Sunday, February 28, 2010

Are Michigan residents just eternal suckers?

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...

Saturday, February 27, 2010

Michigan problem banks

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.

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?

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...

Thursday, February 25, 2010

Nuclear option begins!

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

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...

Wednesday, February 24, 2010

Remember these libs?They're not out of date!

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...

Monday, February 22, 2010

Is reality being pessimistic,or just facing facts?

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...

Saturday, February 20, 2010

Michigan's unemployment taxes going up 775%?

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...

Thursday, February 18, 2010

Stimulus failure breakdown

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
(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
(4) To invest in transportation, environmental protection,
and other infrastructure that will provide long-term economic
(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...

Wednesday, February 17, 2010

Is Pure Michigan worth it?

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...

Monday, February 15, 2010

We can relate to this!

Who woulda thunk it woulda ever come to this?

More to come...

Granholm's thank you budget

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.

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?

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...

Saturday, February 13, 2010

Who is Brooksley Born?

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.

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...

Thursday, February 11, 2010

Obama promotes his job loss strategy

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

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

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...

Wednesday, February 10, 2010

Throw out the Michigan constitution?

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
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
CRC Special Report on Michigan Constitutional Issues
CRC Board of Directors
NICK A. KHOURI, Treasurer
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
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
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
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
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
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 and
sign up for CRC’s e-mail updates
to have notice of their release
delivered directly to your inbox.

2-1-1 tomorrow?

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

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...

Monday, February 8, 2010

What are the 10 scariest words?

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...

Thursday, February 4, 2010


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?

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...

Wednesday, February 3, 2010

"Certain" of an attack?

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

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! 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...

Monday, February 1, 2010

Ignorance is the biggest issue we face

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...