Thursday, October 22, 2009

Ex-Los Alamos lab physicist describes meeting


By HEATHER CLARK

LOS ALAMOS, N.M. — It's a tale of intrigue, involving a nuclear weapons physicist at a national laboratory and a mystery man, supposedly from the Venezuelan embassy in Washington, fluent in Spanish and English.

Late last year, that mystery man paid the scientist, P. Leonardo Mascheroni, $20,000 in cash left in a drop box at the Albuquerque airport, according to Mascheroni, who says he kept it in a closed envelope that was opened by FBI agents who searched his Los Alamos home Monday.

Mascheroni, in an interview at his home Thursday with The Associated Press, said he wasn't interested in the money itself — not the $20,000 in the envelope nor the $800,000 he had asked for from the Venezuelan government for his work. Instead, he said, his motives were pure: He wanted the chance to pursue his theories of nuclear fusion.

"People are going to say, 'He really wanted the $800,000 and to disappear,'" Mascheroni said. "But those are the guys who don't know my character. ... A person like me is driven by the science. I am that kind of a person who goes inside my world. I see global security as a very important part of my science."

The story Mascheroni recounted Thursday seemed far removed from the quiet Los Alamos neighborhood where he lives amid Ponderosa pines and yellow-blooming chamisa in the foothills of the Jemez Mountains.

Last year, the 74-year-old scientist believed the Venezuelan government wanted him to produce a study on how to build a nuclear weapons program. In return, he asked for the $800,000, which he planned to use for his scientific work in New Mexico and persuade Congress to take a look at his theories.

Now, he believes the U.S. government is wrongly targeting him as a spy, an accusation he insisted is not true.

In the raid Monday, the FBI seized computers, letters, photographs, books and cell phones from his home of the former Los Alamos National Laboratory nuclear scientist.

No charges have been filed. An FBI spokesman confirmed the agency is pursuing an "ongoing investigation" in Los Alamos but declined further comment on the probe or on Mascheroni's claims.

Dressed in a gray sweater and khakis, Mascheroni told the AP on Thursday — across a worn coffee table in his living room — that he only provided the mystery man, whom he called "Luis," with unclassified materials found on the Internet.

He hoped the information would show Venezuelan President Hugo Chavez that such a program was too impractical and expensive for the South American country.

Mascheroni said "Luis" was a man in his 40s from the Venezuelan embassy. They spoke in Spanish and English. The mystery man told him: "The less that you know about me is the best for you."

At a one-hour February 2008 meeting at a Santa Fe hotel, Luis talked to Mascheroni about how to start a nuclear weapons program in Venezuela. Mascheroni initially told The AP the hotel was in Los Alamos.

Mascheroni said the man called him the next day, asking for another 30-minute meeting and proof of his scientific credentials.

In July 2008, Mascheroni said he received a formal request via e-mail from his Venezuelan contact to write a study for how to build a nuclear weapons program.

Mascheroni said he finished the study in November 2008 and, following directions, placed a CD containing only unclassified information available on the Internet — which he already had provided to congressional staffers — inside a post office box at the Albuquerque airport.

Later, he said, he received an e-mail telling him to return to the same post office box where he found a note that said there was $20,000 in $100 bills inside an envelope.

"I never opened the envelope," he said.

During their last meeting in July, Mascheroni said Luis told him the Venezuelan government approved of his proposal but the two had a disagreement over his fee.

The scientist said he wanted $400,000 deposited in a Los Alamos bank and another $400,000 paid in person when he traveled to Venezuela to give a presentation.

According to Mascheroni, Luis tried to persuade him to open an offshore account. Mascheroni said he looked into where he could get such an account but never opened one.

Chavez has scoffed at speculation that Mascheroni was working with his government, saying Venezuela hopes to develop a nuclear energy program for peaceful uses with help from Russia.

Mascheroni worked in the nuclear weapons design division at the Los Alamos lab from 1979 until being laid off in 1988 after advocating for development of a hydrogen-fluoride laser to generate fusion.

Asked why he pursued contact with the purported Venezuelan representative, Mascheroni said he was motivated by his belief in cleaner, less expensive and more reliable nuclear weapons and power.

He began approaching other countries after his ideas were rejected by the lab and, later, congressional staffers.

Mascheroni, who is from Argentina but became a U.S. citizen in 1972, said he approached the Venezuelan government and Luis contacted him in return.

During the 13-hour search Monday, FBI agents found the envelope at Mascheroni's home containing the $20,000 and counted the money for him.

Mascheroni said the agents told him they retrieved the CD from Luis, and was told that he was apprehended in Miami trying to leave the country. He said he now doesn't know whether Luis was a representative of Venezuela or a U.S. agent posing as one.

But he hopes his case will finally give him the chance to publicize his scientific ideas.

"Deep inside my brain, I am happy. I am not with fear," Mascheroni said.

The first full day in Salamanca


Doug French introduced the conference, in a room in the St. Esteban Convent in Salamanca, Spain, that just overwhelms you with its history and meaning. Our coffee was served in a hall said to be the place where Columbus actually waited to meet with Queen Isabella to find out the fate of his proposed exploration of the new world.

Our talks today were in the Chapter room where Francisco Vitoria taught and the professors of the 15th and 16th century gave papers for each other before their public presentations at the university. One might say that this was the room for the "Mises Circle" of the late middle ages. It is filled with paintings and insignias of Spanish scholarly history. Buildings like this immortalize these scholars.

People are here from 21 countries, among which Romania, Czech Republic, Brazil, England, Guatemala, France, Dominican Republic, Switzerland, and these are just the people I have met. It is a true united nations but of course we are here to celebrate a time before the nation state, before passports and nationalism and before planning and world wars. There was free movement of goods and people, something we almost can't imagine today given the police-state tracking of everyone and everything moving from state to state. It was a time of rising prosperity and this reality posed many social puzzles that the theologians of the time sought to solve.

The first talk was by Fr. Angel Roncero, who has taught in Spain and Latin America, and he spoke directly to the burning issue on many people's minds: what does this old history of Christianity have to do with the advocacy of free markets? We tend to ignore this question today because it deals with both religion and politics, a potent mix. But it is a fact that economic science began within the milieu of Catholicism in the 15th and 16th century.

Fr. Roncero describe the Gospels as a book of liberation, one completely at odds with the modern planning project in favor of freedom of the individual. He set the setting by discussing the world of the late scholastics, and the pressing issues that were created by the explosion of technology in the 15th century.

The advance of monetary exchange, the discovery of the new world, the accumulation of capital, and the rise of a new merchant and middle class all combined to create an atmosphere of discovery. What they discovered was the science of economics: supply and demand, the source of economic value, and the practical and moral urgency of freedom. Liberalism in economics followed from the rise of liberalism generally in art and science.

The rise of prosperity also gave the state access to new wealth, which posed the pressing problem of whether and to what extent the state can tax and inflate and live off the growing private sector. What the theologians said was that a state that attempted to loot and grab this new source of wealth was an illegitimate state and its leaders illegitimate leaders.

It was special pleasure for me to hear Fr. Roncero list the major thinkers of the time by priestly order: Dominicans, Jesuits, Franciscans, and Benedictines. The accent was beautiful. Fr. Roncero contrasted their work with the writings of Luther and Calvin, which he said denied the freedom of the will with the idea of the enslaved will or the predestined will. I'm not entirely sure that he understood how controversial his comments were on this topic, even in this audience.

He further focused on the ways that the current banking establishment was encouraged by the central banks of the U.S. and Western Europe to ignore the work on banking by the late scholastics. The scholastics counseled prudence in lending above all else, and believed that the depositors were the ones who should be paying for deposit privileges. Today we have this upside down. Depositors believe they should be making money merely by availing themselves to deposit services while the bankers lend without prudence, due to interest rate manipulations.

Peter G. Klein followed next with a detailed presentation that was absolutely up to the minute. He spoke on the Austrian connection with the new Nobel laureate in economics Oliver Williamson. He said that Williamson, his own professor from graduate school, is not a Salamancan or an Austrian but there are interesting implications of his work for the Austrians.

He began by presenting the Rothbardian view that stands against the Whig theory of history which posits unrelenting progress in intellectual history. In contrast, Rothbard believed that there was lost knowledge in the history of thought, and that gross systematic error is a pervasive feature of the history of ideas. The great tragedy was the loss of the Salamancans, which were not rediscovered in the English-speaking world until the 1950s.

The theory of the firm is an example of this. Important contributions were made by scholastics in the understanding the role of entrepreneur. Following up on this were Cantillon, Menger, Knight, Mises, and Coase.

Then in the 1950s, there was a huge step backward in the theory. Firms were reduced to a series of mathematical functions, black boxes that turned inputs into outputs. Price and quality are the only variables, and there was little focus on how they are structured, organized, financed, or governed. This has important policy implications, so that any deviation from perfect competition were inefficient.

Williamson encourages us to open the black box and look inside. He adopts the definition of the firm as a set of resources that are owned and hence managed by one or more entrepreneurs. They constantly face decisions about how much to integrate to produce the more profitable outputs.

An important contribution is his notion of asset specificity which breaks away from treating capital as an aggregate that can be shaped into anything. Williamson saw that capital constitutes a multifarious collection of assets that are specialized to particular uses. Klein says that his approach embeds the notion of heterogeneous capital. This ends up having profound implications for antitrust. Many forms of management are not harmful to society but rather reflect the discovery of new ways of managing assets.

Klein says that his contributions are of great use to Austrians. Williamson, whose work constitutes a recapturing of lost knowledge, had a slogan that he used in class: "Be disciplined, be interdisciplinary, and have an active mind."

Jorg Guido Hulsmann was the next speaker and he addressed the topic of Adam Smith's economics. He presented the Rothbardian critique of Smith, and gave a paper to provide a contrasting perspective, rescuing the good part of Smith.

He began with a discussion of Nicholas Oresme, a thinker highlighted in Hulsmann's own book The Ethics of Money Production. The scholastics built on this theory. In some ways important ways, Smith added to the Scholastic perspective on the self-regulating functioning of the market. Smith added to this an important theory of economic growth. He further noted that both Menger and Mises used Smith's work in their own theorizing. Menger used Smith's Wealth of Nations as a textbook, which he would not have done had he believe Smith to be unacceptable. Mises too had a high regard for Smith. Mises in fact endorsed classical economics in important respects, particularly as regards growth theory.

Austrians should not neglect Smith and his ideas, said Hulsmann. His main contributions are to refute mercantilism, the theory that aggregate spending was the main motor of economic growth. In order to promote economic growth, one had to increase the amount of money spent. Protectionist policies were just one aspect of this.

Smith argued that the level of spending is irrelevant for economic growth, as is the money supply. The main causes of growth are the division of labor and the accumulation of capital. One person can promote economic growth by living a frugal life. Mercantilism contributes nothing to this process and instead only diverts the most-valued uses of capital to less valued uses. Entrepreneurs must be free to use capital as they see fit, taking the risks and reaping the rewards or suffering the losses.

It is true that Smith was not original, but there is merit in bringing together disparate ideas into a systematic treatise. And this is his main contribution to history. He did regress in some areas, such as price theory, but this should not take away from his contributions in other areas. In the same way, Eugen von Boehm-Bawerk made huge contributions forward and also set back theory when he deviated from his own contributions. It is rarely the case that a thinker is perfect.

Finally, Hulsmann heralded Smith for the sheer timeliness of his contribution today. If we understood his economics, we would know that we cannot promote growth through increasing expenditure and by promoting stabilization policies. Smith would say that we need saving, capital accumulation, and the division of labor in order to recover economically. Stabilization policy is not a zero-sum game but a negative-sum game because it diverts resources.

Now, this does not mean that we should rely on Smith exclusively. The Austrians improved Smith in price theory, in the role of time, and the precise function of money and capital. His economics can be dramatically improved using Austrian theory about how investment projects relate to one another, adding the notion of the passage of time to Smithian theory. As regards money, Smith went too far in claiming that money had nothing to do with economic growth at all. He believed money to be nothing but a veil that didn't affect the real economy. Menger and Mises saw the error here. Increases in money can cause malinvestments and price distortions.

In conclusion, Hulsmann praised Smith for his work, and his relevance for our time. The road from Salamanca to Vienna and Auburn travels through Glasgow.

Doug French followed with a presentation of his own personal history as a banker in Las Vegas at Security Pacific. The bank he served was believed to be permanent fixtures of the economic landscape. The managers believed themselves immune from the errors that afflicted the S&Ls of the 1980s. Little did the managers know that the bank was collapsing from within from bad loans. The bank was rescued at the height of the bubble before last.

For French, this was also a time when he began pursing a masters in economics at the University of Nevada, Las Vegas. He was warned by some against taking a class with Rothbard, but the schedule worked out for him and he found himself studying under the great teacher. The class was EC-742, but the content would change every semester. Many people in the class had already taken it the year before, because Murray never gave the same lecture twice.

From the first class, it was clear to French that this class was very different. He spent an entire semester on the scholastics. Rothbard spoke at length about Jean Buridan's theory of money which was a big improvement on Aristotle and Aquinas. He took money out of the realm of the state's creation and saw that it was a natural outgrowth of exchange. Buridan was the teacher of Nicholas Oresme.

Another person that Rothbard wrote about was San Bernardino of Sienna, who wrote a full and robust defense of the entrepreneur and the merchant. Where he was wrong on interest, Cardinal Cajatan was correct on interest payments. Another person Rothbard heralded was Juan de Marina, who saw interest is a reward for risk. French continued with a presentation of Rothbard's list of theorists of this period.

French talked about Rothbard's own exams, two in each semester. They were all essay questions, focused on the late scholastics in the first term.

During this time, French was leaving one bank and going to another, and his thesis topic was on speculative bubbles, Eventually French moved to a bank that was growing at an astronomical rate during a bubble that compared to the most preposterous in history. He knew precisely what was going on as land prices soared and the bank's portfolio grew increasingly inflated. As always, the good times seemed like they would never end, until suddenly it did end, with catastrophic results.

It is striking that French now works for the Mises Institute, which publishes his thesis written under Rothbard, and now carrying on the great project through his work every day. He adds Rothbard's name to the list of scholastics: men with guts who had the courage to defend science and freedom regardless of the trends of his time.

The final speaker of today was Gabriel Calzada of the Juan de Mariana Institute. He spoke on what Bernanke can learn from Mariana. Four hundred years one week ago guards entered a convent to arrest Juan de Mariana and put him in prison for a year for his writings on inflation. Spain was an empire at the time, under King Philip II. After teaching in Paris and Rome he came back to Spain.

His first book was on the role of the prince, but he wrote the opposite of Machiavelli. He explained the society results from the division of labor and argues that the prince or king is nothing but a delegate. He cannot raise taxes or inflate the money supply. He further said that the only way to enforce this against tyranny was to recognize the right of the people to kill the king. This was not an unusual teaching at the time, but he took it further to argue for the rights of the individual to kill the king. The book was written for Prince Philip III. By the time the book was published, Philip had become the King of Spain, and he had expansionist plans for the government. The result was wars and taxes and inflation. They changed the numbers on the coins, as a means of magic finance.

Mariana spoke out with a book De Monetae Mutatione in 1609. He said that the owners of the money were the people, not the King, and therefore the King possessed no right to alter the value of money. He called inflation an infamous plunderer of the people. He demanded that the inflation must stop, alongside the wars and crazy spending plans.

The monetary advisers to the King did not like what Mariana had to say. It was for this reason that Mariana was arrested and imprisoned. They gave him one last chance to recant his views. But he merely reasserted his own position yet again. The Pope then intervened and said that the imprisonment could continue provided that the King refute what he had written. At this point, the King released him immediately, out the back door. Meanwhile, when released, Mariana was friendless but he had several followers carried on his work. He was the last of the scholastics and the most libertarian of them all.

His successors included Leonardo Lessio in the Netherlands and later people like Condillac and Turgot. They all had books by Mariana, who left a legacy of liberalism. Even John Locke owned a book by Mariana. Then we had Adam Smith was a follower in many respects. Later still we had J.B. Say, Gottlieb Hufeland, Wilhelm Roscher and finally Carl Menger. So there we have the line from the scholastics to our own time: a consistent defense of liberty.

Calzada said that Rothbard's What Has Government Done to Our Money reads much like Juan de Mariana. Most recently we have Ron Paul's own End the Fed, which is reminiscent of Mariana. What should Bernanke learn from Mariana? The only answer to the restoration of liberty and prosperity is to stop the press and start to obey the moral law.

Moving to Mexico? Do not forget your list of demands!


I read a funny article the other day poking fun at the reality of illegal immigration in this country.

After I finished the piece, I sent it along to a multitude of friends on all sides of the issue. The amazing part of the whole reading and sending was the return reaction from other readers.

Almost unanimously, there was bittersweet agreement to the humorous approach the article took and the spirit of the author’s intent. The truth was not lost on even the most vociferous champion of the illegal alien.

The following is a portion of the unknown author’s humor …. er ……truth:

Dear _________,

I enjoyed our conversation yesterday. As I mentioned, I’m moving to Mexico.

In preparation for this radical move for health reasons, I wrote the White House asking for their assistance. I’m planning to simply walk right across the border and I need their help in making my arrangements.

I plan to skip all legal stuff like visas, passports, migration quotas and laws. I’m sure those things are much the same as here. I’m sure somebody in the White House will contact Mexican President Calderon to let him know I’m coming.

Anyway, I made a list of things I will need once I arrive that include:

Free medical care.

• An English-speaking government bureauracracy for all services I might need, whether I use them or not.

• All government forms in English.

• I will need all my grandkids to be taught Spanish by English-speaking (bi-lingual) teachers.

• They’ll need to provide classes on American culture and history.

• I want my grandkids to see the American flag flying somewhere on school grounds to remind them of their REAL country.

• The kids will need free breakfast and lunch during school days.

• I will need a Mexican driver’s license so I can get to the polls fast when I vote.

• I will have a car in Mexico, but I don’t plan to have car insurance so I can save money to send back to my relatives in the U.S.

• I plan to fly the American flag proudly from my porch and put U.S. decals all over my car to show my country pride where I once lived. I’ll need English-speaking police officers to protect me if any of the natives resent my attitude toward my new home country.

• A nice job is a necessity. I do not plan to pay any taxes I can avoid being a non-citizen.

• I will be sure to write many letters to the local media warning the locals to remain civil toward my “rogue” behavior, No bellyaching about me being a strain on their “wealthy” economy.

• Free food stamps immediately upon my arrival. I have my rights you know!

• Don’t forget free rent subsidies.

• I’ll need income tax credits so although I don’t pay Mexican taxes, I’ll receive money from the government!

• Arrange the government to pay me $4500 for my new car.

• I’ll need to be enrolled in Mexican Social Security so I’ll get monthly income after my retirement.

It’s a lot to ask President Calderon, but since we already do it for all his citizens living among us, there should be no problem, right?

This will be great fun. And the BEST part is IF anybody gets mad about my little setup, I have the just and proper response ………..

They’re ALL racists!

While President Obama continues to tackle the “big” problems we currently have such as his personal war with Fox News, Rush Limbaugh and appeasing ridiculous expectations of his leftist base, is this REALLY that ridiculous an article?

Sooner or later, this country will have to face the illegal alien issue head on. If things continue as they are at present, the United States of America will cease to exist as the country we have known for 233 years.

It’s time to demand our leaders enforce existing immigration laws and fund them or answer charges of treason against the American people for delinquent handling of their sworn duties as enforcers of our country’s laws.

But I’m sure to the few in this country that would be racist …. their favorite slur.

The Nobel Prize in Economics and you


By Dr. Douglas Rice

Who cares about the Nobel Prize in Economics? Everyone, they just don’t know it.

Before President Obama won this year’s Nobel Peace prize, it’s highly likely that most people couldn’t name any other Noble prize winner in any category. They might have remembered something about Al Gore or Jimmy Carter winning the peace prize or, if pressed for a name, they might have thrown out Nelson Mandela or Mother Teresa. But when television shows grown adults losing quizzes to fifth graders, the odds on someone knowing the Nobel prize winners in economics are astronomical.

While the prize in economics may not be common knowledge or have the star power of the peace prize, the impact can be just as profound, perhaps more. For example, in 1997 the prize in economics was given to Myron Scholes and Robert Merton for their creation of financial derivatives markets. That same year the peace prize was focused on banning landmines. While the devastation of landmines is clearly a problem needing resolution, the impact of derivatives, as evidenced in the recent financial crisis, can’t be overstated and shouldn’t be overlooked.

The work of this year’s winners, Elinor Ostrom from Indiana University and Oliver Williamson from Cal Berkeley, focused on the problems associated with economic governance, another area that was overlooked until the recent debacle. Even though most people may not care to quite grasp the details, they know that executive pay is out of line, some corporations are out of control, and many that write and enforce the regulations aren’t doing their job very well. While they never use the term, many people are talking and thinking about economic governance every day.

Williamson’s work focuses how institutions are created and developed and what impact they have on economic growth. For example, while firms are good at resolving conflict because there is a decisive decision maker, they are bad at limiting the abuse of power for that same reason. The decision maker left unchecked has difficulty in self-limiting their own power. Start to sound familiar?

Ostrom focused on governance of common shared property, such as natural resources. She challenges the centralized command and control approach to governance and the thought that common property will always be mismanaged. Through her extensive global field work, she uses empirical evidence to show that in many situations the people involved can and do monitor each other even when there isn’t a central authority regulating the situation. Essentially she showed that, at least in some situations, common resources can be successfully managed without privatization or government regulation. In other words, less government and less corporate greed is possible. Get your attention yet?

It’s economic governance that allowed the financial system to boom and bust, not once, but twice in the last decade. More than that, it’s economic governance that will pave the path the future, good or bad. While President Obama’s peace prize makes major headlines, but has no real impact, the overlooked and misunderstood economic prize has the potential to have significant impact and change all of our lives. Given the recent debacle in the markets, economic governance should garner attention without the Noble committee pushing it. But we should all be glad they did.

Stealing religion ignored if it’s Native


By Jim Kent:

Picture if you will: a Native American man in a priest's cassock, standing at an altar on a reservation anywhere in the state. He raises bread above a large gold cup and addresses the crowd around him: "We are all one in the body of the Great Spirit of Roslyn."

No, this isn't a new version of the Catholic Mass, nor is the man a Catholic priest. He just "digs" the Catholic religion, "respects" its history and culture and finds himself inexplicably "drawn" to all things Vatican. He wasn't born Catholic; never attended Catholic church or schools. But this recent hub-bub about Jesus Christ and the DaVinci Code has grabbed his "inner spirit." He's thinking that's because "way back" his ninth cousin on his father's side may have been 1/16 Catholic. He just feels it.

So, he did some research, sat in on some masses, picked up an abridged version of the Bible and decided he'd start his own congregation. He calls it "The Cody Two Bear Church of the New Holy Grail." Visitors "donate" $100 minimum for this unique spiritual experience that will bring them closer to the Knights Templar, Christ and Mary Magdalene while discovering the healing capabilities of candle wax - long used in the church, but with little awareness of its true powers. Retreats are available at a higher cost.

Yeah, I'll be surprised not to get e-mails from someone upset just by the mention of this fictional scenario. Imagine the reaction if it actually took place, regularly, across the country. It does; just not with the spiritual teachings of Christianity, Judaism, Islam or any of our other "major" religions.

But just suppose it did. There'd be hell to pay. From the local diocese to the Holy Land, the earth would tremble with accusations of blasphemy and calls for eternal damnation. Yet, it's perfectly all right for anyone to practice, preach and sell the spiritual ceremonies of the Native American cultures - and with little or no repercussions; even when it results in death.

I'm referencing, of course, the recent Arizona fiasco where three people paid $9,000 each to die in a sweat lodge under the guidance of their white "spiritual leader." Unfortunately, this doesn't surprise me. What does is reports that the white "medicine man" who hosted this "Spiritual Warrior" event "declined to be interviewed" by the local sheriff's department after the deaths. Declined? I'm trying to picture any Native American "declining" an interview in a similar situation. Right, that would happen.

And though this tragedy occurred several states away, the same circumstances that led to its disastrous consequences happen right here in South Dakota. Needless to say, local Native American e-mail lines were hopping with references to similarly questionable activities - both on and off the rez - in "the land of great places."

I can't speak to all of them, but I have lost track of the number of white folks who've invited me to their "sweat" somewhere in the Black Hills. Those claiming "true" respect for the Native American culture reference ancestral "Celtic sweats" they're imitating. Nice try. They may have had sweat lodges in Ireland, Scotland, and Sweden, but they didn't use sage, sweet grass, Native American drums or Lakota spiritual terms.

Have I been? Yes, to many over the years and across the states - at the invitation of Native American elders (those are the folks who aren't white "spiritual leaders" and don't charge money).

The elders tell me it's hard to be Lakota. No kidding. In what other culture do they "honor" you by stealing your religion and then destroying its principles along the way?

The dragon roars again after new figures put China’s output on a growth hat-trick




Confirmation that China is well on the road to economic recovery came yesterday with official figures showing that growth in output accelerated between July and September.

Gross domestic product (GDP) was 8.9 per cent higher in the third quarter, compared with the same period last year, on the back of huge government spending. Annual growth had risen by 7.9 per cent in the second quarter and by 6.1 per cent in the first three months of the year — the trough of the Chinese slowdown.

GDP rose by 7.7 per cent in the first nine months of the year, putting the target of 8 per cent for the full year easily within reach. Industrial production growth quickened to 13.9 per cent in the 12 months to September, from 12.3 per cent in August, while daily steel output in September matched August’s record, and iron ore production scaled a new high.

Beijing’s 4,000 billion yuan (£350 billion) stimulus package, including huge spending on rail and road networks, put the once-fanciful 8 per cent growth target within reach. However, many analysts believe that the figures underplay China’s economic growth and that officials have been smoothing the numbers. The country is still in the throes of deflation, with the CPI measure of inflation dropping to -0.8 per cent in September.

Mark Williams, international economist for Capital Economics, said: “Our proxy for Chinese activity suggests that economic growth slipped as low as 5 per cent in the first quarter, well under the official 6.1 per cent. But it also suggests that the subsequent recovery has been even more dramatic than the Government has acknowledged.”

Beijing is eager to avoid pressure to restart appreciation of the yuan, which has barely moved against the dollar for two years. Nor is the Government in any rush to ease policy amid concerns that private sector growth is lagging behind the state sector. A lower third-quarter figure will also help to ensure that China can close the year with even stronger growth statistics — and further delay tightening.

Chris Scicluna, head of economics for Daiwa Securities, said: “The rise in GDP could reach double digits in the final three months of the year.” The Chinese economy is certainly expected to grow well into next year as the fiscal stimulus continues to feed through. But analysts said that consumer spending will be a key factor. “There is uncertainty whether Chinese households will contribute more to growth,” Mr Scicluna said.

A senior Chinese economist said yesterday that there were positive signs from private investment and consumer spending, but warned that it was not yet enough. Liu Shijin, a senior economist with the Development Research Centre, a think-tank in Beijing, said: “We always hope China’s growth can rely less on investment and exports and more on consumption and we have seen encouraging signs in the past months, although we still can’t say its a trend.”

Analysts are also concerned about the possibility of an asset price bubble.Mr Williams said: “The conditions are in place to propel further increases on both equity and property markets. The Government may welcome some price rises as a boost to confidence, but big gains could risk instability when markets return to earth.”

Mr Liu also raised worries over inflation next year. “If we want to keep CPI below 3 per cent, the pressure will be very big, and we cannot rule out the possibility of [CPI being] higher than 5 per cent,” he said.

Terror Arrests and the 'Misunderstood' Religion


By Nonie Darwish

Today we have yet another terror-related arrest of a Muslim, Tarek Mehanna, who was plotting jihad terror attacks against U.S. shopping malls. But Americans are told to never link that to Islamic teachings.

Committed Muslims insist that Islam is misunderstood by the West. Sensitivity training to Islam is forced upon U.S. government employees and teachers. They are told that Islam has nothing to do with terrorism, implying that if they believe their eyes, ears and common sense, then they must be Islamophobes.

Muslim propaganda is cleverly wrapped in illogical strategies to get the Westerners confused about their own perceptions of Islam. For centuries Muslims lived with unchallenged, warped logic regarding their religion. Instead of examining non-Muslim fear of Muslim violence and oppression encouraged by Muslim scriptures, Muslims are trained to regard such complaints as an attack Islam itself.

I have no doubt in my mind that when Dalia Mogahed, White House advisor on Islamic issues, really means it when says that Sharia is misunderstood. Like her, early in my life as a Muslim, I believed the same. That is how we were trained to accept our destiny under Sharia which turned us into robots ruled by fear, intimidation and warped logic.

Women are told they have been liberated by Islam because pre-Islamic society used to kill new born girls. Islam stopped that. We were told that before Islam came, men could marry an unlimited amount of women and slave girls. Then Islam came and limited the number to 4. We were told that women were not able to hold property before Islam. Then Islam came and gave us that right and the right not to share our property even with our husbands.

The absence of community property between husband and wife in Islam is sold as a benefit when it really is the result of polygamy, where women have to protect their inheritance from being shared by other wives and by a husband who does not want to share his wealth. "What a great deal," we Muslim women thought. Day in and day out we had to thank Allah for Islam that stopped our murder at birth. We had to thank Allah for being supported by husbands in a society that crippled us and did not allow us to get out of the house without our husband's permission.

Just as Muslim women are indoctrinated into believing that Islam saved them from murder at birth, Muslims are trying to convince the West that they too have nothing to fear from Islam. Thus we see the sensitivity training of Westerners who are expected to never blame Muslim teachings for terrorism. Westerners deep fear of being called racist has been transferred to fear of being called an Islamophobe. Thus, if the definition of Jihad in Muslim scriptures states that Jihad means "to war with non-Muslims to establish the religion," the West should not misunderstand the word 'war' to be aggression. If Muslim scriptures clearly state that an apostate must be killed immediately and their killers will not be punished, then we must not take the word 'kill' at face value. If Muslim scriptures say that women are deficient in intellect and religion and must not be trusted, we should not take that seriously. Thus connecting Muslim commandments to kill and war with Islamic terror and violence is an act of Islamophobia that must be punished as a hate crime.

We are still told that the West simply misunderstands Islam. Even after constant and persistent acts of Muslim terror against the West, we are told with deep sincerity, not to be afraid of Islam even if Muslims are holding the Qur'an in one hand and decapitating non-Muslims with another. The message of Islam to kill kafirs and apostates is so unreal and unimaginable to the Western mind that some Westerners actually are convinced it can't be true and that no religion can openly advocate such violence and stay respected by the international community.

It must be us, in the West, who do not understand Islam because the alternative is unimaginable. But the unimaginable has survived and thrived for 1400 years and it is still going strong with full force with the support of petro-dollars and facilitated by Western do-gooders.

China’s GDP rises 8.9%


For the first nine months of the year, total GDP grew by 7.7%, reaching Rmb 21,781.7 billion (£1,948.4 billion), meaning China is well-placed to reach its growth target of 8% for 2009.

Chinese industrial production increased, with the year-on-year industry growth rate reaching 8.7%, and profit decreases slowed to 10.9% from 12.2% between January-May.

The success of China’s fiscal policy continued, with investments in fixed assets increasing by 33.4%, 6.4% higher than the previous year. Investment in infrastructure grew by 52.6%, including an 87.5% increase in railways, 50.7% in roads and 72.9% in social security and social welfare.

Money supply grew by 29.3% year-on-year, reaching Rmb 58.5 trillion

Money supply grew by 29.3% year-on-year, reaching Rmb 58.5 trillion, and outstanding loans for all financial institutions grew by Rmb 8.7 trillion over the year.

While foreign trade continued to fall, the rate of decrease fell to 20.9% from 24.9% in the first quarter of the year and 22.1% in the second.

However, economists expressed doubts over the GDP figures, with Lombard Street Research suggesting GDP grew by only 6% in real terms.

Capital Economics warned the rapid rate of growth could create asset price bubbles, as lending growth continues and China’s trade surplus continues to increase.

Religions need to live and let live


On the immediate level, the move by the Vatican is likely the consequence of the continuous decline of Catholic Church membership in North America and Europe over the last several decades. Like countless other Christian denominations, the Church is worried about its numbers, more so, it seems, than wanting to address the reasons that so many have left the religion. For many such organizations, numbers mean donations, donations mean greater power and ability to attract followers, which lead to more donations and more money. The cycle is never ending.

On a broader level, the Catholic Church is also typical of most Christian denominations that believe they have the truth, the only truth, and anyone who does not adhere to their narrow belief system, irrespective of how decent and loving that person is, will end up being condemned to eternal torture and damnation by an all-loving and all-compassionate God. I am not the only one who sees the hypocritical nature of such a belief. It is one of the major reasons that there has been such a decline in active participation and membership in so many Christian organizations and denominations.

Like many other professors of the academic study of religion, I find the supposed validity or invalidity of any truth claims by religious denominations as essentially irrelevant. I view scriptures the same way, any and all of them. My job is not to decide whose religion is "true." Instead, I focus primarily on the historical development of religious traditions, what their adherent believe, why they believe them, and how these beliefs effect their lives and interactions with others. In the case of the prophetic religions, primarily Christianity and Islam, much of their history has been consumed with attempting to convince others of and convert others to their belief systems, even using coercion and violence when necessary. Again, they have often seemed obsessed with numbers. If these traditions spent less time counting their flock and more time tending to them and their needs and also inspiring them to better co-exist in a multi-faith world, we would have much less violence to worry about and far more compassion and empathy to address the real problems we all face.

No hole in the sheet!

Last Shabbat, the story of Sarah Einfeld broke through to the "free" world. A woman with whom I have a once-sided love-hate relationship.


Sarah, previously a pious Gerrer hassid and currently a pained secular divorcee mother of two, spread her story across the pages of Yedioth Ahronoth to show anyone who still had any shadow of a doubt in their mind just how hard it is to be a woman, and haredi on top of that, and a Gerrer hassid on top of that. With the precision of a plastic surgeon, she deconstructs the enigma called a "modern newly secular person." But even here, the whole is greater than the sum of its parts.


Perhaps it is just a feeling, but those who leave religion never really leave, they escape. To Tel Aviv, to a commune in the Galilee, to a kibbutz in the Negev, to the media. Or, like a beloved childhood friend of mine, they choose to put into action the over-played expression and escape to Honolulu, leaving me sending her signs of life via email.


Out of all of those I have met who have left the religious way of life – and I have met quite a few – not one of them became a "conventional secular person" with a Mazda 3, two kids, and a monstrous LCD in the living room across from the sofa. They are always something a little different with a lot of pain.


Contrary to what the many haredim who read the article will say about Sarah, every word there is true. Truth the hard way. "A two-hour fateful meeting with 'the one' followed by a suffocating lifetime and personal desolation" is the story of many women in haredi society. But in response to these comments, the majority prefers to do the obvious in these cases of "particularly dirty laundry" – bury their heads in the sand. Men in the haredi sector will arm themselves with the approach of "be a righteous woman and keep quiet." Haredi women, in the best case, will adopt the version of "the poor girl fell victim to bad matchmaking" and in the worst case will see her as a traitor. So where is the surprise that people are escaping?


The real story

But the real story of Sarah and others who have left religion is in the delicate spaces between the letters, in the pauses, the sighs between each line. It's there and not there. Because its not really the man by your side, or in this case, the man on top of you (for Gerrers, the man is always on top), a wicked rebbetzin, or social pressure that create the intense drive to get out. It's something entirely different.


Reality reveals that the moment must come in the life of every haredi in which he examines himself and his surroundings. Like every adult, including haredim, he needs to clash with the group in which he lives, to rebel against it – be it outwardly or secretly – and through this to reveal who he really is. At the end of this self-flagellating process that occurs at the age of 12, 22, or 32, something emerges: A pious person, a hermit, or an unbeliever.


Then the lot is cast for each person to enthusiastically adopt the sectarian codes with utmost precision. The line is drawn by some for the sake of rabbis and conscience. Others do it out of status and maintaining a good reputation. Alongside them are the "double agents" who hide the television in the closet when they go get the haredi newspaper from the mailbox in the morning.


And then there are strange birds like myself who need a friend from the "double agent" crowd to scan the article from Yedioth for them because they don't have secular newspapers at home, but do have National Geographic. And there are the "Sarahs" whom you read about over the weekend - the ones who have left behind the good, the bad, and the ugly of the haredi world for the good, the bad, and the ugly of the secular world.

With all my agreement to disagree with those who once were "with me" and now aren't, I have a difficult time with the basic need of the average formerly religious person to turn the entire haredi society into a silent, black-and-white horror movie. This nasty habit of confronting the past by turning all haredim into miserable people in a closet has become a bit pathetic. The same goes for writing a blog called "The Hole in the Sheet," one of the most repulsive and erroneous myths about haredim, all out of a sense of self-righteous outrage.


Contrary to the manner in which many who have left the community tend to describe "the inside" to those on "the outside," there are also many excellent reason for people to be haredi out of choice. Behind the walls and the partitions, there is another kind of life. Life full of love, relationships, true happiness – life with meaning. This is difficult to see when you feel foreign, or a lack of belonging seasoned with terrible anger. Sometimes only after a cooling off period can one look back in and read A. Margalit, the Gerrer poet whom I love, together with Natan Alterman and to feel good about it.


And yet, when I come up against the suffering they experience, bosom friends and acquaintances who have ventured out, I am left with this ridiculous need to comfort and hug all of them, even Sarah.

Rabbi Yosef: Ashkenazim think Torah is theirs


In his weekly Saturday evening sermon, Rabbi Ovadia Yosef attacked the Ashkenazi-haredi public and claimed, "They think the Torah belongs to them." According to Rabbi Yosef, the Torah of Israel is not sectoral and therefore is not "biased" in this way.


"There is no sectoral affiliation in the Torah," said the rabbi. "What does it matter if it’s a Persian, a Halabi, if it's a Babylonian or a Tunisian? There is no such thing! There is one Torah – one law."


Rabbi Yosef added, "This is the Torah of all of Israel. 'Moses commanded us a law, an inheritance for the assembly of Jacob.' It is not written 'the assembly of Halabim;' it is not written 'the assembly of Babylonians' and not 'the assembly of Ashkenazim.' It is not written 'the assembly of Ashkenazim.' They think the Torah is theirs? No! The Torah belongs to all of Israel."


Last month, the rabbi also addressed the Ashkenazi-Sephardic tensions over halachic rulings, and claimed that the Messiah will rule in favor of Sephardic customs. During his weekly class on Saturday night, Rabbi Ovadia Yosef addressed the halacha for blowing the ram's horn on the High Holidays, as well as the varying customs between Ashkenazi and Sephardic Jews.


The rabbi emphasized that each person must stick to the customs of his father's house, but claimed that when the Messiah comes, everyone will follow the Sephardic customs.


The rabbi said, "We cannot determine that we were correct until the Messiah comes and will make us one people. Only the Messiah can do this… When Abraham, Isaac, and Jacob will rise up in the revival of the dead, what will they say? They will start to say they were from Halabim, from Aleppo." Rabbi Ovadia claimed that the Ashkenazi method of pronunciation will also give way to the Sephardic pronunciation, and the Ashkenazis will "be reformed."

Study: US youth differ in perception of Jewish identity


A new survey of US Reform, Conservative and Orthodox Jewish youth reveals sharp differences in their perception of Jewish identity.


More than seven hundred youth attending Jewish summer camps around the United States were surveyed in a study conducted by Dr. Erik Cohen, of Bar-Ilan University's School of Education. Dr. Cohen revealed his findings Sunday morning at a special School of Education conference marking the opening of Israel's academic year 2009-10 and Bar-Ilan University's Jim Joseph Education Building.


This new, state-of-the-art facility was officially dedicated on Tuesday, October 20, on the Bar-Ilan University campus, in the presence of Education Minister Gideon Sa'ar.


The survey consisted of a list of 132 symbols developed by Dr. Cohen covering many areas – from the talit, the Talmud, God and the Star of David to Soviet Jewry, the Holocaust, Steven Spielberg and Woody Allen. Respondents were asked to rate which of the symbols expressed an aspect of their personal Jewish identity, and which were the most important to them.


Over three-quarters of the population indicated the symbols God, bar or bat Mitzvah, and religion with Judaism. "This finding is in line with the observation that American Jews, even those who are non-religious, tend to emphasize the religious aspect of Jewish identity; that is, they think of Judaism primarily as their religion, not as their culture or nationality," said Dr. Cohen, who has studied Jewish identity in the Diaspora for many years.


Religious symbols vs. universal values
In comparing the participants of three of the major streams of Judaism, he found that those attending Orthodox camps were significantly more likely to select symbols related to Jewish religious practice, to the Holocaust, to Israel and to discrimination, while participants in Conservative camps were most likely to select universal values such as democracy, co-existence, tolerance, ecology, humanism and peace.


He attributed this to the Conservative Movement's emphasis on universal values within a Jewish context.


Participants in Reform camps were more likely to select items related to Jews' accomplishments in the non-Jewish world (such as wealth and success).


"Interestingly, those at the Reform camps were also most likely to select the symbol of Anne Frank, indicating a somewhat difference attitude towards the Holocaust that that of the Orthodox campers, who were more likely to select Auschwitz as symbolic of their Jewish identity," said Cohen.


"Similarly, the religious symbols of the Star of David and Hannukah were most likely to be selected by those at the Reform camps, again indicating a different approach to the Jewish religion in comparison to those at the Orthodox camps, who were more likely to select symbols such as the Talmud and Torah study," he added.



Another important finding in the study is that the population of youth in summer camps is often not homogeneous, according to Dr. Cohen. Surveyed youth were asked to define their religious affiliation, and there was a significant number of youth attending these camps whose official affiliation was not in congruence with their personal affiliation.



The Orthodox camps, he found, were the most homogeneous, with only 7% of the campers describing themselves as non-Orthodox. On the other hand, 29% of youth at Conservative camps consider themselves Orthodox, Reform, or "just Jewish", while 28% of Reform campers think of themselves as Conservative or "just Jewish".


According to Dr. Cohen, in addition to reflecting differences in Jewish identity, educational programming at US Jewish summer camps must also reflect the non-homogeneous nature of many of these camps.



The study, conducted during the summers 2005-2007, included 731 participants, aged 14-16, in summer camps throughout the United States.

Jerusalem 'chastity squad' branching out


Jerusalem's "chastity squad" is branching out and has recently begun operating in the capital's Beit Israel neighborhood. According to local residents, several of the neighborhood's inhabitants have been violently attacked by members of the "modesty guard".


One of the residents told Ynet that a divorcee living in the neighborhood had been assaulted by squad members, who poured hot water on her and beat her at a local playground.


"The 'chastity squad' members snatched her at the playground, poured hot water on her, and when she began shouting they beat her up," said the resident who witnessed the incident.


In a separate incident, squad members allegedly broke into an apartment where several American yeshiva students lived, sprayed them with tear gas and stole a laptop.


A neighbor who arrived to help the students could not identify the assailants, who fled the scene quickly.


Local residents explained that the squad members had suspected that the young men were screening porn films to local teenagers. Following the incident, the yeshiva students left the apartment.


Another incident took place in the house of one of the local residents, where his friends used to visit him every evening until the small hours of the night.


About a week ago, unknown people painted the stairs leading to the apartment, and the resident told his friends that he had received several warnings from members of the "chastity squad", accusing his friends of harassing girls passing nearby.

The Beit Israel neighborhood has been changing its nature in recent years, from a traditional Sephardic neighborhood to a neighborhood similar to the haredi Mea Shearim.


According to one of the residents, the "chastity squads" are trying to change the neighborhood's acceptable standards and give the place a more conservative nature.

Stanley Fischer voted one of world's top 7 bankers


Governor of the Bank of Israel, Stanley Fischer, has been voted top central banker in his category by Global Finance Magazine.


Fischer was awarded an A-, the highest score possible, in the Middle East and Africa. Among the other six bankers to receive such a score is Australia's Glenn Stevens.


Surprisingly, the US's Ben Bernanke received a relatively low grade of C-, despite his efforts at culling economic discontent in his country.


Global Finance explained that Fischer had scored high because he intervened aggressively in the foreign currency market and thus guaranteed that the rising value of Israeli shekel would not harm the country's economy.


The magazine said Fischer had succeeded in minimizing the impact of the global economic crisis on Israel's market and that his purchase of millions of dollars had bolstered exports.

US immigration authority plugs loophole in application criteria for temporary work visa, making it harder for employer to hire young Israelis


The United States Citizenship and Immigration Services (USCIS) is out to put a stop to the phenomenon of Israelis working in American malls.


Many young Israelis try to "make a quick buck" in the United States by working as salespeople in malls , especially around Christmas time, which is the height of the holiday shopping season in the US.


They are often hired by employers who use a loophole in the H-B2 temporary work visa criteria: The H-B2 visa was created to facilitate non-agricultural employers, such as hotels, that needed a legal way to hire non-professional, temporary personnel.


In order to meet USCIS criteria, an employer had to claim either a one-time need or a seasonal one. The provisional nature of employment meant that the type of work was of no real significance – hence the loophole.


The mall industry quickly took advantage of the obscure nature of the visa to temporarily hire Israelis, despite the fact that it is a year-round industry. The USCIS finally wised up and decided to toughen H-B2 criteria.


Until now, anyone seeking the H-B2 visa needed to apply for it up to six months prior to the job start date. The New USCIS guidelines state that applications can now be submitted only 120 days prior to the job start date.


The new ordinance leaves employers rather in the dark: Since an application can be either denied or only partially granted, employers have no real way of knowing how many employees they will have until the very last minute, leaving them very little leeway.


Moreover, applications which have been granted are scrutinized thoroughly and all potential employees must undergo personal interviews by the consulate and produce notarized documentation.


The USCIS usually grants 65,000 H-B2 visas a year and should the number of applicants exceed that, a raffle is set. The number of applicants six months ago reached 45,000 worldwide – the six-month visa quota is 32,500.


In addition, the US government issued new guidelines for employing foreign workers as part of the fight against unemployment in the United States.


Tougher criteria, scrutiny
According to the new guidelines, employers must prove that they could not find American workers qualified to do the job in question, making it harder to hire Israelis.


The USCIS also requires employees to advertise the position they wish to hire Israelis for in every relevant county, save all applications and provide detailed reasons for turning down any American application, making bypassing the process harder still.


An employer who is granted the coveted authorization will be able to offer his employees the temporary work visa – a five-to-eight month visa in malls' cases. In some cases, the H-B2 visa can be extended to last up to three years.


The new USCIS guidelines are another step in enforcing immigration laws: USCIS officials speaking in the last American Immigration Lawyers Association (AILA) convention called the use of H-B2 visa by malls "an abuse of power."


As part of the enforcement efforts, the Immigration and Customs Enforcement agency (ICE), which is a subdivision of the Department of Homeland Security, has increased its efforts to detain and deport illegal workers.


The new USCIS guidelines also state that information pertaining to anyone caught working illegally in US can be found on all federal databases, making it hard for such a person to enter the US, or any country it has a reciprocity agreement with, in the future.

Chinese descendants of ancient Jewish community make Aliyah


It would probably be difficult to tell the difference between the seven youngsters who arrived Tuesday at Ben Gurion airport, and the thousands of Chinese construction workers living in Israel. However, the young Chinese arrivals, aged 19 to 23, are descendants of an ancient Jewish community which originated from the city of Kaifeng.


Immediately following their arrival, the seven knelt down and kissed the soil of the Holy Land. "My dream is to complete the process of converting to Judaism and become a certified rabbi, after which I will return to my community and serve as its first rabbi since the dissolve of the Jewish community some 150 years ago," said 23-year-old Yaacob Wang. "I am excited to arrive to the holy land. It is a dream come true," he added.


The first destination on the new immigrants' list was the Western Wall, where they prayed "Shehecheyanu", a blessing recited upon a noteworthy achievement.


"I cannot believe after all these years I get to finally visit the Western Wall which I dreamt of for years and drew in many of my drawings," said Hang Shir, 24.


The group's trip to Israel was arranged by Shavei Israel organization, which has been in contact with the Israeli government over the past two years, and recently received authorization from the Ministry of Interior to give the seven a one-year entrance permit, during which they will study Hebrew and go through the conversion process.


Shavei Israel founder Michael Freund, who funded the project out of his own pocket, said Tuesday "this is an experimental project, and if it proves successful, we will bring more descendants of the Kaifeng community, of which a little less than half would like to make Aliyah."


It is still not clear exactly when the first Jews arrived to China, and around what year the Kaifeng community, which currently has some 1,000 members, was established.


However, according to the prevailing theory among scientist as well as Kaifeng Jews' descendants, the community's ancestors were merchants from Persia, who arrived to Kaifeng – then the capital of China — via the silk road during the 10th and 12th centuries.


Although the Kaifeng Jews almost completely assimilated, their descendants continued to observe certain traditions such as not consuming pork, which is the main meat product in China, baking matzo during Passover, painting their frame-head in red instead of a mezuzah, and lighting Hanukkah candles.

In recent years, some decedents of the community began searching for their roots. "One explanation is the internet, which allowed them access to information about Judaism and Israel, which they wouldn't have been able to get otherwise," said Freund.


Recently, three young Kaifeng Jews made aliyah with the help of Shavei Israel, completed their conversion process, and became full citizens of Israel. This time, the organized group will live in the religious Kibbutz Sde Eliyahu, where they will study Hebrew for five months, after which they will complete their conversion.