Tuesday, August 10, 2010

A Fresh Update

Nothing has happened in the past 6 weeks has it?


Good. Anyways, today seems as good a day as any to get this back on track...or at least dump some of my recent musings that i have stored on my computer but not on this blog....

But instead of random thoughts that I have while riding the metro I want take the time to write about something that bothers me. Bailouts.

Without engaging in my standard Austrian influenced rants, let me target two news stories that are connected and a third that exacerbates a problem that led us to where we are today.

This first story is titled Why I'm Not Hiring. In short, it is the story of a small business owner in New Jersey who is not hiring any more employees because the government has created an uncertain environment for the private sector.

The second story is about today's new state bailout bill. $26.1 Billion for teachers...for children...how can you be against that? Well it is easy. Putting aside that taxpayers in one state should not be bailing out the reckless spending by a different state and that $16 Billion of this is going to Medicaid (Welfare), this bill still makes zero sense. What this bill assumes is that there is no possible waste that any of the 50 states could cut in order to find money to pay for teachers, firefighters, and police officers. Instead of forcing states to look for waste, reform pension plans, or cut programs, the House Democrats selflessly came back from vacation to close a tax loophole (raise taxes on US businesses) in order to fund runaway spending in individual states.

And that brings us to our third story. The protection of public sector jobs that happened at the expense of the private sector today is only another instance of the disdain that the left has for business. Guess which sector has taken the hit during the recession...yup, that's right, the private sector. While government employees get to enjoy healthy raises and job security unlike no other, the real driving force of this economy (and the people who pay the bloated pensions of many government employees) is left to get hit by tax hikes...like the one that was signed into law today in this "Manufacturing Jobs Bill". Only 43 members of the House voted against this bill. You want to know why? Because on the surface it looks like a tax cut. Hidden in the details however is a tax increase on corporations that bring in over $1 Billion in revenue each year.

As GDP growth, productivity, and consumer confidence fall we can only wonder one thing. How will redistribution solve this problem when there is nothing left to redistribute?

Wednesday, June 23, 2010

A Topic Left Alone

Gen. Stanley McChrystal stole the headlines today because of insanely stupid remarks by himself and his staff in front of a reporter from, of all places, Rolling Stone. Congratulations Joe Barton, your news cycle was exactly 5 days long. Anyways, more things happened than comments that should not have been made by a General in charge of a war that, let’s face it, might not ever be won in the traditional sense of winning. McChrystal is out, Petraeus is in, and the War in Afghanistan goes on.

This situation, even though it is not the best news story for the White House, does draw attention away from one of the major story lines of the Obama Administration- the economy. This is what the major economic news has been over the past 36 hours since the McChrystal story broke…

- There will be no budget this year

- There will be no discussion about the long term budget objective of the US until December (this means a VAT is coming)

- -New Home Sales dropped 33% in May

- The Canadian Banking System is the envy of the world and Canada has a more stable economy that the US has

- President Obama is considering price controls for health care

- Chancellor Angela Merkel of Germany has told Obama that cutting the deficit will help growth, not stunt it

- According the Federal Reserve, non financial companies have stock piled $1.84 Trillion in cash and liquid assets

I can go on and on, but the problem is that almost no one is talking about this news, especially the top two stories listed, because at the end of the day- the economy is just not sexy to talk about when we have a General resigning and an oil spill that is destroying the gulf coast. However, next week, specifically next Friday, we get a new jobs report (I bet continue to see almost no private job growth because of that last bullet point, which I will tackle soon) and that means for one hour we get to talk about the failure of the stimulus once again.

This could easily develop into a book- the mishandling of the economy by the Obama Administration, but I think the most telling point about the economic failures of the regime comes from a member of his economic team- his Chair of the Council of Economic Advisors Christina Romer. This is the same Christina Romer that wrote a paper 6 months before he appointment to the Administration that cutting taxes is a great way to stimulate growth…Romer and her husband estimate the GDP multiplier from 1 dollar of tax cuts to be 3 while the models the Obama Administration ran said that the GDP multiplier for taxes is .99 and the multiplier for government spending is 1.54 (Want the in depth to this from a brilliant economist who gives a much deeper look into the issue?… http://nationalaffairs.com/publications/detail/crisis-economics)

My question is- why isn’t the administration listening to her? It is clear the stimulus, which was supposed to keep unemployment at 8% or lower (their models also indicated that if the stimulus was not passed unemployment might reach 9%…gasp!) is not working. It is also clear that they should recheck their models and maybe get some more opinions on how to fight this recession. Are they? Nope, they claim their models are correct and that we just need to spend more of the government’s income. Did I say Government Income? I meant money they will take from the taxpayers and redistribute your money the way Congress sees fit…without your say. Remember, the Government does not create wealth, it only finds ways to spread it around.

Of course the answer is simple…she disregarded her own findings to write the Obama plan for recovery… http://otrans.3cdn.net/ee40602f9a7d8172b8_ozm6bt5oi.pdf

So which is it Romer…is your paper wrong, or are you giving in to political pressure to push a stimulus that is costing the American people jobs while allowing the Administration to push for higher taxes? I think it is time for some answers on this contradiction. Maybe the Obama Administration thinks the multiplier for each dollar of their stimulus is greater than 3? I would like to know what is exactingly going on while the private sector continues to flail in the wind.

Oh boy I cannot wait for the fight on the VAT.

Monday, June 21, 2010

My Speech Should Be Protected...Yours Not So Much

The DISCLOSE Act (Democracy Is Strengthened by Casting Light On Spending Act) has been a source of contention between the left and right over the past few months (though it has obviously taken a back seat to oil spills, SCOTUS nominations, and basically everything else in Washington because anything else is more exciting than the DISCLOSE Act.). According to the three cosponsors- Chuck Schumer, Russ Feingold, and Patrick Leahy, the DISCLOSE Act aims to accomplish these 7 things (directly cut and pasted from discloseact.com)…

1. Enhance Disclaimers
Make CEOs and other leaders take responsibility for their ads.
2. Enhance Disclosures
It is time to follow the money.
3. Prevent Foreign Influence
Foreign countries and entities should not be determining the outcome of our elections.
4. Shareholder/Member Disclosure
We should allow shareholders and members to know where money goes.
5. Prevent Government Contractors from Spending
Taxpayer money should not be spent on political ads.
6. Provide the Lowest Unit Rate for Candidates and Parties
Special interests should not drown out the voices of the people.
7. Tighten Coordination Rules
Corporations should not be able to “sponsor” a candidate.

It seems benign at first. However, what this really does is tell corporations and advocacy groups on both sides of the aisle that your voice does not matter. This is directly against the First Amendment. If my fellow citizens want to pool their money together to advocate for a certain interest they should be allowed to, just as I should enjoy that right as well. This is one of those bills there their heart is in the right place, but the execution is just not there. I think corporations and unions should be 100% OUT OF ELECTIONS. That’s right, only the money of the individual should matter. There is no reason why any company, let’s say BP, should be allowed to give money to a politician. There is also no reason why, let’s say the SEIU, should be allowed to give money to a politician. The problem with the DISCLOSE Act is that it imposes restrictions ONLY ON CORPORATIONS and lets unions act as they may. This is break from decades of precedent, which treated unions and corporations in the same way. If GE cannot give to a candidate, neither should the AFL-CIO.
However, this Act also applies to special interest groups, such as the NRA. It just so happens that the NRA, like many organizations (Chamber of Commerce being another notible one) is against the DISCLOSE Act. That is, until this…

The Disclose Act would exempt organizations that “have more than 1 million members, have been in existence for more than 10 years, have members from all 50 states and raise 15% or less of their funds from corporations”
Interestingly enough, along with the AARP and the Human Society (which did not take a stance on DISCLOSE) the NRA just happens to fall into this category. This is not a mistake, as Democrats threw this little passage in to solidify the support of the Blue Dog Democrats who are traditionally pro-gun rights. It also happens that the NRA has now stopped opposing the Act, so long as this sentence stays in the bill. Shameless politics? You betcha. What is worse is this comment from the NRA…

“There are those who say the NRA should put the Second Amendment at risk over a First Amendment principle. That’s easy to say—unless you have a sworn duty to protect the Second Amendment above all else, as we do.”

That is from nraila.com, which is the lobbying arm of the NRA. In short, they are all for the first amendment when their rights are being infringed upon, but as long as they can lock and load, the government could shoot people for disagreeing with official government positions. I have several questions for Mr. LaPierre….

1. What other parts of the Bill of Rights do you believe America can do without?

2. Why are the rights of 4 million Americans more important than the other 300+ Million?

3. Why do you hate corporate America?

I also propose interrupting him constantly in order to show him that silencing speech is as annoying as it is un-American. It is odd that he would be at odds with Elena Kagan on gun rights, but right by her side on restricting free speech. Then again, nothing about being against the first amendment is anything but odd. Congratulations Mr. LaPierre, when the tyrants come to silence us, we know which building in Virginia to stop at first in order hold those accountable for the destruction of freedom in America- yours.

Another Progressive Act My Generation Will Be Paying For

The news over the past 3 weeks has been focused around one issue- THE oil spill. It is no longer AN oil spill, it is THE oil spill, the one my generation will compare future spills to in terms of size, damage, and the response. However, THE oil spill is going to start to take a back seat in the news, barring any more gaffes from either BP (not answering questions under oath) or the Federal Government (such as the Coast Guard pulling the crude oil removing boats off the gulf to inspect them…yes this happened).

No, from next Monday forward the political world will start to shift to something that will have long term implications that will far outreach any new laws that will come about from the Deepwater Horizon spill. The confirmation hearings on what is likely to be our next Supreme Court justice, Elena Kagan, will start on June 28th. If I am reading the climate in Washington correctly it looks like we are one questionable memo away from this being an interesting hearing.

First of all, President Obama does not have the same political clout, nor the popularity, as he did one year ago. At this time last year President Obama’s approval rating was anywhere between a 53% that Rasmussen reported on 6/20 to a 65% that an ABC/Washington Post poll had on 6/21. Today (6/18/2010) Rasmussen has him at 41% approval and the highest rating over the past week was a 50% that was reported by CNN, Ipsos, and the AP, each in separate polls. It is obvious that his approval has dropped and dropped big, which in Washington terms, means it is not politically advantageous for members of Congress to continue to be on his side. Since this was not the case last year, it was an open and shut case to confirm someone such as Sonia Sotomayor, who made it clear that he job on the bench was not to follow the law, but to reform the law to follow her personal political viewpoints (Ricci v DeStefano should do the trick in proving that point).

However, Supreme Court nominees are confirmed by the Senate, which is insolated from shifts in public opinion more than the House. This means the Democratic members are likely to side with Obama and confirm Kagan. In order to get the Democrats to go against Kagan, one of a few things need to happen. The first of which we can throw out right away, which is a major slip up on the part of Kagan. If she somehow is stupid enough to make a comment so controversial that her fellow progressives cannot stand beside her, she is not intelligent enough to be on the bench.

There are other options; from the Senate finding her not qualified (not likely) to her having a poor showing at the hearings (less likely), but getting enough Democrats to side with the GOP will take a minor miracle. What is the most likely way to stop Kagan, Democrats or not, is a GOP filibuster. Mitch McConnell has not ruled out this possibility and we know that the ranking republican on the Senate Judiciary Committee, Jeff Sessions (R-AL) will support a filibuster, the question is whether RINO’s such as Lindsey Graham, Olympia Snowe, and Susan Collins will go along with the idea. My guess is that they will not support a filibuster; help push through Kagan, and that will be that.

The point of this long post- not much, other than to show that Kagan is ending up on the Supreme Court of the United States no matter what Republicans do. She is a fierce partisan who determines law based on her personal politics based on what we can read from her memos during her time in the Clinton Administration. Chief Justice Roberts called her views on the first amendment “startling and dangerous” after Kagan said this

"Whether a given category of speech enjoys First Amendment protection depends upon a categorical balancing of the value of the speech against its societal costs."

There is a saying that you can tell a lot about a man (in this case a woman) by looking at the company she keeps? Her judicial hero is Thurgood Marshall- one of the most activist judges in the history of the court. If her personal hero, the memos she wrote during her time in the Clinton Administration, and her own views she voiced in the Supreme Court are not enough evidence to show Kagan is a radical progressive who will ignore the Constitution just think about this- Is President Obama and his team stupid enough to blow a chance to get another person who is as far left as he is on the court for the remainder of her life?


No way are they dumb enough to blow this opportunity. They may lack leadership abilities, but they are still as politically savvy as any team out there. You can bet this is a carefully crafted move to get a member of the far left onto the court with as little theatre as possible.



Thursday, June 17, 2010

Joe Barton's 15 minutes

Ok, so it was not exactly the best 15 minutes of fame someone can have, but nevertheless, Joe Barton is now making headlines from coast to coast. He literally took the spotlight away from one of the all time worst testimonies in front of Congress, which was done by Tony Hayward today. In short, this is what Barton said...

"I think it is a tragedy of the first proportion that a private corporation can be subjected to what I would characterize as a shakedown, in this case, a $20-billion shakedown."

and

"I apologize. I do not want to live in a country where any time a citizen or a corporation does something that is legitimately wrong is subject to some sort of political pressure that is, again, in my words, amounts to a shakedown. So I apologize."


Of course, Democrats (and Republican leadership) are up in arms about this comment. There are obvious political motivations from Barton (Who has received more money from Energy companies than any other member of the House since 1990 according to Opensecrets.org), the Democrats (who are on the side of Obama and firmly against BP), and the Republican leadership (who have a lot more at stake politically than Barton and do not feel that helping those who were collateral damage of BP and the Federal Government's careless actions is such a bad thing) to speak and respond the way they did, which in my mind makes this a non-story. After all, Barton apologized, which in today's America, is as good as a Presidential pardon.

The sad part is that he had to apologize. Frankly, Rep Barton was not off base. In fact, he hit the nail right on the head. This was classic extortion from a President who hails from the town that made extortion an everyday part of the political and business culture. What legal authority did the Federal Government have to do this? If you guessed none, you are correct. We have a legal process in this country that takes care of damages, but once again, in today's America, we need our instant gratification. The President needed his moment to prove he is tough (see yesterday's post) and the $20 Billion "escrow/slushfund" account is that victory. BP needed to get some decent PR and caving into the White House was the perfect way to show that they care, even though the goodwill they may have achieved from the $20 Billion was wiped away with the "small people" comment.

In reality the Federal Government is just as responsible for this disaster as BP was, if not more so, for letting a company with a questionable safety record go essentially unchecked for years. This is not a failure of capitalism, as the Obama Administration wants us to believe, this is a failure of bureaucracy and the consequences of unchecked greed combining to create a disaster. Unfortunately the Obama Administration made business out to be a terrible plague and will stop at nothing until BP is a distant memory and an important step on the path to taxing carbon.


Wednesday, June 16, 2010

Enter the Motif

The day after President Obama’s first Oval Office speech I want to bring up something that has not yet been used as a talking point by my fellow members of the vast right wing conspiracy, but should be.

Here are three quotes in the past 24 hours of what the talking point revolves around before I get into what it and why it is important.

“This is an assault on our shores, and we’re going to fight back with everything we’ve got.”- 6/15/10 Speech to Troops in Pensacola, FL

“I’ve returned from a trip to the Gulf Coast to speak with you about the battle we’re waging against an oil spill that is assaulting our shores and our citizens.”- 6/15/10 Oval Office Speech

“And I want all Americans to know that I will continue to fight each and every day until the oil is contained, until businesses recover, and until the Gulf Coast bounces back from this tragedy, as I know it will.” 6/16/10 Speech after BP meeting

In the past 24 hours the Obama Administration has created a war motif that is woven throughout the President’s statements. Why are they doing this? The answer is simple. The President needs to prove two things to the American people that have been called into question since he has been on the national political scene. The first is that he does not have the executive experience needed to be an effective President. So far, he has lived up to the billing as an inexperienced and temperamental leader who has a hard time making any kind of decision. The perfect example is one two fronts- the oil spill and the economy. On the oil spill all he had to do was waive the Jones Act (which requires that only American made, owned, operated, and manned ships transport goods between American ports) and say to the Governors and BP “Tell me what you need and it is yours, lets stop the oil, minimize the impact, and go from there.” He did not, and it was well after a month when he finally answered questions about the spill
On the second front, the economy, his leadership has been questionable at best. He told us that we had to pass stimulus after stimulus to save the economy. The economy is still stagnating while the Federal Government prints money to pay off its debts. The Government has continued to extend unemployment benefits, which provides a disincentive to gain employment, and he has been bailing out companies and mortgages, creating a massive moral hazard going forward. He still believe the Government creates wealth and can make up for the dip in consumer spending, which is a problem, because the government can only spend more when it takes more from the people (either now or later- two terrible options).

The second part, where the war motif comes in, is his inability to be a strong Commander in Chief. He has bowed to foreign leaders on numerous occasions, he has had a difficult time backing Israel, our one true ally in the Middle East, and he prefers understanding murderous tyrants such as Mahmoud Ahmadinejad and Kim Jong Il rather than show that America does not have to cave into their demands. President Obama and his advisers know that at times he has been criticized for looking weak on foreign policy and the war motif helps with this issue of showing his strength.

Remember, the Obama Administration will never let a crisis go to waste- and the introduction of the language of war shows that they are trying to kill two birds with one stone. h=His lack of executive action and the lack of strength he conveys as Commander in Chief have been discussed multiple times and it is becoming a serious political problem. Unfortunately for the Administration, they do not have the aim, nor the skill, to pull off this maneuver.

Sunday, June 13, 2010

World Cup

A post on the world cup

As I am writing this, the Socceroos of Australia are taking on the much-depleted German team. I have watched every game of this Cup except for the South Africa-Mexico game (even Slovenia-Algeria) and with half of the teams having played one match so far here are a few thoughts on the greatest tournament in world sport.

1. The officiating has been the most impressive part of the tournament. It is rare for there to be much praise piled onto the officials of any sport, especially soccer where emotions run quite high and there are a lot of subjective decisions that have to be made. Nevertheless, I have yet to see a completely blown call. The offside call during the South Africa-Mexico game is the perfect example of what we want to see from the match officials at the World Cup. Not one card has been undeserving and overall they have let the players play. This is a nice departure from what is sometimes seen in highly competitive situations.

2. This is the type of soccer than will make sure Americans will ignore the game for another 4 years. Let’s face it, this Cup has been a snoozer so far. There have been zero games that resulted in more than two goals being scored in total and the one game that everyone looked forward too, USA-England, ended up being a decent, albeit unspectacular game (it also looked like they were playing on a sheet of ice which might have had something to do with that). If this tournament is going to do for soccer what the Olympics did for hockey in America this is going to have to get more exciting (i.e more goals).

3. The most impressive teams have been South Korea, South Africa, and Argentina. Argentina was as entertaining as a team can be while scoring only one goal. I think this is the lowest amount they are held to all tournament long. They get to pick and choose between Carlos Tevez, Diego Milito, and Gonzalo Higuain to pair up with the best player in the world in Lionel Messi. South Korea looked explosive against a slow and uninspired Greece team. I am looking forward to South Korea v. Nigeria with great anticipation. The last team was South Africa, which I think might make it out of their group if they continue to use the emotions of their fellow countrymen to their advantage.

4. The only team that has played so far that will make a run at the title in Argentina. Sorry England, you looked as if you were a grouping of great players who have no chemistry. The USA will most likely play Ghana or Germany in the round of 16 if they advance and those are not terrible options. The Quaterfinals will leave them playing anyone from France or Argentina to South Africa or Mexico. I don’t think it is outrageous to think the USA will make it to the final 8…or maybe beyond if the cards fall right. Back to the original point of this observation, if I was to put money on one team I saw this weekend…it would be Argentina to make at least the semifinals (where they will meet Spain in all likelihood).

Germany won 4-0 with the last two goals being against an Australian side that was down to 10. In all reality they probably put in at least one of those goals against a full strength Socceroos.

What to look forward to this week? If you like goals, Brazil v North Korea will not disappoint. USA v. Slovenia is a huge game for both sides. Netherlands v Denmark on Monday morning is a biggie, especially with the Dutch missing Arjen Robben. However, without a doubt, Portugal v. Ivory Coast is the game of the week (if Drogba plays). If he doesn’t, the game of the week is France v. Mexico.