Tuesday, February 14, 2012

Quick Hits - February 14, 2012

Over the weekend, on several of the Sunday morning talking head news shows, President Obama's Chief of Staff, Jack Lew, embarrassed himself and the President when he demonstrated an incredible level of cluelessness and partisanship.  When questioned about the likelihood of Obama's budget passing in the Senate, Lew noted that the WH was concerned about the 'do-nothing' Congress that came from needing a 60 vote supermajority to pass budgets.  This is not only incorrect, but irresponsibly incorrect.  Reconciliation, which is applicable to budget items, only requires a simple majority to pass the Senate.  Reconciliation was also the tool that was used to ram Obamacare through the Senate back in 2009 - in a real stretch of the Senate rules.

It seems that cluelessness isn't just limited to the President's Chief of Staff.  Yesterday, appearing on MSNBC's Andrea Mitchell Reports, hosted by the very biased dim bulb Andrea Mitchell, Obama's acting Director of the Office of Management and Budget (OMB) called the Obama FY2013 budget with it's $1.3 trillion in deficits, a 'balanced budget'.  Balanced budget?  We're approaching the Soviet level of brazen lies with this Administration and its officials...

While actively campaigning for re-election on the position that the national economy is improving, privately, the President is saying something entirely different.  In this report based on a response to a letter sent to the WH, the President tells the recipient that it can take up to two more years for a viable economic recovery to take place.  Of course, this is assuming that his anti-business, anti-economic growth, and pro-government growth policies don't extend this timeframe out...

In a campaign event today, President Obama used the rising price of gasoline to stress the importance for the extension of the temporary 2% Social Security Payroll Tax  reduction - providing an example of one person who needed the roughly $40 per month extra to help cover his gas costs. 

This is a typical strawman offered by the President.  Left unsaid and unaddressed by Obama is his role in the the high price of gasoline costs in the US.  When President Obama was inaugurated in January 2009, the average national price for a gallon of gas was $1.84.  Today, it's $3.51 per gallon.  Here in SoCal - we're at $3.89 to $3.94 per gallon.  We're looking at a very real possibility of $5 per gallon gas in SoCal this summer.  Yet no mention about the President's anti-fossil fuel policies or his rejection of the Keystone XL pipeline?

'Fundamental change' from President Obama is nothing more than the deliberate effort to create conditions to 'justify' the progressive policies of the Administration.  Spike gasoline prices to force Americans to embrace hybrid and alternative fuel vehicles - even though they are excessively expensive and in the case of electric vehicles, lacking in range and utility.  Spike electricity prices to make green energy solutions more viable.  Spike the national debt and annual budget deficits to 'justify' the demands for additional taxes - which will be used to fund more government expansion and not reduce the deficit.

The Chicago Tribune, in their editorial titled 'Athens on the Potomac', starts down the objective and responsible path by noting the challenges with the President's FY2013 budget proposal...but then go off the rails...
President Barack Obama's budget proposal Monday all but seals the deal: Together, Washington Democrats and Republicans have stopped governing. Both parties now are on automatic pilot. They'll do as little as possible to solve this nation's debt crisis before Nov. 6. Instead they'll wait to see whether American voters firmly choose a direction for the United States and its destructive indebtedness.
It's convenient, one can suppose, to ignore where the do-nothings in Congress reside.  It's in the Senate Democrat majority - not in the GOP majority House.  Which body has not passed a budget in 1,110 days?  Over 30 bills passed in the House sit stalled by Harry Reid in the Senate - bills that include deficit reduction plans, job growth plans, budget bills.  The feckless mainstream media encourages this action because they are unwilling to call out the Senate Democrats - or the Administration for their role in 'ginning' up yet another campaign line...the problems are the result of the 'do-nothing Republican Congress' not the President or his agenda.

ZeroHedge is noting that, perhaps, finally, the GOP has decided on a more effective strategy to highlight the vapidness of the President's policies and agenda.  Rather than continuing to oppose the President at every step, let him have most of what he is seeking.  Want a up or down vote on the President's budget?  Give it to him.  Maybe it will fail like the last one 0-97.   

The President and the Congressional Democrats want the temporary Social Security Payroll Tax reduction extended without 'paying for it'?  Let them have that to - adding $94 billion to the national deficit.  All the Democrats have to agree to do is to decouple this from the other major related items - revising the long term unemployment rates and negating the Obamacare mandated cuts to Medicare reimbursements to Doctors and hospitals.  Each of those should be debated and considered on their own merits.

Let the American voter see the effects of Obama's policies and direction so these can all be a factor in November's election.

Speaking of elections and voters, the Administration continues to strongly oppose any state taking steps to require Voter ID's to be required when casting a ballot.  They are opposing these initiatives on two grounds.  First is the claim that requiring a voter to produce proof of their identity when they cast a ballot is racially discriminatory.  The second and equally vapid argument is that these steps are unnecessary because there is not a voter fraud problem in the US electoral processes.

A study just released goes far to demolishing the second argument.  This study found that 1 in 8 US voter registrations, totalling about 24 million, have significant errors.  1.8 million dead people remain on voter rolls - and casting ballots.   Many more are registered in 2 or more states, while 12 million have address inaccuracies which include non-existent residence addresses. 

No potential for voter fraud there, eh?

Three explosions reportedly linked to Iranian nations took place earlier today in Bangkok, Thailand.  4 were wounded in the explosions in addition to one person, a suspected Iranian national and the assailant, who lost both of his legs in one of the explosions.  The Israeli Defense Minister accused Iran of making this attack - which followed an attempted bombing of Israeli embassy personnel in Georgia, and the bombing of an Israeli embassy vehicle in New Delhi, India.

As tensions increase with Iran, we need to remind the American voter that the Mad Mullah's of Iran could have been toppled in the summer of 2009 during the massive civilian uprisings there if the Obama Administration decided to offer them support.  However, in that case, like in Syria now, the Obama Administration decided to do nothing.

Massive shelling of Homs resumes as the Syrian Government of Bashar al-Assad intensified their assault on the opposition held city.  Opponents to the Syrian regime are calling the renewed bombardment the heaviest in days.  Conditions have gotten so challenging inside Homs, that the Syrian opposition in the city are forced by the shelling and army checkpoints to send messages via carrier pigeon.

The Assad regime seems to be emboldened by the complete lack of viable action being taken by the United Nations or major nations like the United States.  As the fighting intensifies, the likelihood of a full scale civil war is increasing in Syria.  The Syrian Army is reportedly seeing more defections from their ranks to those of the opposition as the government crackdown continues.

The Greek economic tragedy continues in Europe - with the focus on the next meetings between EU Finance Ministers which will determine if the steps that Greece has taken warrants the second bailout of the country in 21 months.  The circumstances have come down to a choice of actions - worse and 'worser'.  21 months ago, Greece received over 110 billion Euros in a bailout.  Now Greece needs another 145 billion Euros for a bailout - and with the grim economic numbers Greece has, everyone knows that a third bailout will also be needed. 

Jeremy Warner, writing in the Telegraph, calls this 'Death by a Thousand Cuts'...
Consider now what this grim choice of death by a thousand cuts involves. What Greece has in essence committed itself to is an internal devaluation lasting years, if not decades into the future. There is no discernible end to the austerity; year after year, it grinds remorselessly on. Even if everything goes according to plan, which seems deeply unlikely on the record so far, it takes until 2020 to reduce the national debt to 120pc of GDP, a level still far too high to be remotely sustainable.

In addition to having to run big primary surpluses into the indefinite future, Greece also faces a massive hit to nominal wages and living standards as it seeks to impose competitiveness on an economy which in truth has about as much in common with the colder, northern climes to which it has joined itself at the hip as the Mediterranean does with the Baltic. To think that the two can ever be moulded into a unified whole is fantasy of the cruellest kind.

There is not a hope of Greece growing its way back to debt sustainability while still in the euro. As things stand, capital is leaving the country by whatever means available, sometimes stuffed into suitcases and spirited across the border.

It may be deplorable for the country's rich to be running scared in such numbers, but it is also an entirely rational response to a crisis which might at any moment destroy what little capital that remains.

No business can survive in such an environment. Not until Greece devalues, and Greek assets start to look reasonable value once more, will the money return.

The Wall Street Journal takes this, and hammers it home with their editorial today on 'The Chaos of Greece:  What happens to countries that choose economic decline' (behind their subscription wall)...
To top it off, the technocrats in Brussels and at the IMF have misdiagnosed the crisis from the beginning. First, they thought Athens had a liquidity problem that could be eased by large infusions of loans, rather than a fundamental solvency problem. Second, they believed that what Athens needed most was a balanced budget and a smaller debt load, to be solved arithmetically with less spending and higher taxes. But Greece's real problem is the lack of economic growth, itself a product of policies that discourage private enterprise. That's why Greece ranks 100th on the World Bank's most recent rankings of "ease of doing business"—right behind Yemen.

In other words, the fires in Athens are the result of the combustible mix of a desiccated welfare state and the burning embers of Keynes's cigarette. Don't expect those fires to be put out by this latest round of austerity. In theory, Athens has agreed to carve €3.3 billion out of this year's budget (including €300 million out of pensions), slash the minimum wage by 22%, and eliminate 150,000 government jobs by 2015.

These are necessary measures for a government sliding toward a debt-to-GDP ratio of 160%. But they do nothing to address the growth side of Greece's problem. They will also create an intolerable political problem for Greece's government as state workers are laid off into a shrinking economy. Expect a fresh exodus of Greek labor, along with increasingly powerless (and short-lived) Greek governments.

This is the face of what will happen not only in Greece, but much of the rest of the Eurozone as long as they embrace a failed architecture built on the welfare state and Keynesian economics. It is also what is going to happen to the US within the next couple of decades, max, if we do not undertake a massive (and unfortunately painful) course correction now.

It's time to short Amazon's stock...

The Mistress of Disaster, Jamie Gorelick, has been added to the Amazon Board of Directors.  She brings an 'impressive' resume...  her work as a senior member of the Clinton Department of Justice 'built' the firewall that prevented the sharing of intelligence information between government agencies which facilitated the 9/11 terror attack; as a senior executive of Fannie Mae, she made millions while setting the framework in place for the 2008 housing industry collapse - and the need for taxpayers to bail out Fannie to the tune of over $150 billion; her role as a member of the 9/11 Commission which was not only a conflict of interest, but provided her with the ability to whitewash both her culpability and that of the Clinton Administration; her legal work to protect BP in the wake of the Gulf spill; and defending Duke University after it tried to railroad several of the school's lacrosse team in faked sex assault charges. 

Her appointment is not only proof of the 'Peter Principle', but proof that Amazon is doomed.

On This Day in History

278 - St. Valentine beheaded in Rome

1779 - Captain James Cook is killed by natives of Hawaii during his 3rd visit to the Pacific island group

1929 - Sir Alexander Fleming discovers penicillin

1929 - St. Valentine's Day Massacre in Chicago - 4 members of Al Capone's gang, dressed as police officers, enter rival gangster Bugs Moran's headquarters and execute 7 of Moran's henchmen

No comments:

Post a Comment