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Wednesday, August 31, 2011

Congratulations to John Boehner

In a move that truly surprised me, House Speaker John Boehner has asked President Obama to delay the date of his proposed speech to a joint session of Congress. Boehner says that with Congress returning from recess on Tuesday, there is not time to prepare fully for a presidential speech the following day. Boehner adds that he could accept the following evening, next Thursday. Good for Boehner!

As most people now know, Obama announced about a month ago that he would have a jobs plan "soon". Now that he has let another month go by with high unemployment, the president is now suddenly going to announce his plan in a speech to Congress. Sadly, Obama has not released any plan; he is just going to give yet another speech (as if that makes a difference). Obama selected for his speech a time that made it conflict with the debate scheduled for the GOP presidential candidates in California. Since that debate has been scheduled for many months, there is no question that the White House was well aware of the timing. Even so, the White House said that the conflict in timing was just a "coincidence", proof that Obama and the Obamacrats will lie about anything and everything.

Well, since Obama is happy to lie about the timing being a coincidence, I see nothing wrong with Boehner telling him to reschedule the speech for the following evening due to timing difficulties. My guess is that the timing difficulties are actually Obama's inappropriate scheduling of the speech to conflict with the debate. It also does not hurt that the date and time suggested by Boehner conflict with the opening game of the NFL season.

I wish we had a government that was not run with such stupid political games going on. Unfortunately, that would require and honorable and honest leader, something we currently lack. Obama has got to go!


With August winding down, I wanted to take this opportunity to thank those of you who visit this site regularly. Traffic to Connecticut Comments is running at a rate about four times higher than it was as of a year ago. I truly appreciate the support.

One More Time -- The Stimulus Failed

Jonathan Cohn wrote yesterday at the New Republic site that the Obama stimulus plan was successful. Indeed, he pointed to a study by the Congressional Budget Office that concluded that there were "between 1.0 and 2.9 million more people working" due to the stimulus. Supposedly, this makes the stimulus a big success. What utter nonsense!

Consider this: America spent about $750 billion on the stimulus. If the CBO is correct (which I doubt) and if the number of new jobs is 2.5 million which is in the upper reaches of the CBO figures, then the cost of each of these jobs was $300,000. That's right, this great success got 2.5 million people jobs that pay around $40,000 per year for the mere cost of $300,000 a piece. With a few more successes like this, the country will be destroyed.

Wholly aside from the cost, however, the question arises of whether or not the stimulus did what it was supposed to do. This would normally be the definition of success. Obama promised that unemployment would not rise above 8% if the stimulus were enacted. After the stimulus passed, unemployment quickly rose to more than 10% and it has not been anywhere near 8% in the following two and a half years. What a success!

I get tired reading the BS that the left puts forward to wxplain why their failed policies were actually successful. It seems that they will not give up the fantasy, however. Hopefully, the American people recognize for what it is: pure BS.

The Stock for September -- Hewlett Packard

Hewlett Packard (symbol HPQ) has had a truly horrible year thus far. It began the year with some upward movement, reaching $49.39 on February 10, but it has all been downhill since then. Ten days ago, the stock bottomed at 22.75. As I write this, the stock has recovered to $26.02 per share. Despite this terrible performance, I am making HPQ my stock for September. Here is why:

HPQ is enormously undervalued. It is true that the company has stumbled in a number of areas recently. It came out with its own tablet and then decided to cancel the computer after a poor reception. Now it is deciding to partially reinstate the tablet but still to cancel it soon. If this sounds confusing, it is because it is confusing. In other words, management is not handling the direction of the company well. Even so, the expectation is that the company will earn about $4.80 per share in the next twelve months. In other words, the current Price/Earnings multiple is around 5.4, a ridiculously low number.

The company has also put forth confusing signals about its PC division. It will be sold or spun off or kept with some changes. Which one? No one seems to know for sure. Indecision in public of this sort depresses the stock for sure.

Ultimately, however, one needs to remember that Hewlett Packard is a giant company which dominates the market for printers, has an enormous PC business which it may or may not keep and provides tens of billions of dollars of other computer related services and products. I storngly believe that the board will eventually (and hopefully soon) restructure the management by bringing in folks who at least somewhat know what they are doing. Once HPQ unleashes its potential, it will soar. but even if it does not soar, it should still get to a P/E of 10, still a ridiculously low number. If the earnings projections for the next year are too high by 10% and if the P/E multiple is just 10, the stock price should get to 44, an increase of just under 70% from the current market price.

For those who still are not prepared to buy, I also point out that the options for HPQ have high premiums. For example, the November 29 calls are 85 cents at the moment. By buying the stock at 26.02 and writing the November calls for 0.85, one can get a return equivalent to a dividend of 15% while capping the upside potential for the stock at a gain of 73% on an annualized basis.

Disclosure: I am long HPQ stock.

The worst yet

I read the comments of representative Andre Carson, Democrat of Indiana, who said at a Congressional Black Caucus event that some in Congress would “love to see us as second-class citizens” and “some of them in Congress right now of this tea party movement would love to see you and me…hanging on a tree.”
He went on to say that the Tea Party's efforts to cut spending was a move to return to Jim Crow.

This is really the worst yet in offensive, untrue race baiting coming from the Democrats. They seem unable to discuss the issues on the merits. Indeed, since the country clearly agrees in poll after poll that the right corse for America is to spend what we have rather than what we do not have, the upset of the left is coming out in crazy and angry rhetoric.

It is almost trite to point back to just six months ago when president Obama spoke in Phoenix and called for a new civil dialogue, one in which personal attacks and vitriol was avoided. That was at a point when representative Giffords had been shot by a mentally ill man and the Democrats and the press were busy blaming the shooting on Sarah Palin's map that had appeared some six months earlier to show target districts in the 2010 election. Of course, that claim turned out to be totally bogus, but the pious statements of the Democrats about turning down the volume on the rhetoric came pouring out nevertheless.

Now, a sitting Congressman is accusing a large group in Congress and the country of virulent racism, conspiracy to commit murder and, in essence, genocide. It seems that he did not get the message from the Obama speech. OK, so he may be just a crazy pol who spouts off without control. Of course, when he said this to the Congressional Black Caucus, not one of them got up and challenged him. Not one spoke at the event to apologize. President Obama has made no statement condemning this language. The chair of the DNC, Debbie Wasserman Shultz, has not said anything even though the event took place in Florida near her district. The vice president, who called the same Tea Party group terrorists, has also been quiet. I assume Biden is glad that someone finally said something worse than his statement.

Of course, out in America, the ordinary folks must be amazed. The quarter of the voting public that considers itself part of the Tea Party may be offended by these remarks or they may think that the statements just reveal the true idiocy of this one man. In truth, however, the silence of the rest of the Democrats should make clear to the Tea Party just how much work remains to be done to rid the Congress of these angry and unreasonable Democrats, people who seem unable to recognize reality, people who think that everyone who opposes them must be racist, homophobic and a neanderthal.

The real truth is that it is the Democrats who are hoping to go back to the "good old days" when government spent and spent and spent, even though it had no money.

Finally, for what it is worth, Carson should be censured by the House for his statements. It will not mean anything, but it should happen nevertheless.

Tuesday, August 30, 2011

mortgage refinancing

John Crudele has a story in today's New York Post about the recently leaked proposal from Obama to promote refinancing of home mortgages. The story is so important that I have linked it to this post and recommend that you all read it in full. Just click on the title to this post to get to it.

Crudele makes the point that the program that Obama has supposedly decided on is already underway and has been for years. It is nothing new. Indeed, there is massive confusion in the government itself about the status of refinancing programs run by the government. The second point is that the existing program is pretty much a failure. That means that there really is no point at all in a new and repackaged program put forward by Obama.

But read it for yourself....

Obama's plan for jobs: to destroy more

According to an article in the Washington Times, president Obama wrote a letter to House Speaker John Boehner in which Obama stated that there are seven regulations under consideration for passage by government agencies that will cost the US economy between $38 and $100 billion. There are a batch more that will each cost at least $100 million. Think about that! Right now, Obama is supposedly finalizing a plan to create jobs by boosting the growth in the economy. One idea that has leaked is to extend the payroll tax holiday for another year. That will put about $120 billion into the ecnomy in 2012 above what is currently expected. It is the single biggest part of the Obama economic plan. Of course, if the proposed regulations go into effect, that $120 billion will be sucked right back out of the economy. That means no growth, no jobs and stagnation.

Boehner has done the country a service by asking the question of Obama which has forced the president to reveal these job killing regulations. How can Obama believe that Americans will ever take his proposals to create jobs seriously when he is still busy destroying jobs at the same time?

I haven't said it for a few weeks, but it is time for repetition: Obama has got to go!!!!!

The environmental Luddites

In the early nineteenth century, there was a movement in England that protested against the mechanization of the textile industry, a change that was altering the jobs of many textile artisans. The protest of choice in those days was the destruction of the machines. Since that time there have been numerous groups who have tried to fight against modernity, but none have had great success. Actually, I should amend that to say that none in the USA have had great success. After all, the mullahs in Iran succeeded in turning in part a 20th century state back into an eigth century theocracy in the space of a few years. Sadly, a big chunk of the American environmental movement has now joined the Luddite cause. The latest example is the proposed Keystone XL pipeline that would bring oil from the Canadian tar sands to refineries in Texas. This 1700 mile long pipeline would be just another of the many oil and gas pipelines in the USA. It would bring about three quarters of a million barrels of oil per day to American refineries. It would also create about 120,000 jobs, most of which will be in the USA. It would provide the USA with a safe source of energy, particularly important in view of recent events in Libya and other oil producing countries. It would also help cement even closer relations with Canada.

So what is the environmental downside? As I understand it, the big complaint is that there could be an oil spill if the pipeline breaks. To me, that argument is akin to one that claims that one should not fly because there could be a plane crash. It is the same sort of crazy view of the world that led Obama to place a moratorium on off shore drilling and then to hamper that drilling in every way possible after the oil spill in the Gulf of Mexico.

The point is that accidents happen; no one could deny that. Some day, the likelihood is that this pipeline will leak. Maybe it will be an earthquake that causes it. Who knows? Despite this, however, life needs to go on. Americans need to have fuel for their cars. People need jobs. We simply cannot stop the economy and normal life because there may be a problem in the future. If that had been the outlook of past Americans, there would be no railroads (they derail and crash), no cars (need I explain), no planes, no cell phones (they may cause cancer), no computers (artificial intelligence may attack us someday -- remember the Teminator), no central heating or air conditioning (there might be carbon monoxide leaks), and..well, you get the picture.

The sad thing is that today, the group of Luddites is louder and larger than usual. With many in politics and the media, the basic idea has become an article of faith. It is taught in many schools. Think of the global warming debate. If recent science is correct, the theory of man made global warming is essentially destroyed. Nevertheless, it remains a core belief of many in government including the president. It is a tragedy.

Monday, August 29, 2011

More news on the climate front

In an article in the Financial Post, Lawrence Solomon reports on the latest results of scientific enquiry regarding climate change. CERN, the European Organization for Nuclear Research, released the results of detailed experiments that show that essentially all of the recent changes in Earth's climate can be explained by the variations in the magnetic field of the Sun and its effect on shielding the Earth from cosmic radiation. Simply put, cosmic rays work to create clouds in the atmosphere which shield the Earth from solar generated heat. The higher the level of cosmic radiation, the lower the temperature on Earth. If the Sun's magnetic field gets stronger, it shields the Earth from some of the cosmic rays and the result is higher terrestrial temperatures.

Unlike most of the global warming studies of the last decades, this result is not the basis of a computer model containing an assortment of assumptions. The CERN result comes from direct scientific experimentation, observation and calculation. It is an observable fact, not a theory that has to be "believed" like a religion.

The CERN results were published in Nature, this week. Solomon's article, however, is the first that I have seen discussing the increadible importance of this work. I did see Al Gore's latest lament this morning, however, in which he called those who oppose the idea of man-made global warming the "racists" of the 21st century. That diatribe, not actual science, is what gets coverage in the misguided media.

The Psychobabble Bubble

Deepak Chopra is a well known writer on health and wellbeing issues. He began as a Harvard-trained doctor who delved into ayurvedic medicine, the traditional medicine of Indian. From there, he branched out into pop culture and became a guru of the anti-Western spiritualists who attempt liberation from their disappointment with life by fleeing to Eastern thought. Now, Chopra has increased the torrent of psychobabble to an amazing level with a political analysis of the American public. He applies this "analysis" to the upcoming presidential election and predicts that president Obama is unstopable.

Chopra says that Obama satisfies three basic needs of the electorate. First, Chopra announces that Obama keeps the country free of anxiety. In a truly funny statement, Chopra also says "Let's leave aside whether people actually feel more secure." According to Chopra, the American people will reject the Republicans because they are always talking about how bad things are and scaring the public as a result.

This is an unbelievable misunderstanding of reality by Chopra. He needs to understand that sometimes things really are bad and politicians need to talk about how to deal with the problems. In essence, Chopra says Obama will win because he ignores the awful reality.

Chopra next says that Obama satisfies the country's need for achievement by "rooting for the American spirit,...promising a better future and offering economic stimulus and jobs programs." This is truly strange. Normally, one would think that to satify the need for achievement the president would need to achieve something. Apparently, Chopra thinks that being a cheerleader for spirit, making promises that remain unfulfilled and offering programs that fail in dramatic fashion one has reached historic achievements. I think that Chopra will be surprised in 2012 when he finds the verdict of America on Obama's "achievements" or the lack thereof.

Finally, Chopra says that Obama fills the country's need for unity and community. Chopra points out that "to fulfill this need, the President has talked about bipartisanship and the end of crippling divisiveness in politics." This is the worst of the three! Chopra points to what Obama has said on occassion rather than what he does every day. Unity and community! Obama has made villains of the rich, the bankers, the insurance companies, the Tea Party, the GOP and auto executives, among others. Obama has never once engaged in true bipartisanship. Just on an issue like immigration, Obama has done his best to divide the nation into those who support all immigration whether legal or not on the one side and racists on the other. In short, Obama has done more to undermine unity and community than any president in my memory.

There is no question that Chopra lives in the liberal bubble where analysis like his is accepted as accurate and rational, despite the actual reality. Even so, it is hard to imagine that there is a psychbabble bubble where this nonsense is accepted wisdom.

Sunday, August 28, 2011

We could not have made it throught the hurricane without Fearless Leader

I got quite a chuckle over the visit by president Obama to the Emergency Center outside Washington DC. Only in Washington can people believe that Americans will actually fall for this crap. There were many brave men and women who helped those in jeopardy from hurricane Irene. Barack Obama is not one of them. As far as I can tell, the president did not much of anything. It was state and local government that was primarily responsible. This time, unlike during Katrina, the local governments all performed well. North Carolina governor Perdue and New Jersey governor Christie both stood out in their performance. New York City mayor Bloomberg was also ubiquitous, but he often seemed bent on overkill.

In any event, Obama's performance reminded me of the character on the old Rocky and Bullwinkle show. Boris and Natasha, the evil but incompetent spies worked for a man who they called "fearless leader". He never seemed able to accomplish anything. If they ever do a remake of Rocky and Bullwinkle, I think Obama may have a new career as Fearless Leader.

Was the debt ceiling the beginning of the end for Obama?

Three months ago, the Real Clear Politics average of all the polls that check the approval numbers for the president found that Americans approved of his job performance by a margin of about 10%. Of course, that may have been the after glow of the bin Laden killing. Two months ago, the president was back at a slightly positive rating, a place he had been before bin Laden. Since the debt ceiling debate burst into controll of the media story lines, however, Obama has fallen to about a 10% negative rating. Some polls, like Gallup, are showing worse results for Obama. He is at all time low approval of 38% and all time high disapproval of 55% in the Gallup poll. In addition, Obama's ratings on the economy have fallen to less than 30% approval on average. These are killer numbers for a president. Not only is he disliked by more than the number who like him, but on the most important issue to the public he is almost devoid of support.

The truth is that the debt ceiling debate revealed that Obama was unable, unwilling or both to deal with the crisis. He kept himself busy making speeches rather than resolving the dispute or even trying to do so. Now, he is supposed to be coming up with a plan to help increase employment. While many might wonder why, after almost three years in office, there has to be a month long delay before the plan is unveiled, few Americans are waiting eagerly to hear the Obama plan. He has lost the attention of the public and that is a terrible blow to the president.

If Obama loses in 2012 (and it certainly looks like he will), the debt ceiling debate will be seen as the beginning of the end.

Should the housing market be allowed to clear?

In the last few weeks there has been much speculation about the possibility of yet another program from president Obama to help those who are in danger of losing their houses. This will supposedly strengthen the housing market in the USA, although it seems likely that the opposite is true. Obama let fly with a trial balloon for a program that would allow all those with government guaranteed mortgages to refinance at 4%, no questions asked. In other words, there would be a tidal wave of sub-prime mortgages issued by the government to try to cure the ills left from the last time that sub prime mortgages were issued. Here's the thinking: A homeowner with a mortgage guaranteed by Fannie Mae or Freddie Mac would be allowed to refinance the same amount currently left on his or her mortgage at no cost and with no fees and with the interest rate of 4%. This would let folks whose houses are somewhat under water (the house worth less than the mortgage) get new financing to reduce their interest payments. The owners of the mortgages (if it were someone other than the government) would get paid off. The reduced interest payments would come out of the hide of Freddie and Fannie. That means the government would bear that burden since both Freddie and Fannie are technically insolvent. The only ones who would lose are the speculators in Freddie and Fannie stock who would all get wiped out.

Now let's look at the down side. The biggest problem with the program is that it locks people into their homes. Someone who owns a house with a mortgage of $250,000 when the house is only worth $225,000 on the market cannot move. Selling the house would result in the need to come up with the shortfall in the mortgage, something most of these homeowners cannot do. That, of course, is wholly apart from the inability of most of these folks to pay for a new home. If jobs appear at a location other than where the home is located, the homeowner cannot move to obtain that job. And this is a problem which will last for decades.

Another problem is the unfairness of allowing relief to those whose mortgages are guaranteed by the government while leaving those with other sorts of mortgages to fail. There is no logic to that situation.

A third problem is the craziness of keeping people who just cannot afford their homes in a place where they struggle for months and years longer to make slightly lower payments. These folks do not build equity in their homes. They only get somewhat reduced costs to live in a home they cannot afford.

Economically, the program will result in fewer home sales and reduced home building. The people who can afford their mortgages will also be locked into their current homes. That means fewer buyers. Fewer buyers means fewer homes built. In short, the program means that the home builidng industry continues in a depression for a long time into the future.

The alternative is to withdraw the failed programs offered by Obama to help people with their mortgages and allow the foreclosure process to flow fully through the market. This will result in lower prices still in many markets, but the price declines will reverse once the supply of foreclosed homes gets dumped on the market. The problem in the housing market is not that there is a glut of places for people to live. Rather, it is a problem of too many places for sale and too many people fearful of buying while prices continue to fall. Once that is allowed to clear, prices will likely bounce back up a bit and home building can recommence to provide the new homes needed for an expanding population.

None of these courses of action are a panacea for the current difficulties. At least, allowing the market to work unfettered will bring some sort of end to the problems. The Obama "plan" will just drag the inevitable outcome out longer and longer. It will hang over the American economy and reduce the number of new jobs for decades to come.

Saturday, August 27, 2011

A despicable slander

Yesterday's New York Times carried an op-ed column by representative John Lewis, Democrat of Georgia. According to Lewis, the new voting laws put into effect in a number of states are nothing more than racism and attempts to prevent minority voting. This is just ridiculous.

Lewis' biggest complaint is with laws that require voter identification at the polls. Lewis says it is a Republican plot to thwart minority voters and a "poll tax by another name." Maybe Lewis should visit Connecticut. We have had voter ID requirements since 2004. No one can vote without presenting a valid photo ID. This requirement is usually met with a driver's license. And the law was passed by an overwhelmingly Democrat legislature. Was this a move of Jim Crow to the Nutmeg State? No, it was simply an attempt to reduce the possibility of vote fraud. Just like the measures in other states which are essentially the same.

Lewis also complains about reductions in the early voting period in some states. The country managed to survive for centuries with voting taking place on one day only. Early voting was adopted in the hope of increasing turnout, something that did not happen. Nevertheless, even with ten days instead of twenty of early voting, no one group is disadvantaged. If a voter cannot manage to get to vote during ten days, then there is just something wrong with that voter and another ten days of expense to run early voting will not make a difference. With governments squeezed on all sides due to the Obama recession, it is no surprise that the budgets for early voting are being cut. Lewis' complaint makes about as much sense as one from someone who goes to an all-you-can-eat buffet only to be told that the meal can only last seven hours rather than ten. If you cannot eat your fill in seven hours, well...too bad.

The sad thing about current political discourse is that too many Democrats cannot have a reasoned discussion about an issue without declaring the other side racist, homophobic, anti-woman, or some other smear. Sometimes a move to fight fraud is just a move to fight fraud. Lewis and his friends should learn that basic truth.

Friday, August 26, 2011

Today's Big News

In a blow to voters everywhere who claim to be moderately conservative while endorsing essentially all liberal programs forever, former governor of New York George Pataki announced today that he would not seek the GOP presidential nomination. Word is out that two people in Ithaca New York were very upset by the news while no one else cared. Pataki was a joke as governor and he has carried on that tradition as a potential presidential candidate. Gary Johnson and Buddy Roemer both issued statements thanking Pataki for allowing them to stay the most irrelvant candidates in the race.

Have environmental purity tests gone too far?

According to the Wall Street Journal, the SEC has served subpoeana on various natural gas producers which seek information including the content of the fluids that these companies use for hydrofracking. That's right, the Securities and Exchange Commission is now in the environmental protection business. Has the SEC lost its mind? The SEC has no competence to evaluate fracking fluids. That is a job for the EPA, if anyone. But the SEC, in the guise of securities regulation is now asking about the fracking fluids? What's next? Will the SEC start asking drug companies about the details of their phase III studies of new drugs to supplant the FDA? Will the SEC start determining mileage of new cars rather than leaving that to the agency assigned to that task? What is going on at the SEC.

I know that there are apologists for the SEC who will say that the SEC had to investigate whether or not posible environmental liabilities are properly reflected on the books of these natural gas companies. But we all know the answer to that. Under generally accepted accounting standards, there is no need to reflect events which have not yet happened. Put another way, BP did not have to reflect the possibility of the Gulf oil spill until it happened. If the SEC wants to have the accounting boards change their rules, the SEC can attempt this. But the SEC cannot invent some new way to justify an investigation when there clearly is nothing to support it.

A Hope for the Weekend

The forecast for my part of Connecticut is not a good one. As of now, hurricane Irene is most likely to come ashore within ten miles of here. By the time it gets here, it will be at worst a small hurricane or, if we are lucky, a tropical storm. Further south, there are many more who will face the force of a much larger and stronger storm. This is a good time to take a moment and reflect on the insignificance of man compared to the incredible force of nature. It is also a good time for prayer. Let us all pray that no matter where Irene goes, no one is killed or injured.

Thursday, August 25, 2011

A fast note about a new stock -- Fire River Gold Corp.

Fire River Gold Corp (FAU:CA in Canada or FVGCF on the Pink sheets) is a tiny mining company with a working gold mine in Alaska and two other possible projects in the pipeline. The company bought the Nixon Fork Mine which had previously been mined and then closed down. The plan by Fire River for the mine involves doing an extensive drilling program to locate the most promising areas for excavation and then a better program to separate the gold from the ore removed from the mine. The drilling program went ahead over the last year and it showed some areas with high gold content. Let me be quick to point out that these were not extensive areas; the likely gold content of the mine is worth extracting, but this is not a major find. Fire River began actual mining and processing of the ore in early July. It issued its first progress report this morning, and things are looking good.

As a result of today's report, the stock is up about 12% to 48 cents per share. This may seem like quite a jump, but it is just the start of a bigger move that will occur if the performance of the mine continues down the right path as now seems likely. The shares could easily get to $1.50 within a year if the profits come through as expected.

Let me be clear. Fire River remains a highly speculative investment. It is not a place to put money that you may need at some point in the near future. Indeed, I am not even recommending it for investment, although I myself have taken a position in the stock. I am merely calling to your attention a tiny company that has the potential for a big upside. If you like to play with small amounts in the area of stocks that could hit it big, you may want to consider Fire River.

Before you invest, you should review the company's web site for a full introduction to its business plan and prospects. It is also worth reading the governmental filings submitted by the company.

Disclosure: As I say above, I am long Fire River Gold. The investment is for a large number of shares, but at less than fifty cents per share, it is not for a large amount of dollars.

So It's Thursday...

Since it is Thursday, it is time once again to hear the weekly numbers for initial unemployment claims. Today they were not that good. The number came in at 417,000 although this included about 8000 people who were on strike at Verizon. Let me be clear: the number is not that bad, but we were all hoping for something that indicated a hint of growth in the economy. Today's number just shows stagnation or very slow growth of the sort that will never conquer unemployment. So, two weeks after the number finally fell below 400,000 for the first time in over three months, we are back to the usual situation. Something intelligent really must be done. I just hope that when Obama announces his "jobs plan", he does not make things worse. I also hope that he puts forth a real plan, not just another speech with all the old garbage that he keeps recycling.

Wednesday, August 24, 2011

More Political humor

I read an opinion piece by Bill Schneider that appeared today on Politico. It was a hit piece on Texas Governor Rick Perry written by the senior political analyst of CNN. Not surprisingly, I thought it was pretty funny while being sad at the same time.

Schneider says things like Texas has "shockingly low levels of spending on education and social welfare". Really? And just who is it who is shocked? The answer is the liberal establishment of the MSM, the people who stand and cheer as governments spend more than they take in. The people who applaud programs on which billions are lavished with no discernable effect. Think of this example: in the almost fifty years since Head Start was first passed, the total amount spent on the program has been close to a quarter of a trillion dollars. There have been numerous studies done to measure the effectiveness of the program; hgih school and college students as well as those who do not attend college have been compared to find the benefit, if any, obtained by those who were part of the Head Start program as little children. The results have been unanimous. Not a single program has ever found any benefit to the program. Nevertheless, year in and year out folks like Bill Schneider push for more spending on Head Start and call any government that does not do the same "shocking". One would think that after fifty years the USA would learn that Head Start does not work and stop funding it. Nope!

Another funny bit in Schneider's column is a rant about how in Perry's Texas, they still execute murderers. Imagine that! Perry is obviously disqualified to be president.

Perhaps the best point made by Schneider is that Perry is a fifth generation Texan, not a transplanted New Englander like the Bushes. what could possibly be worse.

The truth is that when one reads opinions like those expressed by Schneider, it is easy to see why no one watches CNN. What is the point of watching a "news" show if all you get to see are delusional people?

A Joke?

Yesterday, I wrote a post about a supposed press release from the DNC Chair Debbie Wasserman Schultz with regard to the earthquake in DC. I assume that anyone reading that post knew immediately that it was a satire (it is hard to imagine even someone like Debbie Wasserman Schultz calling the earthquake racist). Nevertheless, I have to write now about something that actually is not a joke. Here goes: Former New York governor George Pataki is considering getting into the GOP race for the presidential nomination. No, really! Pataki is planning to get into the race. The problem for Pataki is not that this is reality, but the the reality is a whole lot funnier than most jokes. Pataki's chance of getting the GOP nomination ar about as likely as the chance that president Obama will announce that he wants to privatize Medicare. Why would someone who was governor of a state put himself through campaigning when he ought to know that he has no chance at all? I guess Pataki must be delusional.

So who is the alternative?

There is a rising tide of grumbling among Democrats about president Obama. There are ideological complaints: he's too liberal or he is not liberal enough. There are even style complaints: he's too aloof. The biggest complaint, however, is that he may not win in 2012. I keep hearing people talk about Clinton getting back into the fray, but she seems to have zero interest in this. So, if the opponent is not Hillary, who could it be. My suggestion is former governor of Pennsylvania and DNC chair Ed Rendell. Rendell has executive experience; he was governor of Pennsylvania for eight years and before that mayor of Philadelphia for an equal term. He was adept at encouraging economic growth; Philadelphia experiences something of a renaissance under his leadership and Pennsylvania also grew its economy faster than most other states. He is well spoken although he is no Obama. He seems level headed and always projects a positve attitude. He also stays away from the extremes and acts in a way that would be seen as presidential. Most important, he seems adept at getting things done. He announces his plans and then pushes towards getting them accomplished. The Obama penchant for dithering and contradicting and confusion would be gone with accomplishment in its place.

Tuesday, August 23, 2011

DNC statement on the earthquake

The chair of the Democrat National Committee, Debbie Wasserman Schultz, released a statement this afternoon about the earthquake that was centered in the Washington DC area. Here is the text:

"As you know, an earthquake struck this afternoon. The quake was centered on an area of Virginia just south of Washington. Fortunately, there has been almost no damage and just a few minor scrapes and bruises. The earthquake is just another attempt by the radical Tea Party Republicans to undermine the effectiveness of the nation's government. It was also directed mainly at Washington, one of the cities with the highest concentration of African Americans in the USA. What further proof of the racism of the Tea Party could be needed? The DNC calls upon all Americans to show the Tea Party that it cannot shake up the American political system. Send your contributions to the DNC at ......"

Earthshaking news!

Okay, so that headline will probably be used 100 times today and tomorrow about minor earthquake centered in Virginia. Although reports say that the quake was felt in New York City and I heard from people that they felt movement in New Haven Connecticut, there was nothing around here 9and we are about halfway between New York City and New Haven. It would serve the media well if they were to be a bit more complete in their stories about the quake. Everything I have read so far reports that the White House and the Capitol and certain other buildings were evacuated. Only the tenth story reported that the reason for the evacuation was not damage from the quake but rather fear that the building had shaken due to a terrorist attack and that there might be more to follow. Quite a different spin on the story!

Obama's role in LIbya

I find it amazing to see all of the articles this morning about president Obama's great "victory" in Libya. Hey media, the victory belongs to the Libyan rebels who fought and died, not to the American president who mishandled the matter with the result that thousands died unnecessarily.

No one should forget the start of the Libyan mess. When the protests in Libya first broke out, there were uprisings all over the country. It was an amazing sight to see all these people rising against their government even though they knew that the government could strike back hard against them. The movement by the people was so widespread that it shook the very foundations of the Libyan state. Gaddafi was thrown back on his heels in confusion. Had the USA supported the rebellion at that point (as we had just done in Egypt) the Gaddafi government would likely have fallen without firing a shot. Indeed, Gaddafi was negotiating for a place to flee to and could have been ushered out of Tripoli without all the bloodshed that followed. Of course, Obama was silent. He waited on the sidelines until Gaddafi caught his breath and started attacking the rebels. Even then, he did nothing other than consult with allies and try to move the matter to the United Nations. Five weeks later, action by the "international community" was in place and the NATO air support campaign began. During those five weeks, thousands died. Once NATO started its campaign, thousands more died. All of these deaths could have been avoided if the president had not dithered. All of these deaths could have been avoided if Obama had seen the national interests of the USA lay in the overthrow of Gaddafi, a supporter of terrorism, and acted when the opportunity appeared. And not only that! Obama in recent days has been blaming some of the problems in the economy on the arab spring meaning the cutoff of Libyan oil exports. Had Obama acted quickly when the rebellion first appeared, that cutoff of oil from Libya could also have been avoided. Imagine, Obama's weak and halting foreign policy cost the US economy growth and jobs. I doubt we will hear much about this from the White House; it will be too busy taking credit for someone else's victory.

Embarrassing knees everywhere

This morning I heard an innocuous report about the New York District Attorney dropping rape charges against Dominique Strauss-Kahn. This was followed by an angry statement from the National Organization for Women which lamented this development as another indication of the mistreatment of women; according to NOW, the action was just another instance in which the past of a rape victim was used improperly against her. I realize that this is a knee jerk reaction expected from NOW, but it ought to be an embarrassment to knees everywhere. The District Attorney revealed to the court that it could not determine when the alleged victim was telling the truth and when she was lying. There had been multiple interviews of the victim, and in each interview she made statements that were revealed to be lies. If the DA could not tell if the complaintant was telling the truth, the DA could not ask a jury to believe her. Conviction in a criminal case has to be based upon proof "beyond a reasonable doubt", and the complaintant could not even get close to that level when speaking to the lawyers who were on her side. To say the least, dropping the charges against DSK is the right thing to do. But there was NOW lamenting this attack on women's rights. It was sad and embarrassing. Certainly, there have been times when women have been mistreated by the system, but that is not the case every time. NOW should know better than just to jump in no matter what the facts.

Monday, August 22, 2011

The bottom falls out for Obama

In an amazing poll our today from Gallup, president Obama losing to Mitt Romeny among registered voters 48 to 46%. Among the same group, Obama dn Texas governor Rick Perry are tied at 47%. Obama leads Ron Paul by 47 to 45% and Michelle Bachmann by 48 to 44%. These are extraordinarily bad numbers for an incumbent president. They show that he would lose big were the election held today. For decades, Republicans always do better among likely voters than among registered voters. In other words, a Romney lead of 2% is probably more like a lead of 5 or 6 % among likely voters. That also means that Perry would be ahead among likely voters. Indeed, Paul and perhaps even Bachmann would be ahead with the group polled. It is astounding.

One needs to remember that few Americans know anything at all about any of these Republican candidates other than Mitt Romney. Even for Romney, there is at best a name recognition with not much more. The votes here are just a rejection of Obama in favor of the unknown. It is a very bad sign for the president. Of course, given the wholesale rejection of Obama's policies by the majority of Americans, these results are not completely surprising. Putting it in terms that the president will be sure to understand (although he will probably deny ever hearing this), "Obama's Chickens have come home to roost!"

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The singlemindedness of the Tea Party Republicans

I had a long argument this morning with a friend who forcefully proclaimed that the total focus of Tea Party Republicans on spending cuts was an extreme position that would doom them to defeat. After all, he told me, there are other issues that have to be addressed to increase economic growth and to create jobs. According to my friend, cutting spending will hurt growth and that cannot be tolerated at the present time.

I strongly disagree with the underlying premise put forward by my friend, a premise which I believe comes right out of the playbook of the main stream media. Since my friend is usually well informed, I thought it might be worth discussing the actual facts so that everyone could see the truth.

First, it is ridiculous to claim that the Republicans or just the Tea Party Republicans have been focused only on cutting spending. Shortly after taking office last January, the House did the following: 1)They voted to repeal Obamacare, a move which would have been a major boost to economic growth. 2)The House passed a budget plan which would have completely rewritten the US Tax Code so as to encourage investment, economic growth and job creation. 3)The House passed a plan outlining restructuring for Medicare, the first attempt to fix the problem with entitlements to pass either house of congress in about 25 years. 4)The House passed legislation to rein in some of the more extreme acts of the EPA, particularly with regard to energy generation and carbon dioxide emissions. There is more, but the point is that the Tea Party Republicans put forward an entire plan to promote growth, increase jobs and help Americans get back to prosperity. Each of these plans was thwarted by the Democrats in the Senate who either voted down the House plans or just refused to vote on them at all. For their part, the Senate Democrats followed the lead of president Obama and came forward with no plan on any of these issues.

Second, the focus on spending cuts comes about because it is the one area in which the House majority can effectuate policy. No spending can be approved without consent of the House, and the Republicans can control that. All of the other issues discussed above need the agreement of the Democrats, but that party is perfectly happy with the way things are already structured. Even though the changes would increase economic growth and create jobs, they conflict with the ideology of the Democrats, so they get voted down in the Senate. On items like spending bills and the rise of the debt ceiling, the Democrats have to get Republican consent in the House, so the focus of the fight to save the economy is there.

Third, while cutting spending will not immediately increase economic growth or create jobs, it will go a long way towards providing an atmosphere in the USA where such growth can take place. An ever increasing federal deficit will undermine any chance for growth. Right now, we are on a course which will lead to a point in a few years where about 20% of the world's assets will be invested in US Treasuries. That is simply unsustainable. Sanity has to be restored to the debt markets before the economy can fully recover.

The idea that the Republicans are focused only on spending reductions is basically one of the talking points of Obama and the Obamacrats. It is simply not factual, but that does not stop its constant repitition. Next time someone tells you this claim as if it is a fact, you now have the information you need to show that he or she is are wrong.

Amazing stability on Obamacare

Rasmussen periodically polls on the question of whether or not Obamacare should be repealed. The latest poll shows that by a margin of 55 to 38% the American public favor repeal of that law. If one looks at the results from a year ago, one finds essentially no change. At that point, repeal was favored by a margin of 56 to 40%, a number statistically the same as the current numbers. Given this huge majority against Obamacare, one would think that there would be real movement towards repeal. It will be interesting to see this issue play out in the next election.

Sunday, August 21, 2011

Gaddafi on the brink

The news from Libya is that Gaddafi is finally on the edge of defeat. Let's hope there is not another of those reversals that seem all too common in Libya. It would be nice to bid farewell to another crazy dictator and supporter of terrorism. Let's hope that the rebels turn out not to be worse.

A Note about GasFrac

I have written often about GasFrac Energy Services (symbol GFS:CA or GSFVF on the pink sheets), but I think an update is in order after the recent market slide. At the close on Friday, GasFrac was trading at 7.26 in Canada and $7.29 in the USA. In my opinion, this remains a buying opportunity.

Let’s look at the numbers. The estimates from the various analysts were adjusted after the recent earnings report. Right now, there are six who cover the stock. Their estimates for earnings per share in 2011 range from a profit of 18 cents to a loss of three cents. In other words, their numbers are all over the lot. In my opinion, however, these are the wrong numbers to consider. The weather problems in Candada and the startup delays and expenses in Texas have distorted the earnings for this year in major ways. I prefer to look at the expectations for 2012; that year should have a substantial run with essentially all of the equipment sets that will let us get a better view of the true potential of GasFrac. According to the analysts, the EPS estimates for 2012 run from a low of 84 cents to a high of $1.21. The average is $1.01 per share. Revenue estimates for 2012 run from 386 million to 582 million dollars. Since the Gasfrac management itself says that it should be able to gross 65 million dollars per set per year and the company will have ten sets for the year, you can see that all of the analysts have provided for a substantial discount from full usage. Indeed, the low estimate allows for only about sixty percent of the maximum revenue (even assuming that there are no additional sets added in late 2012).

The estimates for 2012 vary greatly, but the overarching point is that they are all outstanding numbers. At the low estimate of 84 cents, the stock is currently trading at just over eight times next year’s earnings. For a stock growing at the rate of GasFrac, this is an extremely low valuation. If one uses the average of the analysts instead of the low, the P/E multiple is just over seven! The stock price should be substantially higher.

It seems that the market either does not believe the numbers or it does not understand the nature of GasFrac’s business. So we should examine the potential causes why Gasfrac might miss these numbers.

1) GasFrac could experience more bad weather that would delay its work. Obviously, this is possible, but at the worst, it will just affect three or four months in Canada. With more work going ahead in the USA, the importance of such a weather delay is much less than it was in 2011. This is not enough to cause a major miss.
2) GasFrac could be rejected in the market in the USA. Since all of the data suggests that wells completed with liquid propane perform substantially better than those which are completed with hydrofracking, I find it hard to accept this as a real risk.
3) GasFrac could find that the liquid propane system has an inherent safety risk that was not discovered during the first years of usage. Again, this is an obvious risk, but it is highly unlikely that a safety risk will appear now that the system has been extensively and safely used for a number of years on hundreds of wells.
4) GasFrac could be denied its patents that give it exclusive use of the liquid propane process. The US patent office could deny the patent, but the current indications in no way point to that. It is generally expected that the patent protection will issue within the next year.
5) Another competitor could come forward with a better system. This is true of every company that provides services. It is not a reason to avoid the stock.
These reasons do not explain the low stock price in my opinion. So what are reasons that might give an explanation for the current depressed price?
1) The price of oil is falling and the price of natural gas is low. Anyone who thinks that this is a reason for the stock to be priced as it is, does not understand the economics of the Gasfrac business. GasFrac provides a method to complete wells in shale formations that results in better outcomes with reduced environmental problems. Over the next year, it is highly likely that the price of oil will remain high enough to support continued drilling of wells in shale in both of GasFrac’s markets. Since GasFrac now has less than two percent of that market, there is planty of room for growth even if the overall market contracts (which is not very likely.)
2) The market as a whole is falling and people are fleeing from stocks. I cannot argue with this one; it is probably true. Nevertheless, now may be the best time to get into GasFrac for just this reason. The price is unreasonably low due to panic. What better time to buy.
3) There could be some other reason of which I am unaware. After years in the market, I have come to realize that this is always a possibility. That is why each person who buys stock has to do his or her own due diligence to investigate the company involved. Do not take the word of some columnist (even if he is as charming and knowledgeable as me).
In summary, Gasfrac seems to remain a good long term buy. I realize that I have been saying this consistently as the price of the stock has declined. That only makes it a better buy in my opinion.

Disclosure: I remain long GasFrac stock. It is one of the largest holdings in my accounts and I may add more to the position from time to time.

How about a little honesty from the AP

This morning the AP released a "news" story about how Republicans want to raise taxes but only on the poor. That is actually the slant that the AP put on the debate about whether or not to cut the social security payroll tax by 2% for 2012. That cut would extend the one-year cut done for 2011 as a pro-growth stimulus. According to the AP, certain evil Republicans are against passing that tax cut, so they want to increase taxes on the poor.

Despite the idiotic position of the AP, there are some real issues that arise with regard to the potential tax cut.

1) The tax in question is the one which funds Social Security. That program is already headed for bankruptcy unless something is done to strengthen it. Cutting $120 billion in revenue from the program in 2012 will only work to weaken the program and hasten the day when it goes bankrupt.

2) The debt ceiling compromise requires Congress to come up with about another 1.5 trillion dollars in additional revenues or spending cuts by Thanksgiving. Adding another 120 billion dollars to the deficit by cutting taxes again will only make that harder.

3) There are much better ways to stimulate the economy than this sort of tax cut. The cut in the payroll tax works to give most American workers a slightly higher take home pay; it comes to like 20 bucks a week on average. This will help people make ends meet, but it will not encourage the increase in consumption or investment that would provide a major push towards higher growth. A cut in taxes on investments that lead to job growth provides a much better incentive to move the economy forward. On the other hand, the payroll tax cut provides more of a stimulus than increased government spending of the sort seen in Obama's stimulus bill.

4) Calling opposition to the cut in the payroll tax support for a tax increase is nonsense and it will lead to much bigger problems the following year. The law already sets a tax level for the payroll tax for 2012. IF nothing is done, the temporary reduction will expire and the level of 2010 will return. There are also temporary reductions in income tax rates, estate tax rates and the alternative minimum tax that will expire at the end of 2012. If those are prevented, then the ten year cost to the Treasury is in the order of five trillion dollars -- twice the amount of the cuts agreed to in the contentious debt ceiling debate.

5) The real truth is that the entire US tax system needs a detailed overhaul. We have corporations like General Electric that can make five billion dollars in a quarter but pay no tax due to the complex loopholes put in the system. We have an underground economy in the area of a trillion dollars a year where no one pays tax. We have folks who have taxes so complex that they do not even understand them, let alone have the capacity to file for themselves. If all deductions were removed and rates lowered, the individual inocme tax would be much fairer. If corporations paid a consumption tax rather than an income tax, all the loopholes would disappear and freeloaders like Obama's cronies at GE would pay their fair share.

The truth is that America needs to not get caught up in stupid and sidhonest political battles about who wants to raise taxes and who to cut them. We should be looking for a better tax system. It is not a difficult search, but it requires courage from the politicians to do what is best for the country rather than for themselves. I doubt anything will be done about it until after the 2012 elections.

Saturday, August 20, 2011

The Iranian Diversion

Iran is at a difficult place in its foreign relations. Its main arab ally, Syria, is in the process of ousting the regime which befriended Iran. Many think that it is only a matter of time until the Assad regime is toppled. Of course, Assad and his Baath party are fighting the peaceful protests with tanks, machine guns and grenades. If the courage of the protesters fails, Assad will hang on to power.

One item which provides a major help to the protesters is the support of their cause by other governments. When the Saudis withdrew their ambassador from Damascus, the protesters understood that to be an expression of solidarity. Even when the USA finally said the Assad must go, that was, no matter how belated, an expression which could help give the protesters the impetus to continue their struggle. Indeed, the rising international condemnation of Assad is fueling the fires of protest in Syria.

This is why the Iranians have decided to try to create a diversion which will occupy the world's attention and dishearten the protesters. That diversion is the latests terror attacks in Southern Israel by Hamas, another Iranian ally. Iran wants everyone to focus on these attacks. Indeed, I expect that there will be more in the days ahead. Hamas will strike again; it has been firing rockets into Israel in numbers not seen for three years. Forty-five have hit southern Israel in just the last day with the result that there were many injuries and some damage. My guess is that within a week or two the Hezbollah forces which constitute Iran's closest ally in the region will start shooting into Israel from Lebanon. Iran's goal is to rally arabs to unite against Israel and take attention from the slaughter in Syria.

It is time for the world to take further steps to support the Syrian uprising. We cannot let Iran use the killings of Israelis to divert attention from the murderous Assad regime. The truth is that probably the best way for the terror attacks to be stopped is for the Assad regime to fall. A new Sunni government in Damascus would quickly cut ties with Iran, a move the would isolate both Hezbollah and Hamas. Those terrorists should be less likely to fire off their rockets into Israel if they know that there will be no easy resupply though Syria from Iran.

An Homage to Abraham Lincoln?

With president Obama done with his bus tour and off to his lavish digs in Martha's Vineyard until September, I started thinking about the buses he used to tour the heartland. They were pitch black, leading one wag to suggest that he expected Obama's first words off the bus to be "I am your father, Luke." I doubt that Star Wars imagery was what they were going for, however. Then it hit me. Obama was trying to mirror the caravan the carried the last president who hailed from Illinois when elected, Abraham Lincoln. Many folks will recognize the musical poem, The Lonesome Train, that was written about Lincoln's return to Illinois for burial. Here are the most famous lines: "A lonesome train on a lonesome track/Seven coaches painted black." That was it! Obama was using two coaches painted black in an homage to Lincoln.

Actually, I do not know if Obama and his campaign staff ever thought about Lincoln and his funeral train. One thing is certain, however: Obama's tour was a lot like a funeral procession. Unfortunately for the country, the funeral was being held for the American economy.

Obama's latest "jobs plan"

In his weekly radio address, president Obama today called for action by Congress to get things done by putting "country ahead of party". So we got another attack on the Republicans coupled with some interesting suggestions.

Obama now says that he wants Congress to pass a cut to the payroll tax. Let's be clear what this is. Last December, Obama reluctantly agreed to a GOP idea to stimulate the economy by cutting by 2% the payroll taxes deducted from American paychecks. That cut expires in December and Obama is now calling for it to be extended into 2012. There is no announced Republican opposition to this move, but there will need to be a way found to pay for the reduction in tax revenues. In fact, the most likely outcome is that this reduction will get rolled into the report by the special committee set up as part of the debt reduction bill.

Obama also says that he wants to get the free trade agreements with Korea, Colombia and others passed. It is ridiculous that he is now blaming Congress for the delay. The agreements were negotiated by the Bush Administration and then held up from passing the Senate due to Democrats who followed their union supporters in fighting any further free trade agreements. When Obama took office, he decided to withdraw the agreements and try to make changes to them. Although nothing but cosmetic changes were made, Obama finally resubmitted the agreements back to Congress for action. Now, after delaying the passage by over two years, he is griping about the failure to get them passed. One does wonder, of course, why the Democrats who control the Senate have not acted.

Anther Obama suggestion is a plan to help returning veterans of Iraq and Afghanistan find jobs. That may be a good idea, but it will not create jobs. It will only change who gets the few jobs out there.

Finally, Obama is now pushing for a road construction bill. He first suggested this last week. LAST WEEK! And yet there he is on national radio blaming congress for inaction. Congress has not even been in session since Obama first came out for the roads bill and he well knows that. What a hypocrite. The truth is that there are two competing road bills in Congress. One, in the Senate, is a short term appropriation that will add 12 billion dollars in extra spending. The senate is now trying to find somewhere else to cut spending to offset that 12 billion increase. The second bill is a long term appropriation pending in the House that would use all the highway taxes but not increase spending. This bill, however, would provide more order in the process since there would be no question about the funding being in place for most projects. By the end of September, there will likely be a compromise on the entire issue with a bill passed.

I have to wonder if Obama really thinks he can get away with just lying to the American people.

Amazing poll results -- 2

I read polls all the time. Some are encouraging and some not so. Some seem slanted and some unbiased. For the most part, however, the polls are not really meaningful at this point in the process. They do show trends, but the trends can changed. Today, however, brought a poll that does more than just show a trend in my opinion.

Muhlenberg College did a poll of voters in Pennsylvania that gave these results: Obama's job approval in PA is at 35%. In a race agianst a generic Republican in Pennsylvania, Obama is at 36%, the Republican is at 31% and 31% say it will depend on who the GOP nominates. Finally, by a margin of 73 to 23, Pennsylvania voters say that Obama's policies have either hurt the country (41%) or made no difference (32%) rather than helping.

These results are an earthquake for the Obama White House. First, let's state the obvious. There is no way that Obama wins re-election without Pennsylvania. Pennsylvania has twenty electoral votes, the fifth largest amount. Ohio which is much like Pennsylvania except about 5% more Republican will never vote for Obama if he looses PA. Nor will Florida or North Carolina. In other words, the PA numbers are a symptom of a much larger phenomenon, one that will move enough votes to the GOP column to drive Obama from the White House. Think of it this way: Pennsylvania leans towards the Democrats for presidential votes; elections may be close, but the Democrats have an advantage. The last time that Pennsylvania voted for a Republican while a Democrat won the White House was in 1948, 63 years ago. In other words, if the GOP takes PA, it is almost a given that Obama will lose.

That is why these latest poll numbers are so striking. Fully 31% of the electorate wants only to see if the GOP candidate is acceptable before deciding which way to vote. Obama has the support of only 36% in Pennsylvania even though a large majority of the registered voters in the state are Democrats. Amazing!

Obama's Poll Numbers -- The Left Reacts

Three months ago just after the killing of Bin Laden by brave Navy seals, we were told day after that Barack Obama was now unbeatable for re-election. When the after glow of the end of Bin Laden wore off, the story did not change for a while. Then reality came back to bite Obama and his standing. It is hard to do well as president when you are unable or unwilling to do anything to help restore a damaged economy. It is even harder to do well when it becomes clear to the country that you do not even have a plan or idea as to what would help put the economy on the right path. Americans do not want a clueless bungler as their leader. So, as of now, Obama's approval ratings in nearly every poll are at or just above 40%. That means that disapproval is at or just below 60%.

It has been humorous to see the reactions of Obama's supporters on the left as the vacuous nature of their economic theories has been exposed. Big government economic fixes generally do not work, and that is now an accepted fact in most of America. Another way to say this is that leftist economics has been discredited for the vast majority of American voters. Only the true ideologues still support the need for another stimulus package. The collapse of Obama's poll numbers has also led to hysteria on the left.

Today, however, brings one of the most unintentionally humorous pieces I have seen in a long time. Michael Kazin writing in the New Republic ponderously announces that essentially all presidents end up unpopular. Indeed, nearly all of them leave office with their central goals unachieved. Obama is just another in a long string of presidents to whom this has happened. Hilarious!

Let's look back to see reality. Kazin speaks of presidencies since Theodore Roosevelt. That covers 108 years. Kazin admits that FDR, Eisenhower, Coolidge and Reagan avoided this pitfall and left with full popularity. That covers about 35 years of the period. But even as to the other 73 years, Kazin is not asking the right question. The issue is not which president left without high popularity; it is rather which ones lost their popularity by just two and a half years into their first term and which ones had their programs so completely rejected by public opinion in that short of a time. The answer is not many. George W. Bush was extremely popular after two and a half years in office. He only was brought down by the relentless bad news of the Iraq war as it continued year after year. Bill Clinton was not riding high, but he was still doing fine after a two and half years. George H.W. Bush was at the peak of his popularity after two and a half years. Even Jimmy Carter was not at the depths that Obama has reached in this short time. Gerald Ford can be skipped since he never won the office. Richard Nixon was well on the way to an enormous landslide re-election by this point in his first term. Lyndon Johnson was at his greatest strength and popularity after two and a half years. JFK was also quite popular after two and a half years. Harry Truman is the first president where Kazin's discussion finds a sympathetic example. Herbert Hoover is the second, but Hoover was facing the start of the great depression. Woodrow Wilson was doing quite well in 1915; he was keeping the USA out of World War I. I do not know if there were polls during the Taft administration, so I will offer no evidence on that score. I also omitted Warren Harding since he did not live to see two and a half years in office.

So Obama's fellow presidents who seemed to be failing after two and a half years in office were Truman and Hoover. That means that in 108 years, the presidents in that position were in office for just 13 years or just over 10% of the time.

It seems that Kazin's analysis works just about as well as Obama's economic theories. Both are failures. Sooner or later the left is going to have to recognize Obama for the failure he has been.

Friday, August 19, 2011

Going the wrong way

Just at a time when one would think that the goal of the government ought to be to promote hiring, President Obama takes another step to do the opposite. Yesterday, Obama signed an executive order that requires all federal agencies to take part in a new council which will develop an action plan to promote diversity among the federal employees. As of today, just under 40 percent of federal employees are minorities and about 45% are women. That means that minorities are overrepresented and women underrepresented if these figures are compared to the population as a whole. Does this mean that the federal government has been discriminating against women and in favor of minorities. I doubt it. So should there be thousands of hours spent for yet another committee to promote diversity? Should the American taxpayer pay for the millions it will cost to develop the rules and then to implement them? Should the hiring by the federal government be subjected to yet another set of rules which will slow hiring? None of this makes sense.

Let me rephrase what I said. None of this makes sense except if the goal is to please the liberal base and help Obama with his re-election. The move will hurt job growth in the country, not help it. But Obama will get to crow about how much he has done to promote diversity. Whoopee! Why worry about jobs for the unemployed when you can fight instead for diversity.

A Jobs Plan (1)-- Create a new Industry

Some time after he gets back from his vacation on Martha's Vineyard, president Obama is slated to give a speech about his "new" jobs plan. Most likely, the plan will be a political exercise designed to help with Obama's re-election campaign rather than a realistic attempt to help the economy create new jobs. No matter how unlikely, one can still hope that Obama will actually do something that might help Americans find work. To that end, I will offer a few suggestions.

My first suggestion is that president Obama endorse a plan to create a domestic industry to produce vehicles that run on compressed natural gas. There already are American manufacturers who build cars, trucks and buses that run on CNG, but that industry is tiny. Natural gas, however, is the fuel of the future for a variety of reasons.

First, America has an abundant supply of natural gas. Indeed, we have more natural gas than Saudi Arabia has oil. As the natural gas gets produced, it will create hundreds of thousands of high-paying jobs here in the USA. For example, the most recent projections are that just in the state of Pennsylvania where the Marcellus shale has been developed in the last five years, the natural gas industry has created about 140,000 jobs. This job creation has made Pennsylvania the big state with the lowest unemployment rate. Natural gas has also contributed to economic growth in Pennsylvania and has raised state revenue by over a billion dollars.

Second, unlike electric cars, natural gas vehicles already exist in economical commercial form. Many of the buses in New York run on CNG. This is true in many other transit systems. These vehicles run on fuel that costs less than one-third as much as gasoline or diesel. Thus, it would not be difficult to move ahead in a big way with the use of CNG powered vehicles.

Third, CNG is much cleaner than diesel or gasoline powered vehicles. Compared to electric cars which are actually fueled by buring coal at power plants, the environmental advantage is greater still. Switching to a CNG vehicles would reduce air pollution by over 40%.

Fourth, using natural gas would put billions of dollars into the US economy each year rather than sending it overseas to countries like Iran and Venezuela to pay for oil. The combination of lower overall costs and keeping the money in the country would be an annual boost to economic growth. It would also deprive many enemies of the USA of their economic base in the oil industry.

The big problem facing the natural gas vehicles is the lack of filling stations across the country. If one buys a gasoline powered car, there are stations almost anywhere to buy fuel. The lack of nat gas filling stations is a significant problem. Of course, the filling stations cannot be built quickly until there are sufficient vehicles to use the stations and make them profitable. It is a classic chicken/egg situation.

This is where the federal government comes in. Were the government to promote construction of filling stations and the use of nat gas vehicles, it could jump start the industry and gain all of the benefits discussed above. There already is pending in Congress a bill called the NATGAS Act which would do just that. It has a price tag of 5 billion dollars over two years. That amount is enough to move the basic infrastructure forward sufficiently to push natural gas powered vehicles ahead in a major way.

My first suggestion is that president Obama endorse the Nat Gas bill. He can stop pushing electric vehicles which are uneconomical, polluting and unwanted by the market. Just the savings from stopping the electric car programs could more than pay for the NAT GAS act.

Even Gene Robinson?

Eugene Robinson of the Washington Post is perhaps the most reliably pro-Obama columnist in the country. To Robinson, all Republicans are hateful racists. To Robinson, every plan put forth by Obama has been brilliant. So today's column from Robinson is highly newsworthy. Robinson is criticizing the White House (albeit with a very light hand) for having no plan how to deal with the ongoing slaughter in Syria. Now Robinson's position is certainly a logical one; he thinks that the president ought to explain the difference between Libya and Syria and announce an Obama Doctrine which would rationalize the use of force in the Middle East. No one could be against the use of rational thought in foreign policy, even though it seems shamefully absent in the Obama State Department.

The important point here is that it is Euggene Robinson who is criticizing Obama. If even Robinson feels free to take a shot at Obama, then there are just no true believers next. I am waiting for news next week that Michelle Obama has written a biting critique of her husband.

Thursday, August 18, 2011

Amazingly Ignorant

I just heard the fourth report in the news that blamed today's market debacle in part on the rise in weekly new claims for unemployment. How ridiculous. The claims numbers were up slightly from last week, but they were right in line with the average of recent weeks. It was nothing new. Some day it would be nice if reporters were required to take courses to understand the economy before they reported about it.

You can run (to vacation) but you can't hide

Now that President Obama is back from his campaign bus trip that he claimed was non-political, he is off to another vacation, this time to New England. He will be at a palatial estate on Martha's Vineyard. Unfortunately for Obama, however, he can hide on the island, but Americans still see him for what he really is. The daily numbers for the Rasmussen presidential job performance poll show that only 19% of those questioned express strong support for Obama. This figure is tied with the lowest level reached during his presidency. Even a year ago when approval levels got low, there were still about 30% of the folks who gave Obama the highest marks for what he had done. In the space of a year, fully one-third of that group has dropped their full-throated support for the president. That means that one-third of this group which provides all of those who campaign and raise money for the campaign have vanished. Indeed, among all Americans other than African Americans, the number who strongly support Obama hovers near ten percent. It is an historic low for any modern president.

Weekly jobless claims

This week's data for new unemployment claims show 408,000 first time claimants. This is up by 9000 from the 399,000 who made claims last week (revised up from the original figure of 395,000). This number is in line with the new normal, new claims in the area at or just above 400,000. It means that there is no real job growth in the economy. (For those from CBS that means that essentially no good jobs or low paying jobs are being created.) Any movement in the unemployment rate will be determined by the number of folks who give up looking for work.