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.

Archive for May, 2009

May 31, 2009

Weekend Links

by @ 20:51. Filed under Miscellaneous.

First off: Hi to Steve’s readers! Steve was a big help to me a few weeks ago when I took a week off from my blog, and I am happy to return the favor. Rumor has it that he’s currently trying to convince the Packers to accept him as a walk-on QB, but let’s just keep that between ourselves for the time being. I’m sure he’ll fill us in on the details when he returns. Just make sure to act surprised when he tells you ;)

Ok, with that said, here are some weekend links for your perusal:

—– Must-read: Doug Ross takes a look at Obama’s actions and decisions over the course of the last 100+ days and has come to the same conclusion that Mark Levin has, which is to say that he believes that this administration is “[a]s close to a dictatorship as this country has ever seen.” I’m nowhere near that belief yet, but there are definitely good points which Ross brings up that are troubling.

—– Rep. John Sullivan (R-OK) has checked into the Betty Ford Clinic for help with alcohol addiction, and is taking a temporary leave from Congress. According to the Tulsa World news outlet, he has been open about his drinking problems in the past. Here’s hoping and praying he gets the help he needs at the BFC and that over the long term he wins his battle against alcohol addiction.

—– Legal eagle Bill Jacobson takes a look of the defenders of Sonia Sotomayor’s judicial rulings/decisions, and finds them, well, lacking.

—– The amazing Susan Boyle did not win Britain’s Got Talent – she came in second place, but in the hearts and minds of people all over the world, she’s still a winner … and there’s no doubt she’ll be getting a recording contract from somewhere.

—– Has Obama “expanded the lobbying ban,” as the WaPo reports, or have they loosened restrictions, as Roll Call writes? Hmmm. I suspect the truth is somewhere in the middle.

—–ABC reports that the National Archives has offered a $50,000 cash reward for that missing Clinton hard drive. If they offered several million for it back – oh, enough to pay off old campaign debts – I suspect Hillary would consider returning it.

—– Change you can believe in: CNN reports on how the Obama admin has said it will “continue” to utilize the “states secret” privilege in a case involving a suit by an Oregon-based outfit the US has determined to be a “terrorist organization.” The al-Haramain Islamic Foundation is suing the gov’t over its use of the alleged use of the warrantless wiretapping program against the foundation.

—– Fab Euro-blogger Michael van der Galien has a post up about the announcement earlier this week that conservative Tucker Carlson is planning on starting a “right-leaning” version of HuffPo called “The Daily Caller” (, which Carlson claims will go live “within weeks.” van der Galien writes:

“I wish Tucker best of luck with this new venture – I am pretty sure that there actually is a lot of room for a ‘right-leaning Huffington Post’ – but he has to understand that he has to truly blow everybody away after announcing his new project before a group of bloggers, and telling them he will be better than the HuffPo, Hot Air, or any other existing site, and faster than Drudge. Those are some darn high expectations: You have to wonder whether the man understands what he’s getting himself into.”

Stay tuned …

Cross-posted from the Sister Toldjah blog.

May 30, 2009

If it had been Bush…

by @ 12:09. Tags: , ,
Filed under Press.

You know the answer: late-night comics would have been all over it, the network news shows would have had wall-to-wall coverage for three days, the New York Times would have called it “troubling.” But, since it’s Obama, no biggie:

In which the president discovers an American intelligence agency at Five Guys

On his trip to get a burger with Brian Williams at Five Guys this afternoon, the president appears to have learned of the existence of a Defense Department intelligence arm, the National Geospatial Intelligence Agency, from an agency employee also at the burger restaurant.

“So explain to me exactly what this National Geospatial…” Obama said, after the worker mentioned his employer, according to a video of the event.

“We work with, uh, satellite imagery,” the worker, Walter replied.

Maybe the President doesn’t know about them because they save all the pretty pictures for Biden.

(Cross-posted at Public Secrets. Hi. I’m one of Steve’s stand-ins. :) )

Pre-vacation COLD read – the forecast

by @ 9:33. Filed under Weather.

Below is the screencap of this morning’s Environment Canada official government-provided forecast for Dryden, Ontario, the closest forecast point to North Shore Lodge on Eagle Lake, where I’ll be the next week (do click for the full-sized pic):

For those of you who can’t do the math conversions of the temperatures, allow me to do them for you:

Saturday night’s low (what I will be arriving into) – 32 degrees
Sunday’s high – 50 degrees (with rain and a 13-mph wind)
Sunday night’s low – 37 degrees
Monday’s high – 57 degrees
Monday night’s low – 35 degrees
Tuesday’s high – 57 degrees
Tuesday night’s low – 35 degrees
Wednesday’s high – 63 degrees
Wednesday night’s low – 41 degrees
Thursday’s high – 68 degrees
Thursday night’s low – 45 degrees
Friday’s high – 63 degrees

Did I mention that the average high for today is 68 degrees, or the average low is 46?

Don’t worry; the cabins are heated, and I AM from Wisconsin, so I’m used to the cold. I also have good rain gear, so I won’t get too wet. In fact, the first year I went up there (Memorial Day week, 1996), the place went from 80 degrees to snow flying during the day.

However, I do have a question. Where’s my Gorebal “Warming”, Algore? Five days of six are forecast to have below-average highs, and all six nights are forecast to be below average.

If you think that the Canadian government can’t get it right and want to consult a second source, let’s go to The Weather Network. Their Saturday AM forecast has all six days with below-average highs, and five of six nights with below-average lows.

May 29, 2009

Open Blog Alert

by @ 23:49. Filed under The Blog.

This is the Emergency Blogging System. It has been activated because Steve is headed north of the border for some serious walleye fishing and some serious beer drinking. In his absence, he has lined up a heap of guest-bloggers, both familiar and new, to help Shoebox mind the place for the next week.

The average quality of posts is expected to increase exponentially until Steve returns on the 6th of June (that would be D-Day for the Normandy landings for those of you who know history).

You are instructed to treat the guest-bloggers far better than you treat the owner of this place. This concludes this posting from the Emergency Blogging System.

Pre-vacation auto upates

by @ 23:32. Tags:
Filed under Business, Politics - National.

Yes, there are a couple items, but not the big one that was expected today.

  • The UAW ratified the revised deal that will make it take modest concessions and a $10 billion reduction of a scheduled $20 billion cash payment into the VEBA retiree health-care fund it will run in exchange for 17.5% of the common stock in the new Government Motors, $585 million per year in dividends from prefered stock worth $6.5 billion, and a $2.5 billion promissory note with scheduled payments of $1.38 billion in 2013, 2015 and 2017. What is really telling are some quotes from UAW chief Ron Gettelfinger:

    “I’m regretful that we had to do anything, and I think it’s a disgrace that we had to do anything,” he added.

    Gettelfinger declined to comment on criticism from other GM creditors that the restructuring will favor the union. “This is negotiations. You go in and you do the best job that you can,” he said.

    I would comment, but I don’t want to leave a profanity-laced tirade for my guest-bloggers.

  • Speaking of the UAW, they’re getting a GM plant previously scheduled to close retooled and taken off the axe list so GM can build subcompacts here. Early reports were that they would be the next generation of the Geo Metr…er, overseas-only Chevrolet Matiz (renamed the Spark, with an 84-hp 1.2L engine replacing the 64-hp 1.0L engine), but others suggest the next-generation Chevrolet Aveo would also be part of the mix. If you think that, between the Aveo and the Metr…er, Spark, they’ll hit 160,000 sales per year, you’ve never driven either an Aveo or a Geo Metro. While I missed out on the Aveo, I did drive a Geo Metro once. To Chicago. With my younger sister and her boyfriend-at-the-time (it was his piece of crap). Talk about a frightening experience. I will never, EVER do that again.
  • The bankruptcy judge is taking his sweet-natured time to approve the $2 billion sale of Chrysler to Fiat (with all proceeds going to senior secured creditors, who would get 29 cents on the dollar), with the US and Canadian governments seizing 75% of the new company and awarding a 55% stake to the UAW. That will be delayed until Monday, which will leave 15 days for the expected challenges to be resolved before Fiat walks away from that deal.

I won’t be here to find out whether that mythical percentage of bondholders fall for the bait-and-switch, or the actual terms of the 363 “sale” of GM to the government. I left instructions to the rest of the gang to try to keep up with that.

Pre-vacation Hot Read – Lance Burri’s smackdown of Time on economics

by @ 21:24. Filed under Economy, Energy.

Lance Burri smacks down a Time story that claims oil is not subject to the laws of economics. The closing smash:

In order: expectation of increased demand; increased demand for futures; restriction of supply; more restriction of supply.

Okay, all of you who took basic economics in high school: what do the laws of economics say about those factors?

They say whoever wrote that article doesn’t understand basic economics.

The brilliance is how he uses Time’s article against its idiotic lede.

Right Wing News’ Rightosphere Temperature Check – May 2009 edition

by @ 18:01. Filed under Politics - National.

Once again, John Hawkins ran a blogger poll on the state of the blogosphere. I don’t know whether Shoebox either got an invite or was able to participate, but several friends of the blog, including Sister Toldjah, who will be filling in while I’m out catching walleyes, and Josh Schroeder were among the participants.

I will make you head over there for the results, but I’ll explain my votes:

  1. Do you think the GOP will gain or lose seats in the House in 2010? Gain. The post-election anti-Democrat tide is more-noticeable on a local level than it is on a statewide level, and the NRCC, by its absence in the moderate-v-conservative fight, is better positioned to take advantage than the NRSC.
  2. Do you think the GOP will gain or lose seats in the Senate in 2010? Lose. NRSC head John Cornyn still doesn’t get it, and despite the fact that at least nominally both parties have the same number of seats to defend, the Republicans have more open seats to defend.
  3. Colin Powell said the following, “Americans do want to pay taxes for services. Americans are looking for more government in their life, not less.” Do you agree? No. Over 8,000 who showed up in Madison on 4/15 (the largest non-anti-Vietnam War protest in the history of the Capitol), close to 3,000 who shoed up in Appleton, and hundreds of thousands nationwide who rallied against ever-higher taxes and ever-larger government in the middle of the week tend to send that message.
  4. Whose views do you think are more representative of your personal opinion: David Frum, Meghan McCain, John McCain, & Colin Powell or Rush Limbaugh, Mark Levin, Tom Coburn, & Newt Gingrich? The Rush/Mark/Tom/Newt gang. Do I really need to pull out all the thousands of posts for you, or do I trust you to go through the archives yourself?
  5. Do you support the NRSC’s decision to endorse Charlie Crist in Florida’s Republican primary? No. If there had been a “Oh HELL NO!” option, I would have taken it.
  6. Do you think Barack Obama was born in Hawaii or elsewhere? Hawaii. That doesn’t change the fact that he’s pretty much a Communist.
  7. Do you think that Sonia Sotomayor will be confirmed? Yes. Even if the Pubbie Senators had the votes, they don’t have the balls to do what the ‘Rats did to Robert Bork and Miguel Estrada.

Point/Counterpoint – John Cornyn v. me on the Florida NRSC endorsement

by @ 17:27. Filed under Politics - National.

Sen. John Cornyn (R-TX), head of the National Republican Senate Committee, accepted an invitation from RedState to explain why the NRSC decided to endorse Florida governor Charlie Crist over Florida Rep. Marco Rubio, who was Speaker of the House between 2006 and 2008, literally 15 minutes after Crist decided to enter the race. Without further delay, it’s time for the Point/Counterpoint:

Two and a half years ago, the Republican Party suffered a major blow in the 2006 midterm elections as the Democrats regained control of Congress and began laying the groundwork to take back the White House in 2008.

As a Party, we were stunned. Having failed to anticipate shifting national dynamics and the growing appetite for change in America, we lost critical voting constituencies including independents, Hispanics, and young voters nationwide. And with Barack Obama’s overwhelming victory in 2008, the Democrats acquired an even broader and stronger majority in Congress, leaving Republicans with very little power in Washington to fight against wasteful spending as our nation spiraled into an economic crisis.

You forgot “governmental conservatives” and “fiscal conservatives” in that, Senator. Those voters that were left, when faced with two parties that advocated ever-growing government, decided to go with the party with institutional experience in growing government over the Johnny-Come-Lately Party.

Specifically regarding Hispanics, how did the push for amnesty work out? Not so good.

Many rightfully wondered where our Party would turn to regain the ground we lost.

At the national level, I’m still wondering.

With an almost filibuster-proof majority in the Senate, and Nancy Pelosi and Harry Reid at the helm in Washington, the Democrats have already successfully used their majority to grow our nation’s debt to more than $11 trillion in just four months. They’ve promised to wage a battle on card check, healthcare, and energy. And they may attempt to ram through the President’s new Supreme Court nominee before Republicans are given adequate time to review her record. After Senator Specter’s party switch earlier this month, the Democrats effectively control everything in Washington, leaving us with little power to push back on their liberal agenda.

There were no less than 17 times the Republicans could have stopped elements of this. Except on a couple minor points, they failed because “Republicans” like Arlen Specter (before he returned to his true party), Olympia Snowe and Susan Collins voted with Harry Reid and company.

If he becomes a Senator, Crist, with his less-than-conservative fiscal and governmental record, will be one of those allowing more of those failures to stop the Democrats in the next Congress. Specifically, he touted the stimulus package that kicked in close to $1 trillion of that $11 trillion deficit, and said that he would have voted for it if he had been Senator.

While this political environment appears dire and presents short-term setbacks for Republicans, I believe that it also provides us with a real opportunity for 2010. Next November could be a turning point for the future of our Party – but only if we unite and take advantage of this critical opportunity. That means holding the Democrats accountable for their records, providing real solutions, reaching out to new constituencies, and fielding candidates who can win in states where Republicans have traditionally failed to wage competitive races.

To get to 51 “Republican” Senators, they would not only need to hold onto all 18 seats they currently have (including 5-6 retirements), but get 11 of the 18 Democratic seats up for election. Specifically with regard to Florida, the “failed to wage competitive races” canard is not germaine because the seat is currently held by a “Republican”, and conservatives have won statewide races in Florida in the recent past.

Some believe that we should be a monolithic Party; I disagree. While we all might wish for a Party comprised only of people who agree with us 100 percent of the time, this is a pipedream. Each Party is fundamentally a coalition of individuals rallying around core principles with some variations along the way. My job as Chairman of the National Republican Senatorial Committee is to recruit candidates who have the best chance of winning and holding seats – and to do so in as many states as possible. Earlier this month, two Republicans candidates emerged for the open Senate seat being vacated by Mel Martinez in the Sunshine State: Marco Rubio, the young and talented Hispanic former Speaker of the state House, and Charlie Crist, the state’s popular Governor.

Judging by the actions of the NRSC over the last 5 years, the Party that is being built has many of the same core principles as the Democrats, if in a slightly-lower degree. Indeed, I’ve called it the bipartisan Party-In-Government, where the growth of government under “Republican” rule is used as an excuse by the Democrats to exponentially grow government.

That sure looks like an attempt to create a monolithic party.

There is no doubt both of these candidates have a bright future in the Republican Party. But with his record of leadership and astronomical approval ratings, including strong numbers among Republicans, Democrats and Independents, Charlie Crist represents the best chance for Republicans to hold this seat in Florida. That is why I endorsed Governor Crist for the U.S. Senate. That is also why Governor Crist was endorsed by Senate Republican Leader Mitch McConnell, outgoing Florida U.S. Senator Mel Martinez, U.S. Senator John McCain, and other leaders within the Republican Party.

Actually, it’s because Crist meshes well with the current “Democrat-Lite” attitude prevalent among the Senate Republicans.

The NRSC’s endorsement is not a reflection on Marco Rubio; it is a realistic assessment of both the 2010 Florida Senate race and the national map. With the Democrats standing on the precipice of a filibuster-proof majority, we cannot afford to lose this seat in 2010. Endorsing Charlie Crist will save the NRSC precious resources that can be used to fight in other states. It will also ensure that the strongest Republican candidate maintains control of this seat, and build our numbers with the resulting opportunity to shape policy.

As both my co-blogger Shoebox and I have said before, the Democrats got a filibuster-proof majority the moment the first countings of ballots back in November were over. Specifically with respect to this election, I assert that Crist will join the Democrats on filibuster-busting missions more often than the retiring Mel Martinez has.

While Rubio is certainly an up-and-comer in Florida, a recent Mason Dixon poll showed that he only has a 44 percent name ID among Republicans, which will ultimately force him to spend a lot more money introducing himself to Floridians. Govenor Crist, in contrast, has a 100 percent name ID among Republicans, according to the same poll. In a general election match-up with Democrat Congressman Kendrick Meek, Charlie Crist wins handily 55 percent to 24 percent.

Could someone tell me how far back Barack Obama was at this point in 2007? I seem to recall similar numbers.

We have a chance to field competitive candidates in Connecticut, Illinois, Nevada, California, Arkansas, and Colorado in 2010. But in order to succeed, we need candidates who fit their states. Winning back the majority requires not only that we hold the Democrats accountable, but also that we embrace the vast number of issues upon which Republicans agree. Failing to do so will hand the Democrats yet another victory in 2010, and deny the American people a check on Democrat-controlled government.

California in play? Surely you can’t be serious.

Seriously, again, this is not exactly germaine to Florida. Both moderates and conservatives have won statewide elections in Florida. This is just an excuse to recast the Republican Party in a Democrat-Lite mold.

If we succeed in electing Republican Senators in 2010, issues like relocating Gitmo detainees to the United States, socializing healthcare, and eliminating workers’ secret ballots may never reach the floor of the United States Senate. But we have to work together to make that a reality. The tides are turning, and Republicans have an opportunity in 2010. However, we cannot win if we are focused on tearing each other down.

Again, I point out that Crist is more likely than Martinez has (not) been to join the Democrats on several of those issues. Thus, the argument sort of rings hollow.

As for the teardown argument, by picking this fight, you and the NRSC are engaged in tearing those that want actual differences between the Republicans and the Democrats out of the Republican Party.

We have a chance in 2010 to unite around our common goal to rebuild the Republican Party and fight against the Democrats’ agenda. I hope that all Republicans will join me in that fight.

Question – if Rubio does beat Crist in the primary, will the NRSC step into Florida, or will it abandon it like it abandoned Wisconsin in 2004 when Tim Michels upset Russ Darrow in the primary here?

If you prefer, I could quote Ed Morrissey’s exit question – “If Crist has such soaring support, then he doesn’t need the NRSC to throw around its weight in the primary on his behalf. Why not let Florida decide who should represent them in the general election, and have the NRSC do its job at that point?”

May 28, 2009

New bondholder plan from Government Motors

by @ 18:06. Tags:
Filed under Business, Politics - National.

Fox Business reports that, in the wake of the failed bonds-for-stock swap attempted by GM, they and their Treasury masters have made a second offer that cannot be refused. If and only if a sufficient number of bondholders agree to not oppose a federal/UAW takeover of GM in bankruptcy court by 5 pm Eastern Saturday, the Treasury will reward them and the current stockholders with an initial 10% stake in Government Motors and an pair of warrants to ultimately increase that stake to 25%. The US Treasury will begin with a 72.5% stake, and the UAW with a 17.5% stake, so those of you still holding GM stock will likely be wiped out entirely.

Fox Business also reports that currently, 20% of the bondholders have swallowed the pill whole. Quoting a group of bondholders that apparently are at least part of that 20%: “Since the initial offer was made on April 27th, circumstances have materially changed that make today’s offer more attractive.” Could that be related to the utter thrashing that Chrysler’s secured creditors have taken?

Summarizing from the SEC filing:

  • The transfer of assets from General Motors (“Old GM”) to Government Motors (“New GM”), which will not include the $27.2 billion in bonds or most of the unsecured claims, will happen under Section 363 of the bankrupcy code.
  • All but $8 billion of whatever funding the US Treasury, and possibly the Ontario and Canadian governments, has or will pour into both Old GM overall (including the $20 billion in TARP bailouts) and New GM in relation to the bankruptcy proceeding will never be paid back.
  • Related to that, it is anticipated that Debtor-In-Possession financing provide by the Treasury will be in excess of $50 billion.
  • In addition to the $8 billion in debt the New GM will owe to the federal government, they will owe the UAW’s VEBA $2.5 billion and “other debtors” (presumably the secured creditors) $6.5 billion.
  • In addition to the 72.5% common-stock stake that the Treasury will have, they will also receive $2.5 billion in perpetual prefered stock with a 9% dividend per annum (or $225 million per year). If the Canadians participate in the DIP financing, they will get a portion of this.
  • In addition to the 17.5% initial common-stock stake that the UAW’s VEBA will have, they will also receive $6.5 billion in perpetual prefered stock with a 9% dividend per annum (or $585 million per year). They will also receive a warrant to purchase an additional 2.5% (as of 12/31/2009) any time before 12/31/2015 at a cost of $1.875 billion.
  • If and only if a sufficient number of bondholders, unspecified in the filing, agree to not oppose this, “Old GM” will get a 10% common-stock stake in “New GM”. If that number is not reached, the Treasury will reduce or eliminate that stake, presumably with the percentages of Treasury and UAW ownership in New GM increasing accordingly to 80.6% Treasury and 19.4% UAW in the event of a outright elimination.
  • Again if and only if an unspecified number of bondholders agree to not oppose this, they will recieve a pair of warrants: one to purchase an additional 7.5% stake of New GM any time in the next 7 years for $1.125 billion and one to purchase an additional 7.5% stake any time in the next 10 years for $2.25 billion. Again, if that number is not reached, the Treasury will reduce or eliminate this program.

Revisions/extensions (6:31 pm 5/28/2009) – I might be missing something here, but there is nothing in the SEC Form 8-K linked to above that says that the bondholders themselves will get anything. The 10% initial stake in “New GM” and the pair of 7.5%-stake warrants in same go to the owners of “Old GM”.

GM shuts down the bondholder buyout plan
As the wheels turn, automaker edition

Minnesota GOP leadership debate – tonight

by @ 17:03. Filed under Politics - Minnesota.

(H/T – Chief)

Sorry about the late notice, but the Minnesota Senate District 45 Republicans are hosting a debate between the candidates for Republican Party State Chair and Deputy State Chair tonight at 7 pm at Robbinsdale Armstrong High School (10635 36th Avenue N) in Plymouth. The quick details via Freedom Dogs:

– State Party Chair candidates Tony Sutton, Carrie Ruud and Dave Thompson will be debating during the Party Chair portion of the debate.
– State Deputy Chair candidates Dorothy Fleming (incumbent), Michael Brodkorb, and Robert Swinehart will be debating during the Deputy Chair portion of the debate.
Ed Morrissey and Annette Meeks, founder of Freedom Foundation of Minnesota, will be moderating the event.

The public is invited to both the mixer at 6:30 and the debate at 7. There is a cost of $5.

Matt Abe of North Star Liberty will be live-blogging the debate.

If it moves, tax it, e-commerce edition

by @ 7:32. Filed under Business, Politics - National, Taxes.

(H/T – Allahpundit)

Brett Joshpe wrote on The American Spectator site how sales on the internet are about to become a lot more expensive. Let’s go through the Cliff’s Notes timeline:

– In 1992, the Supreme Court ruled in Quill v. North Dakota that a retailer must have a “physical presence” in a state in order for that state to require the retailer to collect and remit that state’s sales tax. Do note that does not prohibit states from demanding their pound (in the case of Wisconsin, 5%-5.85%) of flesh from the purchaser; indeed, most states do demand their cut.

– Because of mass disobedience of that mandate, last year, New York required any online retailer who so much has an affiliate advertiser in that state to collect and remit the New York sales tax. In plain English, if a site like advertised on, say the New York Times’ site or A Blog for All, it would be forced to collect New York sales tax on purchases made by New York residents.

– In response to that, terminated its affiliate relationships with close to 3,400 entities.

– Meanwhile, the tax-and-spend-and-tax-and-spend-and (you get the idea) folks are trying to shove through Congress, under the guise of “streamlined” sales tax, a requirement to make all online retailers collect all state/local sales taxes.

Back in the dawn of e-commerce, I was involved in a small e-commerce project. Even if somehow a standard list of items subject to a sales tax were created (a pipe dream because the T&S&T&S&T&Sers in places like Madison and Albany will always want to tax more items than those in other state capitals), the myriad of different rates, both at the state and local level, which tend to not remain constant, would be a nightmare to keep up with.

Twitter history contest from Rep. Issa

by @ 6:37. Filed under Economy, Politics - National.

Rep. Darrell Issa (R-CA) is running a “Twitter history” contest. The rules are simple – channel Alexander Hamilton and comment on what the Geithner Cabal is doing to the economy, using Hamilton’s own words (Issa suggests the Federalist Papers and Hamilton’s national bank plan of 1791 for starters). The contest does close at 5 pm Eastern.

Since I don’t want to appear to be better than I am, you’re going to have to reply directly to @DarrellIssa on Twitter instead of leaving your quotes here.

Get Ready!

by @ 5:13. Filed under Economy, Politics - National.

Bonds: Treasury prices fell, with the yield on the benchmark 10-year bond rising to 3.71% – it’s highest since mid-November. It stood at 3.51% late Tuesday. Treasury prices and yields move in opposite directions.

Revisions/extensions (6:49 am 5/28/2009, steveegg) – I presume Shoebox ran out of time to explain why a high yield/low price on Treasuries is not exactly a good thing, so you’re left with the economic understudy to do the explaining. The CNNMoney blurb actually does a fair job of at least touching on that:

– The appetite for short-term (specifically in this case, 5-year) notes represents a lessening demand for longer-term notes (which explains the nearly-failed auction of 30-year notes the other week).

– Mortgage rates are tied to the 10-year yield, and rising interest rates could stifle any “recovery” in the housing market.

– The record amounts of debt coming to market could overwhelm it. Indeed, the Federal Reserve already is soaking up a lot of Treasury securities because there just isn’t enough money out there to buy it all.

May 27, 2009

Wednesday (or is it Thursday?) Hot Read – MKH’s “Are You Ready for a VAT?”

by @ 23:56. Filed under Politics - National, Taxes.

Those who know me know that I have a crush on Mary Katharine Ham. That I find her very attractive does not diminish in the least the brilliance of this tour de force on the onrushing VAT to supposedly pay for health care. Let’s take a few paragraphs from the middle:

Remain extremely skeptical, folks. No matter how much lovely alliteration Obama uses to describe this plan, it’s just another pathway into your wallet for the federal government. It’s just another source to tap for revenue when they’re unwilling to make “tough choices.” It will go up and up, and the relief the nation sees on the corporate income tax or the income tax as a trade-off will be precious little in the Congress we’ve got now.

It should also be noted that the VAT costs $3 billion just to collect in Canada, according to the National Post, on top of the added cost to every single item you buy, every day.

Luckily, because the VAT is a highly visible tax and disproportionately affects the poor, constituents and even their tax-happy Democrat representatives are likely to be wary about enacting one. Heck, even the floating of one might be enough to earn Republicans a few points on the generic ballot.

I hate to have to quibble on a point, but I must. As Charlie Sykes said in his post on this, “Don’t count on it. Just ask smokers.” In fact, depending on the labeling requirements, it can be very easy to hide this (no, I will not say any more; even though I realize that anything I can think of the tax-and-spend-and-tax-and-spend-and-tax-and-spenders can, I’m not in the business of making their jobs easier).

With that out of the way, the fact that every level of production sees a sales tax which is based on the difference of the purchase price of the product (or raw material) and the sale price of the product is a massive drain on the producer. Even a “simple” product like Mountain Dew has 16 different components the bottler has to keep track of.

Related to that, it is impossible to claim that a VAT of X% will not cost more than a end-user sales tax of the same X%. That is becasue not every raw material involved in the manufacture of, say, Mountain Dew has the same number of steps between the individual raw materials and final consumption.

While I won’t steal more of Mary’s content, I do have to comment on another aspect she brought up – the Left’s proposed dual-mode tax scheme. The existence of two different stages of taxation (in this case, wealth-acquisition and wealth-expenditure) makes it easier for government to raise first one stage, then the other. The older among us in Wisconsin remember when the sales tax was a “mere” 4%, and then “temporarily” raised to 5%. In a couple weeks, depending on one’s locale and choice of expenditure, that will be as high as 6.85%. Meanwhile, there’s a new, higher top income tax bracket in that same budget that will hike Milwaukee County’s sales tax rate by a percentage point.

So, what are you still doing here (other than wondering why The Weekly Standard doesn’t offer comments)? Go. Read! NOW!

We’ll know the rest of the sausage tomorrow

by @ 22:41. Filed under Politics - Wisconsin.

WisPoliitcs is reporting that the Dems in the Joint Finance Committee have figured out every other way they’re going to screw the taxpay…er, fudge the numbers in the FY2010-FY2011 budget. Since they don’t want to miss last call while waiting for the Joint Fiscal Bureau to draw up the motions, instead of delaying the start of tonight’s session another 3 hours, they’re supposedly going to show up at the crack of noon to ram it home.

As Asian Badger would say, grab the K-Y.

Revisions/extensions (10:57 pm 5/27/2009) – Speaking of the K-Y, this “compromise” on the elimination of the QEO from WEAC which purports to delay the elimination for a year, isn’t exactly passing the smell test. What I believe will happen is that it will be written in such a way that Doyle can line-item out the delay, while leaving items friendly to WEAC and unfriendly to taxpayers intact.

First, and maybe last, post on Justice-designee Sonia Sotomayor

by @ 22:11. Filed under Lawgivers-In-Black, Politics - National.

Between focusing on the government/UAW takeover of 2/3rds of the Not-So-Big Three, keeping an eye on what the Spendocrats who run the Joint Finance Committee are throwing on the funeral pyre known as the FY2010-FY2011 Wisconsin budget, and preparing for my annual spring walleye hunt, I haven’t exactly been keeping an eye on the nomination of Judge Sonia Sotomayor to replace retiring Justice David Souter. Fortunately, Karl Rove is better-able to handle multitasking. He wrote in tomorrow’s Wall Street Journal regarding the Sotomayor nomination, and what the Senate Republicans can and should do:

The Sotomayor nomination also provides Republicans with some advantages. They can stress their support for judges who strictly interpret the Constitution and apply the law as written. A majority of the public is with the GOP on opposing liberal activist judges. There is something in our political DNA that wants impartial umpires who apply the rules, regardless of who thereby wins or loses.

Mr. Obama understands the danger of heralding Judge Sotomayor as the liberal activist she is, so his spinners are intent on selling her as a moderate. The problem is that she described herself as liberal before becoming a judge, and fair-minded observers find her on the left of the federal bench….

Nonetheless, Republicans must treat her with far more care than Democrats treated John Roberts or Samuel Alito and avoid angry speeches like Sen. Ted Kennedy’s tirade against Robert Bork. The GOP must make measured arguments against her views and philosophy, using her own words and actions.

Indeed, those are wise words for the rest of us right-of-center, words that are echoed by Fox News’ Brit Hume (H/T – Mike)…

Of course, I expect Shoebox (if he manages to come up for air long enough to comment on this) and the co-bloggers to make further comments about the nomination. Somehow I expect to see that she was confirmed by the time I get back from vacation next week Saturday.

Union battle over Chrysler – revisited

by @ 18:00. Tags:
Filed under Business, Politics - National.

Earlier, I brought you news of three Indiana government trust funds (two pension funds and a construction fund) holding senior secured Chrysler debt that had sued (unsuccessfully, at least at this point) to stop the “sale” of Chrysler to the UAW, the American and Canadian governments, and Fiat because they would get far less consideration than the junior creditor UAW. While reading through the comments at a Hot Air post on the shutdown of GM’s stock-for-bonds offer), what is happening between the UAW’s retiree health-care fund (VEBA) plan and the various pension funds (mostly for the benefit of unionized government workers) hit me like a freight train.

It’s not exactly a battle between the UAW and the government unions. Since VEBAs are not defined-benefit plans, they are not covered by the Pension Benefit Guaranty Corporation. Worse, at least from the UAW’s, and thus the Democrats’, point of view, the VEBA obligations are junior in stature.

Since GM and Chrysler are utterly incapable of meeting their full obligations to the VEBAs ($20 billion and $10.6 billion respectively), even in the event of liquidation, a pair of complicated schemes to make the UAW whole came about. In both cases, the UAW was given preferential treatment over other creditors, including creditors senior to it. What is left unreported is that many of those creditors are the aforementioned pension funds, which would be made substantially-whole by the PBGC.

As I termed it in the comments, it’s the Chicago Double-Tap. Step 1 was to screw everybody to make whole the suddenly-politically-powerful UAW. Step 2 is to make the traditionally-politically-powerful government unions that were screwed whole. Other funds, like Indiana’s road construction fund, and the various 401(k)/403(b)/IRA plans, would still be left hung out to dry. Somehow, I doubt that is an unplanned coincidence.

GM shuts down the bondholder buyout plan

by @ 16:56. Tags:
Filed under Business.

(H/T – Ed Morrissey)

USA Today reports that Government Motors shut down the proposed stock-for-bonds buyout plan it had been offering, and will not be honoring any of the exchange offers accepted by the few bondholders that did accept the plan. GM had been offering 225 shares in the “new” GM for each $1,000 in bonds, and had all of the bondholders, which held $27 billion in bonds, accepted, they would have received a total of 10% stake in the “new” GM. One of the conditions the Obama administration set for receiving new taxpayer financing outside of bankruptcy court had been to get those holding at least 90% of the debt to agree.

Given that the current version of the reorganization plan had envisioned 10% of the “new” GM going to those bondholders, with the UAW eventually taking 20% and the government taking 70%, the question is who will get the 10% that was slated to go to the bondholders?

Open Thread Thur…er, Wednesday – 5/27/2009

by @ 6:45. Filed under Open Thread Thursday.

I will be on the road much of the day, so I won’t be doing a lot of posts. The comm-box is open.

May 26, 2009

BOHICA – cell-phone edition

by @ 23:53. Filed under Politics - Wisconsin, Taxes.

Kelly William Cobb over at Americans for Tax Reform put up a post outlining just how bad Doyle and the Spendocrats have it for the money of cell-phone users:

  • First, they raided the $20 million left over in the now-sunsetted E911 fund. That’s right; instead of you getting that $20 million overpayment to upgrade the 911 system to allow the dispatchers to find you if you call them on a cell phone, they’re going to spend it.
  • Then, they created a fresh $0.75/line/month tax on both cell phones and landlines to supposedly fund another upgrade to the 911 system. That would replace an existing $0.16/line/month charge on landlines.
  • For the first time, the Universal Service Fund fee of $0.56/line/month will apply to cell phones, to the tune of about $18.8 million/year.

All told, that’s roughly $100 million per year in new cell-phone taxes according to ATR. But wait, it gets worse. First, Rep. Kevin Petersen (R-Waupaca) reports that the Joint Finance Committee raided $11.2 million of the USF fund for public libraries.

Second, forget about that “next-gen” E911 system – Doyle wants to raid that to directly pay for police and fire.

I could bring up what Doyle said in 2003 (again), but like any ‘Rat, he doesn’t care about lying.

Revisions/extensions (12:15 am 5/27/2009) – The Wisconsin State Journal reports (H/T – The MacIver Institute) that the 911 fund diversion would make Wisconsin ineligible for federal grants to help pay for that “next-gen” 911 system, and that including the cell-phone charge as part of that diversion would violate federal law.

Also, since the 911 fund would replace the current $0.16/line/month charge on landlines, that diversion would cause a $7 million local tax increase.

R&E part 2 (10:50 pm 5/27/2009) – I probably should have done this while temporarily at the keyboard this afternoon, but thanks for the link-love, Americans for Tax Reform. Oh well, better late than never.

Meanwhile, WisPolitics is reporting that the rest of the Necro-budget (© Kevin Binversie) will be passed by the Joint Finance Committee tomorrow. Since Democrats control the entire process, what comes out of the JFC is likely what will plop onto Jim Doyle’s desk.

One note; since the Wisconsin line-item veto is still one of the most-powerful in the country, and because Doyle has no respect for the Wisconsin Constitution, it is vital to not only pay attention to the JFC votes, but to the actual verbiage used. Just one item I’m keeping an eye on – the proposed “compromise” from WEAC (the largest teachers’ union) that would delay the elmination of the QEO (the prohibition of work stoppages by teachers as long as a district offered a 3.86% annual total compensation increase) by a year.

As the wheels turn, automaker edition

by @ 21:42. Tags:
Filed under Business, Politics - National.

The first stop is at UAW Motors (formerly known as Chrysler). Reuters reports (H/T – Gabriel Malor) that a District Court case brought by three Indiana trust funds (the teachers’ union retirement fund, the police retirement fund, and a road construction fund) has been rejected, which means the sale of Chrysler to the UAW/Fiat/US government/Canadian government (technically a hearing on that sale in bankruptcy court) will go on as scheduled tomorrow. The trust funds have been arguing that the federal government does not have any authority to give funds to Chrysler to facilitate the sale, which Judge Thomas Griesa sidestepped in his denial of the motion.

The next stop is Govern…er, General Motors, and their agreement with the UAW. Reuters has a comprehensive summary of that. The Cliff’s Notes version (which assumes that GM doesn’t go into bankruptcy; more on that in a bit):

  • In exchange for a $10 billion payment into the VEBA (the retiree health care fund that GM was scheduled to pay $20 billion), the UAW would get a 17.5% common-share stake (with warrants to increase it to 20%), a $6.5 billion, 9% dividend (or $585 million/year) prefered-share stake, and a $2.5 billion note (with an effective APR of 11.1%, and scheduled payments of $1.38 billion in 2013, 2015 and 2017). Previously, GM had offered a 39% common-share stake to the UAW.
  • GM reacquires 5 Delphi plants in Michigan, New York and Indiana.
  • GM will make its small cars at an idled UAW plant, and will reopen 3 additional assembly and 1 stamping plant if sales “beat expectations”.
  • GM will offer buyouts to all its UAW-represented employees.

The $1 billion-17.5% common-share UAW stake would make the common shares worth just over $5.7 billion at issuance of that stake. Reuters notes in that summary that other creditors and the government would get the rest of the common-share stake (more on that in a bit), with no mention of the fate of the current stock. The prior reorganization plan had the government getting 55%, UAW getting 39% in exchange for the $10 billion VEBA liability, unsecured bondholders getting 10%, and the current stockholders getting 1%, with the common shares worth $25.65 billion at issuance assuming the $10 billion-39% common-share UAW stake ratio).

Assuming that the current stockholders would still get 1% of the company, their current $873.1 million net investment (down from $1.25 billion when the previous reorganization plan was announced last month) would dip to $57 million (down from $256 million in the previous reorganization plan, which was rather inflated).

Stop number three is Governme…er, General Motors and the bondholders. Reuters has the interest in the aforementioned $27 billion for 10% stake offer, which expires in a couple hours and requires a 90% acceptance level to stave off bankruptcy, at well under 10%. Meanwhile, Fox Business says that the process could run all the way through the end of the weekend and up to the June 1 GM drop-dead deadline set by the Obama administration.

The final stop is Government (screw it, it’s no longer General) Motors and the government. The New York Times reports that the new deal envisions the federal government taking 70% of the common stock, with another $70 billion-$90 billion in taxpayer money on top of the $20 billion in TARP money already “loaned” anticipated to get GM through the bankruptcy process. Remember that UAW Motors will not be paying back either the $4.3 billion in TARP money that Chrysler received or the $3.2 billion in interim government bankruptcy financing, but will be expected to pay back the $6.2 billion in post-bankruptcy taxpayer money loaned to it. Using that ratio, it looks like there’s $60 billion, give or take $10 billion, down the hole in exchange for $4 billion in Government Motors stock.

Revisions/extensions (10:15 pm 5/26/2009) – DrewM. points us to an interesting quote in The News Organization That Cannot Be Quoted’s™ story from Kip Penniman, analyst for KDP Investment Advisors:

If GM announced they got low single-digit participation, it would be a slap to GM and the absolute response to the Treasury-mandated offer. … A cynical person would say that the offer was set up to ensure GM would go into Chapter 11 and provide the government a scapegoat.

That story also notes that those bondholders with credit default swaps could make up to $2.33 billion in the event of a GM bankruptcy filing. It does not specify what percentage of bondholders has credit default swaps, but under the prior, highly-inflated plan, the at-issuance worth of the bondholders’ equity stake would have been $2.56 billion, and under the current plan (assuming they still get 10% of the equity), the at-issuance worth of that stake would be $570 million. Do remember that the paper value of those bonds is $27 billion.

Further, The Wall Street Journal reports that, unlike the Chrysler offering, the government is going to pay off the secured creditors in full, to the tune of $6 billion.

ObamiNation turning on its master?

by @ 11:32. Filed under Politics - National.

(H/T – Rob Port)

Rasmussen reports that, as part of their daily tracking polls, the Presidential Approval Index (the “strongly approve” minus the “strongly disapprove”) dropped to its lowest number yet for President Obama, a +1 (31% strongly approve, 30% strongly disapprove). Of note, the 31% strongly approve is a new low.

We’re not quite at the overall low differential of +8 (on 4/22) yet, but with total approval at 55% and total disapproval at 44%, we’re close.

NML wants to soak you so it doesn’t have to pay

(H/T – Patrick McIlheran via Dad29)

Edward Zore, CEO of Northwestern Mutual Life, had perhaps the dumbest letter ever published in yesterday’s Milwaukee Journal Sentinel. Let’s start by fisking said letter:

I am writing to express my support for the creation of a three-county Regional Transit Authority and a viable, dedicated funding source for transit and Kenosha-Racine-Milwaukee commuter rail. As CEO of a major business in Milwaukee County, I know dedicated funding for transit is critical to the future success of my business.

The local business community in Milwaukee is solidly behind the current RTA’s recommendations to shift funding for transit to a dedicated sales tax. Many opponents of this transit proposal argue that shifting transit from the property tax to a sales tax is anti-business or will drive business away. That is categorically untrue.

As one of the commenters over at P-Mac’s place said, I wonder if Zore’s attitude would change if insurance premiums on NML policies were subject to that sales tax. Dad29 notes that businesses like NML pay a lot in property tax, but don’t exactly pay a lot in sales tax.

A quick point or two of order – while there is a 3-county transit authority in the state budget being worked ov…er, on now (and indeed, there is a nascient 3-county RTA now), its sole purpose will be the KRM, and its major funding source would be a massive increase in the car-rental tax (from $2/rental to $16/rental). There also is in that budget a Milwaukee County-only RTA, which would be funded by a 17+% increase in the sales tax (from 5.6%-5.85% to 6.6%-6.85%).

What that sales tax will kill is retail businesses, especially those near the county borders and those specializing in high-cost items. It doesn’t take all that much for someone living in, say, Wauwatosa to go to Brookfield for a fine four-star dinner or a camera and spend less money.

Let’s continue…

Northwestern Mutual has two major offices in Milwaukee County and employs a significant number of residents of Wauwatosa. Our current transit system is so inadequate and obsolete that my employees cannot get from our downtown office to our Franklin location on the Milwaukee County Transit System. The lack of available transit in this region has a much greater impact on my company than a shift in how we pay for transit.

P-Mac points out that the beautiful and recently-expanded Franklin campus is 1 1/2 miles away from the nearest bus stop (Route 27), and well past the point where the sidewalks on 27th St. ends (1 mile, to be exact).

I do have a point of order – there was, for a while, a limited-schedule extension of Route 27, Route 227, that went past the NML Franlkin campus to the Franklin Industrial Park south of Ryan Rd. between 46th St. and 60th St. However, that route was cancelled due to low ridership. Guess not many NML workers rode the bus out to Franklin.

Let’s continue…

Of the top 50 most populated U.S. cities or regions, only seven do not have or are not developing rail transit. Wisconsin is already behind other regions in this regard, and without a stable bus transit system – much less improved transit and commuter rail links connecting Milwaukee to other regions – southeastern Wisconsin will be left behind as the state’s talent pool is attracted to other developing regions. Those remaining in Wisconsin cannot get to their jobs.

STOP THE TAPE!!! Just how are enough NML employees making it out to Franklin for not one, but two good-sized office buildings if one can’t take a bus, train, or sidewalk there? I believe I forgot to mention that there are enough NML employees getting there by car that they built a parking ramp.

As for a commuter train, the closest point of approach for the westernmost rail line, which is used by AMTRAK, is just under 1 1/2 miles. The closest AMTRAK station is 4 1/2 miles away. The closest the KRM, which would be on the easternmost rail line, would get is 4 1/2 miles, with the station being roughly 5 miles away. Further, neither AMTRAK nor the proposed KRM serves (or would serve) Wauwatosa.

P-Mac also hacks away at the idea that light rail would work. Anybody care to guess how much it would take to run a light rail line between Wauwatosa, the downtown Milwaukee NML campus (because we can’t expect NML employees to be bothered by transferring to the streetcar) and the Franklin NML campus?

Four-Blocking the leading economic indicators

by @ 8:31. Filed under Economy.

Tom McMahon does it again

As is usual when I borrow Tom’s stuff, I’m going to direct your comments over there.

I’m Sorry

by @ 5:26. Filed under Economy, Politics - National, Taxes.

First, a little music to set the mood:

This week Drudge ran the headline:

Obama Says We’re Out of Money

Oh yeah, big fat surprise that is!  While the headline is a bit out of context in that Obama was discussing health care, the overall take is correct.  Obama recognizes that he has spent more than he has, by a long shot, and realizes that he must find a way to cut costs or increase revenue or leave office with most Americans longing for another Carter term because in comparison, it was nirvana!  The problem Obama has though is that he has no clue how big the hole is that he has dug for himself and the nation.

Back when Obama released his fairy tale titled “A budget proposal,”  I laid out the many problems with his budget and why he would never come close to closing the gaps on the deficits that he has created.  In this post I pointed out several issues that would cause his budget to fail.  As of today we have enough information to conclude that Obama’s budget assumptions have failed on two key issues.

Obama’s budget assumes a dramatic improvement in unemployment rates.  This improvement is key on two fronts.  First, it reduces the outflows of expenses in unemployment compensation.  This is a huge budget item at both the Federal and State level.  Second, when people go back to work, income taxes get paid thus increasing the tax revenue.  Obama’s budget assumptions had the 2009 unemployment rate at 8.1% with 2010 improving to 7.9%.  Of course, the same team that put this budget together was also the team who never saw total unemployment exceeding 8.0% with the enactment of a stimulus package so we know that numbers aren’t really their thing.  The CBOs most recent survey of private sector forecasts of unemployment now shows that the most optimistic assessments have the unemployment rate averaging 8.8% for 2009 and increasing to 9.0% in 2010.

Second, I warned you that Obama’s budget had a wildly optimistic long term interest rate assumptions.  For 2009 the Obama budget assumed the 10 Yr. treasury would be at 2.8%, for 2010 the assumption was 4.0%  Well, get ready, that bubble is about to burst as well. 

This week the Financial Times is reporting that sales of debt for private businesses is again increasing.  While that is good and it shows a data point of improvement in the economy, it’s bad for Obama.  As private enterprise increases its desire for debt, at the same time that the government is having to finance huge amounts of additional debt, the overall demand will cause all interest rates to increase.  Already the 10 yr Treasury which was running  under 3% at the end of April has increased to over 3.4%.  That’s a 20% increase in rates over Obama’s assumptions and we’re barely three months past the date of the assumption issuance.

For the past two years Senator, PEBO and now President Obama has been running from one corner of the globe to another apologizing for what he believes, have been heinous actions by the US. You know, actions like freeing oppressed people, calling evil evil and using our economic tools to encourage dictators (hello Fidel!) to broaden involvement in governments and economies that have created the greatest gulfs between “haves” and “have nots” through the use of government intervention. I watch Obama’s groveling around the world and wonder: “When will he apologize to the American people?”  I doubt his teleprompter will ever allow that to happen!

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