Tuesday, May 8, 2012

Quick Hits - May 8, 2012

Wisconsin and Indiana are seeing elections today - critical primaries are underway, but not for the Presidential nomination. In North Carolina, there is a vote on a state constitutional amendment that will define marriage as only between one man and one woman.

In Wisconsin, primaries are underway to determine the Democrat candidate to challenge Governor Scott Walker in next month's recall election.

Democrats and union activists were able late last year to get a petition completed to force a recall election of the Republican Governor in response to his legislation passed early last year which significantly weakened the state's public sector unions - eliminated their collective bargaining rights, eliminated their ability to collect membership dues via payroll deduction, and required their members to pay more for their health insurance and retirement benefits, but still far less than employees pay when in the private sector.

This legislation had an immediate and major impact on the state - beyond the massive demonstrations orchestrated by the public sector unions.  School districts, released from collective bargaining agreements that required them to purchase the health insurance coverage for union members from the unions themselves (at highly inflated prices), were able to save millions being able to use the free market - staving off layoffs, and permitting an increase in programs as opposed to decreases.  Towns and cities also were able to leverage these changes to address and in many cases resolve their own fiscal crisis.  The state eliminated a multi-billion dollar deficit without layoffs or major reductions in services.

In today's vote, the focus is on the race for who will oppose Scott Walker.  Tom Barrett, the Mayor of Milwaukee is the current front runner.  He lost to Scott Walker in 2010 by 5pts - and is in an interesting position.  He leveraged the anti-union legislation promoted by Walker to address his city's fiscal challenges  Kathleen Falk, the favored candidate of the public sector and major US unions who are pushing the recall effort, is fading badly in the latest polls - as is public support for the pro-union positions which are centered repealing the Walker legislation.

Barrett is likely to win today - but he faces an uphill battle to replace Scott Walker.

The focus in Indiana will be on the Republican primary for US Senate.  Republican Senator, Dick Lugar, with 36 years of service in the US Senate, is facing a major challenge by the Tea Party sponsored candidate, Richard Mourdock.  Lugar is trailing in the polls, and I believe that Mourdock will defeat the incumbent. 

Former GOP Presidential candidate Rick Santorum issued an endorsement of Mitt Romney for the GOP Presidential nomination late last night.  This comes nearly a month after the candidate suspended his campaign.  Santorum noted in an email to supporters sent last night, 'We both agree that President Obama must be defeated'. 

Kudos to Santorum for making the endorsement, however, it's about as weak as one can make an endorsement. 

Vice President Joe Biden committed another gaffe earlier this week when addressing the topic of homosexual marriage - in response to the vote being held in North Carolina to define marriage as only being between one man and one woman.  Biden expressed strong support for homosexual marriage - calling for an end of marriage discriminating against homosexuals.

The White House Press Corps was running a full court press in yesterday's press briefing - trying to get clarification on President Barack Obama's position on homosexual marriage.  The President is trying to have it both ways / vote present on this social issue.  He is on record as opposing gay marriage - saying it's an issue to be decided at the state level and by each state individually, but is also on record as saying his Administration will not take any steps to defend the 1996 Defense of Marriage Act, signed by President Clinton and defining marriage as between one man and one woman.

In his efforts to spin the President's position and deflect the press hammering, WH Press flack Jay Carney noted the President's past position / statement, that the President does not believe in discrimination in any form, and that his position on gay marriage is 'evolving'...
White House Press Secretary Jay Carney suggested that "evolving" does not necessarily involve "change," as he tried to argue that President Obama is not hiding his position on gay marriage.

"The President said that his views on this are evolving," Carney repeated in the course of a briefing yesterday dominated by discussion of Obama's incoherent position on gay marriage. Asked to define "evolving" -- if that means Obama is preparing "to change" his former opposition to gay marriage -- Carney demurred.

"Not necessarily," he said. "I think he just said they were evolving."

The Washington Post's Chris Cillizza observes today that declaring his support for gay marriage could cost Obama support among the black voters he needs for his reelection.

During the vote for Proposition 8 in California, the measure that defined marriage in the state as being only between one man and one woman, a sizable majority of blacks supported the measure which was intended to block gay marriage.  Gay marriages were 'authorized' by the state court system - making the proposition a direct response / message by the people on this issue. With the President having challenges holding his base together, he can ill afford to alienate a sizable portion of that base on this issue in this election year.

Joe Biden didn't leave his gaffe making to just comments on gay marriage.  Speaking before a Jewish group, the Vice President informed them that we, the United States, is the problem regarding Iran - leaping directly into the 'Blame America First' crowd...

"When we took office, let me remind, there was virtually no international pressure on Iran. We were the problem," the vice president said. "We were diplomatically isolated in the world, in the region, in Europe.”
Senate Republicans blocked a bill today to extend the temporary halving of the interest rate on Federally subsidized student loans established in 2007 and expiring on July 1, 2012.  The interest rate on these loans remains set to return to 6.8% on that date.  The primary sticking points for this legislation remains on how to pay for the roughly $6 billion annual cost for the program and the Republican demands that the reduction be limited to only those students who are in financial need - not everyone in the program as it is today.  The GOP is seeking to use the Obamacare Medicare Advantage slush fund to pay for this - which the Democrats and WH oppose.

The Democrats appear happy to let this become a bigger issue - thinking that it will appeal to the youth vote.  But is that really the best?  One of the effects of this is to continue to hide the effects of the Obama economy on the youth, or at least the 50% of today's graduates who are able to get jobs and pay off their loans. 

Is Justice for Sale at Eric Holder's Department of Justice?  That is the question that is being asked in the latest of a series of scandals and poor decision making that has become commonplace in the Department of Justice.
But Holder and Obama’s anti-Wall Street “law and order” rhetoric has turned out to be a smokescreen that allows the Obama campaign to talk the talk of the 99% while taking money from Wall Street’s 1%. The result is extortion by proxy. As President Obama put it to the Big Finance executives who met with him at the White House just two months into his presidency, “My Administration is the only thing between you and the pitchforks.”

Not surprisingly, of the elite bundlers who made up Obama’s 2008 campaign, the second most represented industry after law was the securities and investment industry. It’s a level of hypocrisy that has outraged even committed leftists. Industrial Areas Foundation activist Mike Gecan put it squarely: “I’m from Chicago, I’ve seen this game played my whole life."

So what have the securities and banking industries received for their political contributions?

As Boyer and Schweizer report, Department of Justice criminal prosecutions are at 20-year lows for corporate securities and bank fraud. And while large financial institutions have faced civil prosecution, those typically end in settlement fees with the major banks that represent a fraction of their profits, often paid through special taxes on mortgage-backed securities.

Case in point - Jon Corzine. Former NJ Governor, former NJ Senator, and former CEO of the failed MF Global - he remains free and unindicted for his malfeasance in the MF Global failure - and the misappropriation / loss of $1.6 billion in customer funds - funds used to cover corporate obligations. Despite this, Corzine remains one of President Obama's top campaign bundlers for 2012.

Think President Barack Obama is a socialist?  It's been confirmed - by the New York Times.
In an article, "Change in Paris May Better Fit U.S. Economic Positions," the Times reports:

"With the victory of the Socialist candidate, François Hollande, in the French presidential election, the White House has lost one of its closest allies on the Continent, but perhaps gained one with economic policy beliefs more closely aligned with its own....Mr. Hollande seems 'naturally more palatable to the administration,' said Justin Vaïsse, the director of research for the Center on the United States and Europe at the Brookings Institution....Observers said that...Mr. Hollande was likely to hew closer to the Obama administration on economic issues....Mr. Hollande...said that the countries had a 'convergence' on economic issues."

So, according to the Times, the French Socialist is "closely aligned with," "naturally more palatable to," and "likely to hew closer to" the Obama administration on economic issues. Is, therefore, Barack Obama (more or less) a socialist?
Speaking of the European elections - major news is breaking there...
A confrontation between Greece and its European lenders could come as soon as next month. Greece had agreed to implement many tough austerity measures, such as cutting health-care spending by June 30, and to find an additional $19 billion in savings for next year. The already difficult prospect of meeting that deadline now appears impossible as the country struggles to find new political leadership after the divisive weekend vote that punished two long-dominant parties and bolstered those on the far left and far right.

Meanwhile, Greece’s coffers continue to empty, and with failure to act on required austerity measures likely to block a scheduled $39 billion bailout installment in June, the country will probably be bankrupt soon after. If Greece runs out of euros, it would be forced to start printing drachmas, which economists say would quickly devalue against the stronger common currency.

The first stage of this confrontation started today as the leader of the Greek leftist party, which got the 2nd largest block of seats in the Greek Parliament announced that the bailout deal in place between the EU, ECB, IMF, and Greece was 'null and void'...
Alexis Tsipras has just declared that the pledges Greece made to receive its financial aid package is null and void, and called for a moratorium (temporary halt) on Greek debt repayments.

Speaking after being granted the mandate to form a government, the Syriza leader declared that Greece's commitments to the international community are no longer valid, now that a majority of Greek people have voted for parties which oppose the terms of the bailout.

Here's the key quote, via Reuters.

The popular verdict clearly renders the bailout deal null.

These remarks kicked off a broad selloff in global markets. In London, the FTSE was down 1.8%, German Dax down 1.95%, France's Cac down 2.8%, and in Athens, the Greek stock market was down 3.6% - to the lowest level in nearly 20 years. The US market was also down - trading last down 1% - but rebounding slightly from the day's earlier low point.

In liberal press outlets, much is being made of the Greek and French elections this past Sunday as being a rejection of the concept of austerity.  The problem for that meme is that in Europe, austerity hasn't really been tried as a solution.
On its own website, the EU itself ridicules the notion of government austerity as a "myth."

"National budgets are NOT decreasing their spending, they are increasing it," the EU says, noting that in 2011, 23 of the 27 nations in the EU increased spending. This year, 24 of 27 will do so.

Did that decade-long spending increase boost GDP growth? No. During the 2000s, average annual GDP growth in the EU fell to 1.2% from 2.2% in the 1990s.

So the idea that Europeans are "tired" of austerity is false. You can't be tired of something you haven't tried. This is why an exasperated German Chancellor Angela Merkel said Monday she'll continue to demand that other countries make real cuts in spending.

She may be swimming against the tide. Hollande has a 60-point agenda that includes raising taxes on the rich to 75% from 41%, hiking corporate tax rates, boosting government spending and hiring more government workers in a bid to "restore growth."
What is true is that Europe remains running out of other's people money...
But regardless of the electoral landscape in Berlin and London over the next three years, the inescapable fact remains that the European Union, and the Eurozone in particular, is in a state of decline. As my Telegraph colleague Daniel Hannan noted in his excellent Encounter Broadside pamphlet ‘Why America Must Not Follow Europe’, Western Europe's share of world GDP fell from 36 percent in 1974 to just 26 percent in 2011, with a projected fall to 15 percent by 2020. In contrast, the US share has remained steady at about 26 percent of world GDP.

As economic freedom declines, EU member states are becoming less and less competitive on the world stage, while emerging economies from Asia to South America are gaining ground. Decades of big government policies have now brought several European economies to their knees. Soaring taxes, spiraling unemployment, mountains of red tape, stifling labour regulations, and ruinous levels of public spending needed to fund vast and unsustainable welfare states and entitlement programmes have created a perfect storm of economic malaise. And France is a potent symbol of that decline, with huge levels of public debt, now standing at more than 80 percent of GDP, government spending at 55 percent of GDP, and a tax burden equivalent to 42 percent of total domestic income.

In addition, Western Europe’s problems have been exacerbated by the relentless centralisation of political and economic power in Brussels, which has added layers of suffocating regulations for businesses operating within the EU, as well as onerous regulations on financial institutions, while the single currency has made it increasingly difficult for national leaders to address their own countries’ economic woes.

This Day in History

1902 - Martinque’s volcano, Mount Pele, has a major eruption that destroys the town of Sainte-Pierre – killing about 30,000 – leaving only 2 survivors in the townin the deadliest eruption of the 20th century… The night shift telegraph operator was sending the reports of the volcano's activity, to the operator at Fort-de-France, claiming no significant new developments; his last transmission was "Allez", handing over the line to the remote operator. It was 8:02[13]; the next second, the telegraph line went dead. A cable repair ship had the city in direct view; the upper mountainside ripped open and a dense black cloud shot out horizontally.[11] A second black cloud rolled upwards, forming a gigantic mushroom cloud and darkening the sky in a 50-mile (80 km) radius. The initial speed of both clouds was later calculated to be over 670 kilometres (420 mi) per hour.

The horizontal pyroclastic flow hugged the ground and sped down towards the city of Saint-Pierre, appearing black and heavy, glowing hot from the inside. It consisted of superheated steam and volcanic gases and dust, with temperatures exceeding 1,075 °C (1,967 °F). In under a minute it reached and covered the entire city, instantly igniting everything flammable with which it came in contact.

A rush of wind followed, this time towards the mountain. Then came a half-hour downpour of muddy rain mixed with ashes. For the next several hours, all communication with the city was severed. Nobody knew what was happening, nor who had authority over the island, as the governor was unreachable and his status unknown. Some survivors were picked from the sea, mostly badly burned sailors who had been blown into the sea by the blast and then clung for hours to floating debris.
There are unnamed eyewitnesses to the eruption, probably survivors on the boats at the time of the eruption. One eyewitness said "the mountain was blown to pieces, there was no warning", while another said "it was like a giant oil refinery". One person even went as far to say that "the town vanished before our eyes."[14]

A warship approached the shore at about 12:30, but the intense heat prevented it from landing until about 3 PM. The city burned for several more days.

1942 - During the 2nd day of carrier airstrikes in the Battle of Coral Sea, the US forces heavily damage the Japanese fleet carrier Shokaku.  Japanese strikes cripple the USS Lexington, which is later scuttled, and seriously damages the USS Yorktown.  With both sides severely damaged, the Japanese invasion fleet targeting Port Moresby is recalled.  The battle is a tactical Japanese win, but a strategic loss.

1945 - VE Day - Victory in Europe - marks the defeat of the Nazi war machine.  In the east, since a number of German units continue to fight against the Red Army - and were not defeated until the 9th - Russia celebrates VE Day on the 9th.

1963 - The first James Bond movie, Dr. No, is released.

1984 - The USSR announces that their Olympic team will not compete in the 1984 Games being held in Los Angeles - a direct retaliation for the US decision to boycott the 1980 Moscow Games over the Soviet invasion of Afghanistan in December 1979.

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