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Tuesday, January 31, 2012

That answers a lot

Have you ever wondered how it is that MF Global could "misplace" 1.2 billion dollars of its customers' money and no action gets taken against its chairman Jon Corzine? Corzine, of course, is a former senator and governor in New Jersey with close ties to the Obama administration. Corzine resigned as CEO of MF Global just when it filed for bankruptcy and the fact of the missing funds became public. Today, the Weekly Standard reports that according to the website of the Obama campaign, Corzine has already raised over half a million dollars for the Obama re-election effort. Could there be any relationship between all that fundraising and the lack of any indictment efforts by the Department of Justice concerning the "disappearance" of all those customer funds? Everyday seems to bring another scandal where Obama helps out big contributors. First was Solyndra, then four other "green energy" schemes. Now comes Corzine. It stinks; it truly stinks!

Syria -- The Obama Squeakwell

Yesterday's daily death toll in Syria reached more than 100 killed in clashes between government forces and protesters against the Assad regime. Putting that in context, that toll in a country the size of the USA would mean roughly 1,750 dead. Taking it one step further, those killed by the Assad forces since the start of the protest are the equivalent of more than 80,000 killed in a country the size of the USA. Indeed, things have finally gotten so bad in Syria that the Obama administration is speaking out about the slaughter. There is a meeting of the UN Security Council scheduled for later today which will consider a three part plan offered by the Arab states. The plan calls for 1) no more violence; 2) the return of Syrian military forces to their barracks and 3) Assad to step aside in favor of his vice president so that national elections can be held. Although the plan is expected to get support from nearly all of the members of the Security Council, it is also expected to be vetoed by Russia, Syria's principal arms supplier. In other words, this will just be another exercise in futility.

Nevertheless, the Obama administration is finally speaking out against the Assad regime. Here is what Secretary of State Clinton had to say: "The longer the Assad regime continues its attacks on the Syrian people and stands in the way of a peaceful transition, the greater the concern that instability will escalate and spill over throughout the region."

That's right, Clinton is concerned about escalating instability which might "spill over throughout the region". Hillary says nothing about the thousands who have been murdered. She is silent about the hundreds of thousands or even millions who have been deprived of basic human rights. Secretary Clinton also says nothing about what will happen to Assad if he does step aside. Indeed, her focus is more on the possible effects on Turkey, Iraq and Lebanon (Syria's neighbors) than on the ordeal of the Syrian people themselves. In other words, Clinton's condemnation is about as mild as it could ever be. How can she speak against Syria without mentioning the senseless killing? It is truly shocking.

The big question, however, is where is Obama himself. He had no problem running in front of cameras to condemn Mubarak in Egypt when less than 20 people were killed by police. He has also come forward to speak out against similar events in Libya, Tunisia and Oman. But for what can only be described as mass murder in Syria, Obama is spending his time campaigning instead. It is a disgrace. The United States has to speak out against the slaughter and it must do so forcefully.

Focusing on the Essential -- the reason why!

The Florida primary is today. That means that the traveling roadshow of Romney and Gingrich calling each other names is moving on to another state tomorrow. The media will focus on the same nonsense as before. for example, the top story today on one news site is a video in which Obama says that the economy created 22 million jobs in three months and then corrects himself to say that it created 3 million jobs in 22 months. I saw three different articles this morning discussing whether or not the Republicans were actually racists. There were also quite a few discussing if Mitt Romney is too rich to be president (which was never a question when the much richer John Kerry ran in 2004). there were also a plethora of reports about the "desires" of the Republican "establishment". But, what I could not find in all the election hoopla was any clear discussion of the important issues facing America. No mention of the critical choices that the people must make, none, nada, zilch!

Today, I am starting a new series of posts that will go issue by issue and attempt to set forth the choices for the election. I will try to identify positions with candidates or parties where I am able. In some cases, that cannot be done since some candidates have avoided taking clear positions at all costs. Think, for example, of president Obama's position on how to save Social Security from bankruptcy. You cannot do that since he has no clear position. Three years after taking office and in the midst of running for office, the president has no clear position on how to deal with this ticking time bomb.

I will try to have at least one issue post per week as we move forward. the issues to cover are pretty obvious, but if there are any that you believe are essential, feel free to leave a comment describing them and I will try to accomodate your views.

Monday, January 30, 2012

Biden Does it Again

In today's news we learned that last spring when president Obama gave the go-ahead to take out Osama bin Laden, vice president Joe Biden advised against undertaking the mission. Biden told Democrats at a congressional retreat this past weekend that aside from Leon Panetta, all of the advisers at the final meeting regarding the potential raid hedged their bets, in essence saying that it was a 50-50 proposition whether or not to go. Panetta, whose CIA was the source of the basic information underlying the raid, was in favor of going ahead. When Obama asked Biden for his opinion, Biden said to hold off until there was more information, and this is Biden's own account of the meeting.

This is an extremely revealing story, but not in the way that Biden means it. Clearly, Biden's take on the meeting is that despite the wishy washy advisers who refused to take a position, Obama moved ahead boldly and took out bin Laden. Indeed, that is one way to look at it. Biden even says that Obama made clear that he thought that his "presidency was at stake." That makes me wonder about what was really going on. That Obama was making political calculations regarding his presidency is bad enough, but at least he came to the correct conclusion. My question is why all these high ranking members of the administration were hemming and hawing. How can Obama function with a cabinet filled with folks who are more interested in protecting their own asses rather than doing what is right for the country? And what does all this say about Biden and his readiness to be president if something happens to Obama. Clearly, Biden never gets it right. Four years ago, Biden was still calling for Iraq to be split into three countries, a plan which would have led to eternal war in the region. Biden's foreign policy instincts make Obama actually look good. Obama should dump him off the ticket in the next election.

Eric Holder's Lies on Fast and Furious Disclosed -- update

After I posted this morning about new documents that appear to confirm that Attorney General Eric Holder lied when he told Congress about his connections to operation Fast and Furious, I got an e-mail from a reader whose comment is well worth sharing. According to my correspondent, "There is a certain symmetry to having an Attorney General who does not tell the truth together with a Secretary of the Treasury who does not pay his taxes. Perhaps next Hillary Clinton will announce that she is coming out of the closet: as a pacifist."

The Media buries yet another story that could embarrass Obama

Last week, Iowa authorities arrested Zachary Edwards, a director of President Obama's 2008 Iowa campaign, and charged him with attempting to impersonate Matt Schultz, Iowa's Republican secretary of state. That sounds quite interesting, doesn't it. A Democrat who had a high positiion in the 2008 Obama campaign gets caught trying to steal the identity of the Republican Secretary of State in Iowa, home of the first presidential caucus. this was followed a few days later by Edwards entering a plea of not guilty on the charges. So here is the key question: how many articles have been written by the mainstream media outside of Iowa discussing the arrest? The answer is ONE, and that is only if you count the Washington Examiner as part of the mainstream media which is quite a stretch. No mention in the Washington Post, the New York Times, the LA Times, Time magazine, or any other liberal print media outlet. Okay, then how many mentions did the story get on NBC, CBS, or ABC evening news programs? Here the answer is NONE! Ths story was also swept under the rug at PBS, CNN and MSNBC. No mentions there at all!

So why is it that identity theft by a Democrat political operative of a Republican office holder gets no coverage at all. Right now there is non-stop coverage around here of a statement made by the mayor of East Haven, Connecticut who, when asked what he could do for the local Hispanic population said he could "eat a taco." Surely, the mayor could have chosen his words better; his statement was incredibly stupid. But the mayor of East Haven did not commit a felony; he stole no one's identity. All he did was make an insensitive comment. Mr. Edwards, the Obama operative is accused of committing a felony! That is much worse than a politically incorrect statement, but the press covers one like it is world war three and the other is shunned as if it never happened.

I believe that what is actually on display is the aversion of the mainstream media of printing or broadcasting anything that might make Obama look bad. Obviously, there are times when even the MSM has to print bad news for Obama. Nevertheless, the one-sided coverage that was the rule in 2008 seems to be back.

I should be clear here. I do not know if Edwards will be found guilty of the charges or not. It really does not matter. The issue right now is not so much the alleged crimes committed by Edwards, but rather the attempt by the liberal media to bury all news about it.

We Know Holder Doesn't Read, Maybe He Doesn't Listen Either

In a column in the NY Post, Michael Walsh has set forth some truly amazing discoveries contained in the latest batch of documents dumped by the Justice Department with regard to Fast and Furious, the government operation to supply about 2000 assault rifles to the Mexican drug cartels purportedly so as to track them back to their ultimate destination. This crazy scheme finally came to an end after a US border guard was murdered with one of the weapons and the operation became public. In testimony before Congress, the Attorney General Eric Holder claimed that even though the murder took place in early December of 2010, he first heard of Fast and Furious only a few weeks before his testimony in May of 2011. Later he changed that to a few months before the testimony. When confronted with memoranda to him from key deputies that set forth all the details of the program much earlier than he claimed in testimony, Holder said that he had not read them. Now, in the new documents, we have email that explain that Holder was "alerted" about the killing of the border guard and the involvement of the weapons from Fast and Furious on December 15 of 2010. In other words, Holder clearly lied to Congress, a felony and an impeachable offense.

You may well say that we are making too much of an Attorney General lying to Congress. I do not think so. Holder is the nation's chief law enforcement official. If he can so easily commit a felony and have it ignored, then it is hard to imagine that the law enforcement community is in good hands.

Walsh's column is a much more complete description of all of this. It is well worth reading and can be reached by clicking on the title to this post.

The Obama Press Kicks into High Gear

IT did not take long for the mainstream media to decide to make yet another push for president Obama. Over the weekend we were treated to articles with headlines like "Obama Rides Favorable Political Winds". The new storyline is that Obama is running a string of successes while the GOP candidates tear each other apart. And what are the successes? GDP growth reached 2.8% in the fourth quarter of 2011 was the most important one. Amazingly, the reporters ignore the fact that the growth rate was most influenced by an uptick in inventory which is a signal that growth will most likely slow as we move forward. Instead they are busy doing high fives over an a growth rate so anemic that it is a disgrace. It is much like celebrating the skill of the doctor when a patient manages to live after minor surgery. Obama should have had the economy back to major growth; instead things are limping along. Another big success is the rescue by Navy seals of two aid workers from pirates in East Africa. In fairness, this is a success for the seals, not the president. The third big success that the press was celebrating was that Obama got to go out on the campaign trail. Seriously, this got listed as a success by the AP. Are they kidding?

I do not know what will happen in November when the USA votes. I certainly hope Obama loses, but only time will tell. I am certain, however, that no one will vote one way or the other because of any of the "successes" identified by the press.

Sunday, January 29, 2012


After I mentioned earlier today that I graduated from Harvard Law School like president Obama, I got a number of questions as to whether or not I knew the president at that time. The answer is no; Obama and I were not at Harvard Law School at the same time. On the other hand, when I graduated from Law School, one of those in my graduating class was Mitt Romney. That fact, however, does not color my opinions about Romney in any way.

Income Inequality and the Obama Lie -3

I have written twice about the fact that president Obama was wrong when he repeated the statement that Warren Buffett's secretary pays twice the percentage of her income in taxes that Buffett pays. Each time, I have gotten e-mail telling me that my focus on the lie coming from Obama is misplaced and that I should instead be talking about the capital gains tax rates. I disagree.

I believe it is very important for the American people to understand just how easily Obama tells lies. I did not say that he misleads the public or misunderstands the facts; I said that he lies because that is what these are. We have spent three years listening to Obama's lies and people need to recognize them for what they really are. Listen, I do not really care what tax rate is paid by Warren Buffett or his secretary. I do care that when the president of the United States of America speaks, the country ought to be able to assume that he is speaking the truth. We went through seven years when Obama and those like us kept shouting "Bush lied and people died!" It was an important charge and one which, I believe, devastated the Bush presidency. I also believe that the charges against Bush were unfair and incorrect. Nevertheless, the point is that everyone in the USA thinks that the president needs to tell the truth.

So how can I be so certain that Obama knows that he is lying? Let's start with a simple fact from Obama's biography: Obama graduated from Harvard Law School. So did I. I know what basic courses Obama had to take as part of his studies. One of them was called Taxation and it dealt with individual income taxes. Another course was Corporate Taxation which obviously dealt with the taxes levied on corporations. Obama well understands that the American income tax system is progressive; in other words, the rates get higher as the income gets higher. He also well understands that there are special rates for capital gains and dividends. Indeed, just over a year ago, Obama himself acted to make certain that the rates on capital gains and dividends would not rise for anyone, even Warren Buffett, since -- Obama said -- raising taxes for anyone during tough economic times did not make sense. So let's be fair; the current tax rates for Warren Buffett are as much the Obama rates as they are the Bush rates. Unless both Obama and the heavily Democrat Congress of 2010 had acted to keep the rates for capital gains and dividends low, these rates would have gone up substantially beginning in 2011 (capital gains by 33% and dividends by over 100%). It does not take a genius to understand that Buffett is not paying twice the taxes as his secretary, and if one has studied taxes as Obama did, it is a given that one understands this basic fact. In short, Obama is clearly lying and the American people deserve to know this.

Now as to the capital gains tax rate, this was just set a year ago by Obama and the Democrats in congress. For Obama to decide a few months later that he would totally change direction is bad enough; after all, what kind of leader has such a lack of foresight that he pushes through a dramatic bit of legislation with great fanfare only to totally abandon course and reverse direction within six months? Clearly, the reversal is not because the economy has gotten stronger. Growth in 2011 was not as strong as the previous year which Obama said were bad economic times. It is not because Obama's core beliefs (if he has any) have changed. No, Obama's new position on taxes is the direct result of his decision as to what would play best in his re-election strategy. Obama does not concern himself with what is good for the country; his only concern is what is good for his re-election.

Syria -- Thirty Years Ago Seems Like Yesterday

Thirty years ago, the Syrian government headed by Hafez al-Assad launched an all out attack on the city of Hama, a stronghold of the Sunni opposition. Assad was an Alawaite Moslem as were the overwhelming majority of his government. Syria, however, is about 75% Sunni, and the Alawaites comprised only about 11% of the total population. (Most of the remainder are Druse.) Assad had decided to put an end to the opposition once and for all. During the weeks that followed, artillery and planes totally destroyed the city. After government forces finally came into the city, anyone believe to be part of the opposition was executed. The death toll was never known for sure, but it is estimated to have left between 10,000 and 40,000 people dead. It was the end of the opposition in Syria for decades.

Now, the Syrian dictator is Bashir al-Assad, the son of Hafez. He is trying to follow in his father's footsteps. Hama is once again a center of opposition. According to the Jerusalem Post, "this past week, dozens of prisoners were dumped throughout the city, shot in the head execution-style, an indication that Bashar Assad’s regime is trying to send a message reminiscent of his father’s deadly assault on the city."

Thirty years ago, the world was mostly silent as the slaughter went on. Syria was a client of the old Soviet Union, so the Cold War structures prevented action. The USSR protected Assad and did not care if he killed his own people. Now, the USSR is gone. The world has a chance to speak out against Assad and his murderers. Every day the killing just continues. Every day, we hear nothing from Washington. Obama is too busy campaigning to care about all these people being killed. Here's the question: As the USA, do we really believe that each man is endowed by his Creator with the right to life, liberty and the pursuit of happiness, or is that just something we say? If people are being systematically deprived of their lives by a half crazed government in Syria, do we not have an obligation to speak out. We do not have to use military force, but we sure as hell have to say something. Where is Obama?

Incredibly Important News about Global Warming -- er... Climate Change --er... Nothing

The Daily Mail is reporting this morning on figures released last week in the UK by the Met Office and the University of East Anglia that show that over the last 15 years world temperatures have not risen at all. Let me make that clear: the University of East Anglia where the beating heart of the Global Warming Theory is located now confirms that for the last 15 years there has been NO WARMING! During this time, carbon dioxide levels have continued to rise without any slowing in growth; accordingly, the computer models used to predict the climate all indicate that there should have been continuing warming of the globe. In 2007, the very people who issued the information predicted that based upon the continuing increase in CO2, there would be an overall increase of 0.3C between 2004 and 2014. In 2009, they predicted that at least three of the years 2009 to 2014 would break the previous temperature record set in 1998.

The current pause in warming may be related to the change in the ocean temperature cycles. The Pacific has already moved into its cooler phase in that roughly 70 year cycle. The Atlantic is about to flip into the cooler phase as well. Indeed, it may be that the fact that both oceans were in their warmer phase during the 1990's led to the great warming during that decade.

The current pause in warming may also be related to the reduction in solar radiation. The current 11 sunspot cycle is showing much less solar activity than those which preceded it. Indeed, overall solar activity seems to be declining. The last significant decline came in the 18th century, the so called Maunder Minimum, which also coincided with the little Ice Age when world saw temperatures plummet.

The new temperature data is a critical piece of information both for scientists and governments. Untold billions of dollars are being spent right now to reduce carbon dioxide emissions. These expenditures may all be a waste of money. In fact, if the climate is cooling in line with both the ocean temperature cycles and a solar energy cycle, it may well be that higher levels of carbon dioxide will reduce the cooling cycle. The truth is that no one actually knows. What we do know, however, is that the computer models used by Al Gore and his fellow fanatics to proclaim the scientific consensus regarding global warming are clearly flawed. Sure, one year could vary from the predictions. Even five years could vary. Fifteen years of failure for the models, however, is a pretty good indication that there are serious flaws in them.

Saturday, January 28, 2012

Income Equality and the Obama Lie -- 2

A few days ago, I tried to calculate what Warren Buffett's secretary 4earns each year. Based upon the claim that she pays 35% of her income in taxes, Buffett's secretary must be in the top 1% of all earners in the country -- she has to earn about $400,000 to pay that much. But word now comes out that Buffett's secretary is paid $60,000 per year according to Buffett. In simple English, this means that the oft repeated claim by Buffett and Obama that Buffett pays only half the percentage of his income in taxes that his secretary does is FALSE. That's right, it's a lie! According to the IRS, the average person earning $60,000 per year pays about 11.5% in federal income taxes. When you add the 4.2% for social security and the 1.3% for Medicare taxes, then Ms. average secretary is paying a total of 17% of her income in taxes. According to the White House, "Bosanek [the secretary] pays a tax rate of 35.8 percent of income, while Buffett pays a rate at 17.4 percent." That means that in truth, Buffet is paying taxes at a slightly higher rate than his secretary. It also means that both Obama and Buffett have been lying about this entire issue. Did they really think that no one would ask for some sort of backup to this claim?

To put the total stupidity of this lie into context, it is important to understand that the marginal tax rate for income for someone with $60,000 of taxable income is only 15%. Of course, Ms. Bosanek would have deductions and exemptions coming off her pay before the tax was ever applied, so she has substantially less than $60,000 of taxable income. The simply is no way to get her tax rate up to 35.8% of her income when one starts with this number. It should also be noted that according to Buffett, he donated about one third of his income to charity last year. The tax rate that he claims to pay, however, is compared to his total income, not what is left after his donations. I am not saying that Buffett should not give to charity; quite the contrary, he ought to be comended for his charity. The point, however, is that the tax code is specifically written so that people get a tax benefit for making donations to charities. Buffett's huge contribution lower his tax rate significantly. America wants Buffett to pay a lower rate if he makes such big contributions.

It will be interesting to see if Obama ever mentions Buffett's secretary again. My guess is that she will soon be lost in the mist. Over at the White House, they must know that the lie has be uncovered. IT is time to move on to the next one.

Reinflating the Housing Bubble

It may seem hard to imagine, but with housing prices still falling and the construction industry in a depression, the Federal Reserve is managing to reinflate the housing bubble that nearly destroyed the economy in the first place. This time, the structure of the bubble is different, but it is out there nonetheless. For the last three years, the Fed has been doing its best to keep interest rates low. Short term rates are near zero. Long term rates are also very low; ten year rates for treasury securities are around 2% and thirty year bonds are at about 3%. These rates are the result of persistent policies by the Fed to drive rates down and keep them there. Indeed, based upon the latest statements from the Fed, it seems likely that these low rates will stay with us through the rest of this year and into next year.

So let's look at what this means to the housing market. First of all, low rates for treasuries means low rates for mortgage loans. Thirty year fixed mortgages are available for under 4% and a fifteen year fixed mortgage at 3.25% is not hard to come by for a qualified borrower. Those folks who are able to refinance are busy doing just that. The key, however, is to look at just who it is that is issuing these new mortgages. Nearly 95% of new mortgages are now coming from either Fannie Mae or Freddie Mac and these entities are just operating with government money. Most banks are not trying to make new long term loans at rates below 4% unless they can immediately sell the loan to the government through Fannie and Freddie. Why would they? Inflation is running at about 2% which the Fed calls the target. It is hard not to see the areas where inflation is actually exceeding this target. A loan for 30 years at 3.75% could easily fall to less than the inflation rate if there is even a mild pickup in the inflation rate. No rational bank wants to hold that risk.

So what is happening is that the Fed's actions on interest rates are driving traditional mortgage lenders out of the market. Indeed, as creditworthy homeowners refinance, the traditional lenders are losing more and more of their borrowers with good credit, leaving them only with those who do not have the credit to refinance either due to their personal finance or the decline in the value of their homes. When interest rates rise again, and they will, Fannie and Freddie will be left with billions or trillions of dollars in loans paying between 3 and 4 percent when the cost of funds rises to 5 or 6 percent. In other words, it is inevitable that Fannie and Freddie will have enormous losses at that point; the only one to bail out those losses will be the American taxpayer.

The truth is that it would be very painful for the housing economy if rates were to rise. The only way for the market to reignite then would be for the house prices to fall further until they became attractive to those with the wherewithal to buy. The problem is, however, that while the Fed fights to prevent that pain from happening, it instead is setting up the economy for a much harsher bout of pain a few years from now when the rates and housing prices do start to recover. Indeed, the Fed's current program is likely to prevent a real recovery in housing for the foreseable future; and nascent recovery will get squelched by the very programs that the Fed is currently using to "help".

Maybe some day those at the Fed will realize that they are not smarter than the market. I hope so.

Even the Libs are pointing out Obama's Lies

US News is hardly a conservative news organization. Indeed, US News is a reliable member of the left-wing mainstream media. So US News is not a place where one expects to see a detailed discussion of the "exaggerations" by president Obama in his State of the Union address. Sure, US News cannot bring itself to call Obama's statements what they actually are: lies. Still, when the even the left feels compelled to point this stuff out, you know just how egregious the lies are.

Yesterday, US News published a column by Daniel Kish entitled "Obama Exaggerates Role of Federal Government in Natural Gas Boom". Of course, this comes after Obama said in the State of the Union that the government was responsible for the technology that is used to take natural gas out of shale. Here are Obama's exact words about the development of that technology, called hydraulic fracturing or hydrofracking. "It was public research dollars, over the course of thirty years, that helped develop the technologies to extract all this natural gas out of shale rock—reminding us that Government support is critical in helping businesses get new energy ideas off the ground."

US News calls this claim "specious at best". After all, hydrofracking has been used for more than 60 years. Indeed, the article points out that fracturing as part of well completion was first used in Pennsylvania in the early 1860's and a patent application was filed for the procedure in 1864. I doubt that Obama was claiming that the Lincoln administration was funding research into fracking during the Civil War.

Well, maybe Obama was not talking about fracking; maybe he meant the use of horizontal drilling which is also very important to the shale gas boom. The article points out that this technique was first used by the oil industry in the 1920's. Is Obama now claiming that it was the Harding and Coolidge administrations that were funding research into these techniques?

US News is kind to only call Obama's claim specious, a word defined as "superficially plausible, but actually wrong". Indeed, US News does not point out that Obama obviously knows the untruthfulness of his statement. Anyone who has the least knowledge about hydrofracking is aware that this process has nothing to do with the federal government. Indeed, at the moment, the biggest threat to the natural gas boom in the USA is the constant rumbling from the governement that it may shut down fracking for phony environmental reasons. Remember, Obama just stopped the Keystone XL pipeline purportedly for environmental reasons; the fear is that were the pipeline to rupture it would harm the acquifer in parts of Nebraska. Of course, after the route of the pipeline was modified, oil would have to flow uphill to reach that acquifer, but Obama still stopped the pipeline. Oh, and there are at least eleven other pipelines that traverse the acquifer and over two million miles of pipelines in the USA with no serious leaks in recent memory, but Obama had to stop this one. In short, lying about energy policy is nothing new for Obama.

It is sad that we have a president who still thinks that the most important thing in the world is what he says. Obama's motto seems to be "If I say it, it must be correct!" But the truth is unchanging and, as the saying goes, "facts are stubborn things." I honestly do not know if Obama simply deludes himself into believing what he says or if he realizes that he is telling whoppers. That leaves us with a president who is delusional or completely dishonest. Let's thank the Lord that we have an election this year.

The Straits of Hormuz

On Thursday, the Christian Science Monitor ran a story by Scott Peterson (who I assume is not the convicted murderer) discussing how Iran could defeat the US military in the event of conflict in the Persian Gulf. It was the kind of analysis that only an academic or a rigid ideologue could set forth. According to Peterson, the Iranians could use "swarming" tactics to hit the US navy together with mines and small subs. Swarming tactics involve sending hundreds of small boats after a much larger ship all at once. The sheer numbers of small boats will overwhelm the larger target. Peterson announces that the American response will need to be somewhat limited in order to "avoid" a war. I am not kidding; this guy thinks that hundreds of small boats together with subs and mines will attack western shipping in the Strait of Hormuz and there will not be a war. What will all those small boats be doing when they attack an aircraft carrier? Will it be an act of peace? Maybe it will just be a protest.

There is no question that an initial attack by the Iranians with the use of swarming technics might achieve some success against an American navy that was not yet on war footing. After the first attack, however, it is hard to imagine Iran being able to mount any successful defense, and by a month later, there would be no way the Iranians would be able to do much of anything.

There is also no question that for some time, the Straits of Hormuz would be affected, but this would end after a few months. At that point, the threat would have been neutralized. Indeed, the Iranians know that fighting the USA is akin to national suicide, or more precisely regime suicide for the mullahs. That is why nothing has happened to date.

An Unbelievable Ruling

In Arizona this week a state court judge ruled a woman seeking election to the San Luis city council inelligible since she did not speak English well enough to carry out her responsibilities if elected. This is exactly the kind of crazy judicial decisions that make most Americans boil. The question of who is and who is not qualified to be a city councilman is up to the voters, not the courts. Sure, there can be minimum requirements like American citizenship and adulthood. A state could even ban felons from office if it chose. Beyond those minimal prerequisites, however, the choice of public officeholders is supposed to be made by the public, not the courts.

If Alejandrina Cabrera, an American citizen, can be stopped from running by a judge, something is very wrong. Governor Brewer of Arizona should step in and put the weight of the state government behind the appeal filed by Ms. Cabrera.

Friday, January 27, 2012

Today in Death -- I mean Syria

The day has not yet ended, but word from Syria says that the government forces killed 37 folks so far today. Some of the protesters died from tank and mortar fire. About six people were killed when the government troops fired upon a funeral. Yesterday, the Assad regime killed 14 members of one family near the city of Homs. In other words, nothing is new and death is still the word of the day in Syria.

The various news outlets that bother to mention Syria are reporting that the UN Security Council is going to meet to discuss the matter. Russia, however, has already said that it will veto any resolution that calls upon Assad to leave power. As a result, the UN will remain powerless to do anything to stop the killing.

Meanwhile, president Obama had this to say today about the non-stop killing of innocent civilians in Syria, " _______" -- No, I did not forget to put in the quote. Obama has just had NOTHING to say. He offers no words of encouragement to the people. Obama says nothing to condemn the Assad regime. My guess is that in a few weeks either Obama or someone from the State Department will announce that the problem in Syria is the result of something the Israelis did. After all, Israel is our only ally in the region, and the Obama policy is always to blame the ally first.

The death in Syria is a tragedy for the people and an outrage for the Assad regime. The lack of response from either the UN or the USA is both an embarrassment and disgusting. At some point, Obama has to take a break from the campaign and do, or at least say something.

One Last State of the Union Note

Earlier this week, I wrote about turning off the Obama State of the Union just after tuning in; it was just too much to have to listen to Obama prattle on about envy and class warfare. The ratings information shows that I was not alone. According to the minute by minute ratings now available from Kantar Media (which has over 100,000 set top boxes across the country), fully 27% of the audience changed the station away from Obama during the first five minutes of the speech. That's right, more than a quarter of those who tuned in gave up almost immediately once Obama launched into the usual nonsense. It is a staggering figure, but one I truly understand.

A hat tip goes to Steve Brill for sending me the ratings info.

Susan Bysiewicz -- Economic Illiterate

In 2010, Susan Bysiewicz threw her hat in the ring in the election of a new Attorney General for Connecticut. It did not last long; Bysiewicz was forced out of the race since she did not meet the Constitutional requirement for the Attorney General. The AG must have practiced law in Connecticut for at least 10 years in order to qualify for the office. Somehow, Susan "overlooked" that requirement. After raising money and campaigning for a while, Bysiewicz recognized reality and had to drop out.

This year, Susan is running for the Democrat nomination for the US Senate. Once again, she seems to have no idea what she is doing. Her new "signature" issue is called "Making Wall Street Pay". Susan wants to impose special taxes on stock transactions to "make Wall street pay for wrecking the economy." Think about it. There are three states who depend heavily on Wall Street to fund their governments: New York, New Jersey and, of course, Connecticut. Making Wall Street pay, by taxing it the way Susan wants will reduce income and employment by the financial firms. All that tax revenue that Connecticut collects from the numerous hedge funds in Stamford and Greenwich will be greatly reduced. The taxes paid by the tens of thousands of folks who commute from Fairfield County to lower Manhattan to work in financial services will also collapse. Indeed, unemployment for Connecticut will rise. A city like Stamford that depends on financial services as its only engine for growth will see a serious downturn. That's right, Bysiewicz has a plan designed to punish Wall Street which will torture Connecticut.

That is bad enough, but you need to hear Bysiewicz's reasoning to understand just how economically illiterate she is. Here is what this guru says on her web site: "Walls Street banks committed fraud by selling sub-prime mortgage derivatives at the same time they were betting against those derivatives with credit default swaps." Let me explain why this is wrong: Anyone who is a prudent investor understands the concept of insurance. If a company builds a new plant, it gets fire insurance for that plant. If the plant then burns down, it does not mean that the company committed fraud. It means that the company was careful and took steps to minimize its risk if the worst happened. When Wall Street firms sold mortgage backed securities, they also got credit default swaps in place. These swaps are in the nature of insurance policies on the creditworthiness of the borrowers. It is a prudent and careful policy, not fraud.

Now some of the Wall Street firms were in the market to sell credit default swaps and also to buy others. Just the same way an insurance company sells insurance and then gets re-insurance to cover a part of the risk, what the Wall Street firms did makes perfect sense. The whole point of the trades was to spread the risk around; it is a good think, not a bad one.

Bysiewicz clearly either does not understand this or she is intentionally lying to the people of Connecticut. Personally, I have no reason to believe that Bysiewicz is dishonest. As a result, the only reasonable conclusion is that when it comes to economics and markets, Bysiewicz is a total moron. Either way, however, this is not the kind of person Connecticut needs in the Senate.

Obama Denies the Undeniable

It seems clear that Newt Gingrich's description of Barack Obama as the "Food Stamp" president has gotten under Obama's skin. Yesterday, Obama said in an interview that he was not the food stamp president. Here is Obama's reasoning:

"First of all, I don't put people on food stamps. People become eligible for food stamps. Second of all, the initial expansion of food-stamp eligibility happened under my Republican predecessor, not under me. Number three, when you have a disastrous economic crash that results in 8 million people losing their jobs, more people are going to need more support from government."

Funny, isn't it, when Obama intentionally "misunderstands" the point. No one disputes that food stamps are more necessary in bad economic times and that Obama did not personally go out and sign people up for food stamps. The point is that after more than three years in office, Obama has not done anything that has restored growth to the American economy. Unemployment is way higher than it should be this long after a recession. Growth in 2011 was only 1.7% according to the Obama administration's own figures. Obama promised to make things better; he only made them worse. As a result millions of people are on food stamps rather than working in the USA.

Some troubling economic numbers

The Commerce Department reported today on the growth in the economy for the fourth quarter of 2011. According to the report, there was growth at the rate of 2.8 percent during the last quarter of 2011. This is the headline that much of the media is touting since this growth rate is up from the 1.8% rate of growth during the third quarter. It sounds like a nice improvement at first glance, but on close inspection it is actually quite troubling. Here's why:

1) The figures released are not the final numbers for growth for the quarter. They may change dramatically. Remember that the third quarter figures were first released at 2.5%, then revised down to 2.0% and revised again to 1.8%.
2) Almost all of the growth came from an increase in the levels of inventory. Without inventory growth included, GDP grew at the annual rate of 0.8% during the quarter. Some of the slower growth during the third quarter was the result of inventory reductions, so it is only normal that during the fourth quarter the levels of inventory would go back up. The point, however, is that the inventory effects are transitory. Moving forward, there will not be a continuing inventory buildup. That means that we are moving into the first quarter of 2012 with a base rate much closer to 0.8% than the 2.8% in today's report.
3) Business spending on capital goods also slowed during the quarter to the lowest level in three years. This is another bad sign for the future. Of all the things that indicate future growth prospects, it is business investment that most clearly shows which way the economy is heading. Another quarter of low investment will most likely mean that the second half of 2012 will see a serious slowdown.

Looks Like I am not the Only One

Last night I reported that Rick Santorum won the GOP debate. I knew as I wrote that post that much of the media establishment would try to ignore Santorum since they view the race as bipolar with only Romney and Gingrich mattering. This morning, however, I saw the ultimate confirmation that I was correct. When I opened my computer, there was the blaring headline from the AP which read, "Tired and Broke, Santorum Heads Home to do Taxes". That's right, the AP is now out trying to undermine any positive results that Santorum achieved last night. Indeed, if you read the article, you find that Santorum is going to Pennsylvania and Virginia and taking one day off from Florida campaigning. Santorum is also going to do fund raising at home. Santorum also makes clear that he is continuing in the race without question. Of course, Santorum is only quoted once you get to the second half of the article. Clearly, the AP wants Florida voters to think that choosing Santorum on election day would be a meaningless act.

If the AP feels compelled to write an article like this, it means that Santorum truly scored last night.

Thursday, January 26, 2012

The GOP Debate in Florida -- CNN Style

As I said earlier tonight, I really did not want to watch another Republican debate, but I did, and I am glad of it. Tonight's debate had a number of familiar portions, things that have been said before at a debate were repeated. The essence of the debate, however, was new. For example, let me point out something that I do not believe I have ever said before. The clear winner of the debate was Rick Santorum. Santorum was the adult on the stage. He was the one who tried to stop the personal attacks between Romney and Gingrich, much to the chagrin of moderator Wolf Blitzer. Santorum was the one who, even when he was explaining why his wife would be a good first lady, was able to display a sharp intellect, a devotion to conservative principles and a good nature that kept him above the others tonight. Perhaps Santorum's strongest moment came when he tied up the individual mandate in Romneycare with a bow and hung it around Romney's neck. It was the most devastating attack on Romneycare and Romney of the campaign in my opinion.

I suppose the conventional wisdom will be that Gingrich was the loser tonight since Romney landed so many punches on him. I do not think so; in my opinion it was Romney who lost big. Romney's weakness has been his lack of authenticity, the feeling that his principles were -- shall we say -- flexible. Mitt started well; he expressed outrage over an ad that had been run by the Gingrich folks. Sure, the outrage sounded like a replay of the Gingrich response to John King in South Carolina on the ex-wife question, but it would have played very well to those who had not seen both debates. Then Romney got asked about an ad that his campaign was running unfairly criticizing Gingrich. Romney's response was to deny any knowledge of the ad. He claimed to be totally unaware of the ad. If the issue were a new one, it would be remotely possible that Romney was unaware of the ad, but this is an issue that has been much discussed in Florida. There is no question that Romney knew of the ad, but his instincts told him to try to deny knowledge of it. All the good of the first exchange with Gingrich was erased. Romney later was again inauthentic when he tried to deny the similarities between Obamacare and Romneycare. I think the night was a clear negative for Governor Romney. He displayed a new feistiness, but it was just unbelievable.

Gingrich also did not have a great night. The initial attacks by Romney hit Newt hard. Even when Romney foundered while dealing with his own attack ads, it did not restore Gingrich. Santorum was effective in painting Newt as a prisoner of "big ideas" like lunar colonies when the government was broke. Newt got to make his pitch for a clear choice election with big ideas presented; Santorum made the point about just how effective a Gingrich presidency might be. In fairness, Gingrich also got to bring forward his crusade to stop the war on religion in America. I believe that this is a message that will resonate in the GOP base.

Ron Paul show a much quicker wit than he has in the past. He was genuinely funny in suggesting that the only travel to the moon he supported would be for "certain politicians." Paul, however, remains limited in the GOP primary by his foreign policy views. Every time he spoke about another candidates views regarding foreign policy, he accused the other candidate of trying to create wars or to impose American ideas through force. It was patently absurd.

I cannot end without noting both the performance of the moderator, Wolf Blitzer and the overall debate management by CNN. Blitzer (or Blitz as Herman Cain called him) was just so-so. His biggest failure was an unwillingness to get to big issues when there were personal disputes and slights to explore. Blitz also felt compelled to change the few questions that came from the audience in ways that were not improvements. CNN, however, was ridiculous. There was a three minute long opening sequence which looked more like the preview for Survivor than the begining of a presidential debate.

It will be interesting to see how tonight's debate affects the voting. My guess is that it will cement things for Romney even though he lost. Gingrich did not have a blow out performance like the debates in South Carolina. More important, to the extent that Santorum picks up votes, they are most likely to come from Newt.

Debate Nostalgia

With the seventy-ninth GOP debate coming tonight on CNN (or at least it seems that way), I am truly not looking forward to watching Gingrich and Romney call each other out. I do not care what Romney and his proxies say; Newt was never anti-Reagan. In fact, I lived through the 1980's an I remember Newt as one of the young turks in the House who consistently defended Reagan's policies. Nor do I think that Gingrich was an influence peddlar, ever, period. Sure, he made money with consulting fees from all sorts of clients, but I never once recall him promoting something that he did not first believe in. On the other hand, Romney is not some sort of evil rich guy who does not care about the "common man". Heck, the guy gave seven million dollars to charity in the last two years alone. And he has donated at that rate for decades! When we have a vice president who could not even break the 1000 dollar barrier in charitable giving, it is hard to call Romney the one who does not care about others. Nor is Romney someone who destroys businesses. Some failed, sure! It is called free enterprise and not guaranteed profits for all. The idiots who attack Romney for his days at Bain are economically brain dead. And by the way, my focus is on who can best lead the country moving forward, not on who was most faithful to his wife in the past.

All that being said, I am hoping for something totally different. Just imagine if Romney started by telling us all that he has seven biological children and he would have had 23 foster children as well. Or how about if Gingrich announces the ten-ten-ten plan. It would be like Cain's old plan but it would go one better. Indeed, in remembrance of Cain, maybe Romney could invite Gingrich's wife back to his hotel room. Maybe Gingrich could channel Pawlenty (remember him) and refrain from all attacks; then after the debate he can say that he should have attacked.

I really am not up for another debate.

Climate Change or no Climate Change

The dogma of Climate Change (originally Global Warming) has been pushed by Al Gore and the other true believers for well over a decade. We went from a scientific "consensus" without a scientific basis, to a scientific disagreement with a huge amount of politics thrown in, to where we are now: major disagreements among the scientists and raging and nasty debates among the politicians. Sure Al Gore and the rest of those who have made big profits from the global warming scare still talk about the "consensus" in favor of Climate Change. Little is said, however, to show the validity of the various climate models which are at the heart of the pro-Climate Change position. Instead, this group usually attacks the sincerity or honesty or even sanity of those who oppose them.

Now, news of a study from an unimpeachable source has made an enormous hole in the Climate Change argument. A study has been released which was conducted by the Canadian Centre for Climate Modelling and Analysis of Environment Canada. Environment Canada is the arm of the Canadian government that deals with environmental problems, sort of like the EPA in the USA. In the study, heating and cooling were reviewed for the last century and a half. This data was compared with items like Carbon dioxide levels, natural events like volcanic eruptions, and even man-made aerosols to see if the the computer models in use by the Climate Change group accurately predicted the results. Of course, the result was that the computer models did not accurately predict the actual climate based upon the actual imput conditions. The computer models more than doubled the actual observed effect.

This is an extraordinary result. It does not mean that greenhouse gases have no effect on the climate. It does, however, mean that the scare tactics being used by Al Gore and his fellow travelers in the climate change movement are way overblown. The simple truth is that things like carbon footprints do not come close to explaining alterations in the Earth's climate over the last century and a half.

One other thing is certain: with the release of this data, we need to stop concerning ourselves about taking immediate action to combat global warming. If there is, indeed, anything that can be done to combat this problem, the simple truth is that no one yet knows what to do. All the nonesense about carbon offsets and programs like cap and trade do not and will not work.

Obama and the tax cheats

Writing in Investors Business Daily, Andrew Malcolm reports on a news release from the IRS on the tax status of federal employees. The IRS report, required by law, states that just about 10% of president Obama's White House employees are delinquent in paying their federal taxes. All together, these folks own the Treasury about $833,000. This works out to about $25,000 each for these tax deadbeats. Maybe next time Obama wants to talk about tax fairness, he can ask these staffers who average salaries of more than $150,000 to pay their taxes.

Obama and Offshore Drilling

Today in Nevada, president Obama is promoting his announcement of "expanded" off shore drilling in the State of the Union Address. At that time, Obama said, "I’m directing my administration to open more than 75 percent of our potential offshore oil-and-gas resources." That really sounds like a big move towards energy self-sufficiency until you learn what Obama is actually doing. The key word used by Obama is "potential". The president is not opening up 75% of all offshore oil and gas for drilling. No, he is limiting what he is doing to 75% of areas already designated by the Interior Department as places appropriate for drilling. Last year, the Interior Department put forth a plan for oil and gas drilling that severely restricted the places where leases would be sold. Many areas (like the Atlantic coast, for example) were completely removed from drilling. Obama is not changing these limitations. Instead, he is opening up only 75% of the limited areas chosen by the Interior Department. Simply put, Obama is trying to look like he wants to expand drilling for oil while, in truth, he is restricting it.

To make matters worse, Obama knows that he has already effectively killed a big portion of the off shore drilling industry in the USA. Drilling in deep waters is done by big floating rigs which cost hundreds of millions of dollars to build. These rigs have to remain in operation or their owners lose millions each month. When Obama stopped all drilling in the Gulf of Mexico for nearly a year, the owners of the rigs moved them at great expense to new locations. Many went to Brazil. Others went to the African coast. More went to additional locations. So now these big rigs are drilling elsewhere. When Obama reopens off shore land to drilling, the rigs will not rush back. These rigs are under contract to drill elsewhere. Even once those drilling contracts end, it will be much more porfitable to continue drilling in the new locations rather than incurring the multi-million dollar cost to bring the rigs back to US waters. Indeed, by the time the leases are actually auctioned off by the government, it will likely be next summer. Permitting for drilling will then delay any drilling until at least after the election. No company in it right mind would spend millions to bring back drill rigs when the possibility remains that just after the election Obama will again find a reason to stop the drilling.

Walker Recall in Wisconsin

Most of you are aware that there has been a huge campaign in Wisconsin to recall governor Scott Walker. The recall has been the major effort of the public employee unions together with the Democrat party ever since last year's passage of legislation that removed the right to collective bargaining on benefits for public employees. Recently, the pro-recall forces turned in petitions that are supposed to have over a million signatures on them supporting recall. While many of the signatures have been determined to be bogus, there will surely be a sufficient number that are authenticated to require a recall election. In the face of such a concerted effort agaist Walker, you would think that Walker would be likely to be thrown out. Not so! The latest polls against his two principal opponents for a recall election show Walker 6 or 7 points ahead with just about half of the vote. He also has a positive job approval rating (54%), so Walker looks like he will survive.

Normally, polls taken this long before the actual election would not be important. Since the issues and the personalities have been thrust before the public in Wisconsin for so many months, however, these polls have to be very bad news for the unions and very good news for the governor.

Income Equality and the Obama Lie

By now, you have surely heard that Warren Buffett does not pays income taxes at a rate lower than his secretary. President Obama uses that statistic over and over again in his speeches. Obama even had the secretary sitting next to Michelle Obama at the State of the Union address two nights ago. Buffett's secretary is surely a victim of the evil and "unfair" tax code, someone who must be protected by Obama!

Now comes word about what Buffett's secretary actually earns. ABC News reports the following which was released by the White House press office: "Bosanek [the secretary] pays a tax rate of 35.8 percent of income, while Buffett pays a rate at 17.4 percent." In an interview, the secretary says she is an average citizen.

Think about this! The highest marginal federal income tax rate is 35% and that only starts at $380,000 of income. Even with $380,000 of income, however, the tax rate as a percent of income is only about 28.5% due to the fact that for the first income earned, the rates are much lower. Now the White House and ABC must be including the payroll tax for social security as well or there would be no way for the rate to be above 35%. The payroll tax is 4.3% on the first $100,000 or so of income. If you do the math, you come to one very interesting conclusion. In order for Buffett's secretary to pay 35.8% of her income in taxes which is what the White House says, she must earn well in excess of $400,000 per year. That puts her squarely in the group whose taxes Obama wants to raise. It makes her part of the so-called 1%. It makes her one of those "millionaires and billionaires" that Obama is always talking about.

So the poor "victim" whose plight is part of the Obama mantra is super-rich. Sure, she doesn't earn in a year what Buffett does, but nearly every American would gladly have her income instead of their own. And she is one of those people who Obama says do not pay their fair share. Obama wants to RAISE her taxes.


The Iranian Oil Embargo

With the European Union agreeing to cut off oil imports from Iran starting next summer, the Iranians are threatening to strike back. The plan is to stop all oil exports to Europe immediately. At that point, Iran would sell its oil to China, India and Japan. It is a strong move by the Iranians if they actually carry out their threat of a cutoff. Some European countries will be hurt by an immediate cessation of oil before they have found substitute sources. On the other hand, such a move by Iran is likely to also lead to further steps by Europe against companies that do business with Iran or Iranian companies (like the Iranian central bank). That move might be sufficient to get refineries to cut off sales to Iran of gasoline. Strangely, Iran produces copious amounts of oil, but it has very inadequate refining capacity. A cutoff of gasoline imports to Iran would quickly grind the economy there to a halt.

So Europe and Iran are engaged in a massive game of chicken. At risk is whether or not Iran gets nuclear weapons. The American Congress has also passed legislation demanding sanctions against Iran. Maybe some day president Obama will actually recognize the threat of Iranian nukes and take time out from his campaign to work on this problem.

Wednesday, January 25, 2012

Just another murder in Syria

The head of the Syrian Red Crescent (the equivalent of the Red Cross in that country) was killed today. According to reports which are admittedly less than clear, he was shot by a sniper in a city in the north of the country. It sounds like the attack came from the forces backing Bashir al Assad, the Syrian dictator. The USA, of course, has said nothing about this killing; nor has president Obama discussed the slaughter in Syria in any meaningful way recently. What better way to show those protesting against the government in Syria that America does not care about them.

So far, in the last two years, there have been two countries in the Middle East that have had serious public protests where the USA and OBama have done nothing: Iran and Syria. Obama jumped right into the mix in Egypt, a US ally. He supported ousting the government in Tunisia, another friend of the USA. Obama also jumped into Libya after a long delay before then quickly jumping out. Similar things happened with regard to Yemen. Strangely, only for Iran which has proclaimed itself a mortal enemy of the USA and for Syria which is the only Arab ally of Iran and the conduit of arms to the terrorists in Hezbollah and Hamas, has Obama taken no action. When the national interests of the USA would be helped by action, Obama does nothing. On the other hand, when action would hurt US security, Obama jumps right in.

Grading the State of the Union

I have already voiced my personal view of Obama's State of the Union address. Here is what some other sources have said:

1) The AP said that Obama's speech was a recycling of ideas that did not get passed in the first three years of Obama's term. Indeed, the AP pointed out that some of Obama's ideas could not even get through Congress when the Democrats had lopsided majorities in both houses. Here is the topic sentence from the AP: "It was a wish list, not a to-do list."

2) The Washington Times said that Obama took credit for saving the auto industry. Indeed, Obama mentioned GM, Chrysler and Ford. Of course, Ford took no money from the government; it saved itself with no help from Obama. For Chrysler and GM, team Obama arranged for the government to throw in about 65 billion dollars only then to give up and let both companies go bankrupt. Then Obama pressured those who were entitled to payments from GM and Chrysler to give up those claims in favor of Obama's buddies at the UAW. Thousands of small businesses, the GM and Chrysler dealers, were put out of business. All of the employees at those dealerships lost everything. Thousands of people who were owed money by GM and Chrysler took major losses as well; many were forced into bankruptcy as a result. In the end, Chrysler ended up no longer being owned by Americans. GM is still owned by the government and the union mostly. So for all those billions, Obama just protected some union benefits at the cost of tens of thousands of businesses and jobs. This was a success?

3) The Weekly Standard actually released a compilation of moments in the speech where Obama just repeated what he had said during the last two State of the Union addresses. Not only were the ideas not new; even the language was the same.

More on the State of the Union

I just reread the State of the Union address in order to make sure that my distaste for Obama did not lead me to unjust criticism of his proposals. Sadly, on reflection, I conclude that the speech was actually worse than I first thought. I tried to focus on any realistic new proposals that would form the basis for a second term for Obama. There really weren't any. We all know that raising taxes will not help the economy. And raising those taxes, of course, is nothing new. Obama did not do it when he had total control in both housed of Congress, so I have to conclude that he really just talks about it rather than meaning it. How about all the palaver about education. So what was new there? Really, what was new there? The energy discussion was a joke which allowed Obama to say something completely opposite to what he had done as president. Another great line and great lie for Obama was his claim to have cut regulation while in office. At least he did not claim to have stopped the rise of the seas. I guess that comes next week.

Tuesday, January 24, 2012

State of the Union

I just could not do it. I turned on the TV to watch Obama's state of the union speech and after two minutes of watching Washington insiders greeting each other while waiting for Obama to show, I gave up. I just have no patience for listening to lies. Instead of watching, I read the text of the speech. I find this a better way to absorb what actually is being said. No distractions while the Obamacrats jump up and cheer to make Obama look good. No shots of Joe Biden in the background trying to remember how to count up to five. No shots of congressmen or senators trying to stay awake. Just the actual words, the essence of Obama's message.

So after reading the speech, I have to say that I was disappointed. At one point, I almost started yelling at my computer screen. It was when Obama said this: "This country needs an all-out, all-of-the-above strategy that develops every available source of American energy – a strategy that’s cleaner, cheaper, and full of new jobs."

That statement calling for an "all-of-the-above" strategy came from a president who has fought for his entire term for a none of the above strategy. Coal -- oh gosh no! Domestic oil -- no drilling in the USA on government land or offshore. Natural gas -- let's investigate fracking to see if the federal government can ban it. Nuclear power -- are you kidding? Solar energy -- only if it is being produced by one of Obama's big contributors. Wind -- not if you can see the windmills from the Kennedy compound. The truth is that I think that the only energy source that Obama likes is power produced by chipmunks running in wheels in cages. Obama's statement is the kind of total and blatant lie that makes Americans cynical about their government.

How about Obama's big claim that he opened up trade for the USA. He touts the trade agreements with South Korea and Colombia that were recently passed. Is he kidding? The trade agreements with these countries were negotiated during the Bush administration. The Democrats in the senate, however, blocked them from passing until Obama took office and then he withdrew them from consideration. Supposedly, these agreements were going to be "improved", but three years later essentially the same agreements were finally presented to Congress again by Obama. Now, they were passed. So Obama delayed the agreements by three years and blocked the creation of tens of thousands of jobs as a consequence. When Obama finally relented and let the Bush agreements pass, he wants to claim credit. What a joke.

Oh, and then there is the lengthy discussion by Obama about how he wants to reform Social Security, Medicare and Medicaid to keep these programs solvent. Oh wait, there actually was one sentence in the endless speech where Obama says he is open to reforming the program in order to keep them solvent. That's it, nothing more. Three plus years into his term, Obama still has no proposal for fixing social security. As for Medicare, Obama has already removed half a trillion dollars from the program through Obamacare and made the future of Medicare extremely precarious. Nevertheless, Obama has not proposal how to fix it. I guess he figures that the problem will have to wait until after he leaves office.

Obama has got to go or we may not survive.

More Media Bias -2

This morning I heard a report on CBS Radio News about what would be in the State of the Union Address. Then, a few minutes ago, I read Washington Whispers at the site of US News; it contained a leaked copy of the talking points from the White House for the State of the Union. As I read the talking points used internally by the White House, they sure sounded familiar. Then I realized that I was reading essentially the text of the CBS radio report I heard this morning with just some minor changes. So CBS was just repeating talking points from Obama. Why do they call it news when it really is propaganda?

SOTU -- Buffett's Secretary will be there

I am still deciding if I have it in me to watch Obama deliver another State of the Union address tonight. During the last three years, I have watched speech after speech by Obama. At first, I listened to every word hoping to follow the president's reasoning and to understand the proposals he put forth. After a while, I came to realize that Obama rarely put forward proposals; at best he made suggestions and left the heavy lifting on draftin proposals to others. Then I watched as his speeches moved more and more towards a 1984 type of oration. In speech one, he would call for something like more spending for economic stimulation. Then in speech two a few months later, Obama would call for spending control in order to cut the budget. Then in speech three a few more months later, Obama would tell us all how he has been fighting higher spending the entire time he has been in Washington. Anyone who had listened to the first two speeches would know that Obama was not telling the truth, but it never stopped Obama from making these false statements anyway. Just think of how many time Obama has told us that he is focused like a laser on job creation. Then try to think of what the president's current plan for job creation is. There is no such plan. Maybe he will put one forward tonight. My guess, however, is that he will instead tell us how focused he is on creating jobs but have no plan.

Oh gosh, the more I think about what is coming in tonight's speech, the less I want to watch it. Maybe there will be a rerun of Jersey Shore on at the same time. I think there is more reality in that show than in the typical Obama speech.

Nonsense and BS regarding Romney's taxes

Since Mitt Romney released his tax returns, there has been a tidal wave of BS flowing over the internet and the airwaves. It has been a while since I have seen so much commentary offered that was not only wrong but also idiotic. Here are a few examples:

1)Mark Steyn was in today subbing for Rush Limbaugh. Steyn went on at length about how Romney had a bank account in Switzerland until last year when it was closed because it would not look good in the campaign. Steyn made fun of the name of Romney's trustee who issued a press release announcing this. The sad thing is that Steyn did not understand what he was talking about. Romney's trustee issued the press release because Romney put his assets into a blind trust when he ran for governor of Massachusetts in 2002. That means that for the last ten years, Romney has not been managing his own money; in fact, Romney does not even get information about where the money is invested. As a result, Romney did not set up a Swiss bank account; Romney's trustee did that. Romney's trustee is also the one who decided to close the account. So what all this means is that the existence of a Swiss account tells us nothing at all about Romney. The same thing is true about the account in the Cayman Islands which has also been at the center of controversy.

2) The Center for American Progress came out with a press release explaining how Romney used charitable contributions to lower the rate of taxes he and his wife paid to an amount less than than the rate paid by many other Americans. Think about that. Romney gave over $4 million to charity in 2010. This is money that he gave to non-profit organizations and religious groups. Only a liberal group could say that such gifts were bad because they lowered Romney's taxes. Indeed, the tax code specifically allows for the deduction of charitable contributions in order to encourage such gifts. Romney's enormous contributions are a good thing, not something to criticize.

3) The Center for American Progress also criticized Romney for paying such a small portion of his income in payroll taxes. This is a truly idiotic criticism. Romney paid the maximum amount in social security payroll tax that any American could pay in 2010. That's right, no one in the entire country paid more social security tax than Mitt Romney in 2010. Of course, that is because there is a maximum amount set for the social security tax for each person. Nevertheless, only a brain dead lefty group like the Center for American Progress could criticize Romney for paying the maximum amount of social security tax.

4) Other criticism on the internet spoke of how Romney had his assets in the Cayman Islands to avoid US taxes. I mentioned above that the choice of the Cayman's was made by Romney's trustee and that Mitt played no role in that selection. This criticism raises idiocy to new heights however. Let's be very clear: when and American puts funds in the Cayman Islands, it does not reduce the taxes that are owned on those funds. What happens with some in the Caymans is that people secretly park money there and then hide it from the IRS. That's right, people hide behind the bank secrecy laws in the Caymans to illegally hide funds from the IRS. Romney, on the other hand, is not hiding anything. He is declaring all of the Cayman funds. That means that he is paying all of the US taxes on those funds just as if they were in a bank account in Boston. So the criticism of the accounts is just plain wrong.

I am not going to go through all of the idiocy that is washing around the internet on this subject. The point here is that Romney has now released his taxes. And guess what? There are no smoking guns or even shady items that have been found. Hopefully, this will be the end of the entire matter.

Clean Energy Update

Two weeks ago, I recommended the purchase of Clean Energy (symbol CLNE) to profit from the drop in natural gas prices. Clean Energy builds and operates natural gas filling stations. At the time the stock price was 13.35. This morning, the price just broke through $15.00 and it seems to be going higher. Most likely, this spurt is due to the expectation that president Obama will speak favorably about the use of natural gas in tonight's state of the union speech. So the stock is up about 12% in two weeks and there is a big event coming which ought to promote the use of natural gas futher. In short, it is a good time to take some of the profits from this stock.

I am not recommending that you sell out entirely. I do suggest, however, either that you sell a half of you position or that you write covered calls on half. For example, the March 15 calls are now priced at about 95 cents. Selling those calls on half of your position will cap your sale on those shares at $15.95, but it will also give you a nice chunk of change. Taking some profits on the way up is normally a wise thing to do.

Disclosure: I remain long CLNE. I did close a portion of my position to take profits earlier today.

George Soros tells us the Future

Glenn Beck used to call financier and left wing angel George Soros "spooky dude" because of Soros' pattern of predicting a crisis. Beck claimed that these predictions came after Soros helped to foment the crisis in the first place and they were intended to make things worse so Soros could profit from the chaos. Of course, Glenn Beck said a lot of things, so you can decide on just how accurate his claims were for yourself. Today, however, Soros is described in the press as predicting riots in the streets of the USA stemming from the Occupy Wall Street movement. Soros also predicts that there will be a corresponding government crackdown on the protests which will reduce civil liberties. Indeed, one article in the Daily Beast says that Soros was "gleeful" in predicting the riots.

Soros has been indirectly involved in funding the Occupy movement. That makes me wonder if he knows of plans for events later this year. I hope not.

Monday, January 23, 2012

Here we go again -- yet another GOP Debate

There was another GOP presidential debate tonight, this one on NBC. It was a marked contrast to the last two. Mitt Romney came in an tried from the beginning to take shots at Newt Gingrich. Gingrich, however, just brushed off most of the attacks, and they fell with a thud at his feet. Indeed, Romney did the one thing that I believe will hurt him in the days ahead: he made charges against Gingrich that were clearly phony. Specifically, Romney said repeatedly that Gingrich resigned in disgrace supposedly because he had been reprimanded after an ethics investigation. Gingrich pointed out, however, that this was not true. The investigation had been completed two years before he resigned; the two were unconnected. Further, Ron Paul also confirmed that Gingrich's resignation had nothing to do with the ethics matter. It is hard to know how many viewers picked up on the phony charge coming from Romney; my guess is that this will play out further during the upcoming week. So, in summary, Romney was certainly taking shots at Gingrich, but they did not hit their mark and may come back to hurt him.

Once beyond the fighting between Romney and Gingrich, the debate went on much as they have in the past. Romney was back to his usual form. He was quite good except for a rather strained answer on what he has done to advance the conservative cause. (He began by saying that he had 5 children.) Gingrich had some good moments and came off well. Rick Santorum had one of his best debates in my opinion. His indictment of the conservative bona fides of Romney and Gingrich was a lalapalooza of an answer. Unfortunately, it was probably too little and too late. Ron Paul also had some moments of clarity and insight (and that is something that I do not often say.)

In short, I thought all four of the candidates had good nights. I doubt, however, that anything said at the debate will shake up the race in Florida at all. So, to that extent, Gingrich has to be declared the winner.

Is this the end of Romney?

According to news reports, Mitt Romney told a crowd today in Florida 1)Newt Gingrich is a failure as a leader who had to "resign in disgrace" from the speakership; 2)Gingrich was reprimanded by the House with 88% of Republicans voting for that outcome, so Newt was a failed leader; and 3)for the last 15 years, Gingrich has been selling influence as a lobbyist in Washington. The attacks seem to me to be a mark of despair by Romney; they may even signal the end of Romney's chances to capture the nomination. Let me explain:

First, it is very unusual for the candidate himself to deliver such negative attacks. Only those candidates who are best described as vicious or total losers do so. Think of Pat Buchanan as a good example of the former and Rick Perry as a good example of the latter. Delivering such attacks make the candidate look mean spirited, and it is likely to turn off a significant portion of the electorate. In Iowa, there were substantial attacks on Gingrich, but they came from the Romney PAC, so Romney could claim that he had no involvement with them. Second, it is critical that if one lets fly with a negative attack that one has the facts correct. Romney is clearly streching some facts and creating others. Gingrich did resign as the Speaker, but it is hard to say that he resigned in disgrace. There were well over 100 charges made by the Democrats against Gingrich in the ethics investigation; all but one were dismissed. For the last one, Gingrich agreed to a reprimand and to pay back the cost of the investigation. He never agreed, however, that he had done anything wrong. So if 88% of the Republicans voted for this outcome, they did so with the agreement of Gingrich himself. After the vote in Congress, the entire matter was investigated by two different agencies, including the Justice Department, and both concluded that Gingrich had done nothing wrong. Remember, this was the Clinton Justice Department, a federal department that would have liked nothing better than to strike a blow against the Republican Speaker. Finally, over the last 15 years, Gingrich has written about ten best selling books, produced seven full length films, run three different private companies together with his wife and participated in a whole host of organizations designed to promote new ideas in government. No one could honestly say with a straight face that Gingrich spent his time as a lobbyist. Indeed, no one could even say that he devoted a substantial portion of his time to such an endeavor.

So Romney is basically 0 for 3 in his charges. It makes him look low and less than honest. Strangely, this may give Gingrich the chance to have yet another of those moments that have propelled him to the front of the pack. Surely, the Romney attack was designed so that it will be mentioned in tonight's debate. We shall have to wait to see what happens, but my money is on Gingrich to use this effectively against Romney.