The Observer

New blog link

2010-08-23T16:12:00.002-04:00

Well, I got bored doing nothing so I'm doing a little blogging over at Spellchek. It's geared a little different. Lots of music, cars, sports and whatever catches my eye at the moment. Oh yeah, some blowin' off steam on political rants will be there as well.

http://spellchek.wordpress.com/

Mission Accomplished!

2010-05-21T23:43:00.002-04:00

The Observer was born on December 4,2008.After 336 posts,it will now be put out to pasture.

A little background.I created this blog to essentially be a diary.In the fall of 2008,I found myself a bit overwhelmed as to what was happening with the economic meltdown.For far too many years,I did as so many others do.Just live each day whistling dixie without a care about global events.Workin' and playin' and raising a family.Ignorance is only bliss to a certain point.

I remember being mystified as to what was happening when the economic 911 hit that year.How could our entire economy implode almost overnight?Of course,when you rely on the mainstream news for your info,you have no chance of ever understanding what's really happening.

So,I dedicated myself to researching what happened.It starts with understanding the Constitution and a whole new world opens up after that.It quickly dawned on me that I had alot to learn.That led to finding a way to take notes on what I was learning and the result was the Observer.A perfect way to put your thoughts and opinions down.

I'm certainly different compared to the average blogger out there.Most are committed to gaining as many followers as possible,while this never motivated me.I didn't want to get stuck in that trap of always being concerned with site traffic and how to get my blog linked to yet another.Kinda like betting on sports.It takes the fun out of it for me when I'm watching the end of a game only concerned with the final score beating the spread.

Again,I realize I'm not the norm here and I don't have any problem with those that have different motivations for blogging.The point is that I accomplished what I set out to do.I have learned much and got to throw out my two cents on a variety of topics.

I haven't yet decided where I will go from here.I'm looking at creating a new blog that will focus more on in-depth,magazine style investigative reporting.Lord knows,there are more than enough bloggers out there covering current events.Fact is,I simply don't have the time to keep up posting on any type of regular basis.Certainly,I could keep on posting my opinion on the endless opportunities provided by Obama and his charade.I just think I would prefer to explore other avenues at this point.

So,thank those of you who have linked or commented in the past.Much appreciated.A very special thanks to Steve at the Motor City Times.He has gone way above and beyond in linking to my blog without reciprocity since the beginning.I encourage everyone to check him out everyday as he does a great job of linking and posting on topical events.I will post a link here when I decide on what's next for me.

No more to come!

Dio-did he choose Heaven or Hell?

2010-05-16T18:48:00.003-04:00

Heavy metal heavyweight Ronnie James Dio is dead from stomach cancer at age 67.Here is the link to the story.

http://www.breitbart.com/article.php?id=D9FO5PJO1&show_article=1

Here is a sampling of his hits.

More to come...

Austerity in America

2010-05-15T00:17:00.003-04:00

Austerity.One of those words you probably had to look up in the dictionary until recently.The Greek financial crisis has made it a household word lately.In short,it means that once a countries debt to GDP ratio exceeds a certain limit,their bond rating is cut forcing them to adopt strict measures of higher taxes,reduced spending,and diminished entitlements for its citizens.

It also means that the citizens pay the price for irresponsible government spending since that is what gets a country into this position to begin with.Usually,it leads to violence such as is occurring in Greece today.The main reason is because government employees and unions are forced to accept reduced pay,pension and health care benefits to help balance the budget.You then get the resulting strikes and protests leading to things like burning banks.

It's coming to your neighborhood.Write it down.Guaranteed.Checks in the mail.You can't stop it.The reason you can't stop it is that you can't stop your government from continuing their irresponsible spending policies.Drunk with power,they simply cannot stop themselves from spending our taxpayer dollars to save us from ourselves.

What can we expect to see and when?You can relax somewhat as it won't happen this year as an election is upcoming in November.However,December 1st is the deadline date for the Obama commission set up to find ways to reduce the debt.This is the out for Obama.The recommendations will come from the commission and poor Obama will merely be acting on their suggestions.Here are a few things you'll see.

•Extend the retirement age for social security benefits.
•Cut Medicaid and Medicare services and reimbursements.
•Institute a valued added tax (VAT) - a national tax applied to every economic transaction in the country.
•Require all wage earners to deposit a minimum of 2% of their pay into mandatory savings accounts.
•Require a percentage of the funds in IRA's, 401K and new mandatory savings accounts to be held in US Treasuries. (As the smart money bails on US Treasury auctions, Americans will be forced to buy their own toxic debt.)

The key point is this.Spending cuts will be borne by the poor because they are the segment of society receiving the bulk of benefits.There will be a huge public backlash as we are now seeing in California.The same thing happens when tax cuts are announced.They are always promoted as tax cuts for the rich.Reason being is that these are the people who pay the bulk of the taxes so of course they benefit the most from any tax cuts.

Greece is a walk in the park.We would only need to shut down the federal government for a portion of one day to reduce spending enough to cover the Greek debt.If you'll remember,we already did that over the winter when a snowstorm forced D.C. to halt.We like to deal in debt in the trillions rather than those pesky billions.

It's too late.The train has left the station.Our debt is too great.Our spending is insatiable.The census bureau predicts we will add another 100 million citizens by the year 2050.Amnesty is on the table today to add millions of illegal immigrants.Does anyone think that the number won't explode from the reported 12 million once the illegals get wind of amnesty passage?

You can just plod along with your head in the sand if you think this will never happen here.Not in the greatest country in the world,right?If you aren't ignorant to what's coming and have the means,please take the time now to make preparations.Once the violence starts,martial law will be sure to be enacted at some point.Then your options will be eliminated.You'll also have to watch your back every minute as your neighbors who are worse off than you will be faced with desperation.No one is safe in that scenario.More to come...

The State of Europe

2010-05-10T12:30:00.007-04:00

It is now official.The European Union has now morphed into one single entity with 27 individual states.Sort of.With the actions taken over the weekend by the Eurozone to prop up the Euro,the European currency,they have effectively set up a national government structure not unlike our own.

In effect,the former individual countries of Europe had their own unique identities which are no no different than traveling from Ohio to Kentucky.You've merely crossed a state line,big deal.Of course,they will vehemently deny this is the case.It will take many years,and probably decades,for this to simply be accepted.

What you will see are transformative changes that all 27 members of the EU must accept or face being shut out from the permanent bailout fund now in place.Even though Germany was in the strongest position financially today,they also caved in so as to not waste the last half century's work in building up the Euro.

In essence,a new superpower has been born.The GDP of this new superpower is over $16 trillion dollars,making it the largest in the world.The U.S. now plays second fiddle at around $14 trillion.Europe has over 500 million citizens.

You may say,wait,what is the Eurozone?It comprises 16 member countries that use the Euro as their primary currency.These are the members that voted on the bailout package of nearly $1 trillion dollars over the weekend.What you'll see occur,however,is pressure for the other members of the European Union to fall in line and adopt the Euro.That's why I say this will take years or decades to fully implement.The European Union has already been evolving in this manner since its inception in 1993.The Eurozone will now follow suit.

What does this mean?Nothing good.But that will come later,probably years.But the groundwork has now been laid to expand the same bubble/bailout mentality across the entire continent of Europe as we have here in the United States.Meaning the crashes will be even larger with no one left to bailout the State of Europe.Also meaning the crashes from either side of the pond will be catastrophic as our global economy is now more intertwined than ever before.Hang on for the wildest ride the globe has ever seen.

Some will question whether Europe has now moved toward a more federal,state structure like the U.S. or if the Euro will crash.Take it to the bank that the Euro will crash.Will it be this year or many years no one knows.But the EU has taken the first necessary step to guarantee its demise.

However,today we will hear nothing of the sort.The stock markets will soar across the globe.Economists will crow about this being long overdue and that Europe is finally standing fully behind its Euro.No one can predict accurately when it will all come crashing down.We have history as our guide to illustrate the exact mistakes that will occur as the era of printing press fiat money has now come to the Euro.More to come...

Michigan Senate GOP ready to cave on school pensions

2010-05-10T08:55:00.003-04:00

For the usual top notch reporting on financial issues in the state of Michigan,where do you go?The Michigan Capitol Confidential,of course.

Analysis: Senate GOP Fumbles, May Approve $25.9 Billion Taxpayer Liability to Satisfy MEABy Jack McHugh | May 10, 2010
Negotiations are continuing between the Republican majority in the Michigan Senate and House Democrats on a modest school pension reform proposal recommended by Gov. Jennifer Granholm to help balance next year's budget. Late reports suggest that GOP Senators may be ready to surrender on one particular demand from the Michigan Education Association that could load a new $25.9 billion liability onto taxpayers.

That's the amount the state would have to set aside to cover future school employee health care benefits under a union-supported provision. Unlike pensions, these benefits can be altered at will by the state and so under current law are not considered enforceable obligations. The MEA is demanding the law be amended in a way that, in effect, would convert them into real liabilities on the state.

Senate Republicans dealt themselves a weak hand for these negotiations beginning in March, when they took up their own version of Gov. Granholm's proposal. As described in Capitol Confidential at the time, several GOP Senators who have been recipients of MEA campaign cash and endorsements caused the removal of several reforms recommended by the Governor but opposed by the union.

This was unfortunate, because the measure cannot become law unless it is also approved by the MEA-friendly Democrats who control the House. Anticipating tough bargaining to come, rather than "negotiate with themselves" the Senate majority should have been staking out the strongest possible bargaining position. By doing just the opposite, GOP Senators ensured that the ultimate price for any reform would be much higher. Perhaps so high that the final bill is not worth adopting.

That's what appears to be happening now. In the words of Senate Majority Leader Mike Bishop, House Democrats have received their "marching orders" from the experienced teacher's union negotiators. Predictably, they not only tossed out all but one of the proposed reforms, but also loaded up the measure with "poison pill" anti-reforms. (See sidebar below for a full list of each side's provisions.)

Some of these House additions were "throw-aways," bargaining chips the MEA didn't really expect to get but could nevertheless use to cancel out something the other side wanted. A provision to force charter schools to enroll their employees in the underfunded defined-benefits pension system probably was one of these.

Other items appear to be real demands that carry huge long-term price tags, especially the one converting the non-obligation of retiree health benefits into an enforceable obligation and genuine taxpayer liability. As the process has unfolded it has become apparent that this is the real "pound of flesh" the MEA is demanding as the price of a modest 3 percent increase in employee pension contributions, which was the centerpiece of Gov. Granholm's original proposal.

The MEA is probably the most politically powerful special interest in this state. It all but "owns" the Democratic majority in the state House, and has a partial stake in the Republican-controlled Senate majority caucus as well. The union is also a world-class bargaining-table champ, for decades having rolled-over the amateur school boards of Michigan's 551 school districts, securing fringe benefits that far exceed private sector norms, and salaries that now make our teachers the highest paid in the nation relative to the income of the state taxpayers who support their salaries.

Compared to the MEA's bargaining savvy, the political careerists who comprise the Senate Republican caucus are relative amateurs at this game. That would explain late reports suggesting that they may now be negotiating the terms of a surrender of the state's flexibility in altering retiree health benefits — a provision that was not part of Gov. Granholm's original proposal.

GOP Senators will probably challenge this characterization, but statements suggesting that the measure will probably get more votes from Senate Democrats than Republicans undercuts their denials.

~~~~~~~~~~~~~

Sidebar: Blow-By-Blow of Pension Reform Negotiations

January 29: Gov. Jennifer Granholm proposes a modest pension reform package for school employees that includes:

•Increase of 3 percent in employee pension contributions
•Boost by 6.6 percent the cash pension benefits of eligible employees who retire this summer (which saves money [in the short term] by replacing high-salary veterans with [initially] lower-paid new hires)
•Prohibit employees from accumulating more than 30 years of service credit toward the calculation of their pension allowance, starting on Oct. 1, 2010
•Eliminate post-retirement vision and dental coverage for school employees who retire after Oct. 1, 2010
•Increase the retirement age for newly-hired school employees (but not replace the traditional "defined benefits" system with a defined-contribution 401[k] one)
March/Early April: Senate Republicans initially favor a substitute that contained all the governor's provisions except for the 6.6 percent early retirement "sweetener." However, as described in the April 2 Capitol Confidential, several GOP senators who have been the beneficiaries of MEA campaign cash and endorsements balked (see "School Pension Reform Stalls in Senate"). After weeks of "negotiating with itself," Senate Republicans finally agreed to, and the Senate passed, a bill that contained the following (bold print indicates rejected items or new demands):

•Increase of 3 percent in employee pension contributions
•NO 6.6 percent boost in cash pension benefits for eligible employees who retire this summer
•NO cap on the number of years employees can accumulate pension-boosting service credits
•NO elimination of post-retirement vision and dental coverage
•Increase the retirement age for newly-hired school employees
April 27: House Democrats reject the Senate version, and with just one Republican vote, pass one with the following:

•Increase of 3 percent in employee pension contributions
•13.3 percent boost the cash pension benefits of eligible employees who retire this summer
•NO cap on the number of years employees can accumulate pension-boosting service credits
•NO elimination of post-retirement vision and dental coverage
•NO increase the retirement age for newly-hired school employees
•Reduce the eligibility standard for the early retirement pension enhancement
•Force all charter school employees into the regular schools' defined benefit pension system, requiring charter operators to pay assessments that could force many to close their doors •Also force outside contractors who provide non-instructional services such as transportation, custodial and food services into the defined benefit pension system
•Allow some of the teachers who retire early to "double dip," collecting both a monthly pension and a paycheck for part-time work in the schools •Deposit the increased employee pension fund contributions into a segregated "irrevocable" trust fund to be used exclusively to pay retiree health benefits (rather than use the money to reduce school district contributions or bolster the underfunded pension fund), and declare these benefits to be contractual obligations
April 27 to Present: The Senate promptly rejected the House-passed version, and both sides appointed members to a conference committee to work out the differences. The current state of play is a moving target, but the latest reports indicate that the House has dropped the charter school provision, and is willing to dicker on the size and scope of the early retirement pension enhancement, but is fighting for health care prefunding and forcing third party school service contract employees into the pension system.

The Senate is also willing to dicker on the early-out pension enhancement, and may surrender on the health care trust fund in return for language stating that "in the aggregate" school retirees do have a contractual right to health care benefits, but not as individuals. What effect the distinction would make is unknown, besides assuring class action lawsuits rather than individual ones in the event of any benefits "haircuts." Either way, taxpayers would be on the hook for a new $25.9 billion liability.

More to come...

BP box epic fail!

2010-05-09T07:17:00.006-04:00

So,the BP box didn't work.Explanation?Ice crystals formed making it bouyant.Hmmm,I'm not buying.How about you?Let's see,the water temperature at the wellhead is 42 degrees farenheit.Seem cold enough for ice crystals?Doesn't seem like it,but I'm not a scientist and don't play one on tv.

What I do know is that there is extreme pressure down there.The water pressure is 2300 pounds per square inch.The oil pressure in the well itself coming from the macondo oilfield is estimated at 135,000-165,000 p.s.i.,with an estimated 1.8 billion gallons of oil still there.

BP is on record stating that a worst case scenario could result in a daily release of 6.8 million gallons of oil.Daily!This is if the 24 inch wellhead completely fails and it is being sanded away internally every minute of every day.The official estimate right now is still 210,000 gallons per day.How much is that?About an olympic sized swimming pool every 3 days.

If the worst case scenario plays out and we see the full 6.8 million gallons per day,we're in for about 264 days of that until the oilfield runs dry.That's about the end of January,2011.Again,this is the worst possible scenario and assuming they can't come up with any solution at all.

The explanation just sounds fishy to me.Oil is being ejected from the broken wellhead at 135,000 p.s.i. and they're saying that slushy ice crystals are accumulating at the top of the oil box?So much that it is floating?A box weighing over 100 tons?Wouldn't you think that pressure like that would simply blow any slush to Kingdom Come?I don't think we're being told the whole story here.More to come...

Reality or illusion?

2010-05-07T15:41:00.006-04:00

Reality today is merely an illusion.What used to be now means something different.Take unemployment.The rate increased in April to 9.9% and the President is quick to claim success.Here's to the new norm-cheers!

How about racism?It used to be sitting at the back of the bus.Today it is attending a rally protesting high taxes and wasteful government spending.Cheers again!

How about patriotism?Displaying the American flag was traditionally a source of great pride.Today it is reason for discrimination.Sorry,can't cheer that one.

All I can say is this.If the events unfolding today don't make your blood boil as a freedom loving American,then you are getting your just desserts.Reaping what you sow.As voters,when we are so reckless as to not do our homework before electing people who are anti-American and only wish to destroy what this country was built on,we pay the ultimate price.

Maybe you haven't experienced the types of events referenced above,but you will.It's spreading like cancer and will eventually affect all Americans.Wake-up and get off your ass before it's too late!Tomorrow is too late.Get involved today.You're already on the computer if you're reading this,so start contacting those elected officials.You could start with Ron Paul's Audit the Fed bill which the Senate is attempting to trash as I write this.Stop them!More to come...

Market manipulation?

2010-05-07T07:20:00.003-04:00

It was a wild ride on the markets yesterday to be sure.A 1,000 dive on the Dow in about 20 minutes time and then a 650 point recovery to close.The unofficial explanation to this point has been a trader error.Somebody fat fingered a computer key and sold off shares in the billions instead of the millions is the story as it was first floated out there.

Not so fast.It turns out that it was more involved than just a slip of the finger.Check out this link from CNBC that explores it a little further.

http://www.businessandmedia.org/articles/2010/20100506174136.aspx

No one is claiming to have the reason yet as there are more questions than answers.I hope we aren't left hanging in the breeze like the last time this happened.Could this be a hacker attack?Remember Sept. 11,2008?That was the infamous run on the banks that triggered the economic collapse and created the TARP monster.

It was an electronic run on the banks that saw $550 billion withdrawn from U.S. banks by 11am before the feds stepped in and stopped it.It is claimed that it would have gone all the way to $5.5 trillion had it run its course.

Yet,even today,we have no clue who was behind it.At least officially.There are lots of conspiracy theories floating around,but no official explanation and no one in government has any interest in investigating it.

So lets see how this plays out over the next few days.Hopefully,not just another unsolved mystery.More to come...

PIIGS are on the spit!

2010-05-06T15:06:00.003-04:00

The Greece debt crisis has continued its global influence causing the Dow to plunge nearly 1,000 points in a matter of minutes.Now,it's likely that a trading error will be found to be the cause of such a violent sell-off,but it doesn't change the bottom line.The U.S. stock market is not reacting to the threat on the Euro currency as much as they are issuing a referendum on our own governments debt problems.The simple fact is that Obama is a systemic risk to our nation.His reckless spending,on purpose no less,with the goal of increasing taxes later to pay for it,is seen on a wide scale as unsustainable.

The PIIGS,as they are known,are Portugal,Italy,Ireland,Greece and Spain.Of the 27 members of the European Union,this group as a whole has the worst debt to GDP ratio.The austerity measures put in place today in Greece are being violently rejected by the citizens of Greece.Get used to seeing it.It's coming soon to a neighborhood near you.

The people are revolting because they are expected to bear the burden of their governments decades of poor fiscal policies which led to the debt crisis.Sound familiar?Well,it certainly should as we have followed the same path here in America and will soon have our chickens home to roost as well.Greece isn't even the worst in the EU as the U.K. is now surpassing them.We have our version here at home in the form of California.

The alarms have been sounding for some time now by hordes of people.Yet,our government doesn't hear them.They see green shoots and a recovery fueled by the Obama stimulus package.Rational analysis of our economy and debt situation can only lead to one conclusion and that is one of a severe crash ahead.

Freddie Mac announced today they will need another $11 billion dollar bailout with even more already forecast down the road.We are now on the hook for over $100 billion in bailing out Fannie Mae and Freddie Mac.

These events are only a sampling of what the future holds.What is sure is that our government will label all of it as 'unexpected' and that no one saw it coming.Worst of all,they will be there as the savior ready to extend a helping hand in exchange for what's left of your liberty.More to come...

Being PC will get us killed

2010-05-05T13:08:00.004-04:00

This is the picture of a white,middle aged,right wing extremist teabagger.No really,it is.Just keep looking at it long enough and you'll see it.At least that must be how it works for the political left in this country because they so dearly wanted this guy to be their straw man.He is Faisal Shahzad,the terrorist who nearly blew up Times Square.

See,they're having a hard time actually locating the real person that fits their profile of a tea party activist.They know he's out there right now plotting to blow up Americans.Racist,violent,extremist.The lefts WMD-a white,middle aged dude.Just like Bush in Iraq,they are acting on bad intelligence.Unfortunately,it's their own bad intelligence that is leading them astray.

Take the immigration stink in Arizona.On the surface,a rather simple scenario.The Feds already have the law in place with the INS tasked to enforce it.Arizona has simply extended the enforcement authority to the state and local level.The Feds were failing in their job to enforce it,so the state took matters in their own hands to see that they have the legal authority to enforce the federal law.

The opposition might want to be careful what they wish for.As they attempt to magnify the issue on a national scale with their violent rallies,they are essentially opening a Pandora's box.If they succeed in overturning this Arizona law,they are succeeding in getting the feds to agree that states do NOT have the legal authority to enforce federal law.

Think about that for just a minute.What a precedent to set.States are not allowed to enforce a federal law.Imagine the implications.For example,trucking regulations.Time allowed behind the wheel.No longer would states be able to enforce this.The left acts on emotion.This is what drives them.They don't always think things through.

In their zest to wish to appear as standing up for the little guy,they make misguided decisions.Gitmo is just another example in this.They have no long term idea of how to address these important security decisions facing us.

Think back to the cold war.MAD.Stands for mutually assured destruction.This is what kept a superpower with nuclear capabilities that match our own in check.They knew they couldn't pull the trigger,because it would result in their own extinction.Not much to gain with that philosophy.

Now we are faced with the constant threat of terrorism.You never know when or where it will happen.It may be large scale like 9-1-1,or just a small,backpack bomb in a subway station.What is our response?Political correctness.No profiling.Don't offend anyone who may possess the same skin color or race or religion,etc.

Terrorists operate under this umbrella of freedom provided by our government and the skewed logic of the left in this country.Until we realize this and correct it,they will continue unimpeded to do as they wish.You could increase the Dept. of Homeland Security 100 times and it wouldn't matter.Not with those type of built-in handicaps.

Profiling is what police work is based on.Serial criminals are caught in this manner.We have 308 million people in this country.If you had to start with a clean slate of 308 million suspects for every criminal activity,you would never catch up to any of them.

Profiling is imperative in narrowing down the likely suspects in order to quickly apprehend them before they can act again.If we must consider granny to be just as likely a suspect as a radical Islam jihadist,then we are screwed.The time wasted tiptoeing around political correctness regulations will insure that the actual criminal will have more than ample opportunity to get away.

Organizations like the ACLU are directly to blame for the success of the terror organizations.They are the enablers that allow them to operate safely.You must separate profiling from racism as this is basis of their claim.

No one wants to go back to the days of being sent to the back of the bus because of your race.Nor do we want it to play in role in hiring decisions or other things of that nature.That's pure racism and it shouldn't be tolerated.

However,profiling plays a necessary role in effective security.Call it a necessary evil if you must,but without it,our defense against terrorism is neutralized.We will always be responding to a terrorist action rather than preventing it.Human traits and behavior patterns are reliable indicators of people.It may,in fact,be culture or religious views that are driving those behavior patterns.It is irrational and irresponsible to not take these factors into account when fighting terror.Lives are at stake.Innocent lives.

Recent events clearly illustrate this.The Times Square bomber absolutely was successful.No,his bomb didn't detonate,but he had it in place and had set the fuse and left the area successfully.The Christmas day airline bomber in Detroit was exactly the same.Only their ineptness saved us from disaster.Richard Reid,the original shoe bomber was another and there are many more examples to choose from.

All left a trail that was exposed after the fact.Had our security forces been allowed to use their instincts along with the capabilities our modern technology makes available,we would have a far better chance to prevent these incidents from becoming near misses.More to come...

Could this be the 'big one' Katrina only hinted at?

2010-05-02T23:04:00.003-04:00

I just reviewed my post from last Sunday entitled "Dumb Economists".At the end I wondered what the unknown factor would be that would trigger the economy to plunge over the cliff.I think the gulf oil disaster just may be the answer.

Little by little,we are finding out more about the true scale of this disaster.Unless they pull a rabbit out of their hat in short order,it appears we are witnessing the greatest environmental and subsequent economic disaster of our time.Check out this link for a possible outcome-http://pesn.com/2010/05/02/9501643_Mother_of_all_gushers_could_kill_Earths_oceans/.As always,we must consider the source as people have agendas and may simply be trying to furthur their own cause which in this case is alternative energy,but it certainly is eye-opening.

Fear mongering?Not when the sources are scientists,not conspiracy theorists.There certainly is no consensus on the release rate of the crude oil.Estimates range from 5,000 barrels a day and up.There is a very real possibility that the sand mixed with the crude is disintegrating the well casing under fantastic pressure.If the wellhead blows,the open well may release an estimated 100,000 barrels per day.That's 4.2 million gallons per day!

It's estimated that drilling the relief well to intersect the well casing to seal it underneath the seabed will take months.What is clear is that no matter how or when or if they seal it,the damage will be astronomical.Some projections are already out for $100 a barrel oil by the end of the week.I've also read that current demand only dictates oil in the $60 a barrel range,so a supply shortage can be absorbed for some time.Take your chances.

It simply doesn't take wild speculation to see that even moderate consequences from this will result in long-term detrimental effects on commercial fishing and the very sensitive biology of the gulf coast.Ocean currents may even spread the problem globally just as how a volcanic ash fallout can traverse the entire globe.

Here is another link to a story that contains many photos of the accident-http://wattsupwiththat.com/2010/05/01/the-gulf-oil-rig-explosion-on-the-scene-photos/.

We are set-up for a chain reaction event that could deliver a kick to the fragile economy that it can't absorb.Still early and much is only speculation,but we may see a drastically different landscape by Memorial Day.The Memorial may be for our economy.Let's hope this entire event is overblown as is often the case,but the fact is that after 20 years Alaska is still dealing with the after effects of the Exxon-Valdez disaster.More to come...

Bail or let fail?

2010-05-01T11:14:00.002-04:00

Systemic risk.Too big to fail.Too small to bail.All buzzwords since the financial crisis began.Not as clear cut an issue as it may seem.

The cause of the crisis is clear cut.Loose monetary policies by the Fed for decades along with government enabling thru it's regulatory policies are what laid the groundwork.Investors simply walked right through the open door with the irresistible urge for seemingly unending,easy profits and we have our bubble/burst cycles.

The issue is how to deal with these scenarios in the future.Government is not going to stop meddling in private industry and it's policies of picking winners and losers.The Fed still has a deathgrip on monetary policy that will continue fueling the bubble cycles.In short,we are destined for a repeat of the crisis and it will be worse with each cycle if we don't completely implode on the next one.

The consensus amongst clear thinking people is that we would be better off without TARP and should let capitalism work by allowing businesses to fail.Agreed 100%.Where I part ways with most people is how to proceed when the government has created such a large scale problem.The so called systemic risk.

Take any particular business with a poor business model.Eventually it will fail.This is good.Let it fail and allow the market to work when other companies and investors move in to salvage any worthwhile remnants left over from the crash.Capitalism at work.

However,the government throws a monkey wrench into the formula.They involve entire industries in engaging in poor business practices.The housing market is the perfect example with the packaging of risky mortgages into financial instruments.All part of the master plan to create systemic risk on such a large scale.This creates the dilemma.You're not simply allowing a company to fail,you're allowing an industry to fail.Capitalism is not designed to work in this manner.

Capitalism supports letting a poorly run business fail and then having another succeed in it's place.The strong survive.But you can't do that with an entire industry.No one really knows what would have happened without TARP.But we can speculate.

The domino effect would have most certainly come into play.It's unavoidable due to the structure of the derivatives market.Mortgages were packaged together and resold in slices.Sometimes they were even sliced up more and resold again.You end up with a whole chain of investors dependent upon the homeowner making their mortgage payment.The fallacy was that housing would just continue to appreciate endlessly making these seem very safe investments.

This is why so many municipalities bought them.Municipal bonds are considered about the safest investment you can make.Little did the common investor realize that the bond they owned was built on such a shaky foundation.

This is the problem had we just sat back in Sept. of 2008 and let the chips fall where they may.A massive,global chain reaction crash due to the intertwined financial instruments would have brought down entire industries.I don't think anyone really disputes this.

The comparison is between what-ifs.Would we have been better off with a steep crash that allows the garbage to flush out all at once?Are we better off with the taxpayers on the hook for the TARP funding?Or is there a 3rd alternative as we are once again progressing toward another bubble burst cycle?

The best solution would be to elect an administration and Congress that would simply step aside and let the free markets work.However,that's not in the cards anytime soon.Even if you elect Ron Paul,he would have massive hurdles to overcome in the form of the entire progressive left opposed to such policies.

The fallout from allowing such a large scale crash is unknown.We already know the credit markets would freeze up.This would kill many businesses alone that rely on credit access for payroll.You would,of course,have massive unemployment with so many businesses going bankrupt.Factor in the state and local municipalities that had invested in the derivatives markets.

Remember,unemployment is key.People stop working and the trickle down is wide.Consumer spending drops.Tax collections drop.Defaults and foreclosures increase.It's all an intertwined web that feeds on itself.

Not only do you have the shareholders of the failed companies losing everything,but the bondholders take a huge hit.If it's a bank,the FDIC only insured up to $100k at that point so those depositors in excess of that would have lost their money as well.

I don't see where it's possible to limit the effects to just the frontline businesses that would go bankrupt.There is simply too much weaved into the mix that is collateral damage.Again,all speculation and nobody knows just how far the entire economy would have fallen.

TARP is not the answer.The pending financial reform is certainly not the answer.Bean counters like to look at numbers in a black and white world.Economists solutions to this problem seem to be in the same vein.They don't properly factor in things like human behavior,or in this case,politics.Far to many politicians aren't concerned with the free market,only power and getting re-elected.

There are more that want the Fed dictating policy than do not.There are more that want government to have a bigger role in private markets.Thus,the problems created by the bubble cycles are sure to continue.

The holy grail here is to find a system that somehow accommodates both capitalism and politicians hellbent on destroying it and somehow protecting the common man who takes the brunt of the fall every time.It doesn't exist and I've never even heard it proposed.For now,simply more of the same.More to come...

Al Gore should thank BP

2010-04-30T06:28:00.006-04:00

Al Gore must be beside himself with joy.He has been the punchline of jokes for months now with global warming being fully exposed as a fraud.He's been getting ambushed for interviews and resorted to throwing critics out of his speeches despite the bad press.

Once in awhile,even when things look their bleakest,you get a gift.Enter the BP oil rig disaster.This has the look of infamy.The reports are now shifting to underestimating the full impact.The Exxon Valdez spill in Alaska is about to get knocked off its throne as the worst environmental disaster in our nations history.

The environmentalists have to be just ecstatic.They needed something huge to get the climategate scandal off the front page and they got it.The White House has already made clear that their recently announced plans for exploratory offshore drilling off the U.S. coast are in jeopardy.

It's too early to tell yet which direction they will go.Do they simply take advantage of the disaster to implement ever greater federal regulation over the oil drilling industry?Or do they go all in and use it to push climate change and replace fossil fuels with green alternatives?

Either way,it will result in higher energy costs for the consumer.Take that to the bank.Obama is already trumpeting that BP will pay for all of the clean-up,even though Transocean operates the rig and was also in charge of the safety measures.This includes the blowout preventer which failed.

The conspiracy theorists are already at full steam ahead trying to tie the Rainbow Warriors to this event.The first lawsuit was already filed just 36 hours after the fire started.The investigations will take years and the insurance payouts probably decades.I've no doubt that BP has been added to Al Gore's Christmas card list.More to come...

Quest for power

2010-04-26T12:48:00.002-04:00

Power.A word with different meanings to different people.To elected officials,it is the ultimate intoxicate.They become subservient to it's draw.An irresistible quest for more.Virtually no one is immune to it in the public sector.It defines them and their actions.It aids us in understanding what motivates these people.

Particularly,these days when we see our elected officials making rash decisions and setting policy that absolutely flies in the face of what their constituents desire.It explains why the person we elected,and possible even knew personally,goes off in another direction once in office.

Today it's Obama.He's merely the current occupant of the throne.His critics,and I am most definitely one of them,tend to underestimate him.Just discount him out of hand as a community organizer who has never held a real job.However,he has a unique set of qualifications to fill a niche.It worked in 2008 and to what extent it can again in 2012 is the $64,000 question.

It is vitally important to understand the role of power as a motivator.The man on the street and the expert alike can be easily confused by events that occur if you don't factor this in.Especially when attempting to decipher the policies of the Obama administration.

It's not the money.While money is no doubt a huge motivator,it's what money brings along with it.Power.Influence.A means to an end.Once you become wealthy and lack for nothing in material goods,people find that empty feeling that money can't fill.Thus the term,money can't buy happiness.I know,people without money say they would still like to die trying,but it's usually true for those with it.

Power is a true lust.A lust in meaning that it can't be fulfilled.There is no lasting value.Once you get it,you always lust for more.An unquenchable desire.There is no lasting satisfaction from obtaining it on a temporary basis.Kind of like pistachios.I mean,who can eat just one?

This is the driver for the Obama agenda.It is behind all of his policies.Everything is designed to create a dependency nation who will perpetually re-elect the same party thus keeping the flow of power going.To those who have studied his influences,it's crystal clear.

It's easy to see when you review his track record.Every major issue has focused on it.I see so many people whether on the street or on tv who discuss what he does and question his motivations.Why would he intentionally make us weaker?Why would he keep spending money we don't have?Why does he focus on this issue when millions of Americans are out of work?

The quest for power answers all these questions.People spend far too much time deciphering the details while leaving out this core driver.Take the stimulus.Maybe you ask why money is going to a seemingly unimportant project that won't create any jobs.But take another look at it.Does it go to reinforce public sector jobs?Union jobs?An environmental cause?

It becomes quite clear at that point.Spend money in areas that will support those who support his party thru financial means or in other ways.If you lose focus on the quest for power,than you find yourself just wondering if he's listening to the wrong advisors or is somehow just misinformed.No,he's doing exactly what he wants to do.

Many people will simply discount an idea like that out of hand.They'll never believe that he could do things that don't have our best interests in mind.Those type of naive people are lost.If you can't keep an open mind,you are doomed to suffer the consequences.

This has nothing to do with race.No big conspiracy theory of Obama meeting in the dead of night with secret societies plotting the takeover of the world.Just an observation of human traits.One of our great weaknesses as a race.We are extremely susceptible to motives of greed,lust and power.

Now look at health care.At the stimulus.At financial reform.At immigration reform.At cap and trade.It all makes perfect sense.All programs designed to make government bigger and stronger and make us more dependent on it with the payoff being that we will remember on election day who did the most for us.

We are more socialist today than we were in 1947 with the New Deal in place.Milton Friedman,the great economist,also holds this position.The New Deal planted a footing,which is still firmly in place,upon which we are building upon now.Government regulation has never in history been higher.There have never been more social programs in place.Both are growing everyday.

This is why I say we seem to underestimate Obama.He knows the best way to accomplish his agenda is by deception.Spend money first,then leave higher taxation as the only alternative to pay for it.Provide government assistance to all for nearly every conceivable reason,knowing that we can't turn away from that assistance later.

Equality for all.Fairness for all.Opportunity for all.Save the planet.All rallying cries that people can't take exception with.If you do,you become an easy mark for ridicule.The thinking has always been that he will over-reach.That he will attempt to grab too much power too quickly and that this will be his downfall.

Don't fool yourself any longer.The quest for power is unquenchable.The lengths that man will go to keep it are extreme.Don't underestimate the threat to your freedom and your way of life.Obama is taking to the highest level yet.He has mastered the art of deception and knows how to play us against each other.While we concentrate on the battles amongst ourselves,he is slowly but surely winning the war.More to come...

Dumb economists

2010-04-25T07:34:00.003-04:00

The glass half full or half empty?Which camp are you in?I'm referring to the supposed economic recovery we are experiencing.Most people are getting off the fence of 'I dunno' and taking one side or the other.Either you buy into the green shoots being offered up daily by CNBC business reporting and the White House economic advisors or you see thru the false numbers and are just waiting for the crash.

I am firmly in the latter camp.I don't buy it for a second.Things happen for a reason but unfortunately some of us remain blinded by the power of positive thinking.It just has to get better.America has always come back.We have,by far,the largest and most resilient economy the world has ever seen.Now this is true without a doubt.But it doesn't happen in spite of itself.

Economists should all be forced to take courses in human behavior.Most simply make no accounting of our traits in their black and white world of number crunching.That's why people like Gerald Celente have been able to outperform their forecasts on a regular basis.His 'Trends Research Institute' is obviously a for profit enterprise designed to make money from us.But it must have the track record to be viable.That's why they weight trends so heavily.They factor in how humans act and react into their forecast modeling.

Housing still remains at the core of misunderstanding.The genesis of the bubble is still heavily debated.Was it the Community Re-investment Act developed under Jimmy Carter in 1977?Was it the greedy,evil bankers?Was it the greedy,evil consumers buying more house than they could afford?Should we blame the Republicans?The Democrats?The government?Do some googling and you will find support for all of these.

As is almost always the case with these things,you will find it's a combination of events.One thing may trigger it,but it usually takes a sequence of events to occur for it to run it's course.The housing bubble is no different.I believe all of the above listed played a part.They all must do their part in generating the perfect storm required to bring down such a resilient economy as we have here in America.

You needed the government manipulation of regulations to enable it.Fannie Mae and Freddie Mac were primary in this.You needed the bankers to play along and we saw the credit derivatives markets play their key part.Of course,the consumers were an easy mark.Offered a chance to get much more house they could afford,their mentality was whatever,if the banks are dumb enough to give it to me,I'll take it.

There were lots of factors.I only mention a few key ones.And they all had to occur just right for the bubble to inflate.Then you had the key events in the summer of 2008.As we now know,the economy had already slipped into recession in December of 2007.But it took the pressure on consumer prices to trigger the bubble to burst.Oil prices spiked and we had gas prices over $4 a gallon.

We had one other event not often mentioned.George Bush implemented his ethanol mandate which forced the cost of corn to skyrocket.That's when we found out that,just like oil,it's in a vast cross section of products.Not just food.We saw retail prices of food and these other products reliant on corn skyrocket in price.

You had the one-two punch of high oil prices and high food prices,as well as the various other products with those ingredients,put tremendous pressure on our purchasing ability.This just happened to occur at the same time we had so many mortgages starting to reset.Either in the form of ARM's resetting or balloon payments coming due from the avalanche of risky loans sold a few years earlier.

Once people started to miss a couple of house payments because the cost of retail goods were skyrocketing,it didn't take much to collapse the flimsily designed credit derivative market built on the basis that housing values would never decline.

There is one other event that occurred that has never been explained nor really even investigated.It was the electronic run on the banks of September 11,2008.The financial 9-1-1 and it is now just a footnote in history.Who was behind the $550 billion dollar run that morning?It was 11 am when the fed took action to snuff it out or it would have resulted in an estimated $5.5 trillion dollar run by the afternoon.

Remember,it was the severity of this crisis which laid the groundwork for TARP.This bank run was the defining event which triggered the stock market crash and the start of the immediate crisis requiring urgent action model we now seem to follow with every piece of legislation.There are no answers and nobody is officially even looking.

Today,we have a strong run up in stocks.We also have a consumer buying surge.These fly in the face of the other factors out there like the persistent high unemployment rate.The stock rise has generally been attributed to businesses becoming more lean and productive.They have trimmed staff to the bone as well as inventories.Refilling those inventories has created a false sense of demand.Better earnings reports are the results of becoming leaner and more productive.We are at the end of that cycle where productivity gains have maxed out.

Consumer spending is also false.The foreclosure world has completely evolved.Once a stigma that no one wanted to be attached to,it is now openly embraced and maybe even a badge of honor.People brag to their friends about walking away from their mortgages and sticking it to those greedy,evil banks.They pocketed months of mortgage payments before being forced out of their homes and this has lead to a surge in buying goodies like electronics and other convenience items.Not only that,even casino profits are up as people use the last of their unemployment money or stashed mortgage payment money to try to escape with a big win.

People signed onto those big,fat mortgages they shouldn't have ever qualified for and then took out home equity loans to buy cars and other big ticket items.Now we have strategic defaults where people are gaming the system for maximum gain.They stay current on their credit cards while blowing off the mortgage payments.

The stock surge is not false.Businesses have shown a better bottom line for the above reasons and the market is simply responding to that.It is setting itself up for the fall,however,due to the reasoning behind the improved profits.Demand has not increased overall.Businesses are not growing accordingly.Once productivity and efficiency peak,the earnings will have run their course and the end will come.

You simply can't take the numbers at face value.We see a reduction for a week in jobless claims for unemployment and then we hear it's all better and the recovery is underway.The numbers rise at all and it's 'unexpected'.The unemployment rate decreases and the Obama stimulus is working.If it stays flat,then the rebound is going to take a long time.

We always get a short-term reaction to events.One must look long-term to see clearly.The government intervention programs are slowing or ending.The stimulus money is nearing an end.The government mortgage programs and bond buying are slowing.A cash crunch is a very real possibility soon.The foreclosure crisis is far from over.And the debt bubble is ever growing.The derivatives market is the largest in the world at over $600 trillion and it is also growing again.

I can't predict when the real crash will occur.Nobody can with certainty.But you can read between the lines and see that it is coming.Probably another as yet unknown factor will be the trigger for it.Choose your side wisely.It's great to be a positive thinker,but don't do it without good cause.Unless you can substantiate why you discard all of the data showing what is ahead,protect yourself now while you still can.More to come...

Bailgate

2010-04-23T23:31:00.003-04:00

Once upon a time the Democrats would at least attempt deception with their motives.These days,the election of Obama has emboldened them to throw caution to the wind on a regular basis.Right out in the open for all to see.

Take the GM 'Bailgate" scandal.Yes,I'll take credit for inventing that term.Withdraw a few billion from one TARP escrow account and give it right back to the government.Then announce with great fanfare that you have paid back your loan 5 years early.

Now this is transparency,the kind we were promised when Obama took office.You can see thru this scam a mile away.No Congressional investigation required.I would think they should have waited until late October to pull this rabbit out of their hat for maximum election value.Too bad for them as it's already been exposed.

Since the government owns them,you'd think this would really tick off the taxpayers.They are using taxpayer money essentially to run the national ad blitz to commit fraud and lie to the American people about paying off the TARP loan.Sorry,taking money from one TARP account and depositing it another doesn't cut the mustard.

Certainly many Americans are familiar with this technique.Call it payment juggling or whatever,we like to use the Mastercard to pay off the Visa bill all the time when we get behind on the bills.Unfortunately it always catches up to you.

The fact is that anyone can see that GM is still losing money every quarter.You can't pay your multi-billion dollar TARP debt when you can't turn a profit.And when you still owe $45.3 billion to the Feds,how is it that you can claim that you paid off your debt in full?Stock that hasn't even been offered for sale yet is just a paper tiger.More to come...

Foreclosure avalanche underway

2010-04-19T03:59:00.003-04:00

You ain't seen nothin' yet.Think the worst is over?Buying into the green shoots b.s. being spewed by the White House and the major economists?Sucker!

So many people have gone over these numbers and charts,yet some people just refuse to face the hard data out there.Just look at them again and live in denial at your own peril,at least if you're an investor.

Bank of America has been unloading an average of 7,500 foreclosures onto the market each month.They now plan to really ratchet it up.All the way up to 45,000 per month by the end of this year.That's a 500% increase!Wow!

That's only one bank.JP Morgan Chase is planning on perhaps doubling their contributions as well going from 23,000 to between 33,000 and 45,000 by the end of the year.

Home prices have dropped again,down 3.9% in the last quarter,the first drop in 9 months.The February foreclosure rate of 3.31% has increased over 50% in the last year.

There are currently 8 million homeowners behind on their mortgage payments.Take the existing foreclosure inventory on the market,add in the planned huge upswing in inventory being added to the market by the end of the year,and further factor in the 8 million potential future defaults and you have the recipe for a total collapse of the housing market.

At the end of this month,Bernanke will end the quantitative easing program that dumped over a trillion dollars into the market to stabilize the losses.The number of ARM resets will spike up again this summer and also again next summer leading to even more defaults.

With unemployment remaining high,there is just no prospect of staving off the avalanche underway of defaults flooding the market.The numbers don't lie.More to come...

Tea partiers should thank Obama?

2010-04-16T23:39:00.002-04:00

In fact,that's what he claims.He believes that he is responsible for cutting 95% of Americans taxes and so we should thank him.I'm from Michigan and a new report from the liberal Citizens for Tax Justice organization supports his claims.In Michigan,they even up the ante claiming that 99% received a tax cut.Here is the link.

http://www.ctj.org/obamastaxcuts/mi.pdf

I thought I would do a comparison of my own taxes to test his theory.Obviously I'm not going to divulge any specific information,however,I can report percentages.I'm actually a very good candidate because very little has changed in my tax situation over the past two years allowing a fair comparison.

My gross income increased $373 from tax year 2008 to 2009.I know,I'm happy it went up at all.Point is,just a minimal change.I had no life changing events or anything of significance that would affect my deductions or exemptions.The tax rates didn't change,so the only "x" factors are tax credits.

I tried to find the fairest way to compare one year to the next.I decided to simply take my gross pay less social security withholding,medicare withholding and federal income tax withheld.I didn't factor in any benefits I have money withheld for,any state withholding,or any investments.I only want to compare federal taxes as these are what Obama is basing his claim on.I received the $800 Obama 'making work pay' credit for families.I looked for a way to take into account all federal giving and taking of my income and discounted everything else.

So,I took my gross less the 3 federal withholdings and added in my tax refund.That's it.Very simple and only takes into account federal factors.I found that my income increased $373,yet my net take home decreased $895.That's the bottom line.My taxes went up.Guess I'm part of the 1% claimed by the report.This includes the $800 Obama 'gift'.So,for the record I can say that my taxes did indeed go up under Obama even after his increased tax credits.So get out of my face,dude.More to come...

A simple question

2010-04-15T19:08:00.002-04:00

I've been watching some of the financial reform back and forth.Pretty dry stuff,but extremely important to our country.

Now,we were told that if Bush/Obama hadn't stepped in with the TARP bailouts that the financial industry would have imploded bringing down the global economy with it.We had banks that were too big to fail.Conclusion?-bailing out banks that are too big to fail is a good thing.

Today,we are told that Chris Dodd's financial reform bill is designed to prevent these banks from ever being bailed out again at the taxpayers expense.That it will be a foolproof way to prevent it from ever re-occurring.Conclusion?-bailing out banks that are too big to fail is a bad thing.

Here then is a simple question.If the Bush/Obama TARP bailouts are what saved the global economy from a meltdown,why would we now pass legislation to prevent us from saving it in the future?Just askin'.More to come...

Duck and cover

2010-04-14T15:20:00.004-04:00

Yes,friends,it's time to dust off those old public service announcements and begin anew our training lessons on what to do when the nuclear bombs come raining down.Our illustrious President has made it clear that all the bad guys need to do is make it appear as if it was launched from a country on the Obama 'do not retaliate list' and we will just sit back and take it lying down.Or in the fetal position.

http://www.youtube.com/watch?v=lW4s7TETtJA

It's too bad all of the newspapers are going out of business because according to the video you merely need to cover your face with one and you will be protected.More to come...

The entitlement trap

2010-04-11T10:16:00.002-04:00

Entitlements are a very divisive issue amongst the parties.To compound the problem,they are defined in different ways.The public gets stuck in the middle as usual with lots of spin and misinformation provided to keep our eye off the ball.

The usual thinking is that democrats like lots of entitlements under the guise of helping people and that republicans are opposed to them due to the cost.That's on the surface,but it's really more complicated than that.

Democrats like entitlements because they mean power.Pure and simple.Creating the dependency nation is their long term plan for power and perpetual re-election.They try to sell it as compassion,as caring for the needy and less fortunate.To not support it is deemed to be political suicide because you become an easy target as wanting granny to die,to be racist and to generally be opposed to the little guy catching a break.

Republicans oppose entitlements as being fiscally irresponsible.We're broke and can't afford it.They view it as wealth redistribution.Stealing from the rich and giving to the poor.Why should anyone else be entitled to the fruits of my labor?They believe that every single citizen should pay taxes.Everyone should have a stake in our society.Even the poor should pay something,albeit much less than those with the means to pay more.

What qualifies as an entitlement?Most people would say social security, medicare/medicaid and welfare.It's not that simple.Social security on it's face is not an entitlement.You have been contributing your entire working life thru payroll deductions to your theoretical personal account.When you retire,you then pull those funds back out of the system.Sounds good so far.You paid in and now you merely get your money back.True unless you live too long.Once you go beyond the tipping point and outlive your contributions,you still continue to receive benefit checks.This is the point where you crossover and become a burden to society and thus are receiving an entitlement.

Medicare and medicaid are set-up in a similar fashion.If you were to somehow be the model of health and die at a nice early age,you may not ever have any claims against medicare or medicaid thus not becoming a recipient of an entitlement.For the vast majority of Americans,this is not the case.Old age dictates that our bodies need a whole lot of maintenance and our claims on the system easily surpass what our payroll contributions were during our working life.

Unemployment is similar to social security.Both the employee and the employer contribute to the trust fund which is then withdrawn when we become unemployed.However,Congress keeps extending additional benefits for the long term unemployed at which point you become a burden on society because you are taking out more than you and your employer ever put in.

So it's not a clear cut case on entitlements.It's dependent on individual situations and usually determined by longevity.The bottom line is if you are receiving something you didn't pay for at the expense of others,it's an entitlement.

The problem comes in the form of the argument presented by the two main parties.Republicans argue that never ending free lunches dis incentivize the public.If you always know that you can get something for nothing,you lose interest in doing anything about your situation.Particularly as you are 'penalized' for trying to do so.

For example,as you make more money,you pay a higher progressive income tax.You may lose those free lunch entitlements such as the earned income tax credit or other similar credits that you received when you made less money.You can actually end up with less money in your pocket after taxes minus those entitlement credits.This kills the will of someone wanting to move up the ladder.Why should they do it if they get penalized to do so?Why work harder for less?

Republicans argue that is inherently unfair to redistribute wealth and equally unwise to encourage long term dependency by the structure of entitlements.People who have had a bad break,lost their job,developed an expensive medical condition,etc.,all can get into the situation where it is too difficult to pull themselves out of it and easier to stay where they are.Responsibility and self-reliance are simply taken out of the equation.

This is the difficult selling point.How do you convince the public that they are better off with a system that only provides temporary help to those that really need it and force you back off it as soon as possible so you again become productive,self-sustaining,and not a burden on others?The problem is that most would agree with this only when they aren't in that situation.When they are,their perspective changes and they think it's not so bad taking some from those more fortunate.Until they fall into the trap and realize it's far more difficult to cross over the hump to get back out.

Democrats realize this perfect storm many years ago and have been playing it to their advantage for just as long.Obama is simply taking it to the next level.He can see the finish line in sight.He has several plans playing out right now.Health care was only one part.Amnesty for illegals is upcoming.The VAT tax is another designed to stress the economy even more to generate more dependency.He'll also go after card check to increase union membership.

Democrats are simply using the entitlement mentality to their advantage.They are better students of the human psyche than republicans.They know republicans haven't developed a sufficient argument to offset their claims of compassion.They have the system rigged so that once you descend into a dependency state,it's very difficult to get back out.It can be riskier or just less rewarding to get over that hump.

This is the challenge facing the country.Continue on this path and America will be destroyed without question.We can't afford it and history is littered with failed examples of socialism.The creation of a dependency nation has been a long,slow crusade by design.To sap the can-do spirit of American that created this nation doesn't happen overnight.The time was when we would not lay down in the face of adversity and accept the easy way out.It in fact was frowned upon.

It has taken this long to get us staged if you will into a mode of acceptance.That it is socially acceptable to be in a position of relying on government for our daily needs.I have stated previously that the republicans will need a salesman to reverse this trend.They can no longer simply claim conservative values and self responsibility and expect that to resonate with the masses that have fallen into the trap.What do they care about deficits and debt when they are in the dependency state?That's somebody else's problem.

Whoever it is that has the ability to connect with these people and show them a way out must be a good salesman.They must also have great political savvy to be able to manipulate Congress into reforming entitlements.The system must be altered to provide incremental steps of progression so as not to penalize those that want out.And to not provide the comfort of endless free lunches to those that don't want out.Some will take advantage on their own to get out.Some must be forced out.Then you only have a safety net left for those that simply can't get out.More to come...

America is dying

2010-04-08T15:49:00.003-04:00

The Founding Fathers warned us that times like these would try us.They recognized even then what so many of us can't recognize today as it's happening right in front of us.

Liberty has a price.It's over 233 years of blood,sweat,tears and eternal vigilance.We owe not only our gratitude to those that provided us our freedom,but also commitment to protect and secure it for all time.

Freedom needs to be exercised.We should enjoy it's fruits everyday by living our lives the American way.Freedom has no value if we don't utilize it.Passively sitting back and watching it erode is unforgivable.Too many have given all to provide it.Ask yourself-are you doing all you can to both live it and protect it?What more can you do?Today,right now!Don't hesitate or it will be gone forever!More to come...

Detroit must go bankrupt

2010-04-07T15:02:00.003-04:00

The CRC has released it's report on the fiscal condition of the city of Detroit.You can read it here.

http://www.crcmich.org/PUBLICAT/2010s/2010/rpt361.pdf

The state of Michigan certainly can't bail the city out and the feds aren't going to pony up the money either.Besides,this would be the worst possible outcome.Just as it was with bailing out the big banks in 2008.I am certain that this country could be well on it's way to a true economic recovery if we hadn't.The fallout would have been more severe in certain segments immediately after letting those banks fail.However,the recovery would be real afterwards rather than the false recovery we are now seeing.

Detroit is in that same position.The fiscal policies of the city must be thrown out to allow any reorganization to have a chance at success.Everything about the way the city does business needs to be overhauled.The unions will heavily protest it because they stand to lose the most.However,a new budget based on tax revenues that will continue to shrink for several more years is the only thing that makes any sense.

If you don't do this now and simply try the standard old,band aid approach,the city will never survive.Just throwing some more money at it won't work.The citizens of Detroit will hopefully realize that this is their one and only chance to get this right and have any hope of resurrecting the city in the future.More to come...

Free will and rights

2010-04-07T04:39:00.002-04:00

These two subjects may seem completely different,yet they tie into together nicely.Do we really have free will?What are our natural rights?Well,they come from the same source.I,as a Christian,believe in God as the Creator.Certainly,many of you may not.That is not the intent of this post.Sorry,you'll have to stick with my beliefs for this one.This is not intended to influence your choices in life,only to illustrate how intertwined the two are.

I have had this discussion in various forms with many different people over the years.Suffice it to say that no one has ever given me a credible alternative to what I believe.I believe that we do not truly have free will.Freedom to completely make the decisions in our lives without bias.Good or evil.Many believe we do.That you decide the course of your life here on earth.

I say if you believe in God and the bible as scripture,you cannot also hold the view that you have true,free will.God has a master plan for all of his domain.The entire universe and it's inhabitants.The human race has a pre-determined destiny.Our fate is set in stone.Down to the minute.How,when and where.Unfortunately for us,only God knows these details.No one else knows the end date despite many who claim they do.

With this in mind,the only way this is possible is for God to have complete control of every facet of his universe.There cannot be any unknown factors which may alter the endgame.For any of us to have the ability to execute free will and impact others would jeopardize this.A madman could instigate a nuclear war triggering a world ending scenario.

The fact is that your actions impact others.For every action,there is an equal reaction.Simple physics.This is why I don't believe it is possible for free will as I could forever alter destiny for myself and others based on my actions.I believe we are simply allowed to think that we are making these choices on our own thus believing we have free will.Think about it.God had the ability to create all of this.It's on a scale we can hardly comprehend and so much of it we cannot.He could certainly have allowed us to feel as though we are 'in charge' of our lives.

The only way to guarantee an outcome at a predetermined time and place is to have complete control.So feel free to continue on with your beliefs.If you disagree,well I believe that was intended as well.By the way,you absolutely should continue on living your life and doing what you believe to be the right thing.Just do so in the knowledge that you are simply fulfilling your role in a much larger plan.

With the debate over health care,the question has been raised if it is a right.Clearly,it is not.Similar to free will,a right executed by one individual cannot infringe on another individuals ability to execute their right.In the case of free will,if I shoot you dead,I have eliminated any choice you have negating it.In the case of a right,the only way I get guaranteed health care is for another person or more to pay for it.That infringes on their life meaning it simply cannot be a right.

Opportunity is often confused with a right.We have many opportunities afforded to us by the fact that we live in a free country.But they are just that,opportunities.No guarantees of success.Our rights are extended to us by God meaning they cannot be taken away.Health care can be taken away.As are many things we want every person to have based on moral and ethical grounds.

Studying this led to me to another conclusion which baffled me for years.It's commonly thought that we must ask for salvation to get to Heaven.If you don't,you don't get in.I wondered than how do people in unique situations ever get to Heaven.Say a child who dies immediately after birth.Someone born brain dead.Retarded.Deaf.Some mental capacity which limits them.What if they live in a very rural area without a church?You can think of many scenarios where one may never hear the word of God in their life.

My conclusion was that we are all born going to Heaven.You can only screw it up.This is the only way to explain how these people can still go despite having never heard the word of God.If you do hear it and reject it,you go to Hell.Very simple.

That's why I tie all this in together.There are only a few things guaranteed to us at birth.These rights are permanent and indisputable.If I exercise my right,I in no way will infringe on yours.Free will is a myth.Life will present us with many choices.We decide in our minds which path to take,yet a higher power is guiding that choice unbeknowst to us.

Some of us do have a true choice to make in life.Whether or not we accept the word of God.This is a real choice,true free will if you will.It is a right in that God has guaranteed us acceptance into Heaven if we accept His word.More to come...

Bubble trouble

2010-04-06T13:55:00.002-04:00

If you've watched any mainstream news outlets recently,you've heard it proclaimed that the recovery is fully underway.That the "Great" recession ended in June of 2009.The stock market is marching relentlessly forward.That housing has bottomed.That unemployment has bottomed out and that we are now adding jobs again.

Sounds pretty darn good.To be fair,most of these reports are tempered with the statement that "we have a long way to go".Those on the left point to the Obama stimulus and the actions of the Federal Reserve as the reasons for the recovery.

The reasons for the recession have been discussed and debated like no other before.We have a whole nation of "experts" now on economics.The blame for the recession doesn't follow standard partisan lines.Some blame the federal government regulations,some blame the evil,greedy corporations,some blame irresponsible consumers.Most blame some combination of these.

Why is it then that so many refuse to believe what they are seeing today?Armed with their crash course knowledge of economics and why the meltdown occurred hasn't translated into recognizing the building of the next crash.The American spirit has always been a can-do attitude and one of optimism.It's an intangible that this country was built on.However,it also can blind you to reality.

People love to buy into the logic of 'if we had just done a little bit more'.A little more regulation.Invest a little more here and there.That this time we will get it right because we have now have hindsight to teach us.Yet we react in the same predictable manner which allows the boom/bust cycles to continue perpetually.

We must keep in mind that all bubbles don't need to burst to have a negative effect on the economy.Just like a boil on your skin,it's painful as it expands,but if it doesn't get infected it may just drain on it's own without breaking.

The bubbles that we have are almost always created by government policy which allow and enable them.Consumers and borrowers than impact the size of the bubble.Certainly,these are generalizations and there may be many complicated factors as to how big and how long a bubble exists.

But the point is that they are dynamic.They impact the economy at varying levels over time.Some get too big and burst causing a dramatic crash.Some don't reach the point of bursting and instead act as a drag,or anchor,on the economy.We are seeing both play out today.

Remember,this minor recovery was also predicted a long time ago.It's going essentially as predicted.Read Harry Dent's "The Great Depression Ahead".All of this was foretold from the crash to the minor recovery we're seeing today,to the eventual big crash to come.

Again,no surprises here.Yet,so many are now beginning to wonder,is it real?Is the Obama stimulus really starting to work?Such poor students of history we are.The spike in temp hiring from the census was projected.The peak in worker productivity as well which means as we regress from being pushed to the extreme and everyone being as productive as possible,more hiring MUST occur to fill in the gaps.That will,however,be at the expense of net profits as payroll will increase.This will be a future drag on the economy.For every action,there is a reaction.

You will also see the part-time workers,the temporary workers and the people who quit searching for work drag down the unemployment numbers for a long time.All of those people want to return to full time employment and will stunt any new job creation.

Just keep a wary eye toward all of the "positive" economic news sure to come spilling out of Washington with the mid-term elections upcoming.It will sound much better than it really is.Remember,you were warned ahead of time just like before.More to come...

Jobs report falls below expectations

2010-04-02T09:00:00.003-04:00

The March 2010 unemployment numbers are out.The rate is unchanged at 9.7%.Now it's time to tweak the numbers to your political advantage.The report shows a gain of 162,000 non-farm payroll jobs.This is the number the left will promote.

Included in that are 48,000 census jobs.Temp help services added 40,000 jobs.Combined,that means 88,000 temp jobs leaving 74,000 real,full time jobs created.This does not keep up with the 100,000+ required each month for our expanding birth rate and immigration requirements.In other words,adding over 100,000 new full time private sector new jobs each and every month is the baseline for job growth.

The key numbers you won't see promoted so much are the alternative measures,mainly the U-6 underemployment number which ticked up to 16.9%.You also won't see the number that fall off the survey as it only includes the last 4 weeks.When you have exhausted your benefits and are no longer actively seeking work,you essentially don't exist anymore,at least in the world of the Bureau of Labor Statistics.

The numbers fell short of analysts projections for job growth,but there will be 2 revisions to come before the final numbers are out.Regardless,they are well below what they should be at this stage of a recovery and don't bode well to support the administrations efforts at job growth.More to come...

Worker time bomb battle brewing

2010-04-01T12:04:00.002-04:00

There is a brewing battle that promises to be very divisive and may lead to some very unfortunate circumstances.It's the public vs. private worker.As public employee employment continues to rise at the expense of the private sector workers,this is a powder keg waiting to ignite.

The national unemployment rate is still near 10% officially.The actual number is much higher when you include workers who have stopped receiving benefits,or stopped looking for work,or are underemployed.There is frustration mounting when these people see expanding government workers who are paid by taxpayers,including those unemployed private sector workers receiving benefits.

It's an extension of the haves/have nots class warfare.Like the scab workers that cross union picket lines to work for less money.Only in this case,they are making even more money as the gap between private sector and public sector compensation is rapidly widening.

State and local municipalities,cities,and townships are all starting to be pinched.Public pensions are vastly underfunded and will break the backs of budgets across the country.This year will start the expected avalanche of bankruptcies as the stimulus bailout funds will no longer prop up the budgets.

This is the trigger for the other shoe to drop that will send this country back into recession as the domino effect will spread.Obama has been ignoring the economy and the jobs issue since he took office.Instead we focus on the stimulus,which is just a slush fund of political payoffs and band-aid budget fixes,health care and climate change.

The federal reserve is also promoting the theory of buying time until everything just gets better on it's own.The results from these policies of ignorance promise to be catastrophic to our country.The uncertainty of late 2007 when the banking world was about to melt down will be replaced with the certainty this time that all of the toxic garbage must be flushed out.It won't be pretty.

I'm afraid that those public sector workers will be targeted as the private sector looks on with envy while their struggles go on and on.Watch your back if that's you because desperate people will want heads to roll and if you still have a job you will be viewed as part of the problem.Elections have consequences.Socialism has consequences.More to come...

Anything but the economy

2010-03-29T05:22:00.002-04:00

Healthcare?Done.Or not,since Obama chooses to taunt the GOP to "go for it" and make repeal the central focus of the mid-terms.So we'll keep arguing.

Next step?A surprise visit to Afghanistan.All of a sudden,the war is a priority again.What's going to be next?

The pattern we're seeing is anything but the economy,stupid.Obama does not want to make it a focal point so we will see a variety of issues rise up to center stage.When you have no plan and no answers,you must try to divert attention elsewhere.

When the federal government enacted the legislation that allowed the housing bubble to balloon,most of us were not cognizant of what was happening.In fact,we got our re-assurances from the Barney Franks of the world that Fannie and Freddie were doing just fine.Everyone knows different now and we've been able to determine that the government created,allowed and encouraged it.

The left will claim the opposite.That it was simply the greedy banksters.No blame goes to the government or the irresponsible homeowners.Standard lefty reasoning.

Now we've been able to witness first hand the genesis of the next great bubble.The dependency bubble.The Obama health care debacle will create the single largest expansion of the population that will depend on government wholly.They will not be able to progress out of the trap laid because earning more income will reduce their subsidies making it pointless to try.

Unemployment is moving in the same direction with literally years of benefits now available which totally disincentives one to dig their way out of their hole.Why get off the gravy train when it's free and seemingly never ending?

All of these will pale with what is waiting in the wings.Cap and trade and the VAT tax.Far worse than health care.Health care is one sixth of the economy.Cap and trade will affect at least 99% of what industry produces.We will all pay,including the poor,with higher prices.The VAT tax will have a similar effect as it will be simply tacked on top of the sales tax rather than replacing it as it was designed to do.

Once our costs of goods and services gets fantastically more expensive,many more will join the ranks of the dependency nation.Throw in the millions of illegals that Obama will grant amnesty to as also going straight to the dependency crowd and we will have the majority of our population depending on our government for all of their basic needs.

Try to find enough conservative candidates who will have to sell self-reliance,responsibility and accountability to that crowd that is on the gravy train.Not going to happen.When we hear that these next election cycles are the most important in the history of our country,it is not overstated at all.We are already well past the tipping point on dealing with the debt.We sit on the tipping point of our liberty.What will you do to make a difference?More to come...

U.N. doesn't believe health care is a right

2010-03-27T00:50:00.003-04:00

I was researching the case for health care being a right and came across this declaration of universal rights from the United Nations.

PREAMBLE
Whereas recognition of the inherent dignity and of the equal and inalienable rights of all members of the human family is the foundation of freedom, justice and peace in the world,

Whereas disregard and contempt for human rights have resulted in barbarous acts which have outraged the conscience of mankind, and the advent of a world in which human beings shall enjoy freedom of speech and belief and freedom from fear and want has been proclaimed as the highest aspiration of the common people,

Whereas it is essential, if man is not to be compelled to have recourse, as a last resort, to rebellion against tyranny and oppression, that human rights should be protected by the rule of law,

Whereas it is essential to promote the development of friendly relations between nations,

Whereas the peoples of the United Nations have in the Charter reaffirmed their faith in fundamental human rights, in the dignity and worth of the human person and in the equal rights of men and women and have determined to promote social progress and better standards of life in larger freedom,

Whereas Member States have pledged themselves to achieve, in co-operation with the United Nations, the promotion of universal respect for and observance of human rights and fundamental freedoms,

Whereas a common understanding of these rights and freedoms is of the greatest importance for the full realization of this pledge,

Now, Therefore THE GENERAL ASSEMBLY proclaims THIS UNIVERSAL DECLARATION OF HUMAN RIGHTS as a common standard of achievement for all peoples and all nations, to the end that every individual and every organ of society, keeping this Declaration constantly in mind, shall strive by teaching and education to promote respect for these rights and freedoms and by progressive measures, national and international, to secure their universal and effective recognition and observance, both among the peoples of Member States themselves and among the peoples of territories under their jurisdiction.

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Article 1.
•All human beings are born free and equal in dignity and rights.They are endowed with reason and conscience and should act towards one another in a spirit of brotherhood.
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Article 2.
•Everyone is entitled to all the rights and freedoms set forth in this Declaration, without distinction of any kind, such as race, colour, sex, language, religion, political or other opinion, national or social origin, property, birth or other status. Furthermore, no distinction shall be made on the basis of the political, jurisdictional or international status of the country or territory to which a person belongs, whether it be independent, trust, non-self-governing or under any other limitation of sovereignty.
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Article 3.
•Everyone has the right to life, liberty and security of person.
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Article 4.
•No one shall be held in slavery or servitude; slavery and the slave trade shall be prohibited in all their forms.
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Article 5.
•No one shall be subjected to torture or to cruel, inhuman or degrading treatment or punishment.
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Article 6.
•Everyone has the right to recognition everywhere as a person before the law.
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Article 7.
•All are equal before the law and are entitled without any discrimination to equal protection of the law. All are entitled to equal protection against any discrimination in violation of this Declaration and against any incitement to such discrimination.
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Article 8.
•Everyone has the right to an effective remedy by the competent national tribunals for acts violating the fundamental rights granted him by the constitution or by law.
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Article 9.
•No one shall be subjected to arbitrary arrest, detention or exile.
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Article 10.
•Everyone is entitled in full equality to a fair and public hearing by an independent and impartial tribunal, in the determination of his rights and obligations and of any criminal charge against him.
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Article 11.
•(1) Everyone charged with a penal offence has the right to be presumed innocent until proved guilty according to law in a public trial at which he has had all the guarantees necessary for his defence.
•(2) No one shall be held guilty of any penal offence on account of any act or omission which did not constitute a penal offence, under national or international law, at the time when it was committed. Nor shall a heavier penalty be imposed than the one that was applicable at the time the penal offence was committed.
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Article 12.
•No one shall be subjected to arbitrary interference with his privacy, family, home or correspondence, nor to attacks upon his honour and reputation. Everyone has the right to the protection of the law against such interference or attacks.
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Article 13.
•(1) Everyone has the right to freedom of movement and residence within the borders of each state.
•(2) Everyone has the right to leave any country, including his own, and to return to his country.
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Article 14.
•(1) Everyone has the right to seek and to enjoy in other countries asylum from persecution.
•(2) This right may not be invoked in the case of prosecutions genuinely arising from non-political crimes or from acts contrary to the purposes and principles of the United Nations.
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Article 15.
•(1) Everyone has the right to a nationality.
•(2) No one shall be arbitrarily deprived of his nationality nor denied the right to change his nationality.
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Article 16.
•(1) Men and women of full age, without any limitation due to race, nationality or religion, have the right to marry and to found a family. They are entitled to equal rights as to marriage, during marriage and at its dissolution.
•(2) Marriage shall be entered into only with the free and full consent of the intending spouses.
•(3) The family is the natural and fundamental group unit of society and is entitled to protection by society and the State.
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Article 17.
•(1) Everyone has the right to own property alone as well as in association with others.
•(2) No one shall be arbitrarily deprived of his property.
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Article 18.
•Everyone has the right to freedom of thought, conscience and religion; this right includes freedom to change his religion or belief, and freedom, either alone or in community with others and in public or private, to manifest his religion or belief in teaching, practice, worship and observance.
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Article 19.
•Everyone has the right to freedom of opinion and expression; this right includes freedom to hold opinions without interference and to seek, receive and impart information and ideas through any media and regardless of frontiers.
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Article 20.
•(1) Everyone has the right to freedom of peaceful assembly and association.
•(2) No one may be compelled to belong to an association.
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Article 21.
•(1) Everyone has the right to take part in the government of his country, directly or through freely chosen representatives.
•(2) Everyone has the right of equal access to public service in his country.
•(3) The will of the people shall be the basis of the authority of government; this will shall be expressed in periodic and genuine elections which shall be by universal and equal suffrage and shall be held by secret vote or by equivalent free voting procedures.
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Article 22.
•Everyone, as a member of society, has the right to social security and is entitled to realization, through national effort and international co-operation and in accordance with the organization and resources of each State, of the economic, social and cultural rights indispensable for his dignity and the free development of his personality.
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Article 23.
•(1) Everyone has the right to work, to free choice of employment, to just and favourable conditions of work and to protection against unemployment.
•(2) Everyone, without any discrimination, has the right to equal pay for equal work.
•(3) Everyone who works has the right to just and favourable remuneration ensuring for himself and his family an existence worthy of human dignity, and supplemented, if necessary, by other means of social protection.
•(4) Everyone has the right to form and to join trade unions for the protection of his interests.
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Article 24.
•Everyone has the right to rest and leisure, including reasonable limitation of working hours and periodic holidays with pay.
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Article 25.
•(1) Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control.
•(2) Motherhood and childhood are entitled to special care and assistance. All children, whether born in or out of wedlock, shall enjoy the same social protection.
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Article 26.
•(1) Everyone has the right to education. Education shall be free, at least in the elementary and fundamental stages. Elementary education shall be compulsory. Technical and professional education shall be made generally available and higher education shall be equally accessible to all on the basis of merit.
•(2) Education shall be directed to the full development of the human personality and to the strengthening of respect for human rights and fundamental freedoms. It shall promote understanding, tolerance and friendship among all nations, racial or religious groups, and shall further the activities of the United Nations for the maintenance of peace.
•(3) Parents have a prior right to choose the kind of education that shall be given to their children.
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Article 27.
•(1) Everyone has the right freely to participate in the cultural life of the community, to enjoy the arts and to share in scientific advancement and its benefits.
•(2) Everyone has the right to the protection of the moral and material interests resulting from any scientific, literary or artistic production of which he is the author.
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Article 28.
•Everyone is entitled to a social and international order in which the rights and freedoms set forth in this Declaration can be fully realized.
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Article 29.
•(1) Everyone has duties to the community in which alone the free and full development of his personality is possible.
•(2) In the exercise of his rights and freedoms, everyone shall be subject only to such limitations as are determined by law solely for the purpose of securing due recognition and respect for the rights and freedoms of others and of meeting the just requirements of morality, public order and the general welfare in a democratic society.
•(3) These rights and freedoms may in no case be exercised contrary to the purposes and principles of the United Nations.
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Article 30.
•Nothing in this Declaration may be interpreted as implying for any State, group or person any right to engage in any activity or to perform any act aimed at the destruction of any of the rights and freedoms set forth herein.

No mention of health care being a right.In fact,article 17(2) states that we should not be arbitrarily deprived of our property.Are you reading this,President Obama?No taking of my property (wages) to pay for an others health care.While I in no way agree with this declaration or the U.N.,it's just interesting to see that even the U.N. doesn't support Obama ideology either.More to come...

Poor mans affirmative action

2010-03-25T07:56:00.004-04:00

I would equate the health care law as the poor mans affirmative action.That's really what it is.It's easily understood by a growing number of Americans how the progressive movement has steadily evolved over the last century.It's been a slow creep.Just like Al-Qaeda,they learned to be patient long ago and bide their time,taking a little bit at a time.Stealing our liberty,for our own good mind you,is not accomplished overnight.

We've now reached the tipping point where they can no longer contain themselves and want to sprint toward the finish line.With the ideologue-in-chief at the helm,they can make huge strides in the next couple of years.The GOP can talk about repeal and replace all they want,but they won't have veto override strength no matter what the outcome of the mid-terms.

Obama will now plow headfirst into amnesty,climate change,financial reform,card check and the VAT tax.Those are the main components left on his plate to provide the progressives all the tools they need.I think the right is far too short-sighted today.The belief is that if we can just get 40 back in the House and a couple senators,we can reverse course and save the country.

Why can't they pay attention to the lessons of the past?The left owns the media,the courts and academia.Simply installing Boehner as Speaker will not accomplish anything,just more gridlock.Sure,we must move in the right direction,but baby steps are now too late.

To my main point,we are already at the point of half the country producing and the other half dependent.Maybe worse already,but certain to become worse soon.Just as the blacks in this country are held down by the appeal of affirmative action,so will the dependency nation.The public will not have the stomach to cut the cord and tough it out without the government safety net.And the GOP has already shown it doesn't have the political will to be the parent and do what's right for the children (the public).They can talk repeal all they want,but they will cave just like Stupak.

Can you imagine the feeling in the pit of your stomach when the day of realization hits you that all of the conspiracy nuts were right?And it's too late to reverse course?That's been the course all along.Never overreach so much as to give the people no choice but to react.You must take into account the whole picture to put the concept into perspective.Revolution will be the only option left.More to come...

America fundamentally transformed-as promised

2010-03-22T02:13:00.000-04:00

There are few times in your life when you witness historical events that will forever live in infamy.Passage of the health care reform bill certainly qualifies.Barack Obama will now be remembered as the father of socialized medicine.Like FDR and the New Deal,this will be written about and analyzed forever.One cannot overestimate just how profound an effect this will have on each of our lives.

You'll probably never again see so divisive an issue pass on the slimmest of margins,yet will affect every single citizen.There is a misconception that our elected officials will vote reflecting the will of their constituents.Rather,they vote for what they believe.This is why it is said that elections have consequences.Those of you who voted for Obama and his message of hope and change,this is what he meant.And there will be more to come.

Of course,the bill doesn't add up.Half a trillion in tax hikes to be offset by half a trillion in Medicare and Medicaid cuts is reform?Just as with the stimulus,you'll find out why it can't work after the fact.Those of you who believe that it was simply the fault of the evil,greedy corporations will see first hand just how badly the government can run a program.Every single entitlement program they have ever created is insolvent,inefficient and filled with fraud,waste and abuse.

10 years of taxes for 6 years of benefits.We must prepay for 4 years to build enough revenue to fund the program.Do you really believe that they will just leave that fund alone and not reallocate it for other uses?Fools.Go visit the Treasury website and see what's left in the Social Security and Medicare trust funds.Unfortunately,it's people like me that will have to forever pay the price along with you.With socialism,everybody pays,willing or not.More to come...

Reconciliation changes summary

2010-03-21T06:26:00.002-04:00

Here are the changes as adopted by the House rules committee that will be voted on today.Courtesy of the Hill.

SUMMARY OF THE AMENDMENT IN THE NATURE OF A SUBSTITUTE
TO H.R. 4872 IN PART A PROPOSED TO BE CONSIDERED AS ADOPTED

Improves the financing for premiums and cost sharing for individuals with incomes up to 400% of the federal poverty level. Modifies the assessment that individuals who choose to remain uninsured pay in three ways: (a) exempts the income below the filing threshold, (b) lowers the flat payment from $495 to $325 in 2015 and from $750 to $695 in 2016 and (c) raises the percent of income that is an alternative payment amount from 0.5 to 1.0% in 2014, 1.0 to 2.0% in 2015, and 2.0 to 2.5% for 2016 and subsequent years to make the assessment more progressive. Improves the transition to the employer responsibility policy for employers with 50 or more full-time equivalent workers (FTE) by subtracting the first 30 full time employees from the payment calculation. Modifies the definition of income that is used for purposes of subsidy eligibility and the individual responsibility requirement. Provides a $250 rebate for all Medicare Part D enrollees who enter the donut hole in 2010. Builds on pharmaceutical manufacturers' 50% discount on brand-name drugs beginning in 2011 to completely close the donut hole with 75% discounts on brand-name and generic drugs by 2020. Freezes Medicare Advantage payments in 2011. Beginning in 2012, the provision reduces Medicare Advantage benchmarks relative to current levels. Ensures Medicare Advantage plans spend at least 85% of revenue on medical costs or activities that improve quality of care, rather than profit and overhead. Strikes the provision for a permanent 100% federal matching rate for Nebraska for the Medicaid costs of expansion populations. Provides federal Medicaid matching payments for the costs of services to expansion populations at the following rates in all states: 100% in 2014, 2015, and 2016; 95% in 2017; 94% in 2018; 93% in 2019; and 90% thereafter. In the case of expansion states, reduces the state share of the costs of covering nonpregnant childless adults by 50% in 2014, 60% in 2015, 70% in 2016, 80% in 2017, 90% in 2018. Requires that Medicaid payment rates to primary care physicians for furnishing primary care services be no less than 100% of Medicare payment rates in 2013 and 2014. Lowers the reduction in federal Medicaid DSH payments from $18.1 billion to $14.1 billion and advances the reductions to begin in fiscal year 2014. Delays the application of the high-cost plan excise tax until 2018, which gives the plans time to implement and realize the cost savings of reform; increasing the dollar thresholds to $10,200 for single coverage and $27,500 for family coverage ($11,850 and $30,950 for retirees and employees in high risk professions). Amends the Higher Education Act to include mandatory funding for the Pell Grant. Terminates the FFEL program for federal consolidation loans. This section also provides that, for a 1 year period, borrowers who have loans under both the Direct Lending program and the FFEL program, or who have loans under either program as well as loans that have been sold to the Secretary, may consolidate such loans under the Direct Lending program regardless of whether such borrowers have entered repayment on such loans. Directs the Secretary to award contracts for servicing federal Direct Loans to eligible non-profit servicers. Permits the Secretary to reallocate, increase, reduce or terminate an eligible non-profit servicer's allocation based on the performance of such servicer. Extends the prohibition of lifetime limits, prohibition on rescissions, and a requirement to provide coverage for non-dependent children up to age 26 to all existing health insurance plans starting six months after enactment. Starting in 2014, extends the prohibition on excessive waiting periods to existing health plans. For group health plans, prohibits pre-existing condition exclusions in 2014 (for children, they are prohibited starting six months after enactment), restricts annual limits beginning six months after enactment, and prohibits them starting in 2014. Increases mandatory funding for community health centers to $11 billion over five years (FY 2011 - FY 2015).

SUMMARY OF THE AMENDMENT TO THE AMENDMENT IN THE NATURE OF A SUBSTITUTE TO H.R. 4872 IN PART B PROPOSED TO BE CONSIDERED AS ADOPTED

Would (1) reduce the growth rate of the Part D spending threshold for catastrophic benefits between 2014 and 2019, providing additional benefits for seniors with high drug costs; (2) add a transitional phase up period for the coding intensity adjustment for Medicare Advantage plans; (3) strike a provision that would have deposited funds collected from Medicare Advantage plans for failing to meet the medical loss ratio into the CMS Program Management Account; (4) insert a new section 1108 that accelerates phase-in of Medicare physician practice expense adjustment for areas with below average practice expense payment rates. In 2010, national blend would be increased from ¼ to ½. Inserts a new Section 1109 that provides an additional payment under the Medicare inpatient prospective payment systems to hospitals located in counties in the bottom quartile of counties as ranked by risk adjusted spending per Medicare enrollee; (5) clarify the timing for the election period for territories to choose to establish Exchanges; (6) clarify new requirements for community mental health centers to be eligible to participate in the Medicare partial hospitalization benefit; (7) strike section 1303 of the legislation (CMS-IRS Data Match to Identify Fraudulent Providers); (8) delete a provision providing for transfers of amounts collected from the supplementary medical insurance trust fund; (9) modify the pharmaceutical industry annual fee schedule; (10) modify the excise tax on importers and manufacturers of medical devices by lowering the rate to 2.3 percent and by eliminating the exclusion for Class I medical devices (except if such devices are of a type which is purchased by the general public at retail and for individual use.); (11) strike section 1411 of the legislation (No Impact on Social Security Trust Funds); (12) amend section 1501 to incorporate the funds into the Trade Act and strikes the provision in section 1501 that expands the focus of programs to individuals eligible for unemployment insurance; (13) move the $13.5 billion in additional Pell funding for fiscal year 2011 into section 401 of the Higher Education Act; (14) strike section 2102 of the legislation (Student Financial Assistance); and (15) strike section 2213 of the legislation (Agreements with State-Owned Banks).

Don't stop calling or e-mailing until the vote is taken.More to come...

Call,call,call TODAY!

2010-03-20T10:46:00.002-04:00

Call,e-mail and fax every member of the House today.It's the last chance to stop this travesty called health care.

In particular,Bart Stupak may be the key to defeating it if his group receives our support and holds together.Contact him at (202)225-4735.More to come...

Votes have consequences

2010-03-19T22:27:00.001-04:00

The last word on earmarks

2010-03-15T11:09:00.006-04:00

I've addressed this subject previously,but it seems pertinent to do so again with the issue currently on center stage in Congress.There are strong misconceptions in this country about earmarks attached to legislative appropriations bills.They are viewed as evil and wasteful spending.

An earmark is simply a portion of a spending bill dedicated to a specific area or project.In fact,I believe every bill that passes should be 100% earmarks.Ron Paul has also made this statement.The reason being is that every dollar is then tied to a specific project and thus also tied to a specific member of Congress.

This is the ultimate in transparency in Congress.You get to see exactly who spent what,where,when and why.When an election cycle comes up,you then have a track record of spending tied to the candidate.Earmarks are a good thing.When you don't earmark specific dollars of a spending package,it falls into the general slush fund.Take the stimulus,which is rampant with fraud.Billions of dollars going to who knows where.We can only hope to find out after the fact where the money ended up.

Earmarks are mistakenly confused with pork.Pork is money ADDED onto a spending bill for a project after the original bill was drafted.An earmark DOES NOT increase the amount of a bill,it only specifies where the existing dollars go without increasing the size of the bill.This is a major difference and misunderstood by nearly all including the media apparently as they continue to denigrate earmarks.

For example,say we have a $100 billion dollar road building bill.Without earmarks,that money will end up in the general fund where it can be redirected to payoff lobbyists,reward specific contractors or just disappear.Sound like the social security trust fund money?With earmarks,the $100 billion is divided up amongst the variety of designers,construction companies and anything else required to complete a project such as this.You at least know where the dollars were intended to go as the government,of course,will still succeed in redirecting it and wasting money anyway.Nature of the beast when government is involved at all.But you see the difference.

If you want the best you can hope for in accountability of where your tax dollars are actually being spent,you want 100% earmarks.How many black hole government projects have you seen where no one ever finds out where the money went?This is not to say there aren't wasteful earmarks.Absolutely,the vast majority of them are.But the point is this way you know who initiated the earmark,who else signed onto it,how much it was,and where it was targeted.You make that member pay at the ballot box if they aren't spending your tax dollars wisely.

You can certainly argue the point that earmark reform is needed and the rules for how they are used to protect against abuse should be changed.There is no question this is a problem and needs to be addressed.But it mystifies me as to why anyone would think we are better off leaving the discretion of where the money is spent to the White House and other bureaucrats rather than members who are accountable to their districts.This is,after all,one of the main reasons they are in Washington is to fight for their districts and make sure federal dollars are spent there.That's how we get at least a portion of our federal tax dollars back.More to come...

Does your party have the right plan?

2010-03-14T05:04:00.001-04:00

President Obama is leading the way continually telling us that we must tax the rich more.The IRS has released results from the 2008 tax year which show why this isn't enough.Over 51 million filers paid zero federal taxes or even received a refund.We have 305 million citizens in this country.142 million filed a tax return.This means that 163 million didn't file and 214 million total paid NO federal income tax.This doesn't factor in the illegal aliens living here that don't file either.Estimates vary from 11 million to up to 20 million.The bottom line is that over 70% of the people living in this country pay NO federal income tax.

Try to imagine a scenario where 7 out of 10 people contribute nothing toward the bottom line.That's a recipe for failure.To say that those 3 people need to pay an even larger share of the burden is simply wrong.The focus needs to be on reducing the overall burden on the 30% of Americans that are supporting the other 70%.In other words,not on raising taxes,but on cutting spending.Neither major political party is interested in this despite the political posturing supporting it.Actions speak louder than words couldn't be more fitting than in this case.

For the first time since the 1930's,Americans are actually receiving more money from the government than they are paying in.An average of $260 for every U.S. resident.This means that we get more money thru programs like social security and unemployment than is taken in from taxes.Another unsustainable formula.When we receive more money back than is paid in thru personal income taxes and payroll tax withholding,it can't work.

So far,we have 30% paying for the other 70% and we are taking out more than we are paying in overall.This is not rocket science.The news is filled with stories showing that we need more money for schools,roads,police,fire,etc.You name it and no one has enough funding.Just as every cause is important to somebody.Maybe not you,but someone else thinks so.I haven't even mentioned the debt yet either.Let's just say that with a $12 trillion dollar debt and tens of trillions more in unfunded liabilities,it is overwhelming.

The facts are that the population is always increasing.That a smaller percentage of it is carrying the tax burden.That the needs of the non-paying portion are increasing.The Democrat solution is to make the smaller percentage of the population,otherwise known as the rich,pay an even greater share to balance the burden.The Republican solution is to spread the burden across a larger percentage of the population to balance the burden.The facts are that neither side has succeeded in implementing a plan that pays for what Congress spends.

The decisions we make as voters are getting more vital each election.It's easy to see that the path we're on is unsustainable.And there isn't a single entitlement program or other use of tax dollars that isn't important to somebody.The fact remains that the money going out exceeds the money coming in and that imbalance is rapidly going to get worse.Is your party and your candidate going to fix it?Do you know what their specific plan is to do it?If you continue to vote for the same old message from the same old two parties that have shown they can't deliver,you have the definition of insanity.Better have that checked out.More to come...

Detroit/Haiti-opposite directions

2010-03-14T03:14:00.003-04:00

A Tale of Two Cities

Haiti’s President visited the White House on Wednesday to discuss his plan for rebuilt Port-au-Prince. The plan has a price tag, of course, something that I’m sure the Obama administration would consider small potatoes:

Haiti’s President went to the White House yesterday with a vision of a Caribbean paradise waiting to be rebuilt after January’s catastrophic earthquake — and a price tag that could rise to $14 billion (£9 billion).

In a document that the Haitian delegation calls simply “the plan”, the slums and rubble of Port-au-Prince make way for a model city of cycle paths, beachfront boardwalks and ecofriendly housing. The economy roars back to life, thanks to tourism and cash crops such as coffee, mangoes and freshly cut flowers, and a hugely ambitious social engineering project permanently relocates at least half a million refugees to suburbs outside the devastated capital as the beginning of a new Haitian middle class.

The Mayor is always behind “hugely ambitious social engineering projects”. Forcing half a million people from the city where they live and relocating them to the *suburbs* (whatever a Haitian suburb is) sounds like a winning idea to me. And I find it especially appealing that once these people are forced to the suburbs, they will be rebranded as “middle class”. That’s a nice touch.

Up the road and to the left - Detroit, another third-world country - has a plan to deal with its urban blight:

Detroit Mayor Dave Bing said Tuesday the city will focus on demolishing thousands of its most dangerous vacant homes and fixing up salvageable ones as he lays the groundwork for a long-term plan to downsize.

It’s not known, Bing said, how much downsizing might cost or how much of the 139-square-mile city could be involved. He wants to make sure residents are a part of the long-term planning process and buy into the city’s plan.

To downsize Detroit, large swaths of the now-blighted, rusted-out city would be turned back into the fields and farmland. The city would pump new investment into stronger neighborhoods, which would become pockets in expanses of green.

For much of the 20th century, Detroit was an industrial powerhouse. Now, the city of nearly 2 million in the 1950s has less than half that number. According to one recent estimate, Detroit has 33,500 empty houses and 91,000 vacant residential lots.

As with Haiti, many Detroit residents will have to be relocated out of their current mess and into a new atmosphere. Fortunately for them, they too will be regarded as middle class after they are booted from their houses.

What does the Haiti plan and the Detroit plan both have in common? They have that sweet Chairman Mao smell to them. And just like the policies of Mao, perhaps these relocated urbanites will be sent to the countryside and to the mountains to be re-educated. An American Great Leap Forward®, as it were.

Sometimes if you want to build you have to destroy first. And it’s great to see the liberal policies that have destroyed this once great city are now willing to raize Detroit to the ground and rebuild it by not rebuilding. Power and greatness through neglect. That can be Detroit’s new logo. No charge, gratis, courtesy of The Mayor.

I have an idea how we can make money off Detroit’s demise - with t-shirts. Let’s design a series of shirts with different landmarks on each. For instance, one shirt can have a crumbling GM on it, while another can have a razed Gillette building; another shirt can have a picture of a corroded steel plant. Below each crumbling infrastructure we have the words, “Razed in Detroit.”

It’s a winner, all I ask is for a small royalty

Thanks to the Mayor of Mitchieville.More to come...

Tick-tock-tick-tock...

2010-03-13T13:11:00.002-05:00

Here's a sobering look at how difficult our debt situation has become.The Tax Foundation produced this chart showing the tax increases that would be required merely to eliminate the federal budget deficit for just this year.This would not touch the total DEBT,only this years DEFICIT.

Table 1
Federal Individual Income Tax Rates for Joint Tax Returns
Current Law Versus Rates Necessary to Erase Deficit
2010

Tax Brackets for
Couples Filing
Joint Returns
Current Law
Tax Rates
Rates Needed
to Close Deficit

$0 to $16,750
10%
24.3%

$16,751 to $68,000
15%
36.4%

$68,001 to $137,300
25%
60.6%

$137,301 to $209,200
28%
67.9%

$209,201 to $373,600
33%
80.0%

$373,601 and over
35%
84.9%

Note: The rates are the same for single taxpayers,
but the brackets vary. For the bottom three brackets, the
threshold amounts are exactly one-half what they are for
couples. For the top bracket, the threshold is the same for
singles as for couples. Brackets are shown for 2009; inflation
adjustment for 2010 will be announced in the summer of 2010.

Source: IRS and Tax Foundation

Of course,Obama and his co-horts in Congress plan on racking up trillion dollar deficits for years to come,so these tax increases would have to be permanent merely to keep pace.The obvious solution would be to cut spending dramatically,but let's keep it real here.

The debt and spending issues are well known.We are also led to believe that the recovery efforts are based on consumer driven spending.The White House publicly states that it wants us to become savers again as a nation.Unfortunately,it's policies dictate that we must spend like drunken sailors for the economy to rebound.It's a misconception that consumer spending is down drastically.Less than 2% from 4Q2007 thru 2Q2009.That's significant,but not a deal breaker.Consumer confidence is,however,down appreciably and that is a more telling statistic.

The more critical number to watch is investment spending.Down almost 30% from early 2006 thru late 2009.This has a direct negative effect on the economy.Investment in equipment,software,training,etc. by companies allows them to stay competitive and grow.

The clock is ticking.State budgets are collapsing.More banks are failing.Unemployment is still growing,even if less severely.Commodity prices continue to rise.Commercial business foreclosures are escalating.The Federal Reserve continues to lend money nearly free which is encouraging banks and other investment companies to wade back into the derivatives markets.The bailouts have given the signal that they will be rescued should they fail enabling them to leave good fiscal practices out of the equation.Even if the bomb blast doesn't get you,the flying shrapnel likely will.More to come...

Detroit HUD office about to be exposed

2010-03-12T22:10:00.002-05:00

James O'Keefe of undercover ACORN videos fame has turned his sights on HUD.The Detroit and Chicago offices will take centerstage and the Detroit Free Press is also in on the cover-up.Here is the link from Breitbart.

http://bigjournalism.com/mwalsh/2010/03/11/wired-conde-nast-scoop-breitbart-the-bigs-hud-next-okeefe-video-sting-target/

More to come...

Be pro-active in tax planning

2010-03-12T12:39:00.002-05:00

Hopefully you take some time at the beginning of each year to review your tax situation and make sure you are having the correct amount deducted from your paycheck each week.Many people fill out their W-4 when they get hired and then never revise it again the entire time they are employed.

This is bad for the obvious reason of deducting too much so that you get that big fat refund check back each year.This simply means you have succeeded in allowing the government interest free use of your money for the entire year.Bad idea!Your goal should always be a zero return,nothing owed and nothing returned.This gives you the maximum amount in your paycheck and allows you to make money on your money and not the government.

However,this year is more important than most to get it right.State budget woes across the country are causing some states to delay tax refunds.So that refund check you may have been banking on to be there right around now may not be there.Next year the stimulus program will be completely done and states that may have utilized it for balancing their budgets may be cash-strapped and go to this step of holding back your refund.You can prevent this now by reviewing your tax situation today and making the necessary adjustments to your withholding so you don't get a refund next year and potentially face having your money withheld.Interest free I might add.

Here is a story concerning this subject from the USA Today.

States May Hold Onto Tax Refunds for Months
(USA TODAY/March 12, 2010) Residents eager to get their state tax refunds may have a long wait this year: The recession has tied up cash and caused officials in half a dozen states to consider freezing refunds, in one case for as long as five months.

States from New York to Hawaii that have been hard-hit by the economic downturn say they have either delayed refunds or are considering doing so because of budget shortfalls.

“It’s an indicator of how bad it is,” says Scott Pattison, executive director of the National Association of State Budget Officers. “You know things are bad when you have to do that.”

New York, hit with a $9 billion deficit, may delay $500 million in refunds to keep the state from running out of cash, says Gov. David Paterson.

Hawaii’s Department of Taxation says some residents may not see state income tax refunds until the end of August, The Honolulu Advertiser reported. It was part of a plan by Gov. Linda Lingle to deal with a revenue drop-off by pushing costs into the next fiscal period, which begins in July.

States often do not have a timetable for refunds because delays are based on cash flow. Most states typically issue refunds within 30 days.

Delaying refund checks isn’t unprecedented, Pattison said, but it is something virtually no politician wants to do, because taxpayers are owed the money and in most cases want it fast. Delays in paying refunds and other state bills can trigger interest on those overdue payments, depending on state laws, he said.

California’s massive budget shortfall of more than $20 billion last year prompted it not only to delay tax refunds but to issue billions of dollars in IOUs to vendors and others who were owed money. State Controller John Chiang called the delayed payments a “shameful chapter in the State’s history” when the IOUs ended last September.

California still faces budget problems, but Chiang said that revenue is running ahead of projections so far this year, lessening the threat of a repeat.

“Californians should expect to receive their hard-earned tax refunds on time,” Chiang said.

The delays come as some states continue to face deep budget holes, even as economists say the nation as a whole has begun recovery. In a recent report, the budget officers group and the National Governors Association said state fiscal conditions “have continued to worsen,” and that state revenues can be expected to lag one to three years behind a national recovery from recession.

This fiscal year, the report said, 36 states have cut nearly $56 billion in spending, and 30 states have cut funding to public and higher education.

More to come...

Policy wishful thinking

2010-03-10T15:44:00.004-05:00

What's good for the goose is apparently not always good for the gander.At least in the world of Obamanomics.I just finished reading thru the 2010 economic report from the White House council of economic advisors.Christina Romer is the council chair and she likes to play the blame Bush game as much as Obama.Here is a statement discussing the inherited problems.

"All told, the Obama Administration inherited a very different budget
outlook from the one left to the previous administration. Figure 5-5
compares the budget forecast in January 2001 (Congressional Budget Office
2001) with the budget outlook in January 2009 described above.3 In 2001,
CBO forecast a relatively bright fiscal future. After a decade of strong
growth and responsible fiscal policy, the budget was substantially in surplus,
and CBO analysts projected rising surpluses over the next decade, even
under their more pessimistic policy alternatives. Rising health care costs
would squeeze the budget only over the long term, and the retirement of the
baby boom generation was still more than a decade away. The intervening
time could have been used to pay off the national debt and accumulate substantial assets in preparation. But policymakers chose a different path.
They enacted policies that added trillions to the national debt and doubled
the size of the long-run problem. Combined with a deteriorating economic
forecast and technical reestimates, the result was a much worse budget
outlook in January 2009 than in January 2001."

She makes a point that Bush should have payed off the national debt.The whole thing.She didn't say pay it down,she said pay it off.According to her,the only reason Bush didn't pay off the entire thing is policy choices.He could have if he wanted to in his two terms.Now,when it comes to Obama,the rules have changed.Quickly paying down the debt is considered unstable and unwise fiscal policy.Lucky for us,Obama has chosen a long term gradual approach.Here is her quote.

"The actions the Administration has taken and is proposing would
reduce deficits by more than $1 trillion over the next 10 years and by even
more after that. These actions are significantly bolder steps toward deficit
reduction than any taken in decades, and they will face serious opposition by
those with vested interests. Even with these actions, however, the primary
budget is forecast to remain in deficit in 2015. And the longer-run fiscal
problem facing the country still centers on the growth of health care costs
and the aging of the population. Thus, barring a substantial and sustained
quickening of economic growth above its usual trend rate, further steps will
be needed to get the deficit down to the target in the medium and long run."

No longer do we see the urgency to address the debt.Particularly from an administration that prides itself on urgently passing every program it creates.We also have a small discrepancy from the non-partisan CBO on those projected deficits.

"(Reuters) - President Barack Obama's budget plans would rack up $9.8 trillion more debt by 2020, or $1.2 trillion more than the White House has forecast, the Congressional Budget Office said on Friday."

Christina Romer makes the point of stating the deficits will be reduced by more than a trillion in the next decade.She doesn't point out that is ANNUALLY and not cumulatively.All in the eye of the beholder.I just wonder why Bush could have completely eliminated the entire national debt with some policy changes,yet Obama can only hope to keep the annual deficits under $1 trillion dollars each year after a decade of his policies.More to come...

Michigan gets an 'F' for race to the top money

2010-03-05T08:23:00.003-05:00

The state of Michigan was bypassed in the first round of the race to the top funding.This is the $4 billion grant program for state education programs.16 states were selected in the first round by a panel using a point ratings system based on the states application.

Michigan sent in their application at the deadline and some wonder if this is the reason we were passed over despite the massive funding issues for education in this state.The MEA,Michigan education association,dragged their feet in signing off claiming they didn't have adequate time to review the application.Finger pointing will be on full display now.The second round application is due on June 1st.

I read the recommendations for the budget.Michigan is a category 2 state meaning the Dept. of Education is recommending our budget request be in the $200 to $400 million dollar range.The Michigan budget request came in at $526,274,787.How about that?Even when we are asking for handout money,we go over budget.I don't know if this was a deciding factor in Michigan being passed over,but you'd think the state would have kept the request in the stated guidelines for the most positive consideration.The reviewers comments and scores will be posted later,so maybe we'll find out at that time.More to come...

Jobs bill vote exposes the hypocrites

2010-03-03T07:18:00.004-05:00

Many argue that there is no practical difference between the 2 parties.The recent flare-up over Sen.Bunning effectively blocking the jobs bill is a prime example of this.Make no mistake,this was all about politics,not trying to deprive the little guy of his unemployment extension.That's the Democrat spin,but it's not what was really going on.

Bunning was absolutely 100% correct in taking the stand that he did and he exposed the other 99 senators as hypocrites.Even though 18 eventually voted no with him,they would not have his back prior to the vote.They just passed the silly paygo rules that Obama wanted to make a show of fiscal responsibility.This was not necessary as they have no constitutional authority to deficit spend anyway,so the paygo pledge is irrelevant.

Bunning was merely forcing the senators to take a vote and go on record as being hypocrites.Senate majority leader Harry Reid made the decision to force this bill thru without debate and he wanted the 100-0 commitment prior to bringing it to the floor to pass it.Obama is also in the hypocrite camp as he has already signed it.

Only a portion of it is "paid" for and this is why Bunning objected.The vote was 78-19.Three didn't vote.All 19 nays were republicans.The bottom line is Bunning got no support from the republicans who let him hang out to dry because their internal focus group polling decided this was a political loser.So much for standing on principle.This whole debacle shows that in some areas,there really is no difference between the parties.If the American voters believe they can simply install republicans back in office this fall and then see a change in our governments spending habits,they are fools.More to come...

Are Michigan residents just eternal suckers?

2010-02-28T13:31:00.004-05:00

The citizens of Michigan certainly must think things can't get any worse,can they?I mean,after a decade of depression under Granholm,what's left to get any worse?Unfortunately there is more to come and we are being misled by those in power to think we've turned the corner.

Granholm has been hard at work handing out tax credits thru the MEDC/MEGA like candy.The MEDC/MEGA has a proven track record and it is one of failure.Less than 30% of the announced hirings will ever be filled and for every million dollars given away in those tax credits,another 95 manufacturing jobs will disappear.The program is a complete and utter failure and needs to be scrapped asap.No chance of that happening until the GOP returns to power.

There are 26.9 million unemployed or underemployed workers in the U.S. as of today.The number of self-employed and contractors aren't counted in these dismal numbers either.To put that in a little perspective,Michigan only has 10 million residents total.For real job growth to happen,not the dreamworld of Obama's 2 million stimulus fantasy jobs,we have a couple of obstacles to overcome.First,we need over 100,000 brand new jobs created every single month simply to keep up with the birth and immigration rates.Second,the bulk of those part-time jobs already counted as employed will likely need to be increased to full-time before companies will hire new workers at all.It's only after these two steps occur that we can start the process of restoring jobs for the 15 million that have no job at all.

25% of home mortgages are underwater right now,meaning they owe more on the mortgage than their house is worth.This is the fallout from the derivatives meltdown.We've experienced firsthand what type of stress this places on the economy even when people generally have 30 years to pay off that mortgage.The commercial real estate crisis winds are now blowing.Beginning in earnest in 2011,we'll have $1.4 trillion dollars in commercial real estate loans up for refinancing.An astounding 50% of those are already underwater.Most of these are financed thru your local community banks.Commercial loans generally refinance every 5 years,not 30.

We will face a double whammy later this year and next year.A large block of residential mortgages are up for ARM expiration and will require refinancing into a conventional mortgage or another ARM.Remember,25% of these are underwater meaning they won't be able to refinance which will lead to another glut of foreclosures.Add the commercial foreclosures from the 50% of underwater mortgages on top of that.This will also lead to personal bankruptcies as small business owners go out of business.3,000 community banks are exposed to these potential defaults.Add it all up and you see businesses failing,banks going under,and even more pressure on residential housing as the affected people will then get into trouble on otherwise stable residential loans.It's truly a recipe for disaster.

Today we see GM calling workers back and investing many more millions into it's auto plants again.Green job initiatives are starting thanks to federal stimulus money.This sounds good on the surface.But what will happen when the dual mortgage crisis's really ramp up?Only the short-sighted Obama kool-aid drinkers would risk personal investment income long-term.Sure,you can still make lot's of money in short-term investments today as long as you can get out quickly when things go bad.Many will be caught who buy into the rhetoric being spewed from our government.It's not that we don't want the country to succeed as some say.There simply has to be a solid,stable foundation for recovery to be real.And we don't have it.Not by a long shot.And none of these scenarios take into account X factors like natural disasters and future wars which will be drags on any recovery.Buckle up!More to come...

Michigan problem banks

2010-02-27T12:18:00.003-05:00

I haven't updated this in quite some time.Here is an UNOFFICIAL list of banks that are facing some type of regulatory action and could possibly be in trouble.Calaculated Risk updates this list from surferdude808.Here are the Michigan banks on the list currently.Please excuse the formatting of which I made no attempt to clean up.I only wanted to show Michigan banks only.The entire list will follow.

24199 200,482 N OCC Capitol National Bank Lansing MI 12/22/2009 Consent Order General CBC
30005 1,712,782 SB FDIC CF Bancorp Port Huron MI 2/4/2010 Consent Order (8-K) General CTZN.PK
30005 1,712,782 SB FDIC Citizens First Savings Bank Port Huron MI Cease & Desist CTZN
34597 242,822 NM FDIC Clarkston State Bank Clarkston MI 6/16/2008 Cease & Desist General HRTB.OB
29981 167,087 SA OTS Edgewater Bank Saint Joseph MI 10/20/2009 Cease & Desist General
33883 994,481 NM FDIC Fidelity Bank Dearborn MI 2/23/2010 Consent Order (8-K) C&D RE DEAR
14370 332,378 N OCC First National Bank in Howell Howell MI 9/24/2009 Cease & Desist CRE lending FNHM.OB
32541 13,994,577 SA OTS Flagstar Bank, FSB Troy MI 1/27/2010 Supervisory Agreement General FBC
34878 53,021 NM FDIC Lakeside Community Bank Sterling Heights MI 11/18/2009 Consent Order C&D RE MCBP.PK
34618 1,826,955 NM FDIC Macatawa Bank Holland MI 2/24/2010 Consent Order (8-K) C&D RE MCBC
28136 100,435 SA OTS Mainstreet Savings Bank, FSB Hastings MI 5/29/2009 Cease & Desist General Yes 12/31/2009 MSFN.OB
33134 1,107,629 NM FDIC Michigan Commerce Bank Ann Arbor MI 4/20/2009 Written Agreement General CBC
35586 113,678 NM FDIC New Liberty Bank Plymouth MI 6/17/2009 Cease & Desist CRE lending
34953 263,579 NM FDIC Northpointe Bank Grand Rapids MI 10/1/2008 Cease & Desist General
9719 330,838 NM FDIC Oxford Bank Oxford MI 5/15/2008 Cease & Desist General OXBC.OB
33126 107,019 NM FDIC Paragon Bank & Trust Holland MI 11/10/2009 Cease & Desist CRE lending CBC
34673 288,263 SM FRB Paramount Bank Farmington Hills MI 11/6/2008 Cease & Desist General
14939 462,001 NM FDIC Peoples State Bank Hamtramck MI 9/18/2009 Cease & Desist General PSBG.OB
34127 97,196 NM FDIC Select Bank Grand Rapids MI 8/28/2008 Cease & Desist General
32232 749,311 SA OTS Sterling Bank and Trust, FSB Southfield MI 8/4/2009 Cease & Desist General
11406 335,267 NM FDIC The State Bank Fenton MI 12/29/2009 Consent Order General FETM.OB
14587 133,851 NM FDIC University Bank Ann Arbor MI 2/12/2009 Cease & Desist General UNIB.PK
22308 148,338 MI FDIC West Michigan Community Bank Hudsonville MI 2/19/2009 Cease & Desist General FETM.OB

Here is the link to the entire spreadsheet of all banks nationwide.

http://cr4re.com/PBLFeb2610.html

Since the official information is not made public for obvious reasons,this list is the best indicator available to illustrate troubled banks that may fail.More to come...

Was Bunning an idiot,or is he 100% right?

2010-02-27T05:18:00.003-05:00

Sen. Jim Bunning (R) from Kentucky is just getting ravaged across the spectrum for his decision to block the legislation that would extend federal unemployment benefits past the Feb. 28th deadline.On the surface,it appears to be a heartless move when so many are dependent on those weekly checks.As usual,it's a little more complicated than that.

He's actually doing what should be considered the proper thing.He's protesting the fact that the $10 billion extension is not paid for.Congress is per normal passing legislation without funding.To be fiscally responsible,he should block it.Harry Reid is contending that this is an emergency situation and thus normal accountability rules don't apply here.Do we see a pattern with these "need to act now" actions?

The real problem is all of this could have been avoided ahead of time.This will still pass anyway,probably after the Democrats implement cloture and pass it with 51 votes.That will cause a delay and all of the unemployed will have to reapply and will miss at least one week of benefits.

But keep in mind that Bunning has disputed this for some time and Reid elected not to take any action ahead of time.Now,the Democrats want to gain some political capital at the expense of the GOP,even though Bunning stands on his own not supported by his colleagues.There were several options available to head this off and have it "paid for".Remember the Obama pledge of paygo?That all legislation must be paid for as it's passed?

Bunning won't get anyone to back him here as this is way too big of a political hot potato.He's also retiring at the end of the year and doesn't need to worry about fallout.So,I would hope that he rescinds at the last minute after having made his point as the unemployed are going to pay the price for being caught in the middle of a political battle.But for the record,he's absolutely correct in his stance.We simply can't continue to spend without limits and accountability.And Reid could have avoided the whole incident had he been proactive when there was time.Instead he chose to make this into an "emergency situation" and he is just as much to blame here.These spending battles are likely to become more commonplace in the future as our economic situation continues to deteriorate.More to come...

Nuclear option begins!

2010-02-25T18:33:00.002-05:00

The nukes are in the bullpen warming up.That's the message delivered by Obama today.He had his dog and pony show and it went as planned.The Republicans laid out their ideas (again,despite the claims of not having any) and rejection was assured.Of course,the President said the right thing.He will take the next few weeks to ponder some of the GOP proposals and he hopes they will do the same.Make no mistake,the gears are now turning for reconciliation in the Senate,the so-called 'nuclear option'.

He pointed out that the bridge was maybe too large of a gap,and that they would move forward after this 'pondering' period with parliamentary procedures and that the upcoming mid-term elections would decide who's right.In other words,we are going to ram this bill thru despite what the public wants or what alternatives the GOP presents.He took time to relay that whenever he hears from the public,they always agree with each important point of his reform proposal.They simply disagree with the overall package.Huh?Does that make any sense?We supposedly agree with all aspects of his plan,but overwhelmingly disagree with the whole thing.Classic doublespeak.Politicians are experts at spewing forth a detailed breakdown of their point,and then you end up more confused than before you started.

We must now suffer thru a period of potentially six weeks in which we will watch a degrading of the process.It starts with the politically correct statements of an attempt at bi-partisanship.We will find the chasm to great to overcome and the President will continue with his urgency platform that we cannot wait,cannot start over,and that the GOP simply won't compromise enough on key points.Thus,he will have no choice but to push the nuclear button.

This is all a foregone conclusion.The real question is in the House.The Senate bill will still be radioactive from the fallout (sorry,can't help myself).Will enough House Democrats be willing to go completely over the cliff to pass it?Obama will rubberstamp anything thrown his way.I've been saying that for a year now.He will pass some version of healthcare reform for his legacy.Anything that gets added to it for decades to come will always be attributed to him and his ability to pass what no other could for a half-century.

We hear that Pelosi doesn't have the votes.That Bart Stupak and his gang will hold it up over abortion language.I still believe that at the end,the Democrats will close ranks and do it.They will believe the fallout to be worse by doing nothing after all their efforts.The onus will then be on the voting public to make them pay with their political career.More to come...

Fearless prediction

2010-02-25T10:38:00.002-05:00

Swami says global warming will be blamed for stalling the recovery and raising the unemployment rate.Fox released this story showing how the snowstorms in the northeast have created a layoff spike.Using standard Al Gore thinking,it was easy to see that since global warming has created more intense snowstorms,it created the layoff spike.Here's the story from Fox.

New Jobless Claims Jumped to 496,000 as Heavy Snow Caused Rise in Layoffs

The number of new claims for unemployment benefits jumped unexpectedly last week as heavy snows caused layoffs to rise.

WASHINGTON -- The number of new claims for unemployment benefits jumped unexpectedly last week as heavy snows caused layoffs to rise.

In addition, many state agencies in the mid-Atlantic and New England regions that process the claims were closed due to the storms and are now clearing out backlogs, a Labor Department analyst said.

The department said Thursday that first-time claims for unemployment insurance rose by 22,000 to a seasonally adjusted 496,000. Wall Street analysts polled by Thomson Reuters expected a drop to 455,000.

Bad weather can cause job losses in construction and other industries sensitive to weather.

Economists closely watch initial claims, which are considered a gauge of the pace of layoffs and an indication of companies' willingness to hire new workers.

The four-week average, which smooths volatility, rose by 6,000 to 473,750.

The four-week average has risen by about 30,000 in the past month, raising concerns that job cuts are continuing. Initial claims had fallen sharply over the summer and fall but the improvement has stalled since the year began.

The economy has grown for six months but is not yet spurring new hiring. Many economists point out that the current recovery is weak compared to the aftermath of previous deep recessions.

The Labor Department said earlier this month that while the unemployment rate fell to 9.7 percent from 10 percent, employers still cut 20,000 jobs. The economy has lost 8.4 million jobs since the recession began.

The Federal Reserve said last week that it expects the rate will average between 9.5 percent and 9.7 percent this year.

The number of people continuing to claim unemployment benefits, meanwhile, was essentially unchanged at 4.6 million. Those figures, known as "continuing claims," lag initial claims by a week.

But there are now many more people receiving extended unemployment benefits that aren't included in the continuing claims figures. Congress has provided up to 73 weeks of extra benefits, paid for by the federal government, for jobless workers who have used up the standard 26 weeks of benefits customarily provided by states.

About 5.7 million people received extended benefits in the week ended Feb. 6, the latest data available, down from more than 6 million the previous week. The extended benefit data isn't seasonally adjusted and is volatile from week to week.

Among the states, North Carolina had biggest increase in claims, with 5,897, which it attributed to layoffs in the construction, furniture and mining industries. Pennsylvania and Kentucky also reported large increases. The state data lags initial claims by one week.

California reported the largest drop in claims, with 5,540, which it attributed to fewer layoffs in services. Illinois, New York, Texas and Missouri recorded the next largest decreases.

So,let's see how long it takes for one of fanatics to make the leap to this conclusion.More to come...

Remember these libs?They're not out of date!

2010-02-24T05:34:00.007-05:00

Wouldn't it be refreshing to see the liberals put their money where their mouth is.They love the thought of redistributing wealth (other peoples,not their own) and paying more in taxes.Unfortunately,liberal ideology doesn't take into account self-accountability and responsibility,rather it requires forced participation from other parties.

I see no reason they can't set a precedent and lead by example.If they believe so fervently in paying more taxes,why not just do it willingly themselves?No one forces you to take the available exemptions,credits and deductions when calculating your tax burden.They could simply reject them and thus pay a higher tax rate.One would think this would relieve them of the burden they must feel with the thought of not contributing enough in taxes.So I say just go ahead and do it proactively.Tax revenues would immediately increase making much money available for Obama to redistribute to the many worthy causes he champions.A true win-win!

OK,enough silliness as this would never happen.You know,today we hear repeatedly that the constitution is outdated and doesn't apply to our culture as it has evolved.This is why judges love case law.Rather than measuring the merits of a case against the actual law itself,they prefer to use precedent as their guide.In other words,whatever the last guy ruled.A dynamic,evolving type of judicial reasoning.They wish to apply the same rules to the constitution.So,rather than review the 10 rights listed in the Bill of Rights,maybe there is another list of ten that they should be more concerned with.Because the laws that they're breaking today don't just throw the constitution away,they break commandments that will cost them much,much more.Yes,those ten commandments.Here they are and isn't it interesting just how applicable they are to what is happening in our society today.

More to come...

Is reality being pessimistic,or just facing facts?

2010-02-22T15:27:00.004-05:00

The deck chairs on the Titanic analogy has never been more appropriate than today.Obama continues on his march to implement his agenda that supports his ideology regardless of public opinion or professional analysis to the contrary.The focus on healthcare and cap and trade and immigration are all misguided at best and reckless more likely.

He makes token resolutions to our jobs situation thru so called stimulus bills that do nothing of the sort.$13 a week in your paycheck does not create jobs.That's your so called tax break.Tax credits to hire workers that aren't needed is another bad idea.The stimulus is what it is.The Pelosi and Reid formula to empower unions and promote green technology with billions available for fraud,waste and abuse.No private sector job growth of any significance.

Meanwhile,we have massive time bombs with ever shorter fuses just ticking away without anything being done about them.This years primary crisis area is state budgets.$194 billion short nationwide.The states used stimulus money in 2009 and again this year to delay the inevitable bankruptcies.This really is a crisis that must be addressed immediately,not healthcare.Media reports about the worst being behind us due to the stimulus and TARP bailouts are flat out wrong.We have merely bought time.If the states don't undertake massive and painful cutting of their budgets (which Granholm here in Michigan has no interest),the fallout is going to be devastating to economies.

The commercial real estate crisis has been discussed for some time now.It will start in earnest in 2011 and run thru 2014.There are $1.4 trillion in loans that will need to be refinanced.Many of these are underwater with the assessed value less than the loan value.Even those with stellar credit won't be able to get a new loan under that scenario.The nations smaller banks have the largest exposure to these loans and many will fail when the foreclosures accelerate.The larger banks had their dog and pony show last year called the stress tests.Unfortunately,it only went thru 2010 when this problem has only begun to materialize.Of course,the administration was well aware of this and rigged the tests accordingly.

For years,we have talked about the debt and the long term costs of entitlements.It was always a far off problem that some generation would have to tackle.It appears that we are that lucky generation.Our politicians don't speak of it in those terms.We hear that we are spending our kids inheritance and this will be their problem to deal with.Wrong.These problems are progressing at breakneck speed to be dealt with much sooner.Remember,just a couple years back,we were told that social security would reach the tipping point in 2019.This is when outlays would exceed revenue.Well,that point is already here today.Not only are the trust funds empty,we are now spending more on benefits than we are taking in.The difference must come from the general fund.Seen any extra in there,lately?

It's frightening when you look at what levels are required just to keep our heads above water.With unemployment,we must create,not save,over 100,000 brand new jobs each and every month just to keep with the birth rate and new immigrants entering the country.This doesn't factor in illegal immigrants either.So when Obama touts his stimulus as creating 95,000 jobs each month this year,we aren't keeping up with the growth rate,let alone recovering the 15 million American jobs for people out of work.

With GDP growth,this is similar.Due to our debt of over $12 trillion,our trillion dollar plus deficits projected each year to add to it,and the unfunded liabilities of social entitlement programs that some say exceed $100 trillion,we have a similar scenario to unemployment.We need a large amount of GDP growth each year for decades just to address these accumulated debts.The Congressional Budget Office says 2.6% over each of the next 50 years and 3.2% when extended out to 75 years.These are conservative estimates based on a historically growing economy and they don't include interest.Several studies have been done and conclude that just to return to our 2005 level of GDP and also address our debt and liabilities,we would need between 7 to 10% annual GDP growth rates all the way thru 2050!Every year for 40 years!Again,not including interest on the debt.No one is projecting growth numbers even remotely close to this in their most wildly optimistic scenarios even over the short term,let alone for 40 years.

Frankly,this situation is out of reach.Many say we can still turn things around if we just do...,yeah,right.Nobody likes to talk about us being past the point of no return.But that's exactly what our government has done.Both parties and generations of politicians are at fault.It's impossible to predict when this will all come to a head,so I won't even try.But the simple fact remains that we will have to make fantastically unpopular decisions on both the debt and entitlement programs someday soon.Our standard of living will be drastically altered.But it's the only way our country will not end up just a chapter in the history books.Sound too dramatic?Study the numbers yourself and try to find a solution.And don't forget to factor in our politicians who have no willpower to be the ones to make those hard choices because their primary concern is re-election.The 'let the next guy fix-it approach' has run it's course.More to come...

Michigan's unemployment taxes going up 775%?

2010-02-20T08:53:00.011-05:00

At a time when Michigan employers can least afford it,they are going to be paying more in unemployment taxes.This scenario looks to be essentially an annual increase as far as the eye can see.Our unemployment trust fund is insolvent and constantly borrowing more.Let's take a look at the program.

Each employer is charged with a 6.2% payroll tax to fund the unemployment insurance program.However,if that employer's state is current on any federal loans,they receive a tax credit,otherwise known as FUTA,of 5.4%.Taxes are paid on the first $7,000 of income in Michigan.So a $434 tax is reduced by $378 leaving the employer to actually pay $56 per employee each year.

That was until 2009.Michigan became the first state to be assessed a FUTA penalty.This is due to the fact that we have an outstanding loan balance as a state.Under Title XII of the Social Security Act,states are authorized to borrow money to fund unemployment benefit payments when their state's reserve fund has become insolvent.And boy,are we borrowing.As of Feb. 18th,we are currently in hock for $3,485,282,333.32.We are authorized advances of up to $350 million per month and we have borrowed $113,900,000.00 in February so far.Our total outstanding balance is only exceeded by California,a state just a tad larger and with the same problems only magnified.Oh,and that Treasury program the states are borrowing from?It had a balance of nearly $80 billion in June of 2008.It was down to just over $16 billion at the end of 2009.The Feds will need to step in real soon and get some money appropriated here or the states will be up the creek without a paddle.I'm absolutely sure they will,but where will it come from?

Due to the A.R.R.A.,otherwise known as the stimulus bill,the interest payments on the loan have been eliminated for 2009 and 2010 which saved Michigan $41 million in 2009.That will return in 2011.Oh,and that FUTA penalty.Every year in which we have an outstanding balance,employers will be penalized .3% of their tax credit.That amounts to $21 per employee for 2009.It doubles to $42 this year.This schedule will increase for 19 years.That's how long it will take for the entire FUTA credit to evaporate and employers will pay the full tax of 6.2%.The employer contribution may go from the original $56 per year to the full $434,an increase of a whopping 775%!

Michigan employers also pay a SUTA tax to the state.This varies from 2.7% during the first two years of business to a maximum of 10.3% based on formulas.This is the fund that is insufficient and forcing the state to borrow from the Federal government to cover paying out unemployment benefits.There are always proposals on modifying this system as well which will almost certainly result in employer paid increases to help balance the deficit.It's currently based on the first $9,000 of income,but that would seem certain to rise in light of our deficit.Regardless,I'm not even calculating this factor into the 775% potential increase.

You may say that's only a worst case scenario.True,but with our trust fund insolvent and with our outstanding loan balance now over $3 billion and growing,how long will it take us to repay the entire balance to get out from under the FUTA penalty?Our state faces a $2.8 billion shortfall for the remainder of FY2010 and FY2011.We only have a $47 billion budget annually,so this means our unemployment loan balance already exceeds 7% of the annual state budget.Not only do we need to return to positive growth in Michigan to escape the recession (depression here as far as I'm concerned),we need to have massive growth over a long period to pay off this debt.And this also doesn't take into account any future increases on the tax base.And let's not forget the interest the state will have to resume paying annually in 2011 on the entire balance.Michigan employers had better get accustomed to annual increases for years and years.More to come...

Stimulus failure breakdown

2010-02-18T12:46:00.005-05:00

In light of the fact that the White House is now fanning out across the country to falsely claim that the stimulus has worked,I believe it is our duty to do our part to help inform the public what the reality is.One way to look at it is did it accomplish it's stated goals?Here they are direct from the A.R.R.A.

(1) To preserve and create jobs and promote economic
recovery.
(2) To assist those most impacted by the recession.
(3) To provide investments needed to increase economic
efficiency by spurring technological advances in science and
health.
(4) To invest in transportation, environmental protection,
and other infrastructure that will provide long-term economic
benefits.
(5) To stabilize State and local government budgets, in
order to minimize and avoid reductions in essential services
and counterproductive state and local tax increases.

1.The country has lost 8 million jobs since the start of the recession and 4 million have come during the last year in which the stimulus was in effect.President Obama warned that the unemployment rate could exceed 8% without passage of the stimulus and as we know it did anyway,all the way up over 10%.Christina Romer is the chief economic advisor for Obama and she is on record as stating that the stimulus has already achieved the bulk of it's job creation despite having only spent 30% of the appropriated money.I think it's clear by any measure here that the stimulus has failed in achieving this goal.

2.Who qualifies as 'most impacted by the recession'?Certainly if you have lost your job or your house or your business,you would qualify.You may have lost a large percentage of your investments and that would also include you.I think it's safe to say virtually all Americans were impacted in some fashion,but the above scenarios probably account for the 'most impacted'.We've all heard the unemployment scenario.We have seen our home prices plummet.Commercial real estate is only just now coming into play and foreclosure defaults are a ticking time bomb which will affect all of us at some level during the next couple of years as they begin to unwind.Banks will fail along with businesses being shuttered.Suppliers will then feel their share of the pain as will the employees.The housing price drop attributed to sub-prime mortgages has already been factored in for the most part.Now it is due to unemployment caused foreclosures and this won't let up until the other shoe drops on the commercial side.Stocks have surged tremendously since the spring of 2009 allowing many people to recover their losses.However,the market hasn't risen due to sound fundamentals.It has been due to companies improving efficiency and productivity at the expense of job losses as well as refilling inventories which were allowed to drop artificially low during the recession.These are not sustainable scenarios long term.Supply and demand will now dictate increasing inventories and companies have cut to the bone so any balance sheet increases forthcoming will have to be the usual way.Demand must drive profits and it isn't there.People have less access to credit and have also adjusted their spending downwards due to the recession.The jury is still out on the recent stock market gains and we'll see if they hold up over the next year of the stimulus.All of these factors leave only one outcome-those most affected haven't been helped by the stimulus.

3.Investments in economic efficiency.Sounds rather vague.Yet another area the federal government has no business spending taxpayer dollars.They also have no constitutionally provided authority either.This isn't what was intended by 'promote the general welfare'.Economic efficiency has certainly been improved due to the nature of the recession itself.Companies had to slash and cut to stay alive thus becoming more efficient necessarily.Advances in high tech are still driven by one thing.Profit.That's the rainbow at the end of the tunnel for the companies that expend the resources to develop these advances.The government has determined that it's role is to provide seed money.I believe rather than being the enabler,it should instead not be the anchor.Regulations and the years long process of jumping thru these regulatory hoops are the main roadblock to start-up companies doing research and development.Instead,the government likes to pick winners and losers.You need look no further than the nightmare at Monsanto and what they have done to the corn and soybean industry.We're seeing it play out right now as Government Motors has set it's sights on Toyota.Government is exploding in size and scope and the regulatory burdens are only getting worse,so again,it's another failure as economic efficiency is a pipe dream.

4.Infrastructure building for long term benefits defeats the goal right out of the gate.A stimulus program by definition is a short term,temporary boost.Creating long term projects such as infrastructure are necessary for our civil society to continue to advance.However,these don't qualify as a stimulus project in any way due to the fact that they take decades to complete.This simply falls under the Rahm Emanuel 'never waste a crisis' mentality as a means to justify these programs as a method to boost the economy.Once again,using taxpayer dollars for funding is taking money out of the private sector.There are only rare exceptions such as the Hoover Dam project.This can be shown to have opened up potential markets and growth opportunities where none existed prior.Rebuilding roads and bridges,weatherizing and the other types of projects,while necessary,can still only be categorized as busy work under the stimulus platform.Another failure in the concept of boosting the economy short term.

5.Stabilizing state and local governments.Another area the federal government has no business being in.And how well has it worked?Here in Michigan,our governor has taken full advantage of the 'free' money to patch holes in her budget.She will again in her projected budget for 2011.This allows her to kick the can down the road and leave it to the next governor to actually address real reform.Many states have redirected stimulus dollars from intended projects to fill budget gaps.Yet,have you heard of any that have stabilized their budgets?No,the opposite is true.This is the same for the industries and companies receiving bailouts.They are being rewarded for their misbehavior and are now inspired to do it more.Delaying the pain has the guaranteed effect of making it worse later.A comparison would be a low tire on your car.You could stop and put air in it or replace it with the spare.Painful now because it will probably make you late to wherever your going.However,if you wait and keep driving on it trying to make it home,you'll likely ruin the rim and make the cost much higher later.The federal government cannot play the role of savior to state and local government.All revenue for any level of government comes from the same source.The taxpayers.Even corporate taxes are passed on to us so it's an indirect tax on us.They try to play a shell game by shifting revenue around,but it doesn't address the underlying deficiencies.Again,no stabilization happening here.

In all 5 of the stated goals of the stimulus,it has been an abject failure.You don't need to play the democrat game of accounting for saved jobs or attacking republicans who attend ribbon cutting ceremonies.You can depend on the fact that by the end of year two of the stimulus,we will be amazingly close to the Obama estimate of 3.5 million jobs 'created or saved' by the stimulus.Yet,when you break it down,it doesn't pass the smell test.More to come...

Is Pure Michigan worth it?

2010-02-17T16:50:00.002-05:00

The state of Michigan continues to receive accolades from across the country on how good it's tourism marketing campaign is.Personally,I like the ads and think they do a good job of showing our state in a very positive light.The funding of the program is now in the spotlight given the budget mess our state is in.

In 2009,we spent $30 million on the campaign.This year it's between $5 to $6 million depending on which story you read.The state claims that for every dollar we spend on it,the state gets back between $2.50 and $3.00 in tax revenue,again depending on which news source you are using.

This makes me wonder if this formula is one of guaranteed success,why is the state funding it?What is the goal?Is it to benefit tourism related businesses?Is it to generate additional tax revenue for the state?Is it both?It would seem to me that if the return on the investment is a ratio of 2 or 3 to one,we should be spending much,much more,right?I mean,if we spend $30 million,that means we generated $60 to $90 million more in tax revenue.We also generated all of the increased business required to tax that much which means businesses must have had a proportional increase in sales and thus profits.

The obvious problem is that the state has no money to fund this program as the budget is currently facing a $1.7 billion shortfall for fiscal year 2011.It would seem to me that both business and the state tax coffers benefit equally under this campaign if the claims of 2 or 3 to 1 are true.So,wouldn't the results be the same even if the tourism businesses funded this program rather than our tax dollars?It doesn't matter who is paying for the program,the important point is that it generates an excellent return on the investment.So,who better to invest in this program than the primary beneficiaries themselves,meaning the tourism businesses.

Why shouldn't they fund the program 100%?They are promoting that it works,so this should be a slam dunk return on their money.The state would be even better off because it would continue to see the increased tax revenue without having the burden of funding the program.Looks like everybody wins!Just create a fair assessment program which spreads the cost across the state to all tourism industries and base it on their revenue.The more they make,the more they pay.Sounds great,huh?Just like our income tax system.

See,I think when push comes to shove,you wouldn't find businesses so eager to fund this program despite the claims of super returns on the investment.People love a program like this,only when somebody else is paying for it.And the tourism industry likes the idea of spreading the cost across the entire taxpayer base rather than paying for it themselves.

I question the validity of these claims.If it were really failsafe as they say,my idea would be embraced.There is no question the ads are good.But how effective?I could create a beautiful,enticing ad for Gitmo,but I don't think I'd want to visit.You could promote the beautiful climate,stunning ocean views,the best cigars on the planet,etc.But who would go?That's the dilemma we face here.Our economic situation is so dire and so well documented across the country that we can't realistically get too many people to come here.Regardless of how slick the Pure Michigan ad looks.

So,I say put the cost in the hands of those that stand to benefit most.If they truly believe in the statistics,they will support and expand the program.We have an $18 billion dollar tourism industry here in Michigan.$30 million or more spent on promoting their product seems like a drop in the bucket.Less than .02% of their revenue.Any business spends far more than that in advertising or they go out of business.

Which brings this all back to the point of who really benefits from the tax dollars being directed at this program.I say we call their bluff and find out.More to come...

We can relate to this!

2010-02-15T11:31:00.000-05:00

Who woulda thunk it woulda ever come to this?

More to come...

Granholm's thank you budget

2010-02-15T08:58:00.003-05:00

Reality has been set aside for the 2011 budget for the state of Michigan.Our Governor has heeded the call by Obama that to pull the country out of recession,we need to start spending more money again.So she has proposed a budget that increases spending by $2.1 billion over 2010.This is partially offset by a tax hike of $554 million due to including the service sector in sales tax collections.

She is leaving office with a sloppy,wet kiss for her union buddies.The state unionized employees will see a 3% pay raise under her plan.This follows the 1% raise in 2010 after a freeze in 2009.In comparison,California is facing a budget shortfall of nearly $20 billion in 2011.They also have a lame duck Governor,the terminator.He proposes a spending cut of $8.5 billion and is asking for a federal bailout of $6.9 billion.While hardly the model approach to fiscal sanity,at least California is addressing the need to reduce spending.This after already chopping $60 billion from the 2010 budget.State employees there just took a 14% hit in 2010 and face another 10% hit in 2011 as well as increased retirement contributions,which Granholm also proposes.

The two states have similar financial situations,albeit California's is on a much larger scale.High unemployment and state budgets way out of whack.Yet,our Governor takes the approach of protecting her union buddies and shielding state employees from the reality of just how bad our finances are while California is making theirs join in the pain with the rest of it's citizens.Arnold is hardly a real Republican,yet he plays one on tv when compared to Granholm's political payoffs to her financial backers.

They both make the same mistakes when it comes to budget projections,however.Granholm projects her new sales tax tinkering will be revenue neutral by 2013.The terminator fudges the numbers by shifting money from the general fund and counting on federal bailout money not yet approved in his budget.Any of our nations illustrious accounting teachers would cringe at the methods used to balance the books in either state.The tax credits Granholm likes to hand out are just appalling.The movie industry is getting upped from $116 to $155 million.brought any jobs to your neighborhood?The Brownfield credits for cleaning up industrial sites are simply criminal.A company in Benton Harbor that is responsible for creating an environmental hazard is the same one getting the taxpayer funded handouts to clean up their own mess!

With the nations highest unemployment rate for years,revenue projections are shaky at best.Yet,our state tax revenues haven't been as dismal as advertised due to the distortions of the Headlee Amendment.It's just that a much greater percentage of tax revenue has gone to entitlement programs,a.k.a. wealth redistribution.From 11.2% when the Headlee Amendment to 18.8% today.Here is the link to that story from the Mackinac Center.

http://www.mackinac.org/12084

Despite having a family leaving our state at the rate of one every 12 minutes,tax revenues as a whole have been just fine,thank you.Our per capita personal income reflects this as Michigan is over 13% below the national average.So,we are left with several constants from the Granholm administration.The citizens are still paying more than their share of taxes.State employees continue to prosper at the expense of their private sector counterparts.Our government continues to spend more than they take in.Our state continues to keep shedding jobs both to other states and other countries.Our population keeps decreasing putting added pressure on those who stay to continue supporting our governments fiscal irresponsibility.

Obviously,Granholm is a devoted follower of the Obama school for economic dummies.They work well together and both have one in common.Zero chance for their economic policies to work.More to come...

Will the U.S.default on it's debt?

2010-02-15T01:35:00.004-05:00

We're certainly moving up the risk list,at least according to this report issued by Credit Suisse.Check out some of the countries that are below us and considered less risky,real examples of stability.Click on it to enlarge it.I didn't include the whole chart,I just wanted to show our standing.

No doubt much of the data used to compile this would be very debatable as to it's accuracy,however,it still doesn't bode well no matter our actual place on the list.More to come...

Who is Brooksley Born?

2010-02-13T05:53:00.003-05:00

Never heard of her?Neither had I until the PBS Frontline documentary told her story of how she exposed the eventual credit derivatives meltdown back in 1994 under the Clinton administration.Yet,we are told by Obama that no one saw this coming.Greenspan may be gone,but other members of the effort to keep her quiet hold prominent positions in the administration today.I know this is not hot news today,but if you haven't watched it,it's very eye-opening.Our government was absolutely wide eyed about this looming catastrophe and took all the necessary steps to encourage it.

http://www.pbs.org/frontline/warning

Today,we are taking all the right steps to get these bubbles re-inflated and insure that the financial meltdown repeats itself,only at a far greater magnitude.More to come...

Obama promotes his job loss strategy

2010-02-11T17:40:00.005-05:00

The White House is claiming jobs growth of 95,000 per month on average in 2010.This from the same group that has claimed the stimulus saved between 1.5 to 2 million jobs.That's a nice round estimate.Makes you wonder how they can claim the stimulus put 42,640 Michiganders back to work.Exactly 42,640.Sure thing.

Even if you buy into that line of bull,the new projections have a problem.We need to create,not save,at least 125,000 new jobs each and every month just to keep up with the birth rate and immigration into this country.So,Obama is telling you that despite the original stimulus package and the upcoming jobs bill,he can't create enough jobs just to keep up with our growth rate.30,000 short every month means 360,000 added to the unemployment roles this year.Of course,it's not calculated that way and the problems the Bureau of Labor Statistics has with it's forecasting models are well documented.

By dumb luck,he has taken office with a census taking place so he'll be able to fudge the numbers with the temp workers involved in the census this summer.Normally,we see an increase in the unemployment number around April every year to account for discrepancies in the BLS models.We'll see if the census workers can offset that this year.Any salvation is only temporary as the factors against growth are stacked up and getting worse with each day that we continue to follow our anti-business policies.Be forewarned,D-day is coming.Maybe not this year,but we have to account for our staggering debt and Obama is not taking any steps to do so.All of the toxins in our system that we've heard so much about won't just evaporate.They must be flushed out.We can delay the pain,but we can't avoid it.More to come...

Government spending solution

2010-02-11T07:05:00.002-05:00

The 2nd snowstorm just hammered D.C. and it brought about great news.The Federal Government will be shut down for a 4th consecutive day.Sweet!This lit a lightbulb in my head.This is the way to stop government spending!I think we should immediately demand every ski resort in the country send their snow guns to D.C. so we can keep up the progress.Way to go Mother Nature!More to come...

Jobs folly

2010-02-11T01:04:00.000-05:00

Jobs bill for sale!Are you buying?Another 80 billion down the tubes.As was the case with the stimulus,it can't work.The premise is wrong.A tax credit for employers sounds good on the surface.However,this is simply a supply and demand issue.Businesses must have demand for their products or services before they will hire.Obama continues to show that he has no interest in creating private sector jobs.Tax cuts across the board works because businesses will stimulate growth in reverse.They will expand to take avantage of the favorable tax climate which gets people working.They then spend their income which increases the demand which creates growth and more hiring and the cycle continues.So simple,however,I don't think our President is smarter than a 5th grader like the tv show when it comes to economics.More to come...

Throw out the Michigan constitution?

2010-02-10T18:00:00.003-05:00

It's that time again.Every 16 years,the voters in Michigan must vote to decide on convening a constitutional convention for the purpose of revising our state constitution.It failed overwhelmingly in 1978 and 1994.Here is some reading to get you up to speed.

CRC Special Report
No. 360-01 A publication of the Citizens Research Council of Michigan February 2010
GENERAL REVISION OF THE MICHIGAN CONSTITUTION
Proposal 2010-01 on the November 2, 2010, statewide ballot will ask Michigan voters whether a constitutional
convention should be convened for the purpose of a general revision of the state Constitution. The
1963 Michigan Constitution provides in Article XII, Section 3, that in 1978 and every 16 years thereafter the
question of a general revision of the constitution shall be submitted to the electors of the state.
Options for Michigan Voters
Proposal 2010-01 will ask Michigan electors to assess
how well the fundamental law of the state serves
as a framework for efficient, accountable government
services that meets today’s economic and social
needs. In November, voters will choose: to convene
a constitutional convention to draft a revised
constitution to deal in a holistic manner with issues
perceived to be problematic; or to allow the 1963
Michigan Constitution to continue in its present form.
If Proposal 2010-01 is approved, Article XII, Section
3 of the Michigan Constitution requires a special primary
and a special election to be held within six
months to select convention delegates. Michigan’s
election law provides for four elections in a calendar
year, so the elections would occur in February and
June of 2011. Article XII, Section 3 of the Constitution
further provides that the electors of each representative
district (110 districts) and the electors of
each senatorial district (38 districts) shall elect one
delegate to the convention.
The 1963 Constitution provides that the convention
would convene in Lansing on October 4, 2011. The
delegates are empowered to choose their own officers,
determine the rules of proceedings and judge
the qualifications, elections and returns of its members.
The delegates will be compensated for their
time and to incur additional cost through the appointment
of such officers, employees, and assistants
as it deems necessary; printing and distribution
of documents, journals, and proceeds; and
explanations and information dissemination about the
proposed constitution. The Constitution does not
dictate the length of time that a convention can use
to draft a revised constitution.
If Proposal 2010-01 is rejected by the voters, the
1963 Constitution will remain in effect. The legislature
and voters may continue to adapt the 1963
Constitution to future economic and social needs by
offering amendments to reform specific sections
viewed as problematic. If the question is rejected, it
will automatically appear on the ballot again in the
year 2026.
Michigan voters decided against similar ballot questions
in 1978 (640,286 Yes to 2,112,549 No) and
1994 (777,779 Yes to 2,008,070 No). The 1963 Michigan
Constitution has proven to be a living document,
having been amended numerous times over the 45
years since its adoption.
A state constitutional convention elected by the
people is free to fashion any kind of document it
pleases, subject only to restraints imposed by the
United States Constitution as the supreme law of
the land and subject, of course, to having its work
ratified by the state’s electors. While Michigan‘s his-
Wholesale Revision
tory with constitutional revision has tended to incrementally
build on existing constitutions, nothing
would bind a 2011 constitutional convention to such
an approach.
Further, while a number of electors may agree upon
issues in need of constitutional reform, there are no
First in a series of papers about state constitutional issues
2
CRC Special Report on Michigan Constitutional Issues
CRC Board of Directors
EUGENE A. GARGARO, Jr., Chair
JEFFREY D. BERGERON, Vice Chair
NICK A. KHOURI, Treasurer
JOSEPH R. ANGILERI
JOHN T. BOZZELLA
BETH CHAPPELL
RICK DIBARTOLOMEO
TERENCE M. DONNELLY
RANDALL W. EBERTS
DAVID O. EGNER
INGRID A. GREGG
MARYBETH S. HOWE
DANIEL T. LIS
ALEKSANDRA A. MIZIOLEK
CATHY H. NASH
PAUL OBERMEYER
BRYAN ROOSA
LYNDA ROSSI
JERRY E. RUSH
MICHAEL A. SEMANCO
TERENCE A. THOMAS, Sr.
AMANDA VAN DUSEN
KENT J. VANA
JEFFREY P. GUILFOYLE, President
single, correct reforms to most of
the large and important questions
that would confront a convention.
These are matters of opinion and
judgment, and honest differences
of view can readily be entertained.
In the end, a convention must
submit the results of its deliberations
to the state’s electors for
approval. To merit this approval,
a proposed revision of the constitution
must be a document that
can be read and understood by
citizens and which in meritorious
features commends itself to the
people as a worthy instrument for
the furtherance of effective and
responsible government directed
to the end of serving and promoting
the common good.
The Nature and Purpose of a State Constitution
The idea of a written constitution
defining the structure of government
and enumerating the rights
of the people as a limitation on
the powers of government is
deeply-rooted in Anglo-American
history. The adoption of the first
state constitutions preceded the
drafting of the United States Constitution
by the Philadelphia convention
of 1787 which established
the federal system under which
we now operate—a system under
which governmental power is
divided between the federal or
central government and the fifty
states of the Union.
A constitution should serve the
purpose of a fundamental organic
document: establishing, defining
and limiting the basic organs of
power, stating general principles,
and declaring the rights of the
people.
American constitutionalism presupposes
certain basic principles
that find expression either expressly
or impliedly in state constitutions
as well as the constitution
of the United States. Some
of these are so fundamental and
familiar and their implications so
plain that they need not be developed
at length:
• That political power rests ultimately
in the people;
• That the popular will is reflected
in the constitution and
in the institutions of representative
government designed
to serve the interests and
welfare of the people;
• That the organs of government
are subject to the limitations
imposed by the people and by
the rights retained by them;
• That a constitution is fundamental
and supreme law; and
• That the courts in the exercise
of the power of judicial
review have the responsibility
and the duty to uphold this
fundamental law and to
refuse to enforce legislative
and other acts of government
found to be in conflict with it.
In addition to these principles, a
state constitution can be expected
to achieve a number of fundamental
objectives. The first fundamental
objective is to establish the organs
of governmental power, to
define and distribute authority
among them, and to state limitations
on these powers. Secondly,
the questions of direct participation
by the electors in the legislative
process by means of the referendum
and initiative and the
mechanics of these processes require
attention. Finally, it may be
suggested that since the political
process is such an inherent part of
government and the operation of
representative government, attention
may well be given in the constitution
to the roles that political
parties may play in Michigan’s state
and local government.
Apart from the electorate and the
three branches of government,
the other organs or bodies that
may be vested with constitutional
status are public corporations.
These may be divided into two
categories: (1) municipal corporations
and other local governmental
units including counties,
townships, and metropolitan districts
and (2) public corporations
organized for specific purposes
3
CRC Special Report on Michigan Constitutional Issues
such as the state universities.
With respect to both classes, the
questions respecting constitutional
position and authority—including,
in the case of those in
the first class, the important
questions of home rule status—
are matters of basic concern.
In addition to establishing the
structure of state government,
municipal corporations and other
local governments, and public
corporations, alteration of a state
constitution has the potential to
alter the basis upon which state
laws and judicial decisions are
based. Amending or revising the
state constitution could affect
broad concepts, such as home
rule for local governments, the
involvement of citizens through
elections, initiatives, and referenda,
and the state’s responsibility
for funding public education.
It also could affect more narrow
concepts, such as government
finance, the death penalty, and
eminent domain.
A constitution should not be an
elaborate document. It should be
relatively compact and economical
in its general arrangement and
draftsmanship. Details should be
avoided and matters appropriate
for legislation should not be incorporated
into the organic document.
Chief Justice Marshall
stated this idea in classic form in
the course of his famous opinion
in McCulloch v. Maryland.
A Constitution to contain an
accurate detail of all the subdivisions
of which its great
powers will admit, and of all
the means by which they
may be carried into execution,
would partake of a prolixity
of a legal code, and
could scarcely be embraced
by the human mind. It would
probably never be understood
by the public. Its nature,
therefore, requires that
only its great outlines should
be marked, its important
objects designated, and the
minor ingredients which
compose those objects be
deduced from the nature of
the objects themselves… .
In considering this question,
then, we must never forget
that it is a Constitution we
are expounding.
Justice Cardozo stated the matter
more succinctly:
A Constitution states or ought
to state not rules for the passing
hour but principles for an
expanding future.
The 1963 Michigan Constitution
contains 12 articles, with several
sections contained within each
article. In brief, these articles are:
Article I – Declaration of Rights
sets forth basic individual liberties
which are to be secure from
impairment by the actions of state
government.
Article II – Elections defines the
qualifications of electors and provides
for the place, manner, and
time of elections. Article II also
discusses the board of state canvassers,
recalls, the powers of
initiative and referendum, and
term limitation. Additional provisions
for term limitation are found
in Articles 4, 5 and 12.
The Michigan Constitution
Article III – General Government
establishes Lansing as the
seat of government and provides
for a separation of the powers
within the structure of state government.
Article IV – Legislative Branch
establishes the constitutional
framework for the conduct of legislative
powers through a Senate
and House of Representatives.
Article V – Executive Branch
establishes the constitutional
framework for the conduct of executive
powers by the governor,
lieutenant governor, attorney
general, secretary of state, and
certain boards and commissions.
Article VI – Judicial Branch establishes
the constitutional framework
for the general authority of
the judiciary to interpret the law.
Article VII – Local Government
contains many of the provisions
regarding the system of local government
in Michigan, which includes
counties, townships, cities
and villages, and authorities.
Article VIII – Education defines
the role and responsibility of the
state for elementary-secondary
education and higher education.
Article IX – Finance and Taxation
contains various limitations
upon the otherwise plenary
power of the legislature to raise
4
CRC Special Report on Michigan Constitutional Issues
funds through taxation, ranging
from the proportion of value at
which property may be taxed, to
requiring voter approval before
local governments may increase
certain taxes and indebtedness,
to specifying how certain revenues
are to be expended.
Article X – Property creates limitations
on the powers of eminent
domain and escheats and entrusts
to the state general supervisory
jurisdiction over all state
owned lands.
Article XI – Public Officers and
Employment provides for an
oath of office for public officers,
the beginning of terms of office,
a classified state civil service, a
merit system for employees of
local governments, and for the
impeachment of civil officers.
Article XII – Amendment and
Revision provides for the amendment
and general revision of the
Constitution.
The 1963 Constitution, Michigan’s
fourth, is now 46 years old. Over
that time Michigan’s population
has grown from 8 million to more
than 10 million. Transportation
and communication networks
have developed to connect people
and population centers. The roles
of governments have expanded
to support welfare programs and
to more actively attract and encourage
economic development.
Although certain provisions of the
1963 Michigan Constitution are in
violation of the United States Constitution,
the framework for Michigan
government is generally
workable. Since adoption, 70
constitutional amendments have
been proposed; 30 of which have
gained approval from the electors.
If a constitutional convention
is convened, it will have the
goal of making Michigan government
work better, not to solve a
constitutional crisis.
Over the coming months, the Citizens
Research Council of Michigan
will publish a series of papers
to provide information which
electors may use to decide
whether the convening of a constitutional
convention is in the
best interest of Michigan at this
Series of Papers
time. The series will relate the age
and length of the Michigan constitution
relative to those of other
states; provide a historical perspective
of the 1963 Constitution;
and consider obsolete and problematic
provisions, as well as provisions
that voters may wish to
change in each article to set a
new direction for the state. Look
for these papers to be released
on roughly a bi-weekly schedule
at www.crcmich.org/election and
sign up for CRC’s e-mail updates
to have notice of their release
delivered directly to your inbox.

2-1-1 tomorrow?

2010-02-10T14:45:00.003-05:00

This story is so quiet,it's deafening.Apparently,everyone is simply declaring it all talk.Iran has made the somewhat unusual proclamation about delivering a "stunning" blow to the west tomorrow and nobody is talking about it.I guess it's just lumped in with a standard Bin Laden release in which the threats are always vague so there's nothing to get excited about.I hope their right.Conspiracy talk for a long time has been that the suitcase nukes we've heard about are already in place in our country just waiting to be detonated.One of these "dirty" bombs would absolutely trigger the other shoe to drop on the global economy.I can't even imagine the chaos that would follow if we woke up to that news.Let's hope it's just another overblown threat.Let's also not forget that we were just warned about a "certain" attack in the next 6 months.More to come...

Governing on a curve

2010-02-10T05:52:00.003-05:00

We're all familiar with grading on a curve from school.You know,where you throw out the best and the worst and the middle is where we all end up.In some respects,our government seems to approach things in this way.We all pay the price for the shortcomings of the few.We all need to be protected from ourselves.Now I know some will say,hold on a minute.The government is actually trying to eliminate the middle and move to a two class society,rich and poor.We're all heading for the poor class while our overseers take the high road.I get that.

But I'm just observing how government makes policy on a wide scale basis based on a few incidents.Look at Obama with Joe the plumber.He wants those who succeed to "pull" those below up,otherwise known as wealth redistribution.We see it in our regulatory agencies all the time.It could be safety as is in the news these days with all of the automotive recalls.Pharmaceuticals are another prime example.There are countless examples when you start thinking about it.

All designed to protect the little guy we are told.Big brother watching over us.If anyone saw the incident in Oregon with the kid and the 2 inch plastic toy at school was understandably outraged at our politically correct society going way overboard with another zero tolerance policy.Again,punish all to protect the one.Just like when somebody threw spitballs in class and nobody would fess up.Everybody got to write sentences.

It has it's place.Team sports.The military.Places where everyone must work together as one unit.But I don't think mainstream America wants any part of it.We want government to get out of our lives in every way possible.Do as little as is required.I just saw a clip on the tv above the speedway gas pump talking about the snowstorm shutting down D.C. for a 2nd day.This was going to cost us $100 million per day in productivity the announcer proclaimed.I say she was dead wrong.Any day our government ceases to function saves us countless millions.The exact reason we need to return to a part-time legislature.They used to meet every 2 years.Can you imagine if it were structured that way?Elected officials making minimal pay without career positions that must pass legislation in one month every 2 years?The results would be spectacular simply for holding them to minimal damage if nothing else.

These days,we can't fly our flag if it doesn't comply with someones ordinance.We can't say the pledge of allegiance.Our religious views must be kept to ourselves.We do ridiculous things like shut down the entire farming industry in central California to protect a 2 inch long fish.Our government regulates our toilets.What's in our medicine cabinet.What foods we can eat.The type of car we can drive.Just an endless stream of how to live our lives.All to protect us and promote a civil society where what we do,say or think mustn't infringe on any other person in any way.Karl Marx would have been proud.We are sitting by idly and at times even encouraging our government to strip away our freedom little by little.Marx thought he had to do it forcefully.If only he knew he simply had to tell us it was for our own good.More to come...

What are the 10 scariest words?

2010-02-08T13:57:00.003-05:00

Hello,we're from the government and we're here to help!That should send you running for cover.This year we are blessed with not only tax day upcoming,we can also look for our census in the mail next month so we get an extra chance to get up close and personal with our government.

The census will be heavily advertised as 10 questions in ten minutes.True,but only for the head of the household.Seven more questions for each additional member.Then maybe you'll really be fortunate and get selected to take part in the American Community Survey.2% of us will and this is the really invasive one that replaces the old long form survey.Of course,lots of fines and potential jail time if you don't take part.Sure has come a long way from the founders intent of just a head count as spelled out in the constitution.

I recently posted about the legitimacy of the Bureau of Labor statistics and their accuracy in reporting the unemployment numbers.This spring will be a good test as the temp workers hired to enforce the filling out of the census will skew the numbers.

The BLS forecasting models need to be overhauled or politicians have infiltrated here as well to mold these numbers.Every year the January numbers are artificially low just as they will compensate in April.It's generally because seasonal hirings aren't factored in.Based on past history which you can access on the BLS website,we are in for a spike in April-May that will push the rate over 11%.Let's watch and see.

There are several of these swings over the course of a year and in theory they will all balance out when looking at the long term.This time around,the flaws in the BLS forecasting have really been exposed as the rate doesn't match up with reality.Anyone can verify this just by taking their own informal survey of people they know.

A company called TrimTabs does employment analysis and they track actual deposits of income tax withholdings into the Treasury.Their numbers are significantly higher than the BLS and would seem to better reflect who's actually working rather than using a household survey as the BLS does.Check out Mish's blog for more details.

There is a lot riding on both the census numbers and the unemployment numbers,particularly in this important election year.The government tells us they are simply trying to help us by insuring the resources of the government are fairly distributed.Sounds great,but I'm still ducking for cover.More to come...

Doom

2010-02-04T16:13:00.003-05:00

When it rains,it pours and the forecast doesn't look good.Let's look at a sampling of what's out there.

Tomorrow the unemployment number will be released,however,it's expected to remain flat.The annual January correction to overcome the BLS's flawed forecasting models will be in there and it will be an eye-opener.They always say it's easier to ask for forgiveness than to ask for permission.That seems to be the case with the BLS as they artificially keep the unemployment number low and correct it later after the politics have had a chance to run their course.

The CBO is virtually confirming that social security is broke.You won't see that in any official announcement,but if you review the numbers you'll find out that the tipping point so long warned about is here.They are now taking in less money than what is going out.They like to claim interest on the trust fund on the positive side,but since the trust fund is a paper tiger,it's not real.They don't really have access to that cash.This tipping point wasn't supposed to hit until 2019 and that was the forecast just last year.Obama didn't want to have to address this bailout so soon,but he'll not a choice.

The TARP fallout will kick into high gear as this year progresses.People are going to jail,and once that starts,let's see who squeals and tries to make a deal.The public smells a rat and once the spotlight really starts to shine on the dirty laundry of Goldman Sachs,Bank of America,Citi and all the rest,it could have a profound impact on the financial sector.You can make money right now on bank stocks,but watch closely as time goes on or you might take a bloodbath.

The states will be really the main players this year.Budget issues are bubbling over across the country and Uncle Sam simply can't save them all.I would look for emergencies to be declared all over.This will bring to a head the legal battles with the unions as the states will want to suspend collective bargaining in order to enforce pay cuts.They must declare the emergency to do this.We all know the political fallout this fall will be massive,however,I don't think alot of people have considered the trickle down effect these budget battles will have on them personally.Depending on your occupation or whether or not you receive assistance from your state,millions will be affected in various ways.

The Obama administration is butchering it's handling of so many areas,it's mind boggling.It looks like they will go entirely overboard on healthcare and get it thru regardless of the fallout.Cap and trade is not likely to rise back up anytime soon.Obama has shown he will take the end-around and work thru the EPA instead.National security will remain front and center because our enemies smell blood.He'll also likely take the plunge in some form to get immigration thru.I've always said he's a one termer,a sacrificial lamb to his ideology.He hopes to have a larger than life legacy as being the one who advanced the progressive movement across the finish line.More to come...

Granholm running for 3rd term?

2010-02-04T02:55:00.002-05:00

Apparently she didn't get the memo on term limits because last night's state of the state speech was a campaign speech.She ticked off a list of her accomplishments,of all the jobs she created and how NOW is the time to re-invent Michigan.What was wrong with 8 years ago when we merely had a bad economy?Shouldn't we have taken all these steps before the policy route she chose helped to destroy the economy?

It's pretty easy to list off all the things that need changed when you won't be around to do the heavy lifting.Here are a few grandiose claims;
-She completely re-invented the Michigan education system
-She has laid the new foundation of the Michigan economy away from the auto industry
-Clean energy,life sciences,homeland security,advanced manufacturing,films and tourism.These are the 6 new pillars of our economy
-She claims we have the most skilled workforce,manufacturing know-how and capacity,natural resources and universities.The best anywhere,2nd to none,it's our competitive advantage
-She also claims to simultaneously have strengthened our core industries

Sounds impressive,doesn't it?It leads one to ask the question-how in the world could you have screwed it up this bad with all of that going for us?The answer is obvious,of course.Her claims are nowhere near reality.For every job she claims she created,3 more evaporated.By the end of her term,she will have a net loss of around one million jobs over 8 years.She is tied to the pathetic MEDC/MEGA,which hands out millions in tax credits yet creates less than 30% of the announced jobs.

The education system?Another disaster.The MEA on top of the NEA has only served their self interests well.The promise scholarships are gone.The high pay and benefits remain without the achievement scores to back it up.Since proposal A was adopted,education has had nothing but increases in funding overall.

Families are leaving our state at the rate of one every 12 minutes.A natural disaster couldn't exceed the exodus rate as people are leaving in droves to escape her utopia.

Strenghtened our core industries?And she said it with a straight face!A claim so ridiculous,it really doesn't deserve comment.Let's just say ask your neighborhood auto worker their opinion.

No plan to overhaul the tax structure.No plan to eliminate the MEDC/MEGA.The two most important agenda items she could address if she were serious about revitalizing our economy.She claims that she has no silver bullet and that the next governor won't have it either.I say you don't need it.No magic required.Only a sound fiscal policy is needed.Reduce tax RATES to the lowest in the nation.Across the board.No more tax credits and incentives.Businesses want to see the long term,low tax rate structure in place.This is the irresistible carrot to get them to come to Michigan and invest for the long-term.Temporary incentives never deliver the results because they are just that,temporary.Eliminate the MEDC/MEGA.Then just sit back and watch the tax coffers fill up.

To many,it's a difficult concept.How can reducing rates increase overall revenue?It's not when you consider what drives business.Profit!That's it.Business is in business to make profit.Period.They will go anywhere on the planet that allows them to make the most profit.That's why we must have the lowest rates anywhere.Growth,expansion,investment,hiring.They all follow.Those businesses also invest locally as do the employees.It becomes a snowball growing bigger and the cycle keeps repeating itself.

The only fly in the ointment is politicians.You can pass a balanced budget like she states,and every state already has this requirement,but if you don't cap the spending it's meaningless.They can all figure out that they merely need to raise taxes to have more money to spend.

So to make the statements she did exemplifying the benefits of our state just makes her look like an incompetent fool.She should have taken the high road and simply put out a press release admitting that our state is in the state of confusion and that she is just going to get out of the way and not ruin it anymore for whoever has to fix it.More to come...

"Certain" of an attack?

2010-02-03T16:08:00.002-05:00

How can one be absolutely certain of anything?You must either have direct knowledge or direct involvement in something to make a claim like that.For our government officials to make a statement like they just did to Feinstein is either terribly careless or the alternative no one likes to think about.

Al-qaeda will attack with-in 3 to 6 months.They are certain.One made the statement and two others concurred.Taken on the heels of the Detroit terrorist incident and all of the unanswered questions surrounding it,this would be amazingly stupid if it's simply a mis-statement.

Talk about adding fuel to the fire.The conspiracy theorists are having a field day.I certainly have no insight as to whether or not our government is involved in some way with these terror attacks.However,I do know they are only magnifying the questions surrounding these incidents with their statements.Virtually anyone can say that Al-qaeda is likely to attack with-in 6 months and would have a very good chance of being correct.Just look at recent history.Gee,and I thought the only thing we could be certain of is taxes and dying.More to come...

Never saw it coming

2010-02-03T15:05:00.002-05:00

Check out this report just released by Bloomberg showing 824,000 more jobs were lost than were thought.I can't wait for the White House.Nobody saw this coming.It's much worse than we thought.We really,really need that 2nd jobs stimulus ASAP!

Bloomberg.com: TV and Radio

Now let me take you back to my posting from Friday,October 2nd,2009 which shows that this was merely the expected result,not a surprise.

2-5-2010 Why?

This is the date on which the Labor Dept. will make a slight correction of the benchmark they use when determining the unemployment number.Current projections indicate there may have been 824,000 more jobs lost than were reported.Oops!Here is the text from the bureau.

Preliminary Estimates of Benchmark Revisions to the Establishment Survey

In accordance with usual practice, the U.S. Bureau of Labor Statistics
is announcing its preliminary estimates of the upcoming annual benchmark
revision to the establishment survey employment series. The final bench-
mark revision will be issued on February 5, 2010, with the publication
of the January 2010 Employment Situation news release.

Each year, the Current Employment Statistics (CES) survey employment
estimates are benchmarked to comprehensive counts of employment for the
month of March. These counts are derived from state unemployment insur-
ance tax records that nearly all employers are required to file. For
national CES employment series, the annual benchmark revisions over the
last 10 years have averaged plus or minus two-tenths of one percent of
total nonfarm employment. The preliminary estimate of the benchmark
revision indicates a downward adjustment to March 2009 total nonfarm
employment of 824,000 (0.6 percent).

Here are the month by month blows since the Obama regime took over.And remember,it was just Sept. 24th when Joe Biden stated to the nations Governors that the success of the stimulus exceeded his wildest imagination.

Mar: 652,000
Apr: 519,000
May: 303,000
June: 463,000
July: 304,000
Aug: 201,000 (preliminary)
Sept: 263,000 (preliminary)
Total: 2,705,000

Thank God for the 1 million jobs Obama claimed his stimulus has saved.More to come...

Transparency at it's finest!Please note from the charts that 990,000 jobs have been reported as created on top of the 824,000 just wiped out.Unfortunately,the ticker is still counting,the Bureau of Labor Statistics will keep on reporting the false job gains and we won't hear the corrected numbers until until February of 2011.They are using a false birth/death model for reporting these numbers and refuse to acknowledge it's flaws.The unemployment numbers being reported each month as well as the ridiculous Obama jobs created or saved or totally unreliable.This fact is very transparent unlike the b.s. coming out of Washington.More to come...

Ignorance is the biggest issue we face

2010-02-01T10:29:00.003-05:00

WJRT released the results of a poll to determine name recognition of the Michigan gubernatorial candidates this fall.The results are not good as the owner of a couple of Detroit sports teams gets the nod simply because their last name is Ilitch.

(WJRT) -- (01/29/10) -- Michigan will have a new governor just ten months from now.

Several political figures have announced they are running, and some have just been mentioned as possibilities.

According to an ABC12 Epic-MRA poll none have very high name recognition, except for one.

The primary election is in August, giving candidates just eight months to get their names out to voters.

Related Content
More: EPIC-MRA governor's race poll
For the Democratic primary 38 percent of those polled say if the primary election was held today, they would be undecided about who to vote for. Twenty-three percent say they would vote for University of Michigan Regent Denise Ilitch. Speaker of the House Andy Dillon and everyone else on the list received less than 10 percent.

On the Republican side 22 percent of those polled said they would be undecided if the primary election was held today. Thirty-two percent said they would vote for Attorney General Mike Cox. U.S. Representative Pete Hoekstra got 25 percent and 16 percent said they would vote for Oakland County Sheriff Mike Bouchard.

Genesee County Treasurer Dan Kildee isn't sure how much these numbers actually mean at this point. "I'm not sure that that's the critical question right now. Campaigns generate name ID. Twelve months before he became governor, very few people in Michigan knew who John Engler was."

The poll also showed if the election for governor was held today, a Republican would likely be elected. Even with different matchups, the Republican candidate was picked.

Also in the poll were matchups of various Republican and Democratic candidates in a general election.

In each case the Republican had more support.

The positive is that it shows a Republican would win,however,I never feel comfortable with an uninformed citizenry making choices on such a thin premise.I mean,Granholm got re-elected even after a horrific first term didn't she?If the GOP can't win this time around after such an absymal decade,they should just pack it in and go fishing.Still one of the few things we enjoy here in our great state.More to come...

Rules for radicals

2010-01-30T12:03:00.000-05:00

My first music video link.Barry Soetoro may not be a fan.

Obama the Commander-in-Fear!

2010-01-30T02:20:00.001-05:00

More fear mongering from our President in attacking the Citizens United case just settled in the Supreme Court.Pretty bland stuff if you have no idea what I'm talking about,but very important if you're a constitution supporter.Research it yourself.This decision doesn't enable corporations and special interest as Obama claims.It does,however,repeal what the Congress should never have done which is to restrict free speech in any way whether it's an individual,corporation or the man on the moon.The first amendment makes it crystal clear.

Obama makes the claim that this decision will allow foreign corporations and special interests to decide our elections.Anyone ignorant enough to think that special interests don't do this already?Why do you think Obama is paying off all of those very same people that got him elected?Why do think his popularity is crashing?He has made countless decisions in the last year pandering to those special interests groups he is beholden to that fly in the face of public opinion.There is a long line of Presidents that came before him also guilty of these same payoffs,so it's nothing new.

For the record,2 U.S.C. Section 441e still upholds that foreign corporations can't directly donate to a political party.This whole issue is about running political ads 60 days before an election.McCain-Feingold attempted to censor who can do this.Aren't newspapers corporations?Don't they get to endorse politicians right up until election day?No conflict of interest here,right?It's all about who gets to influence voters.More to come...

Toyota is compounding it's mistakes

2010-01-30T00:53:00.003-05:00

Why are the owners of Toyota's confused as the headlines are screaming today?They got caught using a supplier providing defective parts to save a few bucks.This is certainly nothing new.Toyota is now butchering their attempt at public relations damage control by sending the re-engineered parts to their factories instead of the dealers.Aren't the customers with the affected vehicles at the dealers awaiting parts?Yes,of course,but those cars have already been sold.The cars sitting at the factories have not been and therefore take precedence in bean-counter world.They need to get the hold on new car sales removed asap so as to not lose anymore market share to GM.Not so hard to figure out.Sales trumps safety.More to come...

GDP number politically motivated?

2010-01-29T19:45:00.004-05:00

Just a quick observation on the GDP numbers just released.The 5.7% growth rate reported sounds good,too good to be true in fact.Let's remember that the 3rd quarter rate started at 3.7%,was revised down to 2.8% and finally down to 2.2%.That's nearly a 40% drop.Where will the 4th quarter end up at?Who knows.I only know that I have strong reservations about the intentions of those responsible for these reports.Sure seems like Obama gets the inflated number out of the box to help in his push to convince Americans that his stimulus plan is working.When the numbers are revised downward later,it's with little fanfare.Right along the lines of saving or creating 2 million jobs.He can't get the unemployment number down with his misguided policies,so he just needs to fudge these numbers instead to offset it.More to come...

Recovery underway?Not a chance!

2010-01-25T05:36:00.002-05:00

I'm officially changing Barack Obama to Mr. Roarke because his version of an economic recovery is straight out of Fantasy Island.Joe Biden would certainly qualify as Tattoo.If you recall,the fee was $50,000 to have your fantasy fulfilled so that seems appropriate for the many donors who buy into the Obama mystique.

The quarterly GDP rate is the only thing he has going right now and you'll also see an increase in the 4th quarter of 2009 to add more fuel to the fire.It's kind of like admiring your garden growing surrounded by a forest fire.You can keep your head in the sand and ignore the impending doom or turn on the sprinklers and put the fire out.I think we all know the choice Mr. Roarke will make.

For every bit of promising economic news,there are 10 times that in underlying problems.The data simply doesn't support what we are seeing in the stock market and the GDP growth.With his recent proclamation that he is going to fight rather than compromise his agenda,we will unfortunately be the ones that pay a staggering price for it.

The Market Oracle has a nice synopsis of a long list of factual data illustrating the problems we face.It follows my comments.The foundation is crumbling.The goal of the White House is to delay the next collapse until 2011 to get past the mid-terms.2011 looks to be a huge debacle as the time the administration has been buying with it's stall tactics will run out.Then we get a replay of bailout central and the government being the only entity available to save us.If all goes as planned,Mr. Roaorke will ride in on his white horse just in time for the 2012 election.

Are We In An Economic Depression?
Economics / Great Depression II
Jan 25, 2010 - 01:54 AM

By: Bob_Chapman

Few professionals are yet willing to admit we have been in a depression for the last year.

You have to understand the position that economists and analysts are in. They work for corporations, insurance, Wall Street, banking and government and if they thought we were in a depression and they publicly announced that all chances for advancement would be lost or they would be squeezed out of the firm or simply fired.

Under such circumstances can you ever expect that you get the truth? We don’t think so. Furthermore the depression we are enveloped in is far from over. The recession encompassed a drop in real GDP in the midst of a credit crisis. The crisis was the result of over-extended credit, prohibitively low interest rates, massive speculation by banks, brokerage houses, insurance companies, and corporations worldwide. It just didn’t happen it was planned that way. We saw that recently in testimony before Congress when CEOs of these financial firms admitted they made a mistake in the process of enriching themselves.

The worst sin was the criminal securitization of mortgages and the deliberately criminal mislabeling of their ratings. Then making matters worse those who sold this toxic garbage to their clients such as Goldman Sachs, JP Morgan Chase and Citigroup were shorting the product that they had just sold to their best clients. What kind of monsters are these people? Unethical doesn’t go far enough. It was criminal. These are the same characters, along with the Fed, and others, who gave us the dotcom boom and collapse and then foisted the real estate boom on our economy. The result has been deflating assets and contracting credit offset by massive lending, money and credit creation by the Fed and monetization, all temporary expedient measures, which in the context of history has led to failure. This has been in process for seven years. This second major abuse of our system in 14 years has presented a terrible dilemma and that is where we are today. Our monetary policy hasn’t worked and won’t work and there has been and presently is little fiscal control in Washington. This is no normal recession; it is a depression.
We have zero funds rates and up until six months ago M3 expansion of more than 17%. The Fed has monetized trillions of dollars of Treasuries, Agencies and toxic waste and now we are told we are in recovery – the worst is over. We wish we could agree, but we can’t. We are reenacting the same mistakes of the past all over again. Unemployment is close to the depression levels of the “Great Depression” and is still expanding albeit more slowly. Money velocity has fallen even after the massive infusion of aggregates. Liquidity is not flowing into the economy it is pouring into Wall Street to aid and abet more speculation, which has sent the Dow from 6600 to 10,700. This game cannot be played indefinitely. Wall Street cannot continue to prosper as the economy remains stagnant, and unemployment climbs higher.

The market is grossly overpriced and the effect of favorable news will begin to wane. It should be noted that insiders are selling into the never-ending rally, and mutual funds have very little money flow coming into the funds. That, of course, is our government at work manipulating the market. Just last week insiders bought $18 million worth of shares and sold $419 million.

This to us is more proof that the stock market is the most overvalued since September 1987, which brought about the market collapse of 10/19/87 and resulted in August 1988 in the Executive Order, “The President’s Working Group on Financial Markets,” which has led to market manipulation and the end of free markets.

That and the bailout of banks, brokerage firms and insurance companies too big to fail, those same entities carrying two sets of books as authorized by the BIS, FASD and the SEC, government purchase of stock in selective Illuminist controlled companies, and government control of the mortgage and real estate markets. This give you corporate fascism at its finest. We see intervention everywhere and that is not free markets.

How can there be a recovery with 22.5% unemployment, and with the additional threat of further unemployment? Who will buy the new housing and the tremendous inventory overhand? What will happen to the commercial inventory building up? Who has money in America to buy cars and trucks? Credits to buy housing for subprime and ALT-A buyers will end up with a 50% failure rate. Cash for clunkers was a colossal failure. Such exercises in futility only buy time, just as stimulus packages, and monetization do the same thing. The elitists behind the scenes know this just as we know this. That means the colossal deficit increase of $1.4 trillion a year will add 10% yearly to the federal debt to GDP ratio that will be over 100% by 2011. The tax liability to service this debt will be overwhelming. Government debt is rising exponentially and if further stimulus is not added the credit crisis will be renewed. This is why the Fed cannot remove further liquidity from the financial system, especially after having taken M3 from 17 to 18% to 6%. Incidentally, England and the ECB have done the same thing, and they still see rising inflation. If further stimulation is not forthcoming, or war, or default comes, we will see inflation reverse and deflation take over and that could last for ten years or more. This deflation, if allowed to take its course, will cause losses of $12 to $15 trillion from the economy and cause unemployment to rise to 40% to 50%. That would also entail cutting extended benefits. That would give us the scenes we saw in the 1930s. The debt we are facing knows no precedent in modern times, and there is no possible way it can be paid.

Bad debt is piling up again in residential and commercial real estate as well as in personal and business debt. This in part is why lenders are not talking about it if they can help it, but they are not lending. Without further lending increases the economy cannot function efficiently because it is so dependent on credit. That means higher unemployment, fewer buyers and a slower economy. If you think foreclosed inventory is bad now wait until the second wave hits and it is going to hit. If you are under water on your mortgage you do not care anymore. You stop paying your mortgage and you live rent-free for a year or more. There is no longer any stigma to walking away or going bankrupt. All the Mickey Mouse games being played by government to keep people in their homes are not going to work. Subprime and ALT-A loans are not the answer. They start going into default in a big way next year as the taxpayer again foots the bill.

The public is catching on. You saw this in Virginia, New Jersey and this week in Massachusetts. The public, a liberal public at that is trying to tell government we have had enough and we want the truth, not more lies. How bad is it? The Tea Party has spoken,, driven by talk radio and the Internet. The moment of truth is upon us. Each passing day brings us closer to facing the music.

Where does the accumulation of debt end? For the two fiscal years ended 9/30/99, the public increased Treasury debt $5 trillion to $7.5 trillion or by 50%. The Fed has purchased 80% of Treasury debt yoy, increasing the monetary base from $850 billion to $2 trillion, which includes Agencies and MBS. Seeking cover on their announcement, they said on Christmas they would supply unlimited funds for three years to Fannie Mae and Freddie Mac. Government liabilities made in behalf of the American taxpayer since the third quarter of 2007 have jumped 61% to $3.62 trillion. It is our opinion that the inflation caused by funding and monetization over the next decade will be very disruptive and expensive to US dollar users as purchasing power falls. That translates into an additional loss in buying power of some 50%.

If liquidity stays at current levels the stock market will fall as it flourishes on increasing liquidity. In addition, higher inflation rates tend to push stocks lower. If we are correct and there is a second credit crisis ahead of us, M3 will rise again and monetization will be pushed into high gear again.

Meredith Whitney, the banking analyst who forecast bank shares would fall in June of 2008, said plans to limit risk-taking at financial companies will probably be approved and may dramatically reduce trading profits.

JP Morgan Chase and Goldman Sachs as a result may have to sell some private-equity business and stop investing in buyouts under a proposal by the President. He wants to prohibit banks from owning or making investments in private-equity and hedge funds.

The banks make their money trading for their own accounts. They won’t have much in the way of earnings if legislation passes, the largest manipulations in history would come to an end.

The President has called for limiting the size and trading activities of financial institutions to prevent risk taking and another financial crisis. He also said there should be no proprietary trading. We are told Goldman Sachs will benefit from the President’s proposal to limit Wall Street risk by forcing deposit-taking banks to unwind trading operations.

Again the commercial paper market fell by $10 billion to $1.092 trillion. Asset-backed commercial paper rose by $3.5 billion to $430.0 billion.

Unsecured issuance fell by $9.9 billion versus rising $12.7 billion in the prior week.

Democrats have completely lost their moorings. They want to allow government to borrow an additional $1.9 trillion to put the national debt at $14.3 trillion. It would need 60 votes to pass.oqHo

Food prices are roaring upward again as the PPI rose 0.2%. That is a 4.4% gain month-on-month.

Housing starts were 575,000 and building permits rose 653,000. Starts fell 4%. How can any sane builder be building when official and bank hidden inventories are well over a year. Groundbreaking fell a record 38.8% to an all-time low of 553,000 units. Single-family starts fell 6.9% in January. New building permits rose 10.9% for all of 2009 permits fell 36.9%. A Florida builder who was going to build 5,000 units declared bankruptcy yesterday.

Americans haven't been fooled by the Dow's rise. What they see ahead are more taxes. Economists may see the recession as being over, but the man on the street does not. Roughly 60% of the public believes the recession still has a way to go,

a NBC/Wall Street Journal poll reported last October.

There are sound reasons for this gloom. Consumers have learned a bitter lesson. They understand that increased consumption—private and public—will have to come from income and not borrowing, and income will have to come from employment. Today, mainstream Americans are going on a financial diet amid deteriorating family finances. By 2008, suburbs were home to the largest and fastest-growing poor population in the country.

Between 2000 and 2008, suburbs in the country’s largest metro areas saw their poor population grow by 25 percent—almost five times faster than primary cities and well ahead of the growth seen in smaller metro areas and non-metropolitan communities. As a result, by 2008 large suburbs were home to 1.5 million more poor than their primary cities and housed almost one-third of the nation’s poor overall.

Midwestern cities and suburbs experienced by far the largest poverty rate increases over the decade. In 2008, 91.6 million people—more than 30 percent of the nation’s population—fell below 200 percent of the federal poverty level.

The timing was political: the president spoke on the day that Goldman Sachs announced fourth-quarter earnings of $4.95bn. Those of a more populist nature than Mr. Obama – both on the left and on the right – will say that he comes late to the game

Indeed, the White House and the US Treasury resisted the backlash against bankers earlier in 2009 – they opposed the punitive tax proposed in the House of Representatives. Instead of using the control they enjoyed over the banks through the troubled asset relief program in 2009, the authorities rushed to free banks from the restrictions associated with Tarp.

Mr. Obama may now be ruing this lost opportunity. The public mood has swung against Wall Street – to which Mr. Obama appears too close for comfort. Trillion-dollar bailouts for people on million-dollar salaries have infuriated Americans living in fear of losing their jobs and their homes.

Sheila Bair, one of the chief regulators overseeing Bank of America’s federal rescue, took out two mortgages worth more than $1 million from the banking giant last summer during ongoing negotiations about the bank’s bailout and its repayment.

In the weeks between the closings on her two mortgage loans, Bair met with Bank of America’s chief negotiator in the bailout talks. To avoid conflicts of interest, the Federal Deposit Insurance Corp., which Bair heads, prohibits employees from participating in “any particular matter” involving a bank from which they are seeking a loan. [Is it stupidity or arrogance that induces solons to flaunt law & ethics?]

In the depths of the crisis, the Fed shipped more than $500 billion overseas through arrangements with other central banks, in exchange for their currencies. Such lending is down sharply and officials expect to end the program according to plan on Feb. 1. As of January 13, the Fed held $5.9 billion in dollar "swap" agreements with foreign central banks, down from $63 billion in early September and $583 billion in late December 2008 as the financial crisis was worsening. [This is very important. Without the swaps supporting the dollar in the Forex and buying Treasuries by foreign central banks will recede. The dollar will fall and there will be more monetization.]

The Fed balance sheet for the week ended yesterday declined $39.849B (Expiry has passed!) due to a TAF decline of $37.387B. Only $38.351B remains in TAF.

The Treasury on Thursday announced auctions to sell a total of $166 billion in securities in a range of offerings next week.

Brown’s victory in Massachusetts not only torpedoes Obamacare, it kills ‘cap & trade’, global warming and a host of other socialistic proposals. (You might want to reconsider your holdings of GE, GS and other cap & trade plays.). It also kills further Wall Street bailouts and impairs CEOs that have pandered to President Obama – Yes, this means you Jamie Dimon, Jeff Immeltdown, Buffett and the Google geeks.

The ginormous upset in the People’s Republic of Massachusetts – Tiananmen II – implies that the GOP could capture the House and possibly the Senate in 2010. Now that all but the safest Democratic House seats are in play, reputable GOP candidates will surface and money will pour into GOP coffers.

The same dynamic is likely to occur if the GOP takes one or both houses of government in November. First stocks will rally but then the medicine will be administered and the results will be extremely bitter.

Please keep this in mind as various blowhards spew ‘start of another massive bull market’ rhetoric. The dynamic behind any GOP revolution is limited government and no more bailouts. A new Congress will institute some degree of limited government, which might include handcuffing the Fed.

The Massachusetts unemployment rate surged by nearly a point in December, driving joblessness to its highest level since the 1970s and dealing another setback to a labor market that appeared to be on the mend.

The state unemployment rate leaped to 9.4 percent from 8.7 percent in November, more than reversing two previous months of significant declines, the Executive Office of Labor and Workforce Development reported. It is the highest rate since August 1976, when the state was recovering from the energy crisis recession that began in 1973 after the Arab oil embargo.

Massachusetts employers, meanwhile, slashed another 8,400 jobs, the most since September. Since the recession began in March 2008, the state has shed more than 136,000 jobs, including 66,000 in 2009.

Under plan, NYC Aid Would Be Slashed By $800 Million; New Soda And Cigarette Tax Proposals Already Angering Masses Governor David Paterson said Tuesday that the days of profligate spending in Albany are over and that starting immediately lawmakers must participate in an "age of accountability”… the governor's new budget has $1 billion in new taxes and nearly $800 million in cuts for New York City.

Senate Democrats on Wednesday proposed allowing the federal government to borrow an additional $1.9 trillion to pay its bills, a record increase that would permit the national debt to reach $14.3 trillion.

The unpopular legislation is needed to allow the federal government to issue bonds to fund programs and prevent a first-time default on obligations. It promises to be a challenging debate for Democrats, who, as the party in power, hold the responsibility for passing the legislation.

A 1.2% decline in light truck prices pulled core lower. Consumer prices, an actual cost to consumers unlike an accounting entry like light trucks, increased 0.3%. Food prices jumped 1.6%.

But inflation in the pipeline jumped. Intermediate goods prices (both headline & core) rose 0.5%. Crude prices jumped 1.0% headline and 5.0% core in surging commodity prices.

Columbia University professor Joseph Stiglitz, a Nobel Prize-winning economist, said the U.S. should inject a second round of stimulus spending into the economy to avert a “double-dip” recession.

It will be “2012 or 2013 at the earliest that we will be back to normality,” Stiglitz said in an interview today on Bloomberg Television. “This is a scenario that is putting us a little better but not much better than the Japanese malaise.”

Releasing its first global economic forecasts since June, the World Bank was more upbeat about this year's outlook, with the rate of recovery expected to reach 2.7% instead of 2%. The contraction in 2009 was also estimated to be more modest than expected, a drop of 2.2% instead of 2.9%.

The 2011 forecast was left unchanged at 3.2%. But the bank painted a more sobering picture for next year and beyond, as credit conditions remain tight and governments start to withdraw extraordinary support measures.

"If the private sector continues to save in order to restore balance sheets, a double-dip recession, characterized by a further slowing of growth in 2011, is entirely possible--especially as the growth impact of fiscal stimulus wanes," the bank said.

Goldman Sachs Group Inc. responded to intense criticism of big Wall Street paychecks by putting less money into its bonus pool, a move that helped it earn a record $4.79 billion fourth-quarter profit.

The big bank said yesterday that it rewarded employees with $16.2 billion in salaries and bonuses for 2009. That’s up 47 percent from the previous year but much lower than many expected. In all, compensation accounted for 36 percent of Goldman’s $45.17 billion in 2009 revenue, the lowest annual ratio since the company went public in 1999. In 2008, Goldman set aside 48 percent of its revenue to pay employees.

The company is also shifting more pay into deferred stock, allowing it to hold off recording compensation costs for years.

The pay restructuring helped the bank easily top analysts’ earnings estimates. Goldman earned $8.20 a share in the last three months of the year, well above the $5.20 a share expected by analysts surveyed by Thomson Reuters.

The $4.79 billion profit was the biggest quarterly gain ever for the New York-based bank. The previous record was $3.16 billion in the fourth quarter of 2007, as the bull market on Wall Street was peaking.

Trading of fixed income, commodities, and currencies buoyed Goldman’s profits for the third straight quarter. The bank also reported higher fees from underwriting stock and debt offerings.

Berkshire Hathaway reinsurer General Re agreed to pay almost $100 million to settle several charges and a lawsuit related to its involvement in accounting frauds by American International Group and Prudential Financial, the Securities and Exchange Commission said Wednesday.

Gen Re agreed to pay $12.2 million to settle SEC charges that it helped AIG (AIG 28.01, +0.05, +0.18%) and Prudential (PRU 53.70, +0.08, +0.15%) manipulate and falsify their financial statements, the regulator said.

News Hub: Has commercial real estate bottomed?

Commercial real estate values fell so sharply that some analysts believe the prices may have stabilized, Christina Lewis reports.

Gen Re will also pay $19.5 million to the U.S. Postal Inspection Service Consumer Fraud Fund as part of a nonprosecution agreement unveiled by the Department of Justice, the SEC said. That was related to a criminal investigation into Gen Re's transactions with AIG.

Gen Re also agreed to pay $60.5 million to settle a class-action lawsuit on behalf of injured AIG shareholders. Gen Re also forfeited to the government roughly $5 million in fees it got from helping AIG falsify its financial statements, the SEC said.

Berkshire (BRK.A 104,500, +300.00, +0.29%) (BRK.B 3,492, +15.99, +0.46%) bought Gen Re in 1998. The acquisition has been one of Chairman Warren Buffett's most troubled deals. Read about Gen Re and Berkshire.

The settlements stem from an accounting scandal that erupted at AIG during the previous decade, before the insurance giant almost collapsed and had to be bailed out by the government. The controversy led to the departure of longtime AIG Chief Executive Maurice "Hank" Greenberg.

The SEC alleges that a foreign subsidiary of Gen Re entered into two "sham" reinsurance transactions with AIG in 2000. The contracts allowed AIG to falsely report rising loss reserves and premiums written, the regulator claimed. AIG paid more than $800 million to settle the charges.

Gen Re also arranged a series of "sham" reinsurance contracts with Prudential's property and casualty division from 1997 to 2002. The deals helped Prudential improperly recognize more than $200 million in revenue in 2000, 2001 and 2002, the SEC said. Prudential was separately charged with securities law violations in 2008, the regulator noted. [As you can see, members of the illuminati never go to jail; they just buy their way out. Warren Buffett and Maurice Greenberg are both crooks. If you or I did what they did we’d be doing 10 years in the slammer. This is a national disgrace that these people can get away with this. It is simply horrifying. Bob]

California is poised to become the first state to set time limits for doctors to see patients, the Department of Managed Health Care said.

Regulations to be announced today require family practitioners in health maintenance organizations to see patients seeking an appointment within 10 business days.

The deadline for specialists is 15 days.

A patient seeking urgent care that does not require prior authorization must see a doctor within 48 hours.

However, doctors can extend the waiting period if they determine it will not harm the patient’s health.

The rules, set to take effect in January 2011, “set reasonable expectations about when care should be provided,’’ said Cindy Ehnes, Department of Managed Health Care director.

The regulations follow years of negotiations among state officials, doctors, hospitals, HMOs, and consumer and health care activists. A 2002 state law mandated more timely access to medical care but didn’t provide specifics.

The rules could be an important change for the 21 million Californians who subscribe to HMO plans, state officials said.

The gap in productivity growth between the United States and Europe widened sharply as US businesses were more aggressive in laying off workers and pushing their remaining employees to be more efficient, according to a business research group. Growth in productivity is the key factor in rising living standards.

In a new report, the Conference Board estimated that productivity - the amount of output per hour of work - rose in the United States by 2.5 percent in 2009 while productivity was falling by 1 percent on average in the euro area, the 16 European nations that use the euro currency.

The Conference Board said in a report to be released today that the gap would narrow in the current year but the United States would still outperform much of the euro area.

The Federal Housing Administration plans to increase the amount of up-front cash paid by all new borrowers and to require higher down payments from those with the poorest credit, according to agency officials.

These policy changes, scheduled to be announced on Wednesday, are part of the agency's effort to beef up its ailing finances, which have been eroded by rising defaults in its increasingly popular flagship mortgage insurance program. The FHA currently backs about 30 percent of all loans for home purchases and 20 percent of refinanced loans.

Under this plan, the agency would increase the up-front insurance premium that borrowers pay at the closing table from 1.75 percent to 2.25 percent of the loan's value starting this spring.

While most FHA borrowers can continue to make down payments of as little as 3.5 percent when they take out a loan, those with a credit score of less than 580 will have to make a down payment of at least 10 percent, possibly starting in the early summer.

The agency also plans to propose limits on the amount of money sellers can kick in, including by paying closing costs or giving free upgrades. The agency will reduce seller concessions from 6 percent to 3 percent of the home's value, in line with the industry norm, this summer.

EVER SINCE his inauguration a year ago, President Obama has tried to motivate Congress with a strong ultimatum: Pass climate-change legislation, or the Environmental Protection Agency (EPA) will use its authority under the Clean Air Act to curb carbon emissions without your input.

Instead of accepting this as a prod toward useful action, Sen. Lisa Murkowski (R-Alaska) apparently wants to disarm the administration. This week she is set to offer a measure, perhaps as an amendment to a bill raising the federal debt ceiling, that would, one way or another, strip the EPA of its power to regulate carbon emissions as pollutants, perhaps for a year, perhaps forever. We aren't fans of the EPA-only route. The country would be better off if Congress established market-based, economy-wide emissions curbs. But hobbling the agency isn't the right course, either.

If Congress fails to act, carefully administered EPA regulation of carbon emissions could ensure that America makes some real reductions, if not necessarily in an optimally efficient manner. If Congress passes climate legislation, the EPA's role, if any, could be tailored to work with a legislated emissions-reduction regime. So removing the EPA's authority now is at least premature. The correct response to the prospect of large-scale EPA regulation is not to waste lawmakers' energy in a probably futile attempt to weaken the agency. Instead, the Senate should provide a better alternative.

That effort is already fraught. The best policies -- a simple carbon tax or cap-and-trade scheme -- aren't gaining steam. Instead, the House passed a leviathan bill, and the Senate is stalled. Majority Leader Harry M. Reid (D-Nev.) indicated last week that he fears Ms. Murkowski's measure will diminish chances of producing a bipartisan climate-change bill. Ms. Murkowski would do better by helping end the Senate's paralysis than by seeking to condemn the rest of government to the same inaction.

The International Council of Shopping Centers and Goldman Sachs Retail Chain Store Sales Index rose 2% in the week ended Saturday from the week before on a seasonally adjusted, comparable-store basis.

The increase--the biggest in the past month--came as consumers "headed to discounters to fight the post-holiday blues," ICSC said. The group noted that January is a low-volume month and can be affected by small swings.

"Sales shifted towards discounters during this past week, which helped to lift the week-over-week pace," added ICSC chief economist Michael Niemira.

Last week, ICSC said consumers after the holidays had tended not to purchase items unless they were on sale.

Niemira also reiterated that January industrywide comparable-store sales are likely to be flat to up 1% "as lean inventories and the lack of the consumer's need to shop will keep sales moderate for the month."

On a year-on-year basis, the reading rose 2.6% last week.

Building permits in the U.S. unexpectedly jumped in December, signaling gains in housing will be sustained into 2010 after winter weather depressed construction at the end of last year.

Applications rose 11 percent to a 653,000 annual rate last month, the most since October 2008, the Commerce Department said today in Washington. Work began on houses at a 557,000 pace, down 4 percent from November.

Wholesale prices in the U.S. rose at a slower pace in December, showing the economy is recovering without the immediate threat of inflation.

The 0.2 percent increase in prices paid to factories, farmers and other producers followed a 1.8 percent jump in November, according to Labor Department data released today in Washington. The gain was more than anticipated and reflected higher food costs. Excluding food and fuel, so-called core prices were unchanged.

Senate Democrats are to seek an increase to the federal government's borrowing limit by $1.9 trillion lifting the total amount the U.S. government can owe to $14.294 trillion, several congressional aides said Wednesday.

The increase is forecast to support the federal government's borrowing needs the end of 2010, one Senate Democratic aide said.

The borrowing hike comes fast on the heels of a $290 billion increase to the debt ceiling agreed to by lawmakers at the end of 2009.

This is not a perfect world, and there will be no way out of the current crisis – which has been decades in the making – without even more pain. But best to suffer the pain sharply than to drag it out like the death of a thousand cuts, as will be the case if we remain on the path of perpetual spending we are now on.

Ohio's unemployment rate has edged up to 10.9 percent for December, from 10.6 percent the month before.

The U.S. government's move to deepen its ties to mortgage-finance giants Fannie Mae and Freddie Mac by agreeing to absorb unlimited losses for the next three years is igniting a debate over whether it should bring the business operations of the companies onto its books.

A decision on how the government treats Fannie and Freddie could have broader political implications. So far, the White House has resisted calls by Republicans to bring Fannie's and Freddie's obligations onto the government's books, a move that could boost the federal deficit by tens of billions of dollars. At a time when the deficit is already at a postwar high, that could create added urgency for Congress and the administration to address the companies' future.

The Congressional Budget Office has reiterated its support for bringing the companies onto the federal budget—and onto the government books—which would effectively mean accounting for their operations in the federal budget as if they were federal agencies.

Manufacturing conditions in the Philadelphia Fed area have continued improving in January, although at at a slower pace than in December, according to the latest Business Outlook Survey by the Federal Reserve of Philadelphia.

The Philly Fed current business conditions Index has eased to 15.2 in January from 22.5 in December, somewhat below the 18.2 index forecasted by market analysts.

New orders and business indexes have continued growing although also at a slower pace than in December. New orders Index dipped to 3.2 in January from 6.5 in December, while shipments Index dropped to 11.0 from 15.3 in December.

The Leading Economic Index for the US grew to 1.1% in January from 0.9% in December. This result marks the ninth consecutive month of gains in the index and is ahead of forecasts of a slight decline to 0.7%.

The number of U.S. workers filing new claims for jobless benefits unexpectedly rose last week - an increase a U.S. Labor Department economist said is partly due to an administrative backlog in processing claims.

Total claims lasting more than one week, meanwhile, declined.

Initial claims for jobless benefits rose by 36,000 to 482,000 in the week ended Jan. 16, according to the Labor Department's weekly report Thursday. The previous week's level was revised upward to 446,000 from 444,000.

Economists surveyed by Dow Jones Newswires expected a decrease of 4,000 initial claims.

The four-week moving average, which aims to smooth volatility in the data, also increased as well last week. The Labor Department said the four-week moving average increased by 7,000 to 448,250 from the previous week's revised average of 441,250.

The loan troubles of many U.S. consumers weighed down fourth-quarter results at Bank of America Corp., Wells Fargo & Co. and U.S. Bancorp, but bank executives predicted loan losses are near a peak.

The three banks hold a combined 24% of all U.S. deposits and operate more than 15,000 retail branches, making them important barometers of consumer sentiment and the health of the U.S. banking industry.

The Treasury Department asked bond dealers on Friday what, if any, impact the Federal Reserve's completion of its mortgage-related security purchases will have on bond markets, and financial markets more broadly. The Fed has said it would buy $1.425 trillion by late March. Before each quarterly debt refunding, the department meets with its primary dealers to discuss supply issues and anything else affecting the markets. The request came in its survey of dealers before that meeting. Estimates on how much mortgage rates may rise after the purchases end, including from the last committee meeting, range as high as one percentage point.

As Goldman Sachs prepared to announce its fourth quarter earnings and employee compensation levels yesterday, the bank had bomb-sniffing dogs and police barricades on hand at its New York City headquarters, the New York Post reports.

The decision to boost security as its offices was apparently driven by growing fervor over the bank's huge profits and bonuses. Yesterday, the bank announced that it earned $13.4 billion for the year, and set aside $16 billion for employee compensation. Goldman was widely expected to set aside approximately $20 billion for employee pay, but CFO David Viniar suggested yesterday in a call with reporters that the bank wasn't blind to the "pain and suffering in the world" and "wasn't deaf to the calls for restraint."

Viniar's remarks indicate an abrupt change in tone among Goldman Sachs execs. In November, CEO Lloyd Blankfein -- who had previously bragged that the bank was doing "God's work" -- said the following at an industry conference:

I often hear references to higher compensation at Goldman. What people fail to mention is that net income generated per head is a multiple of our peer average. The people of Goldman Sachs are among the most productive in the world."

Despite what seems to be a new concern among the firm's leaders about the PR implications of Goldman's banner year, the bank's announcement of the pay packages that individual executives receive will be closely scrutinized. Dealbook spoke to one Goldman insider, who suggested Blankfein's bonus will be a measuring stick for employees who may see their pay cut. (Blankfein earned $68 million in 2007, but didn't receive a bonus last year.) Here's Dealbook:

"It all depends on what Lloyd gets," said one midlevel Goldman employee, referring to Lloyd C. Blankfein, Goldman's chairman and chief executive. He said Mr. Blankfein's bonus had become a popular water-cooler topic. "If Lloyd takes home a big bonus, even if it's all stock, and everyone else receives less, there will be some concern," he said.

More to come...

One way tickets out of town going fast

2010-01-23T10:16:00.003-05:00

The stunning election result in Massachusetts last week seems to be the trigger for the fall guys to start toppling like dominoes.Personally,I'm not buying into Scott Brown yet.First impressions tell me to tread cautiously.There's no question he is preferable to the alternative of Martha Coakley.If healthcare really does die (not sold on that yet),he will be legendary in GOP lore.I mean,as a comparison,we are constantly bombarded with Obama having to overcome 8 years of Bush.Well,Brown must overcome nearly half a century of Kennedy!

We'll have to let him get his feet wet on some other issues and vote a little to see where he really stands.I can see some Lindsey Graham/John McCain type conflicts with him and he has been quite vocal in stating that he is an independent.Let's remember he is also behind the Massachusetts healthcare debacle as well selling it as a good thing.It's hard to see him as a true conservative on all the key issues so the jury is out on him.

But I sure love the uproar he has created in his wake.If the Bernanke confirmation is denied in the senate,this would be another major blow for Obama.It's already essentially a foregone conclusion that Geithner will be a fall guy,only a matter of when.It's simply too good to be true that Bernanke would go down in flames with him as well.Janet Napolitano is also in the queue for stepping down in the wake of the various homeland security incidents.Only when is yet to be decided.

There are of course many more in the Obama parade.Kevin Jennings,the gay freak in charge of our education system,will wilt under public pressure at some point.Rahm Emanuel may also get in line,but that will be down the road.It sure seems that recovery under Obama is painful to say the least.As the snowball heads downhill,we'll see how many more get caught up on the way down.And one thing is for sure with Obamanomics,the forecast calls for lots more snow.More to come...

Are we really the most intelligent life-form?

2010-01-19T15:07:00.002-05:00

Humans are theoretically the most intelligent life form on the planet,but you certainly wouldn't know it by the choices of the American public.Some we can write off as just simply being ignorant.But far too many us are actively seeking our demise.So many bought into the blame Bush rhetoric and believed that electing Obama would really change things.The truly lost souls are still buying that line today so the administration keeps throwing it out there.

When you step back and look at things from an outsiders perspective,it's almost laughable if you don't cry first.We watched Bush amass trillions onto the national debt.Obama routinely points this out and criticizes it,rightly so I might add,but then proposes a solution of spending multi-trillions more to solve it.

Take healthcare.They want to impose a fine upon you if you don't carry health insurance.However,the fine costs less than an actual health insurance policy in most cases.Obviously,people will elect to pay the fine and only buy health insurance when they actually get sick and need treatment.Remember,you can't be denied for pre-existing conditions.When they are well again,they will drop the insurance and go back to paying the fine.The end result will still be millions of Americans without health insurance which is supposedly what this reform is going to fix.

We really are fools.The Federal government is involved in it's massive public relations campaign to make you believe that we can't allow companies to fail.Too big to fail.Systemic risk.Entire industries will collapse.Global depression if we don't act and fast.You've heard it all.But look at the result.The taxpayer gets stuck with the bill for the bailout.That's tacked onto the debt because the government doesn't have any money,so future generations pay for it.The people who actually save money get burned right now because Bernanke has cut interest rates to nearly zero forcing banks to subsequently reduce our savings interest rates accordingly.

Let's look at the companies getting bailouts.Most are merely playing the system with what's available to them.Why not make risky investments with potentially big payoffs if you know you'll be bailed out on the taxpayers backs?When the inevitable failure does happen,they get bailed out and then become fiscally lean by shedding jobs by the thousands.Another price we pay today for the bailout.

We are losing on multiple fronts.The debt,no interest on our savings,high unemployment,and being the enabler that allows these companies to continue on with bad business practices that will guarantee the cycle keeps repeating itself.The true definition of insanity-repeating our mistakes expecting a different result.

Didn't we learn these basic concepts from our parents?When you take the easy way out now to try to avoid facing your demons,the future pain is always much worse.None of these politicians are truly after our best interests because they don't want to be the ones to actually address the problem and likely kill their political future.What began as public service when this country was founded has evolved into politicians that place career longevity and personal gain above the common good.

The change we need is a pole shift from the current state of politics.Accountability,term limits,part-time legislatures,reduced regulation,hard spending caps along with balanced budgets,strict adherence to constitutional limits.These concepts are foreign to our government.They will do the exact opposite of what these people seek.They will greatly reduce their power and influence over us.Can you imagine if we required a simple sources and uses statement from them?If a person purchases even a single unit of stock in a company,the law requires an annual disclosure be provided to them showing what they did with their money.Yet our government can get by with posting a few pie graphs showing how the general slush fund was divided up.

Apparently we haven't experienced anywhere near enough pain yet.Things must disintegrate much furthur to the levels that incite us to act.Continue to buy into the standard 2 party seesaw of partisan politics,finger pointing and simply rearranging the deck chairs on the Titanic,and you'll see no change.It will only get worse.

Think hard and do your homework before the upcoming series of elections.The country must return to it's Judeo-Christian heritage along with conservative values and a true constitutionally limited republic form of governance.That's a tall order as it means overhauling our education system as well as government and the citizens taking personal accountability for restoring our moral and ethic values.It will take many years and require monumental sacrifice to oppose those who will do anything to tear it down.Time to buckle up and get dirty if you value your liberty.More to come...

Bank fees will be paid by you

2010-01-14T14:53:00.004-05:00

The White House will be crowing about the evil banks and how they are looking out for us by assessing fees to the banks that received TARP money.They will also tell you that the fees will be used to reduce the deficit.Neither,of course,are true.

There are several issues here.Many of the banks never wanted the TARP money,yet were forcibly made to take it by the administration.It was a control issue all along and this is just furthur proof of this.

Taking a page from the Alinsky playbook,they are now isolating and demonizing the banking industry.The audacity of these banks to actually make a profit.It would appear the natural extension of that logic would be to encourage bailed out companies to fail instead if success is the evil result.

The fees will reduce the deficit?Such a ridiculous premise that it hardly bears commenting on.Maybe we should just label it the banking trust fund because it's headed to the same black hole that the SS and medicare/medicaid trust funds were swallowed up in called the general fund.Much easier to funnel it to your special interests this way.

The fees paid by the banks will of course be paid by you the consumer as corporations never pay taxes.They merely collect them from their customers thru higher fees and other related costs of doing business.This is another of those indirect taxes we all love.

Certainly nothing groundbreaking here as this is just standard politics.As usual the media will play along.Whatever the industry of the moment is,they get the brunt of criticism about profits.In recent years,we've had the tobacco industry,the oil industry and the pharmaceutical industry all in that position.Now it's bankings turn.

Americans had better get over it.Outlandish bonuses,golden parachutes,preferred stock options and all the other bennies handed out are part of the game.If you believe that corporations are in business for any reason other than pure profit,you're a fool.If that leaves a bad taste in your mouth,than you should fully support Obama and the movement to crush capitalism.

As usual,the government role as the enabler to all of this will be overlooked.The unconstitutional bailouts.Providing banks nearly free money from the Treasury because of Bernanke's policies.Relaxing regulations that allowed investment companies to be considered commercial lending banks.

The government dangles the carrot to encourage this type of activity and then demonizes those who participate.Just like a crack dealer handing out free samples.They provide the air pump and needle and let the unsuspecting blow up the balloon and when the bubble bursts,they will be right there to pounce.This is the point where we are told the government is the only one that can step in and save us from some systemic risk.All you have to do is give away a little bit more freedom and control.You've now become an addict.More to come...

Just kidding!

2010-01-13T15:11:00.002-05:00

Is it too late to cancel hope and change?I know we really don't like John McCain much for President,but how much better of a choice does that look now?Obama has seen his poll numbers continue to shrink and the most recent ones indicate that the public has even gotten to the point of believing we would be better of with McCain.

That's quite shocking put in context.Obama had momentum and the stars were lined up for him to have his way for years,yet he seems to have spent the better part of his political capital already.No surprise to those of us who saw thru him right out of the gate,but the speed of it is surprising.

We all know the numbers now as we've heard them ad nauseum.The cost of the TARP,the ARRA,health care,cap and trade,etc. etc.Obama is now seeking record levels of funding to keep the 2 wars percolating.The list will only grow and soon America will finally start to see just what this little experiment has cost them when the rising taxes kick in.

As Obama likes to say,let's hope this is our teachable moment.Most of us have heard the saying 'elections have consequences'.This is certainly come to fruition here.In any election,it's never likely you will find your perfect candidate on the ballot.We had serious reservations about John McCain and they were for good reason.However,I think it's crystal clear the country would have been much better off electing him.The mistakes he would certainly have made would likely not be irreversible like the ones Obama is making.

I will make the easy prediction that whatever candidate the Republican party puts forward in 2012 will generate much of the same angst amongst conservatives.Americans are coming to a crossroad and will soon have to make a decision.Stick with standard tetter-totter elections between Republican and Democrat candidates or throw all the bums out and finally bring the 3rd party into the fray.If it is to be the tea party that leads it,I think they need to decide on their candidate this year,not wait until 2011.It will take a massive effort to break the bonds of the 2 party system.I hope we have learned that we shouldn't vote for whatever candidate this 3rd party nominates for the wrong reasons.Such as a statement vote just to show the Washington elite we mean business.

We are seeing the extremely high cost from the hope and change experiment.A 3rd party vote at any cost just to show them may send us down the wrong road again.Something to keep in mind if we must choose between another 'weak' McCain type candidate vs. an unknown commodity.More to come...

The TSA should ban underwear

2010-01-08T06:53:00.003-05:00

On the surface,Obama may appear to be doing the stand-up thing by accepting the blame for the underwearbomber screw-up.Under more scrutiny,it's a copout.By going this route,he doesn't have to take any action against anybody.He made his very public declaration that he would hold those accountable for the incident.If that were true,many people would be fired already.He has no interest in going there,so this method allows him to avoid it,although it wouldn't surprise me to see a lower level fall guy get axed just for show.Obviously we all know he's ultimately responsible as he's the President.

As with any government entity,the TSA will now benefit from this fiasco that they played a role in creating.More equipment,more staff,more training,all on the way for sure.It's just like when too much government intervention in the free market creates the bubble itself,they then claim the solution is more regulation.

The TSA is simply a farce.Thousands standing around,taking scissors away,tray stackers association.There are loads of acronyms to describe it and none of them good.Should they now arm passengers with squirt guns to douse passengers who set themselves on fire?The question keeps being raised about how this guy could have been caught without using a body scan.I know,how about banning underwear?Can't hide explosives in your skivvys if you ain't wearing any.Or maybe go all the way and have nude airlines.This would also qualify as 'green' as all those clothes are heavy and just think of the fuel savings for the airlines.

With 3 major incidents in 6 months under his belt in Arkansas,Fort Hood and now Detroit,what's next for Obama?How much longer will the public give him a pass while he pleads for our enemies to "unclench their fists"?Are they all Bush's fault?Will Obama and Big Sis Napalitano still claim these are all just isolated incidents by common criminals?Even though we now know the same cleric that conversed thru e-mail with the Fort Hood shooter has also conversed with the underbomber?And the best they could come up with yesterday was to say they were caught off-guard by Al-Qaeda and that we just couldn't connect the dots?Laughable if not so deadly serious.More to come...

Detroit schools are a national embarassment

2010-01-06T20:33:00.001-05:00

From the American Spectator

Motor City Dropout Factories
By RiShawn Biddle on 1.6.10 @ 6:07AM

By the time Michigan Gov. Jennifer Granholm announced Monday that she was looking to place full control of Detroit Public Schools into the hands of her duly-appointed financial czar, Robert Bobb, its reputation as America's most-abysmal traditional public school district had already become as much a national joke as the Motor City itself.

Last month, Detroit Public drew cackles after news came out that the average math scores of its 4th- and 8th-graders trailed behind every one of the 18 school districts -- even notorious laggards such as D.C. Public Schools and Cleveland -- measured on the National Assessment of Educational Progress, the federal benchmark for academic performance. Smarmy Fox News Channel anchor Shepard Smith succinctly summed up national sentiment when he declared that he would "burn the place down" if his children were in school there.

Motown parents, on the other hand, demanded jail time for the district's teachers and administrators after learning that 69-percent of the district's 4th-graders -- and 77 percent of 8th-graders -- performed at or below NAEP's standard for "basic" proficiency. Given that just three out of every ten high school freshmen attending its dropout factories graduate four years later, Bobb admitted that the district's woeful performance is "a failure of leadership."

By the end of the month, Detroit was raked over the coals by school reformers when it struck a new collective bargaining agreement with its AFT local that features new perks such as a three-minute reduction in average working day for elementary school teachers. The fact that the contract will allow laggard teachers kicked out of classrooms to continue collecting a salary while ostensibly rehabilitating their performance -- a much-mocked feature of New York City's expired contract with its AFT affiliate -- led Education Sector cofounder (and Eduwonk proprietor) Andy Rotherham to call the contract "cheap" and "far from revolutionary enough."

Certainly Detroit is far from the only urban school system where systemic failure is coin of the realm. But four decades of school reform has forced longstanding cellar-dwellers such as D.C., New York City, and even Los Angeles Unified to overhaul curricula, improve the quality of its teachers and turn the tables on teachers unions and graft-grabbing politicos that have long called the shots. Detroit, on the other hand, has remained stubbornly mired in stunning depths of academic, bureaucratic, and fiscal incompetence.

Whether or not Bobb -- or even a possible takeover of the district by the equally scandalously incompetent city government -- will lead to a turnaround remains to be seen. It may be just as likely that the Motor City will follow the same path as New Orleans, where the traditional public school district has been all but abandoned by parents for charter schools since Hurricane Katrina in 2005.

With four-fifths of black and white male freshmen dropping out of high school by senior year, according to the Schott Foundation for Public Education, Detroit ranks alongside an equally-notorious Midwestern school district, Indianapolis Public Schools, as the worst public system for young men to attend. But this woeful statistic doesn't even fully convey the depths of the district's dysfunction.

Within the past decade, Detroit has twice-landed in de facto state receivership after spates of degenerate corruption and incorrigible theft. Last month, a former truck driver for the district was indicted for allegedly pilfering $70,000 in computer equipment. In August, five employees were arrested on embezzlement charges; one staffer managed to allegedly grab $25,000 in checks and cash withdrawals during her employ. An audit found that the district paid $2 million to provide health insurance for ineligible dependents of district employees.

The criminality, alleged and proven, has been matched by stupendous fiscal mismanagement. An audit found that Detroit bought 160 BlackBerries and 11 motorcycles on the taxpayers' dime. The misspending goes back years. In 2002, three years after the state had first removed the school board for widespread graft, the district still managed to strike a deal to buy five floors in the landmark Fisher Building for $24 million, more than the $21 million price tag paid by its owner for the entire building.

Meanwhile the quality of teaching inside Detroit schools can only be described as disgraceful. Back in 1999, the Detroit Free Press found that 14 percent of teachers were absent on any given day during the school year, with the average teacher out of school 10 days each year; the statistics haven't likely changed. Fourteen percent of Detroit teachers conducted classes outside of their subject area. As a result, students are often being taught by substitute teachers -- who often have less training than their fully employed colleagues.

The school district's dysfunction has grown so noticeable that it has even made the city government's spate of indictments and convictions -- including former city councilwoman (and congressman's wife) Monica Conyers' guilty plea for collecting $6,000 in bribes from a city contractor -- seem like child's play. As the Detroit Free Press noted last month in one of its editorials: "Detroit has no future, if this is allowed to stand."

Like the city it serves so poorly, Detroit Public Schools wasn't always synonymous with urban school failure. During the early 1900s, then-Superintendent Wales Martindale introduced the first wave of standardized testing and kindergarten classrooms, along with revising its English curriculum and introducing commercial math classes so children would stay in school till graduation. But Martindale's heavy-handed politicking would annoy that era's progressive activists; their successful effort to oust him would lead Detroit to become the trailblazer in the development of the modern public school district.

But by 1999, suburban flight and ill-fated efforts to decentralize the school bureaucracy would expose the school district to the kind of racial politics and graft that poisoned city government. The rise of the AFT's Detroit local as a force in school board and local politics also complicated efforts to improve the district's academics and operations. That year, the union went on strike after the district proposed to hold back annual pay hikes for teachers absent more than eight days during the school year; the district would eventually back away from the proposal. Seven years later, the union staged another strike that shut down schools for 16 days.

By then, students and their families began fleeing the district in droves; Detroit lost 54 percent of its enrollment between 1999-2000 and 2008-2009. Many would flee to the city's charter schools, which have proven to provide better opportunities for rigorous education; charters now account for 32 percent of public school enrollment, the third-highest after New Orleans and Washington, D.C.

Granholm's plan would likely abolish Detroit's already-waylaid school board once and for all, placing control in the hands of Bobb, who already controls the district's finances. But while Bobb has won over Granholm, the state legislature has already rejected one effort to give him a free hand. In any case, his tenure has shown that he's done little more than adopt the tactics of shutting down schools and laying off teachers already used with little success by his predecessors. He also negotiated the district's much-derided teachers' contract.

Handing over control to onetime Detroit Pistons guard-turned-Mayor Dave Bing -- an approach that has proven successful in New York City and D.C. -- isn't likely to be palatable to either state legislators or taxpayers mindful of the city government's widespread corruption. Memories of Bing's infamous predecessor, Kwame Kilpatrick -- now facing a second tour in prison due to alleged parole violations -- also makes mayoral control unlikely.

Granholm may be better off adopting the tactic of former Louisiana governor Kathleen Blanco, whose one sterling success may have been enacting a series of moves that has made New Orleans the leading hotbed for school reform even amid its sluggish recovery from Hurricane Katrina's man-made and natural disasters. Given the desperate straits in which Motown is currently mired, shutting down the school district and adding more charters wouldn't exactly be any worse than shutting down General Motors.

Man of the year!

2009-12-30T02:20:00.008-05:00

Right around the corner we will soon officially have Bernanke for a 2nd term.I just thought it appropriate to share what he found under his Christmas tree this year.First he got a toolbox!

Inside he found all the tools he needs to do his job!

(for re-inflating those leaking bubbles)

Merry Xmas,Ben!More to come...

TSA should be eliminated

2009-12-27T09:33:00.002-05:00

As a former screener,I have firsthand knowledge of the TSA policies and procedures.With the recent release of the SOP,or standard operating procedure,that was mistakenly posted online and now the terrorist attack on the Delta flight in Detroit,the time has come to end this failed experiment.

The agency was doomed from the outset.It's mission was merely an economic one,to keep people flying after 911.I and a great many other employees questioned many of the practices utilized as being sub-standard from a security standpoint.They simply don't want to make flying too intrusive.It's all for show,simply to give the appearance of safety so that John Q. Public will keep shelling out money to fly.

The attack in Detroit was absolutely a success in terms of defeating the security measures in place just as the Richard Reid shoe bomber attack was.In both cases,these terrorists had bypassed all layers of security.The only reason we didn't experience tragedies is the mere fact that they couldn't detonate the bombs.Poor planning or training or bad luck,whatever,it doesn't matter,they had successfully reached the point where they attempted detonation.

Sure,the other passengers involved can be considered heroic in their efforts to subdue these terrorists,and rightly so,but make no mistake,they could all easily be dead heroes had these bombs ignited properly.The facts remain that security absolutely failed here and I contend they never had a chance as their mandate is not real security,only the appearance of it.

I have cited examples in other posts on how security is lacking.In one case we were never able to clear a passenger whose bags set off the ETD,or electronic trace detection,bomb sniffing machine that looks for trace residue of certain chemicals.We followed all the protocols and the supervisor on duty still put him on the plane so as not to inconvenience him.In a related incident,I myself had inadvertently forgotten to remove the service manual for the operation of the ETD machine from my luggage on a flight.I passed thru screening without a problem.Wouldn't you think a passenger in possession of a detailed manual on how the TSA equipment functions would raise a red flag?We had others as well,such as a private plane taxiing right up to the main terminal by mistake.The pilot and passenger got out and entered the terminal and were never stopped.How easy to bring a bomb right into the hub that way.

The bottom line is that security can be improved substantially,but not without cost.Mainly this would be to the passengers that would have to deal with the tighter screening.What is your safety worth to you?The TSA will respond very publicly for the next few weeks to show that they are on top of this and then it will just fade away again.One of the first responses I've seen is to not let people get up from their seat during the last hour of the flight.So,apparently the telegraphed message to future terrorists is to make sure you set off your bomb earlier in the flight.What a joke!More to come...

Elected lobbyists

2009-12-23T03:34:00.003-05:00

Do people really believe that Obama isn't going to get his healthcare bill done?Lots of talk about abortion language derailing it.Or maybe the myriad of legal challenges.Or the dems squabbling amongst themselves.C'mon,haven't we been paying attention?Don't you think there are plenty of members of Congress that noticed what Ben Nelson and Mary Landrieu were paid off?How many more do you think will get in line at the Pelosi/Reid powwow with their hands out saying that they can't support the committee version of the bill coming in January?

The pay-offs we've seen so far may pale in comparison to what will be doled out to ultimately pass the compromise bill that will be sent to Obama.Essentially,our elected officials have become mere lobbyists.What used to be done behind closed doors in backroom deals is not out in the open and even heralded as good.Members of Congress tout these deals as accomplishments because they are taking benefits back home to their constituents.How is this any different than the role of a lobbyist?.A lobbyist is bribing someone else to get them to vote in a way to support their position.Members of Congress are simply lobbying Pelosi and Reid to secure their vote.

A clear majority doesn't support this legislation,yet the talking heads are in the media everyday declaring the exact opposite.I believe that there is a simple litmus test for this bill or any bill for that matter.What if the language of the bill remained exactly the same,yet the bill was put forth by Bush a year ago?Would all of these people publicly declaring how good this bill is for the American people still hold the same position?Of course not.The bill would be ravaged by Pelosi and Reid and their ilk which exposes it as simply a partisan hack bill.Despite accomplishing the power grab the democrats so desire,they would be forced to take the party line and stop it.

What is clear is that a bill will be signed into law by Obama next year.Bank on it,it's a sure bet.There is no possible way we get this far in the process and allow anything to stop something from being passed.Of course,this is barring any successful legal challenge,but we all know which way the courts lean.I fully support those that will fight this to the end as they must,however,it is inevitable and it's time for people to start charting strategies to minimize and undue as much of the Obama agenda.Now,I would love to be dead wrong here,but I don't see it.More to come...

Revisionist guessing

2009-12-22T17:35:00.003-05:00

What has happened to our 3rd quarter GDP growth?It started at 3.5%,was revised shortly after that to 2.8% and now has been dropped again to 2.2%.That's nearly a 40% drop from the original estimate.I assume these are weathermen making these assumptions because they are the only ones that could be that far off base and still keep their jobs.Normally,you would think the adminstration would run and hide behind numbers like these,but I think this will not be the case here.This will play into their sales pitch for needing a 2nd stimulus jobs bill.Just sit back and watch.Here's the link from Fox News.More to come...

http://www.foxnews.com/politics/2009/12/22/economic-growth-strong-thought-quarter/?test=latestnews

The Obama war on America

2009-12-20T17:35:00.001-05:00

This story from the Philadelphia Bulletin does a nice job of laying out the Obama agenda to date.

Obama And His Appointees Dismantling US
PHILADELPHIA BULLETIN ^ | Saturday, December 19, 2009 | HERB DENENBERG

Posted on Sunday, December 20, 2009 5:24:26 PM by adanaC

President Barack Hussein Obama is proceeding to destroy America and has opened up a six-front war to do so:

1. He has a Democratic controlled Congress that is willing to rubber-stamp his wildest schemes, without even reading them…as we’ve already seen. The Democratic Party is now aiding and abetting the demeaning and destruction of America and has become the voice of leftist extremism. The moderates have disappeared or been transformed, issuing only occasional squeaking and whining before following the liberal party line drawn by Mr. Obama. Where have all the Democratic moderates gone?

2. Mr. Obama has immense executive authority, which he has already used to damage the country. One notable example is his decision to try terrorists in New York City, thereby giving the terrorists the premier platform to broadcast their propaganda and recruit Islamic radicals to their cause. Another example is cap and trade by fiat of the Environmental Protection Agency (EPA), rather than Congressional action.

3. He is filling the White House, the executive branch and the court system with an army of radicals, socialists, Communists, Marxists, Maoists, and America-haters. The most outrageous example was Van Jones, the avowed Communist and believer that 9/11 was an American plot fashioned by President George W. Bush. Van Jones wasn’t too much of an extremist for the White House; in fact, he was loved and respected as a key White House adviser, Valerie Jarrett publicly proclaimed at the time of his appointment. But, he was too extreme even for the mainstream media to cover-up and swallow. But, don’t kid yourself – extremists like that are the rule, not the exception in Mr. Obama’s world.

4. He stands ready to commit the U.S. to radical international treaties that will bleed away American sovereignty and commit the nation to destructive policies. Watch what happens in Copenhagen, and watch the directions of Mr. Obama in matters of international laws and treaties. He has made it obvious he is more interested in pleasing the international community than in protecting the citizens of America. Couple that with his penchant for bootlicking our enemies, apologizing for America, and kicking around and betraying our allies and you have a prescription for international disaster. Note the betrayal of Poland and Czechoslovakia by his withdrawal of missile defense from those two important allies. He did so to appease Russia, again bootlicking enemies while betraying allies.

5. Mr. Obama seems ready to do anything to achieve his ends, a la the formula of Saul Alinsky and his book Rules for Radicals. Alinsky believed the ends justify the means, and that means anything goes. Mr. Obama has demonstrated he is willing to lie, use fascist-style tactics to silent critics, and do what it takes to achieve his agenda. He has even expressed his disdain for the U.S. Constitution in his now infamous quote that civil rights litigation and adjudication went off track because it did not focus on redistribution. His comments, record, and policies show he believes in redistribution of wealth, and views capitalism, free markets and profit as all part of a tainted system that is unjust. One of his major priorities is “spreading the wealth around,” as he admitted to Joe the Plumber.

6. Finally, the mainstream media is sanitizing and covering up Mr. Obama’s worst excesses, as we’ve witnessed with major stories either ignored or almost totally neglected. In recent months, the dishonest, fraudulent, and biased mainstream media virtually ignored Climategate, one of the great scientific scandals of history; the Acorn undercover scandal; and the Van Jones appointment, as well as a long list of other far-out radicals. The mainstream media has become an adjunct of the Obama plan to destroy America, as we know it.

This column will focus on the wild leftist radicals that he is packing into the federal agencies and the unconstitutional czars he is filling up the White House with. I question, when America elects a president who spends over 20 years hanging around with terrorists, racists, bigots, anti-Semites, Communists, Marxists, and socialists, what kind of appointments do you think he’ll be making? And, when he packs the White House with such crazies, what kind of policies do you expect to be forthcoming?

For openers consider his latest appointment to the Equal Employment Opportunities Commission (EEOC), the agency that adjudicates discrimination claims. Her name is Chai Feldblum, she is a professor at Georgetown University and is a most radical homosexual activist. She has advocated polygamy and has said that “sexual liberty” trumps the Constitutional right to “religious liberty.” Of course, she underwent what is called a confirmation conversation – trying unsuccessfully to lie out of previous positions. However, Bill Donohue of the Catholic League found her newfound moderation a total “farce.”

She is the primary author of the Employment Non-Discrimination Act (ENDA) now before both houses of Congress. The bill has been described by J. Matt Barber on the Renew America Web site as follows: “ENDA would force – under penalty of law – Christian, Jewish or Muslim business owners to hire people who unrepentantly choose to engage in homosexual or cross-dressing behaviors, despite the fact that these volitional behaviors are in direct conflict with every major world religion, thousands of years of history and uncompromising human biology. … It’s a direct assault on the inalienable rights of people of faith. It pits the government directly against the free exercise of religion and is, therefore, unconstitutional on its face.” Recall, this president has announced this is not a Christian nation, contrary to American history, a history he more often deplores than proclaims.

The Feldblum appointment is part of a larger effort to force the homosexual agenda on the American people, from the youngest school children on up. For the perfect example, take the safe-schools czar, Kevin Jennings. Here’s the way the Web site www.wordpress.com summarized his qualifications:

· A former schoolteacher

· A gay

· An advocate of promoting homosexuality in schools

· A former drug user

· Dislikes religion

· Failed to report an underage student who told him he had sex with an older man.

The views of Mr. Obama’s science and technology czar, Dr. John Holdren, are also bizarre. In the 1980s, in discussing population controls, he advocated compulsory abortion and sterilization as constitutional. No proposal is too extreme for the Obama team.

This radicalism pervades every corner of the White House and Mr. Obama’s appointments. Take Craig Becker, an Obama appointee to the National Labor Relations Board (NLRB). He was a union lawyer, who was associate general counsel of the Service Employees International Union (SEIU). The SEIU is the union with close connections to the Association of Community Organizations for Reform Now (ACORN), the corrupt group of community organizers best known for voter fraud and extortion and intimidation of lenders. Mr. Becker helped lay the groundwork for the Employee Fair Choice Act (EFCA). That is the proposed law that would do away with the secret ballot in union elections and would permit federally designated bureaucrats to determine employment terms if a union and employer did not reach a prompt agreement. This act is so blatantly anti-democratic that it is even opposed by a far-left liberal, George McGovern, former U.S. Senator and Democratic Party nominee for president.

Even if Congress won’t pass the EFCA, Mr. Becker believes he can get the wildly leftist Obama agenda established by rule making by the NLRB, thus eliminating the need for Congressional action. This is characteristic of the Obama administration – willing to implement the most radical measures without Congressional approval and rule by administrative diktat.

And Mr. Becker will have plenty of support from other top Obama appointees in the federal bureaucracy. There is Secretary of Labor Hilda Solis, who was first elected to Congress in 2000, as the union candidate. For about 10 years in Congress, she had a perfect record of support for union proposals. And, she is likely to coddle unions and persecute employers as Secretary of Labor.

Secretary Solis has already announced her plan to give unions more power over employers and the economy. And, she has already started taking all controls off of union abuses. For example, her predecessor, Elaine Chao, took the responsibility of policing unions seriously. During her tenure, Ms. Chao obtained 929 convictions for corrupt union practices and recovered more than $93 million on behalf of union members (as reported in The American Spectator. The U.S. Labor Department unit that polices unions is the Office of Labor Management Standards (OLMS). Shortly after the union lapdog, Ms. Solis, took office, the Obama administration reported it was cutting OLMS’s budget by more than 9 percent. The American Spectator writes, “As a result, corrupt union bosses will have a much freer hand with which to bilk their members.”

That’s just a taste of what Mr. Obama is doing to the Department of Labor to make it an instrument of unionization and the union agenda. Two other appointments to The Department of Labor are Patricia Smith and Lorelei Boylan. Both have close ties to unions and while working for the New York State Department of Labor, they were in charge of a program in which New York state partners with unions and other liberal groups to police workplaces. The American Spectator writes, “But in practice empowering ‘regular people’ actually means that the government is deputizing unions to help police workplaces.” This is just another example of how the Obama administration seeks to control every aspect of the American economy and do so to favor their political supporters, in this case the unions. Given their way, American business will be run by union bosses and union thugs.

Another area where Mr. Obama seeks to impose government control is talk radio. There is Mark Lloyd, who was appointed to be associate general counsel and chief diversity officer of the Federal Communications Commission (FCC). He is on record of favoring all kinds of regulation of talk radio, which would be designed to muzzle conservative talk radio. To show how extreme these Obama appointees are, consider Mr. Lloyd’s comments about the tyrant of Venezuela, Hugo Chavez. Mr. Lloyd went on record in support of Mr. Chavez who, among other things, is a sworn enemy of America: “In Venezuela, with Chavez, is really an incredible revolution – a democratic revolution.” There is a deadly Orwellian flavor to Mr. Obama and his appointees – a vicious tyrant is transformed into an instrument of “democratic revolution.”

The “Czars” are even more radical and even more out of control than members of the cabinet, who are subject to Senate confirmation. They can escape any Senate confirmation and, consequently, are viewed by some legal authorities as end-runs around the U.S. Constitution. Carol Browner, global warming (energy) czar, is typical. She is one of the leaders of the Socialist International and, as such, advocates “global governance” and maintains that developed nations must shrink their economy to help alleviate global warming. The czars and their threat to U.S. constitutional government are covered in detail in an article in Newsmax entitled “Czars: Never Elected. Never Confirmed. Too Powerful?”

Thomas Sowell, the brilliant conservative pundit, makes an important point for those who think these radical extremists somehow got into the White House because of a failure to properly vet them. Mr. Sowell writes, “Why should we assume Obama didn’t know what such people were like; he’s been associating with these kinds of people for decades. Nothing is more consistent with his pattern than putting such people in government – people who reject American values, and resent Americans and America’s influence in the world.”

Wake up America. We elected one of the most dangerous enemies of America and he now sits in the White House, filled with other enemies of America, relentlessly going about his task of destroying the country as we know it and as the Founding Fathers intended it. You better join the forces in opposition to Mr. Obama’s vision for America because if he continues unobstructed for three more years, it may then be too late to save it.

It’s later than you think. Mr. Obama can kill the economy and America with his version of ObamaCare standing by itself (See The Bulletin, “ObamaCare Spells Doom for America,” Dec. 6-12, and “Wake Up Before Obama Destroys America,” Dec. 13-19). And, he seems to be firing shots with machine-gun rapidity that have the potential to destroy our economy and our country. There’s some element of truth in talk show host Michael Savage’s assertion that we now have a dictatorship. With supermajorities in both houses of Congress and with seemingly inept Republican leadership, with free use of extra-Constitutional methods, i.e. czars, there seems to be no real checks and balances that should keep an out-of-control radical runaway president in check.

Even our Founders, political geniuses, still could not foresee and plan for the election to the White House of an America-hating radical, backed by supermajorities of the Democratic Party willing to follow him over the cliff to the destruction of America.

Herb Denenberg can be reached at advocate@thebulletin.us

Louisiana Purchase-1803 vs. 2009 version

2009-12-20T02:50:00.002-05:00

Interesting to compare the original Louisiana Purchase to the healthcare sellout vote from Sen. Landrieu for $300 million.

Louisiana Purchase - encyclopedia article about Louisiana Purchase.: "The Louisiana Purchase was the acquisition by the United States of approximately 530 million acres (800,000 sq mi or 2,100,000 km²) of French territory in 1803, at the cost of about 4¢ per acre (7¢ per ha); totaling $15 million or 80 million French francs. Including interest, America finally paid $23,213,568 for the Louisiana territory.[1] The land purchased contained all of present-day Arkansas, Missouri, Iowa, Oklahoma, Kansas, Nebraska, Minnesota south of Mississippi River, much of North Dakota, nearly all of South Dakota, northeastern New Mexico, northern Texas, the portions of Montana, Wyoming, and Colorado east of the Continental Divide, and Louisiana on both sides of the Mississippi River, including the city of New Orleans. (The Oklahoma Panhandle, and southwestern portions of Kansas and Louisiana were still claimed by Spain at the time of the Purchase.) In addition, the Purchase contained small portions of land that would eventually become part of the Canadian provinces of Alberta and Saskatchewan. The land included in the purchase comprises around 23% of the territory of the modern United States.[1] The purchase was an important moment in the presidency of Thomas Jefferson. At the time, it faced domestic opposition as being possibly unconstitutional. Although he felt that the Constitution did not contain any provisions for acquiring territory, Jefferson decided to purchase Louisiana because he felt uneasy about France and Spain having the power to block American traders' access to the port of New Orleans."

Japan ‘clunkers’ angers many in U.S. - TheHill.com

2009-12-20T02:27:00.000-05:00

Japan ‘clunkers’ angers many in U.S. - TheHill.com

Capitalism vs. Socialism

2009-12-18T06:10:00.000-05:00

I'd like to ask all residents of this state to take a moment and ask yourself a question.Are the policies of government benefiting you?A simple question,yet not so easy to answer.However,with the debate raging about the direction our country is heading and our governments role in it,I think it boils down to it.Usually in politics,we feud over which party does a better job on the issues that are most relevant during that era.This time around,we are debating the merits of capitalism vs. socialism.I know many will say no,it's communism or marxism or fascism or progressivism.Lets keep it simple just for this letter.For those that couldn't care less or don't know the difference or don't think it matters to us here in Michigan,I say your dead wrong and you need to decide your position right away if you haven't already.

Aren't you tired of the treadmill we are stuck on here in Michigan?A pathetic economy.The rust belt.High unemployment.High foreclosure rate and devasted property values.Roads and bridges crumbling and unsafe.Some of the highest crime rate areas in the nation.School funding decreasing.People are leaving the state in droves.Our budget deficits have us conjuring up tax schemes like keeping the bars open later in a desperate move for tax revenue regardless of any benefit to us.You've heard all the promises from our governor and the legislature about a new direction,green jobs,transformation,etc.Are you buying it?Are you seeing results that show we are really going to get it right this time?The state uses the MEDC/MEGA to hand out tax credits to industries and announce thousands of new jobs coming to your neighborhood.Unfortunately,their track record produces less than 30% of the jobs they promise.And no,they don't get the other 70% in tax credits refunded.

Barack Obama makes no secret of his ideology on where he wants to take this country.He believes in social and economic justice.You can put any label on that you wish,but there are countless interviews and statements from him breaking down how he wants to achieve it and we see some of his first efforts today with healthcare reform and cap and trade.These are massive programs with huge implications for every person in the country.In some cases,around the world.But the point is they are guaranteed to affect you and future generations.Yes,even those of us in little old,rural Michigan.Every single person,whether you know it or not.And if you don't know all the facts and exactly how you'll be affected,you must get educated immediately.Once these programs get started,they are permanent.They'll always be changed over the years,but they'll never go away.

Capitalism is freedom.It's liberty.It's one of the principles this country was founded on and it gives every American the opportunity for success,whatever you decide that is.Own your own home or business.Choose your career path.You have the opportunity to go as far as your hard work and perseverance can take you.Not a guarantee of anything,but the opportunity.Michigan has a great history of innovations that have changed the world.Just think of the innovations implemented by Henry Ford that would never have happened under socialism.Look at our accomplishments in medicine.And on and on.Do you think these would have ever happened under socialism?When you strip away the opportunity for great reward for innovation,you destroy the spirit and inspiration we have as well.

The situation we face in this country is perilous.Our staggering debt is going to come to a head sooner rather than later.You simply can't make a rational case otherwise.Promoting 'green shoots' without sound economic rationale to back them up is dangerous.The toxic debt that triggered the derivatives market meltdown is still there.The TARP money that was supposed to buy it up was diverted instead.Obama blames the fat cat bankers on Wall St. for not lending.Why would they when they can borrow money at near zero interest rates from the Treasury and then simply step down to the next window and purchase 10 year T-Bills at a guaranteed 3.5% interest rate?Yes,better than a ponzi scheme.And yes,that's Time magazines man of the year Ben Bernanke's policy that encourages it.As Milton Friedman used to say,why does anyone believe that a government beauracracy has any more moral standards than the evil corporations?

We have a long record of middle of the pack to the bottom at times on tax policy.Our business model is heavily incentivized on tax credits and other temporary fixes.We have a strong union prescence demanding higher wages to the point of making us non-competitive many times.You cannot escape the reality that stable,long term growth economically is dependent on a low tax rate structure.Companies know that incentives are temporary and as soon as they evaporate,they move in another direction.Look at the track record of auto sales.Most buyers are savvy and know to wait for the rebates and other discount programs because the automakers are caught in that vicious cycle.Sales stay down without them or some other gimmick like cash for clunkers.

However,our state legislature,and usually the sitting governor as well,are simply addicted to the power attached to our tax dollars.The urge to get to decide where those dollars are spent and how many are collected is too enticing.If we continue down this road Obama is leading us,it will get far worse.Your call to action has never been greater.What used to be reserved for conspiracy theorists is now knocking at the door.The push for this extensive of a power grab has been in the works for decades and it may come to fruition if the people don't revolt drastically soon.Ask yourself how important your liberty is to you.More to come...

American Grandstand!

2009-12-15T01:02:00.003-05:00

Obama has set his sights on calling out the bankers as the evil wrongdoers who created this mess.Now he wants them to grab a mop and clean it up.What shocked disbelief he showed wondering why the banks won't lend.Didn't we rescue them in their hour of need?Don't they owe it to us now to help the recovery?Looks like we need a new show called American Grandstand!

A quick review reminds us that we redirected the TARP funds to the banks to provide liquidity to get the banks lending to drive the economic recovery.I think the TARP fiasco will go down in history as one of the worst programs ever created which is really saying something when you think of all the bad ones.

Remember,Congress created the TARP fund to buy up toxic assets and get them off the books of the lending institutions.Bush made a huge mistake by signing it.They simply gave Paulson a blank check to distribute to his banker buddies as he saw fit.He complied by immediately changing the focus of the program from toxic assets to liquidity.The toxic assets purchase has been relocated to the TALF program and is essentially inactive.

Hundreds of billions of borrowed money (the government is broke) was then handed out to the 19 biggest institutions including some like Goldman Sachs which had to be 'rezoned' if you will as a bank.They are an investment facility and don't have anything to do with standard commercial banking but for Paulson to reward his pals he had to cook the books and redesignate them.

Let's not forget that many institutions didn't want any TARP money but were forced to comply from the White House so that they would fall under the pay czar rules.

Now,what did the banks do with the money?They generally sat on it of course using it as a buffer and to comply with the increased reserve fund requirements.Today this is no longer necessary since the Fed is handing out free money with the zero or near zero interest rates.The TARP money is all being returned now so that the banks can get out from under the thumb of the rules set forth to the recipients.

Obama is playing dumb wondering why the evil banks won't lend and are standing in the way of our recovery.He's well aware that they can make more money borrowing at zero percent and investing in Treasury securities making 4 percent than by lending it to us schmucks on the street.More importantly,they are using it as a hedge against the unknown factors yet to play out.

They know unemployment is likely to rise or at least stay high for an extended period.They know that the commercial real estate bubble is leaking air.They know that the unsecured credit bubble has yet to burst.The FDIC chairman Sheila Barr herself has stated that we will have more bank failures in 2010 than 2009.They know that the banks are practicing forbearance in accounting for the toxic assets still on their books since the TARP money never addressed it.

With over a trillion dollars more than regulators require in their excess reserves,the liquidity issue is dead.The stability issue is the main priority.The banks are simply taking advantage of the favorable lending conditions at the Fed to cover-up their poor lending practices leading up to the recession.Now they are in the catbird seat to be the reformed responsible partner they should have been all along and they aren't making the risky loans.

This reflects the larger problem with our economy in which we have shifted from a manufacturing economy to a consumer driven consumption based economy.This is driven by borrowing and credit and when it's not easily available to you and I like it is to the banks,recovery will wither and die.Just like after 911 when Bush asked us all to spend money and show those bad terrorists that they can't affect us,we must do the same today to drive any real recovery.This is why it is imperative that the administration constantly sell us 'green shoots' so that our consumer confidence rises and we spend our money like good little soldiers.

This is impossible to achieve with the agenda Obama adheres to.With everything directed at social and economic justice,healthcare reform,cap and trade and immigration reform driving the wealth redistribution he desires,this requires anti-business and anti-capitalist policies.If businesses won't expand due to high tax policies and stability concerns,any recovery dies and consumer confidence and spending follows suit.It's a vicious circle that feeds upon itself.Action needs to be taken very soon to stop it.More to come...

Do your homework

2009-12-14T12:40:00.003-05:00

It's quite amazing the different views available to us depending on which lens you're looking thru.One could go across the internet and cherry pick enough stories to fully support whatever view they support.I was always taught this is how the human belief system works.First,we develop our beliefs based on our early influences and then spend our time finding ways to support them.

In politics,if you're a republican,you listen to Limbaugh and Hannity and watch Fox.If you're a liberal,you stick to Olberman and Matthews and their ilk.You watch,listen and read whatever is slanted toward your beliefs.Sure makes it tough to objectively weigh the opposing viewpoint.Of course,an independent will claim to take the middle road sometimes agreeing with one side or the other.Eventually,everyone usually ends up disliking you because you ride the fence.

I always wondered which was held in higher regard.The leader type with strong convictions or the open minded type willing to listen to different views.Obama attempts to portray himself as the latter.For example,he's willing to negotiate with terrorists without pre-conditions.I can't say comparing Reagan to Obama would be the best analogy,but they are the two people representing these two scenarios most recently.

If the popularity rating is the yardstick,it's quite clear.Reagan wins hands down. 100% is not possible as there will always be party line people to support one side or the other.If you wish to reject polls and use election results,obviously we can't do that until 2012,but it would be a tall order for Obama to duplicate the Reagan landslide re-election.Based on the mood of the voters and the clear lack of support for Obamas policies,it would be impossible at this point.

I bring this issue up just to ponder what it is we want from our elected officials.Clearly,if you don't agree with their policies,you won't support them.Yet,at face value,one would think you wouldn't want the leader with strong convictions if you're not a supporter.You would be more likely to support a moderate type who may sway to your view.The facts don't seem to bear this out.I'm finding Obama to be more divisive than Reagan.My Dad hated Reagan which I never understood when I was a kid.Now when I look back and realize that my Dad was dependent on the government for its social entitlement programs,I'm able to understand.

You even hear people like John Conyers being scolded by Obama for not publicy supporting him in all instances.The gays are getting impatient.The illegal immigrants are getting impatient.If cap and trade is delayed,you can add them to the list.These are just a few examples that to try to be the all everything to everybody is virtually impossible.It's hard to imagine anyone coming into office with a higher level of support than Obama and he can't pull it off.

To be fair,I blame a large portion of that on the ignorance of the voters.They jumped on the 'hope and change' bandwagon without doing their homework.As we now see with the constant exposes from people like Glenn Beck,this information has always been there if you cared to look for it.

So,as always it comes back to the voter.We really want to vote for a candidate we believe in.Yet,as I explained earlier,human nature dictates that we inherently reject challenges to our belief system.We simply don't want to challenge ourselves,perhaps because we can't deal with the disappointment so well.This leaves us open to buying into the message the candidate is selling.We don't want to spend much time verifying the validity of their claims and researching their true motives.When you do that,you'll find the vast majority of candidates will fail the test.

This is human nature,as well.Power and greed and the two main attractants in holding political office.Even those that didn't enter politics for those reasons find it hard to resist its charms.The moral of this story is you had better spend considerable time studying the character of your candidate and review their influences that shaped their beliefs.Obama is the best example of this.The bandwagon supporters bought into the packaged message for sale while ignoring the man behind it.

It seems those ringing the alarm bells about William Ayers and Rev. Wright had good reason to.We find out more all the time about the radical upbringing of Obama and it makes connecting the dots very easy with the agenda he's pushing thru.We've never had the level of capability that we do today previously in researching a candidate.I would hope that more voters will utilize it next time around so they don't make a short sighted mistake and end up disappointed.More to come...

Reparations for our kids

2009-12-09T15:34:00.002-05:00

Why not?Why not put the framework in place today to make our elected officials accountable for saddling our next generations with trillions in debt?These politicians who so effortlessly write checks for money they don't have without any accountability as they will likely be out of office when the debt comes due must be stopped.

This would take a drastic shift in policy and would only be supported by incoming legislators with no bill to pay.The focus is always on a balanced budget.While an obvious requirement,it's not the most important one.Keeping spending in check is the key.Congress can simply raise taxes to accomodate increased spending to provide a balanced budget,so this is not an effective deterrent.

If you think the Ron Paul Audit the Fed bill is making Bernanke nervous,legislation put in place to make Congress personally accountable for spending money they don't have would be earth-shattering.Their entire existence is predicated on power.Control of taxation and spending provides them with all the tools in the toolbox.Lobbyists supply them with their personal rewards.

Today we hear Obama preach that we were saved from disaster by spending and that now we must spend more to fuel the recovery.At best,he is misguided.More accurately,he is a criminal as are his cohorts in Congress.It could be the illegal distribution of TARP funds or any of a long list of spending policies that have been going on for decades.The current crop of spenders is just expanding on tradition.

I don't believe there has ever been a time in history in which the public is so informed,or capable of it if they seek it,than today.Ignorance is simply not acceptable and should things continue thru the next election cycle,than the public must accept full responsibility for these policies continuing and the fallout to follow.No excuses.More to come...

The case against Bernanke

2009-12-08T16:48:00.001-05:00

Here is a story from IRA breaking down why Bernanke should be denied a 2nd term.

Three Strikes on Ben Bernanke: AIG, Goldman Sachs & BAC/TARP
December 7, 2009

"For a while, the subprime boom enriched investment bankers, lenders, brokers, investors, realtors and credit-rating companies. It allowed hundreds of thousands of Americans to buy homes they never believed they could afford. It later became clear that these homeowners couldn't keep up with their payments… This is the story of how Wall Street transmitted the practices of southern California's go-go lending industry and the inflated U.S. real estate market to the global financial system."

Mark Pittman
"Subprime Securities Market Began as `Group of 5' Over Chinese"
Bloomberg News
December 17, 2007

"Anger is an energy"

John "Rotten" Lydon & Bill Laswell
"Rise"
Public Image Limited
1986

On Saturday, joined by hundreds of friends, family and colleagues on a snowy December day in Yonkers, NY, we celebrated the life of Mark Pittman. Readers of The IRA who wish to express their thanks to Mark and show support for his family may make contributions to the Pittman Children's College Fund, c/o Dr. William Karesh, 30B Pondview Road, Rye, NY 10580.

Bob Ivry from Bloomberg News gave a remembrance of Mark, including reading the letter that his daughter Maggie Pittman posted on zerohedge to dispel rumors that her dad might have been murdered. Some members of the zerohedge family thought that Mark was killed by the banksters for his diligent pursuit of the disclosure of the Fed's many bailout loans to Wall Street firms.

Ivry also told a great story of how, when asked by a younger reporter why she should give Pittman her scoops instead of giving them to CNBC's Charlie Gasparino, Mark replied: "I'm taller than Charlie and can see above the bullshit." We miss Mark a lot.

Coming together with the friends of Mark Pittman ended a grim week. Many of us in the financial community were wading hip-deep through barnyard debris as we watched Federal Reserve Chairman Bernanke dodge and weave in front of the television cameras during his Senate confirmation hearing. We have to believe that Mark would have been pleased as Senators on both sides of the aisle asked questions that came directly from some of his reporting -- and a few of our own suggestions.

To us, the confirmation hearings last week before the Senate Banking Committee only reaffirm in our minds that Benjamin Shalom Bernanke does not deserve a second term as Chairman of the Board of Governors of the Federal Reserve System. Including our comments on Bank of America (BAC) featured by Alan Abelson this week in Barron's, we have three reasons for this view:

First is the law. The bailout of American International Group (AIG) was clearly a violation of the Federal Reserve Act, both in terms of the "loans" made to the insolvent insurer and the hideous process whereby the loans were approved, after the fact, by Chairman Bernanke and the Fed Board. The loans were not adequately collateralized. This is publicly evidenced by the fact that the Fed of New York (FRBNY) exchanged debt claims on AIG itself for equity stakes in two insolvent insurance underwriting units. What more need be said?

As we've noted in The IRA previously, we think the AIG insurance operations are more problematic than the infamous financial products unit where the credit default swaps pyramid scheme resided. And we doubt that any diligence was performed by Geither and/or the FRBNY staff on AIG prior to the decision taken by Tim Geithner to make the loan. We'll be talking further about AIG in a future comment.

Of interest, members of the Senate Banking Committee who want more background on the AIG fiasco, particularly who did what and when, need to read the paper by Phillip Swagel, "The Financial Crisis: An Inside View," Brookings Papers on Economic Activity, Spring 2009, The Brookings Institution.

We hear in the channel that Fed officials were furious when Swagel, who served at the US Treasury with former Secretary Hank Paulson, published his all-to-detailed apology. We understand that several prominent members of the trial bar also are interested in the Swagel document.

Last week the Senate Banking Committee spent a lot of time talking with Chairman Bernanke about why payouts were made to AIG counterparties like Goldman Sachs (GS) and Deutsche Bank (DB), but the real issue is why Tim Geithner and the GS-controlled board of directors of the FRBNY were permitted to make the supposed "loans" to AIG in the first place. The primary legal duty of the Fed Board is to supervise the activities of the Reserve Banks. In this case, Chairman Bernanke and the rest of the Board seemingly got rolled by Tim Geithner and GS, to the detriment of the Fed's reputation, the financial interests of all taxpayers and due process of law.

Martin Mayer reminded us last week that the Fed is meant to be "independent" from the White House, not the Congress from which its legal authority comes by way of the Constitution. Nor does Fed independence mean that the officers of the Federal Reserve Banks or the Board are allowed to make laws. None of the officials of the Fed are officers of the United States. No Fed official has any power to make commitments on behalf of the Treasury, unless and except when directed by the Secretary. Given the losses to the Treasury due to the Fed's own losses, this is an important point that members of the Senate need to investigate further.

The FRBNY not only used but abused the Fed's power's under Section 13(3) of the Federal Reserve Act. In AIG, the FRBNY under Tim Geithner invoked the "unusual and exigent" clause again and again, but there is a serious legal question whether the then-FRBNY President and the FRBNY's board had the right to commit trillions without any due diligence process or deliberate, prior approval of the Fed Board in Washington, as required by law. The financial commitments to GS and other dealers regarding AIG were made always on a weekend with Geithner "negotiating" alone in New York, while Chairman Bernanke, Vice Chairman Donald Kohn and the rest of the BOG were sitting in DC without any real financial understanding of the substance of the transactions or the relationships between the people involved in the negotiations.

Was Tim Geithner technically qualified or legally empowered to "make deals' without the prior consent of the Fed Board? We don't think so. Shouldn't there have been financial fairness opinions re: the transactions? Yes.

We understand that the first order of business in any Fed audit sought by members of the Senate opposed to Chairman Bernanke's re-appointment is to review the internal Fed legal memoranda and FRBNY board minutes supporting the AIG bailout. These documents, if they exist at all, should be provided to the Senate before a vote on the Bernanke nomination. Indeed, if the panel established to review the AIG bailout and related events investigates the issue of how and when certain commitments were made by the FRBNY, we wouldn't be surprised if they find that Geithner acted illegally and that Bernanke and the Fed Board were negligent in not stopping this looting of the national patrimony by Geithjner, acting as de facto agent for the largest dealer banks in New York and London.

The second strike against Chairman Bernanke is leadership. In an exchange with SBC Chairman Christopher Dodd (D-CT), Bernanke said that he could not force the counterparties of AIG to take a haircuts on their CDS positions because he had "no leverage." Again, this goes back to the issue of why the loan to AIG was made at all.

Having made the first error, Bernanke and other Fed officials seek to use it as justification for further acts of idiocy. Chairman Dodd look incredulous and replied "you are the Chairman of the Federal Reserve," to which Bernanke replied that he did not want to abuse his "supervisory powers." Dodd replied "apparently not" in seeming disgust.

We have been privileged to know Fed chairmen going back to Arthur Burns. Regardless of their politics or views on economic policies, Fed Chairmen like Burns, Paul Volcker and even Alan Greenspan all knew that the Fed's power is as much about moral suasion as explicit legal authority. After all, the Chairman of the Fed is essentially the Treasury's investment banker. In the financial markets, there are times when Fed Chairmen have to exercise leadership and, yes, occasionally raise their voices and intimidate bank executives in the name of the greater public good. AIG was such as test and Chairman Bernanke failed, in our view.

Chairman Bernanke does not seem to understand that leadership is a basic part of the Fed Chairman's job description and the wellspring from which independence comes. The handling of AIG by Chairman Bernanke and the Fed Board seems to us proof, again, that Washington needs to stop populating the Fed's board with academic economists who have no real world leadership skills, nor operational or financial experience. Just as we need to end the de facto political control of the banksters over America's central bank, we need also to end the institutional tyranny of the academic economists at the Federal Reserve Board.

The third reason that the Senate should vote no on Chairman Bernanke's second four-year term as Fed Chairman is independence. While Bernanke publicly frets about the Fed losing its political independence as a result of greater congressional scrutiny of its operations, the central bank shows no independence or ability to supervise the largest banks for which it has legal responsibility. And Chairman Bernanke has the unmitigated gall to ask the Congress to increase the Fed's supervisory responsibilities. As we wrote in The IRA Advisory Service last week:

"Indeed, if you want a very tangible example of why the Fed should be taken out of the business of bank supervision, it is precisely the TARP repayment by Bank of America (BAC). The responsible position for the Fed and OCC to take in this transaction is to make BAC raise more capital now, when the equity markets are receptive, but wait on TARP repayment until we are through Q2 2010 and have a better idea on loss severity for on balance sheet and OBS exposures, HELOCs and second lien mortgages, to name a few issues. Apparently allowing outgoing CEO Ken Lewis to take a victory lap via TARP repayment is more important to the Fed than ensuring the safety and soundness of BAC."

One close observer of the mortgage channel, who we hope to interview soon in The IRA, says that given the recent deterioration of mortgage credit, it is impossible that BAC has not gotten its pari passu portion of the losses which are hitting the FHA. The same source says that using conservative math, FHA has another $75 billion in losses to take, with zero left in the FHA insurance fund. Worst case for FHA is double that number, we're told. How could the Fed believe that BAC, which is the biggest owner of mortgages and HELOCs, is immune from this approaching storm? Because the Fed is cooking the books of the largest banks.

The observer confirms our view that trading gains on the books of banks such as BAC are due to the Fed's open market purchases, which drove up prices for MBS and other types of toxic waste. In effect, the Fed's manipulation of the prices of various toxic securities is giving the largest US banks and their auditors a "pass" on accounting write-downs in Q4 2009 and for the full year - assuming that MBS prices do not drop sharply before the end of the month.

Question: Is not the Fed's manipulation of securities prices and the window-dressing of bank financial statements not a vioatlion of securities laws and SEC regulations?

Of note, in her column on Sunday about the widely overlooked issue of second lien mortgages, "Why Treasury Needs a Plan B for Mortgages," Gretchen Morgenson of The New York Times writes that "Unfortunately, there is a $442 billion reason that wiping out second liens is not high on the government's agenda: that is the amount of second mortgages and home equity lines of credit on the balance sheets of Bank of America, Wells Fargo, JPMorgan Chase and Citigroup. These banks - the very same companies the Treasury is urging to modify loans that they service - have zero interest in writing down second liens they hold because it would mean further damage to their balance sheets."

Thus the Fed is not only allowing insolvent zombie banks to repay TARP funds before the worst of the credit crisis is past, but the "independent" central bank is engaged in a massive act of accounting fraud to prop up prices for illiquid securities and thereby help banks avoid another round of year-end write downs, the banks the Fed supposedly regulates. This act of deliberate market manipulation suggests that the Fed's bank stress tests were a complete fabrication. Only by artificially propping up prices for illiquid securities can the Fed make the banks look good enough to close their books in 2009 and, most important, attract private equity investors back to the table.

Of note, the perversion of accounting rules in the name of helping the largest global banks is also well-underway in the EU. Our friends at CFO Zone published a comment on same last week that deserves your attention: "International Accounting Standards Board has 'disgraced itself,' says critic"

What is really funny, to us at least, is that we hear in the channel that BAC is ultimately going to give the CEO slot to a BAC insider, consumer banking head Brian Moynihan, who testified before Congress on the Merrill Lynch transaction in November. Just imagine how the Fed Board, Chairman Bernanke and the Fed's Division of Supervision & Regulation are going to look when, after all the hand wringing about aiding BAC's CEO search by allowing the TARP repayment, the post is finally given to an insider!

Former colleagues describe Moynihan as a close associate of Ken Lewis. If the objective of forcing Lewis' departure was change in the culture in the CSUITE at BAC, installing one of his trusted henchmen, in this case left over from the Fleet Bank acquisition, seems a retrograde step.

All we can say about the treatment of the BAC TARP repayment issue and the Fed's handling of the supervision of large banks generally is that it is high time for the Congress to revisit the McFadden Act of 1927. In particular, we need to look again at making further changes to the Fed to ensure that it is entirely subordinate to the public interest and that never again will private financial institutions such as GS or BAC be in a position to dictate terms to the central bank. Whether you are talking about the loans to AIG or the mishandling of BAC's TARP repayments, the Fed under Chairman Bernanke seems to have acted irresponsibly and contrary to the law.

For all of the above reasons, we think that the Senate should reject the re-nomination of Ben Bernanke and ask the President to nominate a new candidate as Chairman and also nominate two additional candidates for Fed governor to fill the other two long vacant seats.

1or2or3or4or5or6or7or...

2009-12-07T13:55:00.002-05:00

Just had to chime in quickly on Tiger Woods.As of today,he's up to 7 mistresses.I would categorize them as class action whores.It reminds me of the mailings you get from the slip and fall lawyers to get everyone and their brother on board with a class action lawsuit.So,if cheating with a married man is OK on your list of morals,then hurry up and get your name in so you'll be eligible for a chunk of the settlement to just go away.Now,of course Tiger is guilty of having an affair as he has admitted to it.He will have to deal with the fallout for the rest of his life.But I have to start questioning when this many women jump on the bandwagon as to the validity of their claims.It just seems far too many would have to be involved in the cover-up for a long period of time to be plausible.We'll see how it all plays out,but I think it's too late for a mulligan,Tiger.More to come...

Coveragegate!

2009-12-05T09:02:00.002-05:00

Seems appropriate enough.It appears that the major media outlets still march to Rahm Emanuels orders as they won't touch the climategate scandal.Once the lid is off,they know they can't put the genie back in the bottle.So,they will continue the cover-up until Copenhagen.

I'd sure like to know their exit strategy because when the story does come to light,what plausible explanation can they conjur up to explain their ignorance of the greatest scientific cover-up in history?Have they not factored in the NASA angle which is about to get bigger as well?

Obviously,the media has no credibility left with anyone other than the ignorant who only casually glance at the evening news,so what's one more scandal.Take an outlet like CNN,however,and it seemingly makes no sense.Their ratings are plummeting.Losing Lou Dobbs only made it worse.Do they really want to go all the way to the bottom with Obama?Don't you cut your losses at some point?

This certainly has all the earmarks of a stimulus/healthcare scenario with the administration touting the urgency to pass this immediately.I think that's why Obama abruptly changed his agenda and will now be in attendance on the 18th because they know they must jam this thru immediately before the scandal gains traction globally and it's too late.Waiting for next summer at the next conference is no longer plausible.

Reports have been published stating that nothing will happen this year on climate change but I would have to think behind the scenes the dealmakers are drastically working to secure a deal at Copenhagen before that entire agenda implodes.More to come...

No jobless recovery for Michigan

2009-12-04T12:33:00.003-05:00

I just read some comments from the Director of ThumbWorks!,a division of Michigan Works.Marv Pichla stated that Michigan won't have a jobless recovery.He based it on emerging 'green' technology and automotive battery technology jobs.Wow!That takes a minute to swallow.

So the rest of the nation will have a jobless recovery,but not here in our state?Michigan has the 'upper hand' based on our ad campaign so this must set us apart from the rest.What's the matter with these people?Do they only read the White House press releases for their news?

Today we see the national unemployment rate dip to 10.0%.We only lost 11,000 jobs in November they say.I wonder where the 98,000 people went that are no longer part of the workforce?They dropped off the planet apparently.Technically,they haven't actively sought work in the past 4 weeks is why,but this is based on the sample of the 60,000 households surveyed each month by the BLS.

Gee,the 'saved or created' jobs claim fiasco by the W.H. is similar.The number is derived from survey results collected by the administration.They recently threw the people compiling these numbers under the bus stating that reporting errors were responsible for any inconsistencies.So,in other words,take any of these numbers with a grain of salt.

Here in Michigan we have no recovery at all,so the claim is moot anyway.A rosy future?Not possible with the current administration both nationally and at state levels.Sorry,but the status quo is our future for now with flat growth and unemployment not getting worse being the best we can hope for.More to come...