Memo to Pawlenty: Attack Dog Persona does not Fit!!

A Vice-President is generally the person who goes out to do the President's public "dirty" work. I just watched Governor Pawlenty this weekend and realized there is a problem with his desire to be Vice-President.

Pawlenty's affable state wide public persona, "Minnesota Nice", does not play well on television when trying to be an attack dog for McCain. Pawlenty looked uncomfortable and awkward in this position, though I thought his points about Obama were right on.

Maybe it was just me being from Minnesota. However, I think others might sound a similar note in the coming days that the attack dog persona will need some work if he is going to fit into that role.

Norm Coleman Press Release

Dear Friend,

With only a few hours remaining before the close of the 2nd Quarter deadline we wanted to be sure you knew that while recent polls have given us good news the fact remains that we face an uphill battle against Al Franken and his liberal allies. We are currently being outspent nearly 2 to 1 on television and it's only June!

As you know, Norm's record, motives and goals couldn't be more different than Al Franken and his allies. Norm has spent his entire career working to bring people together to get things done in Minnesota; Al Franken has spent his entire career dividing folks, demeaning them, and mocking them.

If we are going to sustain the onslaught of negative attacks and outright distortions from Al Franken and his supporters, we need your help and we need it before the day ends.

We hope you'll take a moment to help us match what Al Franken raises dollar for dollar by clicking here now.

Your contribution -- $5, $10, $25, $50, $100 or whatever amount is right for you -- will ensure we have a successful fundraising report. More importantly, it will help ensure that Norm can continue talking about his record of bringing people together and getting things done.

So before midnight tonight: make your best contribution - or even a modest one - to Norm's re-election campaign. You'll be glad you did!

Sincerely,
Team Coleman

Canadian Health Care We So Envy Lies In Ruins, Its Architect Admits

By DAVID GRATZER Posted Wednesday, June 25, 2008 4:30 PM PT

As this presidential campaign continues, the candidates' comments about health care will continue to include stories of their own experiences and anecdotes of people across the country: the uninsured woman in Ohio, the diabetic in Detroit, the overworked doctor in Orlando, to name a few.

But no one will mention Claude Castonguay — perhaps not surprising because this statesman isn't an American and hasn't held office in over three decades.

Castonguay's evolving view of Canadian health care, however, should weigh heavily on how the candidates think about the issue in this country.

Back in the 1960s, Castonguay chaired a Canadian government committee studying health reform and recommended that his home province of Quebec — then the largest and most affluent in the country — adopt government-administered health care, covering all citizens through tax levies.

The government followed his advice, leading to his modern-day moniker: "the father of Quebec medicare." Even this title seems modest; Castonguay's work triggered a domino effect across the country, until eventually his ideas were implemented from coast to coast.

Four decades later, as the chairman of a government committee reviewing Quebec health care this year, Castonguay concluded that the system is in "crisis."

"We thought we could resolve the system's problems by rationing services or injecting massive amounts of new money into it," says Castonguay. But now he prescribes a radical overhaul: "We are proposing to give a greater role to the private sector so that people can exercise freedom of choice."

Castonguay advocates contracting out services to the private sector, going so far as suggesting that public hospitals rent space during off-hours to entrepreneurial doctors. He supports co-pays for patients who want to see physicians. Castonguay, the man who championed public health insurance in Canada, now urges for the legalization of private health insurance.

In America, these ideas may not sound shocking. But in Canada, where the private sector has been shunned for decades, these are extraordinary views, especially coming from Castonguay. It's as if John Maynard Keynes, resting on his British death bed in 1946, had declared that his faith in government interventionism was misplaced.

What would drive a man like Castonguay to reconsider his long-held beliefs? Try a health care system so overburdened that hundreds of thousands in need of medical attention wait for care, any care; a system where people in towns like Norwalk, Ontario, participate in lotteries to win appointments with the local family doctor.

Years ago, Canadians touted their health care system as the best in the world; today, Canadian health care stands in ruinous shape.

Sick with ovarian cancer, Sylvia de Vires, an Ontario woman afflicted with a 13-inch, fluid-filled tumor weighing 40 pounds, was unable to get timely care in Canada. She crossed the American border to Pontiac, Mich., where a surgeon removed the tumor, estimating she could not have lived longer than a few weeks more.

The Canadian government pays for U.S. medical care in some circumstances, but it declined to do so in de Vires' case for a bureaucratically perfect, but inhumane, reason: She hadn't properly filled out a form. At death's door, de Vires should have done her paperwork better.

De Vires is far from unusual in seeking medical treatment in the U.S. Even Canadian government officials send patients across the border, increasingly looking to American medicine to deal with their overload of patients and chronic shortage of care.

Since the spring of 2006, Ontario's government has sent at least 164 patients to New York and Michigan for neurosurgery emergencies — defined by the Globe and Mail newspaper as "broken necks, burst aneurysms and other types of bleeding in or around the brain." Other provinces have followed Ontario's example.

Canada isn't the only country facing a government health care crisis. Britain's system, once the postwar inspiration for many Western countries, is similarly plagued. Both countries trail the U.S. in five-year cancer survival rates, transplantation outcomes and other measures.

The problem is that government bureaucrats simply can't centrally plan their way to better health care.

A typical example: The Ministry of Health declared that British patients should get ER care within four hours. The result? At some hospitals, seriously ill patients are kept in ambulances for hours so as not to run afoul of the regulation; at other hospitals, patients are admitted to inappropriate wards.

Declarations can't solve staffing shortages and the other rationing of care that occurs in government-run systems.

Polls show Americans are desperately unhappy with their system and a government solution grows in popularity. Neither Sen. Obama nor Sen. McCain is explicitly pushing for single-payer health care, as the Canadian system is known in America.

"I happen to be a proponent of a single-payer health care program," Obama said back in the 1990s. Last year, Obama told the New Yorker that "if you're starting from scratch, then a single-payer system probably makes sense."

As for the Republicans, simply criticizing Democratic health care proposals will not suffice — it's not 1994 anymore. And, while McCain's health care proposals hold promise of putting families in charge of their health care and perhaps even taming costs, McCain, at least so far, doesn't seem terribly interested in discussing health care on the campaign trail.

However the candidates choose to proceed, Americans should know that one of the founding fathers of Canada's government-run health care system has turned against his own creation. If Claude Castonguay is abandoning ship, why should Americans bother climbing on board?

Gratzer is a senior fellow at the Manhattan Institute and a physician licensed in both the U.S. and Canada, where he received his medical training. His newest book, "The Cure: How Capitalism Can Save American Health Care," is now available in paperback.

Source: True North & IBDeditorials

Franken Campaign continues to skid and stumble

Minnesota

Tot Rep Dem Ind Men Wom Wht Union
Franken 41% 4% 76% 35% 37% 45% 40% 47%
Coleman 51% 92% 17% 55% 57% 45% 52% 47%

Source: Quinnipiac

This is quite a devastating poll for the Franken Campaign, but it is not surprising. There is so much skepticism here among the socially conservative Democrats that even they are content with Senator Coleman. Franken is tied with Union Households, Women, and even dose worse among Democrats than Norm Coleman does with Republicans.

Hands down it is going to be a Coleman victory in November. Franken may be able to turn the ship on a few of these numbers but it will not be enough to win.

Beginning Farmer & Rancher Development

Matched Savings Program Lacks Dedicated Funding
Submitted by Elisha Smith on Tue, 06/24/2008 - 13:24.

The 2008 Farm Bill includes the Beginning Farmer and Rancher Individual Development Account Program. This program uses special matched saving accounts to promote a new generation of farmers and ranchers by assisting those of modest means to establish a pattern of savings. The account proceeds may be used toward capital expenditures for a farm or ranch operation, including expenses associated with the purchases of land, buildings, equipment, infrastructure, livestock, or toward training. For numerous aspiring farmers and ranchers, the actuality of starting their own operation is out of reach. One of the biggest obstacles to new farmers is financing the land and the farm operation. This program can bolster their opportunities by helping them save money on a down payment for example. It will also prepare them for success as a farmer or rancher by requiring the participants to acquire appropriate training that focuses on business planning, banking, conservation planning, market development and more.

The program will be tested in at least 15 states before national implementation. However, the farm bill did not provide any dedicated funding, even for the pilot program. The opportunity to make a difference for the next generation of family farmers and ranchers is now. But we must convince the members of the Agriculture Appropriations Subcommittee to seize the opportunity and provide the funds needed to get this program off the ground.

For more information visit: http://www.cfra.org/

Quote of the Day........

"As a rule we disbelieve all the facts and theories for which we have no use. "

William JamesUS Pragmatist philosopher & psychologist (1842 - 1910)

Comment: This was up on my Google Homepage today. I know he probably was not referring to the energy and perilous economic situation we find ourselves in today, but I thought this would be a good forward to all of the politicians in St. Paul and Washington D.C.

~~ The Mayor

WWVD: What Would Volcker Do?

The Federal Reserve meets tomorrow with the big announcement slated for mid-afternoon on Wednesday. The debate is on what bird emerges from that meeting. By that I mean: does the Inflation Hawk take to the skies, or does the FED remain "dove-ish".

I do not pretend to know, but I have been reading a lot about former Federal Reserve Chairman Volcker. I got to thinking about what Volcker might do if he were still at the Federal Reserve. I think expectations would be much different.

I believe Volcker would shock the world by moving that rate tomorrow. In fact, I wish Bernanke would increase a quarter point right away because it would rally the dollar and bring about an environment for energy and commodity prices to back down even if it was minimally in the beginning.

I think a lot of economists feel the last winter rate cuts were unneeded, and the market basically said that too when you look at the credit spreads. Anyways it will be interesting to see where we go from here with the US Economy after the FED speaks!!

TimesOnline: Governor Pawlenty VP Prospects!!

June 22, 2008

Governor with 'prole chic' tipped as John McCain's sidekick

A young, obscure governor with blue-collar appeal is in line to be the Republican’s running mate

ONE name has risen to the top of John McCain’s shortlist for vice-presidential running mate. Tim Pawlenty, the governor of Minnesota, a trucker’s son and advocate of Republicanism for the masses, is the favourite to join his ticket, according to sources close to the McCain camp.

They believe that Pawlenty, 47, has the youth, working-class credentials and executive experience to attract independent voters and disaffected Democrats who find Barack Obama, 46, the Democratic party nominee, too exotic and untested and McCain, 71, too old and too focused on national security.

It is a case of “Tim Who?” outside his home state for now, but Pawlenty is the thinking man’s blue-collar conservative, a political moderate and environmentalist who possesses “proletarian chic”, according to The New Republic, a centre-left magazine.

In a clue to his possible intentions, McCain said on a visit to Minnesota last week that Pawlenty “has a place in the future of this country as well as our Republican party”.

Pawlenty has already pioneered the concept of “Sam’s Club conservatism”, named after the popular discount stores founded by Sam Walton of the giant Wal-Mart retail chain, which holds out the promise of good value, small government catering to working people.

In an interview with The Sunday Times, Pawlenty said he was “honoured to have his name mentioned” as a possible vice-president, while adding that he was delighted with his “day job”. It is bad form to lobby openly for a place on the ticket - “I’m going to be very demure about it,” he said - but a combination of geography, temperament and ideology has lifted him to the top tier of candidates.

“I believe the Republican brand needs refreshment,” he said. “Our principles haven’t changed but the country is changing in terms of demographics, culture and technology and we need to make sure the Republican messenger has a modern message.”

It is no accident that the Republicans have picked Pawlenty’s state for their national convention in September. Minnesota, which narrowly voted Democrat in 2004, is one of many upper Midwestern swing states that they hope to carry.

The governor, who will host the convention, could help McCain to win farming and industrial heartlands from Iowa to Ohio. Recent polls show Obama leading McCain in Minnesota by 50% to 41%.

One confidant of the governor put his chance of being selected vice-president at 50-50; but some Republican insiders place them higher. Pawlenty has been co-chairman of McCain’s presidential campaign since its inception and stuck by the Arizona senator when his White House bid imploded last summer.

For McCain, scarred by his imprisonment as a naval pilot in Vietnam, fidelity in adversity is highly prized. Pawlenty, an evangelical Christian who backed George W Bush in 2000, said his loyalty to McCain was never in doubt. “I endorsed him early because he has the character traits, values and ideas to be president, commander-in-chief and leader of the free world,” he said.

Pawlenty is a firm believer in the heroic age of Republicanism, but his role models are presidents who brought their party into the modern era. “I consider myself a common sense, main-stream conservative in the tradition of Theodore Roosevelt and Abraham Lincoln,” he said.

In one off-colour moment last month, he joked that his wife Mary, a former judge, shared all his passions - except one. “I have a wife who genuinely loves to fish,” he told a local radio station. “She loves football, she’ll go to hockey games and, I jokingly say, ‘Now, if I could only get her to have sex with me’.”

However, Pawlenty has sound relations with the conservative wing of the Republican party without being a perfect fit. He admires Ronald Reagan more for his flexibility than his ideological certitude. “He had an independent, pragmatic streak and I believe I have some of those characteristics as well,” he said.

McCain joked last week that the job of the vice-president was “to inquire daily as to the health of the president”. Pawlenty has little national security experience but fills the gaps in McCain’s domestic qualifications.

“He would be a very good, safe choice,” said Todd Harris, a former spokesman for McCain. “He’s been an extremely effective governor and he’s able to articulate conservative principles in a way that is not scary to moderates and independents.”

Pawlenty’s working-class background helps: “My father was a truck driver, my mother was a home maker, one brother worked in a grocery store, another in an oil refinery, my sister is a special education aide and my other sister has been a secretary for her whole career.”

The young Pawlenty had bigger ambitions. His mother died of cancer when he was 16 and it was her wish that he should go to university. “She was very education-oriented and she was hoping somebody would go to college and Tim was her last hope - because it wasn’t going to happen with us,” said Rosie Atkinson, his sister.

He dreamt of becoming a dentist so he could have a Buick Riviera car like one in his home town: “I went to college thinking it would be a wonderful career but I developed a strong interest in history and public service was a way of pursuing it.”

He put himself through university and law school. “I worked my tail off,” he said. “I have kind of this attitude that if you are able-bodied and able-minded, you should get some fair shakes in life.”

During his campaign for governor in 2001, Pawlenty coined the phrase “Sam’s Club conservatism”, urging conservatives to resist “the stereotype of the Republican party . . . that we’re all a bunch of wealthy snobs” and to appeal to members of “Sam’s Club, not just the country club”.

The idea was taken up by conservative intellectuals in The Weekly Standard magazine, who argued that it could rescue a tired and discredited party “from the wreckage of Bush-style, big government conservatism”.

“Sam’s Club is a metaphor for hard-working, middle-class people who want government to be effective and to deliver value,” Pawlenty said. He is nearly a quarter of a century younger than McCain, but cites the Republican nominee’s popularity in an MTV poll as proof that he can attract young voters.

“He has boundless energy,” Pawlenty said. “I’ve travelled to Iraq with him and he has tremendous leadership skills and is a forward thinker. He has proposed the most daring, cutting-edge initiatives coming from the Republicans.”

Obama will enjoy a huge financial advantage over the cash-strapped McCain, potentially outspending him by five to one. The Arizona senator, who is accepting public financing, will be able to spend $84m in the two months between the Republican convention and election day on November 4, while Obama will have up to $500m at his disposal by remaining outside the system.

Pawlenty believes McCain has “many advantages” over Obama: If you look at the way Senator McCain has lived his life, it’s an incredible expression of commitment, duty, valour and patriotism. He’s forged compromises and achieved great accomplishments in a way that Senator Obama has only talked about.”

If Pawlenty sounds star-struck, it is no bad thing for a running mate whose job is to make the presidential candidate look better than he is.

On the lighter side: Obama's gas crisis solution?

A great article about the recent FARM Bill!!

A great post from over at Boomtown USA. I could not agree more!!

Farming Bill--Law of Unintended Consequences

The Law of Unintended Consequences continues to amaze me. Governments pass laws thinking that they are doing something to help those most in need and often exactly the opposite occurs. I’ve seen it happen over and over and think that there should be a committee set up at every governmental body to study what happens in the long term with governmental action.

This past month the U. S. Congress passed a new farm bill. In most of the Congressional press releases on the bill I read that the bill would help to “keep the family farmer going and provide a boost to young farmers.” Of course if you’d read those same press releases 20 or 30 years ago they would have said the same thing. How have we done over the past 30 years?

Every five years Iowa State University does a survey of Iowa Farmland Ownership which looks at who owns that state’s farmland. They just came out with their new study and to me the results are alarming.

Twenty five years ago, in 1982, about 11% of Iowa farmland was owned by those under 35 years of age. Today it is only 2%. During the same time, those over the age of 65 have grown their ownership from 27% to 55%!

Ownership by someone living out of state has grown from 6% to over 20%!

As alarmingly, the percentage of farmland that crop shared, meaning that the owner of the land shares in the cropping costs and risks, has fallen from 50% to only 21% today.

The farm bills of the past, and this new farm bill are not any different--all have attempted to take the natural economic swings out of farming, providing a safety floor to landowners and farmers. The end result of these policies is that they have driven up the price of land which makes it virtually impossible for a new farmer to enter the profession, focused production into a handful of crops, hurt small towns by diminishing farming diversification, pushed farm ownership into the hands of non-farmers and, in my opinion, seriously hurt rural America.

Congress has caused some major disruptions in rural America by incentivizing farmers in the wrong ways. Our small towns all across the country have suffered as a result. It is too bad that they don’t learn from their past mistakes and the Law of Unintended Consequences, leaving the market to sort out the winners and losers. America and especially rural America would be much better, if they did.

KG gets his with the Celtics!!

The Mayor is not an avid follower of basketball. However a Celtic/Laker Final is something I have enjoyed watching since the days of Magic & Bird. The Celtics were amazing!!

I was pulling for the Celtic's because KG deserved a championship and has always been a class act from his days with the MN Timber wolves. It was good to see KG get his...........it is well deserved!!

Does it make sense to trade in the SUV??? Probably Not!!

Should You Sell Your Gas Guzzler?
By Aleksandra Todorova and Nicole Ridgway Published: June 13, 2008

WATCHING HELPLESSLY AS the price at the gas pump ticks into the triple digits is enough to make any SUV owner want to ditch their fuel-hungry behemoth for something a lot less wasteful. But before putting the "For Sale" sign in the windshield consider this: You could actually lose money by trading in your gas guzzler for a more fuel-efficient car.

"While it may be tempting to trade in your big SUV after spending $100 to fill its gas tank, it is important you take everything into consideration before you decide to change vehicles or you may end up spending thousands of dollars to save hundreds," says Jack Nerad, the executive market analyst for Kelley Blue Book, a provider of used and new vehicle information.

At first glance, a 2008 Ford Escape Hybrid, which averages 32 miles a gallon, looks much more attractive than the 2006 Toyota 4Runner, which gets 17. Some quick math reveals that driving the Escape 1,000 miles at a current $4 a gallon would cost you just $125 in gas; the 4Runner, on the other hand, would need $235 worth — a $110 difference. Sure, it's significant gas savings, but a few things are missing from the equation.

"It seems people are very focused on the immediate pain at the pump, but it's important to think about how much it's going to cost you all year and, if you make the change, how much will it save you," explains Jeff Bartlett, the online deputy editor of autos for Consumer Reports.

To determine whether trading in your SUV for a more fuel-efficient car makes sense use our calculator, which takes into consideration such things as your driving habits, the trade-in value of your existing car and how much you still owe on it. Needless to say, many other factors come into play, including how long you've owned your car and additional ownership costs like insurance and sales tax. Here's what SUV owners need to consider before they unload their gas guzzlers.

Length of ownership

As a rule of thumb, selling your car within the first three years of buying it is a mistake. "[In the first three years] depreciation is greatest, you've just paid tax, insurance is high, most people are still making payments on a loan... you don't have much equity in your car because you're paying more interest in those months," says Consumer Reports' Bartlett.

Sell your car when it's only two or three years old and you'll get just 50% to 60% of the original price, says Karl Brauer, editor-in-chief of Edmunds.com, an auto information web site. Hold off for another couple of years, however, and it will sell for 40% to 50% of its original price. "You'd get twice the use out of it and its only dropping that value a little bit more."

Depreciation

Don't rely on your SUV's resale value to help offset the cost of a new car — it won't be worth anywhere near the amount you'd typically expect.

In a May report entitled "Don't Sell Your SUV," Kelley Blue Book said that the value of the average SUV has depreciated by as much as $5,000 dollars, or roughly 8%, over the past six months. Ordinarily, that type of depreciation occurs over a 12- to 18-month period, says Nerad. Essentially, SUVs are losing value at more than double the regular rate, mainly because of skyrocketing gasoline prices.

Underwater loans

As values plunge, many SUV owners are discovering that they owe far more for their car than it's actually worth. In these cases, the loans are considered "underwater" or "upside down."

"If you're trying to get rid of a car that you can only get $13,000 for and you still owe $20,000 on it, you have a $7,000 deficit before you even buy a new vehicle," explains Brauer.

Car owners in this situation often refinance their existing loans into the new ones. Their monthly payments not only include what they're paying for the new car, but what they still owe on the old car as well — plus interest, says Nerad. (This is the assumption in our calculator).

Thanks to the credit crunch, many upside-down borrowers won't qualify for a new car loan at all. "The banks have tightened up, [they are] not willing to loan the money to get people to buy all of these cars," says Marvin Hedrick, director of finance at a Chrysler dealership in Spring Hill, Fla. "Negative equity complicates it much, much more."

Market conditions

SUV owners who are looking to sell will need plenty of patience. A survey by CNW Marketing Research found that, in April, the average SUV took more than 66 days to sell and, when it did, it sold for 20% less than its Kelley Blue Book value.

Some dealerships aren't even taking SUVs and trucks right now, says Brauer. "It's an extreme example, but that's certainly the mindset. [SUVs] are public enemy No. 1," he says.

There is a silver lining for those willing to wait. Kelley's Nerad predicts that prices for SUVs will bottom out soon, and demand will pick up as drivers face the oncoming winter. In the meantime, Lisa Featherngill, the director of financial and estate planning for Winston-Salem, N.C.-based wealth management firm Calibre, suggests that SUV owners hang onto their gas guzzler and buy an inexpensive fuel-efficient car they can use for their daily commute. Then, when it comes time to go to Costco or take the family on a road trip, they can fire up the SUV.

Transaction costs

Don't forget to consider all the extra charges that come along with buying a new car. Sales tax, for example, can run as high as 5% in some states, says Featherngill. Buy a $20,000 car and the sales tax could easily cost you another $1,000.

You'll also have to register the car with the DMV — for a fee. And depending on the car, you might have to pay more for insurance, too.

Wheels off Franken Campaign: Low approval numbers, high negatives, and way behind on cash reserves!!

The Franken campaign continues to take two steps back only to stumble forward. Ventura polling well and taking support from Franken shows what a poorly put together campaign this has been from the start. Even Democrat observers are now getting off the band wagon as the wheels come off.

They never "vetted" Franken which should have been the first thing his campaign manager did. His colorful past as a comedian should have been released and researched months ago. He will continue to remain off message and bleeding. There are no signs of any change in strategies or real apologies and he continues the same campaign "war" strategy. Sound familiar?

Out in rural Minnesota there is not a lot of buzz about Franken like there was with Klobuchar. It is the same buzz I heard after we had the impersonal Mark Kennedy come through prior to the start of that Senate race.

It means you are in trouble if your last name is Franken and I predict a Senator Coleman victory by 7 points minimum.



Poll: Coleman has strong lead with or without Ventura candidacy
StarTribune: Last update: June 16, 2008 - 11:23 PM

Former Gov. Jesse Ventura would trim support from both Sen. Norm Coleman and Coleman's DFL challenger, Al Franken, if he were to enter the U.S. Senate race, a Survey USA poll has found.

The poll of 700 Minnesota adults, taken last week, showed Coleman winning a three-way match over Franken and Ventura. Forty-one percent of poll respondents said they would support Coleman, compared with 31 percent for Franken and 23 percent for Ventura. The margin of error on that question was plus or minus 4.1 percentage points.

If Ventura doesn't enter the race, 52 percent said they support Coleman and 40 percent said they were for Franken. The margin of error was plus or minus 4 percentage points.

Ventura has said he is considering running. The deadline for filing is mid-July.

The poll also tested how things might change if former Senate candidate Mike Ciresi entered the race and beat Franken in a primary election this fall, thereby becoming the DFL candidate. Under that scenario, Coleman had 41 percent, Ciresi 28 percent and Ventura 26 percent, with a margin of error of plus or minus 4.1 percentage points. Before he dropped out of the race in March, Ciresi said he would abide by the party's endorsement, which Franken won earlier this month.

On the lighter side.......

Breaking News: First Lady of Clarissa in Coleman for Senate Ad

Strange how the Mayor was a few feet from the First Lady and is edited out?

Could it be the first blunder by the Coleman Campaign, or does it show why the Senator should be elected to a 2nd Term?? Stay Tuned!!

A Small City Partnership & Lower Taxes

A few years ago there was a robbery that occurred in a city just down the road.

I witnessed the numerous police agencies that responded. In that one incident we had the Minnesota State Patrol, Todd County Sheriff Deputies, Clarissa Police, Long Prairie Police, Eagle Bend Police, and Bertha Police. (All cities in a 20 mile radius) I did not mind that there was a strong showing from our officers, in fact, it was appropriate and good to see different agencies working together.

I know most of the officers from each of the separate units and they are all excellent. However it made me think about the many layers of government that all of us pay for through our state and local taxes.

Soon after that incident the LGA cuts came, and it meant decisions needed to be made to keep property taxes down and budgets balanced. We do not have huge budgets here. We plow the streets, provide adequate water & sewer services, volunteer fire & rescue, small parks and street maintenance, and police.

After much debate amongst our city council we approved contracting with our Todd County Sheriff's Department for 20 - 30 hours of patrol time within the city. It includes 24 hour emergency response with a deputy in our area 24/7. It is a great partnership that helps the county and the city, but most importantly the taxpayers because it reduced overall expenses on both ends.

The only thing that really changed for Clarissa was our Chief of Police became a Sheriff's Deputy after an opening occurred at the county level. He and his family still live in Clarissa. In fact, he does most of the patrols to this day.

Clarissa will move from being one of the highest taxed cities in the area when I started as Mayor, to the lowest taxed city in the area within just 5 years. We have been able to run small surpluses in case of emergencies, but keeping property tax increases to the rate of inflation. All of this done with out LGA increases and scare tactics. Just another example of small city common sense.

Below is just a recent bust that occurred in our city as a result of great detective work and a great partnership with our Todd County Sheriff's Department.

SOURCE: inhnews.com

According to a Todd County Sheriff report, on May 18 the Sheriffs Office received a report of a robbery involving a dangerous weapon that occurred at a vacant residence in rural Clarissa. The victim reported that he had been talking with a female on a phone dating service and arranged to meet her. The female on the phone directed the victim to a residence that she said was hers.

When the victim arrived at the house, a male individual came from behind the house brandishing a baseball bat and threatened the victim. The male suspect took all of the cash that the victim had and fled the scene. The victim was not assaulted by the suspect. After an investigation, on June 6 the Sheriffs Office took into custody
Stephanie Ann Pischke and Joseph Allen Spaeth for their involvement in the
robbery.

A search warrant was executed at residences co-owned/rented by Pischke and Spaeth in the cities of Clarissa and Eagle Bend.

The case was heard before Judge Jay D. Carlson in Seventh District Court in Todd County on June 4.

Stephanie A. Pischke, 26, Clarissa, was charged with simple robbery, first degree aggravated robbery and second degree assault with a dangerous weapon. Bail was set at $50,000 bond/cash or $25,000 bond/cash with conditions of no contact with the alleged victim and restrictions on possession of weapons. Her next court appearance took place on June 9.

Bail was set at $50,000 bond/cash or $25,000 bond/$2,500 cash for Joseph A. Speath, 32, Clarissa, who is charged with simple robbery, first degree aggravated robbery and second degree assault with a dangerous weapon. Conditions of release include no contact with his alleged victim and restrictions on possessing weapons.
Speath was to be represented by a public defender at the June 9 hearing.

WSJ: Drill, Drill, Drill

Charles de Gaulle once wrote off the nation of Brazil in six words: "Brazil is not a serious country." How much time is left before someone says the same of the United States?

One thing Brazil and the U.S. have in common is the price of oil: It is priced in dollars, and everyone in the world now knows what the price is. Another commonality is that each country has vast oil reserves in waters off their coastlines.

Wonder Land columnist Daniel Henninger says America needs to get serious about its oil and gas resources. (June 11) Here we may draw a line in the waves between the serious and the unserious.

Brazil discovered only yesterday (November) that billions of barrels of oil sit in difficult water beneath a swath of the Santos Basin, 180 miles offshore from Rio de Janeiro and Sao Paulo. The U.S. has known for decades that at least 8.5 billion proven barrels of oil sit off its Pacific, Atlantic and Gulf coasts, with the Interior Department estimating 86 billion barrels of undiscovered oil resources.

When Brazil made this find last November, did its legislature announce that, for fear of oil spills hitting Rio's beaches or altering the climate, it would forgo exploiting these fields?

Of course it didn't. Guilherme Estrella, director of exploration and production for the Brazilian oil company Petrobras, said, "It's an extraordinary position for Brazil to be in." Indeed it is.

At this point in time, is there another country on the face of the earth that would possess the oil and gas reserves held by the United States and refuse to exploit them? Only technical incompetence, as in Mexico, would hold anyone back.

But not us. We won't drill.

California won't drill for the estimated 1.3 billion barrels of recoverable oil off its coast because of bad memories of the Santa Barbara oil spill – in 1969.

We won't drill for the estimated 5.6 billion to 16 billion barrels of oil in the moonscape known as the Arctic National Wildlife Refuge (ANWR) because of – the caribou.

In 1990, George H.W. Bush, calling himself "the environmental president," signed an order putting virtually all the U.S. outer continental shelf's oil and gas reserves in the deep freeze. Bill Clinton extended that lockup until 2013. A Clinton veto also threw away the key to ANWR's oil 13 years ago.

Our waters may hold 60 trillion untapped cubic feet of natural gas. As in Brazil, these are surely conservative estimates.

While Brazilians proudly embrace Petrobras, yelling "We're Going to Be No. 1," the U.S.'s Democratic nominee for president, Barack Obama, promises to impose an "excess profits tax" on American oil producers.

We live in a world in which Russia's Vladimir Putin and Venezuela's Hugo Chávez use their vast oil and gas reserves as instruments of state power. Here, Nancy Pelosi and Harry Reid use their control of Congress to spend a week debating a "climate-change" bill. This they did fresh off their subsidized (and bipartisan) ethanol fiasco.

One may assume that Mr. Putin and the Chinese have noticed the policy obsessions of our political class. While other nations use their oil reserves to attain world status, we give ours up. Why shouldn't they conclude that, long term, these people can be taken? Nikita Khrushchev said, "We will bury you." Forget that. We'll do it ourselves.

Putin intimidates Ukraine, Georgia, the Baltic states and Poland with oil and gas cutoffs, while Chávez uses petrodollars to bankroll Colombian terrorists. Cuba plans to exploit its Caribbean oil fields within a long tee shot of the Florida Keys with help from India, Spain, Venezuela, Canada, Norway, Malaysia, even Vietnam. But America won't drill. Democratic Sen. Bill Nelson of Florida said just last month he's afraid of an oil spill. Katrina wrecked the oil rigs in the Gulf with no significant damage from leaking oil.

Some portion of the current $4-per-gallon gasoline may be attributable to the Federal Reserve's inflationary monetary policy or even speculators. But we can wave goodbye to the $1.25/gallon gasoline that in 1990 allowed a President Bush to airily lock away the nation's oil and gas jewels. This isn't your father's world of energy. New world powers are coming online fast, and they need energy. We need to get back in the game.

The goal shouldn't be "energy independence," a ridiculous notion in an economically integrated world. It's about admitting the need to strike a balance between the energy and security realities of the here-and-now and the potentialities of the future. Some of our best and brightest want to pursue alternative energy technologies, and they should be encouraged to do so, inside market disciplines. But let's at least stop pretending the rest of the world is going to play along with our environmentalist moralisms.

The Democrats' climate-change bill collapsed last week under the weight of brutal cost realities. It was a wake-up call. This is the year Americans joined the real world of energy costs. Now someone needs to explain to them why we – and we alone – are sitting on an ocean of energy but won't drill for it.

You'd think the "national security" nominee, John McCain, would get this. He's clueless – a don't-drill zombie. We may mark this down as the year the U.S. tired of being a serious country.

Write to henninger@wsj.com

By DANIEL HENNINGER
Drill! Drill! Drill!
June 12, 2008; Page A15

On the lighter side.......

KSTP: Humorous 2008 MN Capital Re-CAP

What happened to being Over a Barrel?!

Republican Glen Menze: Minnesota's 7th CD

Glen Menze is our candidate for Minnesota 7th Congressional District.

VISIT: GLENMENZE.COM

Please visit the DONATE portion of his website and make a contribution. Congressman Peterson has been an embarrassment leading the recent farm bill debacle. I think we need fresh leadership that addresses the needs of the 7th District without bowing to pressure from a liberal leadership in Washington D.C.

Glen was born and raised in Ottertail county MN. Being the middle child of ten children taught him many life lessons early. Glen’s father was a road construction engineer working through out the state on projects like the scenic bypass north of Duluth Mn and the interstate 94 and 90 system.

He also was a life long innovative farmer always trying new crops and using irrigation early in his area. After his father had a disabling heart attack Glens mother went to work as a teacher of cosmetology for 30 years. At 18 glens father passed away leaving five children and a farm to his mother.

Glen went to elementary and high school in New York Mills Mn and college in Moorhead Mn for sociology and business administration at Moorhead State Uiversity. Glen moved to Lakeville Mn where he worked for Pitney Bowes Corporation as a postal equipment inspector. The 80s farm crises brought Glen back to New York Mills were he work with the families trucking business later have this own transportation company.

Glen also did accounting and business consulting. He worked as a corporate trainer and sales manager for telnet Inc a sales and marketing company with over 500 employees. Glen moved to a farm in Starbuck MN with his five children were he has continued as an accountant, business consultant and commercial author for his own firm GR Menze services.

Glen ran for congress in 2000 in the seventh district of MN. He won the primary over the 1998 candidate for congress and then lost the general election. Raising 5 children alone gives Glen a unique perspective on the cost and struggles of raising a family in today’s economy.

Glen is proud of his children with three college graduates, one attending college, one an honor student in high school and most importantly proud and contributing citizens of our great country.

Minneapolis Ordinance: Means more taxes in the future!!

As a Small City Mayor I can tell you anytime we look to pass an ordinance the biggest discussion that occurs revolves around: "How do we enforce this", "Pay for this.", and "Is it realistic for the staff we currently have?" Ordinances certainly have a place, but it seems we are getting beyond realism and the ordinance is now a "feel good" action by elected officials.

I believe Mayor Rybak was complaining just recently about the LGA cuts and stated it would come right out of law enforcement budgets thus endangering the public.

Yet, this ordinance just put a tremendous burden on his police force if they were going to have any chance at enforcing this. It shows "feel good" politics, political positioning for another office, and that the LGA cuts should have remained in place. Mayor Rybak will be clamoring for more taxpayer funding to chase exhaust........... further exhausting taxpayers. Stay Tuned!!


Mpls. limits vehicle idling to 3 minutes

The Minneapolis City Council and Mayor R.T. Rybak approved changes Friday, to the city’s vehicle idling ordinance that aims to reduce air pollution. The ordinance limits most vehicle idling to three minutes, except in traffic.

"Most of the air pollution in Minneapolis comes from vehicles and cutting down in idling is one easy thing we can all do for our environment, our health, and the health of our neighbors," said Mayor R.T. Rybak.

Vehicle motors release particulate matter, dirt, nitrous oxides, hydrocarbons, carbon monoxide and carbon dioxide into the air. These chemicals are linked to increased rates of cancer, heart and lung disease and asthma and are the major source of human-caused climate change. Children are especially vulnerable to vehicle air pollution because their lungs are still developing, and they inhale more pounds of pollution per pound of body weight than adults do.

For the driver, reducing idling saves money in fuel. On average, a car will burn more than half a gallon of fuel for every hour spent idling. In general, 10 seconds of idling uses more fuel than restarting the car, according to the U.S. Department of Energy.

"In these times of high gas prices, it’s a way for people to save fuel. If you’re sitting in an idling car, you’re getting zero miles a gallon. That’s not good for your pocketbook or the environment," Rybak added.

Engines generally pollute more when cold and driving a vehicle cuts warm-up time in half. Idling a cold engine actually pollutes more than driving it does and idling is harder on the engine.

An existing ordinance already applies to large diesel trucks and buses in Minneapolis, which in general limits idling of those vehicles to five minutes.

Energy as cheap as we want it!!!

It is amazing to show people a few charts and get their opinion. I showed these two charts to a few people and they were stunned. The "common" knowledge was contrary to what they have heard in the press and media.

Supply of facilities and our ability to turn oil into gas has fallen. The demand for gas has definitely increased so even if we had all the oil we wanted we could not turn it into gas because of the environmental restrictions that continue to be in place.

Saudi Arabia's Ghawar reserve has nothing on North America oil reserves and this is EXCLUDING the hot topic of ANWR in Alaska. The charts make politicians debate on Alaska look silly.

We have enough energy and technology here in North America to supply our homes and vehicles with energy for as low a cost as we have the political will to attain. It seems we have a high pain tolerance for pain at the pump because we keep electing the people who refuse to change course and implement true supply side policies that will bring our energy costs down in an environmentally friendly manner.

However we continue to elect people who restrict the supply side of our "supply & demand equation". Supply and Demand works whether you want it to or not!!

That is why we are looking at $150 to $200 per barrel if current trends hold.

Chart Sources: CARPE DIEM

Breaking News: MN Rep. Dean Simpson (R-Perham) Retires

ST. PAUL – Rep. Dean Simpson, R-Perham, announced today that he has decided to step down from the Minnesota House of Representatives when his third term expires later this year.

"After six years in state government service, it's time to move on," Simpson said. "I never planned to make this a career. This is a citizens' Legislature and I strongly believe that when you become a Representative, you should be prepared to serve for a while and then step aside and let someone else have the opportunity to serve."

Simpson said the desire to spend more time with his family was a major factor in his decision to relinquish his legislative post. He has a wife, four children and two grandchildren. Simpson also said it is time for him to devote more of his time and energy to his grocery stores. He has been in the grocery business since 1972 and he owns Dean's Country market stores in Perham and New York Mills.

"Rural area businesses like mine all have unique challenges that require a lot of attention," Simpson said. "Although I have managers in both of my stores who do a wonderful job, it isn't always fair to ask my staff to be responsible for all the things that I feel I should be taking care of."

Simpson has served several years on the Tax Committee, formerly as a Vice Chair and currently as the GOP Lead, where he has often championed legislation favorable to Minnesota's business community.

"The commitment to serve in the Legislature is huge and during my six years I've acquired a great respect and admiration for all the people who choose to serve there," he said.

Simpson said he is considering renewing his focus on public service at the local level after he leaves the Legislature. He has served his community in various local capacities for nearly 28 years, including more than 25 years serving as the mayor of New York Mills. He also has remained active in several local civic organizations.

Simpson's legislative service will end when his term expires on Dec. 31, but he plans to serve his district in earnest until then.
"I encourage my constituents to continue to contact me regarding any legislative issue that concerns them or their family," he said. "I am committed to serve my constituents until my term ends on December 31st."

As he begins his transition from state Rep. back to his hometown, Simpson is extremely thankful for all of the support he has received from his friends and neighbors during the last six years.

"It has been a true honor to have had the privilege to serve the people of District 10B in the Minnesota House of Representatives," Simpson said. "I believe that I am the luckiest Representative here at the state Capitol."

Painfully Inadequate: Election 2008

By Thomas Sowell

Now that the two parties have finally selected their presidential candidates, it is time for a sober — if not grim — assessment of where we are.

Not since 1972 have we been presented with two such painfully inadequate candidates. When Election Day came that year, I could not bring myself to vote for either George McGovern or Richard Nixon. I stayed home.

This year, none of us has that luxury. While all sorts of gushing is going on in the media, and posturing is going on in politics, the biggest national sponsor of terrorism in the world — Iran — is moving step by step toward building a nuclear bomb.

The point when they get that bomb will be the point of no return. Iran’s nuclear bomb will be the terrorists’ nuclear bomb — and they can make 9/11 look like child’s play.

All the options that are on the table right now will be swept off the table forever. Our choices will be to give in to whatever the terrorists demand — however outrageous those demands might be — or to risk seeing American cities start disappearing in radioactive mushroom clouds.

All the things we are preoccupied with today, from the price of gasoline to health care to global warming, will suddenly no longer matter.

Just as the Nazis did not find it enough to simply kill people in their concentration camps, but had to humiliate and dehumanize them first, so we can expect terrorists with nuclear weapons to both humiliate us and force us to humiliate ourselves, before they finally start killing us.

They have already telegraphed their punches with their sadistic beheadings of innocent civilians, and with the popularity of videotapes of those beheadings in the Middle East.

They have already telegraphed their intention to dictate to us with such things as Osama bin Laden’s threats to target those places in America that did not vote the way he prescribed in the 2004 elections. He could not back up those threats then but he may be able to in a very few years.

The terrorists have given us as clear a picture of what they are all about as Adolf Hitler and the Nazis did during the 1930s — and our “leaders” and intelligentsia have ignored the warning signs as resolutely as the “leaders” and intelligentsia of the 1930s downplayed the dangers of Hitler.

We are much like people drifting down the Niagara River, oblivious to the waterfalls up ahead. Once we go over those falls, we cannot come back up again.

What does this have to do with today’s presidential candidates? It has everything to do with them.

One of these candidates will determine what we are going to do to stop Iran from going nuclear— or whether we are going to do anything other than talk, as Western leaders talked in the 1930s.

There is one big difference between now and the 1930s. Although the West’s lack of military preparedness and its political irresolution led to three solid years of devastating losses to Nazi Germany and imperial Japan, nevertheless when all the West’s industrial and military forces were finally mobilized, the democracies were able to turn the tide and win decisively.

But you cannot lose a nuclear war for three years and then come back. You cannot even sustain the will to resist for three years when you are first broken down morally by threats and then devastated by nuclear bombs.

Our one window of opportunity to prevent this will occur within the term of whoever becomes president of the United States next January.

At a time like this, we do not have the luxury of waiting for our ideal candidate or of indulging our emotions by voting for some third party candidate to show our displeasure — at the cost of putting someone in the White House who is not up to the job.

Senator John McCain has been criticized in this column many times. But, when all is said and done, Senator McCain has not spent decades aiding and abetting people who hate America.

On the contrary, he has paid a huge price for resisting our enemies, even when they held him prisoner and tortured him. The choice between him and Barack Obama should be a no-brainer.

Obama kicks off campaign for 2nd term as President!!

The inevitability of any candidate should be a major concern for any campaign, especially, the Presidency of the United States. This is the 2nd time in a few weeks I have heard Obama talk about his eight years as President. It tends to rub voters the wrong way when you start claiming to read their minds.

He should not be taking McCain so lightly in my opinion. The electoral map is wide open in many states a "traditional" Republican would have no shot at. The northeastern states and even the "left" coast are fair game for McCain right now, and this is not the same as organizing caucus voters in small states. He still has the Clinton's to deal with too!!

Play of the Day: Obama pitches Olympic bid

By NEDRA PICKLER, Associated Press Writer
2 hours, 1 minute ago

CHICAGO - Barack Obama says if Chicago is chosen to host the 2016 Olympics, he's hoping there will be a hometown president to kick off the games.

"In 2016, I'll be wrapping up my second term as president," Obama said. "So I can't think of a better way than to be marching into Washington Park ... as president of the United States and announcing to the world, 'Let the games begin!'"

The Illinois senator, spending a weekend at home after clinching the Democratic presidential nomination, made a surprise appearance at a downtown rally Friday to promote the city's bid. He drew loud cheers from the crowd and gawkers pressed up to windows from the high rise office buildings surrounding the rally.

Obama joked that his home is only a couple blocks from Washington Park, the proposed site of the games, so he's thinking about how much he could get for renting it out. He's hoping to be living in the White House any way.

Chicago is competing to host the games along with Tokyo; Madrid, Spain; and Rio de Janeiro, Brazil. Obama was joined at the rally by other elected officials and dignitaries from the city and athletes including track and field gold medalist Jackie Joyner-Kersee.

"It is a great time to be in Chicago," Obama said. "White Sox are winning. Cubs are winning. And Chicago's going to win the 2016 Olympics and Paralympics. And your senator, he's winning, too."

A WSJ Editorial

The Obama We Don't Know
June 4, 2008; Page A20

With Barack Obama clinching the Democratic Party nomination, it is worth noting what an extraordinary moment this is. Democrats are nominating a freshman Senator barely three years out of the Illinois legislature whom most of America still hardly knows. The polls say he is the odds-on favorite to become our next President.

Think about this in historical context. Jimmy Carter and Bill Clinton were relatively unknown, but both had at least been prominent Governors. John Kerry, Walter Mondale, Al Gore and even George McGovern were all long-time Washington figures. Republican nominees tend to be even more familiar, for better or worse. In Mr. Obama, Democrats are taking a leap of faith that is daring even by their risky standards.


No doubt this is part of his enormous appeal. Amid public anger over politics as usual, the Illinois Senator is unhaunted by Beltway experience. His personal story – of mixed race, and up from nowhere through Harvard – resonates in an America where the two most popular cultural icons are Tiger Woods and Oprah. His political gifts are formidable, especially his ability to connect with audiences from the platform.

Above all, Mr. Obama has fashioned a message that fits the political moment and the public's desire for "change." At his best, he offers Americans tired of war and political rancor the promise of fresh national unity and purpose. Young people in particular are taken by it. But more than a few Republicans are also drawn to this "postpartisan" vision.

Mr. Obama has also shown great skill in running his campaign. No one – including us – gave him much chance of defeating the Clinton machine. No doubt he benefited from the desire of even many Democrats to impeach the polarizing Clinton era. But he also beat Hillary and Bill at their own game. He raised more money, and he outworked them in the small-state caucuses that provided him with his narrow delegate margin. Even now, he is far better organized in swing states than is John McCain's campaign. All of this speaks well of his preparation for November, and perhaps for his potential to govern.

Yet govern how and to what end? This is the Obama Americans don't know. For all of his inspiring rhetoric about bipartisanship, his voting record is among the most partisan in the Senate. His policy agenda is conventionally liberal across the board – more so than Hillary Clinton's, and more so than that of any Democratic nominee since 1968.

We can't find a single issue on which Mr. Obama has broken with his party's left-wing interest groups. Early on he gave a bow to merit pay for teachers, but that quickly sank beneath the waves of new money he wants to spend on the same broken public schools. He takes the Teamsters line against free trade, to the point of unilaterally rewriting Nafta. He wants to raise taxes even above the levels of the Clinton era, including a huge increase in the payroll tax. Perhaps now Mr. Obama will tack to the center, but somehow he will have to explain why the "change" he's proposing isn't merely more of the same, circa 1965.

There is also the matter of judgment, and the roots of his political character. We were among those inclined at first to downplay his association with the Trinity United Church. But Mr. Obama's handling of the episode has raised doubts about his candor and convictions. He has by stages moved from denying that his 20-year attendance was an issue at all; to denying he'd heard Rev. Jeremiah Wright's incendiary remarks; to criticizing certain of those remarks while praising Rev. Wright himself; to repudiating the words and the reverend; and finally this weekend to leaving the church.

Most disingenuously, he said on Saturday that the entire issue caught him by surprise. Yet he was aware enough of the political risk that he kept Rev. Wright off the stage during his announcement speech more than a year ago.

A 2004 Chicago Sun-Times interview with Mr. Obama mentioned three men as his religious guides. One was Rev. Wright. Another was Father Michael Pfleger, the Louis Farrakhan ally whose recent remarks caused Mr. Obama to resign from Trinity, but for whose Chicago church Mr. Obama channeled at least $225,000 in grants as a state senator. Until recently, the priest was connected to the campaign, which flew him to Iowa to host an interfaith forum. Father Pfleger's testimony for the candidate has since been scrubbed from Mr. Obama's campaign Web site. A third mentor was Illinois state Senator James Meeks, another Chicago pastor who has generated controversy for mixing pulpit and politics.

The point is not that Mr. Obama now shares the radical views of these men. The concern is that by the Senator's own admission they have been major moral influences, and their views are starkly at odds with the candidate's vision as a transracial peacemaker. Their patronage was also useful as Mr. Obama was making his way in Chicago politics. But only now, in the glare of a national campaign, is he distancing himself from them. The question is what in fact Mr. Obama does believe.

The young Senator has been a supernova exploding into our politics, more phenomenon than conventional candidate. His achievement in winning the Democratic nomination has been impressive. Now comes a harder audience. The presidency has to be earned, and Americans have a right to know much more about the gifted man who is the least tested and experienced major party nominee in modern times.

Finally: FED sets sights on weak dollar!!

June 3 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke signaled he's done cutting interest rates for now and raised his biggest concerns yet about the inflationary effects of a dollar down 16 percent in the past year against the euro.

The Fed is working with the Treasury to ``carefully monitor developments in foreign exchange markets'' and is aware of the effect of the dollar's decline on inflation and price expectations, Bernanke said today in his first speech on the economic outlook in two months. In addition, interest rates are ``well positioned'' to promote growth and stable prices, he said.

The dollar climbed more than 1 cent against the euro and the price of gold dropped almost $14 after Bernanke's remarks. Policy makers lowered the benchmark rate 3.25 percentage points since September to 2 percent to alleviate the damage to the economy from the credit crisis and housing recession.

``I can't recall such a strong defense of the dollar from a Fed chairman,'' said Sophia Drossos, a currency strategist at Morgan Stanley in New York, who used to work at the New York Fed, where she helped manage the central bank's foreign-exchange holdings. ``The Fed is putting its marker down in letting the market know that a weaker dollar would be detrimental.''

Bernanke, 54, spoke via satellite to the International Monetary Conference in Barcelona, Spain. He is talking on a panel with European Central Bank President Jean-Claude Trichet, Bank of Japan Governor Masaaki Shirakawa and Bank of Spain Governor Miguel Fernandez Ordonez.

`Moderate Growth'

``For now, policy seems well positioned to promote moderate growth and price stability over time,'' Bernanke said. ``We will, of course, be watching the evolving situation closely and are prepared to act as needed to meet our dual mandate.''

The remarks come as the central bank's optimism that inflation is abating and growth will start to pick up has been dashed by the unexpected surge in oil prices, which is eroding the potential benefit to the economy from more than $100 billion in federal tax rebates. The resulting increase in inflation expectations is also getting the attention of Fed officials.

The dollar strengthened to $1.5454 against the euro from $1.5607 today after weakening by 16 percent in the past year. Crude oil fell to $126.29 a barrel in New York at 9:59 a.m. from $127.98 in the minutes before Bernanke's comments were released at 9 a.m. Yields on Treasury securities rose, and U.S. stock indexes gained.

``We are attentive to the implications of changes in the value of the dollar for inflation and inflation expectations,'' Bernanke said. The Fed's commitment to price stability and maximum employment ``will be key factors ensuring that the dollar remains a strong and stable currency.''

Currency Policy

Bernanke and other Fed officials, when asked for their opinion on the dollar, tend to defer to the U.S. Treasury Department, which is responsible for the country's currency policy. The Fed chief meets weekly with Treasury Secretary Henry Paulson, who yesterday repeated his backing for a ``strong dollar.''

``I believe the long-term economic fundamentals will be reflected in our currency,'' Paulson said in Abu Dhabi.

Robert Eisenbeis, former head of research at the Atlanta Fed, said he reads the comments as saying that ``more rate cuts would hurt the dollar and that would have negative feedback effects to our inflation situation.''

``I don't read it as saying that intervention is on the horizon,'' said Eisenbeis, who is now chief monetary economist at Cumberland Advisors Inc.

Pare Rates

Minutes of the Federal Open Market Committee's April 29-30 meeting showed that Fed policy makers, out of concern for inflation, wouldn't pare rates further even with an economic contraction in the first half.

The decision to lower the main rate by a quarter point was a ``close call'' for most FOMC members, the minutes said. The reduction capped off 2.25 percentage points of reductions this year, including cuts of 0.75 point in January and in March. Traders expect the Fed to leave the overnight interbank lending rate at 2 percent through October.

``We have eased monetary policy substantially and proactively,'' Bernanke said.

In his last comprehensive speech on the economic outlook, Bernanke said, ``monetary and fiscal policies are in train that should support a return to growth in the second half of this year and next year.'' He made the remarks on April 2 during congressional testimony to the Joint Economic Committee.

`Remain Strained'

Today, Bernanke said financial-market conditions ``remain strained,'' and consumers face ``significant headwinds'' from declining home prices, a weaker labor market, stricter lending standards and higher energy costs.

A Commerce Department report last week showed that the U.S. economy grew more than previously estimated in the first quarter as Americans shunned imports and exports climbed to a record. The 0.9 percent gain at an annual pace in gross domestic product compares with an advance estimate of 0.6 percent.

The second quarter is ``likely to be relatively weak,'' Bernanke said, leaving out his mention in the April speech of a possible contraction. The second half may have ``somewhat better economic conditions,'' and growth may pick up further in 2009, he said.

House prices may be an especially strong force in the economy because of their influence on consumer spending and financial markets. Investors already anticipate some further declines in prices. Foreclosure filings increased 65 percent in April from a year earlier, RealtyTrac Inc., an Irvine, California-based seller of default data, reported last month.

`Growth Risks'

``Until the housing market, and particularly house prices, shows clearer signs of stabilization, growth risks will remain to the downside,'' Bernanke said. ``Recent increases in oil prices pose additional downside risks to growth.''

Soaring oil costs, which officials deem to be a result of supply and demand rather than speculation or reduced interest rates, may impede a possible rebound in growth in the second half.

Crude oil has climbed 93 percent in the past year, reaching a record $135.09 a barrel on May 22. Gasoline prices have also hit a record, impairing spending by consumers who are already buffeted by a slump in home values.

``The possibility that commodity prices will continue to rise is an important risk to the inflation forecast,'' Bernanke said. Higher public inflation expectations are also a ``significant upside risk'' to prices and may ``ultimately become self-confirming,'' he said.

In April, Fed policy makers revised up their projections for total consumer price gains this year by a full percentage point to a range of 3.1 percent to 3.4 percent. Food prices rose 5.1 percent in the year ended April, the most since December 1990, the Labor Department said.

To contact the reporter on this story: Scott Lanman in Washington at slanman@bloomberg.net

Last Updated: June 3, 2008 10:30 EDT