Monday, July 2, 2012

Quick Hits - July 2, 2012

Earlier today, approximately 50 student activists began to picket the White House calling for the firing of Attorney General Eric Holder over his actions around Operation Fast and Furious, including the cover-up underway by the Department of Justice. reported that soon after the protest began, the Secret Service shutdown the protest, saying that they were acting on concerns over 'a suspicious package' apparently left by a tourist on the White House grounds...
Secret Service officials forced the approximately 50 student-activists, who organized the event over social media, to leave the area after the protest had attracted significant attention from members of the White House press corps. and major news outlets.

Maurice Lewis, a student at the University of California, Merced, who marched in the event told Campus Reform that the Secret Service had seemed on edge well before the "suspicious package" was discovered.

"Several agents seemed hostile to our march and seemed anxious for us to leave the area," said Lewis. "The discovery of the 'unidentified package' came just as the protest began to gain traction."
Fast and Furious continues to represent a major growing scandal for the President despite the efforts of his WH staff, like that reported yesterday of WH Chief of Staff (CoS) Jack Lew, trying to spin the investigation into a partisan political 'witch hunt' while denying any wrong doing by the President or senior Department of Justice officials.

Consider also this - when President Bush, through his Attorney General Alberto Gonzales, dismissed 8 U.S. Attorney's - who serve 'at the pleasure of the President', the Democrats in Congress went crazy calling this a major overreach of the Executive Branch. {President Bill Clinton, without fanfare, dismissed every U.S. Attorney when he assumed office in 1993.} With the dismissal of these U.S. Attorney's, some of them, along with Democrats in Congress alleged that their dismissals were based on political grounds - including protecting Republicans being investigated by the U.S. Attorney's.

Congressional hearings were launched as well as soon as the new Democrat majority controlled Congress took power in January 2007 - demanding via subpoena detailed communications of key WH advisors and employees like the President's Chief of Staff, WH Counsel, and his primary political advisor - Karl Rove seeking to prove that the decision to dismiss the attorney's were politically motivated and not performance related as claimed by the Attorney General.

Ultimately, Attorney General Gonzales, 8 other senior DoJ officials, and Karl Rove resigned over the attacks from the Democrat controlled Congress - with no criminal wrong doing being found or admitted. No one was killed - just 8 U.S Attorney's who serve at the pleasure of the President were let go and replaced. Yet, in the case of Fast and Furious - we have the hundreds dead from the actions of the Holder DoJ, including a murdered US Border Patrol Agent, and a pattern of outright lies being told to Congressional investigators by senior members of the DoJ - including the Attorney General.

Which is the real scandal?

BTW - There are 93 US federal attorneys. Since 2006, 100% of their political contributions have gone to the Democrats.

National Review Online has an excellent timeline of the scandal - and focuses on a number of key points that do not reflect the DoJ acting in a manner consistent with the 'most open and transparent administration ever'. The following video, one of Bill Whittle's excellent 'Afterburner' series - makes a compelling case that Fast and Furious was not only operating as planned - but was conceived and implemented to create a justification for a Democrat initiative to increase U.S. gun control laws.

In perhaps a foreshadow of another set of grim economic news on the June jobs front due the end of this week, comes the report that for the first time in nearly three years, the American manufacturing sector has contracted.  This is intensifying fears that the world's major economic centers (US, Euro zone, and China) are suffering a simultaneous slowdown.
Any reading below 50 signals contraction and June's figure was lower than the most pessimistic forecast. Stock markets on Wall Street weakened after a reading that economists said confirms US economic growth is losing the momentum it enjoyed at the start of the year.

"It's a really terrible number," said David Semmens, an economist at Standard Chartered. There was little encouragement to be found in the majority of the smaller indices that make up the headline number.
The US recession officially ended in June of 2009, and while the US economy has grown since that point, after reaching a peak level of 3% GDP growth in the 4th quarter of 2011, the level of GDP growth has slipped to an estimated 1.5% to 1.9%. This also comes on the heels of a significant drop in consumer confidence and weekly new jobless claims near the 400,000 level.

In the Euro zone, more bad news greets their leadership as unemployment hits a record high of 11.1% - highlighting the economic weakness across the zone.

The United Kingdom is running headlong into the 'Laffer Curve'....

... finding that despite the income tax increases of the Cameron government, tax receipts are actually falling as the size and scope of the increases are having a dampening effect on the British economy.  This places more pressure on the British government spending - requiring them to either increase their borrowing or reduce spending.  In, Daniel Mitchell has an interesting column that highlights this problem and asks the $64 question...
The relevant question is why do politicians pursue bad policy and why do some economists aid and abet bad policy?

For politicians, I think the answer is easy. They simply care about getting elected and holding power. So if they think class-warfare tax policy is the way of achieving those narcissistic goals, they’ll push higher tax rates. Even if it means lower revenue, notwithstanding their usual desire to have more money so they can buy more votes.

I’m more mystified by the behavior of economists. Let’s look at a couple of examples.

Justin Wolfers and Mark Thoma recently cited some survey data to claim that the Laffer Curve was universally rejected by the profession.

But as James Pethokoukis of the American Enterprise Institute explained, the survey actually showed just the opposite, with economists by a margin of nearly 5-1 agreeing that lower tax rates could boost GDP (and therefore taxable income).

Those economists did say that a reduction in tax rates, based on current levels, would not cause taxable income to jump by a large enough amount to fully offset the revenue-losing impact of the lower tax rate. But the Laffer Curve says that only happens in extreme circumstances, so there’s zero contradiction.

The class warfare and power of the central government aspects are one of the main factors being fought over in our own 2012 Presidential election - the results of which will have a major effect on the direction of this country. Will we continue to race down the path of the most troubled nations in the Euro zone or will be embrace limited government, pro-growth policies, and watch this economy actually to finally start to recover.

In the Wall Street Journal, an editorial today highlights that despite the 'blink' last Friday by German Chancellor Angela Merkel, Germany still has to say 'NO' to accepting and covering the debts of the fiscally irresponsible nations in the Euro zone (Spain, Greece, Italy the main players now - France could be added soon).  If Germany does not, then the Euro government bubble will get far worse - not better...
Therein lies the common ground between investors looking to save their own portfolios and politicians looking to spend their way into office. Who cares what happens to Germany and the other responsible nations?

Unfortunately, the long-term consequence of this approach will be global economic chaos. In the past, patterns of taxing, borrowing, spending and the printing of money destroyed local economies. These collapses occurred over time, and the impact was isolated. If Germany assumes the ultimate obligation of paying the debt of other nations, the bubble grows. When Europe gets to the point of collapse, who will guarantee that debt?

Eventually, money will be printed and the standard of living will fall for citizens of irresponsible nations. This is a historical reality. The only real question is, do we prefer that the entire European bubble burst at once, or mitigate the risk by allowing local bubbles to burst periodically over time? The best possible answer is for Angela Merkel to just say nein to more eurobonds.

As reported in previous QH editions, Merkel 'blinked' when faced with a 'unified front' led by France, Spain, and Italy calling on the ESM to begin to buy sovereign debt obligations - with Germany standing firmly behind the ESM. However, this 'unified front' is not quite as unified as two of the stronger economies in the Euro zone, Holland and Finland, oppose the planned solution.
A Finnish government report on last week’s milestone European Summit showed that prime minister Jyrki Katainen opposed plans to give the European Stability Mechanism (ESM) the option to buy government bonds in the secondary market. On Monday a spokesman said Finland’s stance was supported by the Netherlands too.
“Finland finds it an inefficient way to stabilise markets,” said a senior Finnish government official told reporters.

A spokesman for the Dutch finance ministry said: “The Prime Minister said on June 29 he is not in favour of buying up bonds. Using the existing instruments to buy up bonds will be expensive and can only be done if there is unanimity (between member states). That means the Netherlands would need to vote in favour.”

After the Summit, leaders said they had agree to deploy the European Financial Stability Facility (EFSF) and its successor the ESM to buy bonds but have not yet revealed details of how. Without giving detail, it said the ECB “has agreed to serve as an agent to EFSF/ESM in conducting market operations in an effective and efficient manner”.

Under the current rules, Finland is ultimately too small to prevent Brussels from deploying the bail-out funds single-handedly but its opposition is a blow to leaders who are desperate to present a united crisis-fighting front.

In another Wall Street Journal Op-Ed from today's edition, comes this request that President Obama needs to add Adam Smith's 'The Wealth of Nations' to his summer reading list....
Instead of doubling down, Mr. Obama could have seen his party's 2010 midterm defeat as a message from voters to move to the center, announcing that his vast expansion of government was temporary and necessitated by the financial crisis and deep recession.

That's similar to what President Clinton did after his 1994 midterm rebuke that swept Republicans to control of Congress and led to bipartisan agreement to balance the budget and reform welfare. Mr. Clinton won re-election handily.

Here are four things the president could have proposed (but didn't) to remove headwinds to growth and instill confidence in the economy:

1) Avoid the 2013 "fiscal cliff," which the Congressional Budget Office says would put us back in recession, by extending all the Bush tax cuts for one year (leaving him free to pursue his tax hikes on the "rich" later).

2) Approve the Keystone pipeline and speed up oil and gas drilling approvals, with appropriate environmental safeguards, back to the levels they were before the 2010 moratorium following the BP oil disaster.

3) Enact long-run entitlement and tax reform with lower rates and a broader base, using the proposals of the Simpson-Bowles Commission—which the president appointed, but has so far ignored—as a starting point for negotiations.

4) Invest political capital to energize the moribund Doha Round of global trade liberalization and bilateral free-trade agreements.

By taking these four steps, the president would have given the recovery a greatly needed boost and encouraged more businesses to invest and hire. He may well look back on this missed opportunity to move toward the middle as the mistake that ultimately cost him re-election.

It's advice, and a recommendation, that will likely go unheeded - ideologues aren't ready to change or compromise. That's what the other guy is supposed to do.

Heritage Foundation's 'The Foundry' provides a litany of broken promises contained with the Obamacare legislation...
The mandate is in fact a tax, and it’s just one of many new taxes that hit the middle class in Obamacare. Lo and behold, another broken promise. President Obama claims that the mandate is holding people responsible, keeping with that spirit, here’s a reminder of the other promises the President and his health care law are responsible for breaking:

Promise #1: “Under my plan, no family making less than $250,000 a year will see any form of tax increase.”

Reality: The individual mandate is far from alone on Heritage’s lengthy list of Obamacare’s new taxes and penalties, many of which will heavily impact the middle class. Altogether, Obamacare’s taxes and penalties will accumulate an additional $500 billion in new revenue over a 10-year period. Yesterday, a senior economist for The Wall Street Journal revealed that 75 percent of Obamacare’s new taxes will be paid for by American families making under $120,000 a year. Among the taxes that will hit the middle class are the individual mandate, a 2.3 percent excise tax on medical devices, a 10 percent excise tax on indoor tanning, and an increase of the floor on medical deductions from 7.5 percent of adjusted gross income to 10 percent.

Promise #2: “If you like your health care plan, you’ll be able to keep your health care plan, period.”

Reality: Research continues to show that as many as 30 percent of employers will dump their employees from their existing health care coverage. The Administration itself has admitted that “as a practical matter, a majority of group health plans will lose their grandfather status by 2013.”

Promise #3: “I will not sign a plan that adds one dime to our deficits—either now or in the future.”

Reality: As Heritage analysts explain, “A close examination of what [the
Congressional Budget Office] said, as well as other evidence, makes it clear that the deficit reduction associated with [Obamacare] is based on budget gimmicks, sleights of hand, accounting tricks, and completely implausible assumptions. A more honest accounting reveals the new law as a trillion-dollar budget buster.”

These highlight some of the real reasons why the SCOTUS decision to uphold Obamacare by classifying the Individual Mandate a tax will have some major ramifications for the President and progressive Democrats in November's election. The bill contains hundreds of billions in new taxes...

... as the Chief Justice provides Congress with a vast new taxing power...
Chief Justice Roberts's ruling is careless about these bedrock tax questions, and they are barely addressed by either the Court's liberal or conservative wings. His ruling, with its multiple contradictions and inconsistencies, reads if it were written by someone affronted by the government's core constitutional claims but who wanted to uphold the law anyway to avoid political blowback and thus found a pretext for doing so in the taxing power.

If this understanding is correct, then Chief Justice Roberts behaved like a politician, which is more corrosive to the rule of law and the Court's legitimacy than any abuse it would have taken from a ruling that President Obama disliked. The irony is that the Chief Justice's cheering section is praising his political skills, not his reasoning. Judges are not supposed to invent political compromises.

"It is not our job," the Chief Justice writes, "to protect the people from the consequences of their political choices." But the Court's most important role is to protect liberty when the political branches exceed the Constitution's bounds, not to bless their excesses in the interests of political or personal expediency or both. On one of the most consequential cases he will ever hear, Chief Justice Roberts failed this most basic responsibility.

House Minority Leader, Nancy Pelosi, the Mad Red Queen of Haight Ashbury, almost falls off the party line on defining that the fee for the Individual Mandate is not a tax, but a 'penalty' when being interviewed by NBC News David Gregory...

As Hot Air notes...
Actually, Pelosi slips twice in this clip. The first time comes when she asks Gregory, “Well, who is the ta — who is the penalty on?” Obviously, Pelosi hasn’t grown comfortable with the official Democratic nomenclature as they try to unwind the political damage that comes from their legal victory.

Of course the mandate is a tax, and neither Gregory nor Chris Wallace with Jack Lew actually get to the heart of the problem. Both of them limit the tax question to just the penalty, but the mandate requires taxpayers to spend a significant amount of money in a very narrow way. They must buy health insurance from private providers — and not just any insurance or a plan that best meets their own specific needs, but a one-size-fits-all plan — or pay a penalty to the IRS. That’s a tax either way; the only difference is who collects it.

Victor Davis Hanson highlights this 'depressing note' regarding SCOTUS in this week's essay...
Other depressing notes: the Court is now 4 liberals, 2 swings, and 3 conservatives. Is this really the age of a conservative Supreme Court? But more importantly, the elite culture in the New York-Washington corridor is a force multiplier. It defines liberal blinkered orthodoxy on the Court as “open-minded” and “moderately liberal” in contrast to conservative orthodoxy that is “reactionary” and “closed-minded.” In other words, there is always more pressure on a conservative than a liberal to be thought sober and judicious by joining the other side. A liberal justice joining the conservative side almost never happens. Because of the great decision of our age, Justice Roberts will be revered by the media-academia-arts-government nexus as the new Earl Warren, even as conservatives rightly respect his right of independent judicial review. And, as Roberts knew, had he voted otherwise to reject Obamacare, he would now be reviled by the Left in the manner of Robert Bork, while, without fanfare, being simply acknowledged as a fair and circumspect judge by conservatives.

The feckless Washington Post, it is noted by, has finally started to back off their dishonest attack on Mitt Romney regarding outsourcing...
After being caught for the third time in as many months coordinating with the Obama campaign to attack Mitt Romney, the Washington Post finally -- in the most cowardly and slippery manner imaginable -- came clean today regarding the provably false charge that the presumptive GOP nominee outsourced American jobs during his tenure at Bain Capital:

The actual [Washington Post article in question] article, in fact, does not say that transfers of U.S. jobs took place while Romney ran the private equity firm of Bain Capital. …

The Obama campaign moved quickly to define what the article said, claiming that this transfer of jobs took place while Romney ran Bain. That’s not what the original article said.

This is how dishonest media cowards who wake up in the morning with David Axelrod nuzzling their ear correct maliciously-timed, journalistic hit jobs that can no longer withstand scrutiny…

…Which means that under the imprimatur of the Washington Post, the Obama campaign is free to continue lying about Romney being an outsourcer-in-chief -- which further means that the conspiracy hatched between the Post and the Obama campaign to flat-out lie about Romney is free to continue unabated.

TEN DAYS! LATER, after its story completely falls apart under the pressing weight of what you and I call facts, in so many Clintonesque words, the corrupt Post finally admits Romney is not responsible for outsourcing. But only does so by burying that fact in a piece published long after Team Obama has been allowed to use the Post's dishonest reporting to lie about Romney in a massive ad campaign.

And as far as the Post is concerned, it is okey-doke by them if the Obama campaign continues to lie using them as cover.

It's as if Politico and the Washington Post entered a contest to see which failing news outlet could disgrace themselves more before the year was out.

Today in History

1776 – The Second Continental Congress votes for independence, formally adopting the resolution of Richard Henry Lee for independence from Great Britain. The vote is unanimous, with New York abstaining.

1863 – The second day of fighting at Gettysburg – as the Confederate army under General Robert E. Lee attacks both anchor points of the Union army line – Culps Hill on the far right and Little Round Top on the far left. At Little Round Top, the 20th Maine, under the command of Lt. Col. Joshua Chamberlain, held the extreme left of the Union line against repeated attacks by Confederate General John Bell Hood’s division. Running out of ammunition, with no resupply, the regiment conducted a bayonet attack down the hill as the Confederates formed for another push – the surprised Confederates scattered, ending their efforts to turn the Union line.

1881 – President James A. Garfield is shot by an assassin as he walks through a railroad waiting room in Washington DC. He would die 80 days later from blood poisoning.

1937 – The Lockheed Electra aircraft piloted by Amelia Earhart and carrying her navigator, Fred Noonan, disappears and crew is reported missing after failing to arrive at the destination at Howland Island in the Pacific Ocean.

1964 – President Lyndon Johnson signs into law the Civil Rights Act.

1995 – Forbes Magazine lists that the Chairman of Microsoft, Bill Gates was worth $12.9 billion making him the world’s richest man. In 1999, Forbes would report Gates was worth $77 billion.

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