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Friday, September 30, 2011

Obama's plan is still DOA

Here is the latest on the "pass the bill now" American Jobs Act from that great class warrior president Obama. It seems that neither party is prepared to support Obama's nonsensical plans to raise long term taxes in exchange for a few short term tax breaks. Here is what the number two Democrat in the Senate said today according to The Hill: "Senate Majority Whip Dick Durbin (D-Ill.) said, at the moment, Democrats in Congress don’t have the votes to pass President Obama’s jobs bill". Durbin said that the Democrat leadership would continue to work on it, but his comments revealed that not even the Democrats who controll the Senate can get the Obama plan passed.

It is truly funny that Obama blames the failure to pass the bill on the House Republicans. The reality is that both the Democrats and the Republicans recognize Obama's bill for what it is, a naked attempt to create an election issue without doing anything to actually help the economy. No one, not even the Democrats in the Senate, are prepared to watch the country go down the drain just so Obama can get a phony election issue. It seems that despite his rhetoric, Obama has now clearly become the child in the room.

Senate Majority Whip Dick Durbin (D-Ill.) said, at the moment, Democrats in Congress don’t have the votes to pass President Obama’s jobs bill, but Durbin added that that situation would change.

Another Gem from Ron Paul

AP is reporting that Ron Paul has condemned the airstrike that killed Al-Qaeda leader Anwar al-Alawki as an assassination since al-Alawki was born in the USA which makes him a citizen. Statements like that one take Paul beyond the role of the crazy uncle and put him instead in the position of total loon. Here is a guy who is part of Al Qaeda, against which the USA is fighting a war. His citizenship is irrelevant in the war since Al Qaeda is not a nation state. Al Alawki has been responsible for the continuing attacks on Americans and was in a position to plan many more such attacks. Taking him out in a war is not an assassination any more than the deaths of German soldiers on D-day were assassinations. Congressman Paul, it is called WAR. Remember that word. WAR! We have an entire armed forces that has as its goal the defeat of America's enemies, usually by killing them. That's what happened, plain and simple.

Ron Paul is one of the few politicians who can actually make Obama look good.

Florida follies

The state of Florida is moving its primary to the end of January. WHY? Florida was already the fifth in line under the existing dates, but it was concerned that some other state might jump ahead of it. As a result of the shift, the entire primary and caucus schedule is now being pushed forward by a month. That truly sucks. Why does that schedule have to be rushed? So it will help Perry or Romney who are still in the lead? So some Florida politician can say that he or she caused the whole national schedule to shift? Why not just pass a law in Florida that directs the Secretary of State to schedule the primary in Florida for the same day as the one in New Hampshire? In that way, Florida could move to the head of the pack. Maybe we can have the 2016 primary now too. Even 2020 could get an early start. The whole thing is just ridiculous. Florida should be ashamed.

For once some good news

The weekly new unemployment claims fell to 391,000 down 37,000 from the previous week. This is good news. Sure it is only one week and the four week average is still well above 400,000. Nevertheless, it is the first time since April that the figure has clearly fallen below the 400,000 level (there was one week at 399,000, but that hardly counts.)

Let's hope that the trend continues next week.

Thursday, September 29, 2011

Green Energy -- More Corruption than Incompetence

When the Solyndra debacle first became public, folks wondered how the Obama administration could put over half abillion dollars into a company that went bankrupt in a short time after getting those funds. Things were murky at first, and it looked like what had happened was some very poor administration of a program designed to help the USA support its green energy companies. That is all now changing. It seems more and more likely that the green energy program is corrupt. Those getting funds seem to be the friends, family and benefactors of prominent Democrats. Connections are more important than prospects for job creation. Here are just a few key facts:

1)Nine months ago, president Obama was warned that Solyndra was in extremely shaky condition and unlikely to survive. It was made clear that if the government pulled the plug on the Solyndra funding, the taxpayers could probably save about a third of the half billion dollars set aside for that company. The Obamacrats decided not to stop the funding for Solyndra, but rather to subordinate federal money to that of private investors. In that way, the private investors (who happened to include major Obama donors) got their money back while the taxpayers lost 100% of the half billion advanced to Solyndra.

2)The Obamacrats just advanced new money to a project for a solar plant based upon molten salt technology. Hundreds of million of dollars are going to this plant which just happens to have a member of the Pelosi family as a major backer. And, as if this were not enough, the principal Obama donor who had put money into Solyndra is also a key player in this investment.

Wednesday, September 28, 2011

I must be missing something

According to the AP(which means that it may or may not be true), union workers at Ford are extremely resentful of the profits made by the company in the last year and the high salary paid to the CEO who managed to keep Ford out of bankruptcy. The AP article says that the resentment is so bad that it threatens to bring a strike to Ford for the first time since 1976. AP says that the Union workers are angry that they had to agree to give backs when the company was in bad shape and now it is using those give backs to make big profits.

Okay, so far this is a typical class resentment story from the AP. In the world of the AP reporters, social justice demands that the poor factory workers get better compensation for their hard labor in the plant. It is a classic us vs. them story coming from the left.

Here's the kicker, however. Let me quote directly from the AP. "The average hourly worker at Ford made $109,020 in 2010, including wages, benefits and overtime". That's right, these autoworkers come close to being the millionaires and billionaires that Obama always complains about. But their bosses must make fortunes, right? Here again is a quote from the AP story: "But the average salaried factory supervisor made $99,760 in wages and benefits" in 2010.

Think about that. Here we have workers who averaged compensation of just under $110,000 last year who resent the profits of their employer. Here are workers who make ten percent more than their bosses who resent the salary of the main boss. Let me put it this way, if the UAW employees at Ford believe that they are sacrificing too much by working for a mere $110,000 per year, there are about ten million other workers who would gladly take the same job for a lot less.

Since this is an AP article, there is a good chance that it is totally inaccurate, but if not, this is one of the most outrageous things I have ever seen in print.

The Utica Shale and the Northeast Refineries

Yesterday, Conoco Phillips announced that it was selling or closing a refinery in Trainer, Pennsylvania along the Delaware river south of Philadelphia. This is the third large refinery in this area to suffer that fate in the last few months. Two even larger Sunoco refineries are on the block as well. There are also refineries in New Jersey that are in the same category.

Almost at the same time as the announcement about the latest refinery, Chesapeake Energy announced its initial drilling results from test wells in the Utica Shale. The Utica Shale is an enormous formation that underlies much of Pennsylvania, Ohio, West Virginia and the surrounding states. It is actually located below the Marcellus Shale, a huge natural gas reservoir. The Chesapeake announcement disclosed that the Utica in the area where the company drilled has a large amount of natural gas liquids along with huge natural gas flow. Chesapeake said that within a year, it expects to increase its net liquids production to 150,000 barrels per day from the current 95,000, and it also expects to hit 250,000 barrels per day in three years. This is news of enormous importance and great irony.

Think of it this way: we are witnessing the opening of a massive field for the production of natural gas and natural gas liquids. It is certainly possible that we may see production of something like a million barrels of natural gas liquids within a few years from Ohio and Pennsylvania. Who knows; the number could be much higher than that! At the same time, the refineries that could process the liquids are being forced on the market with likely result that most will be closed. Instead of having operating refineries that can process the liquids from the new energy source, will we instead have excess production that will need to be shipped overseas to find an available refinery? It is totally crazy for the existing refineries to be forced to close due to the need to upgrade their facilities to comply with the latest regulations. Sure, the regulations are not the only problem the refineries face, but they are an important one. If the USA is ever to regain its energy independence, these refineries need to be kept open. Maybe, instead of campaigning for a jobs bill that cannot and will not pass Congress, president Obama could look into this situation and take action that could preserve the refineries and the tens of thousands of jobs that go with them.

Tuesday, September 27, 2011

Oh Joy! No Government Shutdown

In the annals of incompetent government, this week's big dispute between the Republicans in the House and the Democrats in the Senate about how to fund government operations and disaster relief has to rank high on the list. Because of the incompetence of the Obama Administration, we almost had a government shutdown. Here's what happened: For months, the Obamacrats told Congress that they needed extra money to allow FEMA to continue with its disaster relief programs through the end of the fiscal year which also happens to be the end of this week. When House majority leader Eric Cantor said that any increase in disaster relief ought to be paid for, the Democrats pounced. Cantor and the Republicans were hare hearted ogres. How could they possible want to pay for the disaster relief when people were hurting. It was totally heartless. Despite the caterwauling from the Democrats, the GOP passed a spending bill in the House that covered all government operations for six weeks and also added the needed funds for FEMA. The GOP bill paid for the extra FEMA funds by cutting the program that brought us the Solyndra scandal, a program that Harry Reid had favored cutting in the past. Since this is already the run-up to the election, the Democrats went crazy in their criticism of the Republicans. Imagine, the Republicans want to pay for disaster relief, something that had never been done in the past. Of course, the Democrats never bothered to note that what happened in the past gave us 14 trillion dollars of debt. The Democrats in the Senate threatened to shut down the government unless those pesky Republicans recanted their crazed desire to actually pay for the spending.

As the rhetoric and the decibel levels rose, the spending bill got nowhere fast. Then, there was a sudden breakthrough. It was disclosed yesterday that the information being furnished to Congress by the Obama Administration was wrong. FEMA was not running out of money. There was no need for extra funding at this time. As a result, there is no longer any dispute in Congress and we got to see Harry Reid's channeling of Emily Litella. As Reid smiled and said "Nevermind", the rest of the country got to see the fabled Obamacrat incompetance in action. This time, Obama and his people nearly caused the entire federal government to shut down. Next time, they may affect something important.

The Consequences of Obama and the Obamacrats

Conoco-Phillips announced to day that it is putting its massive refinery in Trainer, Pennsylvania up for sale. The company further announced that if it is unable to sell the refinery in a short time, it would just shut the facility down. According to Conoco-Phillips, the costs of bringing the refinery up to necessary standards is just to much for them to keep it running.

In order to understand the full importance of this announcement, we need to add a few facts. First, there have not been any new refineries built int the USA in over 30 years. Second, America is at a point where it no longer has the capacity to produce all of the refined fuel that it needs on a day to day basis. Third, closing the American refineries will not reduce demand for fuel in the USA, but it will reduce the number of jobs available to Americans. Fourth, closing an American refinery will likely result in an increase in global air pollution since the restrictions on refineries outside the USA are much less intrusive than those in America.

So what do we have here? An enormous refinery which is a big part of the local economy along the Delaware River in Delaware County, Pennsylvania is in need of an upgrade to meet ever tightening environmental standards. IF there is no one who wants to take on the task of trying to run this refinery at a profit, the plant will close, large numbers of folks will lose their jobs, fuel production will shift abroad, air pollution will increase, the US economy will be hurt, and no good will come of this. If the environmentalists are able to look at the big picture, they should realize that over-regulation of American facilities simply drives the plants overseas where there is little or no regulation. A place like Trinidad would be only too happy to increase the size of its refineries so as to ship more gasoline to the USA. We need to have a government that sees the big picture, not one that is just beholden to a rigid ideology. Obama has to recognize that there are times when his ideology just hurts so many Americans that he has to do the right thing, not the ideologically pure one.

More from Yahoo News

I have written a few times about the bias shown in Yahoo News. Now, I think we should discuss competence. On the Yahoo home page, there are normally ten stories listed as the top news. This morning there are two that are worth noting. Here are the headlines:

1)Oil Wavers on Europe Debt Woes
2)Oil rises above $82 on Europe Debt Progress Hope

And this is supposed to be a news organization?

Monday, September 26, 2011

Obama should fire Geithner

In the news tonight comes an interview of Treasury Secretary Timothy Geithner by ABC News about the Obama jobs bill. Here is the opening of the news report: "Treasury Secretary Timothy Geithner didn't dispute a Harvard economist's estimate that each job in the White House's jobs plan would cost $200,000, but said the pricetag is the wrong way to measure the bill's worth.
And he also pointed out... that there is no other option on the table for getting the economy moving and putting more people back to work."

This man should be fired. He admits that under Obama's plan, each job would cost $200,000 but says there is no other way to put people back to work. Is he kidding? If the government offered people jobs that pay $40,000 per year, I am sure that tens or even hundreds of thousands of folks would line up for them. These employees could rehabilitate old houses, clean up and restore parks, and do all sorts of other work that would help society as a whole. Even with administrative costs and benefits, the jobs will still cost no more than $50,000 each. That means four times as many jobs as the Obama plan. Alternatively, we could have the same number of jobs as the Obama plan for one-quarter the cost. But Geithner says there is no alternative to Obama's plan.

Don't get me wrong --I am not in favor of a massive government employment plan. I know, however, that the crazy plan proposed by Obama is neither likely to succeed or even cost effective if it were successful. If Geithner cannot recognize that reality he ought to be replaced as soon as possible.

Big News from GasFrac Energy Services

I often write about Canadian company GasFrac Energy Services (symbol GFS in Canada or GSFVF on the Pink Sheets). Gasfrac performs well completions in competition with hydrofracking; the company uses liquid propane rather than water. As a result, the wells produce at higher rates with better total recovery since no water is in the reservoir to interfere with extraction. There is also no need for water and no need to dispose of water after it has been used. Thus, the chance of pollution of the local acquifer is greatly reduced and in areas, like Texas, with poor water supplies, the work can continue without interruption.

Tonight, GasFrac released some very big news. It has signed a contract with Husky Energy for the performance of services for three years with an option for a two year extension. Husky is a large company (market cap is in excess of 20 billion dollars), so the contract is a guarantee of substantial work from a very well funded source. For the first time, GasFrac has provided investors with some clear visibility for continuing earnings into the future. This is the kind of news that we have been waiting for with regard to GasFrac. (For a copy of the press release, click on the title to this post.)

On the other hand, GasFrac also used to the announcement to make clear certain information that was mentioned in the last conference call. The third quarter results are not going to be that good. GasFrac put it this way: "With the combination of the wet second quarter and less than anticipated fracs completed in the third quarter under this contract, GASFRAC's 2011 revenue and earnings will be less than originally anticipated. However, given the continued customer diversification, adoption of the propane fracturing technology and backlog of work required under this contract, GASFRAC expects 2012 to be a year where significant growth in revenue, cash flow and earnings are realized."

In the last conference call, the company had made clear that the wet weather in Canada had continued well into the third quarter with the effect of preventing work from going ahead as scheduled. Since two thirds of the company's work currently comes from the affected area, it was clear that the impact on the third quarter results would be substantial. Now that impact has been confirmed.

Overall, this news is a big plus for the company. The days of high revenue and profit may be off by another quarter or two, but the likelihood that such days will arrive has gone up substantially. A vote of confidence such as a long term contract from a large company like Husky says more about the prospects for GasFrac than any short term blip in earnings due to bad weather.

Disclosure: I remain long GasFrac. It is a substantial holding.

The GOP needs to slow down and focus

President Obama has been a disaster for America. It is the only logical conclusion that one can draw. He took economic problems and made them worse. His plan for promoting recovery failed miserably. He ran up enormous debt and got nothing in exchange for it. It is like mortgaging your home to pay for dinner for a week. The dinners may be good during that short time span, but you then have to pay for it over the next 30 years. His push for increased taxes and regulation have frozen businesses into inaction with the result that unemployment keeps getting higher. Even his big accomplishment, Obamacare, is so unpopular and so likely to cause major problems that it was set up by the Democrats to take effect only after the 2012 election when it cannot change perceptions of Obama's time in office in a meaningful way. Obama has managed to reduce domestic energy production in major ways despite preaching the need for energy indepedence. Obama has gone out of his way to help his unioin buddies even when that help has the effect of pushing jobs overseas. Just think about how likely it is that Boeing will try again to build a plant in the USA after the administration went after it for building a new plant in South Carolina, a right to work state. The list goes on, but the truth is undeniable: Obama has been a disaster.

Given this fact, the Republicans need to make that point early and often. They also need to promote growth in the economy and present a coherent plan to remedy all that Obama has injured. Let me be clear -- it is not enough to discuss balancing the budget or restoring the constitution. These are admirable goals, but in the parlance of the old Clinton campaign, "It's the economy stupid!" The candidates for president need not run as if they were accountants worried about balancing the books. They have to run as people who know how to fix the economic mess that Obama has made. The simple truth is that Obama has no answer to the current economic problems. Even his new Jobs/Tax bill is nothing but more hot air.

Thr Republicans need to slow down their response to the Obama plan and focus clearly on what it can and what it cannot do. Too often the candidates act like the American people pay close attention to what is happening in Washington, something that has rarely, if ever, happened. The next debate should focus solely on the economy, the answers allowed should be three minutes long at least, and the candidates ought to be ready to actually explain their plans rather than just repeating a few talking points. The American people are not stupid. They will understand the plans of the candidates if these are properly explained. Just imagine if Obama were forced to deal with facts, with reality. Any thought of his re-election would crumble. There just are not enough people in the country who prefer bringing down the rich to having a good job and a good living themselves.

Who are these people?

It never ceases to amaze me what comes out in the media months or years after it should have been publicized. The latest version of this phenomenon concerns the three hikers who were arrested by the Iranians and who have now been let go after payment of a huge ransom (which the Iranians call bail). Two of the three hikers were living in Damascus at the time of the incident and the third was just visiting. When they were finally ransomed and released, the hikers made a plea for release of political prisioners in the USA. These are folks who are stridently anti-American, part of the hate America First bunch on the left. Through all the hoopla about obtaining the release of these people that fact seemed never to come out. It should not have lessened the efforts of the government to secure their release, but the irony of these people being rescued by the very country that they so despise is certainly newsworthy in my opinion.

You have to wonder why this never came out.

The Great Orator

In 2008, president Obama was proclaimed the greatest orator of modern times, better than Reagan, better than Churchill, better that them all. The truth is that Obama actually was not a great orator but a great reader of the teleprompter. Churchill obviously did not have a teleprompter. I saw Reagan speak twice in person without a teleprompter and he was spellbinding. Obama goes everywhere with his teleprompter which led on wag to start a website for TOTUS, the Teleprompter of the United States, that was actually leading the government.

Lately, Obama has been flubbing line after line, however. In the LA Times, Andrew Malcom has been listing some of these mistakes. Last week Obama claimed that the US government had built the intercontinental railroad. Of course, Obama meant the transcontinental railroad that was built by private companies, not the government. Over the weekend, Obama slipped at the Congressional Black Caucus dinner and confused the word Jew and janitor. His flub made no sense and he caught himself after he said it. The point, however, is that the old Obama did not make those kinds of errors. It seems that he is getting rattled, not a good quality in a president.

what is it with Yahoo News?

I have had Yahoo as my home page for years. Every time I open the internet, there is Yahoo with all its sections. The most prominent of the Yahoo services is Yahoo News which is supposedly telling people what is happening. The amazing thing to me, however, is that Yahoo News is extremely biased. Every article is slanted towards Obama and the Obamacrats. Today, however, it got so bad that I just could not believe how blatant the site has become. Here are the first five entries under a heading called "News for You"

1) Obama says Republicans would cripple US
2) Obama takes shots at Perry, GOP debates
3) Obama adviser: GOP will target middle class
4) Obama criticizes GOP over disaster bill
5) Obama slams Republicans in West Coast money swing

What's next? Will Yahoo news merge with the Daily Kos?

Can Washington ever change?

We are in the midst of another of these threatened government shutdowns. Republicans in the House passed a continuing resolution to fund the government for another few months. The funding level is at exactly the numbers agreed to in the recent debt ceiling legislation except that the money to go to FEMA for disaster relief has been raised and off-setting cuts have been made elsewhere. This keeps the new funding in line with the levels agreed to after the fierce battle over raising the debt ceiling. The Democrats in the Senate reject this new funding on the ground that the new FEMA money should just be an addition to overall federal spending with no offsets. The Democrats argue that this is the way that the federal government has always responded to natural disasters. In other words, the Democrats are arguing for business as usual, Washington style. In three wor
ds, the Democrats' position is "Let's spend more!"

It makes me wonder if there can ever be true change in Washington. How can Harry Reid and the Democrats push for more spending after everyone of them voiced support for keeping spending in check, balancing the budget, getting the money flow under control, etc. They all talk the talk, but none of them walk the walk.

Sunday, September 25, 2011

This is the president of the USA?

Here is the way the Obama-friendly AP begins its report on what the president said to a crowd at a fund raiser on the West Coast: "President Barack Obama charged Sunday that the GOP vision of government would 'fundamentally cripple America,' as he tried out his newly combative message on the liberal West Coast."

I find the comments disgusting. I know we live in a world where each side calls the other names and questions their motives, but this is the president of the United States. As Obama used to like to say, not the red states or the blue states but the United States of America. How can the president claim that his opponents are our to cripple America? It is so unpresidential, so base, so wrong in so many ways.

The truly humorous thing about this attack is that it is just part of the new Obama. For three months all we heard from Obama was about the need for compromise. Now he says there is no place for compromise. He used to claim to be the adult in the room. Now he is yelling names at the other side like an eight year old. He used to have the respect that came from his office, but he has squandered that by sinking into the morass. In other words, by making his base happy with these nasty attacks on the Republicans, Obama is poisoning the well at which the indepedents get their water. He is revving up about a third of the voters only to make sure that he gets hardly any of the other two thirds. It is incredibly poor politics.

I am guessing that some time soon Obama will realize the folly of his current pose and try to become Mr. Compromise again. Good luch with that. There just is not enough time until the election for the folks out there to forget what he is doing now. In his push to get votes, Obama is guaranteeing that he will not get enough.

I am not longer going to say that Obama has to go. No, from now on, the mantra is "Obama is on his way out!"

The Michigan Straw Poll

Since I wrote about the results of the Florida straw poll earlier today, I feel I should also point out the results of the Michigan straw poll held over the last two days. In Michigan, Romney won a clear and overwhelming victory over the field. Perry was a distant second.

Romney, of course, grew up in Michigan. His father was head of a car company and after that, he was governor of the state. This make Michigan results likely to be different than the nationwide situation. Nevertheless, Romney's victory here is likely to give his campaign a little push.

The Florida Straw Poll

Yesterday, the Florida Republicans had a straw poll. Herman Cain won with over 37% of the vote. Rick Perry came in second with only 15%. Romney was third with 14%; then came Santorum at 11%, Paul at 10% and Gingrich at 8%. Huntsman and Bachman had 2% each. The results of a straw poll cannot be used to predict the future primary and caucus results. Nevertheless, these results are striking in a number of regards.

1) The obvious big news here is that Herman Cain got major victory. IT was not even close. It will be interesting to see if Cain can translate this victory into any momentum moving forward. Will his poll numbers now climb? Will his fundraising improve? Will anyone in Iowa care what happened in the Florida Straw Poll? Only time will tell.

2) Another big news item is that Rick Perry did so poorly. This crowd was tailor made for Perry. He should have won going away, but instead the only thing that was going away was his support. There are consequences from doing poorly at debates, and these results were one of those consequences.

3) Romney has made a point of not competing in this or any other straw poll. Thus, his third place finish is fine for him. He should be happy to see the Perry melt down, but we will still have to see where those Perry voters go if this is more than a transient event.

4) Santorum should be ecstatic. True, he finished in fourth place while Cain raced to the lead. Nevertheless, this is the first time that Santorum has been something other than an afterthought in this race. If he can grab 10% of the vote now, then he has a shot at getting himself up to the competative range by the time that the primary and caucus votes happen.

5) The Bachmann numbers show just how far she has fallen. It is just about a month since Bachmann won the Iowa straw poll, but she came in last place here out of eight. This is a body blow to her campaign.

Saturday, September 24, 2011

Ron Paul

For the last few days, every time I open my blog, there is a large picture of Ron Paul on the right side of the page where the advertisements start. The picture has no text, but it takes you to the Ron Paul website.

I just want to make it clear that I do not control which ads appear on the site. As with most blogs, the ads are chosen by Google using their algorythms that match ads with the site content. I do not endorse Ron Paul. I do not support Ron Paul for president. I do not think that Ron Paul would make an effective president. I would never vote for Ron Paul to be president. To make clear my true feelings about Paul: if Paul were the GOP nominee, I still could not bring myself to vote for Obama, but I would just stay home.

I am sure that I will get some nasty e-mail from the Paul supporters. I do not mean to offend, but I want it clear that the picture of Paul is NOT and endorsement.

This is staggering

The latest job approval poll for president Obama comes from the Economist/YouGov poll. It shows 36% say they approve of the job Obama is doing while 56% say they disapprove. It is the worst poll result ever for Obama. As bad as the overall result is, the analysis of the numbers shows that it is truly staggering.

First, let me say that I have not seen the internals of the poll, so my analysis is based upon results from other recent polls. The approval polls that provide a breakdown of their numbers have recently shown Obama's approval among African Americans is down in the area of 80 to 83%. If we assume that this poll found 80% approval among African Americans, then we can calculate the ratings among the remainder of the population. African Americans made up a little more than 13% of voters in the last election, but to be conservative, we will put them at only 12% for the next election. If we adjust the numbers to get the results for the remaining voters, they show that among non-African-American voters, the Obama approval numbers are 30% approval and 61% disapproval.

I think that it is hard to imagine these numbers, so I want to repeat them. This poll indicates that among whites, Hispanics, Asian Americans and others who do not self-classify as African-Americans, only 30% approve of the job that Obama is doing and over 60% disapprove. If these numbers were to translate into votes in the 2012 election, Obama would be lucky to carry any state and could be left with only the District of Columbia. If the same numbers translated into votes for Congress, then essentially every Democrat in a district with less than 40% African Americans is in trouble. That means that more than half of the Democrats in Congress would be in trouble.

Obviously, the numbers will not work out the way I just outlined above. Local issues and candidates will affect how the votes get cast. The point of the exercise is not to indicate the likely result on election day, but rather to indicate the size of the disaster for Obama and the Obamacrats if these numbers do not change.

Indeed, if we get a few more polls showing that these numbers are real, I expect to see a large number of congressional Democrats pulling away from Obama in the near future. Nothing moves a congressman faster than the chance he or she might lose the next election.

Strangely, the current jobs and tax plan coming from the White House is unlikely to change the numbers any time soon. Clearly, the plan is not going to pass; the Obamacrats have not even bothered to introduce the necessary bills into Congress. That means that the economy is unlikely to get better and Obama is going to look ineffectual when he cannot push his program through. Further, even many Democrats are against raising taxes when the economy is doing so poorly. In short, the only ones who are happy about the plan are the base of the party. They already approve of Obama. The plan will not pick up new strength for Obama.

Joe Nocera and the "phony" Solyndra scandal

In his usual style, Joe Nocera is out today with a column filled with the supposed "facts" about the Solyndra debacle and why it is a "phony scandal" ginned up by Republicans who just want to embarrass the Obama administration.
Of course, the problem with Nocera's analysis is that, as usual, it makes no sense. Nocera basically reviews the reason for the Aerican government to subsidize green energy jobs. In his view, such subsidies are not criminal; it is a view with which most folks would agree. It is not the actual issue, however. Nocera completely ignores each of these points:

1) The program under which Solyndra got federal money was actually passed in during the Bush administration. In January 2009, right before Obama took office, the Bush administration rejected the funding of Solyndra after a thorough review of the Solyndra proposal. Solyndra was not considered at that time to be likely to succeed. Within six weeks of Obama taking office, the Solyndra loan guarantees were back alive and there was substantial pressure coming from the White House for quick approval of the loan. How did a loan which had been rejected as unlikely to succeed suddenly become a darling of the White House once Obama took office? Did this have anything to do with the massive campaign contributions that the Solyndra folks gave to the Obama campaign? Even if the pressure was unrelated to the campaign cash, why did the Obamacrats decide that this previously rejected loan now merited a full court press?

2) Nocera points out the the main killer of Solyndra was the drastic fall in the price of solar panels during 2010 and continuing until today. Assuming this is correct and that none of the federal funds were siphoned off to other uses, this price decline is not something that was unknown to Washington. Why did the Obamacrats continue to pour money into Solyndra for more than a year after its business model was shown to be a failure? Nocera can and does ignore that question, but the investigation into Solyndra cannot.

3) The law under which Solyndra got most of its cash from the federal government requires that the United States gets a first lien on all of the company's assets. In other words, if the company goes under, the taxpayers get paid back first out of what remains. Just a few months ago, long after the price of solar panels had collapsed, the Obamacrats made a new deal with Solyndra. In this new deal, the private investors in Solyndra were given priority over the government. In other words, the very statute under which the first loan was made was violated and the Solyndra investors (including some big Obama contributors) got a chance to get their money back before the taxpayers got a dime. Remember, Solyndra has buildings and land in California which are worth millions. It is not enough to repay the federal money sunk into the company, but it is enough to come close to repaying those investors who are now ahead of the USA in line for that cash.

4) During the last six months, the Obamacrats had a representative at the meetings of the board of directors of Solyndra. In other words, Obama's people knew that the company was failing. They knew that there was no turn around. They new that the federal funds were flowing out the door. Fut they did nothing! Why was that?

Solyndra is not a phony scandal except in the talking points world of Joe Nocera. It clearly merits a careful investigation. We do not yet know why the Obamacrats gave the Solyndra folks so much help when they clearly did not merit it. Was it incompetence? That certainly would not be surprising in an administration that has raised incompetence to an art form. Was it a pay off to a big contributor? We will soon see. Was there more here to explain the unexplainable? It has to be investigated.

Pass this bill now -- WHY???

In an amazing article, the AP quotes Mark Zandi chief economist at Moody's Analytics giving his projections of employment if the Obama Jobs Bill were passed as proposed by the end of this year. Zandi ran the numbers through his econometric models and concluded that Obama's program would result in a 1% drop in unemployment and a 2% increase in GDP in 2012. That is the part that consistently gets publicized. Zandi also says, however, that after Obama announced his tax plan which would pay for the Jobs Bill, he went back and ran the numbers again. The whole Obama plan results in a substantial drag on the economy after 2012 with the result that by 2015, the economy will be in exactly the same place as if there had been no bill. After that, however, growth in the economy would be lowered and unemployment would be higher. In addition, these projections do not apply if there is an overall recession or if there are economic disruptions outside the USA that affect the American economy. In other words, these projections simply apply to a situation that is unlikely to occur.

Boiling down the Zandi remarks, one finds an amazing conclusion: the OBama jobs plan is a long term plan to both reduce growth and lower employment all so that there can be a slight boost to the economy just prior to the re-election campaign of the president. Obama is trying to trade away a bright future for the USA in exchange for keeping his job. Do we really want a president who would do such a thing?

Friday, September 23, 2011

The truth and the lies

The head of the Palestinian Authority, Mahmoud Abbas came forth with both the truth and a bunch of lies today at the UN. First the truth from Abbas own mouth: "They talk to us about the Jewish state, but I respond to them with a final answer: We shall not recognize a Jewish state." That truth, of course came in a speech made to supporters just prior to going to the lectern at the UN. There can be no clearer statement from the Palestinians of the futile nature of peace talks.

Here is the principal lie again from the mouth of Abbas: Abbas accused Israel of employing an “ethnic cleansing policy” in Jerusalem. “Israel issues building permits to settlers so they can build in occupied Jerusalem, while it keeps confiscating lands in eastern Jerusalem and driving away Palestinians from their ancestral lands.”

Understand exactly what Abbas is saying; the claim is that if Israel allows Jews to move into the eastern half of the city that is the capital of Israel, it is ethnic cleansing. Only if the area is free of Jews will the Palestinians be happy. The language of those against genocide and racism is used to support measures that are clearly racist and genocidal. It is a heinous lie from Abbas. There is no way that reasonable people could find that areas where Jews and Arabs live together in Jerusalem constitute a problem or even an affront to the Palestinians. Only in the racist and delusional minds of Abbas and his followers could such a position even be considered.

Thursday, September 22, 2011

The Latest Republican Candidates Debate

After watching tonight's GOP debate, I have to say that most of the candidates performed extremely well. Here are my observations:

1) Mitt Romney -- Romney seemed like the clear winner tonight. He never got rattled no matter how hard he was attacked. His answers seemed clear and specific. He got the chance to explain himself on Romneycare, and I thought he did a better job than he had previously. Most important, he was able to fend off all of the attacks from Perry and to return the fire pretty effectively.

2) Rick Perry -- Perry seemed like the clear loser of the debate. He seemed to ramble at times and to stumble at others. Even when he was making a fairly effective attack on Romney (like the flip flop argument) he seemed to lose his train of thought in the middle and the attack faltered. Perry also clearly lost an important debate with Santorum about granting in state tuition rates to illegal immigrant college students. I expect that Perry's position in the polls will decline a bit over the next few weeks.

3) Michelle Bachmann -- Bachmann had good and bad moments. Overall, however, I doubt that she won any converts to her cause. It was mostly a blah event.

4) Herman Cain -- This was the best performance by Herman Cain since the very first debate in my opinion. His answer about his own cancer and the effect that Obamacare would have had on his treatment was powerful and extremely effective. He projected good humor and knowledge of his subject.

5) Jon Huntsman -- Huntsman said exactly what one would have expected him to say. He constantly took advantage of the time rules, something that bothered me but probably had no impact on most people watching. He obviously has to promote himself and his own accomplishments, but he still struck me as going too far in that effort.

6) Ron Paul -- This was clearly the best outing of all debates so far for Paul. His answers were crisp and clear which is something new from Paul. His views still limit his support to a small number of true believers, but he no longer seemed like the nutty uncle that you get to see each year on Thanksgiving.

7) Newt Gingrich -- Once again, Gingrich showed that he is a master of these debates. He clearly outclassed most of his rivals. Of course, he still has all the baggage that will probably make it impossible for him to succeed. Nevertheless, Gingrich is a force to be reckoned with.

8) Rick Santorum -- Santorum too had an outstanding performance. His dissection of the Perry position on in state tuition for illegal immigrant college students probably won him a bunch of converts for the moment. Maybe he will pick up some support in the polls.

9) Gary Johnson -- Johnson got the biggest laugh of the night when he said that his neighbor's dog had created more shovel ready jobs than Obama. I wonder, however, how many of the folks watching knew that Johnson had stolen the line from Rush Limbaugh who had said essentially the same thing this afternoon on his radio show. Strangely, for the audience that Johnson was trying to reach, probably half knew that his great line actually belonged to Rush.

One last note: the Fox News correspondents deserve major kudos for running a debate that was far better than the one on CNN or MSNBC. We did not get any questions that were truly a waste of time. About half of the time was spent on the economy which is where most folks' interests center. The questions did not carry bias like the ones on NBC. Indeed, except for the little extras from Google like the word clouds and the instant polling which were unnecessary, the debate was carried off extremely well.

Good thing it wasn't the George Washington Bridge

President Obama stood in front of a bridge between Kentucky and Ohio today and castigated House Speaker John Boehner and Senator Mitch McConnell for preventing repairs to that structurally deficient bridge. It was interesting as a photo op for the campaign. The only trouble is that the whole thing was a lie, A BIG LIE. First of all, there is nothing wrong with the bridge except that traffic has increased to the point that more capacity is needed. There is no need to repair that bridge, so there is no way that Boehner or McConnell have prevented the repairs. Second, there already is a plan to build a second bridge alongside the existing on to take more traffic over the Ohio River. The new bridge is in the design phase. It has been in that phase for a few years now. The federally required environmental impact statement was filed and there was a lawsuit about it. Various federal agencies have been considering whether or not to approve the currently planned configuration for the new bridge. In other words, it is the federal bureaucracy that have prevented construction of the bridge so far. There is even money set aside in the federal budget to pay for the new bridge, although that will probably have to be raised by the time that the bureaucrats finally allow construction to proceed. So when Obama says that there is a structural problem with the bridge, he is lying. When Obama says that congress and the Republicans have held up repair work, he is lying. Indeed, nothing that Obama said about the bridge is accurate.

Can it be that Obama is so out to lunch that he is unaware of the falsity of his statements? I doubt it. I truly believe that he does not care whether or not the statements are true. No, Obama believes that if he says something, it becomes the truth. It is a delusion, and we have seen it over and over again during his presidency. How many times did we hear him tell us that if we liked our present insurance or doctor we could keep them under Obamacare only to find out now that approximately 70 million people will lose their present insurance due to Obamacare?

I guess it is a good thing that Obama wasn't standing in front of the George Washington Bridge. Washington who couldn't tell a lie would have turned over in his grave.

It seems to be over

I do not recall ever watching an American president self destruct before now. Oh, I watched George Bush fall from favor as he stuck with his Iraq policies amid a growing war weariness in the country. I saw George H W Bush founder as the economy sank into the doldrums during the second half of his presidency. I saw Bill Clinton struggle to overcome impeachment and the whole Monica thing. What is new this time is that president Obama seems to be doing most of the destruction himself. Just think of this: By far, the most important issue to the American people is the economy. In the ten months since the GOP swept the 2010 election just look at the Obama positions on that topic.

1)First, Obama was in favor of raising taxes on the wealthy.
2)In December of 2010, Obama announced that he was in favor of keeping tax rates stead for everyone for two years since one should not raise taxes in a time of economic difficulties.
3)In January of 2011, Obama proposed spending much more in fiscal 2012 than had been spent in 2011 with the result that there would be an increase in the size of the deficit. His budget had no new jobs programs in it.
4)In March of 2011, after the GOP passed a budget that called for cutting the deficit by 6 trillion dollars over the next ten years, Obama continued to push his budget. The senate voted that budget down by 97 to 0.
5)When it was time to pass a spending bill for the remainder of 2011, Obama opposed the GOP plan for spending cuts. Then he announced he was in favor of them and claimed credit for the final agreement.
6)In April of 2011, Obama sudenly became a deficit hawk. He now came out for cutting the deficit by 4 trillion dollars. He had no plan, however, as to how to accomplish this.
7)After Congress was unable to come up with an agreement as to how to cut the deficit, Obama tried to get involved in July of 2011. His involvement was a total failure. The congressional leaders finally came up with an agreement that Obama accepted. It called for no tax increases but for 1.2 trillion in spending cuts and the creation of a super committee to find further savings.
8)In August, after going through the entire year without any push for job creation, Obama finally announced that jobs were essential for the country. Indeed, the country faced a crisis according to the president. As a result, he announced that sometime after he got back from his lengthy vacation, he would put forward a plan to get people back to work.
9)About a month later, Obama spoke to a joint session of Congress and demanded that it pass his jobs bill. Of course, there was no such jobs bill in existence as of that time. Say after day, Obama screamed pass the bill now even though there was no such bill.
10)Finally, Obama came forward with his jobs bill which was basically a plan to raise taxes on a permanent basis in order to cut taxes temporarily in 2012. There was also a component of sending money to the states to help bail them out and to do infrastructure projects that hopefully would result in additional employment. The cost of the bill was about 450 billion dollars and the tax increases that went along with it were about 480 billion dollars. Obama said nothing to explain why it was now okay to raise taxes in the middle of bad economic times when it was wrong to do that a few months earlier.
11)Almost immediately after releasing his jobs bill, Obama also announced a plan to raise revenue to cut the deficit. Basically, his plan was one to soak the rich. Obama expected his base to support him fully and to force the GOP into blocking tax increases for the wealthy. Instead, Democrat after Democrat has announced opposition to the Obama plan. Today, it was announced that even former president Clinton had come out against the basic premise of the legislation. The Republicans never had the opportunity to block Obama's plan since the Democrats have done that by themselves.
12)With his plan to blame the GOP as obstructionists falling apart, Obama has taken to the road to try to convince America that he truly is trying to create jobs, that all would be well but for Republican obstructionism and that the moon indeed is made of green cheese. Even on this Obama is failing. Today he went to Ohio to discuss bridges that were structurally unsound. He stood in front of a perfectly proper bridge to "highlight" the need for repairs. By failing to check the status of the bridge he used as a prop, Obama had the misfortune of looking like a buffoon who could not even find a bridge to be an example of the need for repairs.

This is just bare bones stuff. If I went into detail, most people would just get angry. The president of the United States presents a profile of a man who is only concerned about his re-election. The good of the country has long since been forgotten. Indeed, the self destruction of Obama is now so apparent to so many people that huge numbers of Democrats are pulling away from Obama so as to not go down with the sinking ship.

It is a most amazing sight to behold.

Big news from a small company -- Armanino foods

I have written many times on this blog about Armanino Foods of Distinction (symbol AMNF on the pink sheets.) Armanino makes Italian frozen and prepared foods and pasta. It has been growing steadily both in revenues and profits for years. Today, the company announced a 20% increase in its quarterly dividend which, based upon the current price, raises the dividend yield from 5% to 6% per year. That means a very nice return while holding the stock. Even more important, the company described the reason for the increase as resulting from continuing successful growth. Here is the quote from the Chairman of the Board, Douglas Nichols, "We are having an exceptional year and think we should reward our shareholders accordingly. Our balance sheet remains very strong.”

Over the years, Armanino has generally understated its performance. That means that Nichols' words are doubly important. He is giving a glowing description despite the past practice of downplaying success. As a result, the prospects for the next quarterly earnings report have improved substantially. The company already had record earnings and revenues for the first six months of the year. More good news would give the stock a substantial up side in my opinion.

Also in the report is an update on the stock buyback program currently underway. According to the report, there were substantial buy backs in the last quarter but there remain enough liquidity in the program to buy back about another 2% of the outstanding shares.

Simply put, the company continues to fire on all cylinders. I remain strongly optimistic about Armanino.

Disclosure: I am long Armanino. It is one of my largest individual holdings.

The Weekly unemployment claims -- more bad news

The weekly new claims for unemployment were 423,000. Oh, and last week's number was revised higher as usual. This number sucks. Sure, it could be worse, but it could be a lot better. At 423,000, there is little hope that jobs are being created even at a sufficient pace to keep unemployment unchanged. I have been writing about this number every week since the figure got above 400,000 in a "surprise" last March. For a month or two, we heard from the Obamacrats that the bad numbers were a surprise. Then they shifted to calling them temporary. Now they are just another fact of life and the president has shifted from trying to create new jobs (something at which he has clearly failed) to trying to raise taxes on the folks who actually create most of the new jobs in the country. Somebody better send Obama a clue, since he certainly seems to be clueless when it comes to dealing with economic problems.

Schumer on the Obama plan

Chuck Schumer is about as liberal a politician as you can find in the senate. He is in the Democrat leadership, so you would expect him to support the Obama "jobs" plan strongly. Guess what -- he does not. A friend of mine sent me an article this morning in which local news asked Schumer about the taxes Obama wants to impose on the "wealthy". Here is the key sentence:

"Schumer said the $250,000 limit is unacceptable since it will hit the [NY] metropolitan area disproportionately because of the high cost of living here."

If Obama does not even have Schumer's vote, he probably could not get 30 votes for his plan in the senate despite Democrat control of that body.

Of course, Schumer used to represent NY-9 when he was a congressman. His new opposition to Obama's plan may result from the GOP win in the special election there last week. Schumer is liberal, but more than that he is a political survivor. He would be the first to jump off of a sinking ship.

Wednesday, September 21, 2011

Bill Clinton and Dancing with the Stars

Two big items of news today from former president Bill Clinton. The first is that he considered going on Dancing with the Stars but decided against it since he did not have enough time to practice. The second is that Clinton said that the Republican presidential candidates who did not accept man made global warming were making America look like a joke. Clearly, the truly big news is Dancing with the Stars. Just imagine it! Bill gets to dance around with some lovely young lady on TV and spend a great deal of quality time with her "practicing". My guess is that the lure of this was nearly irresistable to Clinton. Even so, he was able to control himself and say no. It is a major accomplishment by the former president and one that preserves the dignity of the office.

The global warming remark is, on the other hand, a typical Clintonian political jab. Clinton, no matter what one thinks of his conduct, is an extremely smart man. I am sure that he has seen all of the recent data that has come out with regard to man made global warming. 1)NASA satellites kept track for 11 years of the amount of heat radiated into space and these figures show that the computer models on which man made global warming theory is based are inaccurate in a major way. 2)The theory that climate change is dependent on cosmic rays creating clouds in the upper atmosphere was supported by experimental data compiled at CERN. This data is the first real example of any climate theory showing support in real data. Of course, this theory completely undermines the claim that human activity causes global warming. 3)Historical data regarding the Carbon dioxide content of the atmosphere and the world climate has been released after being compiled from fossils dating back hundreds of millions of years. In previous eras, the Carbon dioxide levels were many times higher than they are now, but the world temperature was lower. Since the theory that humans are causing global warming depends on the relationship between carbon dioxide and temperature, this historical data puts a big hole into global warming theory.

None of these facts will stop a fanatic like Al Gore from promoting the global warming theory. He makes too much money from that activity for him to stop now. Bill Clinton, on the other hand should and probably does know better. Clinton should realize that global warming is too important an issue to be used a a political ploy. But then again, he still is Bill Clinton. Just knowing that something is wrong will not stop him.

Range Resources -- what to do now

Since last November, I have been recommending purchase of Range Resource (symbol RRC) one of the biggest producers of natural gas from the Marcellus shale. The stoc was $37.34 when I began my recommendation. Today, it is up over $9.00 and has hit a high of more than $76. For those of you who have ridden the stock up as it doubled in price, here is my suggestion as to what to do now. I think that it is time to take some of the profits you have in the stock. RRC has gone up strongly now for two days in a row based upon takeover rumors. But these are only rumors. Nothing has been confirmed. The stock could just as easily go down ten points if the rumors prove unfounded. Of course, if there is a takeover bid, the stock could soar further. My suggestion is to take profits on half of your position. If the stock goes up further, you will lose the increase on the half you sell. Of course, you will still have doubled your money in less than a year on the stock which you sell, and you can make the gain on the other half of your current holdings. On the other hand, if the stock falls from here, you will have taken the profits for half of your holdings at an elevated price. This will mean that you have take our all of your original investment and still have half of the position.

One last note: I realize that if you bought last November, you are getting close to a one year holding period needed to get a long term capital gains tax rate. I would ignore the tax issue in deciding what to do. Shoot for profits not tax benefits.

Disclosure: I remain long RRC with major holdings.

Connecticut Senate race -- Linda McMahon gets in

It is official: Linda McMahon is again a candidate for the senate. This time it is for the seat of retiring senator Joe Lieberman. I wish she had stayed out. McMahon lost in 2010 against Blumenthal, a flawed candidate if there ever was one. Blumenthal had lied about his military service and handled the campaign more like an annoyance than a real race for the office. 2010 was the best year for the GOP since 1984 when Reagan won 49 states, but Linda still lost. And she lost big. The margin against her was 9 points higher than the margin in the governor's race which voters decided in that same election. That means about 5% of the voters went Republican for governor but switched back to Democrat to vote against McMahon. McMahon may well win the primary since she has unlimited resources to throw at her opponent former congressman Chris Shays. There is no point in winning the primary only to lose in the general election, however. Shays is the only one who could beat the Democrats if they are to be beaten in 2012. McMahon should have recognized reality and not run.

Tuesday, September 20, 2011

You have to wonder

What is going on? It is a question that I keep asking myself each time I consider the latest speech or "plan" coming from president Obama. Think about what has happened just since last November when the voters opted for the GOP in a major shift.

1) First, last December Obama came out in support of extending the Bush tax rates for another two years until the end of 2012. Obama announced that this extension had to happen because to do otherwise would hurt the fragile economic recovery then underway. Since then, economic growth has slowed and unemployment has risen. Now, Obama wants to end the very same tax rates by increasing the amounts paid by the top end. If tax increases of that sort were unacceptable when the recovery looked like it was still in place, how can those tax increases become acceptable when the economy has deteriorated?

2) Last February, Obama proposed a budget that would not cut spending at all. Instead, Obama actually wanted to increase spending and have a larger deficit. The Republicans came forth with their own budget which passed the House; it called for savings of over six trillion dollars in the next ten years. After the senate rejected Obama's proposal in a vote of 97 to 0, he decided that he was going to be a deficit hawk. Of course, it is more accurate to say that Obama announced that he was going to be a deficit hawk but did nothing about that. When the 2011 spending bill had to be finalized, Obama fought for higher spending but finally agreed to with the GOP on a reduction that would save about 40 billion dollars in the next few years. When the debt ceiling debate came along, Obama refused to come up with a plan but kept talking and talking and delayiing any final result. Obama spoke often about the need for tax increases even after he agreed that there would be none. Finally, a deal was reached. The debt ceiling was raised, 1.2 trillion dollars in cuts were set and the super committee was created and charged with the difficult task of finding another 1.5 trillion dollars in savings. Obama spoke at leangth about how difficult the negotiations had been and about what a good result had been achieved.

Within days of the debt ceiling deal being finalized, Obama began to try to undercut it. He announced that there was a crisis of joblessness that had to be dealt with immediately after his two week vacation to Martha's Vineyard. Now, six weeks later we finally get Obama's "jobs plan" and his deficit reduction plan. Both are basically plans for a long term tax increase with some one year reductions in other taxes and a big bump in spending of the sort that is least likely to lead to long term job growth.

How can it be that after giving up on revenue increases in the negotiations for the supercommittee, Obama is back pushing for the same things now. The Democrats in the senate already rejected these ideas in July. How can Obama think that he has any likelihood of getting these proposals passed now?

3) And when Obama proposed his deficit cutting plan, his numbers were off by close to 4 trillion dollars. How can the White House be that sloppy? Is it possible that Obama and his staff are really unaware of the current tax law? Do they really put out plans intended to govern the future of the USA without checking them for accuracy. After all, a 4 trillion dollar mistake is not the result of someone making a computational mistake. Even for Obama, 4 trillion dollars is real money.

4) In the discussions last Summer, Obama said that there would need to be major changes to entitlements if the deficit probem was to be overcome. Now, there are no changes to Social Security and almost none to Medicare. How can it be that the central issue with regard to the deficit is no longer of importance to Obama?

What in the world is going on here? Even if this is just campaign rhetoric from Obama, it makes no sense. Why would Obama put forward plans that cannot succeed? Why would he put forward plans that contradict so many of his positions that he forcefully took just a month or so ago? Why would he put forward plans that are so flawed that they make him look stupid? Indeed, why would Obama put forward plans that the Democrats in the Senate have already rejected?

Maybe there is some brilliant master plan at work here. Somehow, thought, I doubt that. I think that dealing with the economy has suddenly gotten totally beyond Obama's abilities. What we are seeing is flailing and nothing more. Unfortunately, when the president of the USA is flailing about the economy, the rest of us suffer, big time!

Lightsquared in the darkness

The second recent scandal for president Obama with regard to showing favoritism to major campaign contributors just got a lot worse. Reports are out this morning that a second witness was asked to alter his testimony to Congress with regard to the mobile phone system being developed by LightSquared. LightSquared, of course, is home to a major Obama contributor from the 2008 campaign. The new system developed by the company threatens to disrupt the GPS system that not only guides cars but, more important, guides missiles and other "smart" weapons upon which the American millitary relies.

Here is the report from the Daily Beast: "On Monday, a second witness, Anthony Russo, director of the National Coordination Office for Space-Based Positioning, Navigation, and Timing, told The Daily Beast that he too was asked by the OMB to insert the 90-day timeframe [for completion of testing] into his testimony before the House Science Committee, but he refused. The hearing originally was scheduled for Aug. 3, then rescheduled for Sept. 8."

Last week, a four star Air Force General confirmed that he was pressured by the White House to change his testimony regarding the LightSquared proposal by omitting his true concerns about the damage that LightSquared could do to American weapons systems.

Obama and the Obamacrats contend that prior review of testimony by the White House is something that every president does. As they say on SNL, "Really?" I wonder how many prior presidents asked people to put the national defense in jeopardy by covering up the potential major problem that a new program could cause. My guess is that this never happened before.

Adding this to the Solyndra mess, one finds that Obama seems to have trouble understanding that helping campaign contributors at great cost to the country is not, repeat NOT, what a president should do.

A strategy that will fail

As we move towards the 2012 election, there are two competing views of America that are being put forward. President Obama is pushing his "fairness" plan to make the wealthy pay much higher taxes to fund bigger government, something that he calls their fair share. The Republican candidates are offering plans that center on private sector growth and smaller government. This is a choice, I believe, that the American people will make easily. They will reject the Obama plan and the next president will be a Republican.

Here is the nub of the issue: Which of these two competing philosophies will triumph in the American electorate?

1)Things are bad, but the government is going to make sure that those who have been successful are going to have to pay for that success. The government will help those it deems worthy.

2)Each person in this country is going to have the opportunity to improve their lives by hard work, intelligence and some luck. Each individual success will make the country as a whole more successful.

I truly believe that most Americans will choose a course that offers them the possibility of personal success. We are not a country of jealous losers who cannot stand to see someone with more than we have. Do people hate Bill Gates for starting Microsoft? Do we hate Waren Buffet for his wise investment choices? Do we hate our neighbors who just bought a new car with the bonus they got from their employer? NO.

Once it becomes clear to the voters that penalizing the "wealthy" will actually make economic growth slower with fewer jobs created, the pool of voters supporting Obama will be limited to the hardcore Democrat social justice voters. In other words, Obama will lose in a landslide.

Monday, September 19, 2011

Another Obama Lie -- the deficit reduction plan

While I deny being a masochist, I do have to report that I went to the white House website and read the president's plan for deficit reduction that he unveiled today. It is long and wordy and it supposedly will result in a cut to the deficit of 4 trillion dollars over ten years. The problem with the plan, however, is that the calculation it puts forth is a lie. In actual fact, the Obama plan will result in an increase to the deficit of about a 166 billion dollars. Let me explain:

The key section of the plan is this Obama proposal:

"Allow the 2001 and 2003 high-income tax
cuts to expire and return the estate tax
to 2009 parameters. The tax cuts for those
with household income above $250,000 per
year passed in the Bush Administration were
unfair and unaffordable at the time they were
enacted and remain so today. In December
2010, congressional Republicans insisted on
extending them through 2012 and threatened
to allow taxes to increase on middle-class
families if the Administration did not agree.
Not extending the middle-class tax cuts would
have hurt our nascent economic recovery, and
would have imposed an enormous burden on
working families. The Administration remains
opposed to the extension of these high-income
tax cuts past 2012 and supports the return of
the estate tax exemption and rates to 2009
levels. This would reduce the deficit by $866
billion over 10 years."

So Obama is claiming a credit of 866 billion dollars over ten years if the bush tax rates for the "wealthy" are allowed to expire at the end of 2012. The reality, however, is that these tax rates are already supposed to expire at that time. All of the deficit calculations from the government include that change in the tax rates. In other words, there is NO SAVINGS from the expiration of the Bush tax rates on the wealthy.

Going further, however, we should all remember that the overwhelming bulk of the Bush tax cuts did not go to the wealthy, but to the middle class. These lower tax rates also are scheduled to expire at the end of 2012, but Obama wants to make them permanent. If these rates are made permanent, it will cost the treasury about 3.2 trillion dollars over ten years. Obama, however, IGNORES this added cost that would be the result of his plan.

So, the actual calculation is not a 4 trillion dollar savings as Obama claims. That amoung includes 866 billion dollars of supposed savings that are already in the original budget deficit number. The Obama calculation also omits 3.2 trillion dollars of additional deficits due to making the rest of the Bush tax cuts permanent. When you add all of these together, you find that the Obama plan results in an increase of the deficit of 166 billion dollars over ten years.

How is it possible that the White House can put out such a flawed explanation of its plan? Is is impossible that they do not know that the plan is incorrect. I refuse to believe that the entire White House staff and the president are that stupid. I think it is intentional. They all know that the plan will never be implemented, so they are trying to put forth something that they can use in the campaign rather than thinking of what will help the country. It is outrageous.

Keller Should Know Better

The former editor of the New York Times explains in a column why Barack Obama is having some much trouble. Mainly, it is the fault of George Bush and the republicans in Congress who are sabotaging everything he does no matter what the cost. Keller should know better. Instead he spouts this crap.

First, let's look at the easy stuff. Blaming the Republicans in Congress is truly ridiculous. After all, Obama had two full years with total Democrat control. Even if they wanted to stop Obama, the GOP did not have the votes to do that. Bill after bill was passed by the Democrats. The main focus for over a year was on Obamacare which hurt rather than helping the economy, but the Republicans could not even slow down that bill. The stimulus passed by Obama and the Obamacrats sailed through. Of course, it did not do any of the things that Obama said it would. It was just a big run up in debt to achieve nothing. Now we hear from the Democrats that it should have been bigger. Why didn't they make it bigger if that was required? They had the votes.

Even Keller cannot give a single example of something that the GOP sabotaged. The big fight in the few months since the Republicans took the House has been on the deficit and the debt ceiling. Obviously, getting Obama to finally focus on lowering the deficit has not been sabotage. Obama now says that he agrees that the deficit has to be reduced.

Second, Keller's blaming of Bush for the nation's current problems is more than a bit tired. There is no question that things were not good when Obama took office. But he has had three years to do something about it. He has had the federal government spend trillions of dollars. But things have only gotten worse. Indeed, if there is ever a short summary of the Obama presidency it is this: HE MADE THINGS WORSE.

Sunday, September 18, 2011

Obama's New Millionaires Tax

According to news reports today, president Obama is going to ask Congress to pass a new tax that will insure that millionaires pay higher taxes so that their tax rate will not be any lower than the average middle class tax rate. It is an idea that has great appeal when one only hears a general description of the idea. A closer investigation reveals, however, that it is a truly idiotic idea that is destined to fail.

First, there already is a tax that was designed to make sure that the rich pay their fair share. It is called the Alternative Minimum Tax and it was passed over 30 years ago and modified repeatedly since then. When the AMT went into effect, it was supposed to hit a few dozen very wealthy people who paid no taxes due to extensive use of tax shelters and deductions. It was a plan to make the millionaires pay their fair share. Of course, over the years since then, the tax has come to take in more and more of the population. Right now it hits single people who earn more than $112,500 dollars and married couples that make over $150,000. Just to be clear, these figures are for the gross income of the taxpayers, not the amount left after deductions. In other words, tens of millions of taxpayers are now ensnared by the AMT. As a result, Congress has passed a series of temporary annual or two year changes raising the level at which the AMT kicks in. There is now talk that the AMT has to be cancelled since it is applied in such a haphazard way.

It is reasonable to expect that the experience with the AMT would be repeated in any new millionaires tax. It may hit the super rich today, but in a few years, the upper middle class will be captured as well.

Second, there has been a consensus in this country that lower rates on capital gains and dividends encourages investment and economic growth. The main reason that millionaires like Warren Buffet pay reduced tax rates is that most of their income is capital gains and dividends. Passing a millionaires tax would undo much of the benefit received by the economy when the rates on capital gains and dividends were cut. It makes no sense to undo the stimulus given to the economy at a time of high unemployment.

Third, we already have only half of the taxpayers in the country paying income taxes. That means that the median taxpayer is paying next to nothing. Obama may not like the rates at which the super rich are paying taxes, but they are still paying the bulk of all that is collected. It is really not fair to add more on top of that.

Fourth, this tax plan has no chance whatsoever of passing. It is already being opposed by Democrats who do not want to impose big new taxes during a shaky economic time. Add these to the GOP and Obama's plan is dead on arrival. Indeed, Obama obviously does not care whether or not his plan passes. All that he is interested in is getting an issue for his re-election campaign. It would be nice to have a president who put the country and its welfare ahead of his own re-election campaign. Maybe if Obama loses, we can get such a president starting in 2013.

Well It worked in NY-9

This paragraph in a column today by Dan Balz of the Washington Post caught my eye:

"Obama advisers believe the president is stronger in the battleground states than his national numbers suggest. They also argue that, whatever the president’s condition, congressional Republicans came out of the debt-ceiling debate in even worse shape and face losses in the House next year, particularly if they reject most of the president’s new jobs plan."

After the recent special elections in NY-9 (the "Weiner" seat) and Nevada which resulted in two GOP victories with very high margins, it seems that those "Obama advisers" had better come up with a new story.

The Truth in Budgeting Law

The Super Committee that grew out of the debt ceiling compromise is meeting in earnest in Washington. That group has until Thanksgiving to propose at least one and a half trillion dollars in savings in the federal budget or all sorts of unsavory and unacceptable cuts will go into place. There are a myriad of suggestions as to what the committee should do. Supposedly president Obama will put forth his plan this week. But I have a very simple suggestion: put forth the Truth in Budgeting Law. All it would require is that from now on, all budgets moving into the future would remain at the level of the preceding year unless Congress votes to raise expenditures. In other words, if the 2011 spending appropriated to a federal department is 24 billion dollars, the budget for the next year would remain at that level unless Congress voted to change it.

Most people in the country would assume that the budgeting method I just described is what is done in Washington right now, but they would be wrong. A few decades ago, Congress decreed that there would be a federal baseline budget. That baseline budget has increases built in to every expenditure of about 7% each year. In other words, that same federal department that got 24 billion dollars in 2011 will get 7% more or an extra 1.7 billon dollars in 2012, and that will not be considered an increase. Indeed, if the department gets the same 24 billion dollars, in Washington it is considered to be a 7% cut.

The baseline budgeting scam was put in supposedly to take care of inflation. In truth, the budgeting scam actually was meant to take the pressure off of congressmen and senators to justify continual increases in federal spending. After all, if there is a built in 7% increase and you keep the actual increase to 6.5%, you can be a "budget cutter". Aternatively, if you increase spending by 9% year over year, you can tell your constituents with a straight face that you only raised spending by a tiny 2%. So long as the secret of baseline budgeting did not get out, Congress had the ability to spend while looking like it was not.

The time has come for Congress to take back responsibility for its own spending habits. Changing the baseline budget system to one that stays level year after year amounts to a "budget cut" of about 9 trillion dollars over ten years. Nobody's taxes have to go up. No programs have to be eliminated. All that happens is that the dishonest budgeting system is replaced with the actual truth with regard to spending.

The super committee ought to remember this: The Truth will set you free.