MARCH RETAIL SALES

March Retail Sales Increase 0.7%
First Trust Advisors

March retail sales increased 0.7% overall and 0.8% excluding autos, both close to consensus expectations. February retail sales were revised to show a 0.5% gain, after originally being reported as up just 0.1%. Retail sales are up 3.8% from a year ago, 3.9% excluding autos.

The largest gains in retail sales were in gasoline, building materials, clothing and accessory stores, general merchandise stores (which includes department stores), and restaurants and bars. The rebound in building materials was the largest gain since January 2006.

Activity was weak for furniture and non-store retailers (internet and mail-order purchases), although the weakness in non-store retail sales followed the largest one-month gain since 1994.

Excluding autos, building materials, and gas, sales were up 0.3% in March and February's originally reported drop of 0.2% was revised to a gain of 0.3%.

Implications: Today's retail sales data is a bullish sign for the US economy. Retail sales excluding autos and building materials are a direct feed into GDP data (auto sales data come from another source and building materials are counted as investment) - and these sales jumped 7% at an annual rate in Q1, after growing at rates of only 3.7% and 0.1% in the last two quarters of 2006. Given today's data, we project real (inflation-adjusted) consumption - goods and services combined - rose an annualized 3.7% rate in Q1. This will help offset continued weakness in housing.

CYBERBUSINESS BOOMING

ATLANTA, April 12 /PRNewswire-FirstCall/ -- For the first time, consumers in Internet-connected households are paying more of their bills online than by paper check, according to a new study conducted by Harris Interactive and the Marketing Workshop.

The 2007 Consumer Bill Payment Survey showed that, for the first time, online bill payments exceeded bill payments made by paper check among online households. Online payments made up 39 percent of the total volume of bill payments among online households, an increase of 4 percent over the previous December 2005 survey. In contrast, the volume of checks sent through the mail fell 4 percent to 34 percent of the overall volume.

The Consumer Bill Payment Survey - the seventh conducted since 2002 and sponsored by CheckFree Corporation (Nasdaq: CKFR) - highlights consumers' growing use of online banking and electronic billing and payment services to help them manage their household finances.

The January 2007 survey polled 2,018 online respondents who were at least partly responsible for household bill payments. Respondents are representative of the estimated 82.5 million U.S. households using the Internet, and the margin of error is plus or minus 2 percent.

    The survey findings include:

    -- A growing number of consumers are turning to their computers, rather than their checkbooks, to pay household bills.

    -- Paying bills online has become a mainstream activity among U.S. households.

    -- Western states, followed by the South, have embraced online bill payment faster than other regions, which may be driven in part by higher broadband penetration rates and online banking use in these regions.

    -- Paperless bills appear to be catching on as consumers recognize their convenience, security and environmental benefits.

"The fact that online bill payment has overtaken paper checks shows that people feel secure managing their finances online," said Gwenn Bezard, research director with Aite Group. "Once considered a nice-to-have add-on, online bill payment is now the foundation of the Web banking user experience. I expect further growth in this area due to Generation Y's greater reliance on technology in their everyday lives as they move into early adulthood, and the increasing adoption of electronic bills, especially as the environment becomes a mainstream issue."

West Leads Nation in Online Bill Payment, Followed by the South

Nationwide, consumers paying at least one bill online per month rose to 74 percent, compared to 69 percent of respondents in the previous December 2005 survey. Consumer adoption of online bill payment has more than doubled since January 2002, when only 37 percent of online households reported paying at least one bill online.

The West ranks first in overall adoption of electronic billing and payment, with 78 percent of online households paying their bills online, according to the survey. The South ranks second, with 76 percent. The Northeast ranked third in online bill payment, with 72 percent, and the Midwest trailed, with 71 percent.

Factors helping drive regional differences included higher broadband penetration rates, greater online banking use and technology-savvy populations in the West and South.

In the West, 80 percent of surveyed households receive their Internet service through a broadband connection and 83 percent use online banking to check their account activity or transfer funds. By contrast, the Midwest, which trailed in EBP adoption, 70 percent of households have broadband Internet connections and 76 percent use online banking, according to the survey.

Consumers in Western states also were more likely to pay bills at online banking sites (42 percent), than those in the South (38 percent), Northeast (37 percent) and Midwest (33 percent).

Among the survey's six consumer bill-payer personality segments, there were more E-Savvy Planners living in the West (11 percent) and South (15 percent) than in other regions. This consumer segment enjoys trying the latest technology products and using financial management tools to organize their finances. E-Savvy Planners pay bills online because it's safer than mailing a check, they regularly check their credit reports and are more likely to use online banking (94 percent) and online bill payment (91 percent) services than other consumer segments. For more information on the six types of consumer bill payers, visit http://www.ebillplace.com.

Rising Postal Rates Encouraging Consumers to Switch to Online Bill Payment

American consumers increasingly rely on online bill payment services to save time. Eighty-five percent of survey respondents said, "paying bills online is faster."

But the rising cost of mailing paper checks to pay bills also may be helping fuel the trend. Some 85 percent of consumers surveyed said, "paying bills online saves the paper, stamps and the hassle of paying bills by check."

A first-class stamp cost 37 cents in 2005, compared to the current price of 39 cents. An approved postal rate increase will bring the cost of a first- class stamp to 41 cents on May 14, 2007. In contrast, the vast majority of consumers - 93 percent - reported that they get the online bill payment service for free from their banks or credit unions.

"Electronic bill payment is not only a great way for consumers to manage their cash flow and ensure on-time payments, but it is also an often overlooked way to maintain a tidier, more organized home or home office," said Standolyn Robertson, president-elect of the National Association of Professional Organizers (NAPO), and founder of Things in Place, which provides professional organizing services to residents of the Greater Boston area. "By opting to receive electronic bills, rather than paper bills, consumers can reduce or eliminate those stacks of bills near the front door, on the kitchen table or at their desks, and there is no bill to misplace or drop behind the couch. By simply signing up at their local banks or portals, usually for free, consumers can give themselves the gift of time and the peace of mind that comes from organization."

Convenient, Environmentally Friendly E-Bills Poised for Adoption Growth

Paperless billing seems to be catching on as consumers become more aware of the environmental benefits of e-billing. Thirty-nine percent of consumers receiving electronic bills at bank websites said they no longer receive mailed copies of the bills.

    Other key findings related to e-bills included:

    -- Consumers paying bills at bank websites were more willing to stop receiving paper bills than those paying directly at biller sites.

       Eighty-four percent of e-bill users said they were willing to consider shutting off receipt of paper bills through the mail if offered the choice, compared to 69 percent of those paying at biller sites.

    -- Fifty-two percent of e-bill users cited "receiving bills in electronic form saves paper and energy, helping our nation's environment" as a major reason they chose to receive e-bills.

    -- Overall, the most appealing features of e-bills were convenience, due-date reminders and "assurance that bills are never late."

    -- Among the benefits for banks and billing organizations, consumers using e-bills also reported significantly greater satisfaction with their banking and biller relationships and were less likely to switch providers. Some 58 percent of e-bill users claimed they were less likely to switch banks as a result of receiving and paying bills through online banking sites, while 39 percent of e-bill users said they were less likely to switch to a competitor's service.

    -- Seventy-two percent of e-bill users said they were satisfied or very satisfied with their online banking experiences, compared to 52 percent for those who didn't use e-bills. More satisfaction also translated into word-of-mouth endorsements. E-bill users were 58 percent more likely to recommend their banks' online bill payment services to family members and friends.

    Online Bill Payment Adoption Climbs

The average survey respondent paid 11.5 bills in a typical month, with approximately 39 percent of these, or 4.5 bills, paid online, and 34 percent, or 3.9 bills, paid by paper check.

Consumers who used online banking sites for paying bills reported paying more bills per month and paying far more of them online. These consumers paid 8.2 (63 percent) of their 13 monthly bills online, and just 1.6 (12 percent) by paper check.

The survey also showed growth in consumers' use of online banking sites to pay bills. In the latest survey, 38 percent of survey respondents said they paid at least one bill per month at an online banking site, compared to 33 percent in the December 2005 survey.

An increasing number of online banking users are activating online bill payment services, further fueling EBP adoption. Forty-eight percent of online banking customers pay bills online, compared to 37 percent at the end of 2003.

Those who pay bills at online banking websites reported using more of their banks' financial services overall than non-EBP users, including automatic teller machines, demand deposit accounts and loans. Online bill payment customers also tap into more online banking features such as electronic statements, online account transfers and check imaging services.

Biller Sites Growing Steadily

Meanwhile, consumers' use of biller websites to pay bills continues to grow, though at a slower rate than in the past. Fifty-five percent of 2007 survey respondents made a payment directly at a biller's website, up from 53 percent in the December 2005 survey.

Consumers with household incomes of less than $50,000 were more likely to pay their bills at biller websites, while higher-income groups - particularly those earning more than $100,000 - were more likely to pay their bills at online banking sites.

Consumers cited "faster," "saves paper, stamps and hassle" and "provides more control over payment timing" as the top three benefits of paying bills at online banking sites, according to the survey. Non-users cited "don't know enough" as the leading reason why they don't pay bills at their banks'

websites. Concerns about online security were cited by only 13 percent of respondents, compared to 20 percent in the December 2005 survey.

CheckFree Electronic Commerce Division provides electronic billing and payment services that enable more than 2,000 financial services organizations to achieve their customer acquisition, retention and optimization goals through secure online channels. In fiscal 2006, CheckFree processed 1.13 billion transactions and distributed 184.6 million electronic bills. CheckFree Electronic Commerce solutions include online integrated personal finance management, online account opening, funding and transfer; electronic billing and payment for consumers; electronic invoice presentment, payment and receivables solutions for small business banking customers; mobile payment solutions; flexible Web services technology for electronic billing and payment; and payment fraud detection and prevention.

About CheckFree (http://www.checkfreecorp.com)

Founded in 1981, CheckFree Corporation (Nasdaq: CKFR) provides financial electronic commerce services and products to organizations around the world. CheckFree Electronic Commerce solutions enable thousands of financial services providers and billers to offer the convenience of receiving and paying household bills online, via phone or in person through retail outlets. CheckFree Investment Services provides a broad range of investment management solutions and outsourced services to hundreds of financial services organizations, which manage about $1.7 trillion in assets. CheckFree Software develops, markets and supports payment processing solutions that are used by financial institutions to process more than two-thirds of the 14 billion Automated Clearing House transactions in the United States, and supports reconciliation, exception management, risk management, transaction process management, corporate actions processing, and compliance within thousands of organizations worldwide.

Certain of the Company's statements in this press release are not purely historical, and as such are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These include statements regarding management's intentions, plans, beliefs, expectations or projections of the future. Forward-looking statements involve risks and uncertainties, including without limitation, the various risks inherent in the Company's business, and other risks and uncertainties detailed from time to time in the Company's periodic reports filed with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K for the year ended June 30, 2006 (filed September 8, 2006), Form 10-Q for the quarter ended September 30, 2006 (filed November 8, 2006) and Form 10-Q for the quarter ending December 31, 2006 (filed February 8, 2007). One or more of these factors have affected, and could in the future affect the Company's business and financial results in future periods, and could cause actual results to differ materially from plans and projections. There can be no assurance that the forward-looking statements made in this press release will prove to be accurate, and issuance of such forward-looking statements should not be regarded as a representation by the Company, or any other person, that the objectives and plans of the Company will be achieved. All forward-looking statements made in this press release are based on information presently available to management, and the Company assumes no obligation to update any forward-looking statements.

YES, YOUNG ENTREPRENEURS CAN

Can Young Entrepreneurs Get Funding?

If you're young and in love with the idea of starting a business, these tips will help you in your search for startup financing.

By Asheesh Advani |

All entrepreneurs have to overcome hurdles when it comes to finding capital for their new business. When customers are few, earnings are scarce and business assets are immaterial, it takes energy and creativity to locate the necessary funds. And these challenges are heightened for entrepreneurs in their 20s, who are often involved with their first formal business venture or just out of school with limited work experience.

In previous columns, I've advised entrepreneurs how to get bank loans guaranteed by the SBA, how to make a "kitchen table pitch" to relatives and friends, and how to approach angel investors. Much of this advice applies equally well to young entrepreneurs; however, there are typically a few extra hurdles that make these sources of financing more difficult to attain for the younger generation of business owners. Some of this difficulty is simply perception, but some of it is a reality.

When it comes to bank loans, you're required to have a good credit history, submit a personal financial statement, and sometimes make an equity investment in your business--all of which may not be easy for most young entrepreneurs to accomplish. For example, a few stains on your credit report from late payments in college could hurt your loan application. And since most twenty-somethings don't own a home or have much equity built up, relying on home equity lines of credit is also not an option.

---

So the fallback position for many young entrepreneurs is to get bank financing in the form of credit card debt. As I've written in previous columns, this is a dangerous path to go down if your business is in its startup stage and your earnings are unpredictable. Instead, I would recommend getting a debit card rather than a credit card for the first few months of business startup until you're confident that you can forecast earnings and until you develop the habit of making your payments on time. I'd also caution young entrepreneurs from using more than $5,000 per month on their debit or credit card. Anything over that will put you in a different risk category with most credit card companies and, if you end up in delinquency, could really impact your ability to get future financing.

Financing from relatives and friends is also a bit more difficult to obtain for twenty-somethings rather than thirty- or forty-somethings with more extensive networks. Typically, I hear young entrepreneurs tell me that their "family and friend" circle consists of their parents and a handful of close friends--all of whom are either too poor or too uninterested in funding their business venture.

My advice for these entrepreneurs? Open your mind and expand your circle; think about all the different people you know, including friends of friends, who could help fund your business. Many of the country's most well known businesses, including Atlantic Records, Walmart and Subway, were funded after the entrepreneur expanded his financing circle beyond his parents. The founder of Atlantic Records, for instance, landed a loan from his family dentist!

Private investors, or so-called "business angels", are more likely to invest large sums of money with an experienced business owner than with a young entrepreneur. However, there are some business angels who prefer to spread their wealth in smaller investment amounts to young entrepreneurs with promising ideas. So raising $25,000 from business angels is a very achievable goal for most twenty-somethings with a good business concept and solid business plan (though raising $100,000 would be considerably more difficult).

When raising money from high-net-worth investors, young entrepreneurs should aim to pull together small rounds of funding in succession (for instance, $100,000 to $500,000 per round) rather than trying to complete their total capital raise in one fell swoop. Fair warning: It takes longer to close smaller investors than larger investors mainly because the investment isn't a very high priority for the investor (even though it might be your highest priority).

One well-regarded organization that teaches younger entrepreneurs about small-business financing is the National Foundation for Teaching Entrepreneurship. Their website has some good books on the topic of youth and entrepreneurship, many of which are written by their founder, Steve Mariotti, who is a guru in this field. The Entrepreneurs' Organization, formerly the Young Entrepreneurs Organization, is a great networking resource with more than 6,000 members and 120-plus chapters worldwide. Finally, I'd also recommend spending some time on the SCORE website to get financing advice from more experienced entrepreneurs who've lived through the ups and downs of life as a young entrepreneur.

SMALL BUSINESS ADMINISTRATION

Since its founding on July 30, 1953, the U.S. Small Business Administration has delivered about 20 million loans, loan guarantees, contracts, counseling sessions and other forms of assistance to small businesses.

The SBA was officially established in 1953, but its philosophy and mission began to take shape years earlier in a number of predecessor agencies, largely as a response to the pressures of the Great Depression and World War II.

The Reconstruction Finance Corporation (RFC), created by President Herbert Hoover in 1932 to alleviate the financial crisis of the Great Depression, was SBA's grandparent. The RFC was basically a federal lending program for all businesses hurt by the Depression, large and small. It was adopted as the personal project of Hoover's successor, President Franklin D. Roosevelt, and was staffed by some of Roosevelt's most capable and dedicated workers.

Concern for small business intensified during World War II, when large industries beefed up production to accommodate wartime defense contracts and smaller businesses were left unable to compete. To help small business participate in war production and give them financial viability, Congress created the Smaller War Plants Corporation (SWPC) in 1942. The SWPC provided direct loans to private entrepreneurs, encouraged large financial institutions to make credit available to small enterprises, and advocated small business interests to federal procurement agencies and big businesses.

he SWPC was dissolved after the war, and its lending and contract powers were handed over to the RFC. At this time, the Office of Small Business (OSB) in the Department of Commerce also assumed some responsibilities that would later become characteristic duties of the SBA. Its services were primarily educational. Believing that a lack of information and expertise was the main cause of small business failure, the OSB produced brochures and conducted management counseling for individual entrepreneurs.

Congress created another wartime organization to handle small business concerns during the Korean War, this time called the Small Defense Plants Administration (SDPA). Its functions were similar to those of the SWPC, except that ultimate lending authority was retained by the RFC. The SDPA certified small businesses to the RFC when it had determined the businesses to be competent to perform the work of government contracts.

By 1952, a move was on to abolish the RFC. To continue the important functions of the earlier agencies, President Dwight Eisenhower proposed creation of a new small business agency -- the Small Business Administration (SBA).

In the Small Business Act of July 30, 1953, Congress created the Small Business Administration, whose function was to "aid, counsel, assist and protect, insofar as is possible, the interests of small business concerns." The charter also stipulated that the SBA would ensure small businesses a "fair proportion" of government contracts and sales of surplus property.

By 1954, SBA already was making direct business loans and guaranteeing bank loans to small businesses, as well as making loans to victims of natural disasters, working to get government procurement contracts for small businesses and helping business owners with management and technical assistance and business training.

The Investment Company Act of 1958 established the Small Business Investment Company (SBIC) Program, under which SBA licensed, regulated and helped provide funds for privately owned and operated venture capital investment firms. They specialized in providing long-term debt and equity investments to high-risk small businesses. Its creation was the result of a Federal Reserve study that discovered, in the simplest terms, that small businesses could not get the credit they needed to keep pace with technological advancement.

In 1964, SBA began to attack poverty through the Equal Opportunity Loan (EOL) Program. The EOL Program relaxed the credit and collateral requirements for applicants living below the poverty level in an effort to encourage new businesses that had been unable to attract financial backing, but were nevertheless sound commercial initiatives.

Over the past 47 years, SBA has grown in terms of total assistance provided and its array of programs tailored to encourage small enterprises in all areas. SBA's programs now include financial and federal contract procurement assistance, management assistance, and specialized outreach to women, minorities and armed forces veterans. The SBA also provides loans to victims of natural disasters and specialized advice and assistance in international trade.

Nearly 20 million small businesses have received direct or indirect help from one or another of those SBA programs since 1953, as the agency has become the government's most cost-effective instrument for economic development. In fact, SBA's current business loan portfolio of roughly 219,000 loans worth more than $45 billion makes it the largest single financial backer of U.S. businesses in the nation.

Over the past 10 years, (FY 1991-2000), the SBA has helped almost 435,000 small businesses get more than $94.6 billion in loans, more than in the entire history of the agency before 1991. No other lender in this country – perhaps no other lender in the world – has been responsible for as much small business financing as the SBA has during that time.

Since 1958, SBA’s venture capital program has put more than $30 billion into the hands of small business owners to finance their growth.

Last year alone, the SBA backed more than $12.3 billion in loans to small businesses. More than $1 billion was made available for disaster loans and more than $40 billion in federal contracts were secured by small businesses with SBA's help.

SBA continues to branch out to increase business participation by women and minorities along new avenues such as the minority small business program, microloans and the publication of Spanish language informational materials.

There are those who argue that big businesses, profiting from "economies of scale," can produce far more efficiently than small businesses. But small business is where the innovations take place. Swifter, more flexible and often more daring than big businesses, small firms produce the items that line the shelves of America's museums, shops and homes. They keep intact the heritage of ingenuity and enterprise and they help keep the "American Dream" within the reach of millions of Americans. Every step of the way, SBA is there to help them.

EXIMBANK CONFERENCES

Trade Financing Solutions for Exporters and Lenders

• Exporters can increase their export sales with help from the U.S. government

• Small business exporters, as defined by the Small Business Administration (generally under 500 employees for manufacturers), receive a discount on the seminar cost

• Lenders can increase their profits while decreasing their risks with help from the U.S. government
  
  ... plus optional half-day Working Capital Delegated Authority Lender training for lenders interested in partnering with Ex-Im Bank

This seminar helps exporters and lenders learn about trade services they can offer their customers and raise profits. During this comprehensive special event, attendees will learn how:

• Ex-Im Bank supports working capital financing to fulfill sales orders
• To qualify and become an Ex-Im Bank delegated authority lender whereby lenders can process and commit applications at their own speed and obtain generous fees
• Medium-Term Export Credit Insurance and Guarantees can finance capital equipment exports and services
• Special financing products benefit environmental exports, service exports, lease transactions, and enhancements for small, women and minority-owned businesses
• To obtain and complete the application for financing and locate the right professional contact at Ex-Im Bank for prompt efficient consultation

Senior Ex-Im Bank staff conducts this course, which is usually located at the Washington, DC headquarters. The session provides an excellent opportunity to meet and network with Ex-Im Bank staff as well as U.S. exporters, international lenders, insurance brokers, and staff from other trade-related government agencies. The regional seminars are typically one day while the more intensive seminars are offered in Washington are two days.

Working Capital Delegated Authority Training

Instruction for financial institutions that wish to qualify their institutions as Delegated Authority Lenders for Working Capital Guarantees. Training typically follows the two-day Trade Financing Solutions for Exporters and Lenders seminar and runs half-day. Training is open to anyone who wishes to learn more about the Working Capital Guarantee Program and for those desiring to partnership with Ex-Im Bank as a delegated authority lender.

Regional Seminar - "Increase Your Export Sales with Help from the U.S. Government"

Ex-Im Bank hosts an exporter seminar for companies of all sizes who wish to learn more about increasing their export sales and growing their international business. This one-day seminar uses case studies and classroom discussions to facilitate the attendee's understanding of the varied and dynamic trade financing products and services offered by Ex-Im Bank. Attendees will learn how to obtain working capital loans to fulfill foreign sales orders, offer competitive terms to overseas buyers, minimize risk in emerging markets, protect against buyer default as well as how to enter new international markets with assistance from the United States Department of Commerce and Ex-Im Bank.

Exporter Symposium - "Learn How to Find Buyers and Finance Sales"

Ex-Im Bank in cooperation with the U.S. Department of Commerce, Small Business Administration, and Overseas Private Investment Corporation and local sponsors host these half-day symposiums for companies of all sizes that wish to learn how to "find and finance" foreign buyers to increase their sales or are interested in investing internationally. Attendees will learn how to find international buyers, access valuable trade information, obtain working capital loans, protect against the risk of nonpayment, gain support for investments overseas, and offer buyer financing with the U.S. government's assistance. Symposiums will also address special programs for environmental and service exports, lease transactions, and small, minority-owned and woman-owned businesses. This session features case studies and classroom discussions to facilitate the attendees' understanding of the many dynamic trade products and services available.

Women & Minority-Owned Business Symposium - "Learn How to Find Buyers and Finance Sales"

Ex-Im Bank in cooperation with local sponsors hosts exporter symposiums for women & minority-owned business of all sizes who wish to learn how to "find and finance" foreign buyers to increase their sales. Attendees will learn how to find international buyers, access valuable trade information, obtain working capital loans, protect against the risk of nonpayment, and offer buyer financing with the U.S. government's assistance. This half-day session features case studies and classroom discussions to facilitate the attendees' understanding of the many dynamic trade products and services available. Although this symposium is geared towards the needs of women & minority-owned business any small business is welcome and encouraged to attend.

Credit Review and Operations Training

This training is aimed at helping credit administrators in financial institutions and exporting companies better understand Ex-Im Bank's post authorization documentation requirements for loans and guarantees.

THE VOICE OF LARRY KUDLOW

Good Friday Blockbuster

The U.S. Bureau of Labor Statistics delivered a blockbuster jobs report this Good Friday morning: 180,000 new jobs in March, 32,000 upward job revisions for the prior two months, and a 4.4% unemployment rate.

This stronger than expected report puts the lie to those perma-bear pessimists who keep predicting recession from the sub-prime mortgage problem and the housing slowdown (both a function of tighter Fed money over the past two years).

But the free-market US economy, with its low tax-rates, is more durable and flexible and bigger that just housing and mortgage finance. In the March job report, big job gains came from business construction, retail trade and a variety of services.

Unemployment for those with a bachelors degree or higher was only 2.2%. For traditional families with both spouses present, joblessness was 2.5%.

The rate of economic growth ebbs and flows over long expansion periods such as this one (which is now in its sixth year). Sometimes faster, sometimes slower, but in the absence of major policy blunders (big tax hikes, bad inflation, major trade barriers, nasty regulations) the economic pie keeps expanding.

Stocks have been predicting continued growth for quite some time. Since last summer, the major indexes are up about 20%. Year-to-date they are up roughly 3% so far. Since the Bush tax cuts they're up roughly 100%.

Isn't it interesting that markets are better economic predictors than perma-bears?

IRAN INVADING MEXICO?

What If Iran Had Invaded Mexico?
by Noam Chomsky and Tom Engelhardt
TomDispatch

On Tuesday, meeting with the press in the White House Rose Garden, the president responded to a question about House Speaker Nancy Pelosi's visit to Syria this way: "[P]hoto opportunities and/or meetings with President Assad lead the Assad government to believe they're part of the mainstream of the international community, when, in fact, they're a state sponsor of terror." There should, he added to the assembled reporters, be no meetings with state sponsors of terror.

That night, Brian Ross of ABC News reported that, since 2005, the U.S. has "encouraged and advised" Jundullah, a Pakistani tribal "militant group," led by a former Taliban fighter and "drug smuggler," which has been launching guerrilla raids into Baluchi areas of Iran. These incursions involve kidnappings and terror bombings, as well as the murder (recorded on video) of Iranian prisoners. According to Ross, "U.S. officials say the U.S. relationship with Jundullah is arranged so that the U.S. provides no funding to the group, which would require an official presidential order or 'finding' as well as congressional oversight." Given past history, it would be surprising if the group doing the encouraging and advising wasn't the Central Intelligence Agency, which has a long, sordid record in the region. (New Yorker investigative journalist Seymour Hersh has been reporting since 2005 on a Bush administration campaign to destabilize the Iranian regime, heighten separatist sentiments in that country, and prepare for a possible full-scale air attack on Iranian nuclear and other facilities.)

The president also spoke of the Iranian capture of British sailors in disputed waters two weeks ago. He claimed that their "seizure… is indefensible by the Iranians." Oddly enough, perhaps as part of secret negotiations over the British sailors, who were dramatically freed by Iranian President Mahmoud Ahmadinejad on Wednesday, an Iranian diplomat in Iraq was also mysteriously freed. Eight weeks ago, he had been kidnapped off the streets of Baghdad by uniformed men of unknown provenance. Reporting on his sudden release, Alissa J. Rubin of the New York Times offered this little explanation of the kidnapping: "Although [Iraqi foreign minister, Hoshyar] Zebari was uncertain who kidnapped the man, others familiar with the case said they believe those responsible work for the Iraqi Intelligence Service, which is affiliated with the Central Intelligence Agency." The CIA, of course, has a sordid history in Baghdad as well, including running car-bombing operations in the Iraqi capital back in Saddam Hussein's day.

And don't forget the botched Bush administration attempt to capture two high Iranian security officials and the actual kidnapping of five Iranian diplomats-cum-Revolutionary-Guards in Irbil in Iraqi Kurdistan over two months ago – they disappeared into the black hole of an American prison system in Iraq that now holds perhaps 17,000 Iraqis (as well as those Iranians) and is still growing. As Juan Cole has pointed out, most such acts, and the rhetoric that goes with them, represent so many favors to "an unpopular and isolated Iranian government attempting to rally support and strengthen itself."

In addition, just this week, the aircraft carrier USS Nimitz and other ships in its battle group left San Diego for the Persian Gulf. Two carrier battle groups are already there, promising an almost unprecedented show of strength. As the ship left port, U.S. military officials explained the mission of the carriers in the Gulf this way: They are intended to demonstrate U.S. "resolve to build regional security and bring long-term stability to the region."

And stability in the region, it seems, means promoting instability in Iran by any means possible. So, the president's Global War on Terror also turns out to be the Global War of Terror. No one has dealt with the way "state sponsorship of terror" works, when it comes to our own country, more strikingly than Noam Chomsky, who considers the larger Iranian crisis below. His latest book, Failed States: The Abuse of Power and the Assault on Democracy, is just out in paperback and couldn't be more to the point at the present moment. Right now, if the U.S. isn't already a failing state, it's certainly a flailing one. Tom

What If Iran Had Invaded Mexico?

Putting the Iran Crisis in Context
By Noam Chomsky

Unsurprisingly, George W. Bush's announcement of a "surge" in Iraq came despite the firm opposition to any such move of Americans and the even stronger opposition of the (thoroughly irrelevant) Iraqis. It was accompanied by ominous official leaks and statements – from Washington and Baghdad – about how Iranian intervention in Iraq was aimed at disrupting our mission to gain victory, an aim which is (by definition) noble. What then followed was a solemn debate about whether serial numbers on advanced roadside bombs (IEDs) were really traceable to Iran; and, if so, to that country's Revolutionary Guards or to some even higher authority.

This "debate" is a typical illustration of a primary principle of sophisticated propaganda. In crude and brutal societies, the Party Line is publicly proclaimed and must be obeyed – or else. What you actually believe is your own business and of far less concern. In societies where the state has lost the capacity to control by force, the Party Line is simply presupposed; then, vigorous debate is encouraged within the limits imposed by unstated doctrinal orthodoxy. The cruder of the two systems leads, naturally enough, to disbelief; the sophisticated variant gives an impression of openness and freedom, and so far more effectively serves to instill the Party Line. It becomes beyond question, beyond thought itself, like the air we breathe.

The debate over Iranian interference in Iraq proceeds without ridicule on the assumption that the United States owns the world. We did not, for example, engage in a similar debate in the 1980s about whether the U.S. was interfering in Soviet-occupied Afghanistan, and I doubt that Pravda, probably recognizing the absurdity of the situation, sank to outrage about that fact (which American officials and our media, in any case, made no effort to conceal). Perhaps the official Nazi press also featured solemn debates about whether the Allies were interfering in sovereign Vichy France, though if so, sane people would then have collapsed in ridicule.

In this case, however, even ridicule – notably absent – would not suffice, because the charges against Iran are part of a drumbeat of pronouncements meant to mobilize support for escalation in Iraq and for an attack on Iran, the "source of the problem." The world is aghast at the possibility. Even in neighboring Sunni states, no friends of Iran, majorities, when asked, favor a nuclear-armed Iran over any military action against that country. From what limited information we have, it appears that significant parts of the U.S. military and intelligence communities are opposed to such an attack, along with almost the entire world, even more so than when the Bush administration and Tony Blair's Britain invaded Iraq, defying enormous popular opposition worldwide.

"The Iran Effect"

The results of an attack on Iran could be horrendous. After all, according to a recent study of "the Iraq effect" by terrorism specialists Peter Bergen and Paul Cruickshank, using government and Rand Corporation data, the Iraq invasion has already led to a seven-fold increase in terror. The "Iran effect" would probably be far more severe and long-lasting. British military historian Corelli Barnett speaks for many when he warns that "an attack on Iran would effectively launch World War III."

What are the plans of the increasingly desperate clique that narrowly holds political power in the U.S.? We cannot know. Such state planning is, of course, kept secret in the interests of "security." Review of the declassified record reveals that there is considerable merit in that claim – though only if we understand "security" to mean the security of the Bush administration against their domestic enemy, the population in whose name they act.

Even if the White House clique is not planning war, naval deployments, support for secessionist movements and acts of terror within Iran, and other provocations could easily lead to an accidental war. Congressional resolutions would not provide much of a barrier. They invariably permit "national security" exemptions, opening holes wide enough for the several aircraft-carrier battle groups soon to be in the Persian Gulf to pass through – as long as an unscrupulous leadership issues proclamations of doom (as Condoleezza Rice did with those "mushroom clouds" over American cities back in 2002). And the concocting of the sorts of incidents that "justify" such attacks is a familiar practice. Even the worst monsters feel the need for such justification and adopt the device: Hitler's defense of innocent Germany from the "wild terror" of the Poles in 1939, after they had rejected his wise and generous proposals for peace, is but one example.

The most effective barrier to a White House decision to launch a war is the kind of organized popular opposition that frightened the political-military leadership enough in 1968 that they were reluctant to send more troops to Vietnam – fearing, we learned from the Pentagon Papers, that they might need them for civil-disorder control.

Doubtless Iran's government merits harsh condemnation, including for its recent actions that have inflamed the crisis. It is, however, useful to ask how we would act if Iran had invaded and occupied Canada and Mexico and was arresting U.S. government representatives there on the grounds that they were resisting the Iranian occupation (called "liberation," of course). Imagine as well that Iran was deploying massive naval forces in the Caribbean and issuing credible threats to launch a wave of attacks against a vast range of sites – nuclear and otherwise – in the United States, if the U.S. government did not immediately terminate all its nuclear energy programs (and, naturally, dismantle all its nuclear weapons). Suppose that all of this happened after Iran had overthrown the government of the U.S. and installed a vicious tyrant (as the US did to Iran in 1953), then later supported a Russian invasion of the U.S. that killed millions of people (just as the U.S. supported Saddam Hussein's invasion of Iran in 1980, killing hundreds of thousands of Iranians, a figure comparable to millions of Americans). Would we watch quietly?

It is easy to understand an observation by one of Israel's leading military historians, Martin van Creveld. After the U.S. invaded Iraq, knowing it to be defenseless, he noted, "Had the Iranians not tried to build nuclear weapons, they would be crazy."

Surely no sane person wants Iran (or any nation) to develop nuclear weapons. A reasonable resolution of the present crisis would permit Iran to develop nuclear energy, in accord with its rights under the Non-Proliferation Treaty, but not nuclear weapons. Is that outcome feasible? It would be, given one condition: that the U.S. and Iran were functioning democratic societies in which public opinion had a significant impact on public policy.

As it happens, this solution has overwhelming support among Iranians and Americans, who generally are in agreement on nuclear issues. The Iranian-American consensus includes the complete elimination of nuclear weapons everywhere (82% of Americans); if that cannot yet be achieved because of elite opposition, then at least a "nuclear-weapons-free zone in the Middle East that would include both Islamic countries and Israel" (71% of Americans). Seventy-five percent of Americans prefer building better relations with Iran to threats of force. In brief, if public opinion were to have a significant influence on state policy in the U.S. and Iran, resolution of the crisis might be at hand, along with much more far-reaching solutions to the global nuclear conundrum.

Noam Chomsky is the author of Failed States: The Abuse of Power and the Assault on Democracy (Metropolitan Books), just published in paperback, among many other works.