sequester take effect. But the President is not deterred in the pursuit of the broader agenda. Q No, I don't think he is. I’m just asking you how can you -- do you see any signs that what OFA is trying to do for him is working? MR. CARNEY: Well, first of all, I would point your questions about OFA’s success to OFA. The President is focused on his agenda, and there is progress on comprehensive immigration reform, bipartisan progress. There is progress on legislation to help reduce gun violence, and we are moving on the executive actions that were part of the President’s comprehensive proposal to reduce gun violence. We are working and having conversations with members of both parties on Capitol Hill in the effort to see if we can find common ground on balanced deficit reduction to deal not just with the sequester, but the broader goal. We are moving forward on a whole host of areas. The President will be talking about cybersecurity. He will talk about the need to do something about the broken process on Capitol Hill in the Senate with confirmation of judges. And it’s a broad agenda, and the President is focused on all of it. Q On the budget, can we assume that the entitlement reform ideas that are in the offer that you always say is still on the table will be in his budget -- superlative CPI and the means testing of Medicare? MR. CARNEY: Mara, the way you phrase that question makes me think that you’re still working on a typewriter or something. It’s available online. The proposal is there. It’s not just that I say they're on the table. They're on the table, all right? Q Okay. But they’ll be in the budget? MR. CARNEY: Well, again, I’m not going to predict the budget, but that is the offer, okay? Q Right, but I’m asking will that be in the budget. That’s a fair question. MR. CARNEY: Again, you’re asking me to tell you what’s in the budget. I would be -- I would wait for you for the -- I would wait for the budget to come out. But it is the President’s position, it is the President’s offer -- if John Boehner, the Speaker of the House, wanted to take that offer today, the President would take him up on it. Q Well, it seems like it would be -- obviously then it would be in the budget. MR. CARNEY: Again, Mara, I will allow the budget to be presented. Q Okay. MR. CARNEY: It is the President’s position that in pursuit of balanced deficit reduction that includes both entitlement reforms and revenues from tax reform, that the offer he made to Speaker Boehner remains on the table, and that if the Speaker of the House were to change his position and go back to the position he held just a few months ago, which is that tax reform could generate significant revenues towards deficit reduction -- at the time, he claimed he could produce a trillion dollars in revenues in deficit reduction through tax reform -- then we would be well on our way, potentially, to reaching a bipartisan agreement. And that offer is on the table. Q White House officials often say that Republicans never come forward and say what they want to do with Medicare. Now that we understand the Ryan budget is going to include the same premium support plan that he’s had in the past, do you feel that -- do you take that as the Republican position, proposal for Medicare? MR. CARNEY: Well, I’d say two things. One, this debate was had over the previous year and a half, and I think the American people were categorically opposed to the approach that says that we should voucherize Medicare, shift costs over to senior citizens to the tune of $5,000 or $6,000 a year extra per senior. That’s just not an approach that the American people support. It’s certainly not an approach the President supports. However, there are measures we can take in entitlement reform, including dealing with Medicare, that are sensible policy that don’t unduly burden seniors, that strengthen the program and produce savings. And the President includes those in his proposal that is on the table with Speaker of the House Boehner. The fact of the matter is, let’s wait and see what the budget proposals are from Capitol Hill. But there is -- if you look at the broad picture here when it comes to this, both sides -- the President certainly, and Democrats -- say that we need to do some entitlement reform, produce some savings. I mean, that is in the President’s proposal. Both sides say that we should reform our tax code and close loopholes, and cap deductions and simplify. The fact is, as has been noted, the President has put forward a proposal that includes some tough choices when it comes to entitlement reforms. Some Republicans have recognized that. And the Speaker, just a few months ago, said that we could cap deductions and close loopholes for the well-off and well-connected and produce a trillion dollars over 10 years in deficit reduction. The President’s proposal asks for less than that, as a matter of fact. And so there is a potential here, it seems to me, when you look at these broad areas of entitlement reform and tax reform, for discussion, debate, and hopefully compromise. Now, we’re not overly -- well, let me just say this: We’re not naïve about the obstacles that remain, and I think lawmakers of both parties have said so and I’ve said so and the President. This is challenging stuff. There are real disagreements. But there is ground here for discussion and negotiation. Connie. Q Jay, you called on me next. MR. CARNEY: April, then Connie. Sorry. Q On guns and Medicare cuts. Two Fridays ago, in Massachusetts, Attorney General Eric Holder told a crowd that he and the President share similarly one of the worst days in office. He said -- speaking of the aftermath that he viewed at Sandy Hook, Holder said there was blood on the floor and some on the walls when he visited. He said the carpet was picked up in certain places, and he said he realized that was where the bullets had gone. Does the President share that view that it was one of the worst days in his office? And will the President take that message on the Hill when he’s talking about gun control this week? MR. CARNEY: The President has said that the day of Newtown was perhaps the worst day of his presidency. And I think those of you who saw him that day, when he came out here, those of you who saw him speak in Newtown, felt that. And I think he felt that as a father as well as as President. I know that he places great importance on the need to move forward with common-sense actions that can help reduce gun violence, and I’m sure he will address that. I know he will address that when he’s on Capitol Hill. Q Did the President see what Eric Holder described? MR. CARNEY: No, we did not visit the school. Q Okay. Now, on Medicare cuts, is there any way to put a safety net in place? Is the White House talking about a safety net so that doctors can receive their Medicare payments and efforts to maintain a certain level, a certain standard of quality care for those Medicare recipients? Because there’s this concern out there -- MR. CARNEY: Are you talking about the SGR fix thing? The doctors fix? Q Yes. MR. CARNEY: I mean, that’s something that’s addressed annually. Whether that -- how they deal with that in the -- everybody deals with that in the budget process -- Q But there’s a concern -- MR. CARNEY: -- I think we’ll have to leave that to the budget process. Q You do? MR. CARNEY: Well, I mean, yes, I think. But the so-called doc fix is something that’s addressed almost annually of late. Q But there is concern out there right now that doctors are not going to get their payments because of these cuts in these entitlement programs. And if they don’t -- MR. CARNEY: Well, I’m not sure. You have to be specific about which cuts you’re talking about. The President -- Q Medicare. The doctors -- the payments to the doctors. And there is a concern amongst doctors and those analysts who are looking at this process -- MR. CARNEY: I think I’ll have to take your question, because I think it depends on whether you’re talking about the annual thing known as the doc fix, or the cuts proposed by Republicans, or the reforms proposed by the President. It just depends on what you’re talking about. Q Well, this time that you’re allowing those entitlements to be on the table -- this is what we’re hearing, that the White House is allowing these possibilities for these cuts to -- MR. CARNEY: Well, I’ll have to -- again, I need more specifics. Connie. Q Thank you. On Afghanistan -- where’s the passion, where’s the anger? Two more Americans were killed. Karzai’s comments are more strident. Is there any evidence that the Afghans really want us there to continue training? Is there any possibility the U.S. will pull out -- MR. CARNEY: Connie, you know the President’s policy. He is winding down this war and he is withdrawing American troops. Our objective was refined to make it very clear under the President’s policies that we are in Afghanistan -- we went to Afghanistan and we are there now because of al Qaeda, because al Qaeda took up safe haven in Afghanistan and attacked the United States from Afghanistan. And that effort continues, and there has been significant progress in decimating al Qaeda central in Afghanistan. We are winding down that war, as the President promised. We are withdrawing U.S. forces, as the President promised. We are training Afghan security forces precisely because that enables Afghan security forces to take security lead over from U.S. forces. And we have made significant progress towards that goal. The purpose of the policy, in addition to disrupting, dismantling, and ultimately defeating al Qaeda, is to allow for the stability of Afghanistan and enough strength in Afghan security forces to prevent Afghanistan from again becoming a safe haven for al Qaeda in the way that it was prior to the 9/11 attacks. Q Do the Afghans still want us there? And what sort of talks has the U.S. had with the Taliban leadership? MR. CARNEY: Look, we support Afghan-led reconciliation discussions. There are no current -- I’m not going to get into details, but the focus right now is on Afghan-led reconciliation negotiations. Victoria. Q The transfer of Bagram prison to the Afghans fell apart over the weekend when apparently President Karzai balked at some of the details of the transfer. Do you believe that those details can be worked out for the transfer to take place this week? MR. CARNEY: We continue to work out the details on the transfer of the detention facility in Parwan, which is the facility you’re referencing, and making that transfer to the Afghan government. We remain committed to the full transfer of the facility and to all Afghan detainees to the government of Afghanistan. We respect Afghan sovereignty and intend to proceed with the transfer once we have reached full agreement. Q Are you concerned that the Afghan government is going to release Afghan prisoners who might harm Americans? MR. CARNEY: Again, we are working on this issue with the Afghan government, and we will work out those details and make the transfer of the facility to the Afghans. George. Q In your answer to Jim, you outlined the agenda for the meetings coming up with the members of Congress. What does the President get out of meetings like this? MR. CARNEY: I think he hopes to make clear to members of the Republican conferences and the Democratic caucuses what his policy positions are, his priorities, and his willingness to work with lawmakers of both parties to achieve these, essentially, bipartisan or nonpartisan objectives: balanced deficit reduction that strengthens our economy and helps it create jobs; comprehensive immigration reform that strengthens our economy and that has had traditionally the support of Republicans and Democrats; sensible action to reduce gun violence -- action that respects our Second Amendment rights but deals with a scourge that is taking too many lives in our country; action to enhance our energy independence; action that he has in the past and he will in the future, that the President has called on Congress to take with regards to our cybersecurity. And he will also, I’m sure, talk about the need to do something about the problems that we’ve been seeing in the Senate with Republicans when it comes to confirming the President’s judicial nominations. Q But if you have a meeting like the one with Chairman Ryan where they just repeat their disagreements, does that move the process along at all? MR. CARNEY: Well, I think both what we said about that lunch and what Chairman Ryan said was more than that, George. I think that it was a constructive meeting and that certainly the President, and I don’t want to put words in his mouth, but I believe over the weekend the Chairman said that he thought there was room for further discussion and possible compromise on these issues. So that’s what the President believes. He thinks it’s important to have these conversations because the American people have made pretty clear what they want Washington to do and what they think is the right approach. So the President has been engaged in conversations with lawmakers of both parties, seeking out lawmakers who support balanced deficit reduction, who support the idea of compromise and moving forward on fiscal and budget issues as well as on all these other issues, which remain high priorities. Q There are reports circulating that the United States is training Syrian rebels in Jordan. Any truth to that? MR. CARNEY: I haven’t seen those reports. They’re news to me. Cheryl. Q Any update on when either Commerce Secretary or Labor Secretary might be announced? Will that be this week? MR. CARNEY: I have no personnel announcements to make. Chris. Q Jay, in recent weeks, the administration has taken executive action on behalf of the LGBT community. Last month the Pentagon started the process for recommending certain partner benefits for gay troops. And a couple weeks ago the Justice Department filed a brief in the Prop 8 case. One action that remains outstanding is that executive order for federal contractors prohibiting anti-LGBT workplace discrimination. If you’re going to do these other two executive actions, why not do the executive order as well? MR. CARNEY: Well, I mean, I think filing a brief is an entirely different piece of business, Chris. But I think, as you know, the President has long supported an inclusive Employment Non-Discrimination Act, and his administration will continue to work to build support for it. We welcome Chairman Harkin’s announcement that he will hold a vote on ENDA this year. I have no updates for you on an executive order. Q Well, speaking about the Employment Non-Discrimination Act, when the President goes to Capitol Hill this week to talk to lawmakers about his priorities, will he enumerate the -- will he mention the Employment Non-Discrimination Act as one of the things he wants passed? MR. CARNEY: Well, I know that he’ll talk about some of the issues that I laid out, maybe not all of them, and I’m sure there will be other topics that he’ll raise. But I don't have a specific agenda for him. Q Thanks, Jay. MR. CARNEY: Ann, last one. Q Thank you. To put a fine point on what George asked, when the President goes to talk with both the Republicans in the Senate and the House, he doesn't have the new budget to present yet. Will he be presenting new aspects of the programs and the policies he’s already got out there, new areas where he thinks there can be common ground? Or is this a chance to repeat what they know is already on the record? MR. CARNEY: Well, again, I think you’re mistaking the meetings for a budget negotiation. He’s meeting with I guess potentially 535 lawmakers, so I wouldn’t expect that they're going to trade paper on numbers. First of all, the President is the only one with a proposal out there right now that is balanced and achieves the kind of deficit reduction that gets our fiscal house in order over 10 years. And he, I think, as I’ve said -- he looks forward to making clear what his policy positions are, to making clear his sincerity when it comes to his belief that we need to take action on our deficit, but to do it in a balanced way that enhances rather than harms economic growth, that strengthens rather than weakens the middle class. But he also wants to talk about these other issues. I mean, amidst all the talk about partisan stalemating, gridlock, it is a simple fact that there is activity right now in Washington that represents bipartisan compromise -- efforts towards immigration reform, discussions on reducing gun violence. This is important, and they reflect areas that the President believes should be priorities. They're priorities for his agenda, and he will discuss a number of issues, not just the budget and fiscal issues. Thanks very much. END 1:14 P.M. EDT
Gold edged lower today and sentiment remains poor due to the recent price falls. Later today the markets will digest the outcomes of policy meetings of the ECB, Bank of England and Bank of Japan. Ultra loose monetary policies are set to stay which will support gold. Indeed, the British government may be set to hand Carney in the BOE even more powers which will usher in even looser monetary policy. Central banks are among the shrewd investors who buy gold bullion on dips. It was reported that South Korea bought 20 tonnes of gold last month rumoured to be below the $1,600/oz mark. This is the first purchase this year for South Korea, after they purchased 30 tonnes in 2012. Previously they purchased in July 2012 at the same price levels. IMF World Gold Holdings – (Bloomberg) When gold was weak during May to July of 2012, central banks actively bought nearly 71 tonnes. Russia and Kazakhstan’s bought 12.2 and 1.5 tonnes in January, but until the IMF reports official activity, may help the very poor sentiment towards gold today. Central banks utilize gold bullion to diversify their holdings and limit their foreign exchange exposure. Gold Reserves of Russia – (Bloomberg) South Korea’s FX reserves ranked 7th in the world at the end of January. However, their gold reserves remain a tiny fraction of their overall foreign exchange reserves which were valued at $327.4 billion in February. Gold Reserves of South Korea – (Bloomberg) “The Bank of Korea’s gold buying is part of the long-term diversification of currencies and assets in foreign-exchange reserves,” it said in the statement. “It is of no great importance to try to gauge if it’s profitable or not based on short-term price swings.” The World Gold Council noted that central banks increased gold buying 17% to 534.6 tons last year. Smart, prudent money continues to accumulate, particularly on the dips, while the unfortunate 'dumb' money continues to sell on weakness as seen in the significant liquidation in ETF positions in recent days. Webinar: Everything you need to know about Silver in 60 minutes.Date: 13th March, 2013, 1900 - 2000 GMTSpeakers: David Morgan, publisher of the Morgan Report, and GoldCore Director Mark O'Byrne Do you want answers on why silver should be part of your investment portfolio and why silver is a form of saving and financial insurance? Do you want to know the safest way to own silver? Do you want the opportunity to put your own questions to two leading world authorities on silver? We'll help you in this complimentary webinar, "Everything you need to know about Silver in 60 minutes." To register click here! NEWS Gold struggles to pierce range, US growth hopes weigh - Reuters Gold Declines for First Time in Three Days on U.S. Data, Dollar - Bloomberg China's SGE to launch after-hours trading in Gold & Silver – Bullion Street U.K. Gold Hallmarking at Lowest Since at Least ’07 on Price Gain - Bloomberg COMMENTARYVideo: Good To Own Gold and Silver For Long Term - CNBC Dow Record Nice, $3,000 Gold Nicer: Rosenberg – Market Watch Paper Markets To Disappear As Gold War Rages – JS Mineset Gundlach Likes Silver As "The Great Debasement" Will Continue For Years (Not Months) – Zero Hedge
Governments Worldwide are Implementing Orwellian Gold Confiscation Today. You Just Haven’t Realized it Yet.
Bankers Have Flipped Monetary Truth Upside Down Bankers have flipped the paradigm of monetary truth upside down today. People believe in fiat digital money that is, by definition of the term, counterfeit and have zero belief in money that is real, and thus lasted over 5000 years of global history. In fact so few people today have an understanding of monetary history and truth that when I tell them that all money in wide use and circulation today is the equivalent of counterfeit money, even though this is true, they look at me like my beliefs, not their beliefs, are crazy. Hopefully this article will finally open some eyes and answer the question, "What is money and what is not?" Executive Order 6102 Was Passed to Force Americans to Use Counterfeit Instead of REAL Money In 1933, US President Franklin D. Roosevelt betrayed America and signed Executive Order 6102 into law, making physical possession of more than $100 of gold illegal and punishable by a $10,000 fine and 10 years of prison, to bail out the private Rothschild banking family that controlled and owned the Bank of England, because the Rothshchilds had counterfeited the Pound Sterling to finance World War I. Pre-WWI, the pound was 15% backed by gold reserves. Post-WWI, because the Rothschilds had created pounds of thin air backed by nothing and failed to maintain the gold standard, the pound was only 7% backed by gold reserves. Yet, the Rothschilds and the Bank of England refused to revalue the gold/pound exchange rate. However, back then, unlike today, people understood how money works, called the Rothschilds on their scam and started converting their heavily counterfeited and devalued pounds into gold at the pre-WWI gold/pound exchange rate, knowing that they were receiving more gold per pound than the gold reserves (backing the pound) held by the Rothschilds should dictate. This is why the thought of a return to a monetary system of gold and silver money absolutely terrifies the criminal banking cartel so much. Note that this is completely different than the criminal banking cartel fearing gold ownership for themselves. They are snapping up as much physical gold as possible right now. They just don't want YOU to own any. A 100% gold backed monetary system (the only kind of gold standard I support) allows the people to punish the bankers and take their wealth when they try to cheat us. A counterfeit fiat digital system, the kind we all use today, however, allows bankers to perpetually steal wealth from all of us. Under our current counterfeit monetary system of fiat digital currencies, of course we can still choose to convert our counterfeit digital money backed by air into the real money of physical gold and silver, but so few people choose to do this. So let's explore why. In order to stop their gold losses, the Bank of England asked the US Federal Reserve to start counterfeiting US dollars to weaken the dollar against the pound. With heavy devaluation of the two major global currencies at hand and the ongoing collapse of the German mark, when the Reichsbank hyperinflated marks to such a degree that the largest denominated note increased from just 1000 marks to an insane 100,000,000,0000 marks in short time (yes, there was a 100 billion mark note back then, probably the inspiration for Paul Krugman's idiotic suggestion of printing ONE TRILLION dollar coins to pay off the REAL US national debt of $200+ trillion), many people justly and rightfully preferred converting their treasonous devaluing paper fiat money into the real money of gold. So the ongoing counterfeiting of the world’s major currencies eventually led President Franklin D. Roosevelt to betray all Americans and choose to serve his money masters instead of serving the people (all governments only give lip service to serving the people but in reality, always serve the interest of their money masters only). To save his masters, the bankers, Roosevelt passed Executive Order 6102, an EO that literally stole gold from American citizens, gave it to the bankers, and gave Americans devaluing counterfeit money instead. Before you tune out, if you believe my labeling of US dollars as counterfeit money is "unpatriotic", I will prove to you that all fiat money today is counterfeit money beyond a shadow of a doubt, and that in fact, a true patriot would despise the digital US dollar backed by nothing and the bankers that have created them. Today, with massive devaluation of all global currencies, with the Yen falling an astounding 24% against the Euro in just a few months, one would think that everyone in the world would learn from Executive Order 6102 that the way to preserve their wealth against the criminal amoral banking class is to convert not 5%, not 10%, and not even 30%, but as much of their fiat and digital currency as humanly possible into physical gold and physical silver. However, there was one massive difference between citizens of the early 1900s and citizens today that prevents people from grasping this realization and that required bankers to outright steal private citizen’s stores of gold back then through the mandate of a Presidential Executive Order - the widespread knowledge of monetary truth. All through the 1800s until 1879 in the United States, a bi-metallic standard existed in which physical gold and silver and paper notes backed by gold and silver were used as money. However, back then, paper notes backed by gold, though they were in circulation and even issued by the US Treasury, were not even considered “legal tender”. In 1879, the bimetallic gold and silver standard in the US was changed to a gold standard that remained in effect until 1933. Thus throughout the 1800s and the early-to-mid 1900s, nearly 100% of Americans understood that only gold and silver were ever to be trusted as money and that paper notes, if not backed by gold or silver, were just that, paper and nothing more. Even the vast majority of the middle-class and poor in the US that did not have enough resources to accumulate physical gold and physical silver still understood that they should accept only gold and silver as real money and that all else should be considered as fake or counterfeit money. It was this widespread understanding and knowledge of monetary truth that caused bankers to panic after they started counterfeiting money in masse during World War I and led them to order President Roosevelt to confiscate people’s gold in 1933, the year the gold standard effectively ended in the US. People Don't Have the Knowledge to Wage War Against the Bankers & Win Today Because Bankers Have Nearly Purged All Truth About Money From History Books & Education However, today, we have a completely different scenario because of this massive gap in knowledge about money between 1800 and 1900 America and 2013 America. In the 80 years since the bankers ceased convertibility of bank notes into gold in 1933, the bankers have worked furiously to purge all history of monetary truths from school books in the same manner that brutal dictators Chairman Mao and Pol Pot chose to purge the cultural history of their nations from the memories of their citizens. After all, today's people can’t miss monetary freedom if they lack the knowledge of their ancestors and never knew it existed in their recent history, even when monetary freedom (v. the monetary enslavement of today) existed less than one generation ago. This mission of the bankers in America was to purge from the memories of all Americans the history of stable economic growth and widespread prosperity realized under a gold standard, and they, by and large, succeeded. If I tell people today that the global banking system is a Ponzi scheme that runs on counterfeit money, even “educated” people (though they are more properly labelled as the re-educated and miseducated) look at me like I have lost my mind. This is how I know that the bankers have successfully purged almost all knowledge of monetary truth from the memories of today’s citizens. Thus the situation today is nearly the exact opposite of what existed less than a century ago. Back then, nearly 100% of people understand that no money was to be accepted except gold and silver and certainly never to accept paper backed by nothing. Today, you would be hard pressed to find one person out of 100,000 that understands this. The US Federal Reserve Turns REAL Money In Widespread Circulation Into COUNTERFEIT Money In fact, ever since private bankers created the US Federal Reserve in 1913 and then turned money from REAL money into COUNTERFEIT money in 1933, they have continued to commit the same degradation of fiat currencies that they committed during WWI, but only on an exponentially more rapid timeline. In other words from 1800 to 1929, the price index in America was about the same after 130 years under a gold standard (though there were volatile periods in between)! However, it is important to note that the periods of upward volatility in the price index were created only during periods when bankers willfully abandoned the gold standard and counterfeited US dollars, as was the case during the US Civil War, when banker Elbridge G. Spaulding convinced President Lincoln to issue the infamous Greenback, backed by nothing, to fund the war. During the Civil War, prices soared due to inflation, but a return to the gold standard after the war ended brought post-war prices back in line with pre-war prices once again. This is what REAL money does - it regulates economic growth in a sustainable manner, disallows massive price distortions that counterfeit money encourages and keeps prices constant over long periods of time. So anytime you read about banking shills that argue against a gold standard because they point to periods of massive inflation that existed under a gold standard, you will discover that during these periods, bankers were either diluting the gold standard and cheating the people, or that a PSEUDO, and not a TRUE, gold standard, i.e. Bretton Woods, was in use. COUNTERFEIT money, on the other hand, devalues money over long periods of time, and thus, has a built-in component of forever creating more and more poverty. That is why today, in New York City, the words “Give me your tired, your poor” that appear on the Statue of Liberty are unfortunately more apropos than ever, as our acceptance of the use of counterfeit money has caused conditions of homelessness in NYC to now approach the miserable conditions that existed during the Great Depression. Yes, you have your friendly neighborhood banker to thank for this, and if you still don’t understand, please keep reading. After Roosevelt passed the treasonous Executive Order 6102 that confiscated gold, and he caved in to the bankers’ plan to turn the world’s REAL money into 100% COUNTERFEIT money, the price index nearly doubled in the next 20 years, and then increased 400% over the subsequent 40 years. This is what counterfeiting money achieves. Cheap imitation copies of the original product (1973 dollars) devalues all existing original product (1933 dollars). Thus, the situation that caused people to fear the banker’s criminality in the 1930s and led to an overwhelming desire to hold physical gold versus paper has actually worsened at an exponential pace ever since Executive Order 6102. But thanks to the re-education camps of modern academics today, the situation accepted by no Americans in the 1920s is now not only willingly accepted by nearly 100% of Americans today but also accepted by nearly 100% of the 7 billion people populating this earth (with the exception of the Japanese, Indians, Chinese, and Middle Eastern peoples). Bankers Have Already Been Running Executive Order 6102-Like Interference in South Korea and in India And this is why instead of confiscation today, banker-controlled and run Western governments (as detailed in "The Quiet Coup", by Simon Johnson) only need to concentrate on pre-emptive strikes that convince people NOT to buy gold and silver today. By besieging the people with psychological warfare, the bankers' pre-emptive strikes achieve the exact same mission as the gold confiscation mandate of Executive Order 6102 by keeping gold (and silver) out of the hands of the people. As I’ve made reference to this above, in regions of the world where the citizenry has NOT been brainwashed into ignorance about monetary truth by banker-controlled re-education curricula, governments have resorted to chicanery and legislation to confiscate and steal the people’s gold and to prevent them from buying more. For example, during the 1997 SE Asian Tigers banking crisis, the banker-controlled S. Korean government tricked people into giving up their gold by using the political angle of patriotism. The Korean government launched a “Collect Gold for the Love of Korea” campaign and recruited the help of three major Korean corporations, Samsung, Daewoo and Hyundai, to trick all Korean citizens into believing that if they didn’t turn over their gold to the government, they were “unpatriotic”. Shame on Samsung, Daewoo and Hyundai for tricking their own people like this. In fact, the most patriotic thing Korean citizens could have done was defy the government, buy guns with their gold, and round up and jail the criminal banking class that destroyed the won from an exchange rate of 800 won per USD to a pathetic exchange rate of 1,700 won per USD during this crisis. Had Koreans done this instead of falling victim to this banker driven scam, South Korea would perhaps not be suffering from monetary and economic distresses today. Instead, incredulously the bankers were able to scam well over 100,000 citizens, including even my grandmother back then, as Koreans cumulatively donated more than 20 tonnes of gold to the bankers (the exact amount remains unknown today because the government stopped reporting official numbers after the donations ran in excess of 20 tonnes). Today, at a price of $1,580 a troy ounce, those 20 tonnes represent more than $1 billion of wealth stolen by bankers through their use of simple propaganda. So in 1997, South Koreans received and responded to Executive Order 6102 delivered under the guise of “patriotism”. In India, scams of “Give Up Your Gold for the Love of India” would never work because Indians in general, as one of the largest private holders of gold in the world, understand that gold is real money and that rupees are counterfeit money. This is why, even the poor in India will convert their rupees into gold whenever possible. Thus to achieve the mission of Executive Order 6102 in India, bankers need to legislate Indian’s gold buying habits because psychological warfare, effective in other countries, will have no effect in India. When gold is raided in paper markets by bankers and the price drops, Westerners may panic sell in fear, but not Indians. Indians will correctly see the drop as a significant buying opportunity and buy more gold. Furthermore, despite gold’s more than 500% ascent from $250 an troy ounce to $1580, Indians understand that a 500% increase in price does not make gold expensive, but understand that only over valuation can make gold expensive and since gold is still severely undervalued, that it is still a bargain after a 500% increase in price. Thus, the criminal banking class has to assert itself differently in India to accomplish the mission of EO 6102. To stop gold buying, bankers that control India have jacked up the import tax on gold from 1% in December of 2011 to 6% and are discussing a further increase to 8% right now, a move that would represent a 700% increase of the tax on gold in little over a one-year period. Welcome to the pre-emptive strike I discussed above and the Indian equivalent of the tyrannical US Executive Order 6102. How Is The Current Administration Achieving the Goals of Executive Order 6102 in the US Today? Through Psychological Warfare Finally, what methods are the Rockefellers, the Rothschilds and their agent bullion banks in the US employing to re-enact Executive Order 6102 in the United States? Again, since re-education about the monetary and banking system has been completed in America and only a tiny percentage of Americans understand that only gold and silver are money, and all US dollars are nothing but credit (aka counterfeit money), ownership of physical gold (and silver) by the masses is accordingly low. Thus, bankers have also decided to use pre-emptive psychological strikes of irrational fear against the people to accomplish the mission of Executive Order 6102. If the bankers can keep Americans from buying physical gold and physical silver and keep Westerners invested in hugely devaluing dollars, Euros, Pounds, and yen in the form of the global stock markets, then they have achieved their mission of perpetuating our massive fiat counterfeit money bubble. Why do we have a counterfeit money bubble? Because the intrinsic value of all counterfeit money is zero. Thus, when this counterfeit money bubble pops, fiat money millionaires will be welcomed to poverty. In order to keep people “fearful” of gold, bankers have deliberately introduced massive artificial volatility into the price of spot gold and spot silver through their manipulation of paper derivative products along with these three additional techniques I explain in this article. Remember by keeping people fearful of buying gold NOW with massive propaganda, then there is no need for bankers to confiscate peoples’ gold LATER. When the bankers finally massively revalue gold in coming years as they did in 1933, when the revalued gold by 69% higher AFTER confiscating it from the people, they will own the most gold and will benefit the most of all peoples, and cause enormous losses of wealth among all people that they have convinced to hold on to fiat counterfeit paper money like the US dollar, the Euro, the Pound Sterling and the Yen. To summarize, bankers have initiated pre-emptive strikes against Western citizens using rigged volatility in gold and silver markets to create and foster fear among Westerners regarding a collapse of physical gold and physical silver prices that simply will not happen. The end effect of these tactics are the exact same as Executive Order 6102: a citizenry that continues to store his wealth in a paper fiat currency that buys less and less every year and almost zero amounts in real money, physical gold and physical silver. A Simple Example That Should Make It Crystal Clear That ALL Fiat Currency Today is COUNTERFEIT Money I leave you with a very simple fact-based story to conclude this article. If you had kept $20,000 in a bank savings account since 1913, you would still only have $20,000 dollars in your bank account. But remember that in 1913, one would have been able to buy a very large house with $20,000 whereas today, one can not even buy a decent new car with $20,000. Obviously, the nominal amount of dollars has no meaning and accumulating significantly more dollars does not make one richer as many American foolishly believe today. To buy the same $20,000 house one could buy in 1913, since bankers have destroyed 98% of the purchasing power of the 1913 dollar with their counterfeiting efforts over the last 100 years, one would now need 50X the amount of 1913 $20,000 dollars today, or a whopping $1,000,000 2013 dollars just to buy the same house that $20,000 could have afforded you in 1913. Another way of stating that is even if you had $999,999 2013 dollars versus only $20,000 1913 dollars, you would still be poorer today than you were in 1913, an astounding fact. Now imagine you had converted your $20,000 into gold in 1913. In 1913, gold was priced at $18.92 an ounce. Therefore $20,000 would have bought 1,057 ounces of gold. Instead of holding $20,000 in the bank since 1913, had you converted this COUNTERFEIT money in the form of US dollars into the REAL money of gold and simply held 1,057 ounces of gold in a vault (granted one outside of the US) since 1913, your 1,057 ounces of vaulted gold would now be worth 1,057 ounces * 1,580 an ounce = $1,670,060 2013 dollars. And when gold reaches $5,000 an ounce, these 1,057 ounces will increase from $1,670,060 2013 dollars to $5,285,000 future-year dollars. I’ve actually told a class full of 10-year old children that hadn’t yet been exposed to the re-education process this very example and asked them what would they want today given the following choice: $20,000 of USD or $20,000 of gold? 100% of them answered $20,000 of gold because this example makes the decision so clear and so simple. What is money? Something that holds its value over 80 years and increases 83X in value (gold) against the “thing” (USD) we call money today, or something (USD) that plummets to 1/50th of its value in 80 years? This example alone should be able to convince 100% of people of what is REAL money and what is COUNTERFEIT money and that the bankers' objectives are to keep you from owning REAL money and to keep you holding COUNTERFEIT money. The lunacy of bankers’ re-education campaigns, in which they have instructed people to believe that COUNTERFEIT money is REAL money and REAL money is COUNTERFEIT money, is that most people that would never consider buying gold today or turning their paper COUNTERFEIT money into REAL gold money or REAL silver money have heard about the US government stealing gold from American citizens through Executive Order 6102 in 1933. And most people understand that you would not steal something that has NO VALUE and give people something in exchange that has MORE VALUE. Yet when the bankers stole people’s gold in 1933, they gave them fiat COUNTERFEIT US dollars in exchange for their REAL money of gold. Yet today, people cannot connect the simple dots and still choose to hold FIAT CURRENCIES that have LESS VALUE and GUARANTEE THEM LESS WEALTH in the future instead of simply exchanging it for something of MORE VALUE that GUARANTEES THEM MORE WEALTH in the future. The definition of a counterfeit good is something that looks like the original but is of lesser value than the original or dilutes the value of the original. That is exactly the definition of all fiat money today. In the example above, a 2013 dollar is only worth 1/50th of the value of a 1913 dollar because every additional COUNTERFEIT dollar the Central Banking families creates dilutes the value of that original 1913 dollar. The funny thing is, as I’ve explained in this article, governments and bankers worldwide are successfully imposing the end goals of Executive Order 6102 on us with impunity and without as much as a single whimper out of us due to our utter failure to understand the artificial rigging mechanisms bankers use to set spot gold and spot silver prices. Thus whenever the criminal banking cartel utilizes these rigging mechanisms to game gold and silver prices lower and release through the media and banks that they own that gold and silver are bubbles that have just burst, this is sufficient to keep millions of Westerners from ever buying their first physical ounce of gold or silver. Or even worse yet, bankers have shuttled people into phony ETFs like the GLD and SLV that likely own COUNTERFEIT gold and silver. I am still amazed today, that when I tell people to convert as much of their fiat paper into physical gold and physical silver as possible to protect their wealth, that the majority, not the minority of people, still view gold as the risky asset and fake COUNTERFEIT fiat money as the safe asset even though I have informed them that the US dollar that has lost 98% of its value and purchasing power since 1913! Yes, all those suits at the big global commercial investment firms are wildly wrong when they inform you that you should have 5% or 10% of your physical assets in gold. At SmartKnowledgeU, I’ve been telling our clients to own gold since $580 an ounce and silver since less than $11 an ounce because of the indisputable facts of monetary history. In my 2008 article, in which I explained why $800 gold was still cheap, the media was trying to sell the people an idea that $800 gold was massively expensive and signs of the existence of a gold bubble back then, furthering this notion with the lie that “gold [was] at 27-year highs.” In this article, I deliberately used the grossly under-reported US “official” inflation statistics to determine an inflation-adjusted gold price to illustrate why gold was still a great value at $800 an ounce, as in 2008, trying to cram 100% truth down the throats of an unwilling-to-listen populace by using the real inflation statistics of Shadowstats would have been a near impossibility. How To Protect Your Wealth Against the Counterfeiting Racket of Central & Commercial Banks Worldwide The conversion of 5% to 10% of your assets into physical gold (remember, never buy paper gold) will be insufficient to protect your wealth when hyperinflation arrives due to the legalized counterfeiting racket known as the Central Banking and Commercial Banking system. You should be converting as much of your fiat currency into physical gold (and silver) as possible, even 90% or more, if that is possible for you to do. As far as those that say doing so is impractical, research the avenues to do this that now exist, use the grey matter inside your head called your brain, and you will find that technology has rendered the accumulation of REAL MONEY today as very practical. History already tells us what is coming in the future and what is the right thing to do. Even so, due to the mass media spreading 1000 articles of lies and propaganda about gold and silver for every one article of truth that surfaces in the independent media, the vast majority of people will still ignore history and insist on subjecting themselves to massive wealth destruction by holding on to their fiat COUNTERFEIT money and self-inflicting Executive Order 6102 upon themselves when no one is forcing them to do so. Of course, if people would only understand the monetary truths and could digest the monetary facts contained in this article without regurgitating them to make room for the brainwashing propaganda of bankers, we already would have overthrown the corrupt criminal global banking cartels years, or perhaps decades ago, through peaceful means. If you don’t understand what this statement means, simply re-read this article and the solution to defeating the bankers’ systematic mission of bankrupting the world’s citizens will soon become clear. What we know from history, especially in the banking world, is that unfortunately we are destined to repeat the same mistakes of our ancestors despite being presented with indisputable historical evidence that should move us to action. Thus, I’m leaving it up to each one of you to spread the monetary truth of this article to everyone you know until understanding of monetary truth becomes as common today as it once was throughout the 1800s and early 1900s. Arguments Against the Re-Implementation of a Gold Standard Are ALL Without Merit Though I have not discussed how counterfeit money allows bankers to rig the prices of all markets and immorally and unfairly hoard all wealth for themselves, as this is a topic beyond the scope of this article, please refer to the below video titled “Wealth Inequality in America” to see a visual representation of just how obscene wealth distribution in America has become. Also you can read this excerpt from my recent book The Golden Gift, that explains why these arguments are without merit. I imagine this wealth distribution pattern to be just as obscene in many EU nations as well. In addition, I believe that the top 1% of the wealthiest in America currently also own the lion’s share of all physical gold and physical silver in the United States. Because this top 1% benefits the most from rigged financial markets and truly understand the rigging games as opposed to the masses, they are the most likely to have been converting their COUNTERFEIT fiat paper money into REAL money like physical gold and physical silver. Now I want to make it crystal clear that my intent is not to demonize the top 1% of the wealthiest people in any country as surely there are some entrepreneurs among this group that earned their wealth honestly. However, those that earned their immense wealth through immorally rigging markets, like the LIBOR market, the gold and silver market, and so forth, are the ones for whom I have much disdain. Stay tuned for Part 2 next week on my blog, theUndergroundInvestor, as I’ll discuss more of the psychological warfare tactics that bankers have employed against us in their (not our) academic system that have led us down the path to weak convergent thinking (v. enlightened divergent thinking) that ultimately is responsible for our failure to understand a reality of our monetary system that is very different than the one bankers have taught us to believe. Here’s some food for thought in the meantime before my next article: I have found it much easier to teach home-schooled teenagers to understand the reality of our Counterfeit monetary system today than teenagers that attend traditional schools in the public/private education system. Why do you think the fable of “Curiosity killed the cat” is so widely known and popular among children? Instead of teaching kids how to find Waldo (Wally), parents should be teaching their kids how to spot counterfeit money and to replace it with real money. Would you accept counterfeit Louis Vuitton bags, counterfeit Coach wallets and counterfeit Samsung Galaxy S2 phones as payment for your work? If not, then you certainly shouldn't be accepting counterfeit Euros, Yen, Dollars, or Pounds as payment for your work without converting it immediately into REAL money. About the author: JS Kim is the founder and Managing Director of SmartKnowledgeU, a fiercely independent research and consulting firm that focuses on wealth building through the accumulation of gold and silver assets with a mission of returning the world to the use of REAL MONEY once again. To learn more about the topic of this article, including how a return to a TRUE gold standard (Bretton Woods was not a true gold standard) could return the world to a time of economic prosperity and help eradicate poverty, consider JS’s latest book, The Golden Gift, of which he will be donating 100% of all profits from first-year sales to orphanages around the world and bookmark our blog www.theundergroundinvestor.com here to read our articles as soon as they are released. Follow us on Twitter @smartknowledgeu and on our SmartKnowledgeU YouTube channel.
Governments Worldwide are Implementing Orwellian Gold Confiscation Today. You Just Haven’t Realized it Yet.
Bankers Have Flipped Monetary Truth Upside Down Bankers have flipped the paradigm of monetary truth upside down today. People believe in fiat digital money that is, by definition of the term, counterfeit and have zero belief in money that is real, and thus lasted over 5000 years of global history. In fact so few people today have an understanding of monetary history and truth that when I tell them that all money in wide use and circulation today is the equivalent of counterfeit money, even though this is true, they look at me like my beliefs, not their beliefs, are crazy. Hopefully this article will finally open some eyes and answer the question, "What is money and what is not?" Executive Order 6102 Was Passed to Force Americans to Use Counterfeit Instead of REAL Money In 1933, US President Franklin D. Roosevelt betrayed America and signed Executive Order 6102 into law, making physical possession of more than $100 of gold illegal and punishable by a $10,000 fine and 10 years of prison, to bail out the private Rothschild banking family that controlled and owned the Bank of England, because the Rothshchilds had counterfeited the Pound Sterling to finance World War I. Pre-WWI, the pound was 15% backed by gold reserves. Post-WWI, because the Rothschilds had created pounds of thin air backed by nothing and failed to maintain the gold standard, the pound was only 7% backed by gold reserves. Yet, the Rothschilds and the Bank of England refused to revalue the gold/pound exchange rate. However, back then, unlike today, people understood how money works, called the Rothschilds on their scam and started converting their heavily counterfeited and devalued pounds into the pre-WWI gold/pound exchange rate, knowing that they were receiving more gold per pound than the gold reserves held by the Rothschilds dicatated. This is why the thought of a return to a monetary system of gold and silver money absolutely terrifies the criminal banking cartel so much. Note that this is completely different than the criminal banking cartel fearing gold ownership for themselves. They are snapping up as much physical gold as possible right now. They just don't want YOU to own any. A 100% gold backed monetary system (the only kind of gold standard I support) allows the people to punish the bankers and take their wealth when they try to cheat us. A counterfeit fiat digital system, the kind we all use today, however, allows bankers to perpetually steal wealth from all of us. Under our current counterfeit monetary system of fiat digital currencies, of course we can still choose to convert our counterfeit digital money backed by air into the real money of physical gold and silver, but so few people choose to do this. So let's explore why. In order to stop their gold losses, the Bank of England asked the US Federal Reserve to start counterfeiting US dollars to weaken the dollar against the pound. With heavy devaluation of the two major global currencies at hand and the ongoing collapse of the German mark, when the Reichsbank hyperinflated marks to such a degree that the largest denominated note increased from just 1000 marks to an insane 100,000,000,0000 marks in short time (yes, there was a 100 billion mark note back then, probably the inspiration for Paul Krugman's idiotic suggestion of printing ONE TRILLION dollar coins to pay off the REAL US national debt of $200+ trillion), many people justly and rightfully preferred converting their treasonous devaluing paper fiat money into the real money of gold. So the ongoing counterfeiting of the world’s major currencies eventually led President Franklin D. Roosevelt to betray all Americans and choose to serve his money masters instead of serving the people (all governments only give lip service to serving the people but in reality, always serve the interest of their money masters only). To save his masters, the bankers, Roosevelt passed Executive Order 6102, an EO that literally stole gold from American citizens, gave it to the bankers, and gave Americans devaluing counterfeit money instead. Before you tune out, if you believe my labeling of US dollars as counterfeit money is "unpatriotic", I will prove to you that all fiat money today is counterfeit money beyond a shadow of a doubt, and that in fact, a true patriot would despise the digital US dollar backed by nothing and the bankers that have created them. Today, with massive devaluation of all global currencies, with the Yen falling an astounding 24% against the Euro in just a few months, one would think that everyone in the world would learn from Executive Order 6102 that the way to preserve their wealth against the criminal amoral banking class is to convert not 5%, not 10%, and not even 30%, but as much of their fiat and digital currency as humanly possible into physical gold and physical silver. However, there was one massive difference between citizens of the early 1900s and citizens today that prevents people from grasping this realization and that required bankers to outright steal private citizen’s stores of gold back then through the mandate of a Presidential Executive Order - the widespread knowledge of monetary truth. All through the 1800s until 1879 in the United States, a bi-metallic standard existed in which physical gold and silver and paper notes backed by gold and silver were used as money. However, back then, paper notes backed by gold, though they were in circulation and even issued by the US Treasury, were not even considered “legal tender”. In 1879, the bimetallic gold and silver standard in the US was changed to a gold standard that remained in effect until 1933. Thus throughout the 1800s and the early-to-mid 1900s, nearly 100% of Americans understood that only gold and silver were ever to be trusted as money and that paper notes, if not backed by gold or silver, were just that, paper and nothing more. Even the vast majority of the middle-class and poor in the US that did not have enough resources to accumulate physical gold and physical silver still understood that they should accept only gold and silver as real money and that all else should be considered as fake or counterfeit money. It was this widespread understanding and knowledge of monetary truth that caused bankers to panic after they started counterfeiting money in masse during World War I and led them to order President Roosevelt to confiscate people’s gold in 1933, the year the gold standard effectively ended in the US. People Don't Have the Knowledge to Wage War Against the Bankers & Win Today Because Bankers Have Nearly Purged All Truth About Money From History Books & Education However, today, we have a completely different scenario because of this massive gap in knowledge about money between 1800 and 1900 America and 2013 America. In the 80 years since the bankers ceased convertibility of bank notes into gold in 1933, the bankers have worked furiously to purge all history of monetary truths from school books in the same manner that brutal dictators Chairman Mao and Pol Pot chose to purge the cultural history of their nations from the memories of their citizens. After all, today's people can’t miss monetary freedom if they lack the knowledge of their ancestors and never knew it existed in their recent history, even when monetary freedom (v. the monetary enslavement of today) existed less than one generation ago. This mission of the bankers in America was to purge from the memories of all Americans the history of stable economic growth and widespread prosperity realized under a gold standard, and they, by and large, succeeded. If I tell people today that the global banking system is a Ponzi scheme that runs on counterfeit money, even “educated” people (though they are more properly labelled as the re-educated and miseducated) look at me like I have lost my mind. This is how I know that the bankers have successfully purged almost all knowledge of monetary truth from the memories of today’s citizens. Thus the situation today is nearly the exact opposite of what existed less than a century ago. Back then, nearly 100% of people understand that no money was to be accepted except gold and silver and certainly never to accept paper backed by nothing. Today, you would be hard pressed to find one person out of 100,000 that understand this. The US Federal Reserve Turns REAL Money In Widespread Circulation Into COUNTERFEIT Money In fact, ever since private bankers created the US Federal Reserve in 1913 and then turned money from REAL money into COUNTERFEIT money in 1933, they have continued to commit the same degradation of fiat currencies that they committed during WWI, but only on an exponentially more rapid timeline. In other words from 1800 to 1929, the price index in America was about the same after 129 years under a gold standard (though there were volatile periods in between)! However, it is important to note that the periods of upward volatility in the price index were created only during periods when bankers willfully abandoned the gold standard and counterfeited US dollars, as was the case during the US Civil War, when bankers printed the infamous Greenback, backed by nothing, to fund the war. During the Civil War, prices soared due to inflation, but a return to the gold standard after the war ended brought post-war prices back in line with pre-war prices once again. This is what REAL money does - it regulates economic growth in a sustainable manner, disallows massive price distortions that counterfeit money encourages and keeps prices constant over long periods of time. So anytime you read about banking shills that argue against a gold standard because they point to periods of massive inflation that existed under a gold standard, you will discover that during these periods, bankers were either diluting the gold standard and cheating the people, or that a PSEUDO, and not a TRUE, gold standard, i.e. Bretton Woods, was in use. COUNTERFEIT money, on the other hand, devalues money over long periods of time, and thus, has a built-in component of forever creating more and more poverty. That is why today, in New York City, the words “Give me your tired, your poor” that appear on the Statue of Liberty are unfortunately more apropos than ever, as our acceptance of the use of counterfeit money has caused conditions of homelessness in NYC to now approach the miserable conditions that existed during the Great Depression. Yes, you have your friendly neighborhood banker to thank for this, and if you still don’t understand, please keep reading. After Roosevelt passed the treasonous Executive Order 6102 that confiscated gold, and he caved in to the bankers’ plan to turn the world’s REAL money into 100% COUNTERFEIT money, the price index nearly doubled in the next 20 years, and then increased 400% over the subsequent 40 years. This is what counterfeiting money achieves. Cheap imitation copies of the original product (1973 dollars) devalues all existing original product (1933 dollars). Thus, the situation that caused people to fear the banker’s criminality in the 1930s and led to an overwhelming desire to hold physical gold versus paper has actually worsened at an exponential pace ever since Executive Order 6102. But thanks to the re-education camps of modern academics today, the situation accepted by no Americans in the 1920s is now not only willingly accepted by nearly 100% of Americans today but also accepted by nearly 100% of the 7 billion people populating this earth (with the exception of the Japanese, Indians, Chinese, and Middle Eastern peoples). Bankers Have Already Been Running Executive Order 6102-Like Interference in South Korea and in India And this is why instead of confiscation today, banker-controlled and run Western governments (as detailed in "The Quiet Coup", by Simon Johnson) only need to concentrate on pre-emptive strikes that convince people NOT to buy gold and silver today. By besieging the people with psychological warfare, the bankers' pre-emptive strikes achieve the exact same mission as the gold confiscation mandate of Executive Order 6102 by keeping gold (and silver) out of the hands of the people. As I’ve made reference to this above, in regions of the world where the citizenry has NOT been brainwashed into ignorance about monetary truth by banker-controlled re-education curricula, governments have resorted to chicanery and legislation to confiscate and steal the people’s gold and to prevent them from buying more. For example, during the 1997 SE Asian Tigers banking crisis, the banker-controlled S. Korean government tricked people into giving up their gold by using the political angle of patriotism. The Korean government launched a “Collect Gold for the Love of Korea” campaign and recruited the help of three major Korean corporations, Samsung, Daewoo and Hyundai, to trick all Korean citizens into believing that if they didn’t turn over their gold to the government, they were “unpatriotic”. Shame on Samsung, Daewoo and Hyundai for tricking their own people like this. In fact, the most patriotic thing Korean citizens could have done was defy the government, buy guns with their gold, and round up and jail the criminal banking class that destroyed the won from an exchange rate of 800 won per USD to a pathetic exchange rate of 1,700 won per USD during this crisis. Had Koreans done this instead of falling victim to this banker driven scam, South Korea would perhaps not be suffering from monetary and economic distresses today. Instead, incredulously the bankers were able to scam well over 100,000 citizens, including even my grandmother back then, as Koreans cumulatively donated more than 20 tonnes of gold to the bankers (the exact amount remains unknown today because the government stopped reporting official numbers after the donations ran in excess of 20 tonnes). Today, at a price of $1,580 a troy ounce, those 20 tonnes represent more than $1 billion of wealth stolen by bankers through their use of simple propaganda. So in 1997, South Koreans received and responded to Executive Order 6102 delivered under the guise of “patriotism”. In India, scams of “Give Up Your Gold for the Love of India” would never work because Indians in general, as one of the largest private holders of gold in the world, understand that gold is real money and that rupees are counterfeit money. This is why, even the poor in India will convert their rupees into gold whenever possible. Thus to achieve the mission of Executive Order 6102 in India, bankers need to legislate Indian’s gold buying habits because psychological warfare, effective in other countries, will have no effect in India. When gold is raided in paper markets by bankers and the price drops, Westerners may panic sell in fear, but not Indians. Indians will correctly see the drop as a significant buying opportunity and buy more gold. Furthermore, despite gold’s more than 500% ascent from $250 an troy ounce to $1580, Indians understand that a 500% increase in price does not make gold expensive, but understand that only over valuation can make gold expensive and since gold is still severely undervalued, that it is still a bargain after a 500% increase in price. Thus, the criminal banking class has to assert itself differently in India to accomplish the mission of EO 6102. To stop gold buying, bankers that control India have jacked up the import tax on gold from 1% in December of 2011 to 6% and are discussing a further increase to 8% right now, a move that would represent a 700% increase of the tax on gold in little over a one-year period. Welcome to the pre-emptive strike I discussed above and the Indian equivalent of the tyrannical US Executive Order 6102. How Is The Current Administration Achieving the Goals of Executive Order 6102 in the US Today? Through Psychological Warfare Finally, what methods are the Rockefellers, the Rothschilds and their agent bullion banks in the US employing to re-enact Executive Order 6102 in the United States? Again, since re-education about the monetary and banking system has been completed in America and only a tiny percentage of Americans understand that only gold and silver are money, and all US dollars are nothing but credit (aka counterfeit money), ownership of physical gold (and silver) by the masses is accordingly low. Thus, bankers have also decided to use pre-emptive psychological strikes of irrational fear against the people to accomplish the mission of Executive Order 6102. If the bankers can keep Americans from buying physical gold and physical silver and keep Westerners invested in hugely devaluing dollars, Euros, Pounds, and yen in the form of the global stock markets, then they have achieved their mission of perpetuating our massive fiat counterfeit money bubble. Why do we have a counterfeit money bubble? Because the intrinsic value of all counterfeit money is zero. Thus, when this counterfeit money bubble pops, fiat money millionaires will be welcomed to poverty. In order to keep people “fearful” of gold, bankers have deliberately introduced massive artificial volatility into the price of spot gold and spot silver through their manipulation of paper derivative products along with these three additional techniques I explain in this article. Remember by keeping people fearful of buying gold NOW with massive propaganda, then there is no need for bankers to confiscate peoples’ gold LATER. When the bankers finally massively revalue gold in coming years as they did in 1933, when the revalued gold by 69% higher AFTER confiscating it from the people, they will own the most gold and will benefit the most of all peoples, and cause enormous losses of wealth among all people that they have convinced to hold on to fiat counterfeit paper money like the US dollar, the Euro, the Pound Sterling and the Yen. To summarize, bankers have initiated pre-emptive strikes against Western citizens using rigged volatility in gold and silver markets to create and foster fear among Westerners regarding a collapse of physical gold and physical silver prices that simply will not happen. The end effect of these tactics are the exact same as Executive Order 6102: a citizenry that continues to store his wealth in a paper fiat currency that buys less and less every year and almost zero amounts in real money, physical gold and physical silver. A Simple Example That Should Make It Crystal Clear That ALL Fiat Currency Today is COUNTERFEIT Money I leave you with a very simple fact-based story to conclude this article. If you had kept $20,000 in a bank savings account since 1913, you would still only have $20,000 dollars in your bank account. But remember that in 1913, one would have been able to buy a very large house with $20,000 whereas today, one can not even buy a decent new car with $20,000. Obviously, the nominal amount of dollars has no meaning and accumulating significantly more dollars does not make one richer as many American foolishly believe today. To buy the same $20,000 house one could buy in 1913, since bankers have destroyed 98% of the purchasing power of the 1913 dollar with their counterfeiting efforts over the last 100 years, one would now need 50X the amount of 1913 $20,000 dollars today, or a whopping $1,000,000 2013 dollars just to buy the same house that $20,000 could have afforded you in 1913. Another way of stating that is even if you had $999,999 2013 dollars versus only $20,000 1913 dollars, you would still be poorer today than you were in 1913, an astounding fact. Now imagine you had converted your $20,000 into gold in 1913. In 1913, gold was priced at $18.92 an ounce. Therefore $20,000 would have bought 1,057 ounces of gold. Instead of holding $20,000 in the bank since 1913, had you converted this COUNTERFEIT money in the form of US dollars into the REAL money of gold and simply held 1,057 ounces of gold in a vault since 1913, your 1,057 ounces of gold in vault would now be worth 1,057 ounces * 1,580 an ounce = $1,670,060 2013 dollars. And when gold reaches $5,000 an ounce, these 1,057 ounces will increase from $1,670,060 2013 dollars to $5,285,000 future-year dollars. I’ve actually told a class full of 10-year old children that hadn’t yet been exposed to the re-education process this very example and asked them what would they want today given the following choice: $20,000 of USD or $20,000 of gold? 100% of them answered $20,000 of gold because this example makes the decision so clear and so simple. What is money? Something that holds its value over 80 years and increases 83X in value (gold) against the “thing” (USD) we call money today, or something (USD) that plummets to 1/50th of its value in 80 years? This example alone should be able to convince 100% of people of what is REAL money and what is COUNTERFEIT money and that the bankers objectives are to keep you from owning REAL money and to keep you holding COUNTERFEIT money. The lunacy of bankers’ re-education campaigns, in which they have instructed people to believe that COUNTERFEIT money is REAL money and REAL money is COUNTERFEIT money, is that most people that would never consider buying gold today or turning their paper COUNTERFEIT money into REAL gold money or REAL silver money have heard about the US government stealing gold from American citizens through Executive Order 6102 in 1933. And most people understand that you would not steal something that has NO VALUE and give people something in exchange that has MORE VALUE. Yet when the bankers stole people’s gold in 1933, they gave them fiat COUNTERFEIT US dollars in exchange for their REAL money of gold. Yet today, people cannot connect the simple dots and still choose to hold FIAT CURRENCIES that have LESS VALUE and GUARANTEE THEM LESS WEALTH in the future instead of simply exchanging it for something of MORE VALUE that GUARANTEES THEM MORE WEALTH in the future. The definition of a counterfeit good is something that looks like the original but is of lesser value than the original or dilutes the value of the original. That is exactly the definition of all fiat money today. In the example above, a 2013 dollar is only worth 1/50th of the value of a 1913 dollar because every additional COUNTERFEIT dollar the Central Banking families creates dilutes the value of that original 1913 dollar. The funny thing is, as I’ve explained in this article, governments and bankers worldwide are successfully imposing the end goals of Executive Order 6102 on us with impunity and without as much as a single whimper out of us due to our utter failure to understand the artificial rigging mechanisms bankers use to set spot gold and spot silver prices. Thus whenever the criminal banking cartel utilizes these rigging mechanisms to game gold and silver prices lower and release through the media and banks that they own that gold and silver are bubbles that have just burst, this is sufficient to keep millions of Westerners from ever buying their first physical ounce of gold or silver. Or even worse yet, bankers have shuttled people into phony ETFs like the GLD and SLV that likely own COUNTERFEIT gold and silver. I am still amazed today, that when I tell people to convert as much of their fiat paper into physical gold and physical silver as possible to protect their wealth, that the majority, not the minority of people, still view gold as the risky asset and fake COUNTERFEIT fiat money as the safe asset even though I have informed them that the US dollar that has lost 98% of its value and purchasing power since 1913! Yes, all those suits at the big global commercial investment firms are wildly wrong when they inform you that you should have 5% or 10% of your physical assets in gold. At SmartKnowledgeU, I’ve been telling our clients to own gold since $580 an ounce and silver since less than $11 an ounce because of the indisputable facts of monetary history. In my 2008 article, in which I explained why $800 gold was still cheap, the media was trying to sell the people an idea that $800 gold was massively expensive and signs of the existence of a gold bubble back then, furthering this notion with the lie that “gold [was] at 27-year highs.” In this article, I deliberately used the grossly under-reported US “official” inflation statistics to determine an inflation-adjusted gold price to illustrate why gold was still a great value at $800 an ounce, as in 2008, trying to cram 100% truth down the throats of an unwilling-to-listen populace by using the real inflation statistics of Shadowstats would have been a near impossibility. How To Protect Your Wealth Against the Counterfeiting Racket of Central & Commercial Banks Worldwide The conversion of 5% to 10% of your assets into physical gold (remember, never buy paper gold) will be insufficient to protect your wealth when hyperinflation arrives due to the legalized counterfeiting racket known as the Central Banking and Commercial Banking system. You should be converting as much of your fiat currency into physical gold (and silver) as possible, even 90% or more, if that is possible for you to do. As far as those that say doing so is impractical, research the avenues to do this that now exist, use the grey matter inside your head called your brain, and you will find that technology has rendered the accumulation of REAL MONEY today as very practical. History already tells us what is coming in the future and what is the right thing to do. Even so, due to the mass media spreading 1000 articles of lies and propaganda about gold and silver for every one article of truth that surfaces in the independent media, the vast majority of people will still ignore history and insist on subjecting themselves to massive wealth destruction by holding on to their fiat COUNTERFEIT money and self-inflicting Executive Order 6102 upon themselves when no one is forcing them to do so. Of course, if people would only understand the monetary truths and could digest the monetary facts contained in this article without regurgitating them to make room for the brainwashing propaganda of bankers, we already would have overthrown the corrupt criminal global banking cartels years, or perhaps decades ago, through peaceful means. If you don’t understand what this statement means, simply re-read this article and the solution to defeating the bankers’ systematic mission of bankrupting the world’s citizens will soon become clear. What we know from history, especially in the banking world, is that unfortunately we are destined to repeat the same mistakes of our ancestors despite being presented with indisputable historical evidence that should move us to action. Thus, I’m leaving it up to each one of you to spread the monetary truth of this article to everyone you know until understanding of monetary truth becomes as common today as it once was throughout the 1800s and early 1900s. Arguments Against the Re-Implementation of a Gold Standard Are ALL Without Merit Though I have not discussed how counterfeit money allows bankers to rig the prices of all markets and immorally and unfairly hoard all wealth for themselves, as this is a topic beyond the scope of this article, please refer to the below video titled “Wealth Inequality in America” to see a visual representation of just how obscene wealth distribution in America has become. Also you can read this excerpt from my recent book The Golden Gift, that explains why these arguments are without merit. I imagine this wealth distribution pattern to be just as obscene in many EU nations as well. In addition, I believe that the top 1% of the wealthiest in America currently also own the lion’s share of all physical gold and physical silver in the United States. Because this top 1% benefits the most from rigged financial markets and truly understand the rigging games as opposed to the masses, they are the most likely to have been converting their COUNTERFEIT fiat paper money into REAL money like physical gold and physical silver. Now I want to make it crystal clear that my intent is not to demonize the top 1% of the wealthiest people in any country as surely there are some entrepreneurs among this group that earned their wealth honestly. However, those that earned their immense wealth through immorally rigging markets, like the LIBOR market, the gold and silver market, and so forth, are the ones for whom I have much disdain. Stay tuned for Part 2 next week on my blog, theUndergroundInvestor, as I’ll discuss more of the psychological warfare tactics that bankers have employed against us in the academic system that have led us to down the path of convergent v. divergent thinking that ultimately is responsible for our failure to understand a reality of our monetary system that is very different than the one bankers have taught us to internalize through their, not our, academic system. Here’s some food for thought in the meantime before my next article: I have found it much easier to teach home-schooled teenagers to understand the reality of our Counterfeit monetary system today than teenagers that attend traditional schools in the public/private education system. Why do you think the fable of “Curiosity killed the cat” is so widely known and popular among children? Instead of teaching kids how to find Waldo (Wally), parents should be teaching their kids how to spot counterfeit money and to replace it with real money. About the author: JS Kim is the founder and Managing Director of SmartKnowledgeU, a fiercely independent research and consulting firm that focuses on wealth building through the accumulation of gold and silver assets with a mission of returning the world to the use of REAL MONEY once again. To learn more about the topic of this article, including how a return to a TRUE gold standard (Bretton Woods was not a true gold standard) could return the world to a time of economic prosperity and help eradicate poverty, consider JS’s latest book, The Golden Gift, of which he will be donating 100% of all profits from first-year sales to orphanages around the world. Follow us on Twitter @smartknowledgeu.
James S. Brady Press Briefing Room 1:05 P.M. EST MR. CARNEY: Good afternoon, ladies and gentlemen. Thank you for being here in the Brady Briefing Room for your daily briefing. Before I take your questions I have a couple of topics I wanted to raise. First, tomorrow the United States Senate will hold a cloture vote on the nomination of Caitlin Halligan to serve on the U.S. Court of Appeals for the District of Columbia circuit. It is disappointing that a cloture vote is even necessary for someone as clearly well-qualified as Ms. Halligan, who has bipartisan support from lawyers and law enforcement. When Republicans filibustered her nomination in 2011, several of them hung their objections not on her qualifications or her judicial philosophy, but on the D.C. circuit workload. In essence, they didn’t object to her as a judge, just that the seat in their minds did not need to be filled. But since then, there has been an additional vacancy on that circuit, leaving the court with four vacancies -- 36 percent vacant. In fact, the court has never been this understaffed in its history and the caseload has increased almost 15 percent since 2011. After 726 days of delay, we strongly urge the Senate support an up or down vote for this well-qualified nominee with credentials from across the political spectrum for a court that is 36-percent vacant. I have some slides that I hope will turn up. In fact, last night we released an infographic on WhiteHouse.gov showing that Caitlin Halligan is not alone in suffering endless delays for a vote. As you’ll see, 78 percent of President Obama’s circuit court judges have waited more than 100 days for a vote, compared to 15 of President Bush’s nominees. On the second slide, this obstruction also applies to President Obama’s district court nominees -- 42 percent of our district court judges have waited more than 100 days for a vote, compared to eight of President Bush’s nominees. On slide three, you can see that the average wait time for our judicial nominees to get a vote on the floor of the Senate, both for the circuit court and the district court is three to four times as long as it was under our predecessor. This is a problem that needs to be resolved for the sake of our judicial system, for the sake of a carrying out of justice in our country in an expedited and deliberate manner. And we have seen some positive signs of late that perhaps the logjam is beginning to break on Capitol Hill when it comes to confirmation of judges, and we certainly hope that the spirit that informs that change, modest as it has been, will inform the vote the Senate takes on Caitlin Halligan. Secondly, if I may, I would like to note that on Thursday the President will sign the reauthorization of the Violence Against Women Act. He will be joined by the Vice President, who authored the original law in 1994, as well as women’s organizations, law enforcement officials, tribal leaders, survivors, advocates, and members of Congress. The law strengthens the criminal justice system’s response to crimes against women, including domestic violence, sexual assault, and trafficking. It’s a very important milestone that was reached with the vote most recently in the House that allowed this to reach, finally, the President’s desk, and he looks forward to signing it. And with that, I go to Julie. Q Thank you. Why did the White House decide today to release the OLC memos on the drones to the Senate Intelligence Committee after having said you wouldn’t before? MR. CARNEY: We have worked with the committee to provide information about legal advice and we have worked with them to meet their concerns in what the President believes is a unique situation, and to, in doing so, help expedite confirmation. What we have said all along is that with John Brennan, the issue here should be -- as it should be with every nominee -- the qualifications of the nominee. And on the merits, John Brennan is a uniquely and highly qualified nominee to be the next Director of the CIA. And we urge the committee to vote, and we urge the Senate to confirm him as quickly as possible so that he can get about the business of running the CIA -- again, a job to which he is uniquely suited. Q Is this now the full complement of the OLC memos that the Senate Intelligence Committee is going to have access to, or are there any others that they are keeping private? MR. CARNEY: I would refer you to the Department of Justice, but I can simply say that we have worked with the committee to provide information about advice -- legal advice on issues of concern to committee members, and have done that, recognizing that this is a unique and exceptional situation. But it is in keeping with the President’s commitment, which he reiterated in his State of the Union address, to work with Congress to be as transparent as possible about these actions. And we simply look forward to a speedy confirmation for John Brennan. Q Republicans on the committee have obviously been asking for information as well but related to the Benghazi attacks. Is that information being sent to them? Are they getting any additional backup emails that they’ve been asking for? MR. CARNEY: I think we have provided information to committee members who have been interested in that matter, again, in an attempt to be helpful and cooperative as we move this process forward. That issue then returns me to my point earlier, which is that John Brennan's nomination ought to be considered on its merits, on his qualifications, not on disputes about an issue that did not involve John Brennan's nomination to be the CIA director, or Senator Hagel's nomination to be Secretary of Defense. We have been enormously cooperative with Congress on the issue of Benghazi -- hours and hours of testimony, including the Secretary of State -- 10,000 pages of documents, I believe; numerous hearings; and working with members on their concerns with regards to these nominations. But, again, our nominees ought to be considered on their qualifications. We were glad to see Senator Hagel confirmed as Secretary of Defense, and we look forward to John Brennan being confirmed as CIA director. Q And then just quickly on North Korea, does the White House believe that the package of sanctions that the U.S. and Chinese diplomats have apparently agreed to up at the U.N. will be the step that’s needed to get North Korea to back away from its nuclear program? MR. CARNEY: Well, as Ambassador Rice indicated this morning at the United Nations in New York today, the United States tabled a draft Security Council resolution that responds to North Korea's February 12 nuclear test. The draft resolution, which is agreed upon by the U.S. and China, provides a credible and strong response that further impedes the growth of DPRK's nuclear weapons and ballistic missile programs and its ability to engage in proliferation activities. We anticipate adoption of this important resolution later this week. U.S./U.N. has more information if you need more details about it, but I think this demonstrates an international consensus about the urgent need for North Korea to abide by its international obligations -- to get right with the world when it comes to its nuclear weapons ambitions, and in doing so, begin to end the isolation that the government and the country of North Korea has found itself in because of its pursuit of nuclear weapons. Matt. Q Staying on North Korea for a second. The North Koreans threatened to scrap the armistice that ended the Korean War, and to sever a military hotline with the United States if South Korea and Washington press ahead with war games. And North Korea has been known to bluster before, so can you tell us how seriously, or not, the administration is taking this, and what, if any, action might be planned? MR. CARNEY: Well, the DPRK will achieve nothing by threats or provocations, which will only further isolate North Korea and undermine international efforts to ensure peace and stability in Northeast Asia. We have urged the North Korean leadership to heed President Obama's call to choose the path of peace and come into compliance with its international obligations. Again, these provocations are not new -- I think to your point -- but they certainly are not helpful to the North Korean people, and they're not helpful to the effort to bring North Korea into compliance with its international obligations. Q Okay. And another one on Venezuela. Right now, the Venezuelan Vice President is giving a live address. And of course, there are lingering questions about the declining health of President Hugo Chavez. But what Maduro says is that they've uncovered a conspiracy against the Venezuelan government and he’s just announced that the U.S. diplomatic attaché has been expelled for plotting against the Venezuelan government. Are you aware of this -- MR. CARNEY: Obviously, you're reading out a real-time press conference or statement from Venezuela. I can simply say that questions about President Chavez's health should be directed to the Venezuelan government. I have no reaction to the charge that you've just repeated. I can tell you that we continue to seek a functional and productive relationship with Venezuela. And we remain open to a dialogue with Venezuela on a range of issues of mutual understanding -- including counter-narcotics, counterterrorism and the commercial relationship between the countries, including energy. But for more on that, I think we'll have to wait and see if there's a reaction that might come from the State Department. Q House Republicans yesterday talked about -- I guess they just sort of unveiled this -- a proposal to extend the CR through the rest of the fiscal year. And it would include some, I guess, some provisions in there that might soften the sequester somewhat -- its impacts on the Defense Department -- although, the programs that they selected might not be, I guess, the same programs that Democrats would select in either the House or the Senate. What's the President's reaction to that? MR. CARNEY: Well, we are reviewing the proposed continuing resolution, so I don't have an official position to provide to you today. I think I would point you to a couple of things. One is we believe that a CR should be practical, it should be non-political, and it should be consistent with levels of the Budget Control Act. And it is our understanding -- at least on the last point -- that the CR in question is consistent with the levels of the Budget Control Act. I would wait for a further response from us as our experts examine it and make assessments about it. But our interest is not in -- as long as these goals are met, that we do not go headlong into another manufactured crisis -- we are focused on trying to find common-sense solutions to the challenges that face us. The President has -- when it comes to deficit reduction, which is the issue on the table -- consistently put forward common-sense, middle-of-the-road solutions that represent balance and have met the Republicans halfway. And he will continue to pursue that with the Congress as we try to address both the sequester and the broader challenge of reducing our deficit in a way that's fair and that puts us on a fiscally sustainable path. But for more on the CR, we'll have to wait a little bit while we assess it. Q And a number of Republican senators have stepped forward I guess in the last several hours to say that the President has reached out to them on the sequester. Is this a charm offensive? MR. CARNEY: The President is engaging with lawmakers of both parties and will continue to do so. He stood before you, I believe it was Friday, and talked about the need for bipartisan work on common ground when it comes to reducing our deficit. We should be able to achieve that. He has put forward a proposal that addresses the need for entitlement reform in a very serious way as part of a comprehensive package that includes tax reform that would close loopholes and cap deductions in a way that Speaker Boehner said was his position just two months ago. So both sides, if you will, are for entitlement reform and tax reform. And really, one of the issues that seems to be still a matter of debate is what do you do with the revenue gained from improving our tax code -- closing unnecessary loopholes, eliminating special breaks for the well-connected and well-off. Do you take that and convert it into tax cuts that disproportionately benefit the wealthy? Or do you apply it to deficit reduction, which is an eminently conservative and reasonable position to have? That's the President's position. So he is reaching out and talking to members about a variety of issues -- not just our fiscal challenges, but certainly the fiscal issues are among the issues he is talking about with lawmakers. Q And should the reaching out be, I guess, thought of in any way as perhaps the President or the White House not being very comfortable with what the House is talking about right now in terms of extending the CR, that this might evolve into another one of those manufactured crises? MR. CARNEY: I wouldn’t necessarily link the CR, which is a measure that if it meets the test that I talked about would simply continue to fund the government and avoid a government shutdown. It does not in any way -- would not in any way resolve the challenges about the sequester or, more broadly, how do we further reduce our deficit so we put ourselves on a fiscally sustainable path by achieving that $4 trillion-plus goal over 10 years of deficit reduction. That work remains to be done. And the President is interested in finding the members of the “caucus of common sense” and working with them to bring about a resolution to this challenge because we should be able to do it. He’s put forward and finally, I think there’s some recognition here -- although occasionally you see some Republican leaders insist the President doesn't have a plan, and perhaps they don't have the Internet in those offices -- but the plan is available to all of you. It has lived in various incarnations, including the President’s submission to the super committee back in the fall of 2011, the President’s budget, as well as the President’s proposal to the Speaker Boehner at the end of the year, which remains on the table and available to be taken up, and we hope it is. Q Can I follow up? MR. CARNEY: Yes, Ann. Q Thank you. When is the President going to put out his budget that traditionally comes out in February? Was the delay caused at all by the sequester? Or is the CR a factor in the budget that he will produce? And why not do tax reform as one larger package later this year? If so, when would that be? MR. CARNEY: Okay, let me address the portions of the question. As I’ve said in the past, administration officials are working on the President’s budget and we will provide it. I don't have a specific date for you. There is no question that the series of crises, largely manufactured, that we and Congress have been having to deal with over the past several months have had an impact on that process. But the fact is we’re working on it and we will submit a budget. And we note that the Senate will be submitting a budget, as well as the House. And I think the President believes that there is some reason to hope that we can take that simple fact and pursue what a lot of people refer to as regular order, which is to use that budget process to try to resolve some of these issues, and maybe that's an avenue to do it. There’s an interest on both sides to return to regular order, as opposed to a situation where we’re dealing with these unique and arbitrary deadlines and cliffs and crises and things. But the broader issue is how do we go about the job of reducing our deficit further, achieving another $1.5 trillion to $1.8 trillion in deficit reduction that would bring us to $4 trillion or more over 10 years in a balanced way. Thus far the President has signed into law $2.5 trillion in deficit reduction. That has come largely in spending cuts. That's an important fact to note. The Republican leaders in the House in particular, but also in the Senate, like to say that the President got his revenue increases on January 1st, but the fact of the matter is that even with the raising of the income tax rate for the wealthiest Americans back to the level under Clinton, the income achieved from that -- the revenue achieved from that is something like $620 billion. And that still remains just a small -- a relatively small portion of the overall achievement in deficit reduction thus far. It does represent balance. We need to continue with the balance, and the President’s proposal, his offer to Speaker Boehner continues that. It includes entitlement reform savings, as well as savings from tax reform. And tax reform, again, as I said, is something that Republicans say they're for. All we’re asking when we say let’s get tax reform and entitlement reform done together in this effort is for the Republicans to adopt the position that Speaker Boehner had two months ago. Q When this year do you think tax reform would come up as a complete issue? MR. CARNEY: I would not predict when this would happen. Obviously the President hopes that we can have movement on this issue sooner rather than later, because it’s one that has tied up Washington unnecessarily and to the nation’s detriment often. That’s certainly what we’re living through now with the imposition of the sequester, a wholly manufactured crisis, wholly unnecessary, that’s happening because of a decision by the Republicans in Congress not to go along with the basic proposition that balance is the right way to reduce our deficit. So I think the sooner the better. But I’m not saying it will happen sooner. I’m saying that the President is pursuing -- taking an approach that is looking for partners who agree with the basic idea that we can do these two big things, we can reach that goal of $4 trillion through entitlement reform and tax reform. And he has put forward a very reasonable solution to that end. Kristen. Q Jay, thanks. Senator Lindsey Graham is telling reporters that part of the President’s message today to him was that he wants to revisit the idea of a grand bargain. Can you confirm that? Is that really the central message that -- MR. CARNEY: Well, I’m not going to read out conversations -- individual conversations that the President has had. I think that it’s fair to say that when I talk about, and the President talks about finishing the job of hitting that $4 trillion target that was originally laid out when we were all talking about grand bargains, and the Simpson-Bowles Commission was putting its original plan forward, and others were doing that same kind of work, that achieving -- finishing that job you could say would be the completion of the goals set when the grand bargain negotiations were started. The task is smaller numerically now because of the achievements that have taken place already and the $2.5 trillion in deficit reduction. But it is also true that what remains is hard stuff -- entitlement reform and tax reform. But it should not be that hard because the President has led on this issue by demonstrating a willingness to agree to entitlement reforms that, I think it’s fair to say, most of you would recognize as tough choices for Democrats. All he is asking is that Republicans make similarly tough choices for themselves, and that is to go along with a reasonable proposition, which is that everybody ought to share in the burden of reducing our deficit. That is the best thing to do for our economy. It’s the best thing to do for our middle class. And it is an absolute fact in our history that when our middle class is strong, when the economy is growing from the middle out instead of from the top down, our country is stronger and our people are better off. Q Is it fair to say he sees this as an opening, a new opportunity to achieve the rest of the grand bargain, though? MR. CARNEY: I think that he’s been very transparent about his desire for Republicans to take up his offer which remains on the table from the fiscal cliff negotiations and to move forward with a balanced approach to deficit reduction that includes revenues through tax reform -- much as Speaker Boehner said was possible to the tune of a trillion dollars in December. The President’s proposal I think is something short of $600 billion. So it doesn’t seem -- it doesn’t make a lot of sense that what the Speaker thought was possible in December, and possible in a way that could produce a trillion dollars in revenue, is now impossible under the President’s plan. And he has put forward serious entitlement reform. So he'll continue to have these conversations, continue to have these discussions with lawmakers. I want to make clear that he’s not -- when he talks to lawmakers, it’s not just on one subject. You have seen that we continue to work on immigration reform; we continue to work on measures to reduce gun violence; we continue to work on all of the items on the President’s agenda. And conversations he’s having with lawmakers include those issues as well, not just our fiscal challenges. Q And, Jay, if you look at some of the latest polls -- the Gallup Poll, the President’s approval rating has dropped. If you look at the CBS News-Wall Street Journal poll, it seems as though Americans are pretty evenly dividing the blame on the sequester -- 38 percent blaming Republicans, and 33 percent blaming President Obama. Was there a miscalculation on his part not to negotiate more with Republicans sooner? MR. CARNEY: Well, I think you're misrepresenting his position in that he was making clear that his proposal was on the table, a proposal that represented compromise. The position Republicans took was no compromise, no way -- I think the Speaker of the House said he would never negotiate with the President again. Right? That's him saying it. I think Republicans made clear in the run-up to the implementation of the sequester that they would have no discussion about revenues. Well, that hardly represents a willingness to negotiate a compromise. And the Senate put forward a bill that Republicans filibustered that would have brought down the sequester and postponed the implementation of the sequester in a way that would have allowed Congress to pursue the broader deficit reduction package through regular order. Unfortunately, as I said, Republicans filibustered that. The fact of the matter is Americans are rightfully upset by the dysfunction they see in Washington when you have, in particular, one House of Congress and one party within that House of Congress adamantly refusing to go along with a principle that is endorsed by a vast majority of the American people, including a majority of Republicans out in the country. Q It seems like they're blaming everyone for this dysfunction, though, at this point. MR. CARNEY: Again, the President is focused on trying to find solutions. He's not focused on assigning blame. He wants to work together with lawmakers of both parties to fix these problems, to put our economy on a fiscally sustainable path through further deficit reduction that is achieved in a balanced way that doesn’t ask seniors to bear all the burden, that doesn’t ask middle-class families to carry the load by themselves. The choice of imposing sequester that, as I said yesterday, achieves none of the stated goals that Republicans claim they have, but only does harm to those who will have their hours reduced or their jobs taken away from them, or to industries in the defense sector that will be hard hit, businesses within the defense industry that will be hard hit, because they refuse to close some tax loopholes or agree to the basic principle that revenue ought to be part of the package. So that’s unfortunate. The President is looking forward to how do we move from here to resolve these challenges. Bill. Q General Mattis said earlier today that the Syrian opposition was complicated enough so that he could not recommend arming them, not knowing where the arms might wind up. The Secretary of State didn’t seem to go quite that far. Do you have any guidance? MR. CARNEY: Well, I think we have said all along that we are working with the Syrian opposition and helping them unify, with our international partners, and identifying those elements within the opposition that have as their goal greater democracy for the Syrian people. And we will continue to do that. I don’t see -- I'm not sure what conflict you're suggesting exists between what the Secretary has said and what General Mattis has said. Q It seems that, according to what's been said, that it might be possible that we would find some segment of the opposition to help with arms. MR. CARNEY: Well, again, our policy remains what it has been, which is we do not provide arms to the Syrian opposition. We have provided substantial assistance in general, including the assistance announced by Secretary Kerry in Rome. And separately from assistance to the opposition, we’ve provided substantial humanitarian aid to the Syrian people, and that will continue. But on the issue of arms, I have said consistently and will say again today that we are constantly reviewing our assistance programs, constantly reviewing our policies with regards to Syria, and making changes and adjustments and increases in our assistance according to our assessments of what will help the Syrian people achieve their objectives. Q So when you say you do not supply -- we do not supply arms, you’re speaking in the present and not necessarily in the future? MR. CARNEY: Well, I try never to predict the future, Bill, but the -- Q I mean, you’re suggesting that it might be possible under some circumstances -- MR. CARNEY: My answer to the question has always been we are constantly reviewing the options in front of us, and that includes the issue of providing arms. But our policy today is what it has been, and that is we do not provide arms. Q Jay, on the sequester cuts, Head Start is one that you’ve been focusing on a lot and Republicans on the Hill are saying that Head Start was supposed to get about a 5-percent increase in funding. The sequester, as I understand it, is about 5 percent. So if the cut is about what the rate of growth was going to be, how do you back up that up to 70,000 people are going to be kicked off Head Start if it’s a relatively small cut? MR. CARNEY: Ed, I don't have the tables in front of me, but I will get that information for you. It is entirely inaccurate to suggest that those kids will not lose those slots under Head Start if the -- Q But shouldn’t you -- how do you back up that up to 70,000 will be kicked off -- MR. CARNEY: How do I back up that some claim by a House Republican -- Q No, how do you back up the President’s claim from that podium on Friday that up to 70,000 will be cut? You just said, I don't have the table -- MR. CARNEY: Well, I don't have it front of me. I appreciate -- Q How do you know that it’s up to 70,000? MR. CARNEY: We will get that information for you. Again, I find it remarkable that those who weeks ago and certainly months ago were decrying sequester as the worst possible thing that could happen now embrace it as a victory, and try to diminish its impact on the most vulnerable people in America, including kids who go to Head Start. Is that really the message they want? What does the CBO say: 750,000 people will lose their jobs; the economy will grow by a full half a percentage point more slowly than it would have otherwise. The effects are real, and they affect real people. And I am happy to ensure that you get the information that you seek, but I would be wary of charges that somehow folks out there aren’t going to be affected because -- Q Because there have been other Cabinet Secretaries like on Homeland Security -- so Secretary Napolitano yesterday was at a breakfast with Politico and was saying that there’s long lines at airports already, and then she started listing some airports and literally said, but I have to check. Shouldn’t she know before she says something like that exactly which airports are having longer lines? MR. CARNEY: Well, first of all, as Secretary of Transportation Ray LaHood made clear when he spoke to you from this podium, there will be negative effects on our air traffic because of the reductions in FAA man-hours, air traffic controllers in particular. That's a fact. And efforts to muddy that fact by singling out a certain statement, just that can -- we can do that, but there are real people out there who will be delayed, or who will have their wages cut, or who will lose their jobs as a result of the sequester, while folks in Washington are arguing over whether this particular impact happened when we said it was going to happen, or a week later, or a month later. Q Except I’m sure you’re aware that on social media there are real people that you cite who are tweeting from airports all over the country saying, I’m not seeing any long lines. Now, that may just be anecdotal -- MR. CARNEY: Ed, I think you should go with the story that the sequester is having no effects. Q No effect on airports. One other quick thing -- TSA -- the Secretary said that TSA is impacted because their budget has been cut, that that’s why we’re getting longer lines at the airports. It came out today that TSA, on February 27th of this year, had a new contract for new uniforms to the tune of $50 million. Do you think it’s a good idea for the TSA, two days before the March 1st deadline that you and every Cabinet Secretary has been up here warning about, you’ve got to really be careful with the pennies right now -- why would they have a $50 million contract? MR. CARNEY: Ed, I appreciate the question. Obviously TSA would be well suited to answer it, as would DHS. I am not aware of it. Peter, and then Roger. Q Jay, could you give us your thoughts on the Dow reaching a record high, and also what it might say about an economy -- the economy? We have the Dow at an all-time high, but unemployment still remains stubbornly high. MR. CARNEY: Well, I don’t comment on markets. I would simply say that we have an economy in 2013 that outside economists say and I think government economists agree is poised to grow and poised to create jobs, if only Washington did not unnecessarily hinder that progress. And what we know, unfortunately, is that if Washington were not in the way here when it came to imposition of the sequester, the growth that we do see and the job creation that we do see would have been better, would have been greater, if it were not for this adamant refusal to approach this problem in a balanced, sensible, common-sense way. Now, again, as I’ve said already, the President is engaging with lawmakers in the hope that we can move forward in a balanced way because he believes and knows that there are Republicans who agree with the vast majority of the American people, with the majority of Republicans in the country, with the majority of independents in the country, that we should do this in a balanced way, that we should include revenues as well as entitlement cuts, spending cuts when we further reduce our deficit. And so he’s looking for solutions. He’s going to work with -- or hope to work with those members of Congress who are interested in common-sense solutions. But we know that the economy is poised to do well. We know that the sooner Washington resolves these challenges it will do better. Q Just to follow -- is the President frustrated with congressional Republican leadership? Is that one of the reasons he is reaching out to some more rank-and-file Republican members in search of a compromise on fiscal issues? MR. CARNEY: Well, look, the President is interested in working with lawmakers who are newly arrived, lawmakers who are in leadership, lawmakers who are somewhere in between, to find common-sense solutions. And it's a fact that in his negotiations with the Speaker in the past he has had reason to believe that real bipartisan compromise was possible. That's why he pursued those negotiations. That's why he compromised in the way that he did and he put forward offers that represented true good faith in their attempts to meet Republicans halfway. And he will continue to do that. The offer to Speaker Boehner remains available. It is also true that, thus far, we have not seen from the leadership an interest in taking up balance as an approach to dealing with our fiscal challenges. But we have seen indications that others in the Republican Party, as well, obviously, as Democrats, believe that balance is a wise way to go when we talk about achieving both entitlement reform and tax reform. Roger. Q Back to the budget for a moment. Senator McConnell said on the Senate floor this morning that the budget would be coming out on April 8th. Can you clarify that? MR. CARNEY: Again, I don't have any information for you. I don't believe that the White House is looking to the Senate to make announcements for it. So I don't have a date for you, Roger. Q To follow up -- and I'm sure this will come as a surprise -- he also said that the budget timing is politically motivated and irresponsible. Do you want to comment? MR. CARNEY: I don't. Q Jay, as the White House is gauging the pulse of the American people, has there been an uptick in letters and calls to the White House about sequestration and what's happening? MR. CARNEY: I don't know the answer to that question. I can take it and we can see. Q Please. And also, I want to find out when will the President say when? And I'm reminded about something that he said at the podium last week. He said he's going to make hard decisions that some in his party will not like. Virginia Congressman Bobby Scott says the solutions to sequester are about as bad as sequester itself. So when does the President say, okay, this is how far I will go? MR. CARNEY: The President has made clear that he does not support budgetary practices that claim as their goal putting our fiscal house in order that ask all of the burden to be borne by senior citizens or middle-class families or the most vulnerable among us. He will not support that approach. I think that has been consistent throughout the several years that we've had this debate. What he has been willing to do is make clear that if we take a balanced approach, we can enact spending cuts in our discretionary non-defense budget that are serious, but allow us to continue to invest in key areas of the economy like education and research, and development and innovation, and clean energy technology. And we can do that in a way that still brings our discretionary non-defense spending to a level that it has not been since Dwight Eisenhower was President. If we do it in a balanced way, we can reform our entitlements in a way that preserves these incredibly crucial programs for our senior citizens for generations to come and strengthens them, rather than the alternative, which is if you don't do it in a balanced way, as we've seen in the past, you have to gut those programs or end them as we know them, or voucherize them in a way that just shifts costs enormously to seniors. And that's something the President opposes. Q But you have Democrats within the President's own party who are vehemently opposed to those cuts in entitlements. Even if it's administratively, in Social Security or Medicare, they are vehemently opposed. So when will the President say when, and will the President listen to his own party? MR. CARNEY: I think the President made clear when he was here on Friday, as he has many times, that he has made some tough choices in his proposals that he understands are difficult for some Democrats, often many Democrats to go along with. He believes they're within a context of a broader deal, if you will, within a context of a balanced deal that includes tax reform that generates revenues for deficit reduction. The entitlement reforms that he has proposed are sensible. They protect the programs that help our seniors and others. And he knows that they are tough decisions. And I think your question in a way makes his point, which is that he has led on this issue in a way that I think leadership has often been defined in Washington, which is making decisions that are difficult politically within your own party. And what we have not seen from Republicans thus far in this debate, at least from the leaders, is a commensurate willingness to make the tough call and say, you know what, in the name of broader deficit reduction and getting some serious entitlement reforms and getting our fiscal house in order, we should go along with tax reform that produces revenues, much as the Speaker of the House said he wanted just two short months ago. Q You said tax reform that generates revenues for deficit reduction. How is that different than just tax reform that generates revenues? MR. CARNEY: Because the distinction I'm making is that the Speaker has said that he still believes that those loopholes should be closed and those -- Q Right, by revenue-neutral -- MR. CARNEY: -- revenue neutral, and that the savings from that tax reform should be funneled into tax cuts through lowered rates. And as we know, and every economist will tell you, lower rates results in a disproportionate benefit to wealthier Americans. Again, we haven't seen anything laid out specifically from the Republicans on how they would envision this tax reform and who would benefit, but if you're saying we should reform our tax code and then funnel that into tax breaks, as opposed to funneling that into deficit reduction, I think -- Q How do you funnel revenue into deficit reduction? You just get revenue. You can't say that those revenues automatically get -- MR. CARNEY: Right, and the President's plan would, as he has put forward numerous times, would generate revenue through tax reform as well as savings through entitlement reforms. And the combination would account for roughly $1.8 trillion in further deficit reduction. Q Okay. One quick question about immigration reform. Would the President sign a comprehensive bill that did not include a path to citizenship? MR. CARNEY: The President has made very clear that he believes a path to citizenship is a vital component of comprehensive immigration reform. This is in keeping with bipartisan efforts in the past. It's in keeping with the bipartisan discussions that have been underway in the Senate with the so-called Gang of Eight. So he is encouraged by the progress that’s been made thus far in the Senate by that bipartisan group, and he hopes that that progress will continue. Q But would he sign a bill that didn’t include a path to citizenship? MR. CARNEY: Well, I'm not going to speculate. I think the answer is pretty clear. He believes that a path -- Q The answer is no? MR. CARNEY: -- a pathway to citizenship is vital to a comprehensive immigration package, so, yes. Q Mine follows this. MR. CARNEY: Sure. Q On Jeb Bush’s comments yesterday, I'm just wondering if, as a result, does the White House believe that it has made it harder for the President to work with Republicans in Congress now that Jeb Bush has come out against a path to citizenship? Does it move the whole debate to the right? MR. CARNEY: Well, I would leave it to you and others to assess the political dynamics at play here. I would note that numerous Republicans believe that part of comprehensive immigration reform has to include a pathway to citizenship. I would also note that -- just to be clear -- that the President's -- what the President has put forward in his blueprint and what others have been considering does not give an advantage to illegal immigrants. It makes clear that they have to go to the back of the line when it comes to applying for citizenship. And that’s a key component of the President's blueprint. All the way in the back, yes. Donovan, you're next. Sorry. Q Today, China announced it would increase its defense budget by 10 percent. How does the U.S. see this? Do you think this will give stability in the region for all concerned? MR. CARNEY: I don’t have a specific reaction. Obviously, we work very closely with our international partners in -- well, our partners in the Asia Pacific region. We are a Pacific power and we have significant interests in the region. We engage with and work with our Chinese counterparts on a variety of issues, both economic and security-related. But for specific reactions to that, I would probably refer you to the Defense Department. Donovan. Q Thanks, Jay. A little bit of a follow-up on something Kristen and April asked. Gallup had a survey recently that showed 51 percent of the American people have no idea whether the sequester cuts are good or bad. And, as Kristen noted, the President’s approval rating dropped seven points in a week. So it’s clear the American people are blaming him, no matter what it is -- MR. CARNEY: Whoa, whoa -- before we say anything is clear based on one poll, could we just remember, just think back a few months to the summer and fall of 2012, and understand that we’re here focused on the President’s agenda, getting the work done that we think is most beneficial to the middle class. And I would caution everyone -- I’m not saying this is a bad poll at all. I have no idea. I haven’t even looked at it. But I would caution everyone to not suffer from amnesia about the folly that comes from chasing one poll’s results and making grand conclusions about it. Q Sort of like Romnesia? MR. CARNEY: It could be. Anyway -- Q So can I just finish my question? Sorry about that. So over half don’t know whether sequester is good or bad. He’s been out stumping on this -- MR. CARNEY: I’m stunned that sequester or that that many people even know what sequester is because it is -- I mean, it’s a term that most people are familiar with only if they’ve done jury duty, right, so it’s not -- it doesn’t really make a lot of sense when it comes to budgetary issues. But, sorry, proceed, Donovan. Q If they’re furloughed they know. If they’re furloughed they know what’s going on. MR. CARNEY: They do know furlough, yes. Q So he’s been out there, though, stumping, speaking across the country and also addressing it from here. How does the White House account for that seeming failure to break through to get his messages out? MR. CARNEY: Well, again, I would argue that most Americans are focused on their daily lives, what they’re doing to ensure that they’re taking care of their families, that they’re making ends meet. And to April’s point, whether they know or have heard about sequester or sequestration, they’ll know that something bad has happened if they get a furlough notice or a layoff notice or a notice that says their child -- in direct contradiction to Ed’s question -- actually loses a slot in Head Start. They will know. And it will be unfortunate. The President said, and it is absolutely true, that we will manage this situation. But it cannot be lost on anyone that it’s unnecessary and that none of this achieves the stated objectives of the Republican Party -- that is, significant long-term deficit reduction -- sequester doesn’t do it; increases in defense spending, which a lot of Republicans say they want, Republican budgets have proposed, it does the opposite; increases in Border Patrol; increases in some of the other priorities that Republicans say they have -- none of this is achieved through sequester. Entitlement reform -- does not happen under sequester. I think for these reasons, Republicans decried sequester, and the Speaker of the House just a few weeks ago said it would harm our national defense and cost thousands of jobs. And he was right then. And when some House Republicans call this a “tea party victory,” or “a home run,” as two House Republicans have on the record, we couldn’t disagree more, because it may be a narrow political victory in some conference room on Capitol Hill, if that, but it achieves none of the Republican Party’s stated objectives and it does direct harm to our national defense and to average folks across the country. Q Thanks, Jay. MR. CARNEY: I’ll take one more. Q The Saudi Foreign Minister said today that negotiation with Iran is a waste of time. Does the White House agree with this point of view? MR. CARNEY: Well, we are engaged with our international partners through the P5-plus-1 process in discussions with Iran. We are very clear-eyed about Iranian behavior, and that behavior has led to a situation where they are more isolated and suffering through an unprecedented sanctions regime -- more isolated than ever before and suffering through this sanctions regime, and that regime has done harm to its economy. And Iran faces a choice -- the leadership in Tehran faces a choice, which is to abide U.N. Security Council resolutions, to abide by international norms and obligations, and by doing so rejoin the community of nations, end Iran’s isolation, give greater hope for the Iranian people -- or continue down the path of flouting those obligations and endure the consequences through greater isolation and greater sanctions, and the ultimate fact that it is our policy that Iran will not and cannot acquire a nuclear weapon. And the window of opportunity here, as I said the other day -- I think yesterday -- will not remain open forever when it comes to Iran’s chances to get right with the world. Thanks. END 1:55 P.M. EST
Mozambique recently made news with the discovery of astonishing amounts of offshore natural gas in the far north of the country. The region (which includes southern Tanzania and is roughly the size of Ireland) has exceeded expectations, with almost no dry wells from exploration activities since the start in the early 2000s. In 2012 alone, major operators announced combined discoveries of 100 trillion cubic feet of natural gas in northern Mozambique. Twenty years ago, gas discoveries in a country as remote as Mozambique would have been less attractive due to logistical hurdles and export restrictions. Natural gas transportation used to be confined mostly to pipelines, but recent advances in liquefied natural gas (LNG) technology, combined with the country's relative proximity to the gas-hungry Asian markets, could propel Mozambique to the frontline of natural gas exporters like Qatar or Australia. Eni and Anadarko, currently the major stakeholders in the Mozambique gas business, have been pushing for the construction of LNG trains -- the facilities needed to liquefy natural gas -- to facilitate exports. Restricted local capacity however, has stalled these projects for now, but if Eni and Anadarko have it their way then Mozambique will be an LNG exporter starting in 2018. LNG demand has been on the rise in the post-Fukushima world. Some European countries will need to replace nuclear energy with natural gas due to changes in energy policy. But particularly in Asia, LNG demand has been projected to grow significantly. In 2012 Bernstein Research expected LNG demand to double over the next decade to 408 million tons a year. Rising natural gas demand, however, has been met by a surge in supply. The media hype about U.S. shale gas has increased expectations, in particular for LNG exports. But the shale gas boom has started to catch on in other countries such as Turkey, the Ukraine, China, India and the UK. Last week, even German Chancellor Angela Merkel announced that Germany of all countries might start developing its large shale gas reserves. Due to its geographic proximity, Mozambique has a competitive advantage in supplying LNG to Asian countries vis-à-vis America and European countries. It comes as no surprise therefore that the U.S. government has started to monitor Mozambique more actively. The LNG demand outlook across Asia is still dynamic, but there are key uncertainties such as policy issues in countries like India, gas prices, the pace of shale development in China and India, and nuclear policies in Japan, South Korea and Taiwan that have to be accounted for the Mozambican production equation. Even more important are future LNG supply outlooks. If exploration and production keep pace with those of past years, rising supply might outstrip demand, effectively making the LNG business less attractive. Even if LNG is one of the fastest growing segments in the gas market, investments are largely going to depend on the economics of LNG production, that is whether gas prices will be high enough for producers to recover their investment costs. Yes, proven gas reserves are very large and thanks to new technologies, large shares of these reserves have become recoverable. But with gas prices being at a historic low (at least in the U.S.), and some analysts forecasting persistent low prices, the economics of LNG projects may no longer add up. This has a series of important implications for Mozambique. While Asia's hunger for energy could potentially make Mozambique very rich, only time will tell if it really pans out. In the case, for example, of a supply surge in Europe, natural gas from Russia and other supplies will become available and search for new markets. These supply surpluses might become a competition for Mozambique's LNG. The US and Japan have increased their talks on LNG exports from the US to Japan; another potentially large consumer that might be lost to Mozambique. Additionally, the construction of LNG trains is very expensive and requires huge capital investments. Allegedly the floating LNG facility in Australia will cost Shell around $50 to $60 billion. If gas prices are low, there will be downward pressures on revenues from Mozambican LNG projects. Whether natural gas demand will outstrip supply or not will be crucial for the future of many LNG projects. Natural gas prices are still significantly higher in Asia than they are in the US, but only time will tell whether this will hold. In any case, Mozambique should be aware of the two future scenarios: one of natural gas demand surplus and one of supply surplus. Better safe than sorry.
James S. Brady Press Briefing Room 12:20 P.M. EST MR. CARNEY: Good afternoon, ladies and gentlemen. Thank you for being here. I just want to note the President has a Cabinet meeting at 1:00 p.m., so we're going to need to move through this quickly. I will try to be precise and concise in my answers and move around as quickly as I can. And for that reason, I have no topper. Associated Press. Q Thank you. Now that the sequester cuts have begun to take effect I'm wondering what we should be expecting from the White House. Are officials going to be trying to point out negative impacts of the sequester? Is there any effort that's going to be underway to try to build some type of public reaction to pressure Washington to avert these cuts? MR. CARNEY: We made clear that the imposition of the sequester will have serious consequences for middle-class Americans across the country. The sequester will have serious consequences for Defense Department contractors, civilian workers, and for our defense readiness. It will have serious consequences for families whose child will lose a Head Start slot, for workers on the border -- border security agents, for air traffic controllers who will have their hours cut. And I'm sure you will be hearing about these impacts from Americans themselves who will wonder why Republicans made this choice, why they wouldn't go along with what they did two months ago, why they wouldn't go along with balanced deficit reduction, why they chose protecting tax loopholes for the few rather than protecting the jobs of the many or protecting our economy. There have been and there will be specific effects that we'll see, and there will be the overall effect, which I don't think anybody argues with -- CBO, Macroeconomics Advisers, Moody’s, others have estimated that we will lose up to three-quarters of a million jobs because of sequester, if it stays in place, and our economy will grow by a full half a percentage point more slowly than it would have otherwise -- or more. We'll continue to talk about this because it’s bad for the country. It’s unnecessary. It’s a self-inflicted wound on the economy. But we'll also continue to work on those things that the American people expect us to work on -- on creating jobs, growing the economy, making sure that we get comprehensive immigration reform, making sure that we move forward towards getting a comprehensive set of initiatives in place to reduce gun violence, and other things. Q What was the President asking from lawmakers he talked to on Saturday? And can we also get a list of the lawmakers that he called? MR. CARNEY: The President had conversations with Republicans and Democrats over the weekend about the sequester specifically, and the broader issue of balanced deficit reduction. And he spoke here the other day about believing that there is a caucus of common sense out there, lawmakers in both parties who understand that we need to do tough things to achieve entitlement reforms because that's the right thing for our economy, and we need to do tough things on tax reform -- tough things for Republicans -- go along with tax reform in a way that generate revenues to pay down our deficit. And that's the kind of discussion he’s having with lawmakers and he'll continue to have, because he believes that there are Republicans who -- both those who have spoken publicly about it and others who have not -- who support the general premise of balance, who support the idea that we should reform our tax code in a way that eliminates these special breaks for the few and the wealthy and the well-connected, and to use that revenue for reducing our deficit so that we don’t put the burden solely on senior citizens or families with children who have disabilities and the like. So he’ll continue those conversations. I don’t have a list for you. We’re trying to be clear that the President is having these conversations. It’s not necessarily helpful for individual senators to have those conversations specifically read out. But, of course, you’re welcome to contact senators yourself. Yes. Q Is the President open to having talks, or perhaps having talks already, with lawmakers specifically on finding ways to reduce the impacts of the sequester? MR. CARNEY: I think we’ve been very clear about the way the law is written and the fact that flexibility does not help the overall problem, because, as the Chairman of the Fed has said and many others have said, $85 billion withdrawn from our defense and nondefense discretionary budgets will have a negative impact. That’s what the CBO has said. That’s what outside economists have said. And certainly we’re seeing some of those impacts already on regular folks out there who are trying to make ends meet but are finding out through warn notices or other advisories that they may lose their jobs, or they’re going to lose some of their pay, or they’re going to be furloughed. So we’re working with and we’ll continue to work with Congress towards achieving a compromise that eliminates that sequester, that achieves balanced deficit reduction, that does it in a way that allows our economy to grow and to help the middle class grow. Because the President firmly believes that our economy is at its strongest and its best when it grows from the middle out and not the top down. That’s been proven by our history. So that’s the effort that we’re undertaking. Q You talk about moving forward with gun control, immigration reform, but how do you do that when we’re mired in this discussion about the budget? MR. CARNEY: Well, you do it because you have to do it, because these issues matter and they’re important. And there are lawmakers on both sides of the aisle who believe that those issues are important and should be acted on, and we’re working with members, both Republicans and Democrats, on those issues. And they’re very key to the President’s second term agenda. He thinks they’re the right thing for the country, the right thing for our families, the right thing for our economy. So he’ll continue to work on those issues just as he will continue to work on enhancing our national security and continue to work on measures to, in spite of the impacts of the sequester, to improve job creation and economic growth, and help the middle class. It is unfortunate -- again, this is a wholly unnecessary decision that was made by Republicans to allow this to happen. If you step back, what is somewhat remarkable about it, because you see Republicans calling it a victory -- a victory for the tea party or a victory because they stood up to the President on spending -- but remember what Republican goals are supposed to be. Republicans budgets call for an increase in defense spending, not the dramatic cut we’re seeing with the imposition of the sequester. Republicans generally talk about increasing our border security presence, consistent with the way it’s increased over the years, doubled since 2004. Obviously, sequester does the opposite. Republicans say they’re the party of deficit reduction, long-term deficit reduction; the sequester doesn’t achieve that. The Republicans say that they want entitlement reforms; there’s nothing in the sequester that achieves entitlement reform. They say they want tax reform; there’s nothing here that meets that objective. The President has put forward a proposal that does meet those objectives -- that achieves entitlement reform, that achieves tax reform in a balanced and fair way, that allows for the necessary level of funding for our national security interests, that allows for the continued strengthening of our border security. And he hopes that having achieved this empty victory, at least as they see it, the Republicans will understand that their goals are being unmet here, so not only are Americans suffering from this -- regular folks -- but their objectives are being unmet. And there’s an opportunity to change that dynamic, to do something that's good for the country, that's good for the economy, and that's to come together around a plan that would reduce our deficit in a balanced way, that would embrace both entitlement reform and tax reform towards deficit reduction. One of the things that's striking to me when you talk about the differences between these two parties is we’re only asking that the Republicans do what the Speaker said he wanted to do just two months ago -- enact tax reform, achieve revenue by closing loopholes for the well-off and the well-connected, and use that money towards deficit reduction, a very conservative goal. The President has put forward entitlement reforms -- some tough entitlement reforms that achieve savings. And he, as part of a balanced approach, would commit to doing those, as his plan calls for, if Republicans would commit to what they said they wanted to do just a few months ago, which is tax reform in the name of deficit reduction. It is the conservative thing to do to use that money to reduce the deficit, not to funnel it into tax cuts for wealthy folks. That seems counterproductive, to say the least. So the President hopes the common-sense caucus expands in support of those ideas. Jim. Q Jay, isn’t the sequester really here to stay? Because I think what you saw over the weekend is that you heard the two Republican leaders -- Mitch McConnell and John Boehner -- start talking about how we need to work through a continuing resolution. They were confident that that would happen. What makes you think that you can go back and do away with these cuts in the sequester? MR. CARNEY: Well, for all the reasons I just mentioned, and that is that the sequester doesn’t achieve any of the stated objectives of the Republican Party, of Republican leaders. It creates all the harm that Republican leaders said it would create when they were decrying the sequester just a few months ago. Q They said they’re not going to come back and do anything in terms of revenues. There’s not one Republican, Mitch McConnell said, who is in favor of increasing revenues. So it seems like you're at an impasse. MR. CARNEY: Well, that's false on its face since there are a number of Republicans who said they support tax reform that creates revenues, and they’ve said so publicly, including very prominent Republicans. So there’s that. But the issue here is on the continuing resolution and funding the government. We certainly support the idea that, as the President said from here, that we should not create another crisis on top of this one, another manufactured showdown; that Congress ought to pass a CR without drama, as it has a half dozen times since April of 2011 -- you probably didn't know it was that many times because there was no drama around it -- and to do that in a way that's practical and nonpolitical and consistent with the levels of the Budget Control Act. We’ll see what Congress does. We’ll see what the Republicans do. But the President, as you heard him say, would support that approach so that we don't add crisis upon crisis here. But to the broader question about dealing with the sequester, we need to do that, but we can do it if we follow the path that the public says it wants Republicans and Democrats to follow that the President has embraced, that bipartisan commissions have said is the right way to go, and we hope that we can achieve that. Because if we do, we can really unleash some of the potential, the bottled up potential in our economy that exists -- as many economists have said that 2013 could be a very strong year economically if Washington would stop doing harm to the economy and start doing things that would help the economy. Q And as a follow-up -- well, not really a follow-up, but maybe on a separate front. MR. CARNEY: I won’t hold you to it. Q Earlier this morning, Secretary Napolitano said that lines at some of the biggest airports over the weekend were 150 to 200 percent longer. We’re asking Homeland Security for some kind of metrics to back that up. But given the fact that there was sort of this back-and-forth over teacher layoffs with Secretary Duncan, and even the President talked about janitors that might be impacted at the Capitol -- that may not be the case -- what is the administration doing to make sure that these numbers are not hyped? Because might that undercut your message? MR. CARNEY: Here’s the thing. If you disagree with the CBO and with outside economic analysts who say that up to three-quarters of a million jobs will be lost, well, you should make that case. Those are real people. And of course many, many more will see their wages cut or their days on the job reduced. That’s just a fact. And the impact on the overall economy, that is an established, predicted fact by outside economists as well as the CBO. There’s no way to do what the sequester calls for and not create these negative effects. There are just numerous examples already of what’s going to happen. The Department of Defense has informed Congress it will have to furlough 750,000 workers, and the Navy has told Virginia it will have to cancel maintenance on 11 ships. The Army has begun curtailing training for all units except those deploying to Afghanistan. The Department of Justice transmitted approximately 115,000 furlough notices to all DOJ employees. General Dynamics NASSCO, a major ship design, construction and repair company, mailed warn letters to about 1,040 employees in San Diego, Norfolk and Mayport, informing them that they could be indefinitely laid off in April -- at the end of April through the summer, due to the possible cancellation or delay of maintenance and repair work and uncertainty created by sequestration. These are the examples. And I would refer you to the different agencies about how they’ll be felt and who -- which individuals will be harmed by them. On the issue of the janitors, it is -- if you work for an hourly wage, and you earn overtime, and you depend on that overtime to make ends meet, it is simply a fact that a reduction in overtime is a reduction in your pay. Now, obviously there are some folks who -- for whom working hourly is a distant memory if it’s a memory at all, but that’s a fact, and it’s a fact for many families. Q Jay? MR. CARNEY: Yes, Major. Q One question on the flexibility issue that’s arising as House Republicans draft their continuing resolution -- to what degree is the administration interested in negotiating over flexibility for the defense side of this, which appears to be House Republicans’ central focus as they craft this amendment onto a rather standard continuing resolution? MR. CARNEY: Well, I would like to wait to see what Congress produces. As Gene Sperling said over the weekend, we want to see something that is practical and nonpolitical and consistent with the levels established in the Budget Control Act that both parties agreed to overwhelmingly. I’m not going to analyze hypothetical actions that they may take. We’ll have to see what they produce. Q All right. On Iran, is there any thought being given here at the White House of cancelling the President’s trip to Israel because there is not a government formed yet under Prime Minister Netanyahu? MR. CARNEY: We have no scheduling changes to announce. The President is looking forward to, very much, his trip to Israel and the region, and we’re on course planning that trip. Q: There were developments over the weekend -- announcements from Iran about 3,000 centrifuges at Natanz, the IAEA report saying that they can no longer say categorically that all of the research and development is for peaceful uses. And Prime Minister Netanyahu just told AIPAC a few moments ago Iran is getting closer, sanctions haven’t worked, and the red line time is getting -- drawing near. I’d like to get your evaluation of all those developments on this front over the weekend. MR. CARNEY: There is no question, as we’ve said many times, that the window of opportunity for Iran will not remain open indefinitely. There is opportunity here for Tehran to give up its nuclear weapons ambitions, to comply with U.N. Security Council resolutions, to get right with the international community and thereby rejoin the international community and end its isolation from the world because of its behavior. But that period of opportunity, as the President has said and as others have said, will not last forever. And our policy is founded upon the goal that Iran will not acquire a nuclear weapon, and the President is very serious about that. Q Would you characterize Iran’s reaction to the softened negotiating offer that the P5-plus-1 just made -- rebuffed it entirely -- this new -- Prime Minister Netanyahu’s point -- even when there is an effort to delay or soften the conditions set before, Iran responds with nothing. And his point is technologically they’re getting closer. I know this is a sort of catchphrase -- the window is not going to remain open indefinitely -- but the point seems to be, is it closing and are we getting to a point where this issue has to be resolved one way or the other, either through military means or some other means? MR. CARNEY: Well, we take no option off the table, including the military option. That’s a point the President has made repeatedly, A. B, there is no question that the window, the door, the period of opportunity here will not last forever and that the more that Iran flouts -- Q It can't last forever, that’s obvious. What I’m trying to get at is, is it getting -- are we getting to a point where decisions have to be made very soon? MR. CARNEY: There’s no question -- well, I won’t characterize a timeframe here, but there is no question that as Iran continues to flout its responsibilities, as it continues to take seriously the insistence of the international community and fails to produce tangible progress in P5-plus-1 talks, that its opportunities to get right with the international community diminish, as does the timeframe in which they can do that. But I’m not going to put a date certain -- an end date certain. Obviously, there's a lot upon which that depends. Ed. Q Jay, one of the President's top nominees, John Brennan, for the CIA, faces a committee vote tomorrow, I believe. As you know, there have been lawmakers pushing for copies of these memos that show the legal underpinnings for the use of drone strikes. Is the administration willing to share those memos with lawmakers? MR. CARNEY: We have, as you know, taken action to share advice from OLC to the relevant committee members. We are working with the committee to provide information that is consistent with their requests, but obviously mindful of all the national security issues that are at stake in a situation like this. And we look forward to John Brennan being confirmed -- passed out of committee and then confirmed by the Senate to be the next CIA director. He is extraordinarily qualified for the position and he needs to get on the job. Q I understand that you've shared, as you say, the Office of Legal Counsel advice on it. But do you think the nomination can get through without the actual memos being shown to lawmakers? MR. CARNEY: Ed, I can't get into a lot of detail about these issues. We're working with the committee. We have taken extraordinary measures in a unique situation to be forthcoming with information. And we are continuing to work with the committee to meet their concerns. Q Two other quick things. More than a week has passed since the initial reports suggesting that some of the President's outside advisors were offering access to him for a $500,000 contribution to Organizing for Action, this outside group that is at least connected with the President and his former campaign aides like Jim Messina. My question is groups like Common Cause, which are usually not very friendly to the President's opposition, shall we say, has said that this group should be shut down altogether. Can you give us any idea whether the President thinks that's a good idea? Is he concerned about the perception out there? Are you trying to push back on the idea that they will get access for $500,000? MR. CARNEY: Well, I think I pushed back on it and I'll push back on it again. Any notion that there is a set price for a meeting with the President of the United States is just wrong. As you know, Organizing for Action was set up to promote the President's public policy agenda. Therefore, as anyone would expect, the President would likely meet with their representatives to discuss his agenda. But again, any notion that there's a price for meeting with the President is simply wrong. I would send specific questions about how they do their fundraising to the organization. But it is worth knowing that they are going beyond what is required by disclosing donors and not accepting any funds from lobbyists. The bottom line here is that this is a separate organization, as we've noted, the existence of which is perfectly appropriate. And the White House will engage with it consistent with the way we engage with a whole host of other outside constituencies. Q But basically, people could still give money to this outside group as long as it's not directly attached to access. You've got nothing to do with the money that's going in there. MR. CARNEY: The White House sets the President's schedule. And there is no price to meet with the President. Organizations have fundraising. They raise money and this one has committed to disclosing its fundraising activities. But I would refer you to them for more on that. Q The last thing, on sequester. At the top of this you said something to the effect of Republicans made a choice here to let these sequester cuts go through, the context of it. The President has made choices as well, obviously, including the fact that his own staff came up with the idea for sequester. I understand Republicans ended up voting for it and they bear some responsibility here as well it needs to be said. However, does anyone here at the White House regret the fact that people inside this White House came up with this idea in the first place? MR. CARNEY: Well, Senator Gramm and Rudman came up with the idea back in the 1980s. Q They've been out of power a long time. MR. CARNEY: And let's be clear -- and those who were on the inside and those of you who covered it closely will remember that Republicans were pushing for a trigger, a hard trigger as part of the negotiations to avert a default. The White House proposed numerous triggers that included revenues. Republicans absolutely, adamantly, categorically refused to include revenues in the triggers, a position that may sound familiar. They insisted on a spending-cut-only trigger. That is what sequester is. It is a spending-cut-only trigger. The fact that it’s called that was because that's what it was called back in the 1980s under the deficit reduction package known as Gramm-Rudman-Hollings that President Reagan signed when they had a trigger, a spending-cuts-only trigger that was evenly divided between defense spending and nondefense spending. And it’s true that that was put on the table as part of the demand for a spending-cuts-only trigger that “let’s do it the way they did it back under President Reagan,” our team said to Republicans, thinking that might be appealing. And it was so appealing that John Boehner said he got 98 percent of what he wanted. Every House Republican leader voted for it enthusiastically, and Speaker Boehner said he was pretty pleased with the outcome. So this is all pretty irrelevant. What is relevant is that it was never supposed to be policy, and Republicans themselves on so many occasions that I’m sure we’ve all lost count said that we had to do everything we can to avert sequester, that it would be enormously damaging. Speaker Boehner just a few weeks ago in the Wall Street Journal said it would do harm to our national defense and would cost thousands of jobs. And he’s right. So it was a choice to allow sequester to take effect rather than embrace the idea that the American people strongly embrace, that a majority of Republicans strongly embrace out in the country, which is that we can close a few loopholes for the wealthy and well-connected, cap a few deductions, and achieve balanced deficit reduction in a way that would eliminate the sequester entirely. Let’s just do that. Let’s do that and Republicans can say that they achieved some very important goals that are elemental to Republican and conservative philosophy, which is we need deficit reduction, we need entitlement reform -- and the President says, I’ll meet you halfway towards that -- and we need tax reform and we’ll do that. So let’s do it in a bipartisan, balanced way. Jon, then Peter. Q Jay, how big a priority -- how high a priority is it for the President to win back the House of Representatives with the Democrats? MR. CARNEY: Well, he’s obviously interested in the success of Democrats. But I noted the story that probably prompted your question, and I think it goes without saying that the President wants those in his party to do well, but it is not a focus of his particularly at this point. He is focused on trying to get a bipartisan consensus around some very important policy objectives: balanced deficit reduction that helps our economy grow and create jobs; comprehensive immigration reform that helps our economy and the middle class; common-sense measures that reduce gun violence in this country; investments in clean energy technology that help build industries here in this country and help deal with climate change for the future. So that’s what he’s focused on right now. Q Does he agree with the head of the Democratic House Campaign Committee who said, the President understands -- and he said this was based on a conversation with the President -- the President understands that to get anything done we need to get a Democratic majority in the House of Representatives? MR. CARNEY: Well, the President certainly believes that, as other Presidents before him have believed, that it is easier sometimes to enact your agenda when you have more members of your party in Congress. But it is also the President’s belief, and it is established in fact in recent history, that you can achieve important policy objectives with divided government, with, in his case, Republican leadership in the House and Republican semi-control in the Senate through the filibuster. And that’s what he’s done, and he hopes to continue to do that. I mean, we’re talking here about opportunities on immigration reform and other issues, including balanced deficit reduction, that require bipartisan support. And based on what we know in terms of the progress the Gang of Eight is making, or the progress that’s being made in moving forward on reducing gun violence, and the progress that is represented by the voices of those Republicans who say they embrace what the majority of the country embraces, and they embrace what the majority of Republicans embrace when it comes to deficit reduction, that we can do these things. And the President -- that’s what his focus is. Q To the Republicans who say that the President is -- they’re worried the President going into any one of those issues you just mentioned, going into this not necessarily to get anything done but to position himself to have a better run at the mid-term elections, I mean, just to quote Steve Israel again, “to have a legacy in 2016 he will need a House majority in 2014 and it has to start now.” MR. CARNEY: Look, it is just not accurate that the President doesn’t want these accomplishments. He is expending great political capital and energy on the proposition that he wants immigration reform done in a bipartisan way and done early. That’s why he has pushed so hard for the Senate to move forward in its efforts. That’s why he has pushed on gun violence measures and put forward a comprehensive package so early in his -- the first year of his second term. And that’s why he continues to have on the table the offer that he made to Speaker Boehner when it comes to completing the $4-trillion job here of deficit reduction over 10 years that would help achieve that fiscally sustainable path that we want for our economy over the next decade. These are things he believes we can do very soon if bipartisanship and a spirit of compromise on behalf of the American people is realized on Capitol Hill. Q So on that offer, I mean, you’re absolutely right that some prominent Republicans have come out in recent days and said that they could live with a plan that increased tax revenue -- not to replace the sequester, but as part of kind of a renewed effort at the grand bargain. So are we going to see an effort -- MR. CARNEY: But that would eliminate the sequester, which the whole -- the whole idea behind the -- Q But it would be bigger than just eliminate. You’re exactly right. But it would be bigger. So will there be an effort to jumpstart a grand bargain-type series of talks with Republicans in the coming weeks or months to achieve just that? MR. CARNEY: I’d hesitate to place labels on things. I would simply say that the President is interested in moving forward on deficit reduction that pairs the twin objectives of entitlement reform and tax reform in the way that his proposal does, in a way that is consistent with Simpson-Bowles and Domenici-Rivlin and others who have put forward ideas and proposals in a bipartisan way. And it presents an opportunity for both Republicans and Democrats to achieve some important objectives -- objectives that are important to their parties, as well as to the country, and to move forward. Q So that's what the weekend calls were about? The grand bargain, not -- MR. CARNEY: Well, the weekend calls were about trying to find common ground on the way to deal with the sequester and balanced deficit reduction. Q The big deal. MR. CARNEY: But they're linked. First of all, the big deal has been partly accomplished. So when the grand bargain negotiations began with Speaker Boehner, the goal was $4 trillion. Now we’re $2.5 trillion along that road. So it may be the petite bargain -- I guess if you go all French. (Laughter.) Q I'll leave that entirely to you, Jay. MR. CARNEY: But seriously, $1.5 trillion in deficit reduction, the President’s proposal would achieve $1.8 trillion in further deficit reduction in a balanced way. Q Bowles-Simpson want $2.4 trillion now at this point. They’ve moved the goalpost a little bit to -- MR. CARNEY: There’s no question that more work going forward will need to be done as we deal with our fiscal challenges. But the $4 trillion in deficit reduction set as a goal by Speaker Boehner and President Obama and by many economists on the inside and outside of government can be achieved, and then some, if Republicans would embrace the President’s compromise proposal that would do some tough things on entitlements, as well as spending and on tax reform. Q But you understand the difference. He’s trying to create a Republican groundswell for grand bargain talks. MR. CARNEY: He’s just trying to find some common ground around the basic common-sense notion that we can do this in a balanced way because he knows that there are significant -- there’s a significant amount of support for that approach around the country. April. Sorry. Peter, then April. Q April, that was kind of, thank you. Q You’re welcome. Q I’m curious since our time -- MR. CARNEY: Stand up, April. (Laughter.) Q -- since our time with you is limited right now, if the President had any reaction or had a chance to watch some of the conversations with Dennis Rodman who just returned from North Korea, and if the President believes that this in some way undermines the government’s efforts in trying to deal with that country. MR. CARNEY: Peter, the United States has direct channels of communications with the DPRK. And instead of spending money on celebrity sporting events to entertain the elites of that country, the North Korean regime should focus on the well-being of its own people who have been starved, imprisoned, and denied their human rights. We have urged the North Korean leadership to heed President Obama’s call to choose the path of peace and come into compliance with its international obligations. North Korea’s actions, however, directly violate United Nations Security Council resolutions and threaten international peace and security. Q Dennis Rodman carried a message from Kim Jong-un. He said to call. So does the President have any intention -- MR. CARNEY: Again, we have -- Q What did he make of -- what did he make of Dennis Rodman being the ambassador to North Korea? MR. CARNEY: I don't have a readout specific to the President to give to you. I think that what I just said makes clear that North Korea ought to be focusing on its own citizens and opportunities to improve their lives. And the United States has channels of communications directly with the DPRK and those are the channels we choose to employ. April. Q Jay, I want to go back to sequestration and then to something with Mitt Romney. You said sequestration will have serious consequences. With that, what is the estimated number of Americans who will fall out of the middle-class status because of sequestration? MR. CARNEY: Well, I don't have that breakdown. You may look at what -- some of the analysis that has been done by outside economic organizations like Moody’s and Macroeconomics Advisers. But I’m not sure if they break it down that way. Certainly, if 750,000 Americans lose their jobs, that could have an effect on the size of the middle class. And that would be highly counterproductive to the stated objectives of both parties in Washington. Shaving half a percentage point off our GDP growth would be hugely harmful and would have ripple effects. There are jobs that we will know are specifically affected by the sequester in our defense industries and other areas that are directly linked to federal funding. But then, there will be the jobs that are lost or not created because the sequester goes into effect -- around businesses that close -- small businesses that close or cut back, support services around them whether they're restaurants or barbershops and the like, that are affected and don't hire a new worker because there are fewer patronizing their businesses. And that's the shame of all of this, is that there will be so many regular Americans who will be negatively affected by this wholly unnecessary imposition of the sequester. Q And the next question really fast -- what do you say about Mitt Romney's revelation that was televised last night that he did not win the state of Ohio because he failed to attract the black and Hispanic vote with his "47 percent" comment? MR. CARNEY: I actually confess that I didn't see that. I would simply say that Mitt Romney didn't win Ohio. (Laughter.) Donovan. Q George Will said, "I will do many things for my country and my profession. I will not take seriously Mr. Carney." MR. CARNEY: It's funny. I did see that. It's funny you raised that. (Laughter.) I love the structure of the sentence. It's very George Will-ian. But I have a lot of respect for George Will. I've been on the panel on "This Week" with him many times in my previous life. I think he is a very smart guy. And despite the fact that a few days before the election I think he predicted a Romney landslide very confidently on television -- 321-217 over the President -- built on a victory in Minnesota, which the President ended up winning by more than 7 percent, I will continue to take George Will seriously. (Laughter.) END 12:57 P.M. EST
The Science Delusion – Reexamining our Worldview Mindset By Cognitive Dissonance If you are anywhere near a window or door why don’t you stop reading right now, get up, walk over and take five or ten seconds to look outside and absorb what you see. Hell, if that’s asking too much of you then just imagine what you would see if you were to look out your window. Go ahead and take a few seconds. I’ll wait. Regardless of whether your (imagined) view outside was of lawn, woods, mountains, animals or other humans, homes or out buildings, a road or highway, tall office buildings or even skyscrapers, if I were to ask you to describe in detail what you (thought you) saw, what you (thought you) perceived, everyone would pretty much describe it using similar words, phrases, subtext and connotation. This is because even though we all saw different things, we all employ pretty much the same basis of understanding or belief in how our natural world works and functions, of what ‘it’ is that we think we actually see. In short, we see, perceive and thereby ‘know’ through the (distorting) lens of our worldview and the individual/collective mindset that forms that point of view. This in turn determines how we perceive, then interpret and finally describe what we see. Contrary to common belief we do not simply ‘see’ what is there. No one sees and perceives everything exactly the same way as anyone else and I’m not just talking about differences in visible color, clarity or contrast nor just through the distortion provided by a political or religious frame of reference. Our mindset (selectively) interprets what our senses receive based upon our preconceived notions and beliefs. In short, all that we ‘see’ and perceive in every form is run through our worldview mindset for identification, interpretation and then integration. This means that there is great latitude for error when our mindset has been both created and distorted by prior beliefs, propaganda and bias. If we don’t believe (in) what we ‘see’ or perceive, quite simply it is dismissed as unreal and nonsensical………if it is even ‘seen’ in the first place. For all intents and purposes from our perspective fully or partially accepted perception is reality, everything else is not. As I will outline below this is our deeply flawed personal and collective mindset and I contend that this is the basis for many, if not all, of our individual and global social problems. Our point of view determines much of what we perceive Where we stand depends entirely upon where we sit. This wonderfully enlightening phrase works on both the micro and macro level because our basis of understanding and perception, our worldview, determines how we ‘see’ and perceive reality. Since all we know and all we think we know is right >here< in time and space, unless we make an honest, sincere and sustained effort to see beyond these artificial boundaries, to remove the self imposed limitations we all experience when we view everything through our worldview prism, we are personally and collectively condemned to a life of external and internal (self) manipulation and control. In my opinion it is essential to understand that everything is a construct of our consciousness, so >here< is essentially non local, meaning even though for nearly all of us >here< is perceived as located between the ears, this is simply not the case. This perspective altering concept, that of non-local consciousness, is a wonderful example of our collective mindset since the vast majority will quickly and completely reject this notion simply because their present day belief system and worldview tells them otherwise. I will touch on this further down when I list some of the beliefs that form our collective worldview, but if just this one alternative view were widely embraced by the general population consider for a few moments how dramatically different the world we just viewed would seem to be. If we fail to seek our inner knowing to effectively counterbalance the obviously subversive and manipulative external forces that are busily (re)constructing our ever changing, but still very narrow worldview, we become entirely dependent upon that external affirmation to confirm and inflame the internal dysfunction that results from our constant immersion within the insanity. Simply put we go mad, but still remain quite functional in an insane asylum sort of way. Just because I’m crazy doesn’t mean I’m stupid or unable to productively interact with others in our mad world. This internal dysfunction, our inner insanity, aggravates and perpetuates the external manipulation by way of our collective actions in an endless positive feedback loop of escalating collective madness until finally it exhausts itself in a crescendo of war, starvation, deprivation and death. Our inner madness feeds the external madness which feeds the internal and so on. We moan and groan about the obvious insanity of our increasingly psychotic world, about the financial, political and corporate corruption, the blatant greed and endless lies and manipulation, all while remaining comfortably blind to its inner source. Wash, rinse and repeat as needed generation after generation after generation. It simply does not need to be this way. But then again maybe it does since to accept that the source of our torment springs from within means not only that we are the problem, but that we are the solution. No one left to blame then. A perfect example of a thoroughly dysfunctional social feedback loop is the closed society that is present day North Korea. While we do not know exactly what is happening inside that country we do understand that many if not all of its inhabitants do not receive much in the way of a ‘reality check’ to contrast what they are being told by their leadership. Their worldview mindset is horribly distorted by controlling external forces. While our egos might not like to hear this, we here in the West are under similar assault, though the techniques used are much more subtle and extremely effective. Our entire cognitive spectrum is distorted by our worldview prism On a micro mindset level our personal stand on gun control depends upon how we view guns, personal responsibility, local, state and federal government and so on. As well, our opinion of the stock markets’ relentless rise over the last four years depends upon our views and understanding (or not) of statistical manipulation, corporate and governmental corruption and self dealing, unlimited fiat creation and so on. Expanding outward a bit more, on a personal level we believe that our (little patch of the) universe can be fully experienced and understood with just our oftentimes electronically leveraged five senses. Except for a few fuzzy undefined exceptions we believe that nothing further is required in order to fully understand and experience our world other than what we have not yet learned and experienced through our five senses. Man beheld what he cognitively created and it was good. On a more macro mindset level how we view animals, plants, rocks, rivers and roads depends upon if we think of ‘them’ as sentient and conscious or dead and without awareness. For example, many believe that ‘feed’ animals should be ‘humanely’ raised and slaughtered (or at least they should be blissfully unaware of it when they are not) suggesting that we perceive animals as somewhat sentient. Perhaps this is because animals express emotions such as care and nurturing for their young and distress and panic when their young are threatened. Ask most cat and dog ‘owners’ if their animals are aware and emotional, human like in some respects, and the affirmative will come through loud and clear. In other words we perceive (certain) animals as somewhat similar to humans principally because they show similar emotions and reactions, not because we have actually measured consciousness within them………or within humans for that matter. But we give little thought to ‘slaughtering’ woods, rivers and meadows, the very Earth itself, other than possibly holding some concern for the loss of the utility or esthetic value. I am, of course, speaking of the loss to us humans; not so much to those dumb, but still somewhat sentient animals……right? Forget about seeing this as a moral judgment so much as just an irrefutable and near universal belief born of a decidedly narrow perceptional belief, or an iron clad fact some would say. In order for it to be a moral judgment all sides must at least be (carefully) considered, if only to be quickly discarded when it doesn’t square with that delicious steak on the table. It is one of those ‘Duh, that’s obvious’ moments where we roll our eyes and look at the questioner as if he just stepped in dog doo and is stinking up the joint. Humans are at the top of the food chain, alive and conscious. Animals are lower down and maybe conscious, depending on if our view squares with what’s for supper, while rocks and rivers are not at all. That’s just a fact Jack. Our damned delusional unanimity There is near universal agreement (among the ‘civilized’ world that is) that the fundamental basis for our worldview is essentially correct and quite obvious, though there are a few nagging details to be worked out here and there. So obvious in fact that rarely if ever do we talk about these concepts and even less often, either as a culture or as individuals, do we invest our time and/or money to study alternatives to these concepts, except maybe as career ending fringe science. After all everyone knows that rocks are composed of dead inorganic material and are certainly not alive or conscious by any stretch of the imagination. This and other beliefs form our most basic assumptions about life and the world we live in and they are so firmly embedded within our way of life, within our worldview mindset, that we don’t even consider them to be assumptions at all, but rather as irrefutable and self evident facts. And yet if these beliefs were to change, if our perception were to alter and evolve, how different would the world seem even though it did not change, only our prism. Then again, if this were to occur we could no longer be blissfully ignorant in our ravenous and insatiable consumption. It sounds to me like we are deeply conflicted and compromised sentient beings who really don’t wish to look too deep for fear of what we might see. Oops, did I just say sentient beings? I guess the answer to that would depend upon our worldview and perception. ‘We’, meaning the insane, never perceive ourselves to be anything other than sane, normal and very well adjusted to the insane asylum. We are taught these most basic assumptions and beliefs first by our parents and primary caregivers, then by the state and corporate controlled primary and secondary education system, and finally by our corporate overlords. One is allowed, encouraged in fact, to examine the effects and intricacies of our material world in order to further ourselves personally and professionally as well as to contribute ‘economic value’ to the whole (meaning the overlords) as well as the self. After all I must march to the corporate machine because I owe, I owe, so off to work I go. But one must never question the very basis of our worldview belief system unless one wishes to be declared a heretic and summarily expelled from the paternal patronage system of advancement and achievement. Only the wacko’s and crazies unnecessarily think so far out of the box that they must be declared permanently off reservation and dead to the academic and scientific world. You know, for their own good lest they rock the boat, spill the beans and hurt themselves and others. So we hitch up our pants, carefully adjust our blinders and then join the collective worldview of the hive mind. All hail the mighty kings of material science The modern day material sciences, the new global religion adored by nearly the entire world’s ‘civilized’ population, are thoroughly infiltrated and infused with carefully guarded dogma, blind beliefs, long held assumptions and blatantly obvious taboos. Obvious at least to anyone who steps outside the castle walls and gazes back with a clear and steady eye, not to those still deeply embedded within the meme. The world’s declared religions must regard with envy and awe the degree of blind faith and revered belief the scientific community exhibits in service to the holy scientific grail, that of provable and repeatable scientific ‘truth’ and ‘fact’. Not to mention the degree of blind adoration we plebs exhibit in servitude to all things materially scientific, the ultimate effect of manufacturing consent. If it can’t be measured and quantified using repeatable and verifiable experimentation, it just ain’t real folks. But since our measuring instruments are often limited by our own imagination to measuring only that which we are trained and conditioned to perceive, there is an obvious closed loop positive feedback cycle here very similar to a dog chasing its own tail. Good luck getting a government or corporate research grant to examine concepts that might just force us all to reexamine everything, then dismantle much of what we have built in order to preserve what little we still have left……our souls and self survival to name just two. Since I was a young child I have always been a materials science geek so my love affair has not died, just switched from blind belief to critical thinker. For those of us who wish to look beyond the surface layer and ask the really tough questions that threaten to rock our socks off, these days of heightened awareness and self discovery are actually much more exciting than you might think. But only if one is willing to look beyond our pre-conditioned minds and discover a huge wealth of alternative science waiting to be (re)discovered and perused. In other words, only if we are ready and willing to question everything beginning with ourselves and what we ‘know’ to be true. The agony of the arrogance If I were limited to just one word to describe the ‘civilized’ western world (and rapidly the developing eastern world) it would have to be ‘arrogance’. We are so completely sure of our correctness, of our absolute certainty that the world, nay the universe, is pretty much constructed as, of and how we believe it to be because……..well, because our high priests of material science say it is so. See, it says so right here in our cleric approved indoctrination texts with all their pretty pictures, graphs and diagrams. No critical thinking needed since it has already been done for us. Just gaze at the flickering monitor and repeat after me. With the benefit of hindsight we roll on the floor in delirious laugher at some of the obviously silly notions that were held as gospel decades, centuries, even millennium ago while rarely if ever considering that we presently labor under our own woefully wrong flat world perspectives so deeply engrained within our present day mindset that we are completely and utterly blind to how wrong we might be. The amount of self absorbed naval gazing narcissistic hubris it takes to think that we are so much smarter, so much more enlightened than our mothers and fathers of just 20, 50 or 100 years ago is simply staggering to consider. In short we are afflicted with a severe and possibly fatal case of cranial rectal inversion and things don’t look good for a recovery anytime soon. As Mrs. Cog and I continue our journey down the rabbit hole I can’t tell you how many times we have discovered books written fifty, a hundred, two hundred years ago that nail concepts (or just open the mind to other possibilities) that have all been summarily dismissed by the modern day material science priests as deluded and utterly wrongheaded. But after an open minded and thorough reading, we can often see that they clearly and creatively explain so much about the perplexities of our natural world. At the risk of insulting many of my readers I find little difference in motives and methods between the high priests of central banking & high finance and those so-called scientific authorities who are found in various in-house corporate think tanks and labs, government and corporate run research and development centers and the heart of the beast, glorious academia, with its deeply dug in keepers of the holy thought relics and rituals. For the most part true scientific advancement (rather than just ‘material’ science) only creeps forward when a few more of the old guard dies off and the discipline lurches another step or two ahead before the new crop at the top starts protecting turf while permanently closing their minds to non conforming thought. Sadly our present day worldview is seemingly confirmed by so much of what material science gets right, at least when it comes to consumer products, electronic gadgets and fiat printing computers, that we can all safely ignore what it gets spectacularly wrong. Just as long as we can get Wi-Fi, or at least a decent cell signal, all is right in the world and we can remain blissfully asleep at the wheel. Even when it does get it wrong, it ain’t wrong for long thanks to a bucket full of scientific superstition, supposition and sensationalism as they announce the latest greatest wild ass guess disguised as scientific fact-theory, all designed to paper over their last wild ass guess gone horribly wrong. One should rightfully ask a basic question at this point. What difference does it make if science gets a few things wrong here and there? The answer would be ‘not much’ if the errors were at the end of the scientific process rather than at the beginning where they compound over and over again. As anyone who has added, subtracted and multiplied a long stretch of numbers will tell you, while a mistake anywhere along the way will produce an error, mistakes made at the beginning send the resulting sum so far out of the ballpark as to worse than useless, but potentially dangerous. Especially if those errors in thinking and supposition are then used as the basis for other equations, which in turn form our worldview. The result is the insanity that is Earth 2013. Bridging the ice floes I have been writing about our disastrously distorted worldview for several years now, though never in detail and always as part of my ongoing theme of looking within for the answers we all seek. I rarely provide direct answers to specific questions (something that tends to infuriate my readers) because I wish the questioner to first ask better questions as part of their own search within, then to seek and find their own answers so that they may own them as their truth. If I provide specific answers I am not much better than those who peddle snake oil, if for no other reason than I am expecting others to believe me, or at least believe that what I am saying is truth as I believe I know it. In my opinion it is much better for the questioner to seek out and find their own answers so that they may embody them as their own, leaving them better able to integrate that information within themselves. The ultimate authority is found within and the only way to break our dependence upon the external authority is to stop relying upon it for ‘answers’. I feel the same way about recommending books, particularly books that claim to have answers. All writers, including myself, are ultimately propagandists since it is nearly impossible to write on a subject without holding an opinion on that subject. We wish to influence the reader to adopt our way of thinking and the conclusions that spring from it, thus we will present our best argument in favor of the position we are discussing even when we make a genuine effort to be impartial. This is why I prefer to ask open ended questions that appear to have multiple answers (or worse, only one answer) and then present my thinking. However from time to time I will point in a specific book because it does present open ended questions or dramatically points to our cognitive dissonances, then it asks the hard ‘why’ questions while trying to fill in the blanks. Or I will recommend it because it pushes the cognitive boundaries well past the accepted norm. This time I seem to have found a book that does many of these, Rupert Sheldrake’s “Science Set Free: 10 Paths to New Discovery”. The UK edition is titled “The Science Delusion. In his book Rupert Sheldrake discusses in great detail ten fundamentally flawed assumptions or dogma that have infiltrated the western world’s worldview. He then explores possible answers to his own questions. Below is Sheldrake’s summary of modern science’s materialist ideology which I transcribed from an interview of Sheldrake on Red Ice Radio. Number one; there is the assumption that nature is mechanical or machine like. That everything in nature, plants, animals and humans are machine like. Or as Richard Dawkins famously said, we are just lumbering robots and our brains are like genetically programmed computers. Number two; that matter is unconscious. The entire universe is made up of unconscious matter which includes everything in nature including our bodies, but strangely our minds are somehow conscious. This illustrates one of the biggest problems in materialist science, that consciousness should not exist at all and yet it does, but exclusively within humans and maybe some animals and possibly a few other species. Number three; the laws of nature are fixed, that they are the same as they were at the big bang and they will be the same forever. This infers that the “constants” such as the speed of light or the gravitational constant never change or vary. Number four; that the total amount of matter and energy has always and will always remain the same beginning with the big bang and extending forward into infinity. Number five; that nature is purposeless, that there is no purpose in animals and plants or in life as a whole. The entire evolutionary process has no purpose; it has just come about by blind chance and the laws of nature. Number six; biological inheritance is material, it is all genetic or epigenetic or possibly in cytoplasmic inheritance, but in any case material. Number seven; memories are stored as material traces inside the brain. All your memories are inside your head in some way stored in nerve endings or phosphorylated proteins or some other way. No one knows how, but the assumption is that they are there. Number eight; your mind is inside your head, that it is an aspect of the activity of your brain. Number nine; psychic phenomenon such as telepathy is illusory. They appear to exist, but they are not real. That’s because the mind is inside the head and can’t have any effects at a distance. Number ten; mechanistic medicine is the only kind that really works. Alternative and complementary therapies may appear to work, but that’s just because people would have got better anyway or it’s the placebo effect. That’s why governments, pharmaceutical companies, medical research organizations and universities funds only mechanistic medicine based upon the principal that the body is a machine working on chemistry and physics so it can only be treated by the same processes such as drugs or surgery. While that can be very effective up to a point, it’s just part of medicine. Please recognize that the purpose of my continuous exercise in cognitive discombobulation, of questioning everything beginning with myself, is not intended to form new conclusions or even to modify my present day belief system mindset. Rather the desired effect is to expand my perceptive capacity, to push my self constrained thought boundaries far beyond my well manicured cognitive back yard and deep into the wooded forest beyond. In other words it is the journey, not the destination that matters. By challenging our core beliefs, by demanding of ourselves that we look where the emotional and intellectual pain lay, once we honestly begin to do so sweeping new vistas open up. I have no idea what you will find when you look, only that you will find what you are looking for if you are sincere and persistent in your search. Please note that I have not thoroughly read this book, only skimmed, though it is on my must read list to be perused over time. However I have carefully listened to four of Sheldrake’s interviews and I was impressed with his originality and fearless thought process. While he is a classically trained scientist he seems to have found a way to bridge both ice floes, that of a contrarian and of a traditionalist. If nothing else you might want to take a closer look at this one. I most certainly will. There is nothing more exciting, or frightening, than breaking from the herd and crawling way out onto the end of the limb. Provided I continue to seek the courage to maintain my own personal journey I suspect I shall find many of you out there where it all begins. 03-03-2013 Cognitive Dissonance
Authored by Martin Feldstein, originally posted at Project Syndicate, Two Dollar Fallacies The United States’ current fiscal and monetary policies are unsustainable. The US government’s net debt as a share of GDP has doubled in the past five years, and the ratio is projected to be higher a decade from now, even if the economy has fully recovered and interest rates are in a normal range. An aging US population will cause social benefits to rise rapidly, pushing the debt to more than 100% of GDP and accelerating its rate of increase. Although the Federal Reserve and foreign creditors like China are now financing the increase, their willingness to do so is not unlimited. Likewise, the Fed’s policy of large-scale asset purchases has increased commercial banks’ excess reserves to unprecedented levels (approaching $2 trillion), and has driven the real interest rate on ten-year Treasury bonds to an unprecedented negative level. As the Fed acknowledges, this will have to stop and be reversed. While the future evolution of these imbalances remains unclear, the result could eventually be a sharp rise in long-term interest rates and a substantial fall in the dollar’s value, driven mainly by foreign investors’ reluctance to continue expanding their holdings of US debt. American investors, fearing an unwinding of the fiscal and monetary positions, might contribute to these changes by seeking to shift their portfolios to assets of other countries. While I share these concerns, others frequently rely on two key arguments to dismiss the fear of a run on the dollar: the dollar is a reserve currency, and it carries fewer risks than other currencies. Neither argument is persuasive. Consider first the claim that the dollar’s status as a reserve currency protects it, because governments around the world need to hold dollars as foreign exchange reserves. The problem is that foreign holdings of dollar securities are no longer primarily “foreign exchange reserves” in the traditional sense. In earlier decades, countries held dollars because they needed to have a highly liquid and widely accepted currency to bridge the financing gap if their imports exceeded their exports. The obvious candidate for this reserve fund was US Treasury bills. But, since the late 1990’s, countries like South Korea, Taiwan, and Singapore have accumulated very large volumes of foreign reserves, reflecting both export-driven growth strategies and a desire to avoid a repeat of the speculative currency attacks that triggered the 1997-1998 Asian financial crisis. With each of these countries holding more than $200 billion in foreign-exchange holdings – and China holding more than $3 trillion – these are no longer funds intended to bridge trade-balance shortfalls. They are major national assets that must be invested with attention to yield and risk. So, although dollar bonds and, increasingly, dollar equities are a large part of these countries’ sovereign wealth accounts, most of the dollar securities that they hold are not needed to finance trade imbalances. Even if these countries want to continue to hold a minimum core of their portfolios in a form that can be used in the traditional foreign-exchange role, most of their portfolios will respond to their perception of different currencies’ risks. In short, the US no longer has what Valéry Giscard d’Estaing, as France’s finance minister in the 1960’s, accurately called the “exorbitant privilege” that stemmed from having a reserve currency as its legal tender. But some argue that, even if the dollar is not protected by being a reserve currency, it is still safer than other currencies. If investors don’t want to hold euros, pounds, or yen, where else can they go? That argument is also false. Large portfolio investors don’t put all of their funds in a single currency. They diversify their funds among different currencies and different types of financial assets. If they perceive that the dollar and dollar bonds have become riskier, they will want to change the distribution of assets in their portfolios. So, even if the dollar is still regarded as the safest of assets, the demand for dollars will decline if its relative safety is seen to have declined. When that happens, exchange rates and interest rates can change without assets being sold and new assets bought. If foreign holders of dollar bonds become concerned that the unsustainability of America’s situation will lead to higher interest rates and a weaker dollar, they will want to sell dollar bonds. If that feeling is widespread, the value of the dollar and the price of dollar bonds can both decline without any net change in the holding of these assets. The dollar’s real trade-weighted value already is more than 25% lower than it was a decade ago, notwithstanding the problems in Europe and in other countries. And, despite a more competitive exchange rate, the US continues to run a large current-account deficit. If progress is not made in reducing the projected fiscal imbalances and limiting the growth of bank reserves, reduced demand for dollar assets could cause the dollar to fall more rapidly and the interest rate on dollar securities to rise.
As the impact of climate change increases, so does the awareness that we need to transform the global economy to make it greener and more sustainable. But what will it cost? Is it something developing countries, the worst hit by climate change, can afford? The answer is yes, if we do it right. With the right policies and proper implementation, the shift to a greener economy could produce a double dividend -- environmental and social. It has the potential to create a net increase of between 15 million to 60 million additional new jobs over the next two decades, compared to what business as usual would give us. And it could lift tens of millions of workers out of poverty. But it won't be easy. Some jobs and enterprises will be lost, particularly in very carbon-intensive sectors which account for 10- 20 per cent of jobs in most countries. But new jobs and businesses will emerge as the move to a more environmentally-sustainable economy opens new markets, stimulates eco-innovation and attracts investment. Most scenarios suggest the net outcome on the labor market will be positive, if the right policies are adopted to drive the transition. Tens of millions of jobs have already been created by this transformation. Countries as diverse as Germany, Kenya and the Republic of Korea, for example, are investing in harnessing the power of resource and energy efficiency and of renewable energy. In the European Union alone, there are about 15 million jobs directly or indirectly linked to the protection of biodiversity and rehabilitation of natural resources. In Germany, a building renovation program for energy efficiency creates about 300,000 direct jobs a year. Brazil has almost three million jobs -- close to 7 percent of formal employment -- in sectors and occupations which lower environmental impacts. In the United States, about three million people are employed in environmental goods and services sectors. The impetus is clearly there, but there is a need to step up efforts to build national strategies that will simultaneously introduce clean technologies and green jobs. How long and how painful the transition will be will depend largely on prior planning. Developing skills is one of the keys to unlocking the jobs potential of a low-carbon economy. That involves equipping young people today with skills that will be needed tomorrow, and focussing on all education levels, starting with the teaching of environmental awareness to young children. Skills' shortages are already holding back the transition in most countries and sectors. In many cases, demand has been underestimated and skills' training has failed to respond to the needs of green sectors and of occupations which help to green enterprises across the economy. Government and training providers need to work in close collaboration with industry to ensure curricula keep track of new technologies and occupations -- such as eco designers or carbon consultants as well as in occupations whose job profiles are changing significantly, from building workers to logistics' managers. The global youth jobs crisis makes the issue all the more pressing. Young people who acquire skills for the green economy hold a strong competitive edge on a tight labour market. In developing countries, investments in green sectors can breed green start-up enterprises, providing a badly-needed opportunity to create jobs. Entrepreneurship or business training can be a great help in achieving this. In Kenya, for example, 6,000 young men and women have been reached by a program that helps develop green entrepreneurship among young people. In Zambia, new jobs and businesses in sustainable building construction are being created to alleviate the housing shortage. The challenges of moving away from a high-carbon economy are daunting. But it's an investment we can't afford not to make. This post is part of a series produced by The Huffington Post and The International Labour Organization in recognition of the latter's Green Jobs programme. The ILO's Green Jobs Programme provides analysis and policy guidance to help promote a fair globalization and the development of sustainable enterprises and economies, which are efficient, socially just, and environmentally sound.
Press Gaggle by Principal Deputy Press Secretary Josh Earnest aboard Air Force One en route Chicago, Illinois, 2/15/2013
Aboard Air Force One En Route Chicago, Illinois 1:25 P.M. EST MR. EARNEST: Welcome aboard Air Force One for our trip to Chicago. We will only be there a few hours, and then we'll go somewhere much warmer, to Florida for the evening. I'll make some opening remarks and describe to you a little bit more about the President's event in Chicago today, and then we'll open it up to questions. Today, the President will visit Hyde Park Academy in the Woodlawn neighborhood in Chicago where he will deliver remarks to Hyde Park Academy students, faculty, and community leaders on the economic proposals from his State of the Union address designed to strengthen the middle class and those striving to get there. Woodlawn is a community where there is a locally organized, all-hands-on-deck approach to provide educational support for students, improve housing, expand economic opportunity, and attract jobs. That effort makes Woodlawn an appropriate backdrop for the President's focus today on the importance of building ladders of opportunity into the middle class. That includes policies that ensure that every child gets a great education starting from their earliest years; that our young people grow up in strong communities; that there are clearer opportunities for good jobs for all Americans; and that we support financial security for working families. These policies would benefit middle-class families in every single congressional district in the country. So every member of Congress who agrees with the President that our nation is strong only when we have a thriving middle class should be strongly supportive of this effort. Now, prior to his remarks, the President will participate in a private roundtable discussion with 16 students who are enrolled in a youth anti-violence program. This program is a school-based counseling, mentoring, violence prevention and educational enrichment program that promotes social, emotional and behavioral growth for at-risk young men. The group is a mix of students who have voluntarily joined the program and those who have been urged by their principal to join. As the President has often said in the past, there are important steps we can take as a country to keep guns out of the wrong hands and get weapons of war off the street. And he will talk about that again today, as well. But we must also recognize that it's not enough to debate the role of government in reducing violence. It’s up to parents, teachers, principals, neighbors and communities as a whole to make a difference in the lives of our young people and steer them away from a life of gang violence and toward the classroom. So with that, we'll take some questions. Q Will there be any sort of spray of that meeting? Will we go in at all? Or just -- MR. EARNEST: There won't be. Q Josh, he’s got a lot built in -- extra time in his schedule before and after. Is there any chance that he's going to meet with victims' families of the shooting? MR. EARNEST: I don’t at this point have any additional meetings to read out to you. The roundtable discussion that the President will participate in with the young men that I just mentioned will take up some time, and that is what a bulk of that time is devoted to. Q A couple of questions on Hagel. Has the White House ever said why it thinks Senate Republicans are linking Hagel's confirmation to the events in Benghazi? I mean, why are they so insistent on linking the two? MR. EARNEST: Well, that’s a good question. In some ways, that may be a question that’s better posed to the members of the Senate Armed Services Committee. I mean, the thing I can do is I can certainly restate to you the efforts -- the lengths, frankly, that we've gone to, to try to accommodate the requests for information that have been posed by some Republican senators. Again, we’ve hosted 20 member and staff briefings on this topic; 10 different congressional hearings; six different witness interviews. We’ve responded to 40 different inquiries, totaling up to 10,000 pages of documents. But one thing I would add is Senator McCain gave an interview on Fox News yesterday explaining why he was delaying -- why he supported the delay in this confirmation vote. And I just want to read the exact quote from what he said, because I think it's pretty enlightening. He begins saying, "To be honest with you, Neil" -- I didn’t go to journalism school, but I think if I were a journalism professor I would encourage journalists' ears to perk up when an interview -- when a person answering a question says, "to be honest with you." So in this case Senator McCain says, "To be honest with you, Neil, it goes back to -- there's a lot of ill will towards Senator Hagel, because when he was a Republican, he attacked President Bush." Senator McCain goes on to say later in the interview that Senator Hagel was "very anti his own party and people. People don’t forget that," Senator McCain said. He finished saying, "You can disagree, but if you're disagreeable, then people don’t forget that." I think this is ironic -- well, I think this is clarifying. Because this is one of the things -- one of the concerns that we expressed at the very beginning of this nomination process, was that we articulated our view that Republicans should not oppose Senator Hagel merely because he was critical of the war in Iraq. Ironically, the President -- one of the reasons that the President chose Senator Hagel is because -- is that he demonstrated the courage of his convictions in standing up to intense political opposition to articulate his concerns about the war in Iraq. This demonstrates somebody who is of strong character, but also somebody who has a lot of good insight into the proper use of our military might. Q Now that the nomination has been delayed -- I mean, that’s going to give opponents -- Hagel’s opponents some more time to oppose him and beat the drum against him. Is the White House -- is there any sort of effort to counter that in these next 10 days or so until his nomination comes to the Senate again? MR. EARNEST: Well, you have asked me a question about whether or not the Republicans in the Senate are going to try to politically capitalize on this delay. I would actually make the case to you that this delay is a political tactic. I wouldn’t be surprised if there are additional politics that are injected into this circumstance. It is extremely unfortunate. I referred to the President choosing Senator Hagel because of the courage of his convictions -- of Senator Hagel -- because of Senator Hagel demonstrating the courage of his convictions and the insight that he has demonstrated into foreign policy. That’s exactly the kind of insight and exactly the kind of courage that our men and women -- 66,000 of whom are serving in Afghanistan right now -- need in their Secretary of Defense. Next weekend, there will be a meeting of our NATO allies in Brussels where defense ministers from those allies will be participating in discussions about our drawdown in Iraq -- I mean, in Afghanistan -- will be participating in discussions about our drawdown in Afghanistan. Our new Secretary of Defense, who will be responsible for coordinating those efforts, won’t be there. So it’s unfortunate there are Republicans in this case who are choosing to play politics as opposed to doing the right thing. Q But I think the question, though, was, is the White House prepared with some sort of ready response team to counter the attacks that are sure to surface on former Senator Hagel during this 10-day period. And do you guys have your fax machine warmed up, ready to -- MR. EARNEST: Our fax machine, huh? (Laughter.) That was funny. Q The opponents have just bought themselves 10 days to muddy the waters. Are you guys ready to -- MR. EARNEST: Again, I think it’s unfortunate that people are choosing to play politics with such an important issue at such a critically important time. I should say we’re confident that Senator Hagel is going to be confirmed. We are challenging Republicans to drop their opposition -- or at least drop their delay. I mean, this is the other -- I guess this is the other point that I should make. This is unprecedented. Senator McCain, ironically enough, in a previous interview with Fox News, actually pointed out and acknowledged the unprecedented nature of filibustering the President’s nominee to be Secretary of Defense. At that point, you’d think that might be ancient history. That was five days ago that Senator McCain said that he didn’t support doing that. Q Has the President spoken yet to Senator McCain or to Senator Graham? MR. EARNEST: I don’t have any calls to read out to you at this point. Q Can I ask -- I’d like to ask you about -- Q One more thing about Hagel. Are you going to provide any more information to them to try to satisfy their concerns? MR. EARNEST: You mean in addition to the 20 member and staff briefings, the 10 congressional hearings, the 6 witness interviews, the 40 inquiries we’ve responded to totaling 10,000 pages of documents, and the letter that was sent to Senate Republicans yesterday by the White House Counsel? I don’t have anything else to telegraph to you that we might send to them via fax machine or any other modality. Q Has the President spoken to Senator Hagel in the last couple of days? MR. EARNEST: I don’t have any conversations to read out to you at this point. Q Now, after the President leaves Chicago, we know he’s going to Florida for what’s been described as a guy’s weekend. We’ve read some reports in other publications about some of the details but haven’t gotten the full low-down from the White House. So let’s just do it for the record if we can. Can you describe -- is he playing golf? Is it at the Floridian? Is he getting a lesson from Tiger Woods’s former coach, Butch Harmon? I’ve got a couple more, but -- MR. EARNEST: I don’t have all those details handy, so why don’t we talk on the way to Florida and I can get you some more details on this. But as I mentioned yesterday, the President is looking forward to spending President’s Day weekend with some friends in Florida, and I’m sure they’ll take advantage of the opportunity to play some golf. Q Can you tell us what access the press will have to the President during this weekend? MR. EARNEST: I don’t know what all the logistics are for this weekend. The truth is I’m trying to get through our event in Chicago, but that’s certainly something we can talk about before we arrive in Florida. Q And will you release the list of the friends that he’s playing with and staying with this weekend? MR. EARNEST: I’ll work on getting that done. Again, I really just haven’t had a chance to look at it yet, but I’ll be there, too, and I’ll be working to try to do my best to get you the information that you need to do your job while you’re there. Q And is Ben Rhodes -- I’m curious to know why he’s on the trip. Is there -- I mean, is this also a working weekend for him? Is there something that can be read into this, or is he an avid golfer? (Laughter.) MR. EARNEST: I have not been on the golf course with Ben before. Typically, when the President travels overnight, away from the White House, he’ll often bring a member of his national security team just to be there to brief him and keep him updated as necessary on world events. That’s the reason that Ben is coming. I’m not sure that Ben brought his golf clubs. Q I’ve got a question on Benghazi. So Senator Graham was on Fox News recently and he said that DNI Clapper made the President aware of the two IED attacks on the consulate in April and June. Now, did the President take any action then? MR. EARNEST: I have to refer you to my -- for that kind of a detailed, tick-tock question, I’d refer you to my colleagues at the National Security Staff, who can get you -- who can try to get you some more details on this. I don’t have that information in front of me. Q North Korea is telling China that they may set off two more nuclear tests this year. Is there anything you can do to stop them? Or what’s your reaction? MR. EARNEST: Well, I’ve seen the reports that apparently originated with some Chinese sources, I believe, about those conversations. I’m not aware of the content of those conversations. Suffice it to say, we have warned North Korea about the damaging consequences, or at least the -- I should say, the further isolation that’s caused by their failure to live up to their international obligations. Each time we see one of these nuclear tests, it further isolates the country of North Korea, which has a terrible impact on the people of North Korea. It doesn’t serve their interests. So we encourage the North Koreans to live up to their international obligations, abandon their nuclear program, and work with the rest of the international community to become a responsible member of the international community. Q There was a report, shortly before we took off, that various world powers are signaling to Iran that they may ease gold sanctions in exchange for shutting down the Fordow plant. Can you talk about -- what can you confirm about that and what the U.S.’s role in this is? MR. EARNEST: I don’t have anything on those reports. I do know that the United States and other members of the P5-plus-1 are looking forward to the talks that will take place in a couple of weeks in Kazakhstan. But in terms of those -- what kinds of things might be litigated at that meeting, or what kinds of negotiations may be underway in advance of that meeting, I don’t have anything on that for you. Q Since Rhodes is on the plane, is that something that maybe you can get back to us on? MR. EARNEST: I’ll look into it. If we have something on it, I can get it to you. Q There’s also a report that Mrs. Obama and her daughters are -- have a separate vacation plan for this weekend. Can you just confirm that? MR. EARNEST: Those of you who have been covering the White House know that the First Lady and her two daughters, on a pretty annual basis around this time, will go on a ski trip out west with some family friends, and they’re doing that again this year. Q The President doesn’t like skiing? (Laughter.) MR. EARNEST: The President is looking forward to -- Q Colorado is a swing state. (Laughter.) MR. EARNEST: The President is looking forward to a couple rounds of golf this weekend. Q Has General John Allen told the President he does not want to be nominated as NATO Supreme Commander? MR. EARNEST: I’m glad you asked that question. I know that Secretary Panetta talked about this just a little bit yesterday. The President has appreciated the service of General Allen in Afghanistan. He’s coming off a 19-month tenure of service there, in a really pressure-packed situation. This was not -- a stressful role that he played. The President has relied on him quite a bit over the last 19 months as we’ve navigated some very complicated issues, and again, initiated this drawdown of our men and women out of Afghanistan. General Allen has said that, as he considers his next assignment, that he wanted to spend some time talking to his family about what he’d like to do next. And that’s certainly something that is understandable given what he’s been up to the last 19 months. And so we’re happy to give him the opportunity to consider what he would like to do next. But suffice it to say, the President has a ton of confidence in General Allen, not just because of the great work that he did over the last 19 months in Afghanistan, but because of the wisdom and advice that he shared with the President on a range of issues before that. So certainly, we'd like to look for an opportunity for General Allen to continue his service to his country. Q Will the President meet with General Allen to talk about his future? MR. EARNEST: There's no meeting that I'm aware of right now that's on the schedule. Q So it's unclear whether he's going to take this NATO job or something else? MR. EARNEST: Well, it's something that he said that he would like the opportunity to discuss with his family. And we're certainly comfortable with his -- Q So it’s on pause -- it’s on hold until we hear more? MR. EARNEST: Yes. Q What is your sense of how much of the President's remarks today will be devoted to guns and gun violence and homicide in Chicago, et cetera? MR. EARNEST: Well, as I mentioned, the focus of the President's remarks today will be on the priority of building ladders of opportunity for those Americans who are scratching and clawing, trying to get into the middle class. So he'll talk about some of the initiatives that he discussed in the State of the Union and even some of the initiatives that he's talked about over the last couple of days. He'll talk about the difference that it would make to raise the minimum wage up to $9 an hour. This would literally mean the difference between a family of four whose head of household has a full-time, minimum wage job. Currently, the head of a household of four who has a full-time, minimum wage job is actually raising his family below the poverty line -- his or her family below the poverty line. So giving a raise to $9 an hour would have a real impact on the standard of living for families like that. This is why the President believes it’s important to invest in high-quality early childhood education programs. We've seen that investments like this for every dollar that we invest in these kinds of programs, we can save seven taxpayer dollars because of the impact it has on educational achievement down the road, because of the impact it has on things like teen pregnancy rates and even on violent crime rates. So the President will talk primarily about some of these issues. But the other thing that's true -- and Secretary Duncan speaks about this very eloquently -- that our kids are not going to be successful in the classroom if they're scared of violence in their school. So the President is going to talk about -- in addition to these other policies that are critical to expanding economic opportunity, he's also going to talk about making our community safer. And one of the things that he'll also talk about are “promise zones.” Promise zones are an idea where we can coordinate and integrate federal assistance to communities that are struggling both economically and otherwise. So what we can do is we can devote resources from the Department of Justice to fund law enforcement programs. We can dedicate funding from HUD to expand housing options in these communities. We can dedicate money from the Department of Education to improve schools and to expand educational programs. Integrating all these programs is critical to offering a ladder of opportunity to the families that live there. So the President really will be making an effort to focus on the economy, but trying to separate that completely from gun violence is impractical. Anybody else? Thanks, everybody. END 1:44 P.M. EST
Make no mistake: America and China are on a collision course and the battleground is Asia. The China-Japan dispute has little to do with a small group of islands in the South China Sea. It's about a new world power, China, wanting to assert its authority in Asia. And it's about the U.S being threatened by China's increasing power and wanting to contain it. That's what makes the current dispute so dangerous. Even if the fight dies down, the battle for dominance in Asia between the U.S. and China will continue. For investors, the implications from this are not only the potential for increased trade disputes between the U.S and China. But also, the likelihood of rising friction between Asian countries themselves. In fact, we're already seeing it as these countries are being forced to side with either America or China. Intra-Asian trade will be impacted too. Welcome to the new Cold War. Asia is the new battleground I have an abiding love for history. I put it down to a combination of great high school history teacher and a realisation that if you don't understand history, you can't possibly understand the present or the future. Anyhow, I got thinking about how we've been lucky to have lived through a remarkably peaceful period since the fall of communism in 1989. The fall spurred much self-congratulation about how liberal democracies had won the day and communism was dead for good. Francis Fukuyama's 1992 bestseller, The End of History, reflected this sentiment: "What we may be witnessing is not only the end of the Cold War, or the passing of a particular period of post-war history, but the end of history as such: that is, the end point of mankind's ideological evolution and the universalization of Western liberal democracy as the final form of human government." The book was not only silly in theory but totally ignored the rise of communist China too. Now some of you may say that we haven't lived through a peaceful period since 1989 at all. Two wars in Iraq, a war in Afghanistan, a terrorist attack on the U.S., ongoing bloodshed in Palestine, to name but a few of the fights since that time. Not to belittle these conflicts in any way, but they were relatively small fry compared to what happened prior to 1989. The latest Iraqi war and occupation is estimated to have had around 172,000 casualties. The September 11 terrorist attacks had casualties numbering 9,000 including 3,000 dead. These were not total wars though. The number of countries involved was far greater in World Wars I and II, as well as the Cold War. The casualties also dwarfed those of recent conflicts. For instance, casualties during World War I numbered 22.5 million. It's hard for many people to fathom these numbers and the destruction involved. Which brings me to the present day. I can't help but thinking that we're entering a new period of rising tensions between countries. As well as a Cold War in Asia. The 2008 financial crisis and subsequent economic downturn, as well as rising food inflation, have led to the fall of several, once-considered impregnable governments in the Middle East. The installation of new governments in their place is proving problematic. By contrast, increasing tensions in Asia have nothing to do with the economic downturn or food inflation. Instead, they've come about from the rise of China as a new world power. China is staking its claims as a world power both economically and politically, focusing particularly on its own neighbourhood, Asia. And other nations are increasingly concerned about it. China-Japan dispute: appearances deceive The current conflict between China and Japan is supposedly over five tiny, uninhabited islands, Senkaku or Diaoyu islands, in the South China Sea. And the abundant natural gas in the area. China has been challenging Japan's claims over the Senkaku islands and its control of them. The situation has become increasingly tense and in late January there was almost a shoot-out. Japan claims that China beamed fire control radar at a destroyer owned by the Japanese Navy - a first step to potentially firing a missile at it. The dangers of the conflict lay with politicians on all sides wanting to prove their military credentials by appearing tougher than the one another, with little regard for the consequences. This kind of behaviour is similar to that which almost led to catastrophic consequences during the Cuban missile crisis in 1962. Stepping back from the minutiae of the dispute though, it's ultimately about the changing balance of power in Asia. China has already become an economic power, now being the world's second largest economy. It's Asia's largest trading partner in both exports and imports. It's seeking the political power to match its economic might. And it's aggressively building military capabilities to achieve this goal. Japan, on the other hand, is angry over China's economic prowess and wary of its political ambitions in the region. Japan has watched its share of imports in all markets shrink while China's share has rapidly expanded. Japanese companies have been forced to shift the production of manufactured goods to China and other low-cost countries, which has contributed to the country's depressed economic activity. The current dispute is effectively Japan's way of saying: "enough is enough". Of course, Japan's principle ally in Asia is America. The U.S. has publicly remained neutral over the disputed islands, but privately there's little doubt that it's siding with Japan. The backdrop is that the U.S. has historically been Asia's most influential political power but the dynamics are changing with the rise of China. That's why official American foreign policy has been to "pivot" towards Asia and away from area such as the Middle East. China believes that this pivot is about the U.S. containing its power and it's right. Of course, America denies this but logic dictates otherwise. In a previous note, I suggested that it was no coincidence that The New York Times ran arguably anti-China stories U.S. election. I love the Times and some of the stories, such as Premier Wen's family secret fortune, were fantastic pieces of journalism. But I've got no doubt that the sources feeding these anti-China articles were mostly from the Obama administration. It's part of a toughened stance towards China. Asia is splintering Thus far, the U.S. has played its hand well in Asia. It's strengthened relationships with Vietnam and the Philippines by subtly backing their own claims against China to territories in the South China Seas. It's also strengthened military alliances with South Korea, Singapore, Indonesia and Australia. And it's managed to become a key ally to Myanmar, a country with immense potential that is starting to open up to the world, and where China arguably has blundered. Asia itself has splintered. Countries are being forced to ally with the U.S. or China. "You're either with us or against us" in military speak. This trend is most apparent at the 10-member, Association of South-East Asian Nations (Asean). Asean has practically stopped functioning because of the bickering over China's territorial claims in the South China Sea. Last year, Cambodia chaired the association and as an ally to China, pressed its friend's territorial claims. Vietnam and the Philippines strongly objected, and the various arguments became public at Asean meetings. With Brunei now chairing the association, it's hoped these arguments will die down. But I wouldn't count on it. Asean is pushing for a collective agreement over China's claims while China itself only wants discussions and/or agreements with the countries directly impacted by the claims. In short, expect more diplomatic posturing and possibly open hostility. Why it matters for investors There are several implications from this new Cold War. In any war, cold or otherwise, trade usually suffers. You're likely to see the U.S. and China introduce new trade tariffs and sanctions between the two countries. The U.S. will also start pressuring Asian allies to align their investment policies with it. From China's side, you're already seeing work to move away from the dollar as the world's reserve currency. Of course, the elephant in the room is China being the second-largest holder of U.S. government debt. For economic reasons, China's already started to reduce its holdings due to reduced foreign currency reserve growth (which we've talked about recently). The implications of this new war spread much further than just the U.S.-China relationship though. Intra-Asian trade will be impacted too. Consider that exports within Asia account for around 56% of total Asian exports. In other words, Asia matters more than the rest of the world. Consider also that intra-Asia trade grew 3.5x over the past decade, or a 15% Cagr. Tidy. Hat tip: Joshua Saldanha. China's export trade share in Asia though has fallen from 51% in 2002 to 44% now. It's become more export dependent on the rest of the world and less on Asia. On the other hand, Asean has benefited greatly from intra-Asian trade. As a percentage of total exports, Asia accounts for 69% of Asean exports, up from 60% a decade ago. It's not hard to see that Asean could be a big loser from increased trade frictions. Source: http://asiaconf.com