Demand Side Economics - Update

Investors Business Daily - Lawmakers Proposed 1 Trillion in New Spending Last Year

The NTUF analysis found that congressional Democrats are by far the biggest spenders. Last year, 692 spending-hike bills had either all or majority Democratic sponsorship. Republicans, in contrast, sponsored just 126 such bills.

At the other end of the spectrum, GOP lawmakers introduced 172 bills that would have cut federal spending, compared with just 33 such bills offered up by Democrats.

As I've said, the "Demanders" are still in-charge!

(Hat tip:  Instapundit )

Honey, I blew up the world! (And still got a second term!)

We are just now getting a glimpse of Fed transcripts from 2006, and the view is not encouraging.  But is anyone who pays attention really surprised?  I wrote this a year ago, just before Ben Bernanke's reappointment as Fed Chairman: 

Listen to any Ben Bernanke detractor and they’ll sing basically the same tune, which goes something like this: “Ben Bernanke is a an excellent academic economist and an honorable guy who performed well this past year as Fed Chairman, but he was right there at Alan Greenspan’s side in the early 2000’s when interest rates were kept too low for too long. Those low rates helped cause the housing bubble which eventually burst and collapsed the global financial system in 2008. That kind of negligence should not be rewarded with a second term.”

I have trouble disagreeing with much of that, except that there is a far better and more compelling reason to lay some blame for the financial collapse with Fed Chairman Bernanke. I haven’t heard the following argument from anyone in the economic press, so that could either mean I’m out of my mind, or everyone else is missing something. Read on, and judge for yourself.

First a little history: Below is the Fed Target Rates for the last 10 years. The period most Bernanke detractors are focusing on is the period of low rates from roughly 2002 through 2004 when he was Alan Greenspan’s right-hand man.

Ben Bernanke became Fed Chairman February 1, 2006 when the Fed Target rate had already been raised by Greenspan to 4.25%. The day Bernanke became Chairman, he raised the Target Rate to 4.5%, but he didn’t stop there. He kept raising until July 1, 2006 when the Fed Funds Target hit 5.25%. So from July 1, 2004 to July 1, 2006 the Fed raised it’s Target Rate from 1.00% to 5.25%, an increase of 425% in 24 months.

What effect did all those rate increases have on the yield curve and why would that matter? Well, as most economists will tell you, nothing screams recession quite like an inverted yield curve (when long term rates are lower than short term rates) and forcing one is economic poison.

In January, just before Bernanke became Chairman, the yield curve was essentially flat with a slightly positive bias, but that quickly changed. Bernanke’s first raise to 4.5%, resulted in a slightly negative yield curve and again, he kept raising the Fed Target all the way to 5.25% by July 1, 2006. By November 2006, there was a clear downward trend in yields. (see chart below).

Why did Ben Bernanke keep raising interest rates in the midst of a housing bubble, with an election coming up in November 2006, and a yield curve already threatening negative by late 2005? Why did he persist and force the yield curve decidedly negative by mid 2006 which threw us into recession and crashed the housing market? No one but Ben Bernanke knows for sure, but in my humble opinion, if there is a smoking gun against him, it is this and not the period from 2002 to 2004, before he was even Chairman!

In Hebrew, Shalom, which is Bernanke’s middle name, can mean Hello, Goodbye, or Peace. I say Goodbye, and leave us in Peace, but I don’t see that actually happening. In a political and economic climate where a tax cheat can get Senate approval to be Treasury Secretary, a reckless but honorable Fed Chairman is virtually a shoo-in.

(For further encouragement, Treasury Secy. Tim Geithner was a Fed official in 2006!)

The Tebow Test

Reflections on the GOP primaries and Tim Tebow:  

During post-game analysis in the midst of Denver's winning streak, I heard Jimmy Johnson, ex-coach, superbowl winner, and football analyst, opine that he’d never seen a quarterback get more out of his teammates and inspire them to play-up than Tim Tebow.  It reminded me of Harry Potter, the average wizard who manages to pull off amazing feats against all odds with the help of his loyal group of friends, without whom he would not be nearly as magical.  Sunday he did it again against the heavily favored Steelers.

And this brings me to the GOP primaries.  Being a chief executive is never a solitary endeavor despite what we’ve heard.    Good executives are team leaders.  Sure, “the buck stops here” and “it’s lonely at the top”, but look at any effective leader and you will find a team inspired by his/her example.  

The questions for voters are these:  Who will build a team and inspire them to play-up when the game is on the line?  Who has done that in the past?  Who has maintained good relations with former teammates?  Who can lead by example?    Are ideology and oratory enough?  What value should be placed on effective leadership experience?  Who is capable of turning adversaries into allies?  

In other words, who in the GOP field can pass "The Tebow Test"?

(This is an UPDATE of an earlier post by the same name.) 

The Batman Primaries

Check out this cartoon for more commentary on the 2012 race:  Useful Idiots

Christmas Charade

Pundits on the right are declaring “Boehner Blinks” and “House Republicans Cave”, while the left is gleefully touting “Obama Wins” and “Victory”.  Pardon me for not sharing in either the glee of the left or the shame of the right over the payroll tax charade.  Neither is justified.  To make my point I cite these three axioms of politics:  

1. Pandering always trumps austerity when a single group is given a choice.   (The only way to lose a pander is to pander to a narrow group and impose austerity on a broader group, or blatantly pander to buy votes, and get caught.)  
2. Presidents always have the upper hand against opposition in congress.   (Forget the bully pulpit, network face-time, press office, etc.  Presidents can outmaneuver congress the way a Porsche outmaneuvers a freight train, even before taking the bully pulpit into account.)
3. No party can lead while controlling only half a branch of the legislature.  (When Newt Gingrich and the Republicans succeeded in working with  Bill Clinton to get all those landmark agenda items through, like a balanced budget, welfare reform, and capital gains tax cuts, they controlled both the Senate and the House.  Republicans today have only the House.)

What this means is that all the handwringing and celebrations going on are unwarranted. For one, this outcome was about as unpredictable as a sunrise.  Second, the principled but impolitic stand of the House Republicans will be forgotten in a matter of minutes.   And finally, aren’t House approval ratings already in single digits?   Does it matter if they go lower?

That’s not to say there weren’t winners and losers in all this.  Obama clearly has won a PR battle and will benefit in the polls.  On the losing end:  everyone who will inherit this mess.

Oh, and Merry Christmas!   

Obamaball

Have you seen the movie “Moneyball” or read the Michael Lewis book by the same name?  To make a long story short, it is a true story about winning baseball games without superstars by taking a deeper look at the statistics and analyzing them in a better way.  Baseball and economics share a fondness for statistics so the question arises, could economic statistics reveal a similarly undiscovered strategy for the economy like what Oakland General Manager Billy Beane did in “Moneyball”?  Moreover, could the President's economic plan ,“Obamaball”, be that strategy?  

Baseball stats and economic stats are not all that comparable.  In baseball there have always been nine members on a team, ninety feet has always been the distance between bases, sixty feet six inches has always been the distance from the mound to the plate, the bat is always wood, there are three outs, three strikes, four balls, nine innings, and so forth.  Therefore, an ERA has always been an ERA, an AVG has always been an AVG, and R, H, and E have always been R, H, and E.   

If only things were as simple in economic statistics, especially since the big ones all come from the government.  Unlike baseball, the government is always changing how they measure and what they measure.  Sometimes the statistics change because of an unintended consequence from a change in a law.   Sometimes it is for practical reasons.  And sometimes it just seems political.   After all, government economic stats come from the very government they sit in judgment of!

Here are four key statistics which form the basis for much of the economic rhetoric heard today.  In all four cases these statistics fail the baseball test.   

•       Inflation (CPI)– Not only has the Bureau of Labor Statistics changed the way it measures inflation over the years, notably in 1980 and 1990, but they cannot avoid relying on prices for manufactured imported goods which tell us more about foreign labor markets and regulations than they do about our own currency.  When these changes are backed-out, the actual inflation rate is about 2.5% higher than what is reported.  What makes inflation so problematic is that all other measures of economic performance are “inflation adjusted” and thus dependent on an accurate inflation number to start with.  Even corporate earnings must be weighed against an accurate inflation measure.

•       Economic Growth and Recession  (GDP) – GDP numbers are all adjusted for inflation too and thus suffer the effect of any inflation inaccuracies.  That is why a 2.0% annual growth rate based on a “GDP Deflator” which is under-measured by 2.5% feels exactly like, well, a -.5% growth rate.  That is how GDP can be reportedly rising by 2% yet polls can show most people believe we are still in recession.  The people are probably right.

•       Unemployment (U3) – You’d think that “unemployment” would be a cut-and-dried statistic:  “The number of people not employed as a percent of the labor force”.  But that’s not how the government does it.  In fact, if every single person in the US was collecting unemployment, disability, welfare, food stamps, or some other form of assistance but not actively seeking a job, the official unemployment rate in the US would be…0%!  The way we measure, we could have no one working and still have zero unemployment.  If we corrected for just this issue and undid the error back to Barack Obama’s inauguration, the real unemployment rate would be 11%.  If all the nonsense is removed, the actual number is close to 23%.    

•       Income Inequality (1% vs. 99%) – Much of the recent rhetoric about the 1% vs. the 99% is based on a CBO report from October of this year, which has numerous issues.  In order to measure income inequality, the CBO used a government measure based on income tax returns from 1979 to 2007.  Not 2010, which should have been available, but 2007, right before the financial meltdown in the midst of a bubble!  Second, many returns in the top brackets include corporate pass-through income, which is a recent phenomenon and makes income tax returns meaningless for measuring changes in personal wealth.  Moreover, tax rates changed constantly from 1979 to 2007 making any trends difficult to discern.  These are just a few of the problems making this CBO report useless for analyzing trends.

And then there’s the economic analysis.  Here are four big economic issues and the current administrations analysis along with some questions.    

•       Arguably the biggest economic issue of our time is the financial crisis of 2008 and its aftermath.  According to President Obama’s analysis, greedy fat-cat bankers largely caused the whole thing.   Isn’t that like blaming a plane crash on gravity?  Aren’t gravity and greed constants?  Are bankers today greedier than they were, say, in the 1950s?  Were there any sub-prime loans back then?  Where did sub-prime loans come from?  Wasn’t the President part of the chorus demanding sub-prime mortgages in the 90’s and didn’t he then protect and subsidize the dangerous practice through his support of Fannie Mae and Freddie Mac as a US Senator?

•       Once the analysis points to greedy bankers, it’s a short leap to blaming the continued malaise on the same class, which the President has made the theme of his re-election campaign.  So what has prevented Obama from stopping the greedy and the rich from continuing the malaise?  Didn’t he have two solid years of filibuster-proof control of the entire federal government?  Didn’t they pass Dodd-Frank?  How then can he explain MF Global and Jon Corzine (D-NJ), the newest example of greedy fat-cat banking failure?  Why did Obama and the Democrats keep the Bush tax cuts “for the rich” back in 2010 when they were set to expire?  How does this all add-up?  

•       If greedy bankers caused a financial crisis, what better way to fix it than to go on a 5 Trillion dollar spending and borrowing binge, right?   Who will pay for the extra 5 trillion in borrowing? Does that even matter as long as the inevitable collapse is timed to occur after the Obama reign?  Can “the rich” possibly make-up the difference if the top 10% of the country earn 40% of the income and pay 70% of the income taxes already?

•       If the financial crisis was due to greedy rich bankers, then the healthcare crisis must also be caused by greedy rich insurance companies and greedy rich doctors, right?   What better way to fix it all then to put the federal government in-charge of the whole thing?  Aren’t Medicare and Medicaid both disasters from a sustainability standpoint?  How can putting the same government in-charge of the entire industry be a good thing?  How can Obama claim the “free market” has failed in healthcare when it hasn’t been involved in healthcare since WWII when employers got to deduct premiums but individuals did not?      

So this is it in a nutshell:  President Obama, the General Manager of our team, has looked at the statistics, done his analysis, and believes he has saved us from a Great Depression, free markets don’t work, greedy rich people caused all the problems in the first place, the government’s job is to re-distribute wealth, and borrowing 5 trillion is OK as long as it blows-up on someone else’s watch.  

Welcome to “Obamaball” where all the stats are rigged and all the analysis is wrong.

The Tebow Test

Yesterday, Tim Tebow led the Denver Broncos to their 7^th improbable win in 8 games as their starting quarterback.  During the post-game analysis I heard Jimmy Johnson, ex-coach, superbowl winner, and longtime football analyst opine that he’d never seen a quarterback get more out of his teammates and inspire them to play-up than Tim Tebow.  I was reminded of Harry Potter, the average wizard who manages to pull off amazing feats against all odds by having a loyal group of friends without whom he would not be nearly as magical.

I bring this up not to talk about football but rather as an allegory for choosing a President.  Being a chief executive is never a solitary endeavor despite what we’ve heard.    Good executives are team leaders. Sure, “the buck stops here” and “it’s lonely at the top”, but look at any effective leader and you will find a team inspired by his/her example.  The questions for voters are these: Are ideology and oratory everything?  What about effective leadership?  Who is likely to inspire by example?  Who is capable of turning adversaries into allies?   

Remember, all administrations are buffeted by events.  You don’t always get to plan on what challenges you face.  Given that, who will build a team and inspire them to play-up when the game is on the line?  Who has done that in the past?  Who has maintained good relations with their former teammates?  All questions worth asking before pulling a lever.     

"UC Davis" - Song Parody Video

"UC Davis" - a Song for the Occupy Movement

"UC Davis"   (sung to the tune of "Ohio" by Neil Young)
UPDATE - Now a Song and Video!

Tin cops and Obama's coming

We're finally off the bus

Zuccotti I heard the drumming

Pepper Spray at UC Davis

Gotta keep Occupying

Policeman are spraying us down

Like Kent State long ago

What if you knew her 

and she was allergic to ground

jalapeno, you know? 

Tin cops and Obama's coming

We're finally off the bus

Zuccotti I heard the drumming

Pepper Spray at UC Davis

Pepper Spray UC Davis

Pepper Spray UC Davis

Four sprayed at

Four sprayed at...

About that Shooting at the White House...

(THIS IS A RE-POST FROM 3/10 WHICH HAS NEW SIGNIFICANCE IN THE WAKE OF THE RECENT SHOTS FIRED AT THE WHITE HOUSE) 

MONDAY, MARCH 8, 2010

Anatomy of a Myth IV – Obama is in More Danger than Other Presidents!

Have you seen the many references to the mortal danger President Obama is in from potential assassins? The latest piece appeared today in the UK Guardian . I’m not surprised we are seeing these stories because racist whackos could be an additional threat for Obama, but make no mistake about it, Presidents face danger as all modern ones have found out.  That said, Barack Obama is statistically much safer than even George W Bush was!

The tragic fact is that virtually every modern president has been the subject of some kind of assassination attempt. Every one. That’s not to excuse it, but to highlight that danger is part of the office. The job is not for the faint-of-heart. Some nut is going to try and fly a plane into your house (Nixon, Clinton, Bush 43), or blow you up (Kennedy, Bush 41, Bush 43), or just try to shoot you (Truman, Kennedy, Ford, Carter, Reagan, Bush 43). And that is all of them post-WWII!

But, going back all the way, your chances of actually taking a bullet are almost twice as bad if you are a Republican. Five have been Republicans, (Lincoln, Garfield, McKinley, Ford, Reagan) and three have been Democrats (Jackson, Truman, Kennedy).

As far as actual assassinations, three were Republicans (Lincoln, Garfield, McKinley) and only one was a Democrat (Kennedy). In short, your chances of being killed are three times worse if you are a Republican! Moreover, Kennedy, the only Democrat was a tax-cutting supply-sider. If you look at it that way, Barack Obama will die in his bed as an old man. Now, if he could only quit smoking…

Gingrich Paternity Bombshell!

Now that Newt Gingrich is surging in the polls, the media are gearing-up for the obligatory smear phase.  Most people already know about Newt’s marital issues, his religious conversions, his bouts of progressivism, and his tendency towards foot-in-mouth disease, but how many know that he is actually actor/comedian Jack Black’s father?   Just uncovered, the shocking proof!!!   

Newt Gingrich and son Jack Black share a laugh.

"She just has one of those asses you gotta grab!”

The Family Christmas Card

“Why can’t you f*%#ing idiots understand this?"
   

"Temper?  Who's got a temper?"                             

Me and Dad

Me and Dad when we used to drop acid together.

Occupy Wall Street Explained (PG13 version)

Related Posts:
Obama's Mob   
&
Memo to: Occupy Wall Street

2.5% Growth! Really?

Back during the housing bubble, counterintuitive momentum was artificially driven by a key piece of misleading information; "Triple A" ratings from government sanctioned rating agencies on mortgage securities.  We all know how that worked out.

Today the stock market is skyrocketing on, among other things, the latest GDP growth estimates that have the economy up 2.5% in the third quarter; far from a new recession.  But is this "real"?  Consider:  all government growth estimates are based on inflation adjusted dollars and the under-reporting of inflation is about...2.5%!  This figure comes from John Williams at Shadow Government Statistics who looks into these things with a particularly astute eye.  He's not alone, but you needn't listen to anyone.  Instead, look at the overall dollar-price-of-gold since 2005, the base year for these government numbers.

Also, ask yourself, is it possible government appointees might have an incentive to under-report inflation?  Or unemployment?  Jus' askin'.      

Memo to Occupy Wall Street

Memo to Occupy Wall Street:  If you are wondering what happens when the 99% succeed in stopping the 1%, there's a really good book about that.  It's called "Atlas Shrugged" by Ayn Rand and with each passing day it becomes more and more relevant.  Be careful what you wish for.

Related Post: Obama's Mob

Gaddafi Bounce

Let me ask you a question:  What if a person lied, cheated, and stole a billion dollars but then used the money to help catch and kill a murderer; would that be a net contribution to society?  This is the question we face after the killing of Muammar Gaddafi.  Recall:  UN-1973, which was the basis for US and NATO intervention was a humanitarian effort to maintain a no-fly zone over Libya and protect civilians.  That was a lie.  UN-1973 was regime change.  We were also promised it was a mission of days not 8 months costing a billion dollars.  Regardless of what UN-1973 was or was not, no attempt was made to include congress or even congressional leaders in the decision.  Inexcusable.

Every day in American courts, police who capture criminals are punished for doing so if they employ extra-legal methods.  So too should Barack Obama be punished in the polls for doing a good thing the wrong way.  

Nein! - Nein! - Nein!

I must say I was disheartened by the idiotic attacks on Herman Cain’s 9-9-9 tax plan last night in Las Vegas.  It’s one thing to find legitimate issues with Cain’s plan, (and they're there) but it’s another to invent fantasy issues in a lame attempt to ding a front-runner.

As for Herman Cain’s sales skills in defending his plan:  his responses showed he is no Mitt Romney!

I like 9-9-9.  It may be just a tax plan, but it’s a darn good one and it’s not what the naysayers made it out to be last night.  It’s bad enough Herman Cain’s got Barack Obama spewing misinformation about his plan, the last thing he needs is a GOP circular firing squad aiming at him.  

Once again:

9-9-9 is not a VAT.  A retail sales tax is not a VAT.  Many states have retail sales taxes but none has a VAT.  Herman Cain needs to be able to nail this charge in as many words and then stop talking.  This is what a VAT looks like.  See update below.

9-9-9 will not give New Hampshire a state sales tax.  This is just stupid.  Herman’s “apples and oranges” explanation was adequate but he needs to slay this ridiculous charge with a sniper bullet to the forehead:  Texas has no income tax and the federal income tax doesn’t change that.  The same logic applies to sales taxes in NH or any other state.  Period. 

9-9-9 will not increase tax rates on the poor.  Cain really needs to be able to nail this and I’ve heard him almost do it.  He knows pizza, right?  All he needs to say is this: 

“I know pizza.   A $10.00 pizza has about $1.00 of embedded stealth corporate taxes built-in.  The guy who grows the wheat pays a 35% corporate income tax, as does the tomato grower, all the processors, the delivery companies, and the restaurant.  75% of that goes away with a 9% flat business tax and in it’s place is a transparent 9% retail sales tax on a now $9.25 pizza.  Total price:  still about $10.00.”    

Cain calls the stealth taxes issue “sneak-a-tax” and I like that.  In fact, I think stealth taxes are at the root of all tax evils today.

The 9-9-9 sales tax will never result in an ever increasing rate.  Why?  Because it is not a stealth tax.  Only stealth taxes go up inexorably and quietly.  Transparent taxes that hit everyone cannot go up indefinitely lest voters fall asleep.  This one is a slam dunk.  

There are legit reasons to refute Cain’s plan and I think Newt Gingrich nailed it when Anderson Cooper asked him why it was such a hard sell:  “You just watched it” said Newt after watching the Republican field throw clueless flak in Cain’s face.  Revolutions are tricky to sell.  Even good ones take time, and time is in short supply. 

There is a huge industry built around our current tax code and it includes every elected officeholder in Washington.  Cain touched on this last night and it will make changing the tax code next-to impossible.  In today’s Wall Street Journal, Art Laffer, perhaps the most respected voice on tax policy today, writes a full-throated endorsement of Cain’s 9-9-9 plan and disputes the notion that it would be next-to impossible to pass.  As proof he cites Reagan’s success in getting Kemp-Roth passed in the senate with a 97-3 vote.  What he omits is the fact that Reagan had just been shot!  I seriously doubt that vote would have looked anything like that without the “Win One for the Gipper” vibe.  

There are great reasons to like Cain’s 9-9-9 plan:  It eliminates stealth taxes and puts everything right in front of voters for them to see.  The low marginal rates of 9-9-9 will generate huge growth in revenue as per the Laffer-Curve.  The 9% sales tax will finally tax the underground economy at the federal level.   It is exponentially simpler than what we have.  (Unfortunately, when discussing it relative to today’s monstrosity, the complexity of the current system makes comparisons…complex.  A frustrating Catch-22.)

The only thing 9-9-9 needs is a master salesman and 65 votes in the senate (for insurance!).  Short of that, some miracle boost like Kemp-Roth got.  That’s not too much to ask for, is it? 

Update:  Apparently, some are claiming the 9% business tax is akin to a VAT, not the sales tax part.  (see WSJ Letters 10/25/11) That is because it applies not just to profits but to payroll as well.  This is a good point and one I missed, however it still is not a VAT but rather a combined payroll tax and business income tax.   By the logic of those claiming it is a VAT, we already have a VAT in the payroll taxes for Medicare and Social Security that total over thirteen percent of payroll currently!  This is nonsense.  


A business earning ten percent profits with a payroll running twenty percent will pay about  three percent under Cain's plan verses six percent under current tax law as a percent of gross receipts.  That is a fifty percent improvement versus current law!  Still a stealth tax, but a smaller one by half and certainly not a Value-Added-Tax.  I'd rather see all stealth taxes gone and every cent paid by voters, but no politician is currently recommending that.   

Mitt Romney - Birth of a Salesman

I watched the GOP debate in New Hampshire last night and thought something new happened:  Mitt Romney showed how talented he is as a salesman. Now, when I say “salesman” I don’t mean it in the pop-culture sense like “huckster” or “con-man”. No, I mean it as a huge mega-compliment.

I have the utmost regard for quality salespeople; the people of integrity who bring new products, services, and ideas to a reflexively skeptical audience. (Think Steve Jobs.) And boy are we skeptical when it comes to politicians!

The skills necessary to excel in sales are often misunderstood outside business circles. A good salesman does not trick you into buying something you don’t want. A good salesman does not convince you to act against your interests. No, a good salesman has the skills to understand what is important to you and then explain his product intelligently in those terms. Moreover, a good salesman must have a solid product, be knowledgeable, trustworthy, and likeable.

Selling is just a piece of making a good President, but selling is really important. What if a President had a truly decent product (agenda) but lacked the skills to implement it? Would that person make a good President? What if a President had a really bad product and managed to cynically convince us to buy it against our interests? Would that person make a good President?

Last night Mitt Romney passed the sales test for me in a way he hadn't before, but that doesn’t make him perfect. (No one’s perfect, except of course my wife!)

My problems with Mitt Romney are a bit different than the usual. You see, I’m actually OK with Romneycare. In fact, I’m OK with the individual mandate at the state level. The reason for this, as Mitt has explained, is that we’ve always had a mandate in health care, except it was one-sided. That mandate was always on the providers and it forced them to treat anyone who walked into an emergency room. That forced a reciprocal mandate on responsible, insured folks to cover the costs of those who refuse to pay. (Remember, those who are indigent are covered by Medicaid!)

The debate over Obamacare has been hijacked by the mandate controversy because the issue of constitutionality is seen by opponents as a way to kill it in the courts. That may or may not work, but I think it’s been a distraction. The real evil of Obamacare is that it nationalizes the remaining 50% of the health care market and that will kill innovation, access, quality, and life. I think Mitt Romney gets this and the Massachusetts plan was not a similar takeover.

I’m also OK with being pro-choice and pro-life, even though my views may differ from Romney’s at any given time. I’m OK with choice early in a pregnancy, but I define late-term abortion as taking a life. ‘Nuff said.

No, my problem with Mitt Romney is that he does not seem to understand Obama’s role in the financial meltdown. I’ve heard him say things like: “Obama did not cause this mess. He’s a nice enough guy. But he made it worse!” I find this a fundamental misreading of the biggest issue of the day. As much as any one man, Barack Obama did cause the meltdown in 2008 and has lied about it and blamed others ever since. He was known as the “Senator from Fannie Mae” for Pete’s sake! He worked with ACORN to force banks to make bad loans in the ‘90s. He voted for TARP. His fingerprints are all over this from the get-go. And yes, he did make it worse.

I realize the polls don’t agree with this assessment and Acade-Media-Wood have done a great job of covering Obama’s tracks, but I expect the Republican nominee to at least understand this. And once they understand it, I’d hope they can sell it in a general election.  Based on last night, Mitt Romney is half way there.

(I realize there were others at that debate and I thought Michelle Bachman was the other winner, but this post is limited in scope.) 

Obama's Mob

Just in case you think this Occupy Wall Street protest is unique and spontaneous: Barack Obama has been involved in protesting banks since his early days as a community organizer.

 From Investors Business Daily:

Obama, who once represented ACORN in a lawsuit against the state of Illinois, was hired by the group to train its community organizers and staff in the methods and tactics of the late Saul Alinsky. ACORN would stage in-your-face protests in bank lobbies, drive-through lanes and even at bank managers’ homes to get them to issue risky loans in the inner city or face charges of racism.

In the early 1990s, reports Stanley Kurtz, senior fellow at the Ethics and Policy Center, Obama was personally recruited by Chicago’s ACORN to run training sessions in “direct action.” That’s the euphemism for the techniques used under the cover of the federal Community Reinvestment Act to intimidate financial institutions into giving what have been called “Ninja” loans — no income, no job, no assets — to people who couldn’t afford them.

CRA was designed to increase minority homeownership. Whenever a bank wanted to grow or expand, ACORN would file complaints that it was not sufficiently sensitive to the needs of minorities in providing home loans. Agitators would then be unleashed.

Chicago’s ACORN used Alinsky’s tactics against institutions such as Bell Federal Savings and Loan and Avondale Federal Savings. In September 1992, the Chicago Tribune described the group’s agenda as “affirmative action lending.”

How do you think we ended-up writing billions in sub-prime mortgages? Do you think bankers suddenly lost their collective minds in the mid-90s after thousands of years of prudent lending? Who could forget the sub-prime crisis of 1850? Or the sub-prime crisis of 1921? How about the sub-prime crisis of 1952? Of course, there was no such thing as a sub-prime mortgage ever in the history of banking until community organizers like Barack Obama and ACORN began protesting outside banks and accusing them of discriminatory lending. It was a bold attempt to redistribute money and credit to unqualified borrowers and it worked fabulously well. In stepped Bill Clinton in the mid 90’s and through regulation, arm-twisting, and executive orders, out popped a decade of run-away sub-prime, no-doc, and liar-loans, all underwritten by US taxpayers through Fannie Mae and Freddie Mac.

Now Obama and his community organizer friends are at it again protesting banks and twisting arms in the name of more redistribution. As a few have pointed out, the timing of these protests coincides exactly with a marked shift in Wall Street’s political donations. Whereas 70% of Wall Street money had been flowing into Democrat coffers and specifically Barack Obama’s war chest, that trend has reversed lately:

From YourBlackWorld.Com:

Wall Street Donors Stop Giving Money to President Obama   August 24, 2011

The soft economy, overbearing regulation, and class-warfare has finally out-bid the crony capitalism and bailout billions which attracted Wall Street to Obama in the first place. This Occupy Wall Street mob is actually Obama’s Useful Idiot Corps throwing a temper tantrum in an unwitting attempt to restart the Wall Street money pump for him. Don’t believe me? Watch the donations. How much you wanna bet, the protests end the moment Wall Street caves and sends a $10,000,000 check to Obama’s campaign? And if the check doesn’t materialize, watch for the protests to get violent.

This is Obama’s play-book and we’ve seen it all before. It never works out for anyone but him. Expect the same this time.

Obamanomics II

Have you taken a road trip lately?  If so, you’ve seen Obamanomics up close and if you have a basic understanding of economics, you should be horrified.  I just completed my third transcontinental drive in a year (Don’t ask.  Suffice it to say a woman and a dog were involved.) and I can attest that in many cases we are digging up thousands of miles of perfectly serviceable road and repaving them with almost no perceivable improvement.  This is not just wasteful.  It is madness.

   

Economists have forever posited that if full-employment is the goal, why not just dig holes and fill them in again?  Everyone in the country can be kept busy and no one would be unemployed, hallelujah!  But of course this policy is never proposed as a real solution to anything, only as a proof that “creating jobs” is not the goal and “creating value” is.  Unfortunately, Obama and his economic team were either golfing or protesting the bourgeoisie when that lesson was taught.

The supposed architect of Obamanomics, John Maynard Keynes, mentions the fallacy of digging holes and filling them in again in his writings but no one would mistake it for a serious remedy.  Then again Keynes never suggested borrowing trillions for stimulus while running huge structural deficits.  Never mind, that hasn’t stopped them from citing him as their guru for these policies.

 

All in all, Obamanomics has proven to be a tragic farce.  Whether we are being ruled by a confederacy of dunces or an evil cabal is open to debate.  But on the matter of measurable economic results, “the science is settled” as they say.   

Anatomy of a Myth V – Obama Deserves Kudos for “Ramping-Up” the Drone Attacks

Even the most ardent Obama detractors manage to offer the President kudos for “ramping-up” the drone attacks on terror targets. Then they usually throw in a nice word or two about him “getting bin Laden” and then it’s right back to berating him for just about everything else. Well, I’m not going to play that game. Nope. I give him no credit for bin Laden OR the increased drone attacks. In fact, I think both are emblematic of perhaps Obama’s biggest failure of all: losing the intelligence war. To understand why, let's go back in time to the very beginning.

The very first item on Obama’s to-do list was to close the prison at Guantanamo Bay. This had nothing to do with making America stronger. It was a political promise motivated by a mistaken belief that the prison violated international norms and/or the Geneva Conventions. Some prominent Republicans, including John McCain, were also among those calling for closing the prison. But Obama went much further. He wanted to close the prison, move the prisoners onto US soil, try them in civilian courts, treat them like citizens, offer them defense attorneys, place them in witness protection programs, provide them with high-paying union “green jobs”, and get them all slots on American Idol.  (OK, I made those last ones up.)

Of course, Gitmo is still up and running but the administration has pledged to add no new prisoners there. No prisoners? What to do? The answer: kill them all. Rather than engaging in the hard work of capturing live terrorists and interrogating them, Obama prefers dropping bombs on them and their villages from un-manned drones at thirty thousand feet. To the left, indiscriminate death from above is morally just, but capture and interrogation, while perhaps saving hundreds of innocent lives, is unthinkable! The result of this kill-all policy has been a dearth of new first-person intelligence. Are we safer? Are we morally better-off executing suspects than we were holding and questioning them? Are we making more friends in Pakistan and Yemen this way?

Bin Laden’s assassination was part of that same pattern. By now everyone accepts that bin Laden would never have been found were it not for the policies of George W Bush which Obama universally opposed. Moreover, Obama had no way of dealing with a live terrorist, so his only option was execution. Had he been interested in learning as much as he could about al-Qaeda and preventing future attacks, he would have captured bin Laden and dealt with the political ramifications. But his interest was to make the headline and avoid the sticky politics. As for any intelligence gathered from that raid, its value was instantly undermined by the administration's leaks. Why tell the enemy what we found? Why not keep hush or say everything was destroyed?

No, on this 10th anniversary of 9/11 if I’m going to praise President Obama, it will have to be on the grounds that he seems to be a decent father. In fact, he’d make an excellent full-time father!

Save the Guitars!

Obama Hates White People!

Remember when George W Bush was accused of not caring about black people after Katrina hit New Orleans, a city with a nearly 70% black population, and prominent blacks and Democrats rushed to his defense pointing out that the city and state, who are the first responders in a disaster were both run by Democrats? Yeah, me neither.  Pass it on.

Well, it turns out that Vermont, devastated by Irene, is the whitest state in America.  Has Obama been there yet? How many FEMA trailers are on the ground today? Has power been restored to everyone? Is everyone in a shelter? Has the US Army or Navy been mobilized? Does everyone have food and water?   Look, we had a whole week of dire warnings to prepare for this thing.  This was not a surprise!  Was Obama on vacation or something?   I think Obama doesn’t care about white people!

Of course, both the accusation against Bush and my parody against Obama are ridiculous. The difference being I understand the idiocy, but Democrats including Obama rode that ginned-up hatred to electoral victory. Shameful.  And dangerous.

Kanye West Accuses Bush of Not Caring About Black People
http://youtu.be/zIUzLpO1kxI

Vermont ranked as whitest state on Wikipedia
http://en.wikipedia.org/wiki/White_American

Spike Lee bashes Bush on Katrina response
http://www.bvnewswire.com/2011/05/24/spike-lee-calls-out-george-w-bush-for-katrina-response/

The Gibson Blues

First they came for Non-Union Toyota but I didn’t care because I drive a UAW pick-up.
Next they came for Non-Union Delta Airlines but I didn’t care because I don’t fly.
Then they came for the Non-Union Boeing Plant but I still didn’t care because I still don’t fly.
Now the Feds have raided Non-Union Gibson Guitars and I am really pissed-off because I’ve been saving my damn unemployment checks for a smokin’ Les Paul Custom which I could never afford if the price goes any higher!
These Reds are beginning to give me the Blues.   (Apologies to Martin Niemoller)

Yesterday Gibson Guitars in Nashville Tennessee was raided by federal agents.  At first, based on early reports, I thought this was a minor issue about exotic imported wood. NOT ON YER LIFE! This is friggin' serious and I believe it is about UNIONS and OBAMA'S JIHAD against non-union companies and right-to-work states.  Here is a comment clipped from my research on the subject:

“Companies don't move south for the weather.
Tennessee is a Right to Work state and the reason Gibson moved operations there (from Michigan) was to avoid unions. They picked Tenn. over all the other union-unfriendly Southern states because of tax incentives offered to them, but they moved because of labor.”*

This is ominous and Gibson may be fighting for its non-union life, just like Toyota, Boeing, Delta, and others before it. Can you believe we live in a country where the full power of the federal government is blatantly used to selectively harass non-union businesses? I still can't believe it has come to this in our once "Free Country".

*Hat Tip: “Wyatt” on Harmony Central Forums
Update:  If you are unfamiliar with the Toyota/Union connection, please follow the above Toyota link.  Read it and weep.   

Jobs Leaving!

The big news today was: "Jobs Leaving"!  Isn't that the same headline we've had ever since Obama got elected?  Jus askin'...

Holder Announces Investigation!

Attorney General Eric Holder has announced that the US Department of Justice will vigorously investigate any news outlet reporting on the downgrade of the structural integrity of the Washington Monument.  The Washington Monument was apparently cracked during the recent earthquake, which according to administration officials was caused by a tectonic anomaly inherited from George W. Bush, and could have been much worse.       

It could have been much worse!

Barack Obama is claiming a major victory saying that were it not for him, the earthquake could have been much worse!       

Burning Down the House: What Caused Our Economic Crisis

I don't remember seeing this at the time.  Wish more people had...

Hinckleynomics

One of Newt Gingrich’s answers at the Iowa debate on Thursday (8/11/2011) reminded me how lucky we’ve been for the last 30 years. When asked about his qualifications to be President, Newt touted his experiences in congress both as a member and leader during periods of divided government when pro-growth policies nevertheless emerged. The two periods he referred to were the Reagan era Kemp-Roth Tax cuts, and the Clinton era Welfare reforms and capital gains cuts. While both those were in fact accomplished with divided government, I maintain they were very different, and one of them actually qualifies as a miracle.

Not all divided governments are equal. In Clinton’s case the legislature after ’95 was united under Republican leadership. That gave two thirds of the government to the pro-growth Republicans. To Clinton’s credit he went along and reluctantly signed the pro-growth agenda into law, but he was the minority who went along with the majority.

In Reagan’s case, the house was under hostile Democrat leadership and the Democrats could stop the Senate any time they wanted.  How then did Reagan get to sign a sweeping pro-growth tax law?  Much of that had to do with Reagan’s ability to go directly to the people, but there was another factor; Reagan was shot early in his presidency and within about 4 months, Kemp-Roth made it through congress.

Had Reagan not taken a bullet and built-up such a reservoir of good will and respect, would Democrats have given him his wish? We’ll never know, but I’m skeptical.

In other words, John Hinckley’s deranged act and poor marksmanship may be the reason we had almost 30 years of full employment and economic growth in the US.  Sorry Newt, it wasn’t all you.

(Note: this piece was edited 4/2012 for inaccuracies.)