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Misguided foreign policy

The article “Olmert, Abbas confer in Jericho” (Foreign, Tuesday) covering the meeting between Israeli Prime Minister Ehud Olmert and Palestinian Authority President Mahmoud Abbas in Jericho — a town controlled by the Palestinian Authority, but of tremendous historical and religious significance to Jews — describes the surrender of Mr. Olmert to the demands not only of Mr. Abbas but a misdirected State Department foreign policy. The discussions included the surrender of the West Bank to the Palestinian Authority with the removal of 250,000 Israelis from that area, the subdividing of Jerusalem with the Arab section including a Jewish majority and the right of return of the descendants of Arabs displaced during the Arab wars to destroy Israel.

Only fleeting mention is made of the obligations of the Palestinian Authority under the proposed settlement, with the main themes being opening checkpoints to allow Arab terrorists to enter Israel, the transfer of funds to Mr. Abbas and a momentary discussion of security. The State Department continues its flawed policy in this region.

NELSON MARANS

Silver Spring

The Fed’s priorities

Thank you for the informative editorial (“No Fed bailout,” Tuesday) regarding the current credit crisis and its subsequent impact on financial markets. The smart editorial balances all the contradictory attributes from weak growth to an accelerated consumer price index. My concern is that while the economic analysis is sound the editorial failed to acknowledge the structural changes our economy has produced as a result of the U.S. Federal Reserve establishing a 2002-2003 sustained low-interest-rate policy.

The editorial fails to recognize how sustained low interest rates in 2002 2003 became the catalyst for the explosive growth of hedge funds. PerTrac Analytical Platform survey in March 2007 identified well over 4,000 hedge funds with single fund managers accounting for over $1.41 trillion under management with 250 funds surpassing $1 billion mark alone.

From the stock-market crash in 1987 to the bailout of Long Term Capital Management in 1998, former Fed Chairman Alan Greenspan often assured global markets that the Fed would provide enough money to keep financial markets functioning. As a result, interest rates edged lower, markets recovered and corrections became but a pause in a bull market.

In 1998, during the Long Term Capital debacle, there were approximately 400 500 hedge funds with over 40 U.S. primary broker dealers prepared to buy back securities in the event of a selloff. It only took one heavily leveraged hedge fund liquidating $130 billion of securities to seize Wall Street’s primary broker dealer community. Today, as a result of several large mergers, there are only 21 U.S. primary broker dealers servicing thousands of hedge funds while the Fed has raised the Fed Funds rate 17 consecutive times.

Thus Steven Rattner’s concerns are not misplaced. The coming market dislocation will not be relegated to the housing market alone. The Federal Reserve’s singular focus on inflation at the expense ofrecognizing new structural imbalances could quite possibly tip the technical balance that supports the sensitive relationship between hedge funds and the global financial service, creating a severe market dislocation.

I also challenge The Times’ assertion that the Fed can only maintain its credibility by maintaining current interest-rate levels. By deciding to leave current interest rates unchanged on Tuesday, the Federal Reserve set two new precedents. First, it signalled that it bails out exclusive hedge funds when they err, but not the overextended taxpaying homeowner. Second, the Federal Reserve failed to understand how its low-interest-rate policies from 2002 2003 resulted in the explosive growth of hedge funds and the unintended structural imbalances they fostered in the global financial markets.

How do The Washington Times and the Federal Reserve define “moral hazard”?

MICHAEL P. MULHALL

Rockville Centre, N.Y.

Testing the nominees’ bona fides

Once again David Limbaugh hits the nail on the head: “A vibrant, contagious, successful GOP is not reactive” (“Social liberals long shots for the GOP,” Commentary, Thursday). He observes that Ronald Reagan “did not build his coalition by diluting his principles, but by articulating them without compromise or filter.” Conservative Republicans should expect no less from the 2008 Republican presidential nominee.

Mr. Limbaugh believes “social liberals like Rudolph Giuliani are long shots for the Republican nomination,” and their “promises to appoint originalist judges won’t likely mollify the conservative base.”

Traditional American values have been aggressively attacked for the last fifty years. Many believe the major thrust began in the 1950s with the advent of the Warren Court. Since then, liberal activist justices have dominated a Supreme Court that has contorted beyond recognition the meaning of simple constitutional language to support judicial social engineering consistent with the values du jour under attack by the left.

The irony is the presence on the court of Republican appointees who were closet liberals. President Gerald Ford appointed Justice John Paul Stevens, the court’s most liberal active member. President George H.W. Bush appointed Justice David Souter, the most stealthy liberal I can recall. President Reagan appointed Justice Anthony Kennedy, the most unpredictable of the lot.

And therein is the conundrum: how to assure the bona fides of conservative, originalist nominees to the Supreme Court? As the makeup of the present court attests, the answer is that you cannot. Yet it does not take a rocket scientist to realize the likelihood of success is substantially reduced if a Republican nominee who is, or has recently been, a social liberal should win in 2008.

All of which seems to validate Mr. Limbaugh’s belief that Republicans must select from the “capable, credible and electable candidates… who are ‘right’ across [a]… spectrum” embodying a complete range of leadership qualities, which include dealing with terrorists and those who attack traditional values. One thing is certain. When considering who has a chance of winning in 2008, Republicans should not limit Mr. Limbaugh’s “electable candidates” to those who have declared.

ROBERT HARGEST

Alexandria

Abortion and ‘choice’

The editorial “Abortion in Maryland” (Tuesday) cited the horrible killing of a seven-months’ pregnant 24-year old by the baby’s father and how that will be the first test of the Maryland fetal homicide law where the killer can be charged in the murders of both the mother and the baby.

Pregnant women are sometimes killed because they refuse to kill their babies when the fathers don’t want the responsibility. Unfortunately, such killings are commonplace in the United States because of legalized abortion. Murder was the leading cause of death among pregnant women in Maryland between 1993 and 1998, according to a March 2001 study published in the Journal of the American Medical Association.

According to David C. Reardon (“Aborted Women, Silent No More”), up to 60 percent of women having abortions are coerced: “Coercion often comes from parents (including the boyfriend’s parents), husbands, boyfriends, doctors, counselors and others. They may beg, threaten, or blackmail a woman until she agrees to the abortion. In some cases, an abusive partner or a molester will force her to have an abortion.”

So much for women’s freedom of choice to kill their babies. Arkansas now requires signs be displayed in abortuaries telling women it is illegal for someone to force them to have an abortion.

Women who die protecting their babies are heroes, giving up their lives for the love of another. I pray that God will bring good from these horrible killings and the mothers will be recognized as the heroes they are.

DIANE HESS

Damascus, Md.

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