By Larry Kudlow (NRO):  Amidst the financial flight-wave to safety, with stocks plunging, gold soaring, and Treasury bond rates collapsing — and all the European banking fears which go with that — there’s an important sub-theme developing: An almost-forgotten monetary indicator, M2, which is mostly cash, demand-deposit checking accounts, savings deposits, and retail money-market funds, has been soaring.

According to the St. Louis Fed, M2 is up 24.2 percent at an annual rate over the past two months. Almost out of the blue, that comes to a near $500 billion increase. In rough terms, the M2 explosion breaks down to $165 billion in demand deposits and $335 billion in savings deposits.

What’s going on here? There’s a flight to government-guaranteed accounts. Some people believe Europeans are withdrawing from their own banking system and parking their money in the U.S. banking system, guaranteed by Uncle Sam. Kelly Evans reports in her Wall Street Journal column of a $30 billion outflow from equity mutual funds that has probably gone into cash.

This is a very disconcerting development. Normally, big M2 growth would signal a faster economy, and maybe even higher inflation. But as economist Michael Darda points out, the velocity, or turnover, of money seems to be plunging.

“The recent pickup in broad money in the U.S. looks like a dash for risk-free cash assets,” writes Darda. He also notes that widening corporate-credit risk spreads and shrinking government-bond rates signal a recession risk, not a coming boom.

So contrary to monetarist theory, the M2 explosion seems more closely related to a deflation/recession risk. Economist-blogger Scott Grannis writes, “The recent growth of M2 surpasses even the explosive safe-haven demand for money that accompanied 9/11 and the financial crisis of late 2008. Something big is going on, and it can only be the financial panic that is sweeping Europe as money flees a banking system that is loaded to the gills with PIIGS debt.”

Grannis concludes, “In short, it looks like there is a run on the European banks and the U.S. banking system is the safe-haven of choice.”

Read more at National Review Online HERE.

As Research Director and Senior Policy Adviser to Joe Miller for US Senate, I had a front-row seat for an extraordinary piece of Alaska history.  Central to the drama of one of the most hotly contested campaigns in recent memory was an incident that happened more than two years before the campaign even commenced.  Joe Miller’s work as an Assistant Attorney and Contract Counsel for the Fairbanks North Star Borough as described by his former Borough boss, Rene Broker, in an October 2010 article in the Alaska Dispatch was “at a very high level and he did very good work.” She also said in a letter to the state’s Judicial Council that Joe Miller was one of the top three attorneys she had ever worked with.

However, there was one blemish on his otherwise very impressive record of service, a disciplinary action incurred while he was employed at the Borough.  In spite of an explicit “right to privacy” in the Alaska Constitution, members of the Alaska media would sue to force Joe Miller’s confidential personnel file into public view, a judicial decision that should make every public employee in this state shudder.

Here is the summary of the infraction from Mr. Miller’s personnel file: “You accessed three Legal Department employee computers for a non-borough related purpose and then you were dishonest both about your conduct and your reasons for the conduct. Shortly after this incident [read 10-15 minutes], however, you completely admitted the wrong doing, acknowledged the inappropriateness of your actions, and have fully accepted responsibility.”  Ms. Broker concluded, “I believe that thiswas an isolated event.”

Lisa Murkowski, and her astroturf front Alaskans Standing Together, would build a whole campaign around knowledge of this incident, illegally leaked by a Borough employee, incessantly calling Miller a liar.  Then in a brazen public character assassination, Murkowski closed the KTUU debate in October by asserting that due to this indiscretion, Joe Miller was unfit to serve in the United States Senate. Those who knew of his honorable military service and impeccable judicial and legal record were appalled.

During last fall’s election, Murkowski also regaled Joe Miller for an indigent fishing license purchased LEGALLY some fifteen years earlier, falsely suggesting he had broken the law. His real crime: being poor, and not well-connected. In a press release, her spokesman Steve Wackowski sneered, “No true Alaskan would hurt everyone else by poaching.”  Yet when the senator’s staff is caught red-handed poaching, there is no outrage.  In fact, quite the contrary.  He is praised for his “work for Alaska.” One thing we learned from last year’s campaign was that anything Lisa Murkowski does is, by definition, “good for Alaska.”  I suspect Arne Fuglvog’s poaching too was, somehow, “good for Alaska.”

Fast-forward nine months. Lisa Murkowski’s top fisheries aide, Arne Fuglvog, has pleaded guilty to major commercial fishing violations and is headed to federal prison.  The plea agreement was signed on April 8, 2011.

Naturally, folks wanted to know why the senator would continue to employ an admitted criminal at taxpayer expense. She initially refused to answer questions about when she became aware of Fuglvog’s situation, her spokesman claiming that it was “an ongoing legal matter.”  Was the senator’s spokesman suggesting that Murkowski is part of the ongoing legal case?

After being hounded by the media for four days, and significant public pressure, she decided it was alright to talk after all, but claimed not to have known about the agreement until the day Fuglvog resigned. More than three months after the plea agreement was finalized!  Really?

Upon further questioning, she added that he had told her a month earlier that he was going to enter a plea agreement, admitting guilt. If the senator is to be believed, he never mentioned that he had already pleaded guilty months earlier.  Murkowski explained that Fuglvog was allowed to keep his job after she became aware of the situation because he was “innocent until proven guilty.” There’s just one slight problem with her statement, one is not innocent upon confession.

When pressed about when she knew about the federal investigation into Fuglvog’s crimes, she proffered a vague allusion to her former chief of staff having mentioned it possibly in December 2010, adding the she didn’t know “much more beyond that.” Truly an amazing lack of  “intellectual curiosity” and moral compunction for a United States Senator!  Especially so, when one considers the that the reputation of Alaska was at stake, and her own office could be embroiled in scandal due to her actions, or lack thereof.

The Anchorage Daily News issued an editorial in response to the senator’s statement proffering, “Murkowski’s explanation that these things ‘can go on for years or turn out to be nothing at all’ is stunning.  Shrug off a criminal investigation of one of her staffers?”  They concluded, “her account is at best a description of her own inadequacy and poor judgment.”

But there are other troubling facts casting serious doubt on the senator’s veracity.  Representative Barney Frank’s office has stated pubicly that they were aware of the investigation at least as early as  the spring of 2009.  Apparently, that is precisely why Fuglvog withdrew his name from consideration to be the NOAA’s Fish Czar, a position for which he was recommended by Senators Murkowski and Begich.  No later than May of 2009, United Fishermen of Alaska, an organization who backed Murkowski strongly in the 2010 election cycle, was informed by John Enge that Fuglvog had committed serious crimes.  Rumors of Fuglvog’s crimes were also said to be swirling around the southeast fishing community by the time of his withdrawal from consideration for the NOAA’s top fisheries job.  Local talk show host and columnist Shannyn Moore, in a piece published last Saturday in The Anchorage Daily News, dialed up the heat by reporting that she forwarded information relating to Fuglvog’s criminal activities to both Senators Murkowski and Begich more than two years ago.  Other media personalities have privately admitted knowing about the situation for just as long.

We are being asked to believe that Senator Murkowski sponsored Fuglvog for a job as the Federal Fish Czar, he had to withdraw his name from consideration due to a federal investigation into criminal activity, and she didn’t know?  I have worked in high-level government offices, which I can assure you, are almost always the first to know about these things. How is it that knowledge of the investigation was so widespread as to almost be common knowledge and the senator wasn’t in the know?  How could she possibly have plausible deniability?  How could she not have known?  I must admit, the level of credulity it would take to believe the senator’s claims simply escapes me.

Why has the media apparently decided to let the whole thing go?  And why do they continue to let Murkowski skate on her inconsistencies and misstatements yet again?  And further, why do they refuse to expose the senator’s rank hypocrisy?  Could it be that they are primarily driven by ideology?

It has always been my inclination to offer the benefit of the doubt, but Lisa Murkowski has called for a higher standard.  And as the good book says, “with the judgment you pronounce you will be judged.” The senator has claimed Joe Miller’s minor peccadillo at the borough disqualified him for public office.  Now she has covered for, and perhaps even promoted, a known criminal, paid him at taxpayer expense, and chosen not to come clean about what she knew and when she knew it.  So by the senator’s own standard of judgment, is Lisa Murkowski unfit to serve in the United States Senate?  I’m still waiting for a resignation, but I won’t hold my breath.

Read more at RED COUNTY HERE.

By David Stringer and Shawn Pogatchnik (OneNewsNow):

Britain must confront a culture of laziness, irresponsibility and selfishness that fueled four days of riots which left five people dead, thousands facing criminal charges and hundreds of millions in damages, Prime Minister David Cameron acknowledged Monday.

As rival political leaders staked out their response to England’s unrest, Cameron pledged to deliver a raft of new policies by October aimed at reversing the “slow-motion moral collapse” which he blames for fostering the disorder.

“This has been a wake-up call for our country. Social problems that have been festering for decades have exploded in our face,” Cameron told an audience at a youth center in Witney, his Parliamentary district in southern England. “Just as people last week wanted criminals robustly confronted on our street, so they want to see these social problems taken on and defeated.”

Work and Pensions Secretary Iain Duncan Smith said Monday he was checking whether those involved in the riots should have their welfare payments cut, while London mayor Boris Johnson said young people convicted in the disorder would lose their right to use public transportation for free.

Cameron pledged to end a culture of timidity in discussing family breakdown or poor parenting, or in criticizing those who fail to set a good example to their children or community.

“We have been too unwilling for too long to talk about what is right and what is wrong,” Cameron said. “We have too often avoided saying what needs to be said, about everything from marriage to welfare to common courtesy.”

In a rival speech, main opposition Labour Party leader Ed Miliband criticized Cameron’s response as overly simplistic, and demanded that lawmakers focus on delivering better opportunities for disaffected young people.

“The usual politicians’ instinct _ announce a raft of new legislation, appoint a new adviser, wheel out your old prejudices and shallow answers _ will not meet the public’s demand,” said Miliband.

He spoke at his former high school in Camden, north London, half a block from the scene of rioting Aug. 8, when shops were trashed and police came under attack.

“Are issues like education and skills, youth services, youth unemployment important for diverting people away from gangs, criminality, the wrong path? Yes, they matter,” Miliband said.

The differing approaches to Britain’s most serious riots in a generation are likely to dominate the country’s annual political conventions, which begin next month. Miliband has called for a full public inquiry into the roots of the riots, while Cameron insists his government is able to adequately examine the issue.

Cameron insists that racial tensions, poverty and the government’s austerity program – much of which is yet to bite – were not the primary motivations for the riots across London and other major cities.

Instead, Cameron pointed to gang-related crime, and a widespread failure from Britain’s leaders to address deep rooted social issues, including the country’s generous welfare system.

“Children without fathers. Schools without discipline. Reward without effort. Crime without punishment. Rights without responsibilities. Communities without control. Some of the worst aspects of human nature tolerated, indulged – sometimes even incentivized – by a state and its agencies that in parts have become literally demoralized,” Cameron said.

He pledged that the government would intervene to help 120,000 of the country’s most troubled families before the 2015 national election.

Standing before a backdrop of graffiti, Cameron said Britain’s damaged society had for too long been one which “incites laziness, that excuses bad behavior, that erodes self-discipline, that discourages hard work.”

Read more at ONENEWSNOW HERE.

By Jonathan Tobin (Commentary Magazine):

The Obama administration renewed its attack on Jewish Jerusalem today by formally condemning the construction of apartments in part of the city. The approval last week of a housing project in the Har Homa neighborhood of the city was blasted by the State Department as being contrary to the peace process and an impediment to the renewal of negotiations with the Palestinians.

But like previous statements from the administration, the complaint about apartments in Har Homa has little to do with the moribund peace process and everything to do with an Obama policy decision to treat the hundreds of thousands of existing Jews living in parts of Israel’s capital as being no different from the most remote hilltop settlements in the West Bank. Despite the rhetoric from Washington, Har Homa isn’t up for grabs in a theoretical peace deal, and housing there won’t stop a two-state solution if the Palestinians ever decide they want one. What it is an obstacle to is an effort to rip Jerusalem apart and to evict Jews from their homes.

While no American government has ever recognized Israeli sovereignty over all of the city since it was reunified during the 1967 Six-Day War, only Obama has sought to exploit divisions about this issue in such a way as to weaken the Jewish state’s hold on its capital. During the past two years, Obama has personally injected himself into this issue to try and undermine Israel’s position in Jerusalem. The 2010 spat in which the administration disingenuously tried to claim Vice President Biden was insulted by another Jerusalem building project was a lever by which Obama sought to pressure the Netanyahu government into agreeing to suspend all building in the city. The prime minister rightly refused, and to Obama’s consternation, was supported by the overwhelming majority of Israelis. It is true that Har Homa, a project that began in the 1990s, has always been a point of contention between the U.S. and Israel. But the notion control of this land will ever be conceded to the Palestinians is absurd.

Though apologists for Palestinian intransigence claim Israel’s building in Jerusalem is a blow to a potential two-state solution, this is utterly false. The Palestinians know if there is to be an accord, the Israelis won’t be leaving Jewish neighborhoods in Jerusalem. Treating those parts of the city illegally occupied by Jordan from 1949 to 1967 as “Arab territory” in which Jews may not build or live is a non-starter. Though a negotiation might theoretically give a Palestinian state control of some Arab sections of the city, it will not give them places like Har Homa or any of the other place where Jews are building.

Read more at Commentary Magazine HERE.