Asia's Week Ahead: Rates and Elections

Russia Is Back on the Warpath

The West must reaffirm its support for Georgia.

CATHY YOUNG

With President Barack Obama's trip to Moscow on Monday, you might expect Russia to avoid stirring up any trouble. Yet the Russian media are now abuzz with speculation about a new war in Georgia, and some Western analysts are voicing similar concerns. The idea seems insane. Nonetheless, the risk is real.

One danger sign is persistent talk of so-called Georgian aggression against the breakaway regions of Abkhazia and South Ossetia, which Russia recognized as independent states after the war last August. "Georgia is rattling its weapons . . . and has not given up on attempts to solve its territorial problems by any means," Gen. Nikolai Makarov, who commanded Russian troops in Georgia in 2008, told the Novosti news agency on June 17. Similar warnings have been aired repeatedly by the state-controlled media.

Independent Russian commentators, such as columnist Andrei Piontkovsky, note that this has the feel of a propaganda campaign to prepare the public for a second war. Most recently, Moscow has trotted out a Georgian defector, Lt. Alik D. Bzhania, who claims that Georgian President Mikheil Saakashvili "intends to restart the war."

Yet Russia is the one currently engaged in large-scale military exercises in Abkhazia, South Ossetia, and adjacent regions. Russia has also kicked out international observers from the area. On June 15, Moscow vetoed a U.N. Security Council resolution renewing the mandate of U.N. monitors in Abkhazia because it mentioned an earlier resolution affirming Georgia's territorial integrity. Negotiations to extend the mission of monitors for the Organization for Security and Cooperation in Europe have broken down thanks to Russian obstruction. Now, 225 European Union monitors are the only international presence on the disputed borders.

The expulsion of neutral observers seems odd if Russia is worried about Georgian aggression. But it makes sense if Russia is planning an attack.

What would the Kremlin gain? A crushing victory in Georgia would depose the hated Mr. Saakashvili, give Russia control of vital transit routes for additional energy resources that could weaken its hold on the European oil and gas markets, humiliate the U.S., and distract Russians from their economic woes. Mr. Piontkovsky also believes the war drive comes from Russian Prime Minister Vladimir Putin, who is anxious to reassert himself as supreme leader.

Still, the costs would be tremendous. Last year the Kremlin repaired some of the damage to its relations with Europe and the U.S. by portraying the invasion of Georgia as a response to a unique crisis, not part of an imperial strategy. Another war would cripple Russia's quest for respectability in the civilized world, including its vanity project of the 2014 Winter Olympics in Sochi.

And after the patriotic fervor wears off, domestic discontent would likely follow. Moreover, Russia would almost certainly find itself mired in a long guerilla war. This would further destabilize a region where Russia's own provinces, Ingushetia and Dagestan, are plagued by violent turmoil.

Given all this, a war seems unlikely. What's more probable is that Russia will seek to destabilize Georgia without military action. This saber-rattling may be meant to boost Georgian opposition to Mr. Saakashvili.

Still, Moscow's actions are not always rational. If the pro-war faction believes that the Western response to an assault on Georgia would be weak and half-hearted, it could be emboldened. In a June 25 column on the EJ.ru Web site, Russian journalist Yulia Latynina writes that the probability of the war "depends solely on the Kremlin's capacity to convince itself that it can convince the world that the war is its enemies' fault."

That is why it's essential for the United States and the EU to respond now -- by increasing their non-military presence in Georgia, expressing a strong commitment to Georgian sovereignty, and reminding Russia of the consequences of aggression. Such a statement from President Obama in Moscow would go a long way toward preventing the possibility of another tragedy.

Ms. Young is a columnist for RealClearPolitics.com and the author of "Growing Up in Moscow" (Ticknor & Fields, 1989).

Asia's Week Ahead: Rates and Elections

Stocks Skid on Payrolls Data

A weak jobs report roiled financial markets on Thursday as traders' already sagging hopes for a second-half global economic rebound ebbed a little more.

The holiday-shortened week's most eagerly anticipated report on the economy was a stark letdown. Payrolls contracted by 467,000 jobs last month, a worse-than-expected decline, and the unemployment rate climbed to 9.5%, its highest level in more than 25 years.

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The Dow Jones Industrial Average declined 223.32 points, or 2.6%, to 8280.74, with all of its 30 components falling.

The S&P 500-stock index fell 26.91 points, or 2.9%, to 896.42. The Nasdaq Composite Index declined 49.20 points, or 2.7%, to 1796.52. The small-stock Russell 2000 slid 20.25 points, or 3.9%, to 497.21.

New York Stock Exchange trading was extended for 15 minutes until 4:15 p.m. following "system irregularities," according to a statement from the exchange.

Jonathan Corpina, senior managing partner at Meridian Equity Partners, said some economic data had looked a bit stronger lately, encouraging optimism about a potential recovery. But the continuing climb toward a double-digit unemployment rate and the thin trading of a holiday-shortened week were too much for stocks.

All the S&P 500's sectors fell, with the energy, consumer-discretionary, and financial sectors posting the sharpest losses, off more than 3%.

Most sectors of the market, especially consumer stocks, tend to move in the opposite direction of energy, since companies tend to benefit from higher consumer spending at times when their pocketbooks aren't burdened by high fuel costs.

But this week was an exception, with consumer stocks and energy moving in lockstep on several occasions as traders bet that a new round of economic weakness would spread across all categories.

Oil itself also traded sharply lower on Thursday, with futures closing off $2.62 at $66.69 per barrel in New York.

"There's no question it's gotten ahead of the fundamentals," with demand still constrained by the global recession, said trader Don Luke of futures brokerage MF Global in New York. "Maybe this will be the start of something good. It would be nice to get it back under $60."

Financial markets in the U.S. will be closed on Friday in observance of Independence Day. After the long weekend, traders' focus is likely to turn to corporate profits.

"People are going to be focused on that guidance for the back half of the year as a fourth quarter recovery is baked into this market. We need to hear if that is going to materialize," said Russ Koesterich, head of investment strategy for Barclays Global Investors.

Treasury prices were boosted by safe-haven buying. The two-year note gained 4/32 to yield 0.989%. The 10-year note climbed 13/32 to yield 3.500%.

A rash of glitches have plagued NYSE Euronext's systems in the last 24 hours, after it implemented a new system intended to reduce execution times by 100 milliseconds, replacing 33-year-old technology. NYSE Euronext officials didn't say whether the issues stemmed from the systems upgrade.

Thursday's session extension followed a technical glitch at the New York Stock Exchange earlier in the day that halted trading in several securities for roughly five minutes. On Wednesday, a notice of suspension and delisting for American International Group was erroneously posted on the Web site of the NYSE for three hours.

There's No Such Thing as Free Health Care

The costly truth about Canada's health care system

John Stossel

President Obama says government will make health care cheaper and better. But there's no free lunch.

In England, health care is "free"—as long as you don't mind waiting. People wait so long for dentist appointments that some pull their own teeth. At any one time, half a million people are waiting to get into a British hospital. A British paper reports that one hospital tried to save money by not changing bedsheets. Instead of washing sheets, the staff was encouraged to just turn them over.

Obama insists he is not "trying to bring about government-run healthcare."

"But government management does the same thing," says Sally Pipes of the Pacific Research Institute. "To reduce costs they'll have to ration—deny—care."

"People line up for care, some of them die. That's what happens," says Canadian doctor David Gratzer, author of The Cure. He liked Canada's government health care until he started treating patients.

"The more time I spent in the Canadian system, the more I came across people waiting for radiation therapy, waiting for the knee replacement so they could finally walk up to the second floor of their house." "You want to see your neurologist because of your stress headache? No problem! Just wait six months. You want an MRI? No problem! Free as the air! Just wait six months."

Polls show most Canadians like their free health care, but most people aren't sick when the poll-taker calls. Canadian doctors told us the system is cracking. One complained that he can't get heart-attack victims into the ICU.

In America, people wait in emergency rooms, too, but it's much worse in Canada. If you're sick enough to be admitted, the average wait is 23 hours.

"We can't send these patients to other hospitals. Dr. Eric Letovsky told us. "Every other emergency department in the country is just as packed as we are."

More than a million and a half Canadians say they can't find a family doctor. Some towns hold lotteries to determine who gets a doctor. In Norwood, Ontario, 20/20 videotaped a town clerk pulling the names of the lucky winners out of a lottery box. The losers must wait to see a doctor.

Shirley Healy, like many sick Canadians, came to America for surgery. Her doctor in British Columbia told her she had only a few weeks to live because a blocked artery kept her from digesting food. Yet Canadian officials called her surgery "elective."

"The only thing elective about this surgery was I elected to live," she said.

It's true that America's partly profit-driven, partly bureaucratic system is expensive, and sometimes wasteful, but the pursuit of profit reduces waste and costs and gives the world the improvements in medicine that ease pain and save lives.

"[America] is the country of medical innovation. This is where people come when they need treatment," Dr. Gratzer says.

"Literally we're surrounded by medical miracles. Death by cardiovascular disease has dropped by two-thirds in the last 50 years. You've got to pay a price for that type of advancement."

Canada and England don't pay the price because they freeload off American innovation. If America adopted their systems, we could worry less about paying for health care, but we'd get 2009-level care—forever. Government monopolies don't innovate. Profit seekers do.

We saw this in Canada, where we did find one area of medicine that offers easy access to cutting-edge technology—CT scan, endoscopy, thoracoscopy, laparoscopy, etc. It was open 24/7. Patients didn't have to wait.

But you have to bark or meow to get that kind of treatment. Animal care is the one area of medicine that hasn't been taken over by the government. Dogs can get a CT scan in one day. For people, the waiting list is a month.

John Stossel is co-anchor of ABC News' 20/20 and the author of Myth, Lies, and Downright Stupidity.

Heller Ain't No Bad Place to Be

Second Amendment hero Alan Gura continues the legal fight for gun rights

Brian Doherty

Last week was the first anniversary of the District of Columbia v. Heller, where the Supreme Court for the first time declared that the Second Amendment indeed protects an individual right to own guns in the home for self-defense. It was a great victory for individual rights, but by no means a final one.

The lawyer who successfully argued that case, Alan Gura, has remained a dedicated opponent of all sorts of gun regulations that still stand post-Heller. Senior Editor Brian Doherty talked to Gura by phone earlier this week about the various legal challenges Gura is fighting against state and local gun laws. (The Second Amendment Foundation is backing all of the challenges where Gura is serving as counsel.)

Reason: One of your post-Heller cases has already been petitioned to the Supreme Court, McDonald v. Chicago. What's that case about, and what's happened with it so far?

Alan Gura: The city of Chicago has a handgun ban identical to the one D.C. had until Heller. Chicago requires registration of all guns and does not register handguns. We were challenging that and other provisions of Chicago law, like requiring re-registration annually. They make guns unregisterable forever if you forget to renew. But the lower courts rejected our case, believing that, or at least asserting that, they were bound by ancient 19th-century precedent that held that the Second Amendment was not directly applied to states.

Now, the 14th Amendment has been interpreted for over a century as meaning that states do have to obey most of those rights [in the Bill of Rights], that they have been incorporated through the 14th. The Supreme Court advised in Heller quite specifically that ancient cases [about the Second Amendment's application to the states] may not have much value now, that they did not contain the sort of analysis required by courts now.

But lower courts [in McDonald] did not engage in any of the required analysis. They just fell back on old law without applying the century of precedent [changing the way the 14th Amendment is now typically interpreted]. The courts cited cases from an era when nothing was incorporated. The cases relied on by lower courts also said that the First Amendment doesn't bind states, that the Fifth Amendment doesn't, that the Fourth Amendment doesn't. That is clearly not the legal environment we have been in for the last 100 years. The lower courts claimed they were being faithful to the Supreme Court; I disagree. I think that is not true. They clearly did not apply and ignored the required incorporation analysis [of the 14th Amendment] in effect for quite some time, and I believe the Supreme Court will reverse.

I feel confident they will take the case, as there is now a circuit split [on the question of Second Amendment incorporation] and it's a very important issue and a very compelling case. When the Supreme Court reconvenes in October they will consider various petitions, including ours, and I expect sometime in early October they will grant certiorari.

Reason: Another of your recent cases, Hanson v. D.C., already succeeded in making D.C. further adjust its gun laws, right?

Gura: That is correct. Even after Heller, Washington D.C.'s city council in their incredible hostility to Second Amendment rights went around looking for things to do to gun owners and found this California regulation that D.C. adopted as its own. It's a list of "approved" weapons, listing all those that are going to be allowed for sale and banning guns that aren't on the list.

Unfortunately for D.C. we have a Second Amendment in our Constitution, and the Supreme Court told us in Heller what the test for inclusion on any "list of approved guns" should be. It's any gun a law-abiding citizen wants that is in common use that they use for law-abiding purposes. Any such gun can't be banned entirely. California's list has arbitrary requirements applied so they lead to absurd results. So when D.C. adopted that list for itself, we filed a lawsuit challenging that as unconstitutional.

Tracey Hanson [one of the original plaintiffs in the Heller case] wanted to register a gun in D.C. and was denied because it was in the wrong color! The same identical gun is on California's list in other colors, but it could not be submitted to the list in a bi-tone version that Tracey had because by the time that color came out California was demanding that guns have certain features that gun didn't have.

Gillian St. Lawrence [another plaintiff on the case, and another original Heller plaintiff] wanted to register a handgun that California had determined was safe and fine for people to use, but the gun manufacturer stopped paying the annual listing fee [that California requires to keep a gun on its list] since the model was discontinued. Now, there's no allegation that there's anything wrong with the gun. It was a purely bureaucratic removal. I don't think that it's appropriate to deny people access to a gun just because the manufacturer hasn't paid a fee.

Paul St. Lawrence, Gillian's husband, tried to register the same kind of handgun at issue in the Heller case. This handgun being somewhat old, not manufactured anymore, so no one pays to get it listed, so it can't be put on the list. The same gun the Supreme Court ordered D.C. to have registered wound up being banned in D.C. five months later.

The city realized they could not defend this crazy law. They expanded the list in such a way that it pretty much is all inclusive. They invented a new D.C. list which included everything on the California list, everything similar to ones on the California list, everything on or similar to things on similar lists in Massachusetts and Maryland, and all guns made before 1985.

D.C.'s changing its laws had the effect of mooting our case. When D.C. first proposed these laws they made all these declarations that of course [the list] is constitutional and perfectly fine. As soon as our lawsuit was filed and they had to consider its impact and what it did in real life, they realized it was indefensible. They would not have rolled over if they thought they could defend it. They did not change out of the goodness of their heart. They did it because they knew they would lose.

Reason: What other legal challenges regarding the Second Amendment are you pursuing?

Gura: We are also challenging the California list in California, where the 9th circuit recently held [in the case Nordyke v. King] that the Second Amendment does bind the states. The state might be filing its response in early July. It's called Pena v. Cid.

Also in California we filed Sykes v. McGinness, challenging the practices in two California counties denying people the right to bear arms. California is a "may issue" state when it comes to carry permits. They leave it up to local authorities to determine if they will issue carry licenses. Some jurisdictions are fairly respectful of the Constitution and give permits to people who are law-abiding, and some jurisdictions don't.

So we are suing Sacramento and Yolo counties to get their carry policies overturned. The Heller opinion makes it quite clear that "right to bear arms" includes the right to carry. The court said there will be limits on time, place, and manner on this right to bear arms. For example, you cannot carry a gun into a "sensitive place." We're still not sure what a "sensitive place" is, but if there are some sensitive places we can't carry guns into, that also means there are some non-sensitive places.

I'm litigating another case in D.C., on an obscure provision of federal law that prevents expatriate Americans from acquiring guns in the U.S. The grounds of the challenge are the Second Amendment, and also the right to travel. American citizens are allowed to keep the guns they acquired prior to leaving the U.S. and setting up residence elsewhere. But if you have residence overseas, for some reason the government restricts access to firearms when visiting the U.S. That doesn't make sense.

I can't even imagine what the safety rationale of the law is. If you already had a gun [and leave the country] you can leave it with family or friends, leave it in storage, do whatever you want with that gun, but you can't buy a new one.

Reason: Where did this law come from? What was the official rationale?

Gura: It was snuck into the crime bill revision in 1994. I have not located any extensive debate about why this was thought necessary. You try to explain it, and people scratch their heads. Most gun laws have a rationale, even if it's a bad one that we don't agree with; but they try to make the case we need this law because of this, or handguns are too dangerous—OK, that's a reason. It's not a good reason but...The government is claiming we have no standing, not even addressing it on the merits, as far as I can see. This is in U.S. District Court in D.C. We filed this case earlier in various states these individuals were traveling and the government beat us on venue grounds, claiming the only venue is Washington, D.C. So there we are.

Reason: In order to win the Chicago case if it makes it to the Supreme Court, you have to win the 14th Amendment incorporation argument. How do you go about that?

Gura: The traditional selective incorporation argument, that some rights are incorporated against states through the Due Process Clause if they have certain qualifications, and the Second Amendment meets those standards. If you read Heller, it described the nature of the Second Amendment right such that it should be incorporated under modern analysis.

What I would like the Court to do is incorporate under the 14th Amendment's Privileges or Immunities Clause. To do that would require overruling the Slaughterhouse Cases from 1873, which held that the phrase "privileges or immunities" essentially doesn't mean anything. This is an opportunity to take a whack at Slaughterhouse. We don't have many opportunities in which to get the Court to revisit what this language means, and it's important they do so.

The Slaughterhouse Cases declared pretty much that the only privileges and immunities protected by the 14th Amendment are those of national citizenship, rights that accrue out of the existence of the federal government, like the right to a passport or right to travel the waterways of the U.S. or to petition Congress.

That is wrong; that is a ridiculous analysis. We didn't fight the Civil War to guarantee the right to diplomatic protection abroad. Everyone understood at the time of the 14th Amendment's ratification that it was meant to incorporate the entire Bill of Rights plus other innumerable undefined ones; that's not an exhaustive list of rights in the Constitution. But to get that correct reading of the language to prevail, we have to get the Court to overrule the Slaughterhouse Cases.

Reason: What sort of arguments did your opponents in McDonald make that won for them in the lower courts?

Gura: Besides relying on those 19th-century precedents to claim the Second Amendment doesn't apply to them, the defendants made a host of arguments that basically were ignoring Heller. It's like they just didn't believe Heller really came out the way it did and is the law of the land. They are in complete denial of that opinion, all their arguments are contradicted by something in Heller. I understand they don't like it and disagree with it and it's their right to do so. But they need to accept it is the decision of the Supreme Court. They are not required to like it, but they are required to obey it.

Senior Editor Brian Doherty is author of This is Burning Man (BenBella), Radicals for Capitalism (PublicAffairs), and Gun Control on Trial (Cato Institute).

P.J. O'ROURKE: "WHERE WAS THE GOVERNMENT WITH STUDEBAKER?"

THE FREE PRESS OF THE USA

All Eyes on Today's Job Reports

Stocks Skid on Payrolls Data

GEOFFREY ROGOW

Stocks slid at the open Thursday as June payroll figures fell more than expected, raising fresh concerns about the strength of any potential economic recovery.

Recently, the Dow Jones Industrial Average dropped 178 points, or 2.1%, to 8326.01, including declines of nearly 4% for Alcoaand 4.2% for United Technologies. The Standard & Poor's 500 was off 2.2%. The Nasdaq Composite dropped 2.5%.

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Setting off the decline, U.S. payrolls tumbled by an unexpectedly large amount last month on widespread declines across manufacturing, construction and professional services, a grim reminder that the path to economic recovery will be bumpy.

"Jobs are usually a lagging indicator, but this time they're almost a leading indicator in this scenario," said Doug Roberts, chief investment strategist for Channel Capital Research. "Right now, if the consumer at these levels feels there's a prospect of him being unemployed, he's going to pull back. This is a consumer led recession, and despite the government's best efforts, they can't get them to spend."

For June, nonfarm payrolls declined 467,000, according to the U.S. Labor Department, a considerably greater decline than the 350,000 economists in a Dow Jones Newswires survey had expected.

The unemployment rate, meanwhile, continued to creep toward double digits, rising 0.1 percentage point to 9.5%, its highest level in over 25 years. Wages remained stagnant from the previous month.

Traders had hoped a disappointing Wednesday report on private-sector jobs would somewhat cushion the blow from the June nonfarm payrolls report, but much of the morning activity was heavy selling.

Better-than-expected data on manufacturing and housing helped investors shrug off the ADP report on Wednesday as the Dow closed up 57 points.

The dollar rose against the euro after the jobs report. Oil futures extended their slide, falling $2.48 to $66.83 a barrel.

Energy and materials stocks paced the morning's drop, including S&P 500 components Massey Energy, off 4.6%, and Titanium Metals, off 4.5%.

In one piece of improving data on the consumer, the number of laid-off workers filing new claims for state unemployment benefits fell twice as much as expected last week. The number of people collecting benefits for more than a week also declined, suggesting some improvement in the strained labor market.

Still, the weekly figures did little to stem the broad selling on the full June report. Going into the long holiday weekend, expectations are for a robust morning of trading, following by light activity for the rest of the session.

"When you come back from the long weekend, the focus is on earnings," said Russ Koesterich, head of investment strategy for Barclays Global Investors. "People are going to be focused on that guidance for the back half of the year as a fourth quarter recovery is baked into this market. We need to hear if that is going to materialize."

Wednesday, July 1, 2009

Promises, Promises - Will Obama Deliver?

A Family's Valor, a Nation's Freedom

Why would a 61-year-old civilian surgeon volunteer for Iraq?

KARL ROVE

At a dinner last week in California, I was reminded of the debt we owe to those who have, for 233 years, sustained our freedom and independence. One remarkable family in particular exemplifies the best in the American spirit of courage and sacrifice.

Sitting at my table was a friend, Christine Krissoff, wife of Dr. Bill Krissoff and mother of Nathan and Austin Krissoff. One of her sons, Marine First Lt. Nathan Krissoff, was killed in Al Anbar Province in December 2006. A Williams College grad, athlete and musician, he'd left for Iraq on the fifth anniversary of the 9/11 terrorist attacks. He was 25.

I met his parents and brother in Nevada in August 2007 while accompanying President George W. Bush to Reno, Nev. The president was there to address the American Legion before meeting with local families who'd lost a loved one in Iraq or Afghanistan. Mr. Bush has met with about 550 families in private visits like this. At those meetings, he would have a senior staff member close by in case there was something that needed to be followed up on, such as getting a flag to a family member.

We entered a small room in the back of the convention center to find the Krissoffs waiting -- the father in a black suit with his arms crossed and the mother in a plain dark outfit. Their dress contrasted with their son Austin's Marine dress uniform. Like his older brother, Austin had volunteered for service after college. He was to be deployed to Iraq in March 2008.

About Karl Rove

Karl Rove served as Senior Advisor to President George W. Bush from 2000–2007 and Deputy Chief of Staff from 2004–2007. At the White House he oversaw the Offices of Strategic Initiatives, Political Affairs, Public Liaison, and Intergovernmental Affairs and was Deputy Chief of Staff for Policy, coordinating the White House policy making process.

Before Karl became known as "The Architect" of President Bush's 2000 and 2004 campaigns, he was president of Karl Rove + Company, an Austin-based public affairs firm that worked for Republican candidates, nonpartisan causes, and nonprofit groups. His clients included over 75 Republican U.S. Senate, Congressional and gubernatorial candidates in 24 states, as well as the Moderate Party of Sweden.

Karl writes a weekly op-ed for The Wall Street Journal, is a Newsweek columnist and is now writing a book to be published by Simon & Schuster. Email the author at Karl@Rove.com or visit him on the web at Rove.com.

Or, you can send him a Tweet @karlrove.

During my White House years, I saw few people with the quiet power, intelligence and poise of Chris Krissoff. She talked about her sons, the pain of her loss, her concern for her youngest when he went into harm's way, and the stakes in the War on Terror. The entire time, her husband was quiet.

When stories had been told, tears wept, and grief expressed, Mr. Bush asked if he could do anything. At that, Bill Krissoff spoke.

"Yes," he said. "I'm a pretty good orthopedic surgeon. When my younger son is deployed to Iraq next March, I would like to be working as a Navy medical officer, but they won't let me because I am 61 years old. Will you give me an age waiver, Mr. President?" Mr. Bush pointed to me. Dr. Krissoff and I exchanged business cards and he promised to fax me his application.

I checked him out on the way back to Washington. His reputation was that of an outstanding trauma and sports medicine surgeon. He was also a marathon runner and a really fine person.

Two days later, I placed Bill's application on the president's desk before he met with Gen. Peter Pace, chairman of the Joint Chiefs. I made sure Gen. Pace had the file when he left. He promised to get back soon with an answer. I told him that he would have to get back to someone else: The next day was my last day at the White House. One of the last things I did before turning in my badge was to write Bill Krissoff to wish him well.

A day later, I was in West Texas for the start of dove season. While waiting for the next flight of birds, I realized I hadn't written Mrs. Krissoff. So I sat down that night at the Gage Hotel in Marathon and did. She had already lost her oldest son. Her younger son was preparing to deploy to Iraq. Meanwhile, her husband wanted to give up their comfortable life, career and friends so he could honor their sons by joining the military at age 61. And she had given her full, heartfelt support.

A few weeks later, I received a note saying Bill had received his waiver and a chance to pass basic training. A few months later, I was invited to the commissioning ceremony for Lt. Commander William Krissoff, United States Navy Medical Reserve.

Bill emailed me this April about his duties as a combat surgeon in Iraq. He sent photos of himself with Austin, who is now on his second tour there. This is how father, mother and brother are honoring the sacrifice of Nathan. While sharing this story with the audience last week, I found myself unable to look at Christine until I finished and the crowd rose to applaud her.

Watching the smoke rise from the Battle of Bunker Hill, Abigail Adams wrote her husband John, who was away at the Second Continental Congress in Philadelphia. While she and others lived "in continual Expectation of Hostility," Abigail wrote, "like good Nehemiah, having made our prayer with God, and set the people with their Swords, their Spears, and their bows, we will say unto them, Be not affraid of them."

Christine Krissoff's husband and sons, wrapped in prayers and armed with swords and scalpels, have served our nation with valor. So has she. So long as our nation produces families like the Krissoffs, America will remain not only the greatest nation on earth, but also the most noble in history.

Mr. Rove is the former senior adviser and deputy chief of staff to President George W. Bush.

Sotomayor and the Firefighters

Fuel Standards Are Killing GM

A higher gas tax is a better way to get green cars on the road.

ALAN REYNOLDS

General Motors can survive bankruptcy far more easily than it can survive President Barack Obama's ambitious fuel economy standards, which mandate that all new new vehicles average 35.5 miles per gallon by 2016.

The actual Corporate Average Fuel Economy (CAFE) results will depend on the mixture of fuel-thrifty and fuel-thirsty vehicles consumers choose to buy from each manufacturer -- not on what producers hope to sell. That means only those companies most successful in selling the smallest cars with the smallest engines will, in the future, be allowed to sell the more profitable larger pickups and SUVs and more powerful luxury and sports cars.

Sales of Toyota's Prius, Yaris, Corolla and Scion, for example, allow and encourage Toyota to market more Lexus 460s, Sequoia SUVs and Tundra pickups in the U.S. without incurring fines. Hyundai's success selling Accent and Elantra compacts allows it to sell 368-horsepower Genesis sedans.

Chad Crowe

Similarly, Ford has the Toyota-licensed hybrid Fusion and will soon produce the European Ford Fiesta in Mexico. Chrysler will soon have Fiats. But what does GM have?

No independent reviewer suggests that the Chevy Aveo and Cobalt are credible contenders in the small car field. Even the president's auto task force finds the electric Chevy Volt "unviable," since it will lose money unless priced above a Cadillac CTS. The Opel-engineered 2011 Chevy Cruze will face tough competition from Asian cars whose reliability is better established. Launching such new models will be even tougher in the future, now that GM has lost control of Opel.

GM accounted for about 19% of vehicle sales so far this year, but the company had a much smaller share of the market for small cars and SUVs (which accounted for 20% of total sales through May). To continue offering a Toyota-like array of larger cars and trucks under ever-tighter CAFE rules, GM would have to capture a much larger share of the market for small and/or diesel-powered vehicles. Unfortunately, European and Asian car makers have decades more experience building reliable subcompact cars and diesel engines for their local markets -- where consumers face steep taxes on gasoline and large engines.

General Motors does produce competitive cars and trucks, but not one of them is small. Consumer Reports recommends three GM cars and three GM trucks. The recommended cars are the Chevy Malibu (the unrecommended hybrid has been dropped), the large Buick Lucerne and the Cadillac DTS. Consumer Reports recommends the Chevy Avalanche and Silverado and the GMC Sierra trucks. Car enthusiast magazines insist on adding Camaro, Corvette and the 556-horsepower Cadillac CTS-V to that list.

Among those nine best GM vehicles, only the four-cylinder Malibu achieved as much as 25 mpg in Consumer Reports testing. The others get 12-17 mpg, yet they are no less fuel-efficient than comparable foreign brands. The Environmental Protection Agency rates the mileage of the Toyota Sienna van and Nissan Titan pickup as worst in their class, and comparable Chevys as best. Unlike GM, however, Japanese car companies sell enough small cars to offset the large and thus hold down the average figures.

General Motors is likely to become profitable only if it is allowed to specialize in what it does best -- namely, midsize and large sedans, sports cars, pickup trucks and SUVs. The company can't possibly afford to scrap billions of dollars of equipment used to produce its best vehicles simply to please politicians who would rather see GM start from scratch, wasting more taxpayer money on "retooling" to produce unwanted and unprofitable subcompacts and electric cars. The average mileage of GM's future cars won't matter if nobody buys them.

Politicians are addicted to CAFE standards because they create an illusion of doing something sometime in the future without voters experiencing the slightest inconvenience in the present. Tighter future CAFE rules will have no effect at all on the type of vehicles we choose to buy. Their only effect will be to compel us to buy larger and more powerful vehicles from foreign manufacturers. Americans will still buy Jaguars, but from an Indian firm, Tata, rather than Ford. They'll buy Hummers, but from a Chinese firm, Tengzhong, rather than GM. The whole game is a charade; symbolism without substance.

As a matter of practical politics, rescuing GM from strangulation by CAFE will require offering economically literate environmentalists a greener alternative, i.e., one that works. Luckily, the government has two policy tools that, with minor modifications, really could discourage people from buying the least fuel-efficient vehicles.

One is the federal excise tax on "gas guzzlers," which could take some fun out of the horsepower race except that it applies only to cars, not to SUVS, vans and trucks. Why not apply this tax to all types of gas guzzling vehicles? Owners of trucks used for business could deduct the tax in proportion to miles used for business, as they do with other vehicular expenses. Phase it in after 2011 to encourage buyers to snap up the unsold inventory of gas guzzling trucks quickly -- a timely "stimulus plan."

Second, the federal fuel tax is highest on the most efficient fuel (diesel) and below zero on the least efficient fuel (ethanol). Cars get about 30% better mileage on diesel than on gasoline, and cars running mainly on gasoline get about 30% better mileage than they would using 85% ethanol.

To stop distorting consumer choices, simply apply the same 24-cent-a-gallon federal tax to gasoline and ethanol as we do to diesel. This would add funds to the depleted federal highway trust. More importantly, it would remove an irrational tax penalty on buying diesel-powered cars -- arguably the most cost-effective way to improve mileage without reducing car size or performance.

These two proposals are a greener alternative to CAFE, because they'll work. But they'll only work if Congress totally and permanently abandons the charade of CAFE. It is arguably worthwhile to accept a modest tax increase in exchange for an end to harmful regulations, but that exchange is effective precisely because it is not painless.

Unifying fuel taxes and broadening the excise tax on gas guzzlers makes sense as an alternative to CAFE. Otherwise it's just more pain with no gain.

If politicians insist on tightening fleet average mileage standards for bankrupt auto companies, how could those rules be enforced? The only penalty for violating CAFE rules is a big fine. If consumers keep refusing to buy enough small cars from GM and Chrysler to allow them to meet the CAFE rules, how are those companies expected to pay the fines?

The government is already planning to spend about $50 billion bailing out General Motors plus $7 billion for Chrysler. Will President Barack Obama provide Detroit auto makers with even more subsidies to pay CAFE fines?

Maybe so. That would be only slightly more bizarre than current plans to bribe folks with $4,500 to sell their "clunkers," or to offer huge tax credits to those rich enough to buy a $73,000 hybrid Cadillac Escalade or an $88,000 Fisker Karma.

The bottom line is that CAFE standards are totally unenforceable and ineffective. Regardless of how much damage the rules do to GM and Chrysler, Americans can and will continue to buy big and fast vehicles from German, Japanese, Korean, Chinese and Indian car companies. CAFE standards might just be another foolhardy regulatory nuisance -- were it not for the fact that they could easily prove fatally dangerous for any auto maker overly dependent on the uniquely overregulated U.S. market.

Mr. Reynolds is a senior fellow at the Cato Institute, and the author of "Income and Wealth" (Greenwood Press, 2006).

CATO DAILY PODCAST

Cap-and-Trade-War

by Patrick J. Michaels and Sallie James

Despite indications that much of President Obama's agenda is meeting intra-party skepticism all over Capitol Hill, there is one policy nexus where congressional leaders are still doggedly determined to move the country left: energy and the environment. Speaker Pelosi will reportedly allow a vote on the controversial Waxman-Markey "cap-and-trade" legislation at the end of this week.

And it gets even better. Not content to tempt political fate by imposing huge carbon taxes on the American middle class, Democrats have added a provision which imposes stiff tariffs on our trading partners if they don't adopt aggressive carbon restrictions of their own.

You heard correctly: progressives have authored a bill that earns the mortal enmity of domestic energy consumers and our most crucial trading partners at the same time. Economy-killing climate policies and a trade war — together at last!

Patrick J. Michaels is senior fellow in environmental studies at the Cato Institute and the co-author of Climate of Extremes: Global Warming Science They Don't Want You to Know. Sallie James is a trade policy analyst at Cato and author of the forthcoming A Harsh Climate for Trade: How Climate Change Policies Threaten the Global Trading System.

More by Patrick J. MichaelsMore by Sallie James

What happened is this: An early draft of Waxman-Markey already contained triggers that gave the president the choice to introduce carbon tariffs if jobs and industry "leak" overseas to countries that don't constrain emissions so dramatically. (China and India come to mind.) The original version empowered the president to impose the carbon-linked tariffs beginning in 2025.

But though the language is not public yet, the House Ways and Means Committee is reportedly considering provisions that will give extra comfort to protectionists. Leaks from Hill offices indicate that the president would now be forced to impose the carbon tariffs — and could only opt out of doing so with permission from both chambers of Congress. Carbon-intensive imports would be subject to penalties at the border unless the country of origin requires emission reduction measures at least 80 percent as costly as ours. (The original Waxman-Markey bill had a threshold of 60 percent.)

Unfortunately for the amendment's authors, World Trade Organization rules make fairly clear that trade-limiting measures imposed to protect the environment should have the purpose of protecting the environment, and not to address any adverse competitiveness effects on domestic industry. Break that connection between measure and purpose, and you've got yourself a problem. The result could be litigation, retaliatory tariffs, or both. Does anyone really expect China to stand idly by in 2025 as their trade is embargoed?

And just for the sake of discussion, exactly how much global warming will be prevented by this assurance of future trade turmoil? Well, let's use the federal government's own model which — we are not making this up — is called MAGGIC (Model for the Assessment of Greenhouse-gas Induced Climate Change). It comes from the National Center for Atmospheric Research in Boulder, Colorado.

Let's compare the effects of Waxman-Markey to the United Nations' "business-as-usual" emissions scenario that's in their big 2007 climate change compendium. If the U.S. only adopts Waxman-Markey, global warming would be reduced by a grand total of 0.2ºF by 2100. This is too small to even detect, because global temperatures bounce around by about this amount every year. For those who like to think more near-term, the amount of warming prevented by 2050 would be 0.07 of a degree.

According to the UN, without Waxman-Markey the warming from 1990 to 2050 would be 2.8ºF, and 5.3º by 2100. (Of course, observed warming since 1990 is running about 40 percent below the expected rate, largely because there hasn't been any net warming since the very warm year of 1998.)

Now, let's be completely unrealistic and assume that every nation that has "obligations" under the (failed) Kyoto Protocol cuts emissions as much as we do. Then the saved warming balloons all the way to 0.14ºF by 2050 and 0.4º by 2100, or 5 and 7 percent, respectively, of the "business-as-usual" total.

Let's add it all up. We don't do anything measurable to reduce global warming, we alienate some of our biggest trade partners, we risk a trade war, and Americans are allowed to emit the same carbon volumes as the average citizen did in 1867. What's not to hate?

All of which explains why Waxman-Markey is being rushed to the floor. If people find out what is really in it, how risky it is and how small the purported benefits, it is hard to believe that it will pass.