Tuesday, January 31, 2012

Quick Hits - January 31, 2012

GOP Presidential Primary voters head to the polls today in the Sunshine State - with 50 delegates up for grabs in the winner take all format.  Newt Gingrich remains defiant, angry, and petulant as the polls seem to point to Mitt Romney having a very good day in Florida.  The Real Clear Politics average of polls going into Florida's primary has Mitt Romney with a 13 point lead over Newt Gingrich (41.8% to 28.8%), while Rick Santorum trails in a distant third (13%).  Ron Paul brings up the rear with 10.3% support.

Gingrich is vowing to remain in the race until the convention regardless of the results as he plans to continue his scorched earth campaign against 'the Massachusetts liberal'.  Both are making the claims that they are more electable in November against President Obama than the other.  But one thing that we should also consider is, how electable is President Obama?

Democrat registrations and enthusiasm is far lower than they were in 2008.  Barack Obama now has a solid record to run on as opposed to being able to run on 'hope and change', 'anyone but Bush', a 'moderate', and the excitement of being able to demonstrate the post-racial US by voting for an African-American President.  Has the President united the country or has he driven a deeper wedge of polarization into the country?  What successes has the President achieved? 

President Obama did get Osama Bin Laden.  Thanks to VP Joe Biden, we now know that he was firmly opposed to launching that mission.  Except for then CIA Director, now SecDef Leon Panetta, none of the advisers in the Situation Room were firmly in favor of the mission to get Bin Laden.  Biden worried that the mission would be Obama's Desert One...putting politics before the mission / need.

The President's Democrat majority in Congress also rammed through Healthcare Reform (Obamacare), Dodd / Frank, and a $800 billion stimulus program against strong GOP objections - and where a majority of Americans opposed these steps.  He's in the 4th consecutive year of budget deficits greater than $1 trillion dollars and is on pace to add more to the national debt in 4 years than were added by the 'unpatriotic' George W. Bush in 8 - 30% more than Bush 43.

The stimulus program was 'promised' to recover the economy and hold unemployment at or below a max of 8%.  Nope.

His policies were supposed to turn the economy around - even from a 'deep' recession - but this is the slowest most anemic recovery since the Second World War...

In the last quarter of 2011, the US Gross Domestic Product grew at an annualized rate of 2.8% - and that was the best quarter of 2011 by far.  Far below the growth we experienced in the Reagan Presidency as he worked to get the country out of another deep recession...

But even this number is highly suspect - as politics and appearances mean far more to the President than facts...
And that meager 2.8 percent annual growth really isn’t what it seems to be.

That’s because 75 percent of that 2.8 percent growth involved businesses restocking inventories. Who says? The Department’s Bureau of Economic Analysis, which released this data.

So people like you and me weren’t really buying all that stuff in the last months of 2011. It was businesses buying stuff and putting it on their shelves in hopes that people would soon come along and buy it from them.  
Inventories will only build up so much before companies say “no more.” So these restockings are not considered a particularly good thing when the ultimate buyer — the consumer — is still uncooperative.

But that wasn’t the only scary thing in the GDP report. In fact, it wasn’t even the most important thing.

In order to get to that 2.8 percent growth the Commerce Department used a very unrealistic level of inflation in its calculations.

Let me explain: The government comes up with a figure on how much it thinks the economy grew, or shrunk. Friday’s figure was a first estimate for the fourth quarter, so most of the numbers used in the calculation are only guesstimates anyway. (But that’s for a different story.)
The government then takes that growth figure, subtracts the rate of inflation and comes up with the real growth it reports in its press release.

So, in other words, if inflation is rising it reduces the rate of actual, after inflation, growth — which is the figure that Washington reports.

In Friday’s number the government used 0.4 percent as the rate of inflation. Zero. Point. Four. Percent.

In which country is inflation that low? Certainly not in America. Absolutely not in the last four months of 2011.

The consumer price index, which is put out by the US Census Bureau, had prices up 3 percent for the year.
On top of the lack of a real record to engage and excite Middle America, the President still also has his history of demonstrating not only his hubris, but how inexperienced and in over his head he is.  From today's Hot Air Obamateurism of the Day segment written by Ed Morrissey - we have this followed by Ed's to the point riposte...

Obama tells woman her husband shouldn’t be unemployed – (video) - During his Google+ hangout Pres. Obama tells a woman that her husband shouldn’t be unemployed from the growth he has seen in the economy. Obama said he finds it “interesting” because he is getting “the word” that someone in her husband’s job field “should be able to find something right away.” …
A “huge” demand for semiconductor engineers? Perhaps, but the Bureau of Labor Statistics puts the computer and electronic products industry (the employment category in which this job falls) at 36th in employment growth for November to December, with only 200 jobs added nationwide. That was an improvement over the previous three months, which averaged a decline of 1900 jobs a month in that period. Small wonder the wife asked why H1B visas continued to be issued in this industry.

We’re left with one of two conclusions. Either Barack Obama knows this industry like the back of his hand, better than the BLS, and the husband is some kind of slacker, or Obama doesn’t have the grasp of the economy that he thinks he does. Give Obama this much credit: at least he refrained this time from assuming out loud that the husband acted stupidly.
Of the two conclusions - my vote is on the second one.

California's Governor Jerry 'Moonbeam' Brown is continuing his full-court press to continue to press for the boondoggle known as California's High Speed Rail Network.  Despite the estimated cost of $100 Billion to $120 Billion (including 'contingency') developed by the High Speed Rail Network Board responsible for developing and building the network (not to mention stocked by Brown's political buddies, allies, and union friends), Jerry Brown not only is insisting that the actual cost to build the network are far below the Board's current estimates, but that California's Cap and Trade legislation will be able to pay for the building of the network.

The level of bureaucratic stupidity that exists sometimes overwhelms me.  Perhaps this comes from my experience in the private sector where people, including executives, are generally held accountable and responsible for what they say and do.  But this is one of those head shaking moments of wondering if Brown knows where the truth ends and bullshit begins?

California's cap and trade system isn't up and running yet.  The current projection of $1 billion annually in revenues from cap and trade are unreliable and unsubstantiated.  It's a number pulled from the sky [I'm being polite here].  Furthermore, these fees are going to be imposed on businesses - which will result in higher costs for the businesses and consumers - which will result in still lower revenues for the State.  Then there is the absurdity that $1B / year will fund the project.  That's as idiotic as promoting that raising $75B annually in higher taxes on the wealthy will fix a $1.2 trillion annual budget deficit.

Bureaucratic stupidity is not just limited to the US - it can also be found elsewhere. 

The Spanish airliner SpanAir suddenly collapses into bankruptcy stranding thousands of travelers.  What does the Spanish government decide to do about this?  Fine the closed and bankrupt country 9 million Euros for failing and stranding the passengers.  I suspect they also want to get to the front of the creditor line as well.

Staying in Europe for the moment, 25 of 27 European Union nations have approved the Merkozy treaty that binds them to imposing caps on deficits and government debts in their effort to address the Eurozone financial crisis.  Britain remains the primary opponent to the treaty - concerned about having to relinquish their national sovereignty under the treaty provisions which call for automatic sanctions against governments that violate the the EU limits.  PM David Cameron sees the treaty as a move far closer to a financial union and economic subservience to the EU as opposed to each nation's government determining their own economic policies.

German newsmagazine Der Spiegel notes that when it comes to the Euro crisis, and specifically Greece which remains on the forefront with a March 2012 default, European politicians are in denial as to what needs to be done...
The effort to rescue Greece is clearly moving in circles, and there is no evidence of any progress.

Ironically, only three months ago European leaders believed that things were already on the mend. Greece's private creditors were supposed to abandon half of their claims, and the partner countries planned to contribute another €130 billion ($172 billion). These efforts were expected to bring the country's debt level from more than 160 percent of gross domestic product (GDP) to a more tolerable 120 percent by 2020.

But these hopes were deceptive. The Greek economy is shrinking faster than European politicians believed was possible in autumn, and now the country is short on funds once again.
The issue is not just Greece. Portugal, Spain, and Italy remain as precarious as Greece.

The EU and National government officials have largely painted themselves into a corner because of the fundamental architectural failure of Euro-socialism. A system which promotes entitlements, 'social justice', and 'fairness' that does little to encourage economic growth, productivity growth, or innovation. Growth, productivity, and population are needed to fund the taxes needed to pay for the entitlement system. Nations like Germany that have the economic growth and productivity need to sell their products to countries like Greece, Spain, Portugal, and Italy in order to fuel that growth - but that only exacerbates the challenges in those countries.

The decision makers today in Europe want to either increase the centralized government control or try to keep kicking the can down the road another generation so it's someone elses' problem. Neither is a solution...at least to someone who is a Greek, or Spaniard, or Italian and proud of their heritage. Europe has a solution to the problem that will be painful in the short term - but I don't think the leadership's pride or attachment to their ideological dogma will allow them to embrace it.

Italian officials have announced that they are ending the search for the 15 still listed as missing in the submerged portions of the Costa Concordia.  Combined with the 17 confirmed dead, the total death toll for the sinking of the luxury liner totals 32.  The officials say that the status of the hull and the ship has created too many safety concerns to continue the search within the submerged sections of the ship. 

The Canadian paper, National Post, has a great graphic which highlights the challenges of trying to salvage the Costa Concordia...

Click on the image or above link for a larger view. 

Morocco is continuing to press forward with it's United Nations Security Council resolution.  A draft of the resolution calls for Syrian dictator Assad to step down in order to bring...
"an end to all human rights violations and attacks against those exercising their rights to freedom of expression."
Russia, a long time patron of Syria, continues to warn that they will veto this resolution - calling it a path to civil war in Syria.  They are concerned that the resolution will be the catalyst for a military intervention into Syria similar to the intervention in Libya.  Until Russia subscribes to UNSC actions, the UN will remain irrelevant and impotent.

The Assad regime in Syria has released a top al-Qaeda figure and one-time confident of Osama Bin Laden in retaliation for Washington's positions against the Assad regime...
Spanish national Mustafa Setmariam Nasar, ranked number four within the terror organization, and another terrorist, Abu Khalid, were freed in late December, The (London) Times reported Tuesday.

Reports of Nasar's release were first revealed on Sooryoon.net, a website of Syria's opposition in London, and later confirmed by the Spanish daily El Pais…
…Nasar is linked to several deadly terror attacks -- including the 2004 train bombings in Madrid, which resulted in 192 people dead, and the 1985 attack on a Madrid restaurant that killed 18 people, mostly Americans.
 On This Day in History

1865 - The US House of Representatives passes the 13th Amendment to the US Constitution abolishing slavery in the United States.  The Amendment was ratified by the states in December 1865.

1917 - Germany announces the renewal of unrestricted submarine warfare in the Atlantic Ocean.  Three days later, the US breaks diplomatic relations with Germany.

1945 - Private Eddie Slovak is executed by firing squad in northern France on the charge of desertion.  He is the first US soldier since the Civil War, and the only soldier in WW2 executed for desertion.

1950 - 5 months after the USSR's first atomic bomb test, President Harry S. Truman announces the development of the hydrogen bomb

1968 - During the Tet Offensive in South Vietnam, a squad of Viet Cong guerrillas attack and briefly occupy the US Embassy in Saigon before being killed by US paratroopers recapturing the facility.

1 comment:

  1. Your blog, you can cherrypick your own facts. But to compare the economy that Reagan inherited with the one Obama did is disingenuous at best. And Reagan raised taxes 6 times.