No Runny Eggs

The repository of one hard-boiled egg from the south suburbs of Milwaukee, Wisconsin (and the occassional guest-blogger). The ramblings within may or may not offend, shock and awe you, but they are what I (or my guest-bloggers) think.

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Archive for November, 2008

November 27, 2008

Senate Dems prepared to use one part of the Constitution to invalidate another

(H/T – Dad29)

Scott at Power Line reports that the Al Franken campaign, with the blessing of Senate Democratic (and Majority) leader Harry Reid, is contemplating taking their case to count absentee ballots rejected on Election Day thwart a legal election victory by Norm Coleman to the Senate. Their “justification” is that Article I Section 5 of the Constitution gives the power to judge the elections and returns of Senate candidates exclusively to the Senate:

Each House shall be the Judge of the Elections, Returns and Qualifications of its own Members,….

Never mind that the decision by the Minnesota Canvassing Board to reject those ballots in accordance with Minnesota law is wholly consistent with the 17th Amendment:

The Senate of the United States shall be composed of two Senators from each State, elected by the people thereof, for six years…. The electors in each State shall have the qualifications requisite for electors of the most numerous branch of the State legislatures.

This wouldn’t be the first time the ‘Rats have denied the winner of a Senatorial election his seat in order to expand a majority. John Fund recalls that, in 1975, despite already having 60 seats plus another member who caucused with them, they refused to seat New Hampshire Republican Louis Wyman, who beat Democrat John Durkin by 2 votes. The seat sat vacant until August, with 6 failed attempts to break a filibuster to vote in the Democrat. The two candidates agreed on a special election, former Senator Norris Colton returned in a caretaker role while the campaign went on, and Durkin won the rematch.

Happy Thanksgiving!

by @ 5:52. Filed under Miscellaneous.

There is nothing better in remembering Thanksgiving than to hear Rush Limbaugh give the real story of the first Thanksgiving.

Thank you, readers, for your time and your indulgence as you read through my “oh, so not important” missives.   Your comments are always appreciated!

Without further ado, Rush Limbaugh:

Anyway, leads me to the real story of Thanksgiving as written by me in my book “See, I Told You So!” We’re on Chapter Six here: “Dead White Guys or What Your History Books Never Told You,” page 70.

On August 1, 1620, the Mayflower set sail. It carried a total of 102 passengers, including forty Pilgrims led by William Bradford. On the journey, Bradford set up an agreement, a contract, that established just and equal laws for all members of the new community, irrespective of their religious beliefs.

Where did the revolutionary ideas expressed in the Mayflower Compact come from? From the Bible. The Pilgrims were a people completely steeped in the lessons of the Old and New Testaments. They looked to the ancient Israelites for their example. And, because of the biblical precedents set forth in Scripture, they never doubted that their experiment would work.

“But this was no pleasure cruise, friends. The journey to the New World was a long and arduous one. And when the Pilgrims landed in New England in November, they found, according to Bradford’s detailed journal, a cold, barren, desolate wilderness,” destined to become the home of the Kennedy family. “There were no friends to greet them, he wrote. There were no houses to shelter them. There were no inns where they could refresh themselves. And the sacrifice they had made for freedom was just beginning.

During the first winter, half the Pilgrims – including Bradford’s own wife – died of either starvation, sickness or exposure.

“When spring finally came, Indians taught the settlers how to plant corn, fish for cod and skin beavers for coats.” Yes, it was Indians that taught the white man how to skin beasts. “Life improved for the Pilgrims, but they did not yet prosper! This is important to understand because this is where modern American history lessons often end. “Thanksgiving is actually explained in some textbooks as a holiday for which the Pilgrims gave thanks to the Indians for saving their lives, rather than as a devout expression of gratitude grounded in the tradition of both the Old and New Testaments.

Here is the part [of Thanksgiving] that has been omitted: The original contract the Pilgrims had entered into with their merchant-sponsors in London called for everything they produced to go into a common store, and each member of the community was entitled to one common share.

“All of the land they cleared and the houses they built belong to the community as well. They were going to distribute it equally. All of the land they cleared and the houses they built belonged to the community as well. Nobody owned anything. They just had a share in it. It was a commune, folks. It was the forerunner to the communes we saw in the ’60s and ’70s out in California – and it was complete with organic vegetables, by the way.

Bradford, who had become the new governor of the colony, recognized that this form of collectivism was as costly and destructive to the Pilgrims as that first harsh winter, which had taken so many lives.

He decided to take bold action. Bradford assigned a plot of land to each family to work and manage, thus turning loose the power of the marketplace.

“That’s right. Long before Karl Marx was even born, the Pilgrims had discovered and experimented with what could only be described as socialism. And what happened?

It didn’t work! Surprise, surprise, huh?

What Bradford and his community found was that the most creative and industrious people had no incentive to work any harder than anyone else, unless they could utilize the power of personal motivation!

But while most of the rest of the world has been experimenting with socialism for well over a hundred years – trying to refine it, perfect it, and re-invent it – the Pilgrims decided early on to scrap it permanently.

What Bradford wrote about this social experiment should be in every schoolchild’s history lesson. If it were, we might prevent much needless suffering in the future.

“‘The experience that we had in this common course and condition, tried sundry years…that by taking away property, and bringing community into a common wealth, would make them happy and flourishing – as if they were wiser than God,’ Bradford wrote. ‘For this community [so far as it was] was found to breed much confusion and discontent, and retard much employment that would have been to their benefit and comfort. For young men that were most able and fit for labor and service did repine that they should spend their time and strength to work for other men’s wives and children without any recompense…that was thought injustice.’

Why should you work for other people when you can’t work for yourself? What’s the point?

“Do you hear what he was saying, ladies and gentlemen? The Pilgrims found that people could not be expected to do their best work without incentive. So what did Bradford’s community try next? They unharnessed the power of good old free enterprise by invoking the undergirding capitalistic principle of private property.

Every family was assigned its own plot of land to work and permitted to market its own crops and products. And what was the result?

‘This had very good success,’ wrote Bradford, ‘for it made all hands industrious, so as much more corn was planted than otherwise would have been.’

Bradford doesn’t sound like much of a… liberal Democrat, “does he? Is it possible that supply-side economics could have existed before the 1980s? Yes.

“Read the story of Joseph and Pharaoh in Genesis 41. Following Joseph’s suggestion (Gen 41:34), Pharaoh reduced the tax on Egyptians to 20% during the ‘seven years of plenty’ and the ‘Earth brought forth in heaps.’ (Gen. 41:47)

In no time, the Pilgrims found they had more food than they could eat themselves…. So they set up trading posts and exchanged goods with the Indians. The profits allowed them to pay off their debts to the merchants in London.

And the success and prosperity of the Plymouth settlement attracted more Europeans and began what came to be known as the ‘Great Puritan Migration.’”

Now, other than on this program every year, have you heard this story before? Is this lesson being taught to your kids today — and if it isn’t, why not? Can you think of a more important lesson one could derive from the pilgrim experience?

So in essence there was, thanks to the Indians, because they taught us how to skin beavers and how to plant corn when we arrived, but the real Thanksgiving was thanking the Lord for guidance and plenty — and once they reformed their system and got rid of the communal bottle and started what was essentially free market capitalism, they produced more than they could possibly consume, and they invited the Indians to dinner, and voila, we got Thanksgiving, and that’s what it was: inviting the Indians to dinner and giving thanks for all the plenty is the true story of Thanksgiving.

The last two-thirds of this story simply are not told.

Now, I was just talking about the plenty of this country and how I’m awed by it. You can go to places where there are famines, and we usually get the story, “Well, look it, there are deserts, well, look it, Africa, I mean there’s no water and nothing but sand and so forth.”

It’s not the answer, folks. Those people don’t have a prayer because they have no incentive. They live under tyrannical dictatorships and governments.

The problem with the world is not too few resources. The problem with the world is an insufficient distribution of capitalism.

The annual Egg Turkey Execution Proclamation – 2008 edition

by @ 0:01. Tags: ,
Filed under Miscellaneous.

Whereas the turkey is the offical bird of Thanksgiving, and

Whereas turkey is a delicious meat, and

Whereas turkey breast contains more protein and less fat and sodium than chicken breast,

Now therefore I hereby decree that a nameless, pictureless turkey be given a thorough plucking and a complete basting, and warmed to a sufficient temperature for human consumption, and further decree that turkey be thoroughly enjoyed until all of the meat be eaten.

-steveegg


Happy Thanksgiving, everybody. I do believe that this should answer the question that I asked late last week; Texacution for the turkey instead of a pardon.

November 26, 2008

Lather, Rinse, Repeat

by @ 5:27. Filed under Miscellaneous.

Another day, another round of bail outs.

In today’s episode, Hank Paulson told us that he was now going to back stop $200 billion of consumer loans.   He also said he was going to buy $600 billion of home loans from Freddie and Fannie.

At least this time Paulson is doing what he said.   He told us 2 weeks ago that he was going to buy consumer credit.   He also told us he was steering clear of “toxic” mortgages which he appears to be doing.

With Paulson doing his best imitation of “The Breck Girl,” doing his bailout version of “Lather, Rinse, Repeat” on at least a weekly basis, the question arises; “How long can we keep up the bail out express?”

Interestingly, McClatchy took up that exact topic today. After asking, “Can Government keep Spending?” They answered with, “Most Economists Say Yes.”

Now, I’m not the smartest guy but I have managed to keep my family fed.   How can economists not think that the spending and borrowing palooza isn’t a problem?   After reading a couple of the questions and answers from McClatchy, you’ll be a believer too….or not

Q: First of all, where does the money come from?

A: The bulk of the cash has been put up by lenders buying U.S. Treasury Department securities such as bonds, notes and short-term bills.

OK, they recognize that the bulk of the bail out has been financed through debt.

Q: How much money has the U.S. government spent or loaned out since September?

Here the article falls into drivel about the original $700B and today’s $800B.   They apparently haven’t kept up.   Bloomberg says the number is now over $7.7 Trillion.   Maybe to these economists a 500% miss is just a rounding error!

Q: How much longer can the government keep spending?

A: A lot longer, economists say. International investors will keep buying Treasury securities even though the interest rates on many of them are close to zero percent.

Based on this, if I can con multiple banks into giving me loans, regardless of whether I can pay them back, that’s a good way to “enhance my cash flow!”   Huh?   isn’t that the kind of thinking that got us into this situation?

Q: But should the U.S. government be spending so much money?

A: Most economists say yes. Although the federal budget deficit is projected to hit a trillion dollars next year, incurring massive debt at this point is eminently preferable to letting the U.S. economy slide into deep recession.

America can worry about cutting deficit spending when the economy starts growing at a healthy clip, economists said. The goal now is to get banks lending and consumers spending again.

Have we all missed something?   Is there a magical economic formula that says that unwarranted borrowing coupled with excessive spending leads to economic bliss?   Putting this thinking into the Shoebox household, we would be perfectly justified in taking the loans we had bilked banks out of and living a lifestyle that wasn’t sustainable  but for  the loans.   Oh, and we would tell ourselves it was OK because we would pay back the loans when we “got back on our feet.”  

Q: But will all this work?

A: It’s better than doing nothing.

Which leads us back to where we were two weeks ago when I chronicled Hank Paulson’s comments as:

  1. We didn’t know what we were doing.
  2. We don’t know what we’re doing now.
  3. We aren’t sure what we’ll do in the future.
  4. Trust me, I’m spending the money well!

First,  we had a “consensus” of scientists saying that the debate over man made global warming was over.   Now, according to McClatchy, we have “most” economists saying we should continue to borrow and spend without regard to the consequences.   Is it just me or does it seem like when it comes to government, being a part of the “in crowd” almost always means your wrong?

November 25, 2008

A Second Bad “Get Rich Quick” Scheme

by @ 5:35. Filed under Global "Warming".

I wrote a couple of weeks ago that responding with money to email solicitations from Mr. Morgan Smith of Nigeria, was not a good investment. In fact, I heard recently that a second person responded to Mr. Smith and she was now short nearly $400,000!

Yes, you have to be careful what you invest in.   Along with land in Florida and bridges in either San Francisco or New York, comes the next perilous investment opportunity, The Northern Passage.

McClatchy is reporting the possibility of commercializing the ice free Northern Passage. I mean gee, this is actually the third time in the last 110 years that it has become passable, must be a trend!

While commercialization of the Northern Passage would be a good thing, I wouldn’t be investing with anyone who was suggesting that they didn’t have a plan to work in really challenging, thick ice conditions! McClatchy seemed to miss a couple of details from the last few weeks like:
October 2008, Fastest Ice Growth Ever and 200 Whales trapped in Canadian Artic Ice.

Still thinking you want to get in early on the “Next Great Thing?”   You may want to take a look at one of these historical views of arctic ice coverage first.

Still think the ice is going away? Well than “Spin the wheel and take your chances!”

But don’t say I didn’t warn you!

November 24, 2008

Pot Meet Kettle

by @ 5:51. Filed under Economy, Politics - National.

After a week of Congressional appearances and public angst over the possibility of an industry bailout, Nancy Pelosi gave the CEOs of the Big 3 automakers the following advice as they  retreated for their private jets to head back to Detroit:

“I am very optimistic and hopeful that they have gotten the message that they just can’t come and say, ‘Give us this,’ ” Pelosi said Friday. “How do we tell the American taxpayer it was worthwhile to put this in not as a life support for a few more months and then they are back again, but as an investment in their viability?”

How different is this?

The US debt is now at $10 Trillion and counting.   That number doesn’t include the $3.5 Trillion, and counting, price tag of the various bailout and stimulus packages.   The US deficit (negative cash flow) is projected to be $1 Trillion in the next fiscal year and while a big chunk of that is from the bailouts, there’s no plan to reduce the annual deficit and pay down the national debt. Lastly, the unfunded liability for Social Security and Medicaid is estimated to be as high as $101 Trillion!

During the Congressional hearings, the Big 3 were justifiably berated for not dealing with the reality of their financial circumstances and for not having enought foresight to anticipate the need for significant change in their industry.   Certainly one can argue that the current economic environment accelerated the auto problems but they were coming, it was just a matter of time.   Again, how different are they than the US budget and deficit issues?

Let’s look another time at Pelosi’s advice to Detroit:

“I am very optimistic and hopeful that they have gotten the message that they just can’t come and say, ‘Give us this,’ ” Pelosi said Friday. “How do we tell the American taxpayer it was worthwhile to put this in not as a life support for a few more months and then they are back again, but as an investment in their viability?”

Is there any part of that statement that is not just as accurate for Obama, Pelosi and Reid as they clamour for more taxes?   Pelosi and Reid, justifiably, demand accountability from Detroit.   Accountability that they and their compatriots in Congress refuse to put on themselves!

Pelosi and Reid demand that the leadership of the automakers:

And Congress promises to limit executive pay, bonuses and other benefits of top executives, who were roundly criticized after flying corporate jets to two days of hearings this week and providing what many lawmakers called stilted, incomplete answers.

Pelosi and Reid summed up their expectations of the “skin in the game” required from the leadership of the automakers by saying:

“In return for their additional burden, taxpayers also deserve to see top automobile executives making significant sacrifices and major changes to their way of doing business.”

When will Congress set the same limits and expectations on their pay, benefits, perks as they are demanding the auto execs do?   When will Congressional leaders put their “skin in the game?”   When will Congress eliminate the ability to gain any future income from their time in Congress and remake the Representative and Senator roles into the public servant, not public fleecing  roles that they were intended to be?  

If the issue is that the auto execs deserve to be impacted because they have mismanaged their companies into a situation requiring a bailout by the American taxpayer, well, Pelosi, Reid and every other Congress person has done exactly the same thing!

It’s time for Pelosi, Reid and the rest of the Congressional leadership to lead by example!   Before they get another penny of taxes, of any kind, they should vote to impact their own economic benefits in the same way that they expect Detroit to impact theirs.

November 23, 2008

Blog n Grog – November edition

by @ 8:15. Tags:
Filed under Miscellaneous.

The word from Alexander is that it’s over at Nice Ash (327 W. Main in Waukesha, which is not hard to find now that they took out the gazebo and all the one-way streets) Tuesday the 25th at 7 pm. As we say, if you can find it on a map, you’re invited.

Jack is back

by @ 7:59. Tags:
Filed under Miscellaneous.

Yes, it’s a 2-hour movie that isn’t quite following a timeline (as if “24″ ever really followed the rules of the time-space continuum), but Jack Bauer is back after an extended absence forced by last year’s writers’ strike. Personally, the way Season 6 turned out, they could’ve filmed without any of the writers and still not done a worse job.

In any case, I’ll be watching “24: Redemption” with the gang over at Blogs.4Bauer. Be there so I don’t have to do the Bauer Towel Trick on you, dammit.

Don’t forget the B4B Kill Counter (simplified). The hot rumor is that it will be spinning wildly.

November 21, 2008

New NRE poll – What is wrong (if anything) with this video?

by @ 16:55. Tags:
Filed under NRE Polls.

(H/T – Michael Goldfarb)

MSNBC ran the following video of Alaska Governor (and former Republican Vice Presidential nominee) Sarah Palin’s pardoning of a turkey and subsequent post-pardon press conference…

I ask you, the gentle and not-so-gentle readers of this hole in the wall, what, if anything was wrong with it?

What is wrong (if anything) with this video?

Up to 1 answer(s) was/were allowed

  • Nothing. (59%, 19 Vote(s))
  • Sarah Palin should've issued an execution order instead of a pardon. (28%, 9 Vote(s))
  • Sarah Palin and the press should have found another place to shoot the post-pardon interview. (9%, 3 Vote(s))
  • The turkey farm should have waited until the cameras were off to start the turkey slaughter. (4%, 1 Vote(s))

Total Voters: 32

Loading ... Loading ...

This poll will close just before Thanksgiving Day begins, and I’ll give you my answer then. Those of you who know me may or may not be able to guess it.

I’ve got $5.4 billion. Do I hear a $6 billion shortfall?

by @ 10:22. Filed under Politics - Wisconsin.

(H/T – Kevin Fischer)

Just a few days after Gov. Jim Doyle estimated the structural deficit for the next biennial budget at $5 billion, the Milwaukee Journal Sentinel reports that Doyle was 8% low on that estimate, and it is now $5.4 billion that needs to be shoveled into the next budget. There’s a few new numbers in the Journal Sentinel story that should bug one’s eyes out:

- Aid for public schools is now $5.1 billion per year, and given the unrestrained increases in school spending, the state would need to pump in an additional $480 million on top of the $10.2 billion it would spend to keep the 66% state funded promise. Personally, I believe it would need to be much higher given the average 5%-6% increase in spending (and 9%-15% increase in tax levy) for the coming school year.

- Compensation for state employees totaled $2.1 billion last year. Madison, we have an overage of employees, even if Doyle refuses to acknowledge it. Say, whatever happened to the 10,000-job cut that Doyle promised back in 2002?

- Despite the collapsed economy, the state wants to spend $62.3 billion over the next 2 years, $2.8 billion more than was budgeted over the past 2 years. For those paying attention to the percentages, that’s a 4.7% increase in spending. For those paying attention to the shortfall, that increase is over half the “shortfall”. Did any of you non-union/non-government workers get a 4.7% increase in pay over the last 2 years?

- There is a $346 million hole in this budget, caused entirely by an over-estimation of tax revenues. The state will be collecting $509 million less in taxes than it did last year.

- For those considering tax increases (like Doyle and the Dems), they won’t begin to cover this hole. That hospital tax Doyle and the hospitals are keen on sticking to us would bring in only $400 million over 2 years. The oil tax Doyle wants would bring in maybe $393 million in that same time. Even a 10% increase in the individual income tax would bring in only $1.4 billion over 2 years.

I personally like the last part of Rep. Pedro Colon’s (D-Milwaukee) comments – “I think, at some point, whether it’s this Legislature or the next one, we’re going to have to start talking about how we increase revenue"‚."‚."‚."‚or the state is going to have to get used to really severe cuts.”

Break out the chainsaws.

November 20, 2008

So much for centrist Obama and centrist ‘Rats

by @ 18:09. Filed under Politics - National.

Item #1 – Jim Geraghty reminds us that Eric Holder, Barack Obama’s choice as Attorney General, wanted to use 9/11 to crack down on gun shows. I’ll point out that those focusing on Holder’s role in the pardon of Marc Rich are barking up the wrong tree; look at Holder’s record, which also includes hyper-targeted enforcement of civil rights laws against the right.

Item #2 – Jim Hoft reports Henry Waxman was successful in ousting John Dingell from the chair of the House Energy and Commerce Committee. What is significant about that is Dingell is a supporter of the auto industry, while Waxman is a Gorebal “Warming” acolyte and thus is opposed to the auto industry. As Jim said, “Say good-bye to new oil and nuclear energy development.”

Item #3 – Marc Sheppard caught Obama prostrating himself at the altar of the Goracle, repeating and expounding on the essential lies of the religion of Gorebal “Warming”. No wonder he said that his policies would bankrupt the coal industry and cause electric rates to skyrocket.

November 19, 2008

Drill Here, Drill Now Tuesdays – Special Wednesday edition – 11/19/2008

by @ 14:26. Tags:
Filed under Energy.

This was started by Jessi Olson of Wake Up America back when most of the country was off-limits to oil exploration. I’ve sort of fallen off the wagon once the off-shore ban expired, and really fell off after the election.

Price of regular unleaded in south-suburban Milwaukee – $1.899

There is actually some hopeful news today, which is why I brought this thing in from the dustbin. The Salt Lake Tribune reports that the Interior Department has finalized the rules for opening up the Mountain West’s oil shale reserves. Royalties will start at 5%, then increase by 1 point a year after the 5th year of commercial exploitation to the standard 12.5%. Also, 49% of those royalties will be shared with the state in which a particular mine is.

Naturally, the no-drill crowd is all up in arms, but at least they have to actively reverse course now to get oil back up their dream of $140+/bbl and gas to their $4-$10/gallon dream.

Lies, Damned Lies and Statistics

by @ 5:44. Filed under Economy.

The Labor Department released the latest Producer Price Index (PPI) today.   The PPI shows what is happening to prices at the wholesale level.   The latest results showed that the PPI had decreased by 2.8%, the sharpest decline ever recorded.

While the full PPI declined, the core PPI (they remove price changes for  energy and food) rose this month by .4%.

I’ve always thought this notion of “core” PPI to be utter nonsense.   As energy prices were soaring and food along with it, during late last year and early this year, various economists pointed to the lower core PPI as evidence that inflation was still under control.   I don’t know about the economists but my household gets pretty severely impacted by dramatically rising energy and food prices.   Those two items don’t have significant elasticity of demand in our checkbook!   For this and other reasons, I don’t tend to pay a lot of attention to the “core” changes of PPI.   In today’s report however, I say an anomaly that caught my eye.

At the very end of the report was this explanation of why the total PPI went down while the core PPI continued to rise:

The 0.4% increase in core PPI was driven by a sharp 2.6% jump in light truck prices, which include sport utility vehicles, and higher prices for other capital goods.   (emphasis mine)

You’re kidding right?   We’re supposed to believe any of these statistics are meaningful?   The reason the core PPI increased was because of an increase in costs of SUVs?   First, isn’t Detroit complaining that they aren’t selling any vehicles and thus need a bailout?   Does anyone really believe that SUV prices have increased?   I don’t mean the sticker price, I mean the price you actually pay!  

Second, does anyone know someone who purchased a brand new SUV in October?   Weren’t there just stories saying that October was the worst car sales month in 30 years?   Haven’t we seen stories telling us that SUV sales have dried up?

Definition of Statistics:   The science of producing unreliable facts from reliable figures.   Evan Esar

The saddest part about all of this is that our taxes are paying for someone to put out this drivel.   I think I’ve found one place where Obama could trim the Federal budget!

Here Endeth The Discussion of Bail Outs

by @ 5:14. Filed under Economy.

Hank Paulson found Bank of America worthy of a $25 billion investment via his “Anything goes” TARP program.

You remember that TARP program? Those funds were supposed to be used to shore up the US financial system? You also remember how Congress, after having been burnt by Freddie and Fannie assured us that TARP would have significant and stringent oversight?

Um, not so much.

Bank of America was in such dire need of the capital infusion, money that was supposed to assist loans in the US, that they thanked the US taxpayer by investing  $7 billion to increase their stake  in a Bank in China!

Is it any wonder why the vast majority of Americans believe the country is going in the wrong direction?  

Are there anymore questions about whether Congress should ever do another “bail out?”

November 18, 2008

How Obama got elected – video and poll

by @ 17:49. Filed under Politics - National.

(H/T – Ed Morrissey)

John Ziegler went out and interviewed a dozen Obama voters right after they voted to find out what they learned from the media coverage of the election season.

YouTube Preview Image

For those of you who don’t want to sift through the video (though I recommend it), here’s the short version: The voters, by and large, had no clue who controlled Congress, or who Barney Frank, Nancy Pelosi, Harry Reid and Bill Ayers are. While they knew that Sarah Palin had a pregnant teenage daughter and had a $150,000 party-paid wardrobe makeover, and that John McCain didn’t know how many houses he and his wife owned, they were also clueless on who claimed to have campaigned in 57 states (Barack Obama), who won their first election by getting their opponents kicked off the ballot (again Obama), who said that Obama would be tested in his first 6 months by an international crisis (Obama’s running mate Joe Biden), who had to quit a previous campaign because (s)he was caught plagiarizing a speech (Biden again), who said his (or her) policies would bankrupt the coal industry and cause electric rates to skyrocket (Obama).

For those of you who think that a dozen people in Los Angeles aren’t exactly representative of the ObamiNation, Ziegler commissioned a poll from Zogby International of 512 Obama voters nationwide asking those same 12 questions. The results of that poll are mind-blowing.

A majority didn’t know that Democrats controlled both houses of Congress. Worse, while the correct answer was a plurality, a large minority thought that it was the Republicans. No wonder why the Dems increased their majorities despite having historically-low approval ratings.

Also, while the 3 questions regarding Republican “gaffes” all had over 80% of the respondents answering correctly, most of the Democratic “gaffes” had a plurality “not sure” consensus. Indeed, other than the “redistribute the wealth” (the only Dem “gaffe” that had a 80+% correct answer) and a bare-majority-correct “tested by an international crisis” questions (I discount the plurality-correct “start the political career at the home of former Weather Underground members” question because I suspect most of them thought about Perry Sampson and Jeff Masters instead of Bill Ayers and Bernadette Dohrn), no more than 28.2% of the respondents could deliver the right answer.

I would link to today’s Ed Morrissey Show because John was the first-half guest, but there is currently an issue with Ustream’s recording that’s causing things to pass over John’s appearance. John pointed out that we on the right have a serious uphill battle in getting through to the masses. Take a listen to the end of that video, where John asked his dozen volunteers where they get their news – Bill Maher figured into that. Bill Fragging Maher, who has a second-rate comedy show.

I guess we can count “Saturday Night Live” as a “news” source for the ObamiNation as well – an overwhelming majority in both the video and the poll misattributed the Tina Fey “I can see Russia from my house” humor quote to Sarah Palin, when Palin actually said that one could see Russia “from land here in Alaska”.

Left Logic

by @ 5:52. Filed under Miscellaneous.

OK, I admit up front that the title is an oxymoron.  

It didn’t take long following the 35W bridge collapse before the left, unable to bypass another “Bleed it leads” headline, started claiming that lack of funding caused inadequate inspections and thus the bridge collapse. A month had not passed when  a Star and Tribune editorial ran an editorial crying that the bridge collapse proved we needed to pay higher taxes:

The need to acknowledge that, whatever the collapse’s specific cause, Minnesota has allowed its transportation infrastructure to deteriorate to a level that threatens the safety of the public and the future of the economy.

and

The need to comprehensively repair what’s crumbling and start building and funding a transportation system compatible with market demand and the new global realities of energy insecurity and climate change.

The final report on the 35W bridge collapse was issued by the NTSB this week.   The findings, identified early in the process but naysayed by those who wanted a demon, was that the gusset plates were undersized by 50% in the original design.  

Darn, that sure puts a crimp in the whole “we need your money, money, money” meme!

Not to be put off track, the Star and Tribune wrote an editorial this Sunday addressing the NTSB report.   Unable to use the report to further pin the tail on the Republican Donkey Elephant, the Star and Tribune goes the next step and blames the Minnesota Taxpayers:

Last week’s National Transportation Safety Board (NTSB) hearings on the cause of the Interstate 35W bridge collapse were dominated by the technical lingo of the investigators. Finite element analysis. Initiation location. Load redundancies. There was also one oft-repeated phrase combining two words rarely used together: “bridge owners.”

A heads-up to all Minnesotans: The NTSB is talking about you. And while it’s hard to think about owning bridges the same way as a home or a car, the reality is that these critical components of daily life belong to the public — not to politicians, not to transportation officials nor any other bureaucrat. Everyone owns them. Everyone shares the responsibility for ensuring they are maintained and cared for.

Um, No!

Can you just imagine the scene that would occur when I decide that I’m concerned about bridge X and that because I am a “bridge owner,” I’m going to stop traffic so that I can crawl around the bridge to give it my examination?   OK, well maybe that wasn’t what the Strib was going for.   However, their notion that we each share a responsibility for the safety of bridges is just as ridiculous.

The problem with the Strib’s thinking, and that of much of the Left’s policies are that at the first sign of trouble, if they can’t immediately pin the problem on a Republican, the next stop is that it’s “everybody’s problem!”   When it’s everybody’s problem than it is the perfect reason not to be left to individual cases but must be dealt with as a blanket issue by the Federal Government.   The left has no ability to deal with personal accountability.   Doubt me?

Abortion – no personal accountability at all.   Abortions must be available all the time for any reason.

Guns – must be banned.   No one individual can be held accountable for their improper use of a gun so no one can have one.

Fairness doctrine – some one may be offended so no one can hear speech that has a different opinion.

Social programs – don’t even get me started!

Education – again, don’t get me started!

The only way that I agree with the Strib is that we as taxpayers hire people to monitor, manage and repair various functions.   We call these people Senators, Congress people, Governors, Presidents etc.   In some cases, like the 35W bridge collapse, it doesn’t appear that there is reason to believe that any of these folks, or the folks they hire and oversee, would have reasonably determined the flaw in the original bridge design.   That said, in most other situations, these same people should be expected to anticipate and correct problems.   Unfortunately, that seems to be happening less and less.   In that case, we taxpayers are “owners” and we need to be more vigilant in holding our elected officials to accountability.

As I used to tell some of my people, “I’ve hired you to do a job and expect you to do it.   I’ll help, coach and support you but I won’t do your job.   If I have to start doing your job, then one of us is no longer needed….and it won’t be me.”

57,58,59 or 60 – It Really Doesn’t Matter

by @ 5:08. Filed under Politics - National.

Some parts of the Country, political junkies and all the D.C. insiders are holding their breath awaiting the result of the Alaskan absentee count, the Minnesota recount and the Georgia runoff.   All actions that will determine Senate representation in those states.   The results will also determine whether the Democrats have 57, 58, 59 or the magical 60 votes.  

Here’s a news flash, the remaining 3 elections don’t matter.

Well, I guess they do matter if you’re into the community soccer “we’re all winners” kind of scoring.   However, in terms of running the Senate or holding the Democrats from running wild on their agenda, the results don’t matter.

Don’t believe me?

Let’s assume the Republicans hold the last three races.   Let’s look at a few issues and see if the Democrats can get them moved through.   Remember, it only takes 3 RINO defections to join the Democrats and the Democrats can cease debate and move to a vote.

Global warming – Specter, Coleman and McCain are all firm believers in man made global warming.  

Off Shore drilling – Coleman, Collins and Graham are just 3 of the 10 Republicans who were willing to give away any real ability to drill because they saw political advantage.

Illegal amnesty – McCain, Graham and Kyl were the ringleaders on the last go around.   I don’t expect they’ve found any reason to change their positions.

Abortion issues – Snowe, Collins and Specter are all pro choice.

There’s a part of me that  wishes the Dems would get their 60 votes.    Even at 59, Reid and his ilk will continue to stand in front of microphones and whine about “Republican obstructionists,” after which, he’ll cry “Buuuuuuuuuuuush.”   At 60, all of that goes away and the Dems will have no one but themselves to look.

Regardless of the outcome of the three remaining elections, the Dems will have full control of  Washington on nearly every issue that comes up.   After all, it’s not like this election has made the RINO an endangered species, it’s just made them a little less likely to blend into the background.

November 17, 2008

The End Justifying the Means?

by @ 5:58. Filed under Global "Warming".

5The Telegraph reports today  that what had been reported as the warmest October on record turns out to be not even in the top 50% of warmest! How would such a discrepancy occur? Can you say “data manipulation?”

Originally, Nasa’s Goddard Institute for Space Studies (GISS), which is run by Al Gore’s chief scientific ally, Dr James Hansen reported that while many of us had experienced unusual cold in October, areas of Russia were 10 degrees above average. However, when reviewed by a couple of official “deniers,” it was determined that GISS merely copied September’s information across into October for the Russian readings!

Oops, our mistake….or maybe not!

Instead of admitting their mistake, GISS said, “Oh no, um, that wasn’t it. There was unusual warmth in the Arctic!” The problem with this is that the Arctic has been cooling so fast that the ice (remember all the screams about the melting ice this spring?) that was melting and about to flood Florida off the map, has been reforming so fast that it is now 30% larger than last year at this time.

Again, our mistake….um nope!

I’ll just cut and paste this because it is the epitome of truth being stranger than fiction:

Another of his (Dr. Hansen’s) close allies is Dr Rajendra Pachauri, chairman of the IPCC, who recently startled a university audience in Australia by claiming that global temperatures have recently been rising “very much faster” than ever, in front of a graph showing them rising sharply in the past decade. In fact, as many of his audience were aware, they have not been rising in recent years and since 2007 have dropped.

Dr Pachauri, a former railway engineer with no qualifications in climate science, may believe what Dr Hansen tells him. But whether, on the basis of such evidence, it is wise for the world’s governments to embark on some of the most costly economic measures ever proposed, to remedy a problem which may actually not exist, is a question which should give us all pause for thought. (emphasis mine)

Huh, What?   A railroad engineer?   This guy is only smart enough to drive a vehicle on a track?   We’ve got a person who’s only qualified to  drive the Jungle Cruise at DisneyWorld telling us that man is ruining the earth?

I was thinking the other day, when I heard that Al Gore had turned down the offer to be “Global Warming Czar” from Barack Obama, “Why would he do that?”   Honestly, if the guy is as concerned as Gore claims to be about global warming, why not take the role that would undoubtedly set direction and precedent for at the the US and possibly the world?

Yeah, I thought about it for about 5 seconds and  the answer was  obvious.   If Al became the Czar he’d actually have to answer questions, come up with facts, be subject to scrutiny.   On top of that, he wouldn’t be able to charge ridiculous amounts of money as the “Johnny Appleseed” of global warming!   No, none of that would do.   Why would Gore want to subject himself to all of that when with the election of Barack Obama, he got another four year lease on fleecing of the gullible public.

Who’s Doing The Math?

by @ 5:47. Filed under Economy, Politics - National.

Wasn’t it just last week that Barack Obama said there is only one President at a time?

Barack Obama and others are pushing a $50 Billion bail out of the Auto Industry.   Phrases like “too big to fail,” “catastrophic” and “psychological impact” are being used as reasons for urgent and significant action (sound familiar?)

This time, unlike the original “trust me” bailout, we have a pretty good idea of what is causing the problem and how big the problem is.   Let’s take a look.

The  current problem with the automotive industry is that they aren’t selling any cars.   Some claim credit is an issue, some claim that Detroit is designing and making vehicles people don’t want.   I don’t think either of those are more than a small percentage of the problem.   The core problem is that consumers have pulled in their spending, hard.  

The last thing many consumers are doing while jobs are a concern,  is to  make major purchases that are not absolutely essential.   While credit for purchasing autos hasn’t dried up, it has gotten tighter.   Rather than financing more than 100% of the purchase price, most lenders have gone back to the draconian practice of getting a down payment!   Additionally, the value of used cars have dropped drastically in the past few months.   This means that many consumers have a bigger delta that they need to bridge between the value of their  trade in and the car they desire.  

While current sales are certainly a problem, even waving a wand and restoring 2006 level sales won’t save Detroit.   Why?   Detroit has a cost structure that is uncompetitive.

The Carpe Diem blog put together an analysis that shows that the Big 3 pay fully loaded wages that are 50% higher than their competitors levels. Now we can argue about whether this is labor or management’s problem to solve but regardless, even with the Big 3 closing the gap on productivity, they are left with a significant cost disadvantage which isn’t going away.   OK, so that’s one problem.

Another problem is with the pension plans that the Big 3 have.   Over the years, they have made commitments to their union employees to provide certain retirement benefits.   Like a lot of companies and industries, the funding for these retirement programs have not kept up with the expected cost of the benefits.   In the case of the Big 3, the unfunded portion of their health and pension programs is now estimated to be $90.5 billion.  

Not that it’s impossible, but it’s hard to imagine any of the Big 3 returning to a profitability level that could put a serious dent into the $90.5 billion short fall. GM’s last profitable year was in 2004 and it was just shy of $3 billion. GM’s share of the $90.5 Billion is estimated to be about $50B.

Finally, the Big 3 are burning huge amounts of cash. Reports have it that GM and Ford alone, are using $15 Billion per quarter. Chrysler is a private company so it doesn’t report it’s burn rate but you can bet they are feeling pain as well. At the end of September, 2008, GM had $16 Billion of cash. They had burned nearly $9 billion during the quarter. It’s entirely likely that GM’s situation has not improved this quarter. If their cash burn continued as it was in the third quarter, they are reaching a point of no return. With the consumers now sitting on the side lines, especially with major purchases, and many economists saying we won’t see any improvement until at least the second half of 2009 and some saying into 2010, how does $50 billion make much of a dent in an industry that is burning $15+ billion per quarter?

So here are the questions:

  1. Does shoving $50 Billion into a $90.5 billion hole even get you to the point where you can see above the edge of the hole?
  2. Do you believe that $50 Billion can buy enough time for the automakers to keep them alive until consumers buy their product again?
  3. If you answer yes to 1 and 2, how do the Big 3 remain/regain competitiveness with a labor cost structure that is 50% above their competition? Oh, and if you have any notion that the competition is getting easier, read this great article!

Should GM and others get a straight “bail out?”   Nope.   I can’t see how putting money into this without a dramatic change in the underlying cost structures does anymore than delay the inevitable.   Additionally, I don’t want Nancy Pelosi and Barack Obama making decisions on what the Big 3 make, how they make it etc.   Having anyone in Washington dictating Detroit’s marketing plan is a sure way to ensure we’d never get the money back.

Should GM fail?   Probably.   Should it fail now?   Probably not.   While I don’t favor a straight bail out via capital infusion or additional loans, I would favor debtor in possession loans.

I believe GM, and the others if they find themselves there, need to go through a Chapter 11 reorganization.   It appears to be the only way for them carve out profitable business segments and shed costs that they can no longer support…and I’m not talking just union contracts.   The conventional wisdom is that GM and others, can’t file for bankruptcy because they couldn’t get interim financing.   I think the conventional wisdom is accurate.   However, I don’t see the government standing by and watching GM sink under the waves, they will do something.   I would rather see the hard decisions forced via the bankruptcy proceeding than allow “whistling by the graveyard” of getting funding and hoping it will be enough to get by.  

Some may argue that by filing for bankruptcy the US tax payer will end up paying for the unfunded liabilities of the pension and health plan as they are insured by the Pension Benefit Guaranty Corporation.   While that is true, I suspect we’re going to be ultimately responsible for it anyway.   By forcing the issue now we can stop the bleeding.

Some may argue that the example of Chrysler in the ’80′s shows that bankruptcy isn’t needed.   Actually, the Chrysler situation proves the point for bankruptcy.   The Chrysler loans,  a deal at just $1.2 billion, contained language that required Chrysler supplies to provide certain concessions.   The effect was that Chrysler negotiated contracts with suppliers, unions and debt as if they were in bankruptcy.   The populace is already upset about the $700 billion bailout and even more so by Paulson’s nose thumbing on doing what he said he was going to do with it.   If a bail out for Detroit gets shoved down the taxpayer’s throat, it should at least have the appearance of serious consequences for shareholders and those who have been sucking from the teat while the industry fails from a growing cancer.   Even without a bankruptcy filing, Washington is going to find little support for a Detroit bailout.   With a bankruptcy filing, the howls may be muted.

Additionally, there is concern of whether US consumers will purchase from an auto company that is in bankruptcy.   To those folks I say, that folks are more likely to buy from a company that is dealing head on with their issues and forging a plan than with a company whose future is solely tied to a quick spring back in the economy.

In the end, I don’t know if the US auto industry, as we know it, will survive.   Certainly pieces of it will but I doubt it will contain the behemoths we see today.  

It used to be said that “What was good for GM was good for America.”   While I think that phrase may still be fairly true, I don’t believe that the converse is true.   America can’t  continue to write checks with nine zeros at the end of some number.   This is especially true when there are endemic issues that significantly dilute the benefit of any support.   There will likely be support for the Big 3, I hope that Detroit is forced to deal with their issues and Washington resists the temptation to dictate automotive development.

I hope but I’m not hopeful!

November 15, 2008

Well, This Is One Way to Fix It!

by @ 15:33. Filed under Politics - Minnesota.

Heard today on the Northern Alliance Radio Network:

You may have heard about the little issue of a recount for the MN Senate race?   You may also have heard that our Secretary of State, who ran on a platform of “The Secretary of State should be non partisan” but has been THE most partisan Secretary of State and arguably executive leader in Minnesota ever, has been highly partisan in his actions thus far.   You may also have hear that our Secretary of State has a history with groups like ACORN…

Well,

The House Republican leader, Marty Seifert announced that the Republican House minority has agreed with Governor Tim Pawlenty that the Governor will line item veto the budget for the Secretary of State’s office and the Republican House members will sustain the veto, until the Democrats agree to require a photo ID for voting!

Seifert has done a great job leading a minority group.   If it hadn’t been for 6 RINOs last year (Oh and they are all gone now) he would have held the Dems last year  to a modest budget increase with no increased taxes and left us positioned to face the current downturn.   It’s unfortunate that Seifert has not had a majority to work with…he’s my kind of Republican.

It will be interesting to see how this plays out.   I’m sure the Dems will get snippy and threaten retaliation.   The real question will be if the 47 Republican House members can stay united.   I suspect they can.

A photo ID requirement would at the least put to rest, concerns of voter fraud.   If it doesn’t exist, no harm.   If it does exist, there’s no other way to ferret it out.

Good luck Marty!   This will be one blogger who will watch and support your efforts!

November 14, 2008

Random economic thoughts

by @ 11:52. Filed under Economy.

Yes, I’ve been silent all week. I still don’t have any one thing quite post-worthy, but let’s run through some thoughts:

- CNBC had a banner earlier today asking whether the International Monetary Fund could “save the world”. My memory may not be what it used to be, but when the IMF tried to save Mexico, South America, and Asia, they had to be bailed out by (you guessed it) the US. There just isn’t any money out there anymore.

- Speaking of no money out there anymore, I find it interesting that gold, the haven of last resort in fiancial troubles, is down 15% from late summer. If that is not a sign of money simply evaporating from the global market, I don’t know what is.

- As bad as you think things are here, they’re worse in Europe. The Euro and British Pound are both down over 20% against the dollar. By contrast, the Japanese Yen and Chinese Yuan are up slightly against the dollar, with most of the rest of Asia down. Once again, I attribute that to money simply disappearing from the global market.

- There is but one reason why GM/Ford/Chrysler are at the head of the bailout line – the UAW. I can’t remember which Dem Congressman admitted the only reason they want to bail out the “Big” Three is so that the fat union contracts stick around. Left unspoken is that the UAW donates millions upon millions of dollars to those same Dems, and Barack Obama proved that money talks.

- If the Dems are successful in killing the 401(k) program by making it ordinary taxable income, I honestly don’t know where the bottom for the equity markets is. There is not nearly enough ability between the pension funds and 403(b)s (which I imagine will still receive favorable tax treatment as they’re union and government creations), and money-market IRAs (which, even if they didn’t suffer the 401′s fate, are far more limited in money) to prop up the market.

- If you think the government has that cash, guess again. I just heard on CNBC that an auction of 30-year T-bonds yesterday went very poorly. Even with the market crash, the equity markets still have far more value than either the entire federal budget or the national debt (something north of $20 trillion versus roughly $3 trillion and $11 trillion respectively). Again, where’s the money?

- Speaking of deficit, Jim Doyle just admitted that there’s a $5 billion hole in the state budget for the next biennial period. That is an 8.4% typhooning of total state spending over that two years and nearly-150% increase in the structural deficit from the estimates at the time (if memory serves). If filled the way the Dems usually fill (if they were honest about filling it), it would also represent an 18% 2-year tax increase. Of course, they want to lop on a tax doubling for their version of CubaCare (which would more-likely require a tripling or perhaps a quadrupling).

- Back to fat union contracts; 80% of spending by the city of Oak Creek is on (mostly-)union-negotiated compensation. After all, where else but government, which never really cuts back in absolute terms, can one get 50% of one’s salary in benefits? So far, tax levy increases have been “limited” to the anti-freeze provisions, but that is only because of massive fund transfers and a fresh infusion of cash from We Energies (via the state). Guess what? Those funds are empty, and that We Energies payment is as high as it’s going to get.

November 13, 2008

Project Valour-IT fundraiser – 2008 edition

by @ 20:33. Tags:
Filed under Miscellaneous.

I’m a bit late to the party, but once again, Soldiers’ Angels is having a fundraiser for their Project Valour-IT through Thanksgiving Day. Project Valour-IT provides laptops and other technology to support servicemen and servicewomen who are recovering from hand and other severe injuries.

As usual, there are teams aligned along the five branches (Army, Navy, Air Force, Marines and Coast Guard, which has been split off from the Navy this year) to spur the competitive juices. Do rest assured that no matter which team you donate to, the money is going into the same pot, and that it is all going to buy that technology. For those of you who itemize, Soldiers’ Angels is a 501(c)(3) non-profit, so you can itemize the donations. Like last year, I simply can’t pick a single team, so instead, I’m going with all of them.

There also is a slight change in the look of the blog. During the fundraiser, I have moved “Day By Day” to the right sidebar so I can run the charts at the top of the page.



Theme change

by @ 20:18. Tags:
Filed under The Blog.

Mike Little, the author of this theme (Journalized), has released a WordPress 2.7-compliant version. Not only are widgets officially supported now (I had been using a self-hacked version), but tags, gravatars (which I will not be enabling) and threaded and paginated comments (which is coming with 2.7) are as well. Things should look only slightly different because I’m still using the Blue theme (I had been toying around with switching to Winter).

Naturally, I’ve done a wee bit of hacking. I had to put my randomized roll of bloat back in (the stock links widget is alphabetical with no way to change it), and make the search function stand out a bit more (the stock search widget is fugly, with no title).

Thanks, Mike. Glad to see you’re still alive.

What Is Paulson Smoking?

by @ 9:33. Filed under Economy, Politics - National.

Dad29′s comment on my Smith Barney post reminded me of a ridiculous  statement in Paulson’s written comments to Congress:

We are looking at ways to possibly use the TARP to encourage private investors to come back to this troubled market, by providing them access to federal financing while protecting the taxpayers’ investment. By doing so, we can lower costs and increase credit availability for consumers. Addressing the needs of the securitization sector will help get lending going again, helping consumers and supporting the U.S. economy. While this securitization effort is targeted at consumer financing, the program we are evaluating may also be used to support new commercial and residential mortgage-backed securities lending.   (emphasis mine)

In regular people speak, Paulson is suggesting that he wants to have part of the TARP funds focused on increasing consumer credit.   Note that he isn’t referring to mortgages because he talks about that seperately at the end of the quote.  

OK, I guess?

Hey, wait!   Haven’t I been reading articles about how over extended the consumer is on credit?   Haven’t I also been reading that unemployment is rising rapidly and many people are concerned about the security of their jobs?   I think I also remember reading that the consumers have seriously cut back on spending because of their concern about future income.

Detroit has quit selling cars.   Their lack of sales is not due to their high employment costs (although that may contribute).   Thier lack of sales is not due to foreign makers having (at least perceived) better quality and design (I’m pretty happy with my US vehicles).   Lastly, their lack of sales are due to a lack of credit (although it may hurt a bit)   No, the fact that Detroit is trucking in mothballs by the ton is because the consumer has quit buying because they are finally concerned about managing the financial house.   And it’s about time!

Consumer lending still exists.   Loans are available for people who qualify for them.   The only loans that have been cut back are the ones, similar to the housing mess, that you could get with no proof of income or ability to repay.   Those loans have dried up and they should.

Unfortunately, our economy had been living on mortgages, car and credit loans that were far beyond the means of many of their owners to pay back.   There is no short order fix for what we are experiencing.   They economy needs to reset to levels that are sustainable and not the ficticious “we never have to pay it back,” levels.

Hank Paulson needs to put his monopoly money back in his pocket.   None of what he is doing is going to speed or alter the resetting process.   Pushing more money into the economy at this time will only set us up for more pain once things settle….get ready for inflation like it’s 1979!

When Smith Barney Talks, People Listen!

by @ 5:47. Filed under Miscellaneous.

Or at least that’s what used to be said.

Today, the phrase is more like, “When Hank Paulson talks, the market listens!”

Hank Paulson went to Capitol Hill to give an update on how he’s been spending the TARP money.   The market went from a down day, to one of those that gets posted on the top end of the history charts.   Unfortunately, this is something we’ve become accustomed to when Paulson speaks.  

What did Paulson tell Congress?

  1. We didn’t know what we were doing.
  2. We don’t know what we’re doing now.
  3. We aren’t sure what we’ll do in the future.
  4. Trust me, I’m spending the money well!

You doubt me?

Remember when it was “urgent” that we get a bailout bill?   So urgent that a mere 10 pages, double spaced, was enough for Paulson to get $700 billion? At that time Paulson was urging passage of the bill so that he could go out and buy toxic debt, CDOs.   Remember all the questions about how the $700 billion was arrived at and Paulson’s kind of answer that it was 5% of outstanding debt?   Geez, as late as October 24th, Dana Perino  was making excuses for why Paulson hadn’t implemented his CDO buyout with, “it’s complicated.”   Yeah, well, that was then:

"Over these past weeks we have continued to examine the relative benefits of purchasing illiquid mortgage-related assets," Paulson said in a speech today. "Our assessment at this time is that this is not the most effective way to use TARP [Troubled Asset Relief Program] funds."

Instead of doing what he said he was going to do with the money, Paulson decided that direct infusions of capital into financial institutions was the way to go.   Paulson has been purchasing non voting stock or warrants for stock in various financial institutions.   Even though some have questioned whether the Treasury has been getting good value for their investments, Paulson has continued…up until now.  

After about $200 billion and about six weeks, Paulson has figured out, along with the Congressional buffoons, that if you put money into entities with “no strings attached,” that those entities will use the funds in their own best interests.   Funny thing is that the entity’s “best interest” hasn’t been aligning with what Congress and Paulson have thought the “best interest” was. This has made Congress mad (I don’t know why. After all, they were the ones that wrote the bill that was specifically vague in what Paulson could do with the money. If they didn’t care enough to put the time in to provide some guidance, why are they surprised when the actions are following to a “T” their lack of direction!) and has put just a hint of yolk on Paulson’s face.

In his written report and verbal comments, Paulson now wants to try a third path.   Paulson now believes that Treasury should use a combination of approaches.   He still believes that some direct cash infusions will occur.   Additionally, Paulson wants to do a matching fund approach where Treasury would match an amount raised through private equity (What have we got, some kind of a share-a-thon going on?)   Finally, Paulson told Congress that he didn’t want to be limited to just banks:

“We are carefully evaluating programs which would further leverage the impact of a TARP investment by attracting private capital, potentially through matching investments,” he said. “In developing a potential matching program, we will also consider capital needs of non-bank financial institutions not eligible for the current capital program; broadening access in this way would bring both benefits and  challenges.”

I would read that as “consumer loans,” most likely auto loans.

A couple of weeks back I reported on a study done  by the Federal Reserve Bank of Minneapolis.   They looked at the initial reasons that Paulson gave Congress that the bail out was needed.   The study concluded that the issues that Paulson claimed he was attacking, really weren’t impacting the economy.   The combination of that report with Paulson’s helter skeltering from one approach to the next, leaves me wondering whether Paulson knows what the problem is or how to actually affect it.

If only Smith Barney were still alive.   Maybe he’d have the answers.

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