Saturday, October 20, 2012

Obama Campaign Gets Sweetheart Loan From BoA

Obama Campaign Gets Sweetheart Loan From BoAThe conservative media (talk radio and a few online publications) have been spinning this story as the Obama campaign in financial trouble, but they're missing the point. The point of the story of the campaign borrowing $15 million at 2.5% from Bank of America is that it got a sweetheart loan from Warren Buffett's bank with an interest rate below the rate of inflation. If I could borrow millions of dollars at 2.5%, I'd borrow as much as I could because, as 2.5% is lower than the CPI of around 3.0% This is a fine example of crony capitalism, isn't it, Mr. "Raise My Taxes" Buffett?

Friday, October 19, 2012

40% Of Americans Have Less Than $500 Savings

40% Of Americans Have Less Than $500 Savings
For excellent evidence that we're in an economic depression and the Fed, with its incessant money printing and ridiculously low interest rates, is hurting the average American, one need look no further than a recent survey conducted by CreditDonkey.com. (What's with legitimate, informative websites with silly names?) At any rate, the survey, which compiled financial data on 1,100 respondents of various socio-economic levels, found that 40% of Americans have less than $500 in savings. Here's the kicker: the low savings number was irrespective of income group; many respondents with millions of dollars in net worth had little tucked away in the bank. From CBS News:
A survey of about 1,100 Americans finds that more than 4-in-10 respondents admit they don’t have more than $500 in readily accessible savings.

The survey is a kind of departure for CreditDonkey.com, a website that compares credit card deals. Not respondents all were poor. Some had big houses, big mortgages or 401(k)s, but still no more than five Benjamins to rub together right now.
With most savings plans yielding interest significantly lower than the rate of inflation, a record number of seniors remaining in the workforce because their retirements are being threatened, it's no wonder why many Americans don't have much in savings. You can't put away money you don't have, and, even if you had the cash, it would lose value in the bank.

Also from the survey: 45% of respondents are afraid they’ll never be able to save.

Congress Most Important For Fiscal Future

Congress Most Important For Fiscal Future
The hyper-polarized Coke/Pepsi nation has worked itself into a frenzy about the upcoming presidential election. But Julie Borowski of FreedomWorks reminds us today on townhall.com that Congress, not the president, will ultimately decide the nation's fiscal future:
Congress, not the president, writes the laws and controls the purse strings in the federal government. No matter how much the president wants to spend, he or she cannot spend a penny that the Congress has not first appropriated.
And Julie reminds us that it was the GOP Congress, not Bill Clinton, who reigned in the federal deficit in the late '90's:
The Clinton Administration serves as a reminder that Congress controls the fiscal agenda on Capitol Hill. At the recent 2012 Democratic National Convention, Bill Clinton had the nerve to take credit for policy that he had virtually no part of whatsoever.

“Now, people ask me all the time how we got four surplus budgets in a row,” Clinton said. “What new ideas did we bring to Washington? I always give a one-word answer: Arithmetic.”
Clinton wants voters to believe that he balanced the federal budget in his second term, but the GOP-controlled Congress deserves the highest recognition. When Republicans controlled the House and Senate from 1995 to 2001, they stopped Clinton from spending the outrageous amount that he wanted to spend.

In 1995, when the GOP took control of Congress, Clinton’s budget projected continued federal deficits of $200 billion or more indefinitely into the future. 
The Republican Congress acted immediately to cut taxes and reduce spending—the recipe for balancing the budget. The capital gains tax was cut from 28 percent to 20 percent and federal discretionary spending was slashed by 17.5 percent, as a percent of GDP, over the next 4 years. 
Indeed. And you'd think that, with recent polls showing the GOP maintaining the House and picking up some seats in the Senate, the probability of some fiscal sanity would high. However, the Karl Rove-inspired GOP of the 2000's, unfortunately, shunned the party's fiscal conservatism of the 1990's in favor of social conservatism, joining its Democrat brethren in a spending orgy only surpassed by Obama's "2nd New Deal". The public outcry over limitless bailouts and massive new bureaucracies (hello, Obamacare) may convince this batch of congressional Republicans to return to fiscal conservatism. But I wouldn't count on it: The movement that helped the GOP regain the House in '10 (the Tea Party) was instantly corrupted by the Rovian "God, guns, and gays" wing of the Republican party. The word "evangelical" was frequently thrown around during the GOP primaries, and idiot social conservative Republicans such as Todd Akin and Scott DesJarlais continue to thump their Bibles on Capitol Hill.

Thursday, October 18, 2012

TSA Inspections With K-9s At DC Metro Stations

TSA Inspections With K-9's At DC Metro StationsJulie Borowski pointed out yesterday that the TSA has begun to perform bag checks using K-9s at metro stations in DC. Today, Matthew Taylor of the American Spectator gives us a little background:
The random bag searches on WMATA, focused on explosives, but embracing drug searches, started in December 2010. The proximate rationale for the security measure was the failed bomb plot of one Farooque Ahmed. But it turns out Mr. Ahmed's plot was conjured by the FBI, who designed a sting operation and encouraged him the whole way, after learning that he was planning to travel to Afghanistan or Pakistan to fight US forces there. To catch him, FBI agents posed as al-Qaeda operatives and redirected his efforts towards a metro bombing, asking him for help gathering information on possible Metro station targets. The eventual charges successfully brought against Mr. Ahmed were attempting to provide materials to a foreign terrorist organization, and collecting information to assist in planning an attack, for which he got 23 years.

This 2010 post from greatergreaterwashington.org, published at the time of the beginning of the random bag searches, makes all the right arguments about the foolishness, inconvenience, wastefulness, rights-infringment, and ineffectiveness of these searches.
So here we have the worst kind of government waste and invasiveness offered as a solution to a threat invented by government agents, a threat paraded as an example of successful government counter-intelligence.

The centralized defense to terrorism has two parts: 1) monitoring intelligence and following up on good leads, and 2) containing the damage of an attack, so that normal public life can continue. Counter-intelligence needs to be as adaptable as the threat it faces. The WMATA security measures, and so many DHS-sponsored measures like them, are a Maginot line, providing a veneer of security that may make some of us feel more comfortable, but are easily penetrated by a cunningly-devised blitz. When that happens, morale collapses.

Wednesday, October 17, 2012

Obama Promised 1 Term If Economy Bad

Obama Promised 1 Term If Economy BadLet's not forget the president's own words right after his inauguration. In a February 2009 interview with Matt Lauer, Obama stated that his presidency would be "one-term proposition" if the economy didn't recover in 3 years.


Despite the MSM's insistence, the economy has made very little improvement since that interview. GDP has been growing at an infinitesimal 1-2% per annum, and the U-6 unemployment rate (the real unemployment rate) is still hovering around 20%. But is Obama fulfilling his promise and bowing out of the race? Of course not.

Obama Promised 1 Term If Economy Bad - chart

Taxpayers To Recover $0 From Solyndra

Taxpayers To Recover $0 From Solyndra
The MSM is such a joke. No questions at last night's debate about the coming "fiscal cliff". One question about Libya (the only foreign policy question and the debate's shortest segment). And not a peep about Solyndra, which we've learned today will be unable to pay back taxpayers for the $500+ million in government-backed loans it blew. Highlights from the ticker:
*SOLYNDRA HAS ABOUT $71 MILLION IN NET DISTRIBUTABLE ASSETS     *SOLYNDRA LENDERS AHEAD OF GOVERNMENT OWED ABOUT $77 MILLION
So Obama's cronies' company, which is suing Chinese solar firms on the basis that they entered into a "conspiracy" to bankrupt it, will walk away from its bankruptcy without returning a dime to the American taxpayer. I guess it would have been too much for Candy Crowley to ask about Solyndra last night. Because, you know, it would have embarrassed her president.

Monday, October 15, 2012

Obamacare To Cost $114 Bil By 2015

Obamacare To Cost $114 Bil By 2015
The following chart is from "Federal Spending by the Numbers 2012", an exhaustive analysis of profligate government spending from the Heritage Foundation. (Which hasn't yet been published. Heritage's PR department sent me an advance copy. The full report will be available here on Oct. 16 at 8:00 AM EST.) As you can see from the cart, Obamacare spending will grow exponentially from day 1, immediately dwarfing the small business tax credits that are supposed to "offset" additional employee costs due to the behemoth legislation. As I said before, there are 2 primary reasons to hold your nose and vote for Romney: 1) the possibility of a new Federal Reserve president; 2) the repeal of the Obamacare monstrosity.

Obamacare To Cost $114 Bil By 2015 - chart

More Gov Exaggerations: Retail Sales

More Gov Exaggerations: Retail SalesThe divergence between the the Fed's and the BLS's "headline" numbers and their later adjustments has gotten so great that it's not even worth paying attention to the initial reports anymore. Seasonal adjustments to the Fed's September retail sales report paint the exact opposite picture that its initial report painted, that retail sales have been increasing year-over-year since 2010. Take a look at the difference between the initial reported data and the seasonally-adjusted numbers:

More Gov Exaggerations: Retail Sales - chart

Without seasonal adjustments, it appears that September retail sales have been increasing each year since 2010. But, with seasonal adjustments, we see that September sales have actually been decreasing each year--and by quite a bit.

Sunday, October 14, 2012

Former Fed Prez Volcker on Bernanke: Bullsh*t

Former Fed Prez Volcker on Bernamke: Bullsh*tThe list of Bernanke's critics from current and former economic policy leaders has been growing by leaps and bounds. David Stockman, director of the Office of Management and Budget during Reagan's first term, recently stated the the current Fed chief should be "run out of town on a rail". Philly Fed Prez Charles Plosser recently warned that Bernanke's QE exit strategy will "end badly". And in the new biography of Paul Volcker, author William Silber writes that the former Fed president is quite critical of Bernanke's belief that "a little inflation" is good for employment:
It all sounded too easy. Push this button twice and out pops full employment. Equations do not work on people as well as they do on rockets... And all I can remember after that was a word flashing in my brain like a yellow caution sign: 'Bullshit.' I'm not sure exactly where that came from...but it's a thought that never left me.
Volcker is correct of course. While Plosser has stated that the full inflationary effects of Bernanke's monetary games won't be fully realized until 2015, anyone who has bought food or gas in the last couple of years knows that we've already begun to feel them. But have multiple rounds of QE and year after year of ZIRP resulted in an improvement in employment? Gallup's U-6 unemployment rate has been hugging 20% since QE1:

Former Fed Prez Volcker on Bernamke: Bullsh*t - chart

Steve Wynn: Employees Lose If Obama Reelected

Steve Wynn: Employees Lose If Obama ReelectedMany libertarians claim that there is essentially no difference between Obama and Romney. This isn't true. For one, Romney, unlike Obama, has said that he would nominate a new Fed president to replace Helicopter Ben. (Remember, the market wants Obama to win because it believes that he would be more likely to allow Bernanke to continue to prop it up.) Secondly, Romney has said that he would work to repeal Obamacare. I don't care if Obamacare was largely modeled after Romneycare. Romneycare is a state program, not a federal program. Big difference. No, I'm not a fan of Romney. Quite the contrary, I can't stand his neoconservative foreign policy. But I won't sit idly by while fellow libertarians make a ridiculous black-and-white claim.

Casino mogul Steve Wynn, a lifelong Democrat, has been on an anti-Obama tear as of late, warning of the repercussions of reelection. In particular, Wynn has been warning of how Obamacare would negatively affect employment, the nation's greatest challenge during this economic depression. In a recent interview with Jon Ralston, host of Ralston Reports on NBC-affiliate KSNV MyNews3 in Nevada, Wynn said that he, his colleagues, and his employees are "frightened" of the prospect of an Obama 2nd term:
The president is trying to put himself between me and my employees. I have no idea what goofy idea, what crazy, anti-business program this administration will come up. I have no idea. And I have to tell you, Jon, that every business guy I know in the country is frightened of Barack Obama and the way he thinks.
For those who believe that Obama and Romney are essentially the same candidate, ask yourself the following: Since Gary Johnson has no chance of winning (let's be realistic), would you rather see the reelection of a president of whom the nation's jobs creators are afraid (if you've ever been long-term unemployed as I have, there is no way you'd allow that to happen), or would you rather have a new president who might force Bernanke to pack his bags and reduce barriers to employment? Sure, it's all talk right now. And Romney does have a history of flip-flopping. But at least he's saying some of the right things.