Miami. The skyline appears to have more cranes than buildings, as if the city were just one vast construction site, and that has been the good news.

The bad news here in Miami, as well as most major U.S. cities, is that the real estate boom of the last few years is coming to an end. The villain in this drama is the U.S. Federal Reserve (the Fed), which fueled the boom and now is destroying it.

The Fed, by its own admission, has been failing to keep inflation within its own targets. Yet, the Fed's main responsibility is to provide the U.S. with a sound currency; one that neither loses value (inflation), nor gains value (deflation).

The Fed has a long history of reacting too late, then overreacting, to the inflation or deflation it causes. One reason the Fed keeps failing is its overreliance on lagging indicators of inflation, such as the well-known consumer price index (CPI).

St. Petersburg, Russia. The economic glitterati have descended on Russia's "second capital." President Dmitry Medvedev, vice premiers and ministers, CEOs of Intel, Nissan, Coca-Cola and other Forbes 500 companies, and oligarchs are rubbing shoulders with superstar pundits such as Thomas Friedman and Nuriel Rubini.

All have flocked to the St. Petersburg International Economic Forum.

Russians are all smiles after the purchase of 2 percent of Facebook, and state-owned Sberbank's participation in acquisition of the General Motors Corp.'s German subsidiary Opel.

The public discourse is all about diversification, innovation and coping with the global crisis. Mr. Medvedev says he wants innovation-based growth. But privately, many sotto voce discussions turn to the question: What is Russia's global strategy?

If you knew the U.S. government was going bankrupt primarily because of spending on Social Security and Medicare, and the only solutions were the following, which one would you pick?

(1) Doubling individual and corporate income tax rates.

(2) Immediately cutting Social Security and Medicare benefits by two-thirds.

(3) Immediately cutting all federal discretionary spending (including defense) by 143 percent.

(4) Reforming Social Security and Medicare by moving from the current defined benefit plans to a program of individual investment accounts, like the current 401(k) and Medical Savings Account (MSA) plans.

Many leading economists of the political right and left have concluded the U.S. government will not be able to pay its creditors, including its current and future retirees, the full value of promised benefits, unless current policies are radically changed.

So we must choose.

From an Israeli perspective, Mr. Obama's speech yesterday (6/04) in Cairo was deeply disturbing. Both rhetorically and programmatically, Obama's speech was a renunciation of America's strategic alliance with Israel.

Rhetorically, Obama's sugar coated the pathologies of the Islamic world - from the tyranny that characterizes its regimes, to the misogyny, xenophobia, Jew hatred, and general intolerance that characterizes its societies.

In so doing he made clear that his idea of pressing the restart button with the Islamic world involves erasing the moral distinctions between the Islamic world and the free world.

In contrast, Obama's perverse characterization of Israel - of the sources of its legitimacy and of its behavior - made clear that he shares the Arab world's view that there is something basically illegitimate about the Jewish state.  

Does the language you speak or use help influence how wealthy you are?

When trying to determine why some countries are wealthier than others, economists rarely, if at all, consider language. However, if you look at the list of wealthiest countries on a per capita income basis, you will notice all but three of the top 20 are English-speaking, or use some other Germanic language.
 
Is there something about the English language itself that helps make one wealthier, and is there something about the Arabic language itself that inhibits economic development?

Standing in front of an array of photovoltaic solar panels at Nellis Air Force Base last week (5/29), Mr. Obama claimed that his vision for an America powered by clean, renewable energy and awash in green jobs is becoming a reality faster than anyone could have imagined.

Nellis, near Las Vegas, is the home of the largest solar-energy plant in the Western Hemisphere and, in the president's words, a "shining example" of what renewable energy can do to put our economy on a "firmer foundation for economic growth."

Beyond these words, uncritically reported by the mainstream media, is the reality of a make-believe industry touted by environmental zealots, corporate freeloaders parading as entrepreneurs, and a president capable of staggering disingenuousness (that's a fancy word for dishonesty).

You probably have seen the ads about the "net neutrality" bills before Congress, concerning who gets to manage and set fees for access to the Internet. The House of Representatives has just done the right thing by defeating the so-called net neutrality proposals, and the issue is now before the Senate.

The "net neutrality" advocates are a strange coalition of leftist political groups hostile to property rights, self-appointed consumer groups totally ignorant of good economics, and a few large business users of the Internet (such as Google) who want the telecom companies to provide them a free ride for their demands for a more robust network.

To understand the fight, you need to be aware of the economic interests of the various players.

You can not win a war if you don't know who the enemy is," teaches master strategist Sun Tzu - a commonsense maxim that needs repeating as the Obama administration seeks a way out of the newly designated AfPak (Afghanistan/Pakistan) imbroglio.

As the Pakistani army battles Taliban insurgents in Swat and elsewhere, the answer to the question of who exactly the Taliban is, and what is the nature of its relationship with al-Qaeda, is of key importance in judging the chances of success for the emerging Obama strategy.

For even as Washington pushes Islamabad to keep the Taliban from expanding its territorial sway in the North-West Frontier Province, the administration seems to think the real solution to the Taliban problem, on both sides of the border, lies in striking an "acceptable compromise" deal with the militants.

Such thinking is a dangerous combination of ignorance and naïveté.

Do you think your taxes are too high or too low? Though I expect that well over 90 percent of you are thinking "too high," the liberal media and political class keep telling us taxes are too low.

The left-leaning intelligentsia, in their arrogant smugness, claim we just don't know what is good for us. Yet, they are the ones who ignore the empirical evidence and are unable to distinguish between variables and constants.

As a prime example, a May 7 editorial in The Washington Post, advocating higher tax rates on the rich, states: "Economics cannot predict how high taxes can be raised before they reach counterproductive levels."

The editorial then says an increase of "taxes on the top 1 percent by 5 percentage points would raise $85 billion annually or perhaps a bit less if it spurred some extra tax evasion."

Like nature, Israel's strategic relations abhor a vacuum. In the wake of the Obama administration's decision to drastically curtail the US's strategic alliance with Israel in the interest of American rapprochement with Iran and Syria, the Netanyahu government has been moving swiftly to fill the void.

On Monday (5/11), with Pope Benedict XVI's arrival and with Prime Minister Binyamin Netanyahu's visit with Egyptian President Hosni Mubarak at Sharm e-Sheikh, two potential strategic alliances came into view.

Rather than viewing with alarm Mr. Obama's clear antipathy towards Israel, Mr. Netanyahu views it as an opportunity to pursue alliances in Israel's interest without regard to the wishes of the American president.