A MULTIWAVE PUBLIC ATION

THE LOS ANGELES

PROFESSIONAL EXPRESS
PROTESTERS SHAKE ARAB WORLD!
COMPLIMENTARY ISSUE NUMBER 2 - 5 | THURSDAY, FEBRUARY 3, 2011

News Summary
China restricts reports
on Egypt protests
The protests in Egypt are about
free elections and overthrowing a
longtime dictator? Not according
to China’s state media, which is
painting them as the kind of cha-
os that comes with Western-style
democracy. Page 2
Jordan’s Islamists say
new PM must step down
Jordan’s powerful Muslim op-
position on Wednesday urged
the country’s newly appointed
prime minister to step down, call-
ing him the wrong person to in-
troduce democratic reforms and
tackle deepening poverty and un-
employment. Page 2
Israeli PM says Iran
would like ‘another Gaza’
in Egypt
Israel’s prime minister on
Wednesday said Iran wants to
take advantage of the chaos in
Egypt to create “another Gaza”
there, run by Islamic fundamen-
talists. Page 2
Relief as Australia mops
up from giant cyclone
Australians voiced relief and
surprise after one of the world’s
most powerful cyclones spared
the nation’s northeast coast from
expected devastation on Thurs-
day, with no reported deaths de-
spite winds tearing off roofs and
toppling trees. Page 2
Journalists attacked
and detained in Egypt
In multiple incidents, journal-
Do the people of Egypt not deserve the right to self determination?
CAIRO -- Supporters of President
Hosni Mubarak charged into Cai-
ro’s central square on horses and
camels brandishing whips while
others rained firebombs from roof-
tops in what appeared to be an or-
chestrated assault against protesters
trying to topple Egypt’s leader of 30
years. Three people died and 600
were injured.
The protesters accused Mubarak’s
regime of unleashing a force of paid
thugs and plainclothes police to
crush their unprecedented 9-day-old
movement, a day after the 82-year-
old president refused to step down.
They showed off police ID badges
they said were wrested from their
attackers. Some government work-
ers said their employers ordered
them into the streets.
Mustafa el-Fiqqi, a top official
from the ruling National Democrat-
ic Party, told The Associated Press
that businessmen connected to the
ruling party were responsible for
what happened.
The notion that the state may have
coordinated violence against pro-
testers, who had kept a peaceful country, stubbornly proclaiming he to depict the movement as foreign- looting and lawlessness and the es- “The army is neglectful. They let
vigil in Tahrir Square for five days, would die on Egyptian soil. fueled. cape of thousands of prisoners from them in,” said Emad Nafa, a 52-year-
prompted a sharp rebuke from the His words were a blow to the pro- After midnight, 10 hours after the jails in the chaos. old among the protesters, who for
Obama administration. testers. They also suggest that au- clashes began, the two sides were Soldiers surrounding Tahrir Square days had showered the military with
“If any of the violence is instigated thorities want to turn back the clock locked in a standoff at a street cor- fired occasional shots in the air affection for its neutral stance.
by the government, it should stop to the tight state control enforced ner, with the anti-Mubarak protest- throughout the day but did not ap- Egyptian Health Minister Ahmed
immediately,” said White House before the protests began. ers hunkered behind a line of metal pear to otherwise intervene in the Sameh Farid said three people died
Press Secretary Robert Gibbs. Mubarak’s supporters turned up on sheets hurling firebombs back and fierce clashes and no uniformed po- and at least 611 were injured in Ta-
The clashes marked a dangerous the streets Wednesday in significant forth with government backers on lice were seen. Most of the troops hir Square. One of those killed fell
new phase in Egypt’s upheaval: the numbers for the first time. Some the rooftop above. The rain of bot- took shelter behind or inside the ar- from a bridge near the square; Farid
first significant violence between were hostile to journalists and for- tles of flaming gasoline set nearby mored vehicles and tanks stationed said the man was in civilian clothes
government supporters and oppo- eigners. Two Associated Press cor- cars and wreckage on the sidewalk at the entrances to the square. but may have been a member of the
nents. The crisis took a sharp turn respondents and several other jour- ablaze. “Why don’t you protect us?” some security forces.
for the worse almost immediately nalists were roughed up in Cairo. The scenes of mayhem were cer- protesters shouted at the soldiers,
after Mubarak rejected the calls for State TV had reported that foreign- tain to add to the fear that is already who replied they did not have or- By HADEEL AL-SHALCHI
him to give up power or leave the ers were caught distributing anti- running high in this capital of 18 ders to do so and told people to go (Associated Press)
Mubarak leaflets, apparently trying million people after a weekend of home.

China says
ists covering Egypt’s unrest were
pummeled, hit with pepper spray,
shouted at and threatened by loy-
alists to President Hosni Mubarak
as the scene at anti-government

Fed easing
demonstrations suddenly turned
ugly. Page 2

Gang gunbattles, street

blockades in MexicoNo-

ineffective
Suspected drug cartel gunmen
hurled grenades, burned
vehicles and blocked streets in a
rapid series of attacks in Mexi-
co’s second-largest city! Page 2

& dangerous
Yemeni president
signals he won’t stay
beyond 2013
Yemeni President Ali Abdullah
Saleh, eyeing protests that threat-

Heavy gunfire rings

en to topple Egypt’s long-serving
president, indicated on Wednes-
day he would leave office when
his term ends in 2013. Page 2
Quantitative easing by the Fed- cy depreciation,” the Chinese cen-
eral Reserve and other central tral bank said in its 59-page report.
banks cannot address fundamen- “It is creating imported inflation and
tal economic problems but may short-term capital inflows, pressur-

out in Cairo protest

S Korean crew recount
beatings by Somali
pirates
South Korean sailors held captive
by Somali pirates for a week said
they were frequently beaten and
their lives were repeatedly threat-
ened before South Korean com-
mandos rescued them, a news re-
port said Wednesday. Page 2
Republicans lose vote
on health law
A Republican drive to repeal the
year-old health care law ended
in party-line defeat in the Senate
on, leaving the Supreme Court to
render a final verdict on the issue.
The vote was 47-51. Page 3
lead to excessive global liquidity
and competitive currency depre-
ciation, China’s central bank said
on Sunday.
In its monetary policy report for
the final quarter of 2010, the Peo-
ple’s Bank of China (PBOC) also
confirmed that it would target 16
percent growth of the broad M2
measure of money supply this year,
down from the 19.9 pct growth re-
corded at the end of 2010.
The central bank said the Fed’s
monetary easing was pushing up
international commodity prices and
asset prices in emerging markets,
including China.
“Quantitative easing policy cannot
fundamentally address economic
problems, and it may cause exces-
sive liquidity on a global scale as
well as risks of competitive curren-
ing emerging markets,” it said.
As a result, China needed to work
hard to soak up liquidity from for-
eign exchange inflows in order to
minimize the impact on the domes-
tic economy, it added.
The central bank reiterated that it CAIRO (AP) -- Bursts of heavy dead protesters being carried to- ing whips while others rained fire-
would keep the yuan basically sta- gunfire rained into Cairo’s Tahrir ward an ambulance. He said the bombs from rooftops in what ap-
ble while making the exchange rate Square before dawn Thursday, kill- gunfire came from at least three lo- peared to be an orchestrated assault
regime more flexible. ing at least three anti-government cations off in the distance and that against protesters trying to topple
The central bank said it would demonstrators among crowds still the Egyptian military, which has Egypt’s leader of 30 years. Three
continue to use different tools, in- trying to hold the site after an as- ringed the square with tank squads people died in that earlier violence
cluding interest rates, bank reserve sault by supporters of President for days to try to keep some order, and 600 were injured.
Hosni Mubarak, according to a pro- did not intervene. Bloodied young men staggered or
requirements and open-market op-
test organizer. Footage from AP Television News were carried into makeshift clinics
erations, to rein in money supply
Sustained bursts of automatic showed two bodies being dragged set up in mosques and alleyways by
and bank credit growth as a way of
weapons fire and powerful single from the scene. The health minister the anti-government side.
handling inflationary pressure.
shots rattled into the square starting did not answer a phone call seeking
at around 4 a.m., and was continu- confirmation of the deaths. By HADEEL AL-SHALCHI,
ing more than an hour later. Throughout Wednesday, Mubarak (Associated Press) Edited by Edgar
Reporting by Zhou Xin and Michael
Martina; Editing by Simon Rabino- Protest organizer Mustafa el-Nag- supporters charged into the square Tenenbaum.
vitch (Reuters) gar said he saw the bodies of three on horses and camels brandish-
WORLD NEWS
China restricts reports on Egypt protests
BEIJING -- The protests in Egypt
are about free elections and over-
throwing a longtime dictator? Not
according to China’s state media,
which is painting them as the kind
of chaos that comes with Western-
style democracy.
The recent uprisings in Egypt and
Tunisia are no doubt giving pause to
many authoritarian regimes around
the world, but nowhere else appears
to be as determined to control the
message as China.
Chinese censors have blocked the
ability to search the term “Egypt”
on microblogging sites, and user
comments that draw parallels to
China have been deleted from Inter-
net forums. The People’s Daily, the
flagship newspaper of the Commu-
nist Party, carried only a short report
Jordan’s
Islamists say
new PM must
step down
AMMAN, Jordan – Jordan’s power-
ful Muslim opposition on Wednes-
day urged the country’s newly
appointed prime minister to step
down, calling him the wrong person
to introduce democratic reforms
and tackle deepening poverty and
unemployment.
Also, Jordan’s King Abdullah II
made a surprise visit to an impov-
erished northern village. It was his
first such trip since the unrest broke
out in neighboring Egypt, and ap-
peared to be an attempt to defuse
popular anger over the country’s
troubles and portray himself as a
caring leader.
On Tuesday, Abdullah named Ma-
rouf al-Bakhit prime minister, bow-
ing to public pressure from protests
inspired by those in Egypt against
President Hosni Mubarak.
Hamza Mansour, a leader of the
opposition Muslim Brotherhood’s
political wing, rejected al-Bakhit’s
nomination, saying he “is not the
right person for the job.”
“Al-Bakhit is a security man, a
Journalists attacked
and detained in Egypt
NEW YORK -- In multiple inci-
dents, journalists covering Egypt’s
unrest were pummeled, hit with
pepper spray, shouted at and threat-
ened by loyalists to President Hosni
Mubarak as the scene at anti-gov-
ernment demonstrations suddenly
turned ugly.
“For the first time in the last few
days, we can feel what dictatorship
really means,” said Lara Logan of
CBS News, who said she was ef-
fectively trapped in an Alexandria
hotel.
When a CBS camera crew at-
tempted to take pictures of violence
between pro- and anti-government
crowds, they were marched back to
their hotel at gunpoint, Logan said.
The CBS journalists were only al-
lowed to leave without cameras, and
were watched wherever they went.
Mubarak’s opponents were becom-
ing afraid to talk to journalists, she
said.
Several reporters told similar sto-
ries of what the Committee to Pro-
tect Journalists described as a se-
ries of deliberate attacks. The New
York-based CPJ called on the Egyp-
Thursday saying Egyptian President
Hosni Mubarak would not stand for
re-election.
While there is little chance the pro-
tests could spark demonstrations in
China, the extent to which the long-
ruling Communist Party is censor-
ing the story underscores how wary
it is of any potential source of un-
rest that might threaten its hold on
power.
“Of course, the government
doesn’t want to see more comments
on (the protests), because stability
is what they want,” said Zhan Jian,
a professor with the Media Depart-
ment at the China Youth University
for Political Sciences.
Elsewhere, authoritarian leaders
from Madagascar to Iran have put
their own spin on the Egyptian and
former army general and ex-intel-
ligence official. He doesn’t believe
in democracy,” Mansour told The
Associated Press. Instead, he said
the country needs “a national fig-
ure who can tackle Jordan’s serious
economic and political crisis.”
Jordan is grappling with a soar-
ing foreign debt estimated at $15
billion, an inflation rate which has
swelled by 1.5 percent to 6.1 per-
cent in December and high unem-
ployment and poverty rates — set at
12 and 25 percent respectively.
Mansour also criticized al-Bakhit
for signing off on Jordan’s first ca-
sino, which the Brotherhood strong-
ly opposed on the grounds that it
violated Islamic principles and en-
couraged vice. The project was later
canceled.
On Tuesday, King Abdullah, fac-
ing public pressure inspired by the
revolt in Tunisia and Egypt, sacked
his government and named al-Bakh-
it as prime minister, ordering him to
move quickly to boost economic
opportunities and give Jordanians a
tian military to provide protection
for reporters.
Veteran international correspon-
dent Christiane Amanpour, now
working for ABC News, said she
witnessed Mubarak supporters ar-
riving at Cairo’s Tahrir Square in
what appeared to be coordinated
fashion in the early afternoon and
sensed the mood changing.
“The thing about this is you can
smell it,” she said. “I just wondered
what this was going to bode for the
day.”
She soon found out. She was trying
to interview a Mubarak supporter
when she was surrounded by sever-
al young men shouting that “we hate
Americans” and “go to hell.”
When it was clear the situation
wouldn’t improve, Amanpour and
her ABC colleagues got in a car
to leave. The car was surrounded
by men banging on the sides and
windows, and a rock was thrown
through the windshield, shattering
glass on the occupants. They es-
caped without injury.
Blaming the press when things are
going bad is a “time-honored and
Tunisian protests to justify their
staying in power.
In some countries, including Sau-
di Arabia, Equatorial Guinea and
North Korea, the media strategy
seems to be to ignore the protests,
with little or no coverage. Others
have used the media to reinforce
their message.
State-controlled television in the
Ivory Coast has shown looting in
Tunisia, explaining that is the cost of
the country’s leader stepping down.
The unstated context: the Ivorian
president is refusing to leave office
two months after losing an election.
In Zimbabwe, media loyal to long-
time President Robert Mugabe have
portrayed the protests as anti-impe-
rialist, an uprising against Egypt’s
leader because he is close to the
greater say in politics.
Al-Bakhit, 63, is a former ambas-
sador to Israel who supports strong
ties with the U.S. and Jordan’s peace
treaty with Israel — policies which
the Brotherhood and the leftists op-
pose. The fundamentalist Brother-
hood advocates the introduction of
strict Islamic sharia law, close rela-
tions with Muslim nations and Is-
rael’s destruction.
Many Jordanians see al-Bakhit as
a tough enforcer of security, which
sad tradition,” she said.
CNN’s Anderson Cooper said he,
a producer and camera operator
were set upon by people who be-
gan punching them and trying to
break their camera. Another CNN
reporter, Hala Gorani, said she was
shoved against a fence when dem-
onstrators rode in on horses and
camels, and feared she was going to
get trampled.
“This is incredibly fast-moving,”
Cooper said. “I’ve been in mobs be-
fore and I’ve been in riots, but I’ve
never had it turn so quickly.”
A journalist for Dubai-based Al-
Arabiya television suffered a con-
cussion, said media watchdog In-
ternational Press Institute, citing
Randa Abul-Azm, the station’s bu-
reau chief in Cairo.
The attacks appeared to reflect a
pro-government view that many
media outlets are sympathetic to
protesters who want Mubarak to
quit now rather than complete his
term. On Tuesday night, Mubarak
pledged not to run in elections later
this year, and the army urged people
to cease demonstrating.
THE PROFESSIONAL EXPRESS
U.S. “This is exactly what happens
when sovereign governments sup
with the devil,” the state-run Daily
Mail said.
But Zimbabweans can still clus-
ter around TVs in sports clubs and
bars, which have been switched
from the usual sports programs to
blanket coverage of the protests on
Al-Jazeera and other satellite news
channels.
Not so in China, where CNN and
BBC are not widely available, and
many are getting only the govern-
ment version of events.
Those accounts have focused on
the chaos and ignored protester
complaints about autocracy and
corruption, both sensitive topics in
China. The reports have also high-
lighted the government’s dispatch-
goes against their calls for greater
democratic freedoms. Al-Bakhit is
an ex-army major general who also
served as the chief of Jordan’s Na-
tional Security Agency in the last
decade. He is credited with main-
taining Jordan’s stability following
the 2005 triple attacks on hotels in
Amman, claimed by al-Qaida in
Iraq. At a small protest Wednesday
near al-Bakhit’s office, leftist activ-
ist Hadi Khitan said al-Bakhit was
no different from deposed Prime
In Wednesday’s fighting, security
forces did not intervene as thou-
sands of people hurled stones and
firebombs at each other for hours
in and around the capital’s Tahrir
Square.
Fox Business Channel’s Ashley
Webster reported that security offi-
cials burst into a room where he and
a camera operator were observing
the demonstration from a balcony.
They forced the camera inside the
room. He called the situation “very
unnerving” and said via Twitter that
he was trying to lay low.
CBS newsman Mark Strassman
said he and a camera operator were
attacked as they attempted to get
close to the rock-throwing and take
pictures. The camera operator, who
he would not name, was punched
repeatedly and hit in the face with
Mace.
| FEBRUARY 3, 2011
ing several chartered planes to res-
cue hundreds of stranded Chinese.
Online, searching for the term
“Egypt” on microblogging sites,
which draw millions of users, brings
up the message: “According to rel-
evant laws, regulations and policies,
the search results are not shown.”
Foreign Ministry spokesman Hong
Lei gave the government’s routine
denial of online censorship Tuesday,
saying: “China’s Internet is open.”
By Tini Tran., Lova Soarabary in
Antananarivo, Madagascar; Ruk-
mini Callimachi in Abidjan, Ivory
Coast; and Angus Shaw in Harare,
Zimbabwe, contributed to this re-
port. (Associated Press) Edited by
Y. Isacov.
Minister Samir Rifai.
State television showed Abdullah
shaking hands with jubilant men
and children as women ululated.
Mobs surrounded the monarch as
he walked through the village une-
scorted. In one clip, Abdullah was
shown sitting on a floor mattress,
taking notes of people’s grievances,
which included improved sewage
and roads.
By Dale Gavlak (AP)
“As soon as one started, it was like
blood in the water,” he said. The two
men were caught up in a crowd they
soon learned were anti-Mubarak
demonstrators who were trying to
whisk them to safety. The demon-
strators told them to get away for
safety’s sake, and they complied.
“It’s a significant news story but at
the same time you have to protect
yourself,” he said. “You’re not do-
ing anybody any good if you end up
in a hospital or worse.”
Al Jazeera kept its camera crews
away from the square and instead
relied on reporters of Arab descent
who had flip cameras and tried to
do their work by blending in with
the crowd, said Al Anstey, the net-
work’s managing director.
By David Bauderand Chris Torchia
(AP)
| PAGE 2
Israeli PM
says Iran
would like
‘another Gaza’
in Egypt
JERUSALEM -- Israel’s prime
minister on Wednesday said Iran
wants to take advantage of the cha-
os in Egypt to create “another Gaza”
there, run by Islamic fundamental-
ists.
Speaking before the Israeli par-
liament, Benjamin Netanyahu said
he expects any new government in
Egypt to honor its three-decade-
long peace agreement with Israel.
But he warned that Islamic groups
have already taken over by demo-
cratic means in Iran, Lebanon and
Gaza.
“Is there freedom in Iran? Is there
democracy in Gaza? Does Hez-
bollah promote human rights?” he
asked. “They (Iranians) want an
Egypt that goes back to the Middle
Ages. They want Egypt to turn into
another Gaza, that will be run by
radical forces that are against ev-
erything we want, everything the
democratic world stands for.”
He did not say how Iran would do
this.
After initially keeping a low pro-
file over the unrest, Netanyahu has
in recent days been warning of
the dangers posed by instability in
Egypt.
Egypt became the first Arab nation
to sign a peace accord with Israel
in 1979 and has strictly honored it.
Egyptian President Hosni Mubarak
has close ties to Israeli leaders and
has acted as a bridge between Israel
and the Palestinians to the broader
Arab world.
The anti-government protests, led
by secular Egyptian activists, forced
Mubarak to announce he will not
seek re-election.
Netanyahu said that a more demo-
cratic Egypt would not pose a threat
to Israel. He called on the inter-
national community to insist that
whoever takes over power in Egypt
remains committed to peace with
Israel.
By ARON HELLER (AP). Edited
by Mark Davis.
Relief as
Australia
mops up from
giant cyclone
NNISFAIL, Australia (Reuters) –
Australians voiced relief and sur-
prise after one of the world’s most
powerful cyclones spared the na-
tion’s northeast coast from expected
devastation on Thursday, with no
reported deaths despite winds tear-
ing off roofs and toppling trees.
Cyclone Yasi, roughly the size of
Italy and packing winds of up to
around 300 km per hour (186 miles
per hour), threatened Australia with
its second major natural disaster in
as many months this week but ended
up missing heavily populated areas.
“It’s amazing no-one was killed.
The wind was howling like a ban-
shee,” said farmer Nathan Fisher,
speaking out the window of his
four-wheel-drive vehicle as he re-
turned to his property from a shelter
in the small town of Innisfail.
Australia, a vast continent with less
than three people for every square
km, is one of the few countries
where a storm as large and terrify-
ing as Yasi -- with a diameter of up
to around 500 km (310 miles) --
could simply miss major cities.
The cyclone came ashore around
midnight along hundreds of km of
coast in Queensland state and then
drove inland, bringing heavy rains
to mining areas struggling to recov-
er from recent devastating floods.
By Rob Taylor (Reuters)
 WORLD NEWS
Gang gunbattles, street blockades in Mexico
Suspected drug
cartel gunmen
hurled gre-
nades, burned
vehicles and
blocked streets
in a rapid se-
ries of attacks
in Mexico’s
second-largest
city!
GUADALAJARA, Mexico -- The
seven attacks within two hours late
Tuesday appear to have been coor-
dinated, and were staged by drug
gangs, possibly in retaliation for the
arrests of their members, said Fer-
nando Guzman Perez, interior sec-
retary of Jalisco state, where the city
of Guadalajara is located. A police-
man and two transportation workers
were injured in the attacks.
“This is an orchestrated attack by
criminal forces,” Guzman Perez
said. “There have been arrests ... of
people linked to these cells of or-
ganized crime, and perhaps it was
because of those detentions that at-
tacks over the past few hours broke
out.”
Assailants hurled a grenade at a
police station and burned a bus and
commuter trains to block streets, in-
Yemeni
president
signals he
won’t stay
beyond 2013
Yemeni President Ali Abdullah
Saleh, eyeing protests that threaten
to topple Egypt’s long-serving pres-
ident, indicated on Wednesday he
would leave office when his term
ends in 2013, after three decades in
power.
Saleh, an important U.S. ally
against al Qaeda, pledged not to
hand the reins of government on to
his son and appealed to the opposi-
tion to call off protests as a big rally
loomed.
“I present these concessions in the
interest of the country. The interests
of the country come before our per-
sonal interests,” Saleh told parlia-
ment and members of the military.
“No extension, no inheritance, no
resetting the clock,” he said, refer-
ring to ruling party proposals on
term limits seen as designed to en-
able him to run again.
The move was Saleh’s boldest
gambit yet to stave off anti-govern-
ment turmoil spreading in the Arab
world as he tried to avert a show-
down with the opposition which
might risk drawing people on to the
streets in the poverty-stricken state.
He spoke a day before a planned
juring transportation workers who
tried to resist, he said.
Other attacks took place Tuesday
and Wednesday in the northern cit-
ies of Zacatecas and Monterrey,
Mexico’s third-largest city, resulting
in several deaths.
In the wealthy Monterrey suburb of
San Pedro Garza Garcia on Wednes-
rally by the opposition, dubbed a
“Day of Rage” and seen as a ba-
rometer of the size and strength of
the Yemeni people’s will to follow
Egyptians and Tunisians in demand-
ing a change of government.
“I call on the opposition to freeze
all planned protests, rallies and sit-
ins,” Saleh said. “I call on the op-
position after this initiative to come
and form a national unity govern-
ment in spite of the ruling party ma-
jority. We will not allow chaos. We
will not allow destruction.”
About 5,000 government support-
ers held a rally in a sports stadium
in a suburb of the capital Sanaa on
Wednesday, some carrying signs
that read “No to sabotage, yes to
security and stability” and “Yes to
unity, no to separatism.”
Yemen, at risk of becoming a failed
state, is trying to fight a resurgent al
Qaeda wing, quell southern sepa-
ratism, cement peace with Shi’ite
rebels in the north, all in the face of
crushing poverty. One third of Ye-
menis face chronic hunger.
“I think it is very significant,”
Dubai-based security analyst The-
odore Karasik said of the move.
day, gunmen fired upon a group
of Mexican marines who were re-
sponding to reports of illicit activity
at an apartment complex, the Mexi-
can navy said in a statement.
The marines returned fire, killing
four suspected gunmen, the navy
said.
A series of attacks in Monterrey
“What they are doing in Yemen is
trying to not have what happened in
Egypt.”
“I don’t know if it will be enough
to satisfy people. It may try to heal
some of the cleavages between for
example the southern secessionist
movement and Sanaa, but is it going
to be enough for everyone?”
The United States relies heavily on
Saleh to help combat al Qaeda’s re-
gional Yemen-based arm which also
targets neighboring Saudi Arabia,
the world’s biggest oil exporter.
President Barack Obama tele-
phoned Saleh to express support for
his initiative, the state news agency
Saba said. “You have handled the
situation well, and I look forward to
working with you in a good partner-
ship between the two countries,” it
quoted Obama as saying.
Yemen’s biggest opposition party
welcomed the initiative but said
Thursday’s rally in Sanaa would
still go ahead. The rally’s size and
mood will offer the first glimpse of
popular reaction to Saleh’s conces-
sions.
“We consider this initiative posi-
tive and we await the next concrete
THE PROFESSIONAL EXPRESS
on Tuesday left a federal police of-
ficer and three suspected cartel gun-
men dead and three police officers
injured, said Jorge Domene, public
security spokesman for the state of
Nuevo Leon, where Monterrey is
located.
The cartel members erected road-
blocks to aid their escape, and
steps. As for our plan for a rally to-
morrow, the plan stands and it will
be organized and orderly,” said Mo-
hammed al-Saadi, undersecretary of
the Islamist party Islah (reform).
“This is a peaceful struggle through
which the people can make their
voices heard and express their aspi-
rations.”
Saleh had already offered lesser
concessions on presidential term
limits and pledged to raise civil
servants’ and military salaries by
around $47 a month, no small move
in a country where about 40 percent
of the population lives on less than
$2 a day.
Saleh promised to delay parlia-
mentary elections due in April to
conduct reforms to persuade the
opposition the vote will be fair. The
delay was not expected to more than
several months.
By Mohamed Sudam (Reuters). Ad-
ditional reporting by Mohammed
Ghobari in Sanaa, Erika Solomon
and Mahmoud Habboush in Dubai;
Writing by Cynthia Johnston; Edit-
ing by Andrew Dobbie)
| FEBRUARY 3, 2011
hurled a grenade at a police check-
point that caused a patrol car to ex-
plode.
In one of the assaults, gunmen
driving a black sport utility vehicle
opened fire on police officers in a
patrol car in the suburb of Monterrey
Apodaca, killing one and wound-
ing three. Assailants exchanged fire
S Korean crew recount
beatings by Somali pirates
SEOUL, South Korea -- South Ko-
rean sailors held captive by Somali
pirates for a week said they were fre-
quently beaten and their lives were
repeatedly threatened before South
Korean commandos rescued them, a
news report said Wednesday.
Such abuse - and even torture - is
being systematically perpetrated by
Somali pirates on their hostages, ac-
cording to the top commander of the
European Union Naval Force.
Seven South Korean sailors from
the cargo ship hijacked in the Ara-
bian Sea on Jan. 15 returned home
Wednesday. The crew have been
largely kept away from the media
while investigators interview them,
but a few recounted their ordeal to
the Yonhap news agency.
One sailor said he lost several
teeth when a captor beat him.
“Pirates trampled and beat me
whenever I talked with my captain,”
Kim Du-chan was quoted as say-
ing by Yonhap. “I lost my four front
teeth after being hit by the elbow of
one pirate.”
The pirates frequently beat the
captain and other senior crew while
shouting “kill,” another sailor Choi
Jin-kyung said.
Yonhap said it obtained the com-
ments while the sailors were outside
of an investigation room at a local
coast guard office at the southeast-
| PAGE 3
with the police for several blocks
before they holed up in a drug store.
Another gunfight ensued before the
suspects were captured. Police did
not say how many were taken into
custody.
Earlier Tuesday, assailants hurled
a grenade at a municipal police
checkpoint in Monterrey, but the of-
ficers were able to get out of their
patrol car before it exploded. It was
the third time a grenade has been
thrown at checkpoints in Monterrey
since they were set up last month.
The checkpoints are meant to mon-
itor suspicious activity and combat
vehicle theft, but have become easy
targets for the cartels.
In a separate Monterrey suburb
Tuesday, three suspected drug gang
gunmen were killed in a shootout
with federal police, said police com-
mander Manuel Jesus Uco Limon.
January was the bloodiest month
of drug violence in recent history in
Monterrey. According to public se-
curity office figures, more than 120
people were killed as a result of or-
ganized crime, including 21 police
officers.
In Zacatecas on Tuesday, gunmen
opened fire on state police officers
who had arrived after receiving a tip
that armed men were parked outside
an office-supply store, the govern-
ment of Zacatecas state said in a
statement Wednesday.
Two bystanders, a man and a
boy, suffered non-life-threatening
wounds in the gunbattle, the state-
ment said. As in Monterrey, the as-
sailants hijacked vehicles and used
them to block streets to aid their
escape. Two suspects were arrested.
By Arturo Perez (AP). Edited by
Edgar Tenenbaum
ern city of Busan.
Coast guard spokesman Eum Jin-
kyung confirmed the sailors were
being questioned about their treat-
ment but said he couldn’t confirm
the reported beating.
The published report came a day
after Maj. Gen. Buster Howes told
The Associated Press that Somali
pirates have begun systematically
using hostages as human shields
and torturing them.
Howes said that pirates have re-
cently tied hostages upside down
and dragged them in the sea, locked
them in freezers, beaten them and
used plastic ties around their geni-
tals.
During last month’s raid, South
Korean commandos killed eight pi-
rates and captured five. None of the
crew members was injured in the
raid except for the captain, who was
shot in the stomach by a pirate. The
captain, who was brought to South
Korea for treatment last week, was
regaining consciousness, a hospi-
tal official said. He asked not to be
identified as he was not authorized
to speak to media. The rest of crew
- two Indonesians and 11 Myanmar
citizens - are staying in Oman.
By Hyung-Jin Kim (AP)
Edited by Yuri Isacov.
NATIONAL NEWS THE PROFESSIONAL EXPRESS | FEBRUARY 3, 2011 | PAGE 4

Blizzard covers nearly half the USA

CHICAGO -- A fearsome storm spread a smothering
shroud of white over nearly half the nation Wednesday,
snarling transportation from Oklahoma to New Eng-
land, burying parts of the Midwest under 2 feet of snow
and laying down dangerously heavy ice in the North-
east that was too much for some buildings to bear.
Tens of millions of people stayed home. The hardy
few who ventured out faced howling winds that turned
snowflakes into face-stinging needles. Chicago’s 20.2
inches of snow was the city’s third-largest amount on
record. In New York’s Central Park, the pathways re-
sembled skating rinks.
The storm that resulted from two clashing air masses
was, if not unprecedented, extraordinarily rare for its
size and ferocious strength.
“A storm that produces a swath of 20-inch snow is
really something we’d see once every 50 years - may-
be,” National Weather Service meteorologist Thomas
Spriggs said.
Across the storm’s path, lonely commuters struggled
against drifts 3 and 4 feet deep in eerily silent streets,
some of which had not seen a plow’s blade since the
snow started a day earlier. Parkas and ski goggles nor-
mally reserved for the slopes became essential for get-
ting to work.
“This is probably the most snow I’ve seen in the last 34
years,” joked 34-year-old Chicagoan Michael George.
“I saw some people cross-country skiing on my way to
the train. It was pretty wild.”
Although skies were beginning to clear by mid-after-
noon over much of the nation’s midsection, the storm
promised to leave a blast of bitter cold in its wake.
Overnight temperatures in the upper Midwest were ex-
pected to fall to minus 5 to minus 20, with wind chills
as low as minus 30.
The system was blamed for the deaths of at least a
dozen people, including a homeless man who burned
to death on New York’s Long Island as he tried to light
cans of cooking fuel and a woman in Oklahoma City
who was killed while being pulled behind a truck on a
sled that hit a guard rail.
Airport operations slowed to a crawl nationwide, and
flight cancellations reached 13,000 for the week, mak-
ing this system the most disruptive so far this winter.
A massive post-Christmas blizzard led to about 10,000
cancellations.
In the winter-weary Northeast, thick ice collapsed sev-
eral structures, including a gas station canopy on Long
Island and an airplane hangar and garages near Boston.
In at least two places, workers heard the structures be-
ginning to crack and narrowly escaped.
By DON BABWIN and MICHAEL TARM (AP)
Edited by Yuri Isacov

Janitor Republicans
shoots lose vote on
school health law
principal
WASHINGTON -- A Re- said. demn judicial activism,”
publican drive to repeal Democrats worked to said Sen. Dick Durbin, D-
the year-old health care minimize any political Ill., who presided. “They
law ended in party-line repercussions, a concern are pushing the Supreme
defeat in the Senate on for a party already acutely Court to strike down this

to death
A janitor at an elemen-
tary school near Sacra-
mento, California, was
arrested on Wednesday
after he shot and killed
the school’s principal, a
county fire department of-
ficial said.
The shooting occurred
at about 10:30 a.m. local
time in an office at the
Schnell School in the Si-
erra foothills town of Pla-
cerville, about 20 miles
northeast of the state capi-
tal.
The gunman fled the
scene on foot to his home,
where he was taken into
custody by law enforce-
ment authorities, accord-
ing to El Dorado County
Fire Department Battalion
Chief Larry Marinas.
Placerville police said
they were holding the
suspect, John Luebbers,
44, on a felony charge of
murder.
The victim, identified
as the school’s principal,
Sam LaCara, was taken to
a nearby hospital, where
he died from a single gun-
shot wound to the chest,
Marinas said.
No one else was hurt or
Wednesday, leaving the
Supreme Court to render
a final, unpredictable ver-
dict on an issue steeped in
political and constitution-
al controversy. The vote
was 47-51.
Moments earlier, the
Senate had agreed to
threatened with violence make one relatively minor
in the incident, Mari- change in the law, voting
nas said, but the shoot- to strip out a paperwork
ing prompted a security requirement for business-
lockdown at the school es.
that lasted for at least two President Barack
hours. Obama, who has vowed to
The circumstances and veto any total repeal of his
motive for the shooting re- signature legislative ac-
mained unclear, he added. complishment, has said he
Placerville Police Chief would accept the change.
George Nielsen said the It does not directly affect
suspect may have con- health care.
fronted the principal over Republicans conceded
a perceived grievance, the in advance their attempt
Sacramento Bee newspa- at total repeal would fall
per reported online. short. But they also said
“It’s not really clear they had accomplished an
whether there was a dis- objective of forcing rank
pute. It appears there had and file Democrats to take
been a discussion” before a position on an issue that
the shooting, Nielsen was reverberated in the 2010
quoted as saying. campaign and may play a
An online notice posted role in 2012.
on the Placerville Union Senate Republican lead-
School District website er Mitch McConnell said
said only that at shoot- the vote marked an oppor-
ing had occurred at the tunity for Democrats who
Schnell School campus voted for the bill last year
and that all students were “to listen to those who
safe and under a class- have desperately been try-
room lockdown. ing to get your attention.”
“To say, yes, maybe my
Writing and additional re- vote for this bill was a
porting by Steve Gorman; mistake, and that we can
Editing by Peter Bohan do better,” McConnell
(Reuters).
aware it must defend 23
seats - and its shrunken
Senate majority - in the
2012 elections.
Majority Leader Harry
Reid, D-Nev., said the
Republican repeal move-
ment would “take away a
child’s right to get health
insurance and instead give
insurance companies the
right to use asthma or dia-
betes as an excuse to take
away that care.”
“It would kick kids off
their parents’ health in-
surance,” Reid said. “It
would take away seniors’
rights to a free wellness
check.”
Democrats also coun-
tered with the proposed
repeal of the law’s re-
quirement that businesses,
charities, and state and
local governments file
income tax forms every
time they purchase $600
or more in goods.
It was approved 81-17,
after Republicans pointed
out it had originally been
their idea.
Across the street from
the Capitol, Democrats
convened a Judiciary
Committee hearing to so-
licit testimony on the con-
stitutionality of the law
they passed and Obama
signed months ago.
“Many who argue the
Affordable Care Act is
unconstitutional are the
same people who con-
law because they could
not defeat it in Congress.”
Republicans were scath-
ing in response.
“The sensible process
would have been to have .
held a hearing on the law’s
constitutionality before
the bill passed, not after,”
said Sen. Chuck Grass-
ley of Iowa. “Like Alice
in Wonderland, sentence
first, verdict afterward.”
Two federal judges
have ruled the law is un-
constitutional, partially
or in its entirety, citing a
requirement for individu-
als to purchase coverage
and pay a penalty in taxes
if they fail to do so. Two
other judges have upheld
the law.
The controversy has
yet to reach the Supreme
Court, but it is widely
expected to, and Sen.
Bill Nelson, D-Fla., an-
nounced he would file leg-
islation urging the justices
to act quickly.
Under federal law, So-
cial Security benefits are
generally guaranteed. As
a result, the provision Sta-
benow advanced assures
merely that no administra-
tive costs can be cut at the
agency.
By David Espo (AP Spe-
cial Correspondent) Lau-
rie Kellman contributed to
this report. Edited by Yuri
Isacov.

$77 million awarded to 150 victims

of sexual abuse by Catholic church
Delaware’s Catholic Diocese
of Wilmington settled a lawsuit
Wednesday with nearly 150 alleged
victims of sexual abuse, awarding
them more than $77 million, and
the church agreed to fully disclose
documents relating to the abuse.
The lawsuits claimed child sexual
abuse by dozens of diocesan and
religious order priests dating to the
early 1960s.
Attorney Thomas Neuberger, who
represented 99 of the 146 alleged
victims, said they would each re-
ceive $530,000 on average.
Lawyers for the victims called the
release of unredacted documents a
historic step toward making sure it
doesn’t happen again and promised
to put them on the Internet.
“When people see the documents,
they will be able to judge for them-
selves” how the church dealt with
pedophile priests, attorney John
Manly said.
Diocese attorney Anthony Flynn
said church officials were pleased
with the settlement.
“It’s been a long struggle, but
we’ve finally reached agreement,”
he said.
Delaware law created a two-year
“lookback” window that allowed
claims of abuse to be brought re-
gardless of whether the statute of
limitations had expired.
The abuse cases created a poten-
tial liability that drove the diocese
to seek Chapter 11 bankruptcy pro-
tection in 2009. At the time, it was
the seventh U.S. diocese to file for
bankruptcy since allegations erupt-
ed years earlier against Catholic
clergy in Boston. Numerous multi-
million dollar settlements between
alleged victims and dioceses across
the country have been reached in the
aftermath.
The Wilmington Diocese covers
Delaware and the Eastern Shore of
Maryland and serves about 230,000
Catholics.
The bankruptcy filing had delayed
some trials, but Judge Christopher
Sontchi ruled in August that law-
suits against several parishes could
go forward.
On Dec. 1, a Delaware jury award-
ed $30 million in damages to a man
who claimed he was abused by a
priest - a verdict that was exception-
al for both the amount and for find-
ing the local parish liable, not just
the diocese.
By Kasey Jones (Reuters)
ECONOMY
Opinion: A mockery of a sham
Back in October of 2009,
when Congress first an-
nounced the formation of
a commission to investi-
gate the cause of the 2008
financial crisis, I knew
immediately that their ul-
timate conclusions would
support the agendas of
their respective politi-
cal parties. Particularly,
I knew that the commis-
sion’s Democrat major-
ity would use the crisis to
justify more government
involvement in the finan-
cial markets. These con-
cerns have now been fully
validated.
Given that I was one
of the few people who
had accurately predict-
ed the magnitude of the
housing bubble, and had
laid out in my 2007 book
Crash Proof the specific
consequences for the
banking system and the
economy when it burst,
I immediately contacted
the commission offering
my services as a witness.
In particular, I assumed
that the Republicans on
the panel would appreci-
ate hearing from someone
who thought that the crisis
resulted from too much
rather too little govern-
ment regulation.
To burnish my creden-
tials, I sent the commis-
sion a list of articles I
wrote between 2004 and
2008. Much of that pre-
crash critique is summa-
Opinion: Inflation is here to stay
In current economic anal-
ysis, inflation is largely in
the eye of the beholder,
and depending on how
you choose to look, very
different stories emerge.
In the U.S., food and
beverages count for just
16.4% of the CPI calcula-
tion. The Chinese appar-
ently believe that the basic
necessities of life should
count for more, assigning
a 33% weight to the nutri-
tional components. These
differences in measure-
ment are partially respon-
sible for the divergent
inflation climate in both
countries, and make most
people believe that infla-
tion is fickle and local-
ized. From my perspec-
tive, inflation is a global
wave that will ultimately
swamp all shores.
As the world’s economic
leaders gather in Davos
Switzerland, much of the
discussion has been fo-
cused on a report jointly
Fed’s Duke says current easing likely sufficient
A top Federal Reserve
official said on Wednes-
day she does not think
the U.S. central bank will
have to extend its $600
billion bond-buying pro-
gram beyond midyear, but
economic weakness could
force the Fed’s hand.
“If the economy does,
as I expect it to, and con-
tinues to, grow at a mod-
erate pace, then I think
things will begin to come
together,” Fed Governor
Elizabeth Duke said in re-
sponse to a question about
extending the bond-buy-
ing program after a speech
at the University of North
Carolina’s Kenan-Flagler
business school.
“If we see further weak-
rized in a speech I gave in
2006 to The Western Re-
gional Mortgage Bankers
Association.
However, despite these
supporting materials, my
repeated outreach to the
commission bore no fruit.
At that point, I realized
that they had no interest in
giving any visibility to the
narrative that I favored,
namely that the ultra-low
interest rates engineered
by the Greenspan-Ber-
nanke Federal Reserve
were the primary factor
behind the financial crash
of 2008.
Ignoring how low rates
created the crisis is like
blaming the crash of
the Hindenburg on bad
weather, poor piloting,
lazy ground crews, and
overly emotional broad-
cast journalists, while ig-
noring the 200,000 cubic
meters of flammable hy-
drogen gas that the airship
held in its structure.
The Democrats clearly
wanted to place the blame
squarely on “greedy”
bankers and “derelict”
regulators who had fall-
en under the spell of the
“laissez-faire” impulse
favored by Republicans.
These conclusions would
sanction Democrat plans
to garner even greater
government power.
Yet, even the Republican
minority opinion widely
missed the mark. In their
issued by the Global Eco-
nomic Forum and McKin-
sey & Co. which forecasts
a $100 trillion increase in
global debt in the coming
decade. The authors of the
report argue that such an
increase will be needed to
maintain global economic
health. Strangely, while
acknowledging how the
massive increase in credit
caused the global finan-
cial crisis of 2008, the
report’s authors admit no
fear of even greater lever-
age today. They conclude:
“Credit is the lifeblood of
the economy, and much
more of it will be needed
to sustain the recovery
and enable the develop-
ing world to achieve its
growth potential.”
But the global credit
stock has already doubled
from $57 trillion in 2000
to $109 trillion in 2009,
with disastrous conse-
quences. The WEF report
wouldn’t be so alarming
ness in the economy, then
we’ll have to decide what
seems to be the appropri-
ate action to take at that
time,” Duke said.
Duke’s comments are
among the first from poli-
cymakers after a meeting
last week at which the Fed
held course on its bond-
buying program to help
strengthen modest growth
and pull down a lofty job-
less rate. Her remarks
suggest the Fed is open to
further action if the recov-
ery disappoints.
U.S. employers are ex-
pected to have added
145,000 jobs in January,
not enough to make a dent
in the jobless rate, which
is forecast to creep up to
dissenting opinion, three
Republican commission-
ers blame the crisis on
global factors beyond the
ability of US policymak-
ers to control. While it
is true that other nations
suffered housing bubbles,
they did so because their
own central banks also
kept interest rates too low.
The best result was a
third minority report, au-
thored by Peter J. Walla-
son. He correctly blamed
government-insured
mortgages and govern-
ment-mandated loans to
non-creditworthy minori-
ty borrowers for the hous-
ing bubble, yet omitted
the key role played by the
Federal Reserve in mak-
ing those loans “afford-
able.”
The government has
been subsidizing hous-
ing since the Roosevelt
administration, and we
never had a bubble of this
proportion. It was not un-
til these guarantees were
combined with a 1% fed-
eral funds rate that they
became supercharged. It
was the unfortunate com-
bination of government
guarantees and cheap
money that produced such
a toxic brew.
During the bubble, a
large percentage of loans,
particularly those in high-
priced markets like Cali-
fornia, had adjustable
rates. These rates were
if it wasn’t emanating
from a gathering of global
central bankers, business
leaders and politicians.
These are, unfortunately,
the folks with all the pow-
er to turn these ideas into
reality.
In his State of the Union
address, President Obama
kept pace with the mad-
ness in Davos by vowing
to “slash” government
debt by just $400 billion
in 10 years. However, al-
most simultaneously the
Congressional Budget Of-
fice upped its 2011 deficit
projection to $1.48 tril-
lion, which is over $400
billion more than it pre-
viously forecasted -- ef-
fectively wiping Obama’s
cuts before they are even
formally proposed.
The myopia extends into
the legislative branch. In
a recent appearance on
NBC’s Meet the Press,
Senator Harry Reid said,
“When we start talking
9.5 percent from 9.4 per-
cent in December.
Another Fed official,
Kansas City Fed Presi-
dent Thomas Hoenig, said
on Tuesday that extending
the bond-buying program
beyond June “may get
discussed” if economic
data is “disappointing,”
according to an interview
with Market News Inter-
national.
Duke noted that month-
ly job gains of around
150,000 would only ac-
commodate new workers
entering the labor mar-
ket, not return the United
States to full employment,
which policymakers be-
lieve comes when the job-
less rate is around 5 per-
popular as a direct result
of the ultra-low fed funds
rate, which made them
significantly cheaper than
traditional thirty-year
fixed-rate mortgages.
Some of the most popular
subprime loans were of the
“2/28” variety, where bor-
rowers enjoyed artificially
low “teaser” rates for the
first two years only. For
conforming loans, Fannie
and Freddie actually guar-
anteed mortgages based
solely on borrowers’ abili-
ty to afford the teaser rate,
even if they could not af-
ford the resets. Therefore,
without low rates from the
Fed, most of these ARMs
never would have been
originated.
Most importantly, it
was low rates that made
overpriced homes seem
affordable. Buyers paid
attention to monthly pay-
ments, not home price.
These mortgages were
tailor-made for real estate
speculators and home flip-
pers, whose only intention
was to make quick profits
on the resale. Higher rates
would have put a lid on
home price appreciation,
as potential borrowers
would not have been able
to swing the higher pay-
ments.
Meanwhile, the low
rates themselves created
investor demand for mort-
gage debt. With Trea-
suries and CDs offering
about the debt, the first
thing people do is run to
Social Security. But So-
cial Security is fully fund-
ed for the next 40 years.”
Apparently the Senator
pays no attention to the
non-partisan CBO either.
Last week the office states
that Social Security will
run permanent deficits be-
ginning this year, 5 years
sooner than expected. If
we aren’t going to be hon-
est about the insolvency
of Social Security and
Medicare, how can they
possibly be fixed, and how
can the costs ever be con-
tained? The unfortunate
truth here, once again,
leads to the conclusion
that financing our nation’s
entitlement programs will
be done courtesy of the
Federal Reserve.
The CBO also said that
the government will run
up an additional $12 tril-
lion in debt over the next
decade if current taxing
cent to 6 percent.
Duke played down anxi-
ety about rising commod-
ity prices for the U.S. eco-
nomic outlook, although
climbing prices have
spurred fear of inflation in
Europe and Asia and con-
tributed to social unrest in
some places.
Higher commodity prices
take a long time to creep
into underlying measures
of inflation, she said.
“If you look over the last
year or so it’s hard to find
any measure that doesn’t
show inflation drifting
down and drifting down
pretty noticeably to really
historically low levels,”
she said.
While she said she be-
THE PROFESSIONAL EXPRESS
pitiful returns, investors
were encouraged to look
elsewhere for (seeming-
ly) low-risk investments
with higher yields. This
created unprecedented
demand for Fannie- and
Freddie-insured debt as
well as new varieties of
mortgage-backed securi-
ties.
Since Wall Street need-
ed additional mortgages
to package, lending stan-
dards steadily eroded to
meet the demand. Much
of the demand came from
foreign sources looking
to recycle large trade sur-
pluses, which would have
been much smaller had
the Fed not kept rates so
low.
The reality is that no one
wants to blame the crisis
on loose monetary policy
because monetary policy
is even looser now then it
was then. If the commis-
sion had correctly blamed
the housing bubble on
easy money, then it would
have called into question
current Fed policy. Given
the fragility of our econo-
my and its continued de-
pendence on low rates, no
one has the guts to open
that can of worms. If so
much economic damage
was done by a 1% fed
funds rate, imagine how
much damage is being
done by 0% rates, super-
charged by quantitative
easing.
and spending policies re-
main in effect. Their re-
port contained this fore-
boding comment: “…a
growing level of federal
debt would also increase
the probability of a sud-
den fiscal crisis, during
which investors would
lose confidence in the
government’s ability to
manage its budget, and
the government would
thereby lose its ability
to borrow at affordable
rates.” The fact that our
elected leaders fail to un-
derstand basic economics,
or simply bury their heads
in the sand, underscores
why inflation will be a
major factor in the years
ahead.
For me, there is no es-
caping the conclusion that
inflation will continue to
surge. Inflation is, after
all, the increase in money
supply. And there appears
to be no escaping the like-
lihood of massive floods
lieves the trend of falling
inflation has come to an
end, she added expecta-
tions are that inflation will
remain low and stable.
Addressing a criticism
that the Fed has failed in
its mission of maintain-
ing price stability because
the value of the dollar has
fallen since the United
States left the gold stan-
dard, Duke said there is
not enough gold in the
world to support current
levels of commerce.
“You have to have a
currency that is flexible
enough to accommodate
the level of economic ac-
tivity that is going to oc-
cur,” she said.
In her speech Duke said
Neither Democrats nor
Republicans want the Fed
to turn off the monetary
spigots for fear of the
short-term shock. That is
why even the most vigi-
lant government regula-
tors would not have pre-
vented the financial crisis.
Any official who tried to
rain on the real estate pa-
rade would have been out
of a job.
Of course, the fact that
three separate reports
drew three separate con-
clusions – strictly along
party lines – shows that
politics was the driving
motivation behind the en-
tire farce. Even with the
benefit of hindsight and
$9 million taxpayer dol-
lars, this commission still
came up empty.
The conclusion that
should have been drawn is
that we do not need more
regulation. Government
interference has done
enough damage already.
We simply need to return
to a sound monetary poli-
cy and get the government
out of the mortgage and
housing markets. Unfor-
tunately, that’s not going
to happen.
By Peter Schiff, President
and Chief Global Strate-
gist at Euro Pacific Capi-
tal.
of new money rolling off
presses around the world,
especially in Washington.
But to a degree that is vir-
tually ignored by many
economists, a currency’s
purchasing power is not
only affected by money
supply growth but also
from the mere percep-
tion of it. Just like Enron
shares became worthless
overnight, if the U.S. is
deemed to be insolvent
because it cannot pay
back its debt, the cur-
rency could plummet in a
very short period of time,
even if that pending sup-
ply of dollars has yet to be
printed.
When you understand
these basic issues, the de-
cision to include precious
metals, and other stores of
value, in investment port-
folios becomes a foregone
conclusion.
By Michael Pento, Euro
Pacficic Capital
the Federal Reserve’s
easy money policies have
helped reduce debt ser-
vice burdens and saved
many small businesses
from failure.
Short-term interest rates
have been near zero since
December 2008.
Fed Chairman Ben Ber-
nanke is due to give a
speech on Thursday in
which he may provide
more insight about the
Fed’s decision.
Reporting by Ned Barnett,
writing by Mark Felsen-
thal; Editing by Leslie
Adler, Dan Grebler, Phil
Berlowitz (Reuters)
| FEBRUARY 3, 2011
Food prices
hit record
high in Jan
Surging food prices are
on Thursday expected to
push the United Nations’
food price index to a re-
cord high in January for
a second straight month,
further above the levels
which prompted food ri-
ots in 2007/2008.
The Food Price Index
of the UN’s Food and
Agriculture Organization
(FAO), which measures
monthly price changes
for a food basket of cere-
als, oilseeds, dairy, meat
and sugar, hit a record in
December, above a previ-
ous high set in June 2008
during the food crisis.
A mix of high oil and fuel
prices, growing use of
biofuels, bad weather and
soaring futures markets
pushed up prices of food
in 2007/08, sparking vio-
lent protests in countries
including Egypt, Camer-
oon and Haiti.
The Rome-based agency
has warned food prices
could climb even higher,
expressing concern about
global weather patterns.
Severe drought in the
Black Sea last year, heavy
rains in Australia and dry
weather in Argentina and
anticipation of a spike in
demand after unrest in
north Africa and the Mid-
dle East has helped power
grain prices to multi-year
highs.
The worst winter storm
for decades in the U.S.
December
construction
spending
lowest in
10-1/2 years
U.S. construction spend-
ing unexpectedly fell in
December to touch its
lowest level in nearly 10-
1/2 years as investment
in both public and private
projects declined, sug-
gesting the sector would
continue to struggle this
year as federal stimulus
spending tapers off.
The Commerce Depart-
ment said on Tuesday
construction spending
dropped 2.5 percent to an
annual rate of $787.9 bil-
lion, the lowest level since
July 2000. The govern-
ment revised November’s
data to show a 0.2 percent
fall, which was previously
reported as a 0.4 percent
increase.
Economists polled by
Reuters had forecast con-
struction spending flat in
December. For the whole
of 2010, construction
spending declined 10.3
percent to $814.2 bil-
lion, also the lowest since
2000.
| PAGE 5
grain belt kept up pres-
sure on wheat futures on
Wednesday.
Surging food prices have
come back into the spot-
light after they helped fu-
eled protests that toppled
Tunisia’s president in
January and have spilled
over to Egypt and Jordan,
raising speculation other
countries in the region
would secure grain stocks
to reassure their popula-
tions.
Algeria on January26
confirmed it had bought
almost a million tonnes
of wheat, bringing its
bread wheat purchases to
at least 1.75 million since
the start of January, and
ordered an urgent speed-
ing up of grain imports,
a move aimed at building
stocks.
World leaders at the
World Economic Fo-
rum in Davos last week
warned rising food prices
could stoke more unrest
and even war. French
President Nicolas Sar-
kozy reiterated calls for
regulation to rein in spec-
ulation and volatility.
Multi-year highs for
grain and sugar futures
in January helped push
higher spot and physical
prices which the FAO
uses to calculate the in-
dex.
Reporting by Svetla-
na Kovalyova; editing
by Keiron Henderson
Spending in December
was weighed down by a
2.8 percent fall in invest-
ment in public projects,
which reflected an 11.6
percent drop in federal
construction projects.
State and local govern-
ment spending on con-
struction projects fell 1.8
percent in December.
Investment in private
construction dropped 2.2
percent in December, end-
ing three straight months
of gains. Spending on
private home building
tumbled 4.1 percent, with
private nonresidential out-
lays dipping 0.5 percent.
Home building and the
construction of structures
were minor contributions
to fourth-quarter gross
domestic product growth.
Reporting by Lucia Mu-
tikani; Editing by Neil
Stempleman (Reuters)
OPINION / EDITORIAL
U.S. should save face, take cues from past and stay neutral on issues in Egypt
In a domino effect, the Arab
world has resorted to social
uprising due to its displeasure
with the continuous decline of
the economic and political situ-
ation in its countries.
Rising unemployment, poverty,
corruption and police abuses are
some of the reasons why Tunisia,
Lebanon and now Egypt have made
widespread outcries by taking to the
streets. Tunisia’s successful over-
throw of dictator Zine el-Abidine
Ben Ali this past month has become
the poster child of rebellion against
rogue regimes in the Middle East.
There is no telling what directions
these countries will be taking yet.
It is to our dismay that one of our
strongest allies in the region, Egypt,
Why Mubarak must step down
IMMEDIATELY
In the wake of the unfolding up-
rising in Egypt, President Hosni
Mubarak’s announcement on Tues-
day that he will serve out the re-
mainder of his term until scheduled
presidential elections this Septem-
ber will only fuel greater instability,
not only in Egypt but throughout
the Middle East. If Mubarak obsti-
nately flouts both protesters on the
streets of Egypt and U.S. emissaries
behind the scenes calling for his im-
mediate resignation, his very pres-
ence and leadership would further
jeopardize the long term objectives
of the United States, Israel and key
Arab states in the region--Saudi
Arabia and Jordan, in particular. To-
day, violent attacks by pro-Mubarak
forces have resulted in the injuries
and deaths of many protesters on
the streets. As President Obama
stated in the White House yester-
day, an orderly transition in Egypt
“must begin now.” This transition
cannot be managed or presided over
by Hosni Mubarak, and the Obama
administration must therefore force-
fully push for Mubarak’s exit imme-
diately.
The unprecedented protests in
Egypt over the last week have
stirred much debate on the poten-
tial consequences of Mubarak’s fall,
including the fracturing of the cold
peace between Israel and Egypt, the
empowerment of political Islam,
the spread of revolt across the Arab
world, and the American abandon-
ment of a trusted ally and partner.
More than anything, the specter of
the Iranian revolution in 1979, the
legacy of which the United States,
Israel and the Arab world are threat-
ened by today, looms over the
Egyptian uprising. Those who op-
pose placing significant pressure on
Mubarak fear that a post-Mubarak
Egypt will be the Iran of tomorrow,
an Islamic state that will be openly
hostile to Israel, the United States,
and secular Arab nations. However,
while the Muslim Brotherhood’s
participation in a future Egyptian
government will present serious
challenges for America and its al-
lies, such fears of an “Iran redux”
belie the reality of today’s upris-
ing in Egypt, which encompass the
youth, the disenfranchised middle
class and other opposition groups
long shut out of the political estab-
lishment in Cairo.
If Mubarak were to resign in the
coming week, his departure would
pave the way for an interim care-
taker presidency in Omar Suleiman,
Egypt’s veteran intelligence chief
and recently appointed Vice Presi-
dent, who has developed strong re-
lations with the United States and
Israel. More importantly, Suleiman
can maintain the critical backing
of the Egyptian military, which
is under pressure for regime change.
The Egyptian government is fight-
ing to stay in power, despite the
eruption of clear discontent from its
people.
President Hosni Mubarak, an au-
tocrat in power for 30 years (since
the assassination of President An-
war Sadat in 1981), claimed in a
speech on Friday that he would be
putting new people in power, in an
attempt to bring reform to Egypt.
This message clearly undermines
what the Egyptian people want: a
regime change, not a change in the
regime. Despite Egyptian govern-
ment’s oppressive tactics, which in-
cludes a serious crackdown on the
Internet that resulted in a blackout
and a block on the SMS capabilities
on cell phones, the Obama admin-
remains highly respected among
Egyptians. Suleiman’s primary
goal as an interim caretaker presi-
dent will be to serve as a mediator
between the opposition forces in
Egypt, coalescing behind Moham-
med ElBaradei, and the cautious
military brass.
In balancing the demands of the
opposition for broadened political
participation against the army’s clear
hostility toward a resurgent Muslim
Brotherhood, Suleiman undoubted-
ly faces a daunting task. However,
by publicly calling for new, free and
fair parliamentary and presidential
elections in the coming months, and
by working openly with ElBaradei
and other opposition leaders, Su-
leiman could provide calm to an
increasingly volatile landscape.
Public negotiations with ElBara-
dei and the opposition groups, re-
garding constitutional reforms and
the lifting of the Emergency Law,
will help legitimize Egypt’s transi-
tion and temper the uprising on the
street, which has wreaked havoc on
the Egyptian economy. More than
anything, Suleiman’s interim presi-
dency could increase the chances of
success in an orderly transition of
istration is standing by its ally gov-
ernment: a mere dictatorship.
Vice President Joe Biden told
PBS NewsHour that he would not
refer to Mubarak as a dictator, and
that Mubarak had been responsible
in his role concerning Middle East
peace efforts.
Biden reportedly went on to ques-
tion twice whether the Egyptian
people were making legitimate
complaints about Mubarak’s re-
gime.
If the Egyptian people’s demand
for an improvement in their eco-
nomic situation and civil liberties
is not a legitimate reason to oust
Mubarak, then what is? The man
clearly leads an oppressive regime
if he is blocking access to informa-
tion technology and his people com-
power in Egypt.
In addition, Suleiman will be able
to assuage and manage the concerns
of the United States, Israel, Saudi
Arabia and Jordan, which jointly
see the uprising as a major threat to
regional stability. While Israel and
the Arab states have much to fear
individually from continued volatil-
ity in Egypt, the impact of the Egyp-
tian uprising on burgeoning rela-
tions between Israel and the Arab
powers could be detrimental on
shared interests, such as containing
Iranian influence in the region. With
the rise of Iran, Israel and key Arab
states have developed closer rela-
tionships, albeit cold or clandestine.
Nothing less than the legitimacy of
U.S. leadership in the Middle East,
particularly in challenging the he-
gemonic aspirations of the Iranian
regime, hinges on a stable transition
of power in Egypt, which accounts
for the concerns of the opposition
groups and the indispensable mili-
tary.
Although Mubarak’s resigna-
tion should bring satisfaction to the
Egyptian people that have joined
together in the last week in protest
against him, the choice of Sulei-
THE PROFESSIONAL EXPRESS
plain of human rights abuses.
Biden’s words are a punch in the
stomach to people suffering at the
hands of oppressive regimes alike.
How would the international com-
munity have reacted if similar
things were said about Iran’s 2009
post-election protests, the Green
Revolution?
The very things the Iranian peo-
ple demanded are no different from
what motivated the Egyptians to
take to the streets.
The direction the Obama admin-
istration seems to be tilting toward
is not a favorable one. It is bound to
bring about disappointment. Their
demonstration of “solidarity” for
democracy is almost hypocritical
of what the U.S. stands for. This
leads me to believe that we have not
man as interim president is by no
means a palatable and ideal cure-
all to the process of democratic re-
form in Egypt. The opposition may
very well view Suleiman as nothing
more than Mubarak’s handpicked
stooge, with his own aspirations
for a lengthy tenure in office. Yet
the United States can play a pivotal
role in exerting pressure on Sulei-
man and the Egyptian military to
conduct timely and substantive ne-
gotiations with the opposition on
constitutional reforms and guaran-
tee new elections. For example, if
the Egyptian government reneged
on promises to conduct meaning-
ful negotiations with the opposition,
the United States could significantly
reduce its military and economic aid
to Egypt, which totaled $1.5 billion
in 2010 alone.
Ultimately, this transition of
power simply cannot be led by
Hosni Mubarak, as the hundreds of
thousands of protesters who have
taken to the streets in Egypt have
demonstrated, and as forces loyal
to Mubarak violently attack the
protesters. Mubarak’s continued
presence in Egyptian politics alone
will only galvanize greater unrest in
| FEBRUARY 3, 2011
learned from our past mistakes.
Supporting oppressive regimes
such as that of Mubarak’s will back-
fire on the United States’ foreign
policy as it has in the past.
It is best we not take a stance and
watch things unfold during the next
couple of weeks in Egypt. This way,
no matter what happens, the fingers
will not be pointed in our direction.
Then we can save face in a region
whose respect is integral to U.S. in-
terests, and is vital to the security of
our military presence in countries
like Iraq and Afghanistan.
At this point, we should play the
game right and watch where this
special set of dominoes stops fall-
ing.
By Holly Dagres, Contributor
Egypt and further complicate what
will clearly be a difficult transition
period. Behind the scenes, the Unit-
ed States should threaten Mubarak
with the complete suspension of
any military or economic aid to his
regime unless he stands down, and
call on Suleiman and the generals
to force Mubarak’s hand. While the
United States has not “lost” Egypt
yet, Mubarak’s unyielding pro-
nouncement to stay in power until
elections in September could pave
the way for a future Egyptian gov-
ernment hostile to the United States,
if seen as complicit in Mubarak’s
defiance. In forcefully pushing for
the immediate resignation of Hosni
Mubarak, thereby paving the path
for an interim presidency by Sulei-
man and negotiations with the op-
position and military on fair and
new elections, the Obama Admin-
istration will reduce the likelihood
of greater instability in Egypt while
reassuring Israel and Arab allies in
the region.
By Josh Lockman
Lecturer in Law at USC
| PAGE 6
Islamists
emerge as
powerful
force in the
new Tunisia
They are at pains to assure Tuni-
sians this is no Islamic revolution.
They do not seek the presidency.
They will run alongside other
groups in the democracy that re-
places Zine al-Abdine Ben Ali’s
police state.
Tunisia’s main Islamist group
may not have played any role in
the revolution that toppled Ben Ali
after 23 years, but any doubt that
Ennahda would emerge as one of
the largest players was dispelled
with the return of its leader Rachid
Ghannouchi.
Thousands thronged Tunis airport
to see Ghannouchi, dwarfing any
reception laid on for other exiles
and alarming those Tunisians who
want to keep Islam separate from
the state in this French ex-colony
used to decades of officially im-
posed secularism.
They will be watching closely in
the coming months to see if En-
nahda’s actions match the modera-
tion of its rhetoric.
“Tunisia will not change to adapt
itself to the Islamists and their
ideas. The Islamists must adapt
to modern Tunisia,” said Neji
Bghouri, head of the journalists
union.
“There is a trend in Ennahda
that began to adjust to this reality
but there are those who are more
extreme. This is an issue of great
sensitivity among Tunisia’s politi-
cal elite.”
Despite a crackdown that saw
thousands of their members jailed
or exiled from the 1990s, Ennah-
da’s supporters already appear to
be more organised than any other
political groups.
At Ghannouchi’s homecoming,
polite young Ennahda volunteers
marshalled the crowds with airport
security virtually invisible.
They all seemed to know each
other, they had a plan and they
wore white baseball caps to iden-
tify themselves as volunteers.
That is no mean feat for a group
that was banned for over two de-
cades and in a country where
women who wore the Islamic head
covering, or hijab, were excluded
from jobs and education and men
who prayed too publicly were reg-
ularly rounded up.
“Ennahda has adjusted its nar-
rative to suit the moment and the
moment is one of self-restraint,”
said Larbi Sadiki, a Tunisian lec-
turer at Exeter University.
“They will be scrutinised more
than others because for a long time
Tunisia and Islamist could not be
spoken together.”
Ennahda has been careful not to
play a visible role too soon, for fear
of accusations that it was trans-
forming a popular revolt into an
Islamic revolution as happened in
Iran in 1979.
There, the exiled leader and cleric
Ayatollah Ruhollah Khomeini be-
came the supreme leader of a new
Islamic Republic.
Ghannouchi did not return im-
mediately. His party will field no
presidential candidate. Ennahda
will take part in parliament elec-
tions but Ghannouchi himself will
not run for public office.
No one has forgotten the 1989
election, when Ennahda was al-
lowed to participate. It won a re-
spectable share of the vote, alarm-
ing Ben Ali who banned Ennahda
and crushed its members.
Ennahda may prove no less alarm-
ing to secular opposition groups
who won less than 3 percent of
the vote in the 1989 poll and will
surely fear a similar trouncing by
the Islamists now.
By Lin Noueihed (Reuters)
Edited by Yuri Isacov
OPINION / EDITORIAL
Alan Greenspan on gold and economic freedom
An almost hysterical antagonism to-
ward the gold standard is one issue
which unites statists of all persua-
sions. They seem to sense - perhaps
more clearly and subtly than many
consistent defenders of laissez-faire
- that gold and economic freedom
are inseparable, that the gold stan-
dard is an instrument of laissez-faire
and that each implies and requires
the other.
In order to understand the source
of their antagonism, it is necessary
first to understand the specific role
of gold in a free society.
Money is the common denomina-
tor of all economic transactions. It
is that commodity which serves as a
medium of exchange, is universally
acceptable to all participants in an
exchange economy as payment for
their goods or services, and can,
therefore, be used as a standard of
market value and as a store of value,
i.e., as a means of saving.
The existence of such a commod-
ity is a precondition of a division of
labor economy. If men did not have
some commodity of objective value
which was generally acceptable as
money, they would have to resort to
primitive barter or be forced to live
on self-sufficient farms and forgo
the inestimable advantages of spe-
cialization. If men had no means
to store value, i.e., to save, neither
long-range planning nor exchange
would be possible.
What medium of exchange will
be acceptable to all participants
in an economy is not determined
arbitrarily. First, the medium of
exchange should be durable. In a
primitive society of meager wealth,
wheat might be sufficiently durable
to serve as a medium, since all ex-
changes would occur only during
and immediately after the harvest,
leaving no value-surplus to store.
But where store-of-value consider-
ations are important, as they are in
richer, more civilized societies, the
medium of exchange must be a du-
rable commodity, usually a metal. A
metal is generally chosen because it
is homogeneous and divisible: ev-
ery unit is the same as every other
and it can be blended or formed in
any quantity. Precious jewels, for
example, are neither homogeneous
nor divisible. More important, the
commodity chosen as a medium
must be a luxury. Human desires for
luxuries are unlimited and, there-
fore, luxury goods are always in
demand and will always be accept-
able. Wheat is a luxury in underfed
civilizations, but not in a prosperous
society. Cigarettes ordinarily would
not serve as money, but they did in
post-World War II Europe where
Obama, don’t fear change in Egypt
Egyptian president Hosni Mubarak
has announced he will not stand
for reelection in the fall, Reports
are that Egyptian president Hosni
Mubarak will not stand for reelec-
tion in the fall, and one reason for
Mubarak’s decision is that Presi-
dent Barack Obama privately urged
this course.
That’s a step in the right direction
— but President Obama needs to
go much farther. He should pub-
licly, and enthusiastically, back the
protesters who are demanding a
new dawn in Egypt.
Yes, many things could go wrong
if there is sweeping change in the
world’s oldest nation. But many
things could go right, too. Ameri-
ca’s highest ideal is freedom. The
United States strongly supports
freedom for itself, for Europe,
for China and Japan. Why not for
Egypt?
In 1979, Washington put itself
on the wrong side of the Iranian
revolution, standing by the dictator
Mohammad Reza Pahlavi. When
he fell, the United States looked
foolish and lacked credibility with
Iran’s next generation. In 1991,
Washington put itself on the right
they were considered a luxury. The
term “luxury good” implies scarcity
and high unit value. Having a high
unit value, such a good is easily por-
table; for instance, an ounce of gold
is worth a half-ton of pig iron.
In the early stages of a develop-
ing money economy, several media
of exchange might be used, since a
wide variety of commodities would
fulfill the foregoing conditions.
However, one of the commodities
will gradually displace all others, by
being more widely acceptable. Pref-
erences on what to hold as a store of
value, will shift to the most widely
acceptable commodity, which, in
turn, will make it still more accept-
able. The shift is progressive until
that commodity becomes the sole
medium of exchange. The use of
a single medium is highly advan-
tageous for the same reasons that
a money economy is superior to a
barter economy: it makes exchang-
es possible on an incalculably wider
scale.
Whether the single medium is
gold, silver, seashells, cattle, or to-
bacco is optional, depending on the
context and development of a given
economy. In fact, all have been em-
ployed, at various times, as media
of exchange. Even in the present
century, two major commodities,
gold and silver, have been used as
international media of exchange,
with gold becoming the predomi-
nant one. Gold, having both artis-
tic and functional uses and being
relatively scarce, has significant
advantages over all other media of
exchange. Since the beginning of
World War I, it has been virtually
the sole international standard of
exchange. If all goods and services
were to be paid for in gold, large
payments would be difficult to ex-
ecute and this would tend to limit
the extent of a society’s divisions
of labor and specialization. Thus a
logical extension of the creation of a
medium of exchange is the develop-
ment of a banking system and credit
instruments (bank notes and depos-
its) which act as a substitute for, but
are convertible into, gold.
A free banking system based on
gold is able to extend credit and
thus to create bank notes (currency)
and deposits, according to the pro-
duction requirements of the econo-
my. Individual owners of gold are
induced, by payments of interest, to
deposit their gold in a bank (against
which they can draw checks). But
since it is rarely the case that all de-
positors want to withdraw all their
gold at the same time, the banker
need keep only a fraction of his to-
tal deposits in gold as reserves. This
side of the Moscow military coup
d’état, with the elder George Bush
publicly, and firmly, backing the
thousands of Russians who took to
the streets demanding elected gov-
ernment.
True, the 1979 Iranian revolu-
tion led to a dangerous theocracy,
at least at the top (many young
Iranians strongly oppose the coun-
try’s corrupt regime). Perhaps if
the United States had sided with
democracy in Iran in 1979, the out-
come would have been different.
And true, today’s Russian Federa-
tion has taken, at best, halting steps
toward consent of the governed.
But compared to Russia’s past, that
is progress. In 1991, when Wash-
ington did the right thing regarding
Russia, the good guys won.
It is time to do the right thing re-
garding Egypt — Barack Obama,
cast America’s lot with the demon-
strators in the streets! Their cause
is just and their desire to be set free
from dictatorship is the same desire
that motivated the founding of the
United States. America must not be
caught on the wrong side in Egypt
in 2011, as it was in Iran in 1979.
enables the banker to loan out more
than the amount of his gold deposits
(which means that he holds claims
to gold rather than gold as security
of his deposits). But the amount of
loans which he can afford to make
is not arbitrary: he has to gauge it
in relation to his reserves and to the
status of his investments.
When banks loan money to fi-
nance productive and profitable en-
deavors, the loans are paid off rap-
idly and bank credit continues to be
generally available. But when the
business ventures financed by bank
credit are less profitable and slow to
pay off, bankers soon find that their
loans outstanding are excessive rel-
ative to their gold reserves, and they
begin to curtail new lending, usual-
ly by charging higher interest rates.
This tends to restrict the financing
of new ventures and requires the
existing borrowers to improve their
profitability before they can obtain
credit for further expansion. Thus,
under the gold standard, a free bank-
ing system stands as the protector of
an economy’s stability and balanced
growth. When gold is accepted as
the medium of exchange by most
or all nations, an unhampered free
international gold standard serves to
foster a world-wide division of labor
and the broadest international trade.
Even though the units of exchange
(the dollar, the pound, the franc,
etc.) differ from country to coun-
try, when all are defined in terms of
gold the economies of the different
countries act as one-so long as there
are no restraints on trade or on the
movement of capital. Credit, inter-
est rates, and prices tend to follow
similar patterns in all countries. For
example, if banks in one country
extend credit too liberally, interest
rates in that country will tend to fall,
inducing depositors to shift their
gold to higher-interest paying banks
in other countries. This will imme-
diately cause a shortage of bank re-
serves in the “easy money” country,
inducing tighter credit standards
and a return to competitively higher
interest rates again.
A fully free banking system and
fully consistent gold standard have
not as yet been achieved. But prior to
World War I, the banking system in
the United States (and in most of the
world) was based on gold and even
though governments intervened oc-
casionally, banking was more free
than controlled. Periodically, as a
result of overly rapid credit expan-
sion, banks became loaned up to the
limit of their gold reserves, interest
rates rose sharply, new credit was
cut off, and the economy went into
a sharp, but short-lived recession.
If Mubarak’s autocracy collapses,
practically anything could happen
— from democracy in Egypt (great
for Egyptians, and great for Israel)
to theocracy (bad for Egyptians and
Israelis both) or perhaps something
in between. There is risk involved
in any change.
But backing the pro-democracy
freedom activists on the streets of
Cairo — who are showing disci-
pline in mainly being peaceful, a
good sign — is the right thing to do.
Propping up dictators in hope of
regional stability has long been
American policy in the Middle East
and nearby areas, and what has it
gotten the United States? Oil sup-
plies and endless inconclusive ten-
sion. What has it gotten the people
of Egypt, Saudi Arabia and other
nations? A miserable life under
dictatorship. That’s not right. The
United States must stand for what’s
right.
What’s right is a bold endorse-
ment, by President Obama, of
the pro-democracy movement in
Egypt.
Yes, this could trigger a sequence
of events that would be bad for Is-
rael’s security. It could also trigger
THE PROFESSIONAL EXPRESS
(Compared with the depressions of
1920 and 1932, the pre-World War
I business declines were mild in-
deed.) It was limited gold reserves
that stopped the unbalanced expan-
sions of business activity, before
they could develop into the post-
World Was I type of disaster. The
readjustment periods were short and
the economies quickly reestablished
a sound basis to resume expansion.
But the process of cure was mis-
diagnosed as the disease: if shortage
of bank reserves was causing a busi-
ness decline-argued economic inter-
ventionists-why not find a way of
supplying increased reserves to the
banks so they never need be short!
If banks can continue to loan money
indefinitely-it was claimed-there
need never be any slumps in busi-
ness. And so the Federal Reserve
System was organized in 1913. It
consisted of twelve regional Feder-
al Reserve banks nominally owned
by private bankers, but in fact gov-
ernment sponsored, controlled, and
supported. Credit extended by these
banks is in practice (though not le-
gally) backed by the taxing power
of the federal government. Techni-
cally, we remained on the gold stan-
dard; individuals were still free to
own gold, and gold continued to be
used as bank reserves. But now, in
addition to gold, credit extended by
the Federal Reserve banks (“paper
reserves”) could serve as legal ten-
der to pay depositors.
When business in the United
States underwent a mild contrac-
tion in 1927, the Federal Reserve
created more paper reserves in the
hope of forestalling any possible
bank reserve shortage. More di-
sastrous, however, was the Federal
Reserve’s attempt to assist Great
Britain who had been losing gold
to us because the Bank of England
refused to allow interest rates to rise
when market forces dictated (it was
politically unpalatable). The reason-
ing of the authorities involved was
as follows: if the Federal Reserve
pumped excessive paper reserves
into American banks, interest rates
in the United States would fall to
a level comparable with those in
Great Britain; this would act to stop
Britain’s gold loss and avoid the po-
litical embarrassment of having to
raise interest rates. The “Fed” suc-
ceeded; it stopped the gold loss, but
it nearly destroyed the economies of
the world, in the process. The ex-
cess credit which the Fed pumped
into the economy spilled over into
the stock market-triggering a fan-
tastic speculative boom. Belatedly,
Federal Reserve officials attempted
to sop up the excess reserves and
a sequence of events which gives
Israel a large, strong neighboring
democracy, improving Israel’s situ-
ation dramatically. In either case,
how can it be right that 80 million
live under the heel of dictatorship
in Egypt so that 8 million can live
in freedom in Israel? There must be
another way.
In the last generation, the old So-
viet Union collapsed; China has
| FEBRUARY 3, 2011
finally succeeded in braking the
boom. But it was too late: by 1929
the speculative imbalances had be-
come so overwhelming that the at-
tempt precipitated a sharp retrench-
ing and a consequent demoralizing
of business confidence. As a result,
the American economy collapsed.
Great Britain fared even worse, and
rather than absorb the full conse-
quences of her previous folly, she
abandoned the gold standard com-
pletely in 1931, tearing asunder
what remained of the fabric of con-
fidence and inducing a world-wide
series of bank failures. The world
economies plunged into the Great
Depression of the 1930’s.
With a logic reminiscent of a gen-
eration earlier, statists argued that
the gold standard was largely to
blame for the credit debacle which
led to the Great Depression. If the
gold standard had not existed, they
argued, Britain’s abandonment of
gold payments in 1931 would not
have caused the failure of banks all
over the world. (The irony was that
since 1913, we had been, not on a
gold standard, but on what may be
termed “a mixed gold standard”; yet
it is gold that took the blame.) But
the opposition to the gold standard
in any form-from a growing num-
ber of welfare-state advocates-was
prompted by a much subtler insight:
the realization that the gold standard
is incompatible with chronic deficit
spending (the hallmark of the wel-
fare state). Stripped of its academic
jargon, the welfare state is nothing
more than a mechanism by which
governments confiscate the wealth
of the productive members of a
society to support a wide variety
of welfare schemes. A substantial
part of the confiscation is effected
by taxation. But the welfare statists
were quick to recognize that if they
wished to retain political power, the
amount of taxation had to be limited
and they had to resort to programs
of massive deficit spending, i.e.,
they had to borrow money, by issu-
ing government bonds, to finance
welfare expenditures on a large
scale.
Under a gold standard, the amount
of credit that an economy can sup-
port is determined by the economy’s
tangible assets, since every credit
instrument is ultimately a claim on
some tangible asset. But govern-
ment bonds are not backed by tan-
gible wealth, only by the govern-
ment’s promise to pay out of future
tax revenues, and cannot easily be
absorbed by the financial markets.
A large volume of new government
bonds can be sold to the public
only at progressively higher inter-
changed from ruthless party control
to semi-free; South Africa aban-
doned apartheid in a peaceful fash-
ion; India has become a free-market
democracy that protects freedom of
speech. All these positive develop-
ments were viewed as impossible
by the sorts of people who want to
protect the old status quos in these
nations against change.
If Egypt changes from autocracy
| PAGE 7
est rates. Thus, government deficit
spending under a gold standard is
severely limited. The abandonment
of the gold standard made it pos-
sible for the welfare statists to use
the banking system as a means to an
unlimited expansion of credit. They
have created paper reserves in the
form of government bonds which-
through a complex series of steps-
the banks accept in place of tangible
assets and treat as if they were an
actual deposit, i.e., as the equivalent
of what was formerly a deposit of
gold. The holder of a government
bond or of a bank deposit created
by paper reserves believes that he
has a valid claim on a real asset. But
the fact is that there are now more
claims outstanding than real assets.
The law of supply and demand is
not to be conned. As the supply of
money (of claims) increases rela-
tive to the supply of tangible assets
in the economy, prices must eventu-
ally rise. Thus the earnings saved by
the productive members of the so-
ciety lose value in terms of goods.
When the economy’s books are fi-
nally balanced, one finds that this
loss in value represents the goods
purchased by the government for
welfare or other purposes with the
money proceeds of the government
bonds financed by bank credit ex-
pansion.
In the absence of the gold stan-
dard, there is no way to protect
savings from confiscation through
inflation. There is no safe store of
value. If there were, the government
would have to make its holding ille-
gal, as was done in the case of gold.
If everyone decided, for example, to
convert all his bank deposits to sil-
ver or copper or any other good, and
thereafter declined to accept checks
as payment for goods, bank deposits
would lose their purchasing power
and government-created bank credit
would be worthless as a claim on
goods. The financial policy of the
welfare state requires that there be
no way for the owners of wealth to
protect themselves.
This is the shabby secret of the
welfare statists’ tirades against gold.
Deficit spending is simply a scheme
for the confiscation of wealth. Gold
stands in the way of this insidious
process. It stands as a protector of
property rights. If one grasps this,
one has no difficulty in understand-
ing the statists’ antagonism toward
the gold standard.
By Alan Greenspan, former Chair-
man of the Federal Reserve. Origi-
nally printed in Ayn Rand’s The Ob-
jectivist.
to even fitful, halting free elections
and free speech, that could send
dictators on the run across the Arab
world — and perhaps the Persian
world of Iran, too.
Barack Obama — don’t be timid!
Don’t fear change! Cast America’s
lot with those marching for free-
dom on the streets of Cairo!
By Gregg Easterbrook (Reuters)
SCIENCE THE PROFESSIONAL EXPRESS | FEBRUARY 3, 2011 | PAGE 8

Scientist works to grow meat in lab

In a small laboratory on an upper floor of the basic sci-
ence building at the Medical University of South Caro-
lina, Vladimir Mironov, M.D., Ph.D., has been working
for a decade to grow meat.
A developmental biologist and tissue engineer, Dr.
Mironov, 56, is one of only a few scientists worldwide
involved in bioengineering “cultured” meat.
It’s a product he believes could help solve future global
food crises resulting from shrinking amounts of land
available for growing meat the old-fashioned way ... on
the hoof.
Growth of “in-vitro” or cultured meat is also under
way in the Netherlands, Mironov told Reuters in an in-
terview, but in the United States, it is science in search
of funding and demand.
The new National Institute of Food and Agriculture,
part of the U.S. Food and Drug Administration, won’t
fund it, the National Institutes of Health won’t fund it,
and the National Aeronautics and Space Administration
funded it only briefly, Mironov said.
“It’s classic disruptive technology,” Mironov said.
“Bringing any new technology on the market, average,
costs $1 billion. We don’t even have $1 million.”
Director of the Advanced Tissue Biofabrication Cen-
ter in the Department of Regenerative Medicine and
Cell Biology at the medical university, Mironov now
primarily conducts research on tissue engineering, or
growing, of human organs.
“There’s a yuck factor when people find out meat is
grown in a lab. They don’t like to associate technol-
ogy with food,” said Nicholas Genovese, 32, a visiting
scholar in cancer cell biology working under a People
for the Ethical Treatment of Animals three-year grant to
run Dr. Mironov’s meat-growing lab.
“But there are a lot of products that we eat today that
are considered natural that are produced in a similar
manner,” Genovese said.
“There’s yogurt, which is cultured yeast. You have
wine production and beer production. These were not
produced in laboratories. Society has accepted these
products.”
If wine is produced in winery, beer in a brewery and
bread in a bakery, where are you going to grow cultured
meat?
In a “carnery,” if Mironov has his way. That is the
name he has given future production facilities.
He envisions football field-sized buildings filled with
large bioreactors, or bioreactors the size of a coffee ma-
chine in grocery stores, to manufacture what he calls
“charlem” -- “Charleston engineered meat.”
“It will be functional, natural, designed food,” Mironov
said. “How do you want it to taste? You want a little bit
of fat, you want pork, you want lamb? We design ex-
actly what you want. We can design texture.
By Harriet McLeod (Reuters)

NASA finds
FIFTY FOUR
life-friendly
planets!
WASHINGTON -- An or-
biting NASA telescope is
finding whole new worlds
of possibilities in the
search for alien life, spot-
ting more than 50 poten-
tial planets that appear to
be in the habitable zone.
In just a year of peer-
ing out at a small slice
of the galaxy, the Kepler
telescope has discovered
1,235 possible planets
outside our solar system.
Amazingly, 54 of them are
seemingly in the zone that
could be hospitable to life
- that is, not too hot or too
cold, Kepler chief scien-
tist William Borucki said.
Until now, only two plan-
ets outside our solar sys-
tem were even thought
to be in the “Goldilocks
zone.” And both those
discoveries are highly dis-
puted.
Fifty-four possibilities is
“an enormous amount, an
inconceivable amount,”
Borucki said. “It’s amaz-
ing to see this huge num-
ber because up to now,
we’ve had zero.”
The more than 1,200
newfound celestial bod-
ies are not confirmed as
planets yet, but Borucki
estimates 80 percent of
them will eventually be
verified. At least one other
astronomer believes Ke-
pler could be 90 percent
accurate.
After that, it’s another big
step in proving that a con-
firmed planet has some
of the basic conditions
needed to support life,
such as the proper size,
composition, temperature
and distance from its star.
More advanced aspects
of habitability such as at-
mospheric conditions and
the presence of water and
carbon require telescopes
that aren’t built yet.
Just because a planet is in
the habitable zone doesn’t
mean it has life. Mars is a
good example of that. And
even if some these planets
are found to contain life,
it may not be intelligent
life; it could be bacteria or
mold or some kind of life
form people can’t even
imagine.
All the celestial bod-
ies Kepler looks at are in
our Milky Way galaxy,
but they are so far away
that traveling there is not
a realistic option. In some
cases it would take many
millions of years with cur-
rent technology.
But what Kepler is find-
ing in distant parts of the
galaxy could be applied to
exploring closer stars, as-
tronomers say.
“Our grandchildren will
have to decide what’s the
next step,” Borucki said
at a NASA news confer-
ence. “Do they want to
go there? Do they want to
send a robot?”
Before Wednesday, the
count of confirmed plan-
ets outside the solar sys-
tem stood at 519. That
means Kepler could triple
the number. And those
findings are from Kepler’s
scanning of just one four-
hundredth of the night
sky, so the actual num-
ber of planets out there
is presumably hundreds
of times greater, Borucki
said.
That is exciting to as-
tronomers, since the more
planets there are, the
greater the odds that life
exists elsewhere in the
universe.
Yale University astrono-
mer Debra Fischer, who
wasn’t part of the Kepler
team but serves as an out-
side expert for NASA,
said the new information
“gives us a much firm-
er footing” to hope for
worlds that could harbor
life.
“I feel different today,
knowing these new Kepler
results, than I did a week
ago,” Fischer said. She
said Kepler “has blown
the lid off of everything
we know about extrasolar
planets.”
Another outside astrono-
mer, Lisa Kaltenegger of
Harvard University, called
the findings “exciting
good news.”
Kepler also found that
there are many more rela-
tively small planets than
there are giant planets.
That is encouraging, too:
Astronomers think a plan-
et needs to be solid - rocky
like Earth or Mars - for
life to develop. And very
large planets are unlikely
to be solid; they are more
prone to be gas behemoths
like Jupiter.
Sixty-eight of the planet
candidates Kepler found
are considered Earth-
sized, including the first
ones ever discovered to be
smaller than Earth. An ad-
ditional 288 planets were
less than twice the size of
Earth, which is still in that
optimum zone for life.
Only five of the 54 poten-
tially habitable celestial
bodies are close to the size
of Earth, while the rest ap-
proach the gassy girths
of Neptune or Jupiter,
Borucki said.
To be in the habitable
zone, a planet has to be the
proper distance from its
star so that it could have
liquid water on its surface,
at least sometimes. NASA
considers habitable-zone
temperatures to be rough-
ly between 0 degrees and
200 degrees Fahrenheit.
The proper distance varies
by star; smaller, weaker
stars, for example, would
require planets to be clos-
er to be habitable.
Because of the various
factors that could make
planets more prone to life,
University of California
Santa Cruz astronomer
Greg Laughlin created a
formula that puts a dol-
lar value on these far-off
planets with the idea that
the first planet that is in-
credibly similar to Earth
would have a value of $1
million.
Until Wednesday, the
highest value Laughlin
assigned to an exoplanet,
which is what astrono-
mers call a planet outside
our solar system, was a
measly $158. One of Ke-
pler’s new discoveries is
worth nearly a quarter-
million dollars, Laughlin
figures.
Kepler was launched in
2009 and orbits the sun
between Earth and Mars.
It needs time to find plan-
ets, identifying them by
watching them repeatedly
move past the star they
orbit.
Kepler scientists are strict
about calling candidate
planets confirmed. Of
400 candidate planets an-
nounced last year, only
nine of Kepler’s discov-
eries had been confirmed
before Wednesday.
Of the more than 800
new candidates, both in
and out of the habitable
zone, only six are con-
firmed, all way too hot for
life. And they are strange
- all densely packed and
circling a single star. Five
of them are closer to their
star than Mercury is to
our sun, and they move in
precise circular and stable
orbits.
That strange star sys-
tem is 2,000 light years
from Earth, according to
a separate study published
Wednesday in the jour-
nal Nature. A light year is
nearly 6 trillion miles.
By SETH
BORENSTEIN (AP)

Japanese robo-ship arrives at Space Station A robotic Japanese cargo
ship reached the Interna-
tional Space Station on
Thursday, the first of a
quartet of spaceships due
to arrive at the orbital out-
post over the next month.
The ship, laden with
supplies, science equip-
ment and spare parts, is
the second from Japan to
dock at the station.
Its arrival boosted confi-
dence that supply lines to
the $100 billion outpost, a
project of 16 nations, will
remain fully operational
after NASA retires its
space shuttle fleet in about
six months.
Japan’s HTV-2 space-
craft, Europe’s Automat-
ed Transfer Vehicles and
Russian Progress capsules
will become the station’s
lifelines after two or three
more space shuttle flights.
The shuttle program is
ending after 30 years due
to high operating costs
and to free up funds to
develop U.S. spaceships
that can travel beyond the
station’s orbit 220 miles
above Earth.
The U.S. space agency
hopes commercial car-
riers Space Exploration
Technologies and Orbital
Sciences Corp will pick
up some of the station’s
supply runs as early as
December. Crew transport
to the station already is
exclusively provided by
Russian Soyuz spacecraft,
at a cost to the United
States of $51 million per
seat.
Japan’s second HTV,
named Kounotori,
launched on Saturday
aboard a Japanese H-2B
rocket from Tanegashima
Space Center in southern
Japan.
The craft hovered about
33 feet from the station
early on Thursday while
station flight engineer
Catherine “Cady” Cole-
man, working from inside
the station’s cupola com-
partment, maneuvered
the station’s robot arm
into position to snare the
35,000-pound (15,875
kg) vessel. With Kouno-
tori firmly in the crane’s
grasp, it was then attached
to a berthing port on the
station’s Harmony node.
The six-member station
crew, led by NASA astro-
naut Scott Kelly, will be-
gin unloading Kounotori’s
3.2 tons of spare parts,
food, research equipment,
computers, water and oth-
er supplies on Friday.
The next batch of cargo
is right behind. A Rus-
sian Progress rocket was
scheduled to lift off from
the Baikonur Cosmo-
drome in Kazakhstan on
Thursday and reach the
station on Saturday.
The European Space
Agency’s second Auto-
mated Transfer Vehicle, or
ATV, named Johannes Ke-
pler, is slated for launch
on February 15. NASA’s
space shuttle Discovery is
due to launch on February
24 with spare parts and a
storage room, among oth-
er items.
By Irene Klotz (AP).
TECHNOLOGY
Murdoch bets on iPad for future of news Social
Rupert Murdoch, among
the most ardent defenders
of the traditional press,
has staked his reputation
on a risky bet that for just
14 cents a day he can save
the news business with
tablet devices like Apple’s
iPad.
Unlike the News Corp
chairman’s other news-
papers such as the Wall
Street Journal or the Times
of London, it was not im-
mediately clear who the
Daily, News Corp’s digi-
tal newspaper for the iPad
unveiled on Wednesday,
is intended to reach.
But that has not stopped
the 79-year-old media
mogul from investing $30
million to start to find an
answer.
The Daily, a general
news product available to
iPad users in the United
States, will cover every-
thing from national poli-
tics to sports to gossip. It
will cost 99 cents a week
or $39.99 a year. Apple is
Egypt’s Internet
gambit misfires.
Surprised?
As China prepared to
quell the Tienanmen
Square protests in 1989,
the government of Deng
Xiaoping made a crucial
tactical decision: It or-
dered western networks
to shut down their satel-
lite trucks, making sure
the violent end to the
revolution would not be
televised.
As Egypt tried to con-
tain nationwide protests
this past weekend, the
government of President
Hosni Mubarak at first
did nothing to stanch the
endless real-time flow of
street-level video show-
ing angry, violent con-
frontations.
Instead, they turned
off the Internet.
China’s ruthless ap-
proach handed the re-
gime an enduring propa-
ganda victory, of course.
Even though hundreds
of peaceful protesters
were mercilessly mowed
down when the military
swept through Tienanmen
Square, the most iconic
image of the crackdown
is downright peaceful: A
tank commander refusing
Iran tech expo sends defiant message to West
DUBAI, United Arab
Emirates – An Iranian su-
percomputer. New space
rockets and satellites car-
rying the flag of the Is-
lamic Republic. Biotech
innovations that include
artificial tendons.
Iran’s claims of scien-
tific advances are coming
at a rapid-fire pace these
days as the country be-
gins events to mark the
anniversary of the 1979
Islamic Revolution.
It’s become part of an-
nual celebrations of schol-
arship and military might.
But this year, there is an
added message to the
West after the latest talks
over Iran’s nuclear pro-
gram fizzled in January:
expected to take a 30 per-
cent cut in the first year.
The Daily will also be the
first subscription product
available through Apple’s
iTunes store. The first two
weeks will be free cour-
tesy of Verizon Commu-
nications.
News Corp will later roll
out the Daily on other tab-
lets.
“We can and must make
the business of news gath-
ering and editing viable
again,” Murdoch said in
New York. “We’re enter-
ing a remarkable age of
innovation and digital re-
naissance.”
Murdoch’s lofty remarks
recalled his speech almost
six years ago when the
media mogul urged news-
paper editors, or “digital
immigrants,” to save the
news business by apply-
ing a “digital mindset.”
Shortly thereafter, News
Corp was hailed as a digi-
tal leader among tradi-
tional media companies
to challenge a single, un-
armed civilian who would
not yield.
On the other hand, for
all the democratizing
power the internet pro-
vides, Egypt’s decision
to shut the internet door
shortly after midnight
Friday (along with much
wireless service), while
technically effective, was
entirely ineffectual. And
as for TV: It was only on
Sunday that Cairo moved
to silence Al Jazeera,
which had been broad-
casting non-stop, in what
one hopes is not prelude
to a Tienanmen Solution.
It all gets down to criti-
cal mass. Twitter and
Facebook are peerless
accelerants, but when
you can look out of your
window to see where the
protesting is going on (to
paraphrase veteran NBC
correspondent Richard
Engle) the power of the
internet is dwarfed by
pure people power.
In a way, you could ex-
cuse Egypt’s knee-jerk
reaction. After all, wasn’t
there a “Twitter Revolu-
tion” in Moldavia? Didn’t
Tehran’s ability to make
atomic fuel remains at
the heart of the country’s
drive for home-grown
technology.
“The government’s sup-
port for science and tech-
nology is an unchangeable
strategy,” said President
Mahmoud Ahmadinejad
last month at a high-tech
trade exhibition in Tehran.
“This includes the nuclear
efforts.”
It’s hardly a new state-
ment from the Islamic
Republic, which has re-
peatedly insisted it will
not negotiate over its right
for uranium enrichment
under international pacts.
This message, however,
be reinforced strongly in
after its purchase of the
once-hot MySpace social
network. MySpace was
overtaken by Facebook
and now faces either clo-
sure or sale.
The Daily represents
a big gamble that start-
ing a digital organization
from scratch employing
traditional journalists will
revive the news business
beset by declining reader-
ship and advertising rev-
enue.
But will anyone pay for
news that is not special-
ized, analysts asked.
“It helps us answer the
big question of 2011,” said
Ken Doctor, an analyst
with Outsell Research.
“Can you charge for (on-
line) general news?”
The Daily represents
News Corp’s newest at-
tempt to get consumers
to pay for online news
and support investment in
journalism.
In another example,
News Corp put all the
the small messaging ser-
vice propel the “Green
Revolution” in Iran?
Wasn’t Facebook banned
by Iran before the 2009
election which returned
President Mahmoud Ah-
madinejad to power?
Apparently, the Mubarak
government isn’t reading
Malcolm Gladwell. So-
cial media inspires and
creates nothing like the
social activism which, the
best-selling author argues,
sparked the U.S. civil
rights movement. Weak
ties, are, well, wimpy.
“Our acquaintances —
not our friends — are
our greatest source of
new ideas and informa-
tion,” Gladwell wrote in
the coming days as offi-
cials boast about Iran’s in-
novations.
It also offers an impor-
tant lesson in how much
political capital is vested
in Iran’s effort to stake
its claim as the scientific
vanguard of the Muslim
world.
Iran plans a major tech
exhibition beginning Sat-
urday in Damascus, Syria,
whose underlying purpose
seeks show that interna-
tional sanctions have not
crippled Iran’s labs.
The expo is expected
to showcase an array of
made-in-Iran innovations
from more than 120 com-
panies including preci-
sion industrial equipment,
news from the Times of
London website behind
a pay wall, charging 1
pound for a day or 2
pounds for a week’s ac-
cess. Its online readership
dropped by almost 90 per-
cent.
Murdoch said the Daily
would cost an additional
$500,000 or less a week to
run before revenue from
advertisers and subscrip-
a much-dissected New
Yorker article. “The In-
ternet lets us exploit the
power of these kinds of
distant connections with
marvelous efficiency. It’s
terrific at the diffusion of
innovation, interdisciplin-
ary collaboration, seam-
lessly matching up buyers
and sellers, and the logis-
tical functions of the dat-
ing world. But weak ties
seldom lead to high-risk
activism.”
Twitter’s own (perhaps
self-preserving) view of
itself is also somewhat
humble. In the midst of
Friday’s protests the com-
pany reminded the world
that it is a medium, not a
messenger.
nanotechnology and aero-
space-related items. No
nuclear technology is on
the list.
An Iranian diplomat in
Syria told The Associated
Press that the five-day ex-
hibition — the first of its
kind outside Iran — aims
to show “friend and foe”
that sanctions have not
slowed Iran despite claims
by U.S. Secretary of State
Hillary Clinton and oth-
ers. The diplomat spoke
on condition of anonym-
ity because he was not al-
lowed to brief reporters.
Ali Reza Khamesian, a
journalist for the moder-
ate newspaper Melleat-e
Ma newspaper in Tehran,
said the technology show
THE PROFESSIONAL EXPRESS
tions. He added that he
would measure his suc-
cess by “selling millions”
of subscriptions.
News Corp executives
were much more eva-
sive about whom they
expect to read the digital
newspaper. The Daily’s
editor-in-chief, Jesse An-
gelo, relayed a story about
Murdoch’s response to a
question about the Daily’s
“Some Tweets may fa-
cilitate positive change
in a repressed country,
some make us laugh,
some make us think,
some downright anger a
vast majority of users,”
co-founder Biz Stone and
General Counsel Alexan-
der Macgillivray wrote in
a Friday blog post. “We
don’t always agree with
the things people choose
to tweet, but we keep the
information flowing irre-
spective of any view we
may have about the con-
tent.”
It’s tempting to give lots of
credit to a medium which
is still so new we aren’t
quite sure how to process
a reach we’ve only begun
seeks to project Iran as the
“most powerful and in-
dependent country in the
region.”
“It has a clear goal,” he
said. “That is to show the
regional countries that
Iran is unique since it has
achieved technological
achievements” despite
sanctions.
During the coming week,
Iranian officials have
promised to display a new
range of rockets and satel-
lites — which could raise
more concern in the West
that Iran’s space program
spilling over into possible
efforts at creating a long-
range ballistic missile ar-
senal.
A year ago, Iran an-
target audience: Every-
one.
Publishers are particular-
ly protective of subscriber
data such as names, ad-
dresses and credit cards,
which helps them court
advertisers and market
new products to existing
readers.
By Jennifer Saba and Yin-
ka Adegoke (Reuters)
to appreciate. There’s no
doubt Twitter and Face-
book are as loathed by re-
pressive governments as
they are loved by adver-
tisers — and for the same
reason. Strike a match,
toss it on the lighter flu-
id and just try to control
the flames. Like wildfire,
there is nothing like social
networks to spread word
globally with unprece-
dented speed.
So, in the age of the inter-
net, does withholding the
internet slow a crowd’s
ability to form?
Memo to the next regime
who thinks so: Turn on
the TV.
Reuters Technology News
nounced it launched some
animals — including a
mouse, two turtles and
worms — briefly into
space on a research rock-
et. In February 2009, Iran
sent its first satellite into
orbit.
Iran’s deputy president
for science and technolo-
gy, Salar Amuli, told state
television that computer’s
power will be used for ar-
eas that include nuclear
physics.
‘History has shown that
the Iranian nation was
pioneer of achieving sci-
entific progress,’ he said
last week.
By Brian Murphy (AP)
| FEBRUARY 3, 2011
networking
next frontier:
the Boob Tube
You already tell your
friends which bars and
restaurants you’re hang-
ing out at, thanks to so-
cial networking tools
like Facebook Places and
Foursquare.
A new company called
IntoNow, led by a former
Google and MTV execu-
tive, thinks television is
the next frontier.
The company has devel-
oped a technology that
scans the audio waves em-
anating from your televi-
sion set and identifies the
program you’re watching,
similar to how the popular
iPhone app Shazam magi-
cally informs you of what
song is playing on the ra-
dio.
Of course, anyone with
even the most rudimen-
tary abilities operating a
remote control can (hope-
fully) already figure out
the name of the program
they’re watching. The
real benefit of IntoNow is
that it can tell you which
of your friends are also
Charles
Manson
found with
cell phone
again
Mass murderer Charles
Manson was caught with
a cell phone behind bars
for the second time in two
years, a California prison
official said on Wednes-
day.
The state bars mobile
phones for all inmates, out
of a concern they could
use the devices to master-
mind crimes in the outside
world, or arrange attacks
on inmates or guards.
Guards at Corcoran State
Prison found Manson’s
contraband phone in a
routine search of his pris-
on cell on January 6, said
Terry Thornton, spokes-
woman for the California
Department of Correc-
tions and Rehabilitation.
Prison authorities are still
investigating how Man-
son got the phone and who
he might have called, she
said.
Manson, 76, is one of
America’s most notori-
ous mass murderers who,
along with his cult follow-
ers, was convicted in the
1969 murders of seven
victims, including preg-
nant actress Sharon Tate,
who was the wife of direc-
tor Roman Polanski.
Thornton said prison of-
| PAGE 9
watching the same show.
It doesn’t take a wild
imagination to think of
how this could fit into the
social media landscape,
sparking discussions on
Facebook among friends
watching the latest Real
Housewives episode for
example, or taunts among
buddies that are tuned-
in to the same game. Or
providing an easy recom-
mendation system for TV
shows.
IntoNow released a free
iPhone/iPad app on Mon-
day that provides the basic
capability to identify a TV
show and share the show
you’re watching with
friends. But the company
hopes that other develop-
ers will build apps using
its technology to provide
new functionality, such as
polls about who is “hot-
test” or most despicable
person in a show. Stay
tuned…
Reuters Technology News
ficials take their cell
phone policy seriously,
even though one slipped
through to Manson.
“If you were to visit a
prison, we would ask you
to leave your cell phone in
the car. No one is to have a
cell phone in the prison,”
she said.
In 2009, Manson was
also caught with a cell
phone. He used it to call
people in California, New
Jersey, Florida and the Ca-
nadian province of Brit-
ish Columbia; and he re-
ceived calls from Florida,
Massachusetts and Indi-
ana, Thornton said.
Thornton said she did
not know if any crimes
resulted from those calls.
As punishment, Manson
lost 30 days of good be-
havior credit. Thornton
said Manson will face a
hearing that will decide a
penalty for the second cell
phone offense.
Manson, who is serving
a life sentence, was denied
parole for the 11th time in
2007. He is eligible for
another hearing in 2012.
Reporting by Alex Dobuz-
inskis: Editing by Peter
Bohan (Reuters)