After months of wrangling with hardline Tea Party members of the House and Senate, Congress finally in the 11th hour, sent a bill to President Obama raising the debt ceiling with a plan to cut expenditures by over 2 Trillion dollars. Just days after, in a week of extreme volatility in the public markets around the world, Standard & Poor downgraded the nation’s credit rating from its historic AAA rating.

This will mean that every credit card holder, student, homeowner or business borrower will be immediately affected by increased costs of borrowing. Credit markets, already tight, will become even tighter, making it more and more difficult for new enterprises to start and existing ones to expand. That translates into reduced job opportunities and potentially, more corporate belt tightening and consequential job losses.

In a period when it is critical to increase employment and build the national economy, this will come as a major blow to the future and its impact will be felt for at least a generation, maybe two. It will be felt in every corner of the nation; in big cities and small villages; and by every socio-economic group. The ramifications of this crisis of national creditworthiness will grind government projects into the ground, causing appropriations for the most routine, even essential functions to be reduced or eliminated.

The Tea Party seems to have won their goal to reduce the size of government, but they did so at the price of destroying the economy in the process.  We are likely to slip into a second Great Recession and likely, a full economic depression purely for the sake of their political commitment to a non-governmental organization not to pay taxes.  They took a political pledge and allowed it to supersede their primary obligation – their oath of office – to uphold and defend the Constitution of The United States.

While our corporate institutions are generally in good shape economically and able to withstand many of the pressures this crisis will create, in order for them to do so, they will be compelled to downsize even more.  We are likely to see more and more companies transferring their corporate operations off-shore, to places like China, India and other growing industrialized nations.

The debate over raising the debt ceiling deeply wounded John Boehner’s speakership, making it difficult for him to successfully hold his party’s votes together.  Eric Cantor (R-VA) is likely to continue siding with the Tea Party faction, effectively stabbing Boehner in the back by breaking the long-held tradition of unified Republican voting.   This could make Congress ineffective in resolving the complexities involved in restoring the Nation’s credit rating.  At minimum, we may be forced to wait until 2013 to see the effect of political change.  Either voters will add to the Tea Party’s ranks or they’ll replace them with representatives with stronger, more stable economic knowledge and practical solutions.

The longer this goes without resolution and restoration of the triple-A rating, the harder it will be to fix the condition. We fully expect and anticipate that with the present Congress, it will be nearly impossible to pass any legislation that will be productive. As a result, we believe the Nation, and indeed the world will be headed into a global depression.

When the last Great Depression hit in 1930, the only means of resolving it was massive stimulus spending, inspirational national projects and ultimately, war.  Why war as a tool of economic restoration? For two reasons. it reduces populations allowing for the redistribution of wealth to a smaller, but wider group; and it creates massive government spending.

Depression will lead to the rise of fanaticism, racism, social bias and prejudice, hatred and eventually to military confrontation. Fear and economic panic will eventually radicalize any population. As a result, irrational behavior will become commonplace and we’ll see stable, civilized nations greatly affected, perhaps facing revolutions.  With the use of technology, we’ve already seen Egypt and other nations subjected to revolutions.

The public will likely blame the Republican Party for this crisis, though it is not the moderate Republicans who caused this. It is however, squarely the responsibility of ill-informed Tea Party members who base doctrine and dogma on incorrect analysis of data and fear-mongering. Oddly, the same thing that led to the rise of the Nazi Party in Germany in 1932 and Iraq’s Bath Party in the 1960′s and while we are not comparing any politician or political group to the Nazi’s, we are suggesting that the circumstances and history are similar.

The public’s fear of economic loss and deprivation of an expected lifestyle will cause many to shift political opinion, just as the middle-class and lower classes did in the Russia of 1917.  War will ensure that Americans radicalize.  The political future will be volatile, dangerous, unstable and fearful.

Democrats will not come out of this crisis unscathed either. Failure of strong leadership by President Obama and the lack of strength of former Speaker Nancy Pelosi to lead a compromise will cause many to blame Democrats. While perfectly true, it remains however, a crisis caused solely by the bullying tactics and ill-informed economic theories of the Tea Party.

For Speaker Boehner, the problem will not be whether he can get his Tea Party members to vote with him, it’s going to be what they’ll actually vote on.  Before a bill is introduced, it is usually negotiated and rather than doing most of his negotiating with Democrats, he’ll be compelled to do so within his own caucus.  The result, most likely, will be watered down legislation that is ineffective and potentially hazardous.

The S & P downgrade was the result of watered down legislation that could have easily prevented this entire fiasco.  The original compromise legislation that Boehner and Obama had reached would have successfully prevented this crisis by ensuring that there were added revenues in addition to spending cuts to ensure deficit reduction.  Now, Congress has no option other than to approve immediate repeal of the Bush-era tax cuts and to allocate 100% of that revenue to deficit reduction.

The American public, meanwhile, will be the worse for the wear, suffering considerably as this unfolds before them.  Disgusted, and already radicalized, they won’t know whom to believe.  Faith will not resolve this, not even faith in their leaders.  Rather, they must elect moderates who’s goal is to fix the economy,  not to reduce taxes, strip spending or downsize government.  Dogma and ideology have no place in resolving broken economies.

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View the full FDX chart at Wikinvest

The technological revolution is like every other revolution. There will be victims and heroes.  The Post Office has slowly become a victim, while companies like Google and Microsoft have been the heroes, making communication between people faster, easier and more effective.

Still, even in this revolution, the Post Office endures and indeed it must continue to operate as an obligation and duty of government, even though for a very long time it has been only quasi-governmental.  There are ways to save it from potential bankruptcy, despite its multi-billion dollar annual losses.

One would be to scale back the number of post offices, consolidating many located in close proximity, and re-zoning zipcodes.  For example, when the US Census is taken and Congress redistricted based on population shifts, so too should be zipcodes to ensure that the zipcode reflects a number of occupied deliverable addresses.  Less zipcodes means less post offices. Staggering delivery days could help too, with some sections of a postal zone receiving delivery on Saturday and skipping Wednesdays, and others only receiving delivery Monday through Friday.

Congress could legislate that the USPS have jurisdiction over e-mail, and impose a fee, like a stamp, on all commercial  e-mails that are unsolicited by their recipients.  This proposal, long outstanding, would reduce the volume of spam, help to enforce the Cann-Spam Act and generate a few billion annually for the USPS.

Critics will say this would create a government policing of our e-mail communications and invasion of our privacy.  Potentially, that may have merit, but if private direct communication between two individuals, even business people, is left untaxed and unmonitored, there should be no harm.  Only commercial e-mailers would be taxed, even if they operate outside the United States.  Failure to pay would result in denial of access to US networks.  Those same critics would also complain that freedom of communication would result.  Actually, only the freedom to spam, and send out unsolicited commercial communications.

Prior to e-mail, many companies did direct mail using the USPS and this proposal is merely an electronic extension of that concept, where direct mailers had to obtain bulk mailing permits and mail on a fee basis.  Is it unreasonable that commercial bulk e-mailers should pay the same type of fees to the USPS?

Another consideration would be to have the USPS provide more electronic services, complementing and coordinating under law, with all electronic communications.  For example, expanding on the sale of stamps, one could buy a stamp for a penny and ensure delivery of your email with confirmation via the USPS mail servers.  Or, all private mailservers could route through USPS for a nominal fee, allowing USPS to filter out all unpaid emails, reducing junk mail to zero.

The USPS could offer coupons, delivered by mail to everyone, offering small discounts to use its services.  It could also send out mailings to every business customer offering special discounted programs to compete even more with its commercial rivals.

Congress could approve USPS becoming the central broadband carrier, enabling it to earn revenues electronically, with minimal labor.

USPS could do a marketing campaign to remind Americans of its loyalty to them for over 200 years and calling upon them to return the loyalty and mail a letter, send a card or a package.

It could provide postal discount loyalty programs through greeting card companies.  For every 50 cards you send, you get 5 stamps free, or something like that.

USPS could rebrand, and become more competitive in the marketplace.  Private companies do this, but they don’t use government based contracting to achieve positive results.  They also test branding.  The last time USPS rebranded, it did a low-bid contract that resulted in typically government-styled logo and designs.

Reorganize, including major shifts in personnel costs and management.  They should consider bringing in some management consultants, M&A specialists and organizational experts who are not government employees.  Take a private sector approach to rebuilding the organization from a purely competitive perspective.

Consider increasing the scheduled pick up and delivery. Without adding new labor costs, it is possible to pick up mail more often and deliver it more frequently.  The technology exists to facilitate this.  Capital investment by Congress could ensure profit versus a $7 Billion loss.

It is time USPS and more important, Congress, become more aware of their need to compete in an open marketplace. The alternative would be a return to the monopoly, with the nationalization of FedEx, UPS an all other delivery services.

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New York will presently be the largest and most populous state to allow gay marriage, California’s law still remains in the courts, but is expected to reach the US Supreme Court at some point, The passage of the New York legislation will certainly send a loud signal to justices that gay marriage is the will of the people.

The passage of the same-sex marriage law approved same-sex marriage, hands American gay rights advocates a major victory in their quest for equality.

After extensive debate, the New York State Senate approved the legislation Friday night, as two previously undecided Republican lawmakers cast the deciding votes in favor of it.

Ross Levi, executive director of the Empire State Pride Agenda, said the law would have “a ripple effect across the nation”.

“It’s truly a historic night for love, our families, and democracy won,” he added.

New York could become a magnet for such marriages because the state has no residency requirement for obtaining a marriage license, All the other states with legalized same-sex marriage have some residency requirement.

Activists consider New York’s approval particularly significant since it is the third largest U.S, state and because of New York City’s international stature, The city also is considered to be the birthplace of the gay rights movement, with the Stonewall riots in the city’s Greenwich Village community in 1969. There was a huge street party at the Stonewall Inn overnight.

Revelers posted photos of the celebrations on Twitter, which included waving rainbow flags and dancing. The vote is likely to be celebrated at annual gay pride events this weekend, culminating with parades in New York City, San Francisco and other cities on Sunday.

Pressure to back the legislation came from celebrities, athletes and New York City mayor Michael Bloomberg, who has long used his own fortune to help bankroll Republican campaigns and personally lobbied some undecided representatives.

The state Senate debate over the last several days centered on providing legal protections for religious groups opposed to same-sex marriages that feared they would be sued for discrimination if they refused to allow their facilities to be used for gay weddings, The lawmakers agreed on language allowing religious organizations to refuse to perform such marriages or provide space for them.

One of the pivotal Republicans, State Senator Stephen Saland, had voted against a similar bill two years ago, but on Friday pledged the deciding vote in favor the law, He called his change of heart “a vote of conscience” and said he was “doing the right thing.”

Gay couples in the legislative gallery wept as they listened to his speech,

In approving the law, the state joins Vermont, New Hampshire, Connecticut, Massachusetts, Iowa and Washington, D.C, in allowing gay couples to marry.

The legislative debate coincided with President Barack Obama’s speech Thursday before a group of gay rights supporters at a campaign fundraising event in New York City.

Obama told the crowd that gay couples deserve the same legal rights as any other couple in this country, but he did not fully endorse same-sex marriage, The president has upset gay rights activists for his support of civil unions over marriage, but recently said his views on the matter are “evolving.”

The passage of this law in New York, particularly with the Republicans supporting it may give Obama the political support to endorse the initiative, and to seek repeal of the Defense of Marriage Act that has plagued same-sex couples since the Bush administration, That law allows states to disregard the laws passed in other states, While a same-sex couple may be married legally in New York, states like Colorado or Utah do not have any legal obligation to respect that marriage, as they would the marriage of an opposite-sex couple.

Obama defended his administration’s record on gay rights, including repealing the ban on homosexuals serving in the military, and ordering the Justice Department to stop defending a law that narrowly defines marriage as that between a man and a woman.

Some analysts expect other states which have previously passed same-sex civil unions to amend their laws to allow actual marriages modeled on the New York law, Others anticipate that the same type of law, with provisions to allow religious bodies to discriminate against gay marriages on their properties will follow suit and pass such laws, though it is expected to take a long time.

Gay community activists however, believe this win to be a major victory in a long battle for equality and civil rights.

Economists on our staff believe New York will see a major surge in consumer spending and a dramatic increase in population over the next two years as same-sex couples spend on weddings, and others from states without such laws move to New York, The gay community has one of the highest economic profiles according to analysis performed by Harvard School of Economics in the 1980s.

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Anthony Weiner, former Representative of NY’s 9th District.

The reason for his popularity is that he produces results and he speaks to their desires and wishes.  To blazes, they feel, with what the Congressman did privately.  While they feel his pain, they also feel the horrible fear that whoever steps into his office will have no clue how to do what he did so well.   Those are well founded fears.

The 9^th district is one that has always considered itself left out of New York City’s political benefits and many parts have felt they’ve suffered enough.  Keeping in mind that Congressman Weiner represented the part of the Rockaways that suffered the greatest losses of life in the 9/11 tragedy, only to have a jet crash upon less than 2 months later.  His district covers areas of wealth and poverty and every ethnic and religious group possible.  He represented them equitably, explaining his continued popularity.

Every single charity, social organization and civic group has benefited one way or another by his excellent leadership and representation.  Now that he’s gone, they all know that they and the communities they serve will suffer greatly.  It is that, not his personal mistakes that have made so many community leaders in the district angry and upset.

Andrew Breitbart, self-proclaimed journalist

The actions of Andrew Breitbart in this whole affair raise a plethora of questions about his motives, his behavior and his professionalism as an alleged journalist.  We say “alleged” because his behavior in this has been far less than that of a journalist, and more of a rumor-monger and political antagonist.

After invading and literally taking the podium at the press event Weiner called without Weiner’s consent and disclosing that he had more photos but promising not to show them, Breitbart indeed showed those images to Opie and Anthony, hosts of a New York radio talk show, allowing them to take a photo of that image and did not protest their publication at all.  Effectively, he permitted and enabled them to violate the privacy of the Congressman with the direct intent to destroy his reputation and his personal life, not to mention, with the clear intent to bring harm to his district.  This isn’t strange, it’s incredibly bizarre and smacks of some underlying motivation not yet revealed.

Who appointed Andrew Breitbart to be the moral police of this nation’s leaders?  Who gave him the right to violate any individual’s privacy?  Even an elected official is a citizen and has rights to freedom, privacy and security. How did Breitbard acquire the sanctimonious authority to investigate the private conversations of anyone, let alone a Member of Congress?  This sort of “journalism” is not only dangerous, it is precedent-setting.  It should make all citizens, irrespective of their political affiliations, faith or gender absolutely fearful, for this is the modern-day equivalent of a lynching and anyone with any level of authority is subject  to this “yellow journalism”.

Where does this end?   We see a very bleak future ahead when any political leader, may be investigated privately, even when no laws have been broken.  No politician, in the performance of his or her duties will be able to make a call, send an email or post any information for the fear that someone will misinterpret it, or that it will spur a private citizen investigation that will cause him or her to lose the seat they hold.

This does not have limitations to Congress.  Literally, any CEO or even a low level supervisor may be blasted in the media today for some supposed moral violation, even if not a violation of law or ethics codes.  There is no limit, up or down the chain.  Mr. Breitbart, by his alleged and self-professed Americanism, has without fail, turned this nation into Soviet Russia, when anyone with a moral complaint about a fellow Russian could file a story with the party and within hours that person was gone.  Yes, Mr. Breitbart is sponsoring a communist, socialist state.

The people of New York’s 9^th, particularly those organizations that have need for and have benefited from Congressman Weiner’s aid and representation, should collectively sue Mr. Breitbart for damages they suffer as a result, because the Congressman was forced to resign, leaving them for over a month without representation – a violation of their civil rights.

Mr. Breitbart should also be held by professional editors and journalists to the same high, altruistic standard of journalism that major newspapers and media outlets have been held to for generations.  He has given them a bad name and a black eye.

If the House Ethics Committee did consider this matter, they would have been forced to investigate Mr. Breitbart’s actions and his purpose, and he would have been held accountable for those actions, legally and morally. Weiner’s resignation has saved Breitbart from government scrutiny, but not civil. The disruption this whole affair has caused is not the result of anything the Congressman did, but of the politically motivated release of information obtained perhaps illegally, by Mr. Breitbart.  If he gets away with this, it will be open season on any politician, in any office whatsoever.

We, as a nation, do not need a moral police squad operated by Breitbart or anyone else.  If a Member of Congress has violated the law, the Congress has a process for dealing with that and Breitbart should have followed that rather than rushing to publish photos that were outside the scope of professional journalism.  Scandal mongering does not deserve a place in a free society.

For the record, we do not know former Congressman Weiner, nor his wife.  We do not operate in his district, but our Chief Economist and Director grew up and lived there for most of his youth, his family living there since the 1880’s.  He served on a community organization that is in the Congressman’s district long before Weiner ran for office the first time as a NYC Councilman.  This scandal is causing a community of hard working people great harm – which will not be cured by Weiner’s resignation, but exacerbated by that.

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Westboro Baptist Church Uses Children to Carry Hate Signs

The Westboro Baptist Church organizes protests around the nation at military funerals, with people, including children, carrying signs and placards that are anti-gay, anti-American and hateful, to say the least.

While the Court’s decision upholds the rights granted in the Bill of Rights to freedom of speech, one must question whether the court’s decision will not go down in history as it’s lowest point.

Protests are held not only at US military funerals, but at other funerals, particularly those of well known people, gay victims of AIDS or bias-crimes, at other religious institutions and even on the steps of the US Capitol.   In 1998, they famously protested the funeral of Matthew Shepard, who died as a result of a vicious gay-bashing.

More recently, they protested at the funeral of Elizabeth Edwards, who died of cancer, and was the ex-wife of former US Senator John Edwards. In a stunning example of intolerance and poor taste, the church said:

God hates Elizabeth Edwards. Flee her example.

Counter protests were launched against the group in Tucson, Arizona when the group planned protests at the funeral of Christina Greene, aged 9, a victim of the now infamous shooting that resulted in several deaths and the near-fatal injury to Congresswoman Gabbie Giffords.

The Reverand Fred Phelps, who runs the Westboro Baptist Church has been organizing such protests for years, with a largely anti-homosexual theme, but also protesting against Catholics, Jews, the United States government, members of Congress, and the President of the United States. Protests have been mounted at theatres, as dens of homosexual activity, even if the play has no such theme. Their actions are clearly intended to garner media attention to themselves by outrageous and outlandish statements and actions.

Justice Samuel Alito was the sole dissenter, stating:

I fail to see why actionable speech should be immunized simply because it is interspersed with speech that is protected. The First Amendment allows recovery for defamatory statements that are interspersed with nondefamatory statements on matters of public concern, and there is no good reason why respondents’ attack on Matthew Snyder and his family should be treated differently.

The Supreme Court ruled Tuesday that the right to free speech protects Phelps and his church members to express their opinions during military and other high-profile funerals.

We raise the question whether the expression of free speech should be expressed in a way that is intentionally harmful to others, and whether those harmed by free speech have a right to sue for damages done by the exercise of free speech.   While it is within the rights of anyone to express their opinion, if that expression causes harm, are not the victims of such harmful statements entitled to seek civil action to either stop or be recompensed for the damages done?

The Supreme Court’s decision may have serious consequences in the broader spectrum of American society. It effectively says that someone who is harmed by the words or actions of others by some form of communication have no rights. Essentially, this decision may be used in cases of slander and libel, setting a new standard.

If a newspaper or media outlet were to report, falsely, that someone is a criminal, for example, under this decision, that person would lose a suit brought against the media outlet on the basis that the communication was an expression of opinion, and therefore falls under freedom of speech.

Justice Oliver Wendell Holmes, in an earlier court, pointed out that the freedom of speech does not include the right to yell “Fire” in a theatre, causing panic. But this decision overturns that, providing anyone with an opinion the right to express any statement, true or false, irrespective of the consequences or damages such statements may cause, from being sued or prosecuted.

The traditional media in this country have for a long time, endeavored to ensure that the statements published by them are factual, but this decision could provide all media companies with the right to publish any opinion or false statement, knowing they will be doing so as freedom of speech and therefore exempted from prosecution

Justice Alito cited that Westboro Baptist Church has other tools at its disposal for the dissemination of their message such as newsletters, websites, emails and books or articles. Instead, Phelps and his group “launched a malevolent verbal attack on Matthew [Snyder] and his family at a time of acute emotional vulnerability”.

Will Congress or President Obama react to this court decision or let it stand?  The President could issue an executive order keeping protesters back a specific distance from all military funerals. The Arizona legislature in an emergency measure after the Tuscon shootings did just that, compelling that all protests be 300 feet away from the funeral.   Congress could make it a crime to protest at military funerals.

The Secretary of Defense could order armed military personnel to create a barrier between protesters and the funeral, keeping a significant distance between the two. The IRS could remove the church and non-profit tax status of Phelps’ church, and investigate their fund-raising activities.

However, the greatest solution would be for the media to stop providing coverage of Phelps and his followers. If they didn’t get a column inch or a moment’s worth of television coverage, their purpose would simply go away, as should those protests.

Congress must also act to clarify that decision and enact laws protecting the rights of victims of harmful speech, upholding and reinforcing libel and slander statutes.

While we defend the rights of anyone to express a valid opinion, but to express nothing but hatred and cause harm to others is, in the opinion of The Institute, subject to civil suit for damages. Those harmed have as much right to the pursuit of happiness as protesters have of free speech.

Read the full Supreme Court decisions here.

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Tunisian and UN aid officials say they face a “migration tsunami” as more than 10,000 people streamed through the tiny border crossing of Ras Jedir.

A 45-year-old Egyptian laborer, said: “They were arresting our friends – Tunisians and Egyptians – people they thought had helped the revolution. “I saw six Egyptians killed by police. Just shot in the street like dogs. “After that we knew that Tripoli was not safe for us.”

Others had similar stories, explaining that their phone batteries or sim cards had been seized to prevent them taking photographs or telling their stories to the outside world.

Italian officials warn of a mass exodus to Europe. Chaos in Libya has led to immediate concern that hundreds of thousands of immigrants could head for Europe. Italy’s interior minister, ahead of an EU summit in Brussels, called on Thursday for European help in dealing with a looming “catastrophic humanitarian emergency.”

Other Italian officials warned earlier last week of a wave of refugees fleeing violence that Muammar Gadhafi’s regime has reportedly visited on its own people. But if Libya collapses into anarchy, some observers have said, it could become an immigration route for far more people from sub-Saharan Africa.

A ‘Biblical Exodus’
“We know what to expect when the Libyan national system falls,” said Italian Foreign Minister Franco Frattini on Wednesday, “… a wave of 200,000 to 300,000 immigrants.”

“These are estimates, and on the low side,” he added. “It is a Biblical exodus. It’s a problem that no Italian should underestimate.”

“They rounded people up, handed them guns and then took photographs and said they had tried to attack Libyan soldiers,” said another refugee who would only give his name as Zaim. “We thought Gadhafi was a good man because he let us come to his country and have jobs. Now he is just a liar. “They said we were the ones selling coffee with drugs to make people fight.”

Many cautioned against international intervention to remove Gadhafi, asking that the safety of thousands more migrant workers be taken into consideration.

“The Libyan people don’t need the help of Britain, America, Europe and the others,” said Zaim Saeede, who had arrived yesterday morning from Tripoli in a convoy of cars. “They can finish this revolution by themselves.” All day throngs of people arrived through the crossing in cars and on foot from the western parts of Libya were Gadhafi’s rule remains strong.

Families were handed cakes, fruit and sandwiches by aid agencies as they stepped on to Tunisian soil. Mothers held babies sitting on suitcases or sacks of clothes while groups of men squatted smoking cigarettes.

Most were migrant Egyptian workers trying to work out how to get home. A few cars carrying Libyans also made it through.

Elizabeth Eyster, country director of the UNHCR, the United Nations’ refugee agency, said more and more migrant workers were leaving as Gadhafi’s regime appeared more unstable and construction sites, factories and oil plants closed. She said yesterday’s estimates suggested 10,000 people had passed through the border.

“More and more people are coming through every day. It started with a trickle on Sunday last week but now we are facing a migration tsunami,” she added. “None of us were expecting such large numbers.”

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The sanctions include travel bans on Gadhafi and senior officials in his regime and the freezing of their assets. The resolution also calls for transferring the handling of Gadhafi and his associates to the International Court of Justice in The Hague on suspicion of war crimes.

All 15 members of the Security Council voted in favor of the resolution. Unanimous votes are not normal when imposing sanctions of any kind.

Earlier, both US President Barack Obama and Secretary of State Hillary Clinton called on Gadhafi to step down, saying he had lost the legitimacy to rule.

Obama said in a conversation with German Chancellor Angela Merkel that “when a leader’s only means of staying in power is to use mass violence against his own people, he has lost the legitimacy to rule and needs to do what is right for his country by leaving now,” the White House said in a statement.

Clinton remarked, “We have always said that the (Gadhafi) government’s future is a matter for the Libyan people to decide, and they have made themselves clear.” She added that Gadhafi “has lost the confidence of his people and he should go without further bloodshed and violence.”

Clinton added that she was working with partners to determine how to provide humanitarian aid to Libyans in need.

Disagreements ahead of vote

Saturday evening Security Council members were still divided over whether to refer the Gadhafi regime’s violence to the war crimes court. In an attempt to break the deadlock, Libya’s UN delegation, which has denounced Gadhafi, sent a letter to the president of the Security Council, Brazilian UN Ambassador Maria Luiza Ribeiro Viotti, confirming its support for an immediate ICC referral.

Libyan UN Ambassador Abdurrahman Shalgam wrote to Viotti that his mission “supports the measures proposed in the draft resolution to hold to account those responsible for the armed attacks against the Libyan civilians, including through the International Criminal Court.”

The council has previously referred only one other case to the ICC: the conflict in Sudan’s western Darfur region. The court has indicted Sudanese President Omar Hassan al-Bashir for genocide and other crimes against humanity in Darfur.

France and Britain drafted the six-page sanctions resolution, which as noted calls for travel bans and asset freezes for Gadhafi and his inner circle, in consultation with the United States and Germany.

Foreigners flee Libya

Both France and Britain evacuated citizens from Libya Saturday, with France announcing towards evening that it was shutting its embassy down and Britain using C-130 Hercules planes to carry Britons and other nationals, to Malta.

Earlier, British UN Ambassador Mark Lyall Grant told reporters before entering the council chamber that he was “encouraged by the broad agreement” among the 15-nation council members on the main points in the draft, though he said there were several outstanding issues, including the ICC referral.

French Ambassador Gerard Araud told reporters before the council meeting that the ICC was the main sticking point and suggested they would have to find a compromise. France and Germany have been lobbying hard to immediately bring the Libyan violence to the ICC, based in The Hague.

Permanent veto-wielding council members the United States, Russia and China are not members of the ICC and view the permanent war-crimes tribunal with suspicion. But diplomats said privately that Washington was advocating the ICC referral while Moscow could live with it or without it.

The sheer numbers of foreigners leaving Libya as Gadhafi’s regime attacks anti-government protesters has been staggering. As of Saturday, at least 16,000 Chinese, 15,000 Turks and 1,400 Italians had been evacuated, most working in the construction and oil industries.

In addition, UN Secretary-General Ban Ki-moon told the Security Council that some 22,000 people have fled across the Libyan border to Tunisia and another 15,000 crossed the border into Egypt.

AP and Reuters contributed to this report.

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5. MidEast Mess As protests erupted today in Sanaa (Yemen) and Manama (Bahrain), police cracked down on protesters in Tehran (Iran). Additional protests also took place in the West Bank (Israel)....

Gross Domestic Product (GDP) is the broadest measure of economic activity in the nation. Last year, government officials predicted a 3.2% rate for 2010, and higher for 2011. Reports like that restore confidence among investors and spur business activity.

However, in this case, officials were compelled to reduce their forecasts as the economic downturn has caused municipal, county and state governments to curtail spending, reducing the rate to 2.8%.

For quite a long time, we have held that there is a global economic depression underway. While others have called it a recession and said publicly that the recession is ended, we maintain that the depression is different than a recession, and that we are likely to see further declines in GDP moving forward.

As the various levels of government experience continued declines in tax revenues they are forced to reduce payrolls, expenditures and close facilities. Corporations are also going to see declining revenues, not only from contracts with state and local government being reduced or eliminated, but also from a decline in consumer spending. More and more people are losing jobs. Unemployment benefits are running out for more and more of the so-called “99ers” who’ve depleted 99 weeks of benefits.

Wisconsin is not the only state seeking to reduce spending through breaking the cost of union benefits. If successful, most every state in the nation will follow suit, seeking to reduce costs. Shortly after, even the Federal government will become involved, not in defense of unions, but against them.

Despite their anti-regulation platform, if in power at that time, the Republican leadership will seek to compel every worker to pay into Social Security and Medicare, probably eliminating caps on wages. More so, the unions that have raised the costs of government payrolls and retirement funds will likely be subject to serious review. Organized labor for government workers will bear the initial brunt of this, but private unions will soon experience the consequential effects.

First and foremost, government must end double-dipping. This is the practice of collecting multiple benefits. Let’s say that a worker for a railroad has retired at age 60 (the threshold for that contract), with a substantial pension check coming in every month, he takes another job, works for five years. The company that hired him in his post-railroad years downsizes and he’s laid off. Now, in addition to his railroad pension, he may file for 99 weeks of unemployment benefits and, file for Social Security when he turns 67. He will literally make more money doing nothing than when he worked.

Just as Reagan reformed welfare, compelling those who collect it to work at government offices, it is likely Congress will consider a similar program for unemployment insurance. While the public may balk at this notion, in fact, it makes good sense for those who collect those payments. It would serve to keep them active, and let them keep their resumes up to date.  It would help struggling municipalities and states by providing a low-cost labor pool.

It is ironic that many of those collecting double or triple dip benefits, or living singularly on the social support network developed in the 1930′s have protested, strongly, against President Obama, calling him a socialist.

The fact that GDP is declining does indicate that the time is come to take decisive action to fix mistakes of years gone by. It is important to note that the Federal government’s tax receipts will be greatly reduced as time goes by, forcing more and more tax increases. While tax breaks provided by Congress may seem great to some, ultimately, government is likely to raise the tax rate over 50% and close the loopholes.

Revolutions in the Middle East may seem lighthearted by comparison to what might happen here with diminished employment, raised taxes and broken union.

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2. The Fix Is In! Says Who? The present economic crisis affecting the Nation will soon become a global economic depression....
3. Invest in America Yesterday, after extensive deliberation with economists in the United States and Europe, The Epicurus Institute proposed to Congress an alternative to the Paulson Bill, which is now expected to fail once more in the House....

The likely disappearance of Gadhafi and his family from power after a few days of protests by unarmed demonstrators is all-the-more surprising because his regime systematically destroyed the slightest pretense dissidence and has polarized Libyan society to ensure that no organization – formal or spontaneous – could ever consolidate sufficiently to oppose it.

Political Islam, whether radical or moderate, has been the principle victim, especially after an Islamist rebellion in Cyrenaica, the country’s eastern region, in the late 1990s. Other political currents have been exiled since 1973, when “direct popular democracy” was declared and the jamahiriyah, the “state of the masses“, came into existence.

Even the Libyan army was treated with suspicion, with its officer corps controlled and monitored for potential disloyalty. No wonder that major units now seems to have broken away from the regime and made the liberation of Eastern Libya possible.

Causes for collapse
The only structures that the regime tolerated, outside the formal structure of the “state of the masses” Colonel Gadhafi’s idiosyncratic vision of direct popular democracy in Libya’s stateless state in which all Libyans were theoretically obliged to participate – came from Libya’s tribal base and the Revolutionary Committee Movement, itself tied to the regime by tribal affiliation and ideological commitment and used to discipline and terrify the population through “revolutionary justice”.

Apart from that, there was only the colonel’s family and the rijal al-khima, the “men of the tent” – the colonel’s old revolutionary comrades from the Union of Free Officers which had organized the 1969 revolution against the Sanussi monarchy which had brought the colonel to power. And even the tribes did not necessarily support the regime, although they were constrained by the “social popular leadership”, a committee bringing together thirty-two of the major tribal leaders under the watchful eye of the regime.

Yet, in reality, the Sa’adi tribes of Cyrenaica, for example, had little love for the regime, for they had been the cradle of the Sanussi movement which had controlled much of modern Libya and Chad in the nineteen century. In partnership with the Ottoman Empire, the Sa’adi led resistance to Italian occupation between 1911 and 1927.

They had been disadvantaged by the revolution, not least because the revolutionaries came from three tribes – the Qadhadhfa, the Maghraha and the Warfalla – which had originally been subservient to them.

It could be argued, in short, that the revolution was, at its heart, a reversal of tribal politics, despite its ostensible commitment to Arab nationalism.

Geographic issues
Indeed, the regime has been consciously constructed on the back of these three tribes which populated the security services and the Revolutionary Committee Movement.

Yet even they had their own grievances; the Warfalla had been implicated in the unsuccessful 1993 Bani Ulid coup and its leaders had refused to execute those guilty as a demonstration of their loyalty to the regime.

Colonel Gadhafi’s henchmen organized the executions instead, earning tribal enmity and probably explaining why tribal leaders so quickly sided with the opposition when the regime began to collapse.

Then there is also a geographic imperative for the rapidity of the collapse of the regime. Libya is essentially a desert, with the only areas that can support intensive residence located in the Jefara Plain, around Tripoli in Tripolitania, and the Jabal al-Akhdar behind Benghazi in Cyrenaica.

The result has been that Libya’s six million-strong population, as a result of oil-fired economic development in the rentier state that emerged at the end of the 1960s, is now highly urbanized and largely concentrated in these two cities and the satellite towns around them.

Corruption
This means that any regime which loses control of them has lost control of the country, even if it controls all outlying areas, such as the oil fields in the Gulf of Sirt between them, which is also the home base of the Qadhadhfa, or the Fezzan that still seems to be loyal to the Gadhafi regime.

It is this that explains how, once the army in Benghazi changed sides, the regime lost control of Eastern Libya and why its hold on Tripoli, the capital, has been so rapidly contested.

Nor should the nature of the regime or the Gadhafi family be ignored as a factor for the collapse. The regime has, in recent years, benefited from growing foreign investment in Libya, alongside its massive oil revenues, after sanctions in connection with the Lockerbie affairs were removed in 1999.

As foreign economic interest grew, so did corruption and, although Colonel Gadhafi himself may not have been corrupt, his seven sons and one daughter certainly were, drawing their fortunes from commissions and income streams siphoned off from the oil-and-gas sector.

Libyans themselves have been excluded from the benefits of oil wealth for decades, so the blatant corruption inflamed their resentment in recent years.

‘Foreign mercenaries’
In addition, the Libyan leader, who had no formal role inside the jamahiriyah but made sure that the Revolutionary Committee Movement answered only to him, has played on the aspirations of his sons to succeed him, pitting one against the other to ensure that none of them could amass sufficient power to threaten his position.

In such an atmosphere of eternal mistrust and suspicion, it is hardly surprising that the ultimate bastion of the regime has been the “foreign mercenaries” that have terrified Libyans with their indiscriminate violence during the country’s latest revolution.

Yet, they too form part of the leader’s conception of the state. In the 1980s, Libya opened its borders to all who were Muslim, as part of its vision of Arab nationalism and Islamic radicalism.

The regime also recruited an “Islamic Legion” to aid it in its foreign adventures, particularly in Africa, as Chad, Uganda and Tanzania were to discover.

In 1997, Libya also renounced its self-image as an Arab state, prioritizing its African destiny instead, opening its borders to sub-Saharan Africa, despite the intense domestic tensions that the inflow of migrants generated, which resulted in riots and deaths in September 2000.

Now, apart from using African migrants as a tool to coerce European states such as Italy with the threat of uncontrolled migration, it has also recruited them into its elite forces around the “Deterrent Battalion” (the 32nd Brigade) which are used solely for internal repression.

They have no loyalty to Libyans who hate them and they are the forces on which Colonel Gadhafi relies to ensure that his regime ends in a bloodbath to punish Libyans for their disloyalty to his political vision.

The future
Whatever the Colonel thinks – and it is what he thinks that determines the struggle inside Libya today – there are objective factors that will determine the outcome.

Unrest in Western Libya has already led to towns in the Jefara Plain falling to the widening anti-regime movement. Zuwara is said to have been taken over by them and major struggles are taking place between armed forces loyal to the Gadhafi regime and the inchoate movement opposed to it in Misurata and Zawiya, where helicopter gunships seem to have been used.

Even if Tripoli is still under regime control, the towns surrounding it seem to be slipping away. Eventually, the leader will control only the capital and nothing else. There is no doubt that the struggle is becoming increasingly bloody, with estimates of losses being set at between 600 and 2,000 dead.

The outcome will be determined by the loyalty of the armed forces and the institutions of the state towards the Libyan leader.

Yet this is increasingly in doubt; two ministers, from the justice and the interior, have resigned and Libya’s diplomatic missions around the world are gradually falling way, including key missions at the United Nations in New York and in Washington. Diplomats say the are sickened by what they regard as genocide as Libya’s armed forces fire on unarmed demonstrators.

Even the armed forces are becoming increasingly unreliable – a belated revenge, no doubt, for the way in which they have been chronically mistrusted and misused. Few, in the armed forces or within the population, have forgotten the abuse heaped upon them by the regime after Libya was forced out of Chad with heavy losses in the late 1980s.

Who follows?
The problem is that it is extremely unclear what could emerge to replace the colonel’s unlamented regime.

One consequence of its unrestrained repression has been to ensure that no movement or individual has emerged as a natural alternative. Inside Libya, only the Muslim Brotherhood and some extremist Islamist groups have any formal presence.

Outside Libya there are myriad opposition groups, it is true, but there is no evidence that they have any real purchase inside the country.

There are also growing fears in European states along the northern shores of the Mediterranean of a flood of migrants and asylum-seekers fleeing the violence. And then there are the one million sub-Saharan African migrants marooned in Libya in the hope of crossing into Europe.

George Joffé – University of Cambridge contributed in large part to this article.

Note: A rentier state is a term in political science and international relations theory used to classify those states which derive all or a substantial portion of their national revenues from the rent of indigenous resources to external clients

Editorial commentary
The position of The Epicurus Institute is that while Gadhafi must go, along with his entire family and their network of spies and saboteurs, western powers must take particular care to ensure the absolute dismantling of his regime and it’s members must be eliminated from power or any ability to inflict future damage. This dynasty is not above using terrorism to recapture power later, nor is it fearful of killing Libyans or others in an effort to retain power. The west, in this case, via the United Nations, must engage in a serious nation-building effort unnecessary in other Arab nations such as Egypt or Tunisia. Whether the consecutive government is a democracy or a constitutional monarchy with democratic voting and a legislature elected by the people, there must be stability.

Related posts:

1. Risk of Civil War in Libya Saif al-Islam Gadhafi, a son of the Libyan President Muammar Gadhafi, has blamed opposition members outside the country of organizing protests in Libya....
2. The Man Who Would Be King The crowds anticipated a resignation. They heard, instead, a dogmatic, stubborn man give them political rhetoric and gamesmanship that was hardly suitable to them....
3. Middle East Mania As Egypt, Yemen, Tunisia and other nations in the Muslim world erupt in riots and political revolution we raise the question... Have we seen the beginnings of seeds we ourselves have sown? ...
4. Markets in Turmoil over Protests Political unrest in Libya and other north African and middle-eastern nations, as well as here at home in Ohio, Wisconsin and Indiana pushed markets into absolute turmoil today....
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Rumors of a shooting are circulating throughout the world, after Switzerland moved today to freeze any assets held by the possibly former Libyan dictator.

Crude futures were down more than $2 in post-settlement trade and gold dropped $16.30 at the time of this posting, just after the markets closed. Silver and platinum were also down, though copper rose slightly.

The big question will come tomorrow, whether he’s really been shot or is dead? What happens if he re-appears on Libyan state television to say he’s still alive? Where would the markets go?

Most likely, they would spike on such bad news. But Colonel Ghadhafi seems to have nine-lives, and seems to survive many an attack. It is curious if he was shot, who did it and why? Protesters have been generally very peaceful, even though in a rather crazy move, Ghadhafi and his son Saif ordered military action against their own people.

It may be this is part of a coup attempt by his son, who has long awaited the opportunity to become Libya’s next leader. Meanwhile, all five of Libya’s major cities, save Tripoli, have fallen peacefully to the protesters. At present, if alive, Ghadhafi only controls part of Tripoli, where the public is in hiding or has evacuated for safer locations.

Market volatility during these tumultuous times is to be expected and investors should not react out of panic.

Related posts:

1. Risk of Civil War in Libya Saif al-Islam Gadhafi, a son of the Libyan President Muammar Gadhafi, has blamed opposition members outside the country of organizing protests in Libya....
2. Benghazi Falls, Tripoli Deserted Libya's capitol city, Tripoli, is said to be absolutely deserted, with most residents have fled out of town to avoid bloodshed while Benghazi and other large cities fall to protesters. ...
3. MidEast Mess As protests erupted today in Sanaa (Yemen) and Manama (Bahrain), police cracked down on protesters in Tehran (Iran). Additional protests also took place in the West Bank (Israel)....
4. Markets in Turmoil over Protests Political unrest in Libya and other north African and middle-eastern nations, as well as here at home in Ohio, Wisconsin and Indiana pushed markets into absolute turmoil today....