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Thursday, May 31, 2012

This Ship Has Sailed

David Letterman used to have a feature on his show called "stupid pet tricks". Today, I want to update that a bit and have a new feature "stupid Democrat statements". It seems that the ship has sailed on the idea that the national Democrat party has a leadership with a brain.

Today, let's look at Nancy Pelosi. The former Speaker of the House is perhaps best known for her face frozen in a botox smile and everyone's favorite remark that the House has to pass Obamacare to find out what is in that law. But Nancy is still trying to show her intellect (clearly a losing effort). Now, Pelosi is telling the press that the Supreme Court will uphold Obamacare. Why? Because, according to Nancy, she "knows the Constitution". What insightful analysis! Brilliant! Nancy knows the Constitution.

The truth is that I wonder if Nancy can even spell the word constitution. In the past when Pelosi was asked to explain why Obamacare met the constitutional requirements, all she could say was "Are you serious?" That was it, no more! Now she knows; we all should be so glad to hear.

Another stupid Democrat statement came today in the House when a bill to outlaw sex selection abortions after 5 months of pregnancy was voted down. Just to be clear, the bill outlawed the practice of aborting a fetus because of its sex during the second half of pregnancy. The bill would protect female children from being aborted by parents who wanted sons, not daughters. The stupid Democrat statement came from the House Democrat who said that the bill was part of the Republicans' War on Women. Got that? this genius is telling us that a prohibition against killing female children is a War on Women. By that logic, laws against murder must be part of some War against the human race.

The Biggest Lies Around

Answer this question: have you heard that the net worth of the Walton family (which owns Walmart) is higher than the combined net worth of the lowest 30% of the country? This "truth" is resurfacing again in the latest efforts of the Democrats to attack the successful in America. According to the left, income inequality is so severe that just a few people have more than close to 100 million others.

Now answer another question: consider a first year lawyer who just started his full time legal career last September. This young lawyer makes $175,000 per year plus benefits working for a large law firm in New York. The young lawyer, however, has school debt of $35,000 from college and law school and has not yet been able to save anything from his income. Is this lawyer poor? Indeed, in any universe would this lawyer making close to $200,000 counting benefits be considered poor? The answer is clearly a resounding NO!

Of course, the 30% of the population that supposedly has less net worth than the Walton family includes this lawyer. After all, this fellow has a negative net worth. It also includes a family that bought a house for $300,000 in 2008 with a down payment of $30,000 and a mortgage of $270,000. The house is now worth only $250,000, so the family with no real savings also has a negative net worth. This is so even though the husband and wife together have an income of $185,000 per year. They are not poor, but they are included in that 30% whose net worth is less than that of the Waltons.

In other words, the claim about the Walton family compared to the net worth of others is only accurate because it distorts reality. It never considers the income of the folks involved. It only looks at net worth after all loans are first used to reduce that net worth. It is lie number 1.

Lie number 2 of the Left's top 10 is that the USA only has 2% of the world's oil reserves. It is a blantant lie which I have explained many times on this site.

Lie number 3 on the Obamacrat hit parade is this howler: Barack Obama actually raised federal spending less than any other recent president. This lie first assigns all of the major spending initiatives under Obama like the Stimulus to Bush. There is no reason to do this other than to manipulate the numbers. Even so, Obama himself is out telling this whopper to the press.

Lie number 4 is the amazing claim that Obama is a "better friend to Israel" than any past president. I find this lie so galling that it annoys me too much to explain why it is false.

Lie number 5 from Obama is that the Stimulus worked. That's right, but for the stimulus things would be so much worse. True, things suck at the moment. The economy is growing at an incredibly slow pace and unemployment is not down yet to 8%, the level that Obama promised would never be reached if the stimulus were passed. So what. The Obamacrats can tell us that things would have been worse but for the stimulus. They want us all to ignore reality and just accept their word. After all, they have been so honest in the past!

Cherokee Liz Speaks with Forked Tongue

Massachusetts Democrat Elizabeth Warren has become famous for her claim that she is 1/32 Cherokee. For weeks, Warren (or Cherokee Liz as I like to call her) has claimed that she only listed herself as part Native American in order to meet similar people at events. Cherokee Liz said that it had nothing to do with her being hired as a minority professor at the law schools at the University of Pennsylvania and Harvard. The mantra was that there was absolutely no impact of her supposed Native American heritage on he being hired as a professor at these prestigious institutions. Indeed, Liz said that she did not know if the law schools even knew about her heritage.

Now, the story has morphed again. Warren now admits that she herself told both schools of her claimed Cherokee heritage. Here is the excerpt from her statement to the Boston Globe:

At some point after I was hired by them, I... provided that information to the University of Pennsylvania and Harvard....My Native American heritage is part of who I am, I'm proud of it and I have been open about it.

Warren still claims that her supposed heritage had nothing to do with her being hired, but she also refuses to allow release of her employment documents at either school. So let's recap:

1) Warren first claimed that she had a marriage license application from 1897 that showed her ancestor was a Cherokee. That turned out not to be true.

2) Warren then said that her claim to Cherokee heritage was based upon family "lore" and her high cheekbones "like all the Indians have". So much for the left staying away from stereotypes.

3) Warren said she had not told the law schools about her racial background as part of her hiring. Of course, now she admits that she did tell them of the Cherokee heritage.

4) Warren says that the fuss about all of this is just a ploy by the campaign of her opponent Senator Brown to change the subject of the campaign. That would make the Boston Globe, the subsidiary of the New York Times that is the main liberal outlet in Massachusetts, a dupe for the Brown campaign. The Globe is many things, but a dupe for the Republicans is not one of them.

5) Warren still refuses to release her employment records which could easily put to bed the claim that she benefitted in hiring from a phony claim of being a Cherokee. This refusal speaks more about Warren than all her press conferences combined.

I am becoming more and more convinced that Warren is likely to withdraw from the race in the near future. Her excuse will most likely be that she wants to spend more time with her tribe.

The Reason behind the War in Wisconsin

On Tuesday, the recall elections in Wisconsin go to the voters. At the moment, governor Scott Walker is ahead in the polls by between five and seven percent. The Republican state senators who are challenged are also comfortably ahead of their Democrat challengers with one exception; in that contest, the polls show the GOP candidate leading but within the margin of error. In short, it is looking like the Republicans will win this epic battle. Perhaps the most amazing thing about these elections is that the cause of the recall movement, Walker's changes to the benefits of public employees and the removal of benefits from collective bargaining, are no longer being mentioned in the campaign. It seems that Wisconsin has accepted the clear success of these moves.

News was also out yesterday that made clear exactly why the recall effort has continued despite its likely defeat. According to the Wall Street Journal:

Wisconsin membership in the American Federation of State, County and Municipal Employees—the state’s second-largest public-sector union after the National Education Association, which represents teachers—fell to 28,745 in February from 62,818 in March 2011, according to a person who has viewed Afscme’s figures. A spokesman for Afscme declined to comment.

Much of that decline came from Afscme Council 24, which represents Wisconsin state workers, whose membership plunged by two-thirds to 7,100 from 22,300 last year.

That's right, membership in the public employee union, the union whose members were supposedly so outraged by the Walker moves, has vallen by over 50% over the last year. How could that happen? It was Walker! The new laws passed last year stopped the practice in Wisconsin of requiring public employees to be union members. Individual workers gained the right to decide whether or not they wanted to be union members. Monthly dues were no longer automatically taken from their pay checks and sent by the state to the union. More than half of the work force dropped out of the union.

This change in union membership is a direct threat to the strength of both the union and the Democrat party in Wisconsin. For decades, the dues taken from public employees paychecks by the state were recycled by the unions into Democrat campaigns for public office. These same Democrats then made sweetheart deals with the employees all at the expense of the folks that the Democrats were supposedly representing. It is a disaster of the highest magnitude for Wisconsin Democrats.

There are still many states across America where public employees are forced to be union members. Just imagine what will happen if Wisconsin's move towards freedom for the workers is replicated across the country.

Another Important Obama First

I believe that America is looking at the presidential race in a distorted way. In 2008, the race was called "historic" over and over again. This time, it seems to be viewed in a much more politically pedestrian manner. It should not be. The 2012 election will hopefully have a result every bit as historic as 2008 did. Let me explain:

In the entire history of the United States, we have never had an African American former president. Barack Obama has the chance to make history once again. Just imagine: there is an earthquake or hurricane or one of those other disasters that periodically strike around the world. As usual, the president asks former presidents to get involved to head the fund raising effort to help those stricken in the disaster. These former presidents become the face of America helping those in need. Wouldn't it be great if one of those faces is that of Barack Obama, the first black former president. It would be historic! We hear often about how Obama cares for the downtrodden. Here is a great chance for him to show this. Let's all get together and help this to happen.

The Economic Reports Today

Thurday brought three important economic reports: new unemployment claims hit a 5 week high; first quarter GDP growth was revised down to 1.9% and the ADP jobs report came in a bit below the consensus. None of these three reports is that important as an indicator of where the economy is going. The move back up in weekly unemployment claims was not that large. The GDP number was actually at the consensus figure -- very slow growth, but growth nevertheless. The ADP report is notoriously unreliable for predicting the unemployment rate or even the number of jobs found by the government. Taken together, however, these reports indicate that things are not improving. The economy continues to limp along, growing slightly. The only way that the number of unemployed will be reduced with figures like these is for more folks to just give up looking for work.

Wednesday, May 30, 2012

The Chips Keep Falling

In the last month, we have seen president Obama and his campaign start a frontal assault on free market capitalism. Sure, they say they are not on the attack, but then they tell us over and over how Romney's record at Bain Capital is a big issue. Obama tells us how Romney was concerned with "profits" not people as if this is a bad thing. We hear from the campaign that private business entities are responsible if efforts to save a failing company with a major infusion of new capital do not work. That's right, Romney and Bain put in tens of millions of new dollars in investment into a failing steel company and the is a really bad thing in the world view of the Obama campaign. It is fine if Obama does the same thing with our money and fails (like Solyndra and numerous "green" energy enterprises), but for Bain to use its own capital and succeed only 80% of the time shows the inhumanity of Romney. He is a vulture when a company fails two years after he leaves Bain, but Obama is a hero when he puts hundreds of thousands in the auto industry out of work after pumping in $70 billion that he borrowed from China.

Any sane American understands that what Obama is attacking is the way that the US economy has functioned and grown for the last 200 years. Private enterprise is akin to an epithet in Obamaland. Obama can think of no words more vile than "banker", "Wall Street", "capitalist" and that extraordinarily terrible one, "private equity". Oh, unless, of course, those words apply to someone who is making large contributions to the Obama campaign. Then they are national heroes like Buffett etc.

Because Obama is taking on the free enterprise system, even Democrats are starting to get nauseated by his tactics. We all know what happened with Cory Booker; he spoke his mind and then had to recant on a video that looked like one of those creepy messages from hostages held by the Taliban. Other Democrats with guts and smarts also have been speaking out. Ed Rendell, a former chair of the DNC, not to mention two term governor of Pennsylvania has made clear his own opposition to Obama's tactics. Now, Artur Davis, formerly a congressman from Alabama has announced that he is switching parties as a result of Obama's campaign against the free market. Davis was the first black to be elected from Alabama in a district where the majority was not African American. He lost in a race for higher office two years ago, but he remains active in politics. But no longer as a Democrat.

On the same day, a member of the Democrat State Committee in Pennsylvania also switched parties. This woman switched because, she said, her Catholic faith was under attack by the Democrats, and by Obama in particular.

What is actually happening is that folks around the country are hearing the message that Obama is pumping out to them. It is the standard message for exciting the crowd inside the liberal bubble that surrounds Washington and the media. Bashing capitalism is popular with the Hollywood elites who have gotten rich as a result of that system. Denigrating Catholicism and every other religion is a big hit for the secularists who populate the Washington liberal think tanks. The crowd in the bubble is so insulated from real Americans that they have no idea how poorly their ideas actually play when put before the people. Inside the bubble, the rest of the country really are those "bitter clingers" that Obama spoke about in 2008. These folks are foolishly clinging to their Bibles and their guns and their fears of those who are different. This world view just does not change. Inside the bubble, the crowd just knows that it better than the rest of America. They just know that they are right in all things.

In November, this crowd is in for a rude awakening. Sure, they will blame racism for their coming electoral apolcalypse. We will all get to hear for months about how America really is a racist country that just could not re-elect a black president. They will never be able to explain how we elected Obama in the first place but then became too racist to re-elect him, but they will say it nonetheless. Of course, by that time, it will no longer matter. The real America will be saved. The liberals and their allies will be out of power.

The Shame of Syria

Syria has finally made it to the front pages of the main stream media. Only 15 months after the killing began, both the newspapers and the TV networks have started to cover the ongoing human disaster in that country. Even president Obama and the Obamacrats are discussing the situation with more than passing interest. Of course, Obama has made clear that the USA will not get involved in any military action. Indeed, so far the strongest thing we have done is to expel the Syrian ambassador after only 12,000 civilian deaths at the hands of the Assad regime. Oh, they must be shaking in Damascus.

The truth is that Obama's conduct with regard to Syria is shameful. Had America taken a strong stand a year ago against the death squads that Assad set on his own people, there might have been a different outcome. Just imagine if Obama had spent even one tenth the effort to stop the slaughter that he put in for fund raising for his re-election effort. There was no need for American military involvement; in the early days of the killing a major diplomatic push might well have been enough. Of course, there is also the moral component to this whole mess. The United States got involved in fighting in Libya when many, many fewer civilians were killed. Obama told the world how we would not stand idly by and watch as a government killed its people. Then, a few months later in a country in the same part of the world, Obama stood idly by and watched as a government killed its people. So much for honesty. In fact, if you ever want to cry and laugh at the same time, try listening to the White House spokesman explain why Libya and Syria were different. The clearest answer seems to be that Libya has an L in its name while Syria has an S.

The reality, of course, is that polls show that Americans do not want any involvement in Syria and Obama is only 5 months from the election. Once again, politics triumphs over morality.

Who Decides What Goes on the Teleprompter?

At a ceremony yesterday at the White House, president Obama awarded the Medal of Freedom posthumously to Jan Karski, a hero of the Polish resistance during World War II. In the middle of a one paragraph description of the reasons for the award to Karski, Obama spoke of the "Polish death camps" of world war II. More precisely, Obama read that description off the teleprompter that he uses for all of these speeches. The result is an uproar in Poland. The death camps were German; they just happened to be located in Poland. Since the Poles lost a greater percentage of their people during that war than any other group except for the Jews, calling these camps "Polish" is of major moment in Warsaw. With that one sloppy phrase, Obama has managed to offend a large segment of the Polish people.

All this makes me wonder who it is who decides what should be on the teleprompter. Does Obama read it first? If so, is it possible that Obama does not know that the camps were German? If Obama does not read the statements first, which genius in the Obama administration missed this fact?

Just once, I would like to see Obama do something that seemed remotely competent. Hopefully, he will be good at moving out of the White House next January.

Tuesday, May 29, 2012

It's About Time

For the last few weeks, the country has been treated to the ridiculous spectacle of president Obama and his campaign criticizing Mitt Romney as unfit for the presidency since some of the companies in which Bain Capital invested while Romney headed the company actually went under. That's right, the official Obamacrat line is that Bain bought a few companies, invested millions of Bain's dollars in trying to turn these companies around, but then failed with many folks losing their jobs. The point, according to the Obamacrats, is that Romney does not know how to create jobs.

This always seemed like a strange line of attack against Romney. After all, the record shows that about 80% of all of the companies in which Bain invested made money. Indeed, while Romney headed Bain, the companies in which Bain invested grew to create something over 100,000 new jobs. Sure, about 20% of the time, Bain (and Romney) were unsuccessful in turning around the target company. That is how capitalism works. Management tries to make the company efficient enough to prosper in the private economy, but sometimes other factors win out and take the company under. One thing we do know, however, is that without the involvement of Bain and Romney, essentially all of these companies would have failed and tens if not hundreds of thousands would have lost their jobs.

Today, the Romney campaign is out with a video that turns things around. Instead of looking at Romney's performance at Bain Capital it looks at Obama's performance with his green energy investments program. Obama took close to $35 billion or our money and gave it out to boost "green jobs". The majority of the money went to Obama's big contributors and friends. That's right, something like $20 billion of taxpayer money went to Obama's friends and family. And how many of these companies are successful? Is it anything like the 80% that Romney achieved? The answer is clearly no! There are no success stories for Obama. There is no equivalent of Staples or Dunkin Donuts like Romney had. There are only bankruptcies, layoff, fraud and investigations. Obama has completely failed. Here is the video. Watch it yourself.

So let's boil down this whole area. Obama and the Obamacrats say Romney is not qualified to be president since he was successful on 80% of the time. On the other hand, Obama has failed at the same task 100% of the time. I think it is safe to say that batting .800 is always better than batting .000 except in the world according to Obama. If you throw in all the payoffs to cronies, Obama is actually batting less than zero.

The Apology Makes it Worse

There is a fellow named Chris Hayes who apparently has his own show on MSNBC and who substitutes frequently for Rachel Maddow on the same cable network. Over the weekend, Hayes was talking about Memorial Day and he said that he felt "uncomfortable" using the word heroes for the soldiers, sailors and airmen who have given their lives for this country. It was too "rhetorically proximate to justifications for more war" according to Hayes. In his bloviating way, Hayes was saying that if we honor those who gave their lives for this country, we are more likely to have more wars in the future. It was a disgusting display even from a network like MSNBC which often acts as if it exists to denigrate America and its achievements. Brave men and women who defeated Hitler are to be forgotten. The Union army that ended slavery and saved the United States are not important. The Continental Army that starved at Valley Forge to keep the flame of liberty lit are not to be praised. Indeed, our sons and daughters are probably to be told that all these people who gave their lives for the country are meaningless.

I was mightily annoyed when I heard what Hayes had said, but I decided that I would not comment on it since I probably have almost as big an audience with this blog as Hayes does for his TV show (both are quite small), and I did not want to add to the coverage that Hayes got for his public display of stupidity and bad taste. Then I heard that Hayes had apologized and I read the text of the apology. Here it is:

"In seeking to discuss the civilian-military divide and the social distance between those who fight and those who don't, I ended up reinforcing it, conforming to a stereotype of a removed pundit whose views are not anchored in the very real and very wrenching experience of this long decade of war. And for that I am truly sorry,"

Do you get that? Hayes is not sorry for refusing to call these brave men and women who gave their lives for us "heroes". No, Hayes is sorry that he acted like a stereotypical pundit whose views are not anchored in the reality of the last decade. As a former partner of mine would say, that statement is clear as mud. Hayes does not have it in him to actually apologize. He needs to apologize to the dead. He needs to apologize to the families of the dead. He needs to apologize to the country as a whole. He needs to apologize for dishonoring these brave men and women.

Hayes may have apologized for being too intellectual. In his mind, that is probably a badge of honor. I can just picture him sitting alone somewhere chukling to himself that he managed to issue an apology that says nothing at all. The truth, however, is that the so-called apology actually speaks volumes about Hayes. It says that he is a smarmy, self-important pseudo-intellectual whose views are based wholly in the dogma of the left. To Hayes, all soldiers are on the other side of the "divide" from him. To Hayes, he is superior to all those fools who actually fight. Hayes is here to revel in the benefits of being an American; it is just when it comes time to pay the price for those benefits that he disappears.

I would suggest that you all stop watching Hayes show, but there is no point to that. There are so few in that category already that my search for an actual viewer might be futile.

China -- Will it soon give out Loss of Fortune Cookies?

For the last two years, I have stayed away from investment in Chinese based companies. My reason for this approach is simple: I do not invest in countries where I do not trust the government to act consistently and fairly. Russia is another country I consider off limits to investment. In recent days, however, I have been considering whether or not to expand the scope of my China-avoidance. I have concluded that it is time to stay away from companies that depend to any great extent on the Chinese market. With China being the great success story of the last decade, it may seem odd to move strongly away from this country. Supposedly, the Chinese economy is currently still growing at a rate of 8% (compared to a slight contraction in Europe and growth in the 2.5% range in the USA. Here are my reasons:

1) Chinese economic statistics are notoriously unreliable. The Chinese have no need honestly to report on their growth rate. This is particularly so since the Communist Party is about to select new leaders for the next decade. It would do no good for the current leadership to have the economy contracting at the same time it was trying to name a successor.

2) The actual accurate Chinese statistics that can be obtained all indicate that China is falling into a recession. Matthew OBrien has a good summary of these statistics here at the Atlantic. Other knowledgeable China watchers say the same thing.

3) If it turns out that China is actually in a recession, the fall of that economy will be much more of a shock than the recession in Europe. China has been in a 35 year growth trajectory. It has developed a major real estate bubble. It is reliant to an extreme extent on new investment as the growth engine of the economy. The Chinese people have gotten used to steady strong growth rather than a downturn, no matter how severe. The reaction in China to a downturn is much more difficult to predict that a similar event in other countries.

4) China has managed to supply an enormous portion of the world market for many key commodities and products. China uses more than half of the world's iron output. It has a voracious energy appetite. It uses copper to a much greater extent than any other country. This means that a Chinese slowdown or recession will cause havoc in all of these industries. Prices will plummet as the current output levels are no longer needed.

I realize that what I am describing is the basis for a world wide recession, not just a slowdown in China. Such a worldwide dip may well come to pass. For the moment, however, I am not recommending that one pull all investments from the markets. It is too far from clear that we are headed on a path to recession. Nevertheless, it is time to "get smaller" in China and for companies in the main Chinese affected markets.

Here are a few steps I recommend:

a) Sell your stock in Chinese companies. These companies are the most likely to get hit hard if the Chinese economy falls. Indeed, it remains possible that the Chinese government could impose some sort of controls or take some other action which would make stock in these companies tank.

b) Stay away from basic commodity stocks. Companies like Vale of Brazil, Rio Tinto or Southern Copper are heavily dependent on sales to China. Indeed, so are nearly all of the commodity stocks.

c) Stay away as well from financial stocks. The stress to the world financial system that will result from a Chinese recession will be extraordinary. Couple that stress with the problems that are underway in the Eurozone, and we may see a host of failures in this area.

d) Consider hedging steps to offset any losses that could be coming. Shorting the S&P 500 by buying calls on SDS is a possibility. Another possibility is small but leveraged investment in Gold.

e) Stay alert to further shifts in the wind. If a Chinese recession goes from a distinct possibility to a likelihood, you will need to move quickly to limit your downside risk.

DISCLOSURE: I own no interests in any of the companies mentioned, but I do employ the hedging methods described.

Monday, May 28, 2012

The Week Ahead

This morning, I managed to get on the Monday morning conference call held every week by the Obama campaign for "friendly" journalists. After listening to the items covered, here is what is going to happen in the week ahead.

1) The big event of the week from the standpoint of the campaign is the release of the employment figures for May. Based upon what was said, the likely results are that there will be an increase of 5,000 jobs in the economy for May and the unemployment rate will decline from 8.1% to 5.7%. The decline in the rate will come as a result of just over 4.1 million people leaving the workforce.

2) An independent analysis paid for by the campaign will announce that Obama is the "Education President" for three reasons: a)for the first time ever, the total amount of student loans outstanding has declined during a president's term. This is because all loans issued during Obama's term but under legislation passed during the term of an earlier president will be charged against that president rather than Obama. b)High School graduation rates will climb to 100% for Obama as a result of the new method for computing this rate. During the Obama term, highschool dropouts will now be considered people who are no longer looking for an education so they will no longer be counted. c)The health insurance costs for teachers and university professors during the Obama term will be higher than ever before.

3) The Obama team will tout the great success achieved by the president with regard to Iran by pointing out that so far during Obama's term in office, Iran has not exploded a single nuclear weapon.

4) Events in Syria are to be recharacterized as "classified", so the media will drop all further coverage.

5) In order to show a commitment to increased domestic energy production, Obama will announce an auction of drilling rights on certain federal lands. These will include Acadia National Park in Maine, federal land in Vermont, Connecticut and Rhode Island, and a large area outside of Seattle. Geological surveys show that there is no oil or gas on these lands, but when there are no bidders, Obama will point out the lack of interest to the public and explain that this shows that the Republicans are working with big oil to keep prices high by not drilling.

I cannot wait to see what happens the following week (if they let me back on the call).

Sunday, May 27, 2012

Thomas Friedman's Mind -- R.I.P.

Thomas Friedman is the pundit who famously pines for America to be more like China. After all, in China, when the government wants something to happen, it just tells the people what to do. The people obey, or they end up in prison or with some similar fate. Friedman likes the system since the Chinese do not have to bother with all those messy demands from individual citizens or interest groups. Like any true liberal, Friedman thinks that the government knows best, so giving the government total power is clearly the answer to his dreams.

Friedman's arguments about the Chinese reveal the essence of his political thought: he prefers total government power over democracy and freedom. That was bad enough. Now, however, Friedman is revealing that he has lost his ability to discern reality. His mental abilities have died. No, Friedman is not in a coma in some hospital room; it is just that he has become totally delusional. Friedman is out with a column that calls for president Obama to start talking about all of his accomplishments. That's right; Friedman says Obama should stop bashing Romney and instead talk about all the wonderful things that he accomplished in his first term.

It is a great idea..........for Republicans. Just imagine Obama's speech discussing all of his great accomplishments. it is, hot off the teleprompter:

My friends, thank you for that warm welcome. [Smile and wave.] I am here today to explain once and for all why it is that you should vote to keep me in office for another four years. I do not often speak about myself and my accomplishments. [pause for snickering to die down] Today, however, I am going to have to do that. I want you all to realize what a great country we are living in due to my efforts over these last few years.

Let me list the great things that I have done.

1) I killed Osama bin Laden. It was not an easy decision to order the Navy to go after the man who killed 3000 of our countrymen on 9-11. I struggled for days with that one. After all, on the one hand I had the chance to finally take down the head of al Qaeda, the mastermind of so many attacks against Americans. On the other hand, however, Axelrod and Plouffe told me that if the raid did not go well, my poll numbers would drop. Two days before the raid, I spent a sleepless night tossing and turning. Michelle asked me if something was wrong and I told her I had to decide if getting bin Laden was worth the risk to my job approval ratings. She smiled and told me that I was just having some crazy nightmare. Ultimately, I made the single most courageous decision ever by an American president; I said to hell with my poll numbers and I ordered the raid.

2) I got unemployment down to 8.1% last month. This was an historic accomplishment. No president since the Depression has seen unemployment as high for so long as I have. I tried many things to bring down the percentage of jobless. I borrowed money from China to send funds to states to help pay health benefits and pensions for union workers. I borrowed money from China to fund much needed research at universities across the land. This research included such essentials as learning about the sex lives of coeds at Syracuse. I borrowed money from China to fun a huge number of shovel ready projects. While, as I have said before, these shovel ready jobs were not really shovel ready, we did achieve some milestones. We built tunnels under certain roads so that salamanders could cross the highway safely. We had a few roads here and there repaved. Mostly we funded work that was already scheduled with this new source of funds.
There were many other efforts here as well. I personally saved General Motors and Chrysler rather than letting them go through bankruptcy as Governor Romney advocated. Indeed, I borrowed money from China to send over seventy billion dollars to GM and Chrysler. Of course, then both companies went through bankruptcy, but not until they spent that seventy billion dollars. Then I used my muscle as president to subvert the bankruptcy court in order to force the bondholders to release most what they were owed so that the UAW could come out of the process owning a big chunk of both companies. Then I gave much of Chrysler to Fiat. I also required GM to build an electric car, even though it did not work well. All this was such a success that we were able to take GM public again at $32 per share. It is true that GM now sells for only $22 per share, so all those investors who bought the company lost big bucks. Of course, that is completely different than when people lost money on Facebook's IPO. After all, for GM, I did it.

I also arranged for billions of dollars to go to my friends and fundraisers for "green" energy ventures. I borrowed the money from China and sent enough to my friends so that they could skim tens of millions for themselves before these firms went under. But even then, the unemployment rate stayed stubbornly high. Even for me, it was a problem to figure out what I could do next.

Finally, I realize the truth. No matter how much I borrowed from China and wasted, I could not get the economy to create jobs quickly. We were moving towards an election year with excessive unemployment. That is when I came up with perhaps my greatest idea. We would no longer look to create jobs; instead, I focused my efforts on forcing the unemployed to give up hope and drop out of the labor force. In just the last two years, I have convinced nearly three million people who once proudly held a job in America to throw in the towel. They now just sit at home without hope and wait for the next government check. What a great achievement. With this move, I got the unemployment rate down to only 8.1%. It is true that if those who have given up hope and stopped looking for work are counted, the rate would be about 11%, but we just do not count those folks.

3) My third triumph is how well I kept spending from rising. Just this past month, a new analysis was released that showed that spending during my administration rose at the slowest rate of any modern president. Now, I have to come out and counter all those lies that were told on Fox News that claimed that I had spent a lot. It is just not true. When I borrowed $800 billion from China to spend on a stimulus, that was really spending by George W. Bush. When I took the about $400 billion of TARP funds that had not been necessary to spend to prevent the big banks from failing and then spent it all in 2009, that too was spending by Bush. After all, TARP was passed during his administration. Hey, just a thought here, Social Security was passed when Roosevelt was in office. I think that makes it FDR's spending. Anyway, when I got Congress to raise spending by another $400 billion in the spring of 2009, that was also Bush's responsibility since he was president when fiscal 2009 began. Bush was the big spender, not me.

I am going to stop listing accomplishments for now, but I plan to continue this effort each week as the campaign unfolds. Next week I am going to focus on my heroic efforts following the BP oil spill in the Gulf of Mexico, my preventing Iran from getting nuclear weapons, and my efforts to keep the price of energy low.

Thank you, and God bless the United States of America and me, Barack Obama

Maybe Obama should Negotiate with Them

The Assad regime in Syria is denying responsibility for the slaughter of 90 civilians, about half of whom are children, in a tank and artillery assault yesterday. The spokesman for the regime says that heavily armed men carried out the assault. Of course, teh civilian population says it was government forces. The United Nations "peacekeepers" found spent tank and artillery shells at the site of the massacre. I assume we will next hear from the government that those shells were just planted there by the foreign terrorists on whom the regime blames all violence.

In simple terms, Bashir Assad and his regime are lying. They are ignoring the rest of the world and attempting to slaughter their way to retention of their power. So far, it seems to be working as the rest of the world has displayed major indifference to the killing of 12,000 Syrians.

Given yesterday's headlines that Iran now has enough enriched unranium for five nuclear weapons, my guess is that president Obama will want to replicate that great success here. Obama can have endless discussions with the Assad regime while they kill tens of thousands just as he has talked to Iran while their machinery of death cranks out a few nukes.

Murmurings from inside the Bubble

On the top of the front page of Sunday's New York Times is an article about Syria under the headline that president Obama is "hoping to ease out Assad with Russia's help". So let's get this straight. Russia so far has prevented any truly strong action from being taken against Syria. In the last two days, a Russian merchant ship carrying a cargo of arms for the Assad forces pulled into port in Syria. But Obama is "hoping" for assistance from Putin and the Russians.

Obama sounds like one of those contestants at the Miss America pageant who is "hoping for world peace." Let me put it this way. I have more chance of winning the lottery than Obama does of getting help to oust Assad from the Russians, and I do not have a lottery ticket.

Of course, what this may mean is that Obama is about to stop contruction of any further missile defense systems in exchange for Russian "help" here. If that happens, it will mean that Obama sacrificed the security of our European allies and the American East Coast against an Iranian missile in exchange for "help" from Putin.

Saturday, May 26, 2012

Congrats to Obama for that "Reset" button

Remember all the hoopla when president Obama announced at the start of his term that he was "resetting" the relationship with Russia? He even had the Secrtary of State present a red reset button to the Russians. Obama made clear that the "new" relationship with Russia would pay great dividends for America.

Three years later, it is time to take another look to see how that reset plan has worked. In the last month alone the following has happened:

1) Russian ships have been delivering enormous amounts of weapons to the Assad regime in Syria despite efforts by the USA to limit the arms flow to that country.

2) Russian made artillery was used just today to kill about 90 people (mostly children) in Syria. These folks had the misfortune to be in a town where demonstrations against Assad had taken place yesterday.

3) When the g-8 met at Camp David, the Russian president, Vladimir Putin, did not even bother to attend. As a result, it was impossible for any agreement to be reached on steps that might help tamp down the fighting in Syria or increase the chances that Iran would stop its nuclear programs.

4) A few weeks ago, Russia announced that if the USA did not stop installing anti-missile systems in parts of Europe which would be able to shot down any Iranian missiles launched in attacks against that continent, then Russia would take it upon itself to use its force to destroy the missile sites. Let me make that one clear. Russia adamantly opposes any country using force to destroy the Iranian nuclear program. On the other hand, Russia threatens to use for to destroy an American missile defense system which could defend against Iranian nuclear missiles.

There is a lot more, but what could speak louder than Russian threats to launch a military strike against American bases in Europe? Simply put, the "reset" program has been an unmitigated disaster. Under Obama, American policy towards Russia has been a series of capitulations followed by a list of embarrassments. In other words, Reset is a total failure.

One and One quarter Million

Since the signing of the Declaration of Independence, about one and one-quarter million members of the armed forces have died fighting in wars for America. On Memorial Day we remember them and their sacrifice. So here's the question: for what did these soldiers die? Was it to make sure that government workers got good health benefits? Did they sacrifice to make sure that no one was offended by the use of politically incorrect words? Did they give their lives to make sure that bundlers for the Obama campaign could get federal money pumped into their business ventures a la Solyndra? Maybe they died to make certain that female law students at high priced law schools could get contraceptives paid for by society rather than by themselves.

Obviously, none of these are the reasons for the sacrifice. American forces fought for the preservation of freedom, for the continuation of liberty in the United States. They did not fight for the government; they fought for each and every one of us. They fought so that we each could be free to say what we want without being surpressed by the government. They fought so that we each can worship God as we so choose (or choose not to do so) without interference from Washington. They fought so that we could continue to live free from government interference in our homes and our daily lives. They fought so that each American could have the chance to live the American dream, a life where hard work, talent and, yes, some luck could let anyone of us become successful and wealthy. They fought for a country where what was important was the merits of one's own efforts, not the favors obtained by reason of the accident of one's birth. They fought for a country where we all shared the understanding that success for some of us meant greater success for all of us, a country where personal triumphs were to be celebrated not punished.

To paraphrase Lincoln: now we are engaged in a great civil struggle to determine whether that nation, the one for which these brave soldiers fought and died, can endure. On the one side we have the forces that would take from individuals the ability to determine their own futures through their own efforts and replace that with the government deciding who wins and who loses each day. These are the forces who would impose government rules that would force tens of millions of religious folks to violate their own beliefs or else to face government punishment. These are the forces who want to decide what we can eat, what we must teach our children, what sort of cars we can use, whether or not we can have guns, and how successful we can be in our businesses. These are the people who reward compliance with their desires, funneling billions to campaign contributors and key interest groups no matter what the cost to the rest of us. These are the folks who foment class warfare, racial antagonisms, and anger at those who are successful as a method to divide and thereby control us all.

On the other side we have the forces that are struggling to reclaim the America that has always been, "the land of the free." These are the people who celebrate success in the knowledge that each success for one person increases the likelihood of success for all. These are the forces that seek to insure freedom of religion that is guaranteed in the Constitution. These are the people who recognize that parents are the ones who must raise their own children and who must decide what is best for those children. These are the people who recognize that millions of Americans must be free to pursue their own lives as they see fit; the choice is theirs and does not belong to the government. It is, after all, "government of the people, by the people and for the people" not government controlling the people. These are the folks who recognize that Washington and its army of bureaucrats do not have all the answers. Indeed, these folks know that Washington does not even understand all the questions.

As we remember those who fought and died, let us renew our own efforts to preserve the America for which they made this sacrifice.

Negotiations with Iran Go Nowhere

The American negotiating team is returning home from Baghdad after participating in the so called P5 + 1 meeting with Iran. The five permanent members of the UN Security Council plus Germany were trying to get Iran to agree to stop its nuclear weapons program. Things went so poorly in these negotiations that it is rumored that the State Department is busy erecting a large sign saying "Mission Not Accomplished" at Dulles Airport outside Washington in order to set the stage for the welcome home ceremony. Indeed, literally nothing was accomplished in these talks. Even the eternal supporters of "diplomacy" are struggling to find anything good in events in Baghdad; news reports tell us that in a "breakthrough", the Iranian representative spoke for about 30 seconds to the American representative when they were not seated in the conference. One wonders what was said. My guess is that the Iranian said something like "Move aside infidel, I need to get by." Who knows? I certainly am not willing to get excited by a 30 second conversation in the middle of a failed conference. Only someone truly delusional would consider it important.

So, where do we go from here? The answer is Moscow. That's right. The failed conference in Baghdad was a dud. As a result, the diplomats have scheduled a follow up conference for next month in Russia. Remember Einstein's famous statement: "Insanity is doing the same thing over and over again and expecting a different result."

Friday, May 25, 2012

The Benefits of Failure

Have you ever failed at something important? Did you get fired from a job? Did you lose money in an investment scheme? Were you ever divorced? Did you fail a course in school? Things like this happen to everyone. Almost nobody succeeds at everything. The problem is not experiencing failure; it is learning how to deal with it and learn from it. In fact, experiencing failure is one of the most common ways of learning important life lessons. Somehow, however, our society is trying to do away with having to deal with the consequences of failure.

Think about where we are right now. This week, the big failure was the Facebook IPO. The stock came out and went down instead of going up. A large number of people lost money on the trade. Right away, the media is looking to find someone who is at fault for these losses. Congress is going to hold hearings. Rumblings of wrongdoing by the underwriters or the company are everywhere. Nevertheless, through it all almost nobody says that the stock market always carries the risk of stock going down as well as up. Losses (or investment failures) can happen at any time. The fault (if there is one) normally lies with the investor. There is not someone else to blame.

Last week, president Obama spoke repeatedly about the economy and spending levels. He told us how every problem was the fault of George Bush or the Republicans in Congress. In four years, Obama has never accepted anything as his own personal failure. There is always someone else to blame.

Millions of folks borrowed money to buy homes. They took out mortgages that pushed them to the limit. They expected that as their home went up in value, they could borrow more and use the extra funds to pay for the ongoing cost of the mortgage payments. Of course, the prices of the houses went down and there was no way to borrow additional money. Many just failed in making payments and lost the houses through foreclosure. So what do we hear? The lenders who gave these folks billions of dollars were "predatory" lenders. These predatory lenders were so evil that they gave cash to people and only asked them to pay it back. The lenders were so evil that they took the risk that the borrowers would default. So the borrowers got to buy better homes than they otherwise could. The borrowers got to live nicely without being credit worthy. Yet, when the borrowers failed to pay back the money they had been given, the lenders foreclosed. This meant that the borrowers were victims. Imagine! The evil lenders had forced them to take money.

All of these people suffered failures but none of them are accepting the consequences of those failures. Accepting failure and dealing with the result is the best way to grow as a person. Learn that not all IPO's go up. Learn that the president of the United States actually must be responsible for the results of his policies. Learn that when borrowing money, one should consider what one can afford.

When I was little, they used to talk about the "school of hard knocks". In other words, people were supposed to learn about life through their failures. Not anymore. Now we are just supposed to find someone else to blame and sue (or campaign against them.) I still think that graduating from the school of hard knocks does more to teach the realities of life to a person than anything else.

Warren's Position is unraveling

Democratic senate candidate Elizabeth Warren of Massachusetts is falling off a cliff. Warren, or as I like to call her Cherokee Liz, has been dealing with a firestorm that resulted from the disclosure that she put forward a claim of Native American ancestry at both the University of Pennsylvania and Harvard Law School on the basis of statements that her aunt made about having high cheekbones. Obviously, the real issue is whether or not Warren used her claim to be 1/32 Cherokee to get hired at the two universities on the basis of her claim of "minority" status. The Boston Herald was all over the story and many other web based media sites gave it major coverage. The story progressed with disclosure that Warren copied French recipes and passed them off as Native American cooking for a cookbook to which she contributed. Warren also told a ridiculous sounding story that she only made the claim to Indian heritage in order to meet people at events.

For quite some time, the main stream media has been protecting Warren. That now seems to be ending. Today, the Boston Globe ran a long story on Warren's position. True, today is the Friday before Memorial Day, so it is a good day to run stories that the paper wants to bury. Nevertheless, the nub of the Globe's story is that Warren claimed Native American status and she did not even deserve to do so.

The Harvard document defines Native American as “a person having origins in any of the original peoples of North America and who maintains cultural identification through tribal affiliation or community recognition.’’ It notes that this definition is consistent with federal regulations.

It is not a definition Warren appears to fit. She has not proven she has a Native American ancestor, instead saying she based her belief on family lore, and she has no official tribal affiliation. The current executive director of Harvard’s Native American program has said she has no memory of Warren participating in any of its activities.

For those who do not know, the Boston Globe is owned by the New York Times company. For a Times owned outlet to print articles pointing out that Warren, in essence, lied about her claim to Native American status and also that Warren's phony claim improved her chances of being employed at Harvard is a game-changer. When a liberal like Warren loses the main stream media it is the beginning of the end. We may soon see Warren withdrawing from the race to spend more time at home in her wigwam.

Running on a Lie

About a week ago, articles and charts started appearing which purported to show that spending under president Obama had not climbed as fast as it had under other presidents. That's right, the charts indicated that while Obama increased spending like all the other modern presidents, he did so at a slower rate. The idea is so shocking that I spent some time trying to find the data underlying the charts, but it was not available. All that was out there was the chart and analysis of it. In the last two days, however, the basis of the analysis has been made public, and it shows that the charts are just lies. Let me explain: In doing the spending analysis, the creator of the chart put all spending in fiscal year 2009 under the Bush column. Remember the 800 billion dollar stimulus that was passed a month and a half after Obama took office? According to the chart, that was spending by George W. Bush. Remember the $400 billion of TARP funds that were left when Obama took office and which Bush said he was not going to spend? According to the chart, when Obama decided to spend those funds anyway, that was Bush spending. In other words, the huge $1.4 trillion increase in spending during Obama's first year in office was Bush's spending according to the chart. Simply put, the chart and the analysis is based on a big lie.

It is not surprising to see campaign supporters lie during a campaign. It happens every four years. Some are just uninformed and some are intentionally lying. Sadly, it is part of the American political scene. What is unusual, however, is for a presidential candidate to just out and out lie. A lie discovered can do more harm to a candidacy than nearly anything else. For a candidate to do so is either a mark of desperation about a losing effort or a show of enormous conceit, a belief that the candidate is so much smarter than the public that he can convince the people of a falsehood and get away with it. That is why it is so astounding that president Obama has now adopted the lie.

Here is what Obama told the crowd at a rally yesterday in Iowa.

“But what my opponent [Mitt Romney] didn’t tell you is that federal spending since I took office has risen at the slowest pace of any president in almost 60 years.”

There you have it. Obama is now putting forth a blatant lie as part of his stump speech. Indeed, he is doing this six months before the election. There is no way that this lie will go undiscovered or unpublicized. Particularly since spending is one of the main issues of the campaign, this subject will be repeated over and over.

I believe that Obama has sealed his own doom as a candidate with these claims. The American people well know that spending has soared for the last four years just like they know the sky is blue. Maybe next week Obama will officially tell us that the sky is now yellow. He will have about as much success convincing folks that the sky has changed color as that he is not a big spender.

Thursday, May 24, 2012

Fantasy Economics -- 2

After my post this morning about the difference between president Obama's economic outlook and that of Mitt Romney, I received an e-mail that claimed that I had stacked the deck in the discussion. How could I speak only about a business that was just limping along; I ignored all those prosperous companies that are bringing in enormous profits. The e-mail continued by claiming that when the entire economy was considered, Obama's economic plans were surely better. So let's take a look at this claim.

First of all, we cannot ignore the many businesses that are not doing that well. They employ millions and millions of people across America. As I discussed in the prior post, businesses like these will hit a brick wall under the Obama policies. Those same obama policies put millions of jobs at risk.

Second, we have many other companies that are highly profitable. A great many of these firms make products that compete in the world market. What this means is that the costs incurred by these firms have to stay lower than those of the foreign competitors if they are to be assured continued success. Since these firms have high profits, the tax increases proposed by Obama will take a chunk of the capital otherwise available to these firms and transfer it to the government. Similarly, the implementation of Obamacare will take another chunk of the assets of these firms and use it to meet healthcare costs. Another way to look at this is that the higher healthcare costs for employees will drive the costs up for each product made by the firms. If these firms decide to borrow to expand their operations, loans from community banks or even mid-size banks will be much harder to obtain due to the restrictions put in place by Obama in the Dodd-Frank law. New EPA regulations will also affect the costs incurred by these prosperous firms and their unit costs will rise. We also cannot forget the higher energy prices that these firms will have to pay due to the Obama program to discourage drilling for oil on federal land or offshore, the Obama threats to limit the use of hydrofracking, the Obama plan to drive up the cost of coal and to drive down its usage, the Obama plan to force people to use energy from high cost renewable sources, and the like. High energy costs will mean high unit costs for the products.

Putting all this together, we can see that the businesses that are currently prosperous will be less prosperous under the Obama regime. There are a whole series of additional costs imposed on these firms, and the profits that they still earn will be reduced further by higher taxes. In other words, some of these prosperous firms will be transformed into companies that are just getting by. We all know what the next step after that is: all those Obama obstacles will eventually drive the firm under.

Let's add one more item to the list. If one considers all those folks who no longer have jobs as a result of shaky companies going under, there will be a big chunk of the country that will move from having a reasonable income to living off of food stamps, unemployment, welfare and other government programs. These government subsidies are enough to provide most of the necessities of life. They are not, however, enough for the recipients to spend on "extras". These folks cannot afford to go to a restaurant, to the movies, to the theater, to a baseball game, to the bowling alley, or even to buy something that is not a necessity like jewelry. This means that all of these industries will lose a large number of customers. If 7% of the folks who go to restaurants stop going, there will be a large number of places that will go under. The ripple effect from the job losses will just continue and grow. In other words, even when one considers financially stronger companies, the result is the same: the Obama policies seriously hurt the private sector.

So let's make the assumption that the goal is to get everyone who wants to work a job. Clearly, Obama's plans not only fail to achieve that goal, but they also move the economy further away from creating the needed jobs.

Fantasy Economics

Productivity is measured by the amount of output that a worker can produce each hour. Over the long term in the USA, productivity has increased by just under 3% per year. Let's examine what this means. Simply put, as each year goes by, America gains the ability to produce 3% more goods and services than in the previous year with exactly the same labor force. Put more in the language of economics, the USA can have 3% growth in GDP with no change in the labor force. Now, of course, this is the long term trend. Fifty years ago, the growth in productivity was slower and it has accelerated during the last twenty years. In other words, during the last twenty years, the USA could have between 3.5 and 4% growth in GDP with no change in the labor force.

These are key numbers and they have enormous impact on the people of America. Under president Obama, the USA has never had a year with economic growth that hit 4%. That is why job growth under Obama has been so anemic. Output has grown, but no new employees are needed. Of course, this is an overall measure for the economy, so there are some places where new employees are needed and others where some folks lose their jobs. Overall, however, it is the anemic economic growth under Obama that has led to the continuing high levels of unemployment and underemployment.

This lack of growth under Obama is the main reason why the current debate over economic philosophy between Obama and Republican Mitt Romney is so important to the future. Just yesterday, Obama was out on the campaign trail raising still more money and chastising Romney for his economic outlook. According to Obama, Romney believes that "if he and his fellow millionaires and billionaires are getting richer, then the rest of us are too." While this is not anything that Romney has ever said, it is illustrative of Obama's view of market capitalism. Obama does not want the wealthy to get richer; this is a constant of his philosophy.

So let's examine Obama's view. Let's think of it anecdotally. Let's think about a private company that employs 400 workers and which is not doing well. The sales of its products are flat, and competition from abroad is preventing any price rise that could restore profitability. Right now, the company is barely breaking even. There are many such companies in America as I write this, and they employ millions of workers.

Now let's apply the Obama economic plan to these companies. First, we will raise taxes on the owners of the company. Because it is a private company, it pays its taxes through the individual tax returns of its owners rather than as a separate entity. So Obama is raising taxes on the company. What does this do? First of all, it does not raise much tax revenue since the company is just about breaking even, so there is little profit to tax. Secondly, however, it discourages new investment in the company which will make it more able to compete since the investor will get to keep less of any profits that result from that infusion of cash. In other words, the higher tax rate means that the company is less likely to recover or grow.

Second, Obama is imposing Obamacare on this entity. One thing that everyone recognizes is that Obamacare will result in a substantial rise in healthcare costs for employers. Until now, because money has been so tight, the company has been giving its employees low cost insurance which does not meet all the requirements of Obamacare. The new policy to be provided results in a substantial increase in costs.

Third, Obama's EPA is stepping in to require new and expensive steps to be taken to reduce pollution at the company's plant. The cost for this change is very large, and the company does not have the cash to pay for it.

Fourth, in order to pay for the extra costs of Obamacare and the EPA, the company goes to its local bank to borrow funds to cover these new Obama-imposed requirements. Under the Dodd-Frank law that Obama had passed, however, the local bank can no longer make this loan due to the restrictions of that statute. Our example company is not able to borrow the necessary funds anywhere.

Fifth, the owners of the company sadly shut it down and layoff all of the employees. The town that was supported in large part by the people working in the plant also suffers a major disaster. Hundreds go on unemployment, but there are no jobs available for these folks to take. Many eventually have to move elsewhere in search of work, but they find that the story of their company is being repeated across America.

Obama can be happy since the wealthy folks who owned the business did not get richer. But the real truth is the answer to Obama's taunt of Romney. When the rich get poorer, it does not help the rest of us do any better. Indeed, it hurts everyone.

But what would have happened had one of those "evil" private equity companies come into the picture rather than having Obama's government aparatus crush the company? Let's say that a private equity group (let's call it Main Capital) came in and bought the struggling company with which we began this discussion. Because of the difficulties in which the company found itself, Main Capital is able to buy the firm for a relatively low price. The old owners do not get as much as they would have liked to receive, but they do get their money out of the company. At this point, the success or failure of the company is a risk taken by Main Capital.

Now, Main Capital takes a sharp look at our enterprise and decides that what is wrong with the company is that it operates inefficiently; it uses old machinery to make its products which results in a much higher cost per until. Main invests $5 million of its own money to outfit the plant with all new equipment. As a result of the new equipment, ten percent of the workers of the company get laid off. These 40 people go on unemployment, but the costs of the company go way down. As a result, prices get cut, market share is taken back from the imports, and profits start to rise quickly. Soon, the orders received by the company are so large that it has to expand. More equipment is purchased from the funds generated by the new profits and additional workers are hired to run these machines. Indeed, 100 new employees are brought on board. Not only do the 40 people who were laid off get their jobs back, 60 other folks get work as well.

After a few years, Main Capital sells this thriving company and makes a major profit on its investment. In Obama's words, the rich get richer. But all of the original employees and the new employees get jobs. The town where the plant is located is thriving and many folks there make nice livings as well.

But what happens if Main Capital fails. Let's say that it buys the company, puts in its $5 million extra and the company is a flop. The answer is simple: Main loses all of its investment. All the folks working at the plant lose their jobs. The town suffers. In other words, if Main fails you get the same result as when Obama succeeds.

We need a president who understands this difference. Obama has got to go!

Wednesday, May 23, 2012

What Complete Nonsense from the New Republic

Walter Shapiro bills himself as an old time political reporter; his bio tells us that this is the ninth presidential election he is covering. Given that record, one would think that Shapiro could recognize a bit of reality in his articles. Alas, this is not the case. A good example comes in a piece from Shapiro today about the relevance of Mitt Romney's experience at Bain Capital. It is an amazing bit of sophistic rhetoric from Shapiro that basically discounts everything that Romney has ever done and then focuses on Bain Capital. According to Shapiro, Romney's time running Bain Capital tells all. As Shapiro puts it: "This is who Romney is -- a portrait in business success rather than selfless altruism." Oh, the horror of it all! While working in the business world, Romney was only a wild success in the business world. Romney, you see, did not run Bain Capital on the basis of selfless altruism. Romney actually did his job and made money for his investors.

There is so much wrong with this analysis that it is hard to know where to begin. Let's start with the comparison to Barack Obama. Obama was a lecturer at the University of Chicago. While there, he taught. He did not operate on the basis of selfless altruism; he did his job. Then Obama ran for the Illinois legislature and won. While there, Obama ducked all the difficult votes; he voted "present" rather than taking a position for the benefit of his constituents. That's right, Obama acted in these votes for the benefit of his own political future rather than acting on the basis of what was good for those who he represented. Then Obama ran for and was elected to the US Senate. While there, Obama spent nearly the entire time running for president. Issues came and went on the floor of the senate, but Obama was out slogging through Iowa or some other state seeking votes for his own personal benefit. So much for selfless altruism there. Finally, Obama got to be president. Even then, the idea of selfless altruism never crossed his mind except as a phony rhetorical device. Did he care about the poor and the jobless? No! Indeed, since passing the stimulus in February of 2009, Obama has done essentially nothing to promote job growth. He could have tried in a serious manner to pass other measures that might have helped. Instead, Obama made speeches containing proposals that had no chance of being passed. This was done to help his chances for re-election. In Obama's world, it is much more important to get re-elected than to actually help those without jobs or without hope. Indeed, Obama is about as far from selfless altruism as one can get.

Second, Shapiro must know after all these years that the point of being in business is to make profits. Shapiro, in his quasi Marxist world view, may not like that reality, but he cannot change it. It is hard to imagine that Shapiro could actually criticize Romney for being so successful at making money. Indeed, since Romney's efforts also resulted in major economic success for hundreds of thousands of others, it is a triumph of shortsightedness for Shapiro to lament Romney's successes.

I should not expect anthing better from a long time lib like Shapiro, but it still rankles me to see the nonsense that he puts forth being treated as if it had any merit. It does not.

American Leadership -- Obama Style

This morning, president Obama told the graduating class of the Air Force Academy in Colorado that "there's a new confindence in our [American] leadership around the world." That set me to wondering where those newly confident people are. Are they in Afghanistan where Obama has set a withdrawal schedule slow enough to guarantee hundreds, if not thousands, of additional American dead and wounded, while at the same time making that schedule quick enough to also guarantee that we will not accomplish the goal of destroying the Taliban? Maybe the newly confident folks are in Syria where nearly 15,000 have died at the hands of the Assad regime while American "leadership" has consisted of a few statements here and there, a few sanctions which do not really affect the Syrians all that much, and not much else. Possibly the newly confident folks are the citizens of the Falkland Islands who have voted by a margin greater than 95% to remain part of Britain only to watch Obama recognize the potential validity of the claim of Argentina to these islands hundreds of miles off the Argentine coast. The newly confident folks might also be in South Korea who saw Obama reach agreement with the North Korean regime to stop nuclear and missile testing only to then see North Korea do a missile test within 6 weeks of that agreement. In diplomatic terms, the actions of North Korea were the equivalent of their peeing on Obama's leg. Maybe the newly confident people are our close allies in Canada who offered their enormous oil reserves for shipment to American refineries via a secure pipeline called the Keystone XL pipeline. That offer would result in the oil being priced at the US rate rather than the higher world price, but our friends in Canada made the offer nevertheless. Of course, president Obama stretched the process out for three years only to ultimately reject the offer due to political considerations. Maybe the newly confident folks are out friends in Israel who watched Obama insist on keeping certain areas of the Holy Land free of all Jews, in a move that seemed more like it happened in the 1930's than in the 21st century.

I am not going to list all the possibilities of those who have this new confidence in American leadership under Obama. I would suggest, however, that Obama probably meant that people around the world think that American diplomacy is actually a confidence game, or as it is usually called a con game. Sadly, the only one who seems to be fooled by it all is Obama himself.

Another Shift in Opinion?

One of the biggest planks in the Democrat platform has been unlimited access to abortion; the Democrats have held that position for decades now. By contrast, Republican platforms have generally been pro-life in orientation. Of course, none of this made much difference since the right to abortion was made clear in Roe v. Wade forty years ago, and absent a constitutional amendment, that will not change.

Gallup is out with a new poll, however, that makes clear that perceptions are changing on this issue. Right now, 50% of Americans call themselves pro-life with only 41% who self-describe as pro-choice. The majority for pro-life is a recent developmnet. For many years after Roe v. Wade, the pro-choice position had a large lead (about 20%). Over the last 15 years, however, the difference between the two positions grew narrow and now pro-life has the largest lead ever. Pro-choice is at the lowest ever measured.

The biggest news out of the Gallup survey, however, is not the size of these two camps. Instead, it is the continued belief by Americans that limitations on abortion are proper. Fully 72% of the population support limiting abortion in either all or some cases. Only 25% of the folks think that unlimited rights to abortion are proper.

As the umpteenth article gets written about the inevitable decline of the Republicans due to demographic changes, perhaps it is time for someone to write about those issues where the people are moving strongly towards the Republican viewpoint. But, hey, that might be looked at as actually being balanced, and we could never expect that from the media.

Facebook -- no surprise here

So the lawsuits are flying, the investigations are starting up and the market commentators are all tut tutting about the drop in the price of Facebook stock after the IPO. It is another symptom of the flawed outlook of American society on the workings of the market. Facebook sold its stock and the price went DOWN!!! Oh, the horror! Anyone who follows the market should know that when a hot tech company like Facebook goes public, everyone who invests is supposed to make a big profit by flipping the stock shortly after the IPO. The stock was supposed to go UP bigtime. When it fell, someone had to be at fault, right? And that someone has to pay for this mess, right?

The real answer is that we are talking about a market here. Markets go up and down, not just up. The fools who thought that tech IPO's all go up are like the fools who thought that housing prices only go up. Reality broke through and now the whining starts. No one said that the IPO price was the actual assured value of the stock; it was set at a level at which the underwriters thought they would be able to sell the shares. And that was a ridiculously high price. Does anyone actually think that Facebook is worth about two and a half times what Ford Motor Company is worth? I hope not, but that is where the IPO set the price.

Potential buyers in the market have duties before buying which include things other than yelling "me, me, me" when offered a new stock. Buyers had to look at the relevant data and determine if the price of the stock seemed reasonable. I was offered the chance to buy FB stock, but I passed. The price seemed way too high to me. My point is not that I am some sort of seer, but rather that the information was all there and rational decisions could be made. Those who chose to participate in the frenzy cannot now complain that it did not work out the way that they expected.

Some of the brouhaha is about the analyst at Morgan Stanley telling some clients that he had changed his estimates for certain items going forward. So what? Morgan Stanley was barred by law from issuing any written report on Facebook stock during the period in question. The IPO does not forecast future revenues (I believe that it is not allowed by law to do so). That means that Morgan Stanley was not changing the information available to the public when the analyst changed his own view of future revenues. All of this is a long way of saying that Morgan Stanley did nothing wrong here based upon the information now available to the public.

Sometimes when one invests, one loses money. These losses are not meant to be repaid to the poor victims of the loss. They are not victims; they are just folks who made bad investments. The sooner the public learns this basic truth, the better the country will be.

So Where is the Story?

I happened to be in my car at 8:00 am today and I listened to CBS news on the radio. The news broadcast at that time is about three times longer than the others during the morning; it is claimed to be a full report on national news. The top story was about yesterday's primary elections; I heard that Mitt Romney won easily (no surprise there) and was just about at the number of delegates needed for nomination. That was it; no other coverage of the primaries was included. I have to say that I was amazed. There was an enormous story in those primaries, and CBS was choosing not to cover it.

So what is the story? President Obama came close to losing the Democrat primaries in Arkansas and Kentucky. In Kentucky, "uncommitted" got 42% of the total vote and carried more than half the counties in the state. In Arkansas, an unknown businessman named John Wolfe got 41% of the vote and also carried a large number of counties across the state. Indeed, outside Little Rock, the vote in Arkansas was nearly tied.

These vote totals are incredible. Obama is having trouble carrying the votes of DEMOCRATS in these two states. The last time a sitting president had trouble of this sort was 1968 when Lyndon Johnson almost lost the New Hampshire primary to Eugene McCarthy. Johnson won and held McCarthy to 42% of the vote. The result was nevertheless so shocking that Johnson withdrew from the race. In 2012, the media won't even tell us about the story. CBS is just protecting Obama from having to explain why Democrats in these states refuse to support him.

I know that neither Kentucky or Arkansas is likely to vote for Obama this year. So what! In 1968, New Hampshire was unlikely to vote for Johnson. It did not matter. Also, remember all those primary nights earlier this year when we heard about how Romney had problems with very conservative voters in his race with Santorum et al? The smarmy talking heads on CNN nearly had a nervous breakdown as they breathlessly told us of this "glaring weakness" for Romney. Some of the Republican base was voting for candidates other than Romney; how can he possibly win in November -- ot so they told us. But now we have some of the Democrat base voting against Obama. These are not votes for another candidate; they are purely protest votes against Obama. Where is CNN now? Will we hear David Gergen or or Gloria Borger opine at length about how this shows Obama's weakness? I doubt it. Certainly, they said nothing of the sort last night as the votes came in.

The media ought be ashamed of itself for covering for Obama.

UPDATE: I have now checked the other major media to see coverage of this story. MSNBC, not surprisingly, mentions the results and then explains that they are the result of local racism. ABC has only a sentence in the middle of a long article which says that Obama did not do as well as might have been expected.

Tuesday, May 22, 2012

Europe needs a stimulus plan

According to president Obama, the European nations need to engage in more government spending to stimulate their economies. Obama also says that the austerity that the Europeans have tried so far has not worked.

If you read any of the coverage of the G-8 meetings of this past weekend or of the NATO meeting in Chicago, you heard that Obama gave the leaders of Europe this advice. It is advice that is both astounding and uninformed.

First, Obama is pushing for more spending even though more spending has not worked anywhere to get out of the recession and speed up growth. Obama's stimulus in the USA was a complete failure. The spending in Greece and Spain and Italy and elsewhere in Europe has not led to growth, only to debt. Furthermore, Obama does not even bother to discuss what sort of spending ought to be undertaken. Should it be payoffs to cronies like Obama did with the green energy "investments" like Solyndra? Should it be military spending? Should it be payoffs to political supporters like the salary support to teachers in the teachers' unions? Obama does not even bother to explain how to proceed here.

Second, Obama acts as if the large European nations have actually undertaken austerity. That is a lie. They have not cut spending. They have talked a great deal about cutting spending, but talking is not the same as doing. Obama ought to know this fact, but, if he is aware of the truth, he does his best to ignore it.

Obama's actions are the equivalent of what he is doing with Social Security and Medicare. Those programs are quickly running out of money. Obama, however, comes forward with no suggestions as to how to fix the programs. His position is that neither is bankrupt yet. Indeed, Obama's conduct reminds me of the old joke: A guy jumps off the Empire State Building. About halfway down, someone calls to him and asks, "How are you doing?" The jumper replies, "So far, so good!"

Obama and the USA may soon hit the pavement and splatter, but for now, it is so far so good. Americans need to wake up to this impending disaster. We can fix the problem with some hard work now. If Obama continues this mess in place, however, the damage will be permanent.