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.

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.

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!

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?”

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.

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”.

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.”

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.

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.

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!

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!

- 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.

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.

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.

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!

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.

Following what was their first fact to face conversation, between a very gracious current President and the holder of the “Office of the President Elect,” a conversation that purposely invited no staff of either man’s, the content of the conversation was leaked.  It wasn’t leaked by the White House or people affiliated with the gracious host.  The information was leaked by “anonymous aides” of the individual who is not yet President but has been the Presumptuous President for over a year.

Why is it that when I think of Obama and his staff moving into the White House I get a mental picture of college freshman arriving at the college campus and charging towards the frat house awaiting the first of their many anticipated parties.  Like the college freshman, I hope Obama and his staff figure out that there’s more to being in the White House than leaks, special favors and other attempts to make themselves look good.  Eventually, like college freshman, they’ll learn that there is a lot of day in, day out work that needs to be done.  Work, without which, they’ll fail.

So Karl Rove has finally figured out that you can’t play defense and take body blows for 10 rounds and expect to win!  For as smart as Rove was at orchestrating two elections, this was one topic that he sure flunked!

You can bet Obama won’t be making the same mistakes!

The New Jersey councilman who allegedly urinated on a crowd of concertgoers from the balcony of a Washington, D.C. nightclub swore off booze on Sunday — two days after he was busted for the embarrassing stunt.

OK, well, maybe not all of the people he peed on were voters from his district.  Then again, like a four year old at a urinal, I’m not sure Democrats are feeling the need to be too careful about who they piss on these days!

From the “Agency who can not be named,” Pawlenty jobs plan has green tint

Yup, that’s right, one of McCain’s short listers, one of the guys who the MSM were pining for wants to move forward promoting a green jobs agenda!

Minnesota will likely face a $2 - $3 Billion dollar budget shortfall this year and Pawlenty is proposing flushing several million down the drain in an attempt to create “green energy” jobs in one of the highest taxed states in the nation! Has he learned nothing from shoving a bunch of state money into the ethanol industry only to find that the industry has no means to self sustain?

Minnesota is looking less and less like the Midwest and more and more like an End of the Great Lakes version of Michigan!

For the minor investment of just over $30 million, a group of 9 banks and investment firms garnered almost $163 billion of funding from the Treasury.  That’s a return of over 5,400 times the investment! 

PNC Bank appears to have the best negotiators.  For a mere $320,000, PNC received $7.7 billion, an amazing 24,000 times return on investment.  At the other end was Goldman Sachs who got a return of less than 2,400 times their $4.2 million dollars of lobbying.

If only we all had gotten the minimum 2,400 times return on the money we had invested as of the end of September.  I’m pretty sure most of us, well, me for sure, wouldn’t be caring much about all the other nonsense the Treasury was doing.  Heck, if I had 2,400 times my September balance, I might have voted to raise taxes on myself too!

First, I want to clearly state that while I am an Evangelical Christian, I am not like Pat Robertson or Jerry Falwell where I believe you can discern God’s will or see God’s hand in every event that occurs.

Ok, going Old Testament.

After the Israelites escaped from Egypt, the were lead by Moses and then Joshua. After Joshua, a series of “Judges” ruled/lead the nation, or parts of Israel.

During the time of the Judges we find that Israel’s relationship with God had become distant. As generations passed, the new generations didn’t have the benefit of first hand knowledge of God’s works in their lives as the generation of the Exodus had had.  As a result, many of the Israelite tribes took to worshiping Baal during this period.

It’s clear throughout the book of Judges that God no longer paved the way for the Israelites as a result of their distance. “If it feels good, do it,” was the guiding principle for the Israelites during this time. In fact, the last line in Judges is:

Everyone did what was right in his own eyes.

As things continued to deteriorate for Israel and a civil war took place, the people of Israel desired change from what they were experiencing.  Rather than looking back to see what had worked previously, they looked around themselves to other nations and said “we should be more like them!”  The result was a request to God via Samuel, to request a king to lead them.

God understood that the reason the Israelites were having challenges had nothing to do with the type of leadership they had.  He knew that the issue was one of self importance, arrogance and disobeying of God’s word. 

In 1 Samuel 8, God attempted to warn the Israelites that there would be consequences of their desire:   

¹⁷He will take the tenth of your flocks, and you shall be his slaves. ¹⁸And in that day you will cry out because of your king, whom you have chosen for yourselves,^(M) but the LORD will not answer you in that day.”The LORD Grants Israel’s Request

Unfortunately, the Israelites didn’t heed God’s advice and demanded a king:

    ¹⁹But the people refused to obey the voice of Samuel. And they said, “No! But there shall be a king over us, ^20(N) that we also may be like all the nations, and that our king may judge us and go out before us and fight our battles.” ²¹And when Samuel had heard all the words of the people, he repeated them in the ears of the LORD. ²²And the LORD said to Samuel,^(O) “Obey their voice and make them a king.”

So, God gave them a king in 1 Samuel 9, Saul, and he turned out to be as bad as God had warned and worse.

It didn’t take long for the Israelites to realize they had made a mistake.  Only a couple of chapters in the Bible, 1 Samuel 19, and according to some scholars, probably a couple of years in real life, the Israelites were asking for forgiveness for their demand of God for change:

¹⁹And all the people said to Samuel,^(AM) “Pray for your servants to the LORD your God, that we may not die, for we have added to all our sins this evil, to ask for ourselves a king.”

So why the history lesson?

Even without tying in issues of faith, the parallels between the Israelites and the US are stark.  Like the Israelites, the US has moved from a period of steady prosperity into a time of trouble and uncertainty.  Also like the Israelites, rather than looking back and taking responsibility for the actions that have gotten us here, we’ve assumed that the right answer for our troubles is “change” and “to look more like other nations.”  Finally, like the Israelites, we have concluded, even though every sign tells us otherwise, that wholesale change of our method of governance is the answer.

The Israelites went through some tough times after they got Saul as their king.  While Saul had an early successes, he quickly turned from God and lost His favor.  God then instructed Samuel to anoint David as king but it would be years before David finally took the throne.

While I expect us to go through some difficult times as a result of our recent political decisions, I remain hopeful.  Like the Israelites, I expect the citizens of the US to eventually see the errors of their selections.  Also, unlike Israel, we won’t have to wait an unknown time frame until the death of a king to make a change.  We’ll be able to make a change in two or four years.

Saul’s pride and jealousy created a schism within Israel at the end of his reign.  Rather than a peaceful transition to David, the king who God anointed, there was fighting between the families and followers of David and Saul.  Eventually, David won but not until there was great bloodshed within Israel.

Like Saul, it’s apparent that Barack Obama has enormous pride.  I’m not going to suggest that should Obama or the Dems lose an election, that we would not have a peaceful transition.  I am going to suggest that the pride and ego I see in Obama, Reid and Pelosi leaves me concerned that they will attempt to impact how future elections occur.  Oh, I don’t mean not having elections.  Re instituting the “Fairness Act” and implementing the union card check program are two ways to tilt future elections in the Dem’s favor.

I certainly don’t have a crystal ball to see the future.  I do however, believe we are seeing a similar human behavior pattern (and just maybe a pattern of God) that is similar to the Israelites of old.  I guess the way to handle this for the near term is the same way that Samuel dealt with the situation with Saul.  When the Israelites recognized that Saul was a mistake, they confessed their sin to Samuel and asked him to pray for them.  In 1 Samuel 12, Samuel replied:

²³Moreover, as for me, far be it from me that I should sin against the LORD by ceasing^(AT) to pray for you.

I’ll pray for this country’s citizens and its leadership.

Working from your base to the middle works better than working from the middle towards your base - Obama received support from 89% of self ascribed “liberals”, compared to Kerry getting 85% of the same group.  McCain only received 78% of the “conservative” vote while Bush received 84% of the same group.  Of course those who are moderates broke for Obama 60% to 39%.  It’s clear from this that while Obama held his base, McCain never fully recovered from his early pokes in the conservative eyes.

After looking over some past exit polls, I don’t think that statement quite covers it.

In this election we had arguably, the most liberal candidate ever fielded by the Democrats run against one of, if not the, most moderate Republican (OK, we can argue about Ford, maybe even GHW Bush.)  Additionally, while the moderate tried to cloak himself with conservatism, the liberal made no such attempt and ran a campaign that was unashamedly left.

The notion of running a Moderate for the Republican candidate was cobbled from a series of theories. 

First, the Republican brand had been decimated through the combination of President Bush’s disappearing approval ratings and the electorates mistaken notion that the Democrats didn’t have a hand in the existing economic mess. 

Second, the Republican leadership is at best, moderate.  They believe they reflect their party and the broader electorate.  Remember the guffawing from Peggy Noonan and Mike Murphy when, caught via a “hot mike” were heard ridiculing the choice of Sarah Palin because her choice by McCain was “cynical.”  Their point was that no one in the Republican party (read that leadership) believes what Palin believes.  Party Leaders, moderate and believing to be reflective of the electorate, they wanted one of their own.

Finally, there was a belief that a moderate would be able to gain votes from a broader electorate spectrum.  After all, where else could the conservatives go, the liberals were obviously going for the Dems so the fight was going to be for moderates.  The candidate who gained a bigger share of support from the moderates would surely win this election.

So with all that rationale for running a moderate, how did it work out?

Not well!

Yes, McCain loss but that’s not the take away from this election.  How he lost is the lesson.

I took a look at the exit polls for the last 32 years.  They started with Jimmy Carter beating Gerald Ford and went through the most recent election. I noticed a few things that debunks the “we win with moderates” thinking.

First, there are some who believe that we have become an electorate that is at least more moderate if not sliding to the liberal side. While there is some movement from year to year, you’ll notice that for the most part, the electorate, at least as they describe themselves, looks pretty much today as it did in 1976. In 1976, the electorate was 20%, 48% and 31% Liberal, Moderate and Conservative respectively. In 2008 the same split was 22%, 44% and 34%. If anything, the moderates have become slightly smaller as the electorate becomes a bit more polarized.

Second, note that with the exception of Reagan’s first term against Carter, no Republican has won without getting at least 80% of the Conservative vote. Reagan’s shortage of Conservative support can be attributed to some being split off to Anderson along with the fact that the election of that year had the smallest percentage of the electorate describing themselves as Conservative.  At any rate, it seems pretty clear that if a Republican doesn’t hold 80% of thieir base, they have little if any chance to win the election.  Interestingly, the same parallel does not hold for Democrats.  Democrats can win with less than 80% of the liberal vote, note Carter and Clinton’s first runs.  Only in Clinton’s second run, and now Barack Obama, have liberals supported the Democrat candidate with greater than 80%.

Finally, let’s look at those moderates.  Note that since 1976, Only Reagan’s landslide victory of 1984 garnered greater than 50% of the moderate support for Republicans.  Of course, Reagan also achieved a modern high of 29% amongst liberals.  Other than that instance, no Republican has gained greater than 50% of the moderate’s support.  More typical has been the Bush victories where mid 40% of the moderates supported the Republican.

OK, so some moderate support is required to win.  Was McCain’s strategy of courting moderates successful?  Obviously based on the end results, no.  However, I believe more than “No” we can say “Hell, no!”  Note that Obama has been the only candidate in modern times to gain 60% of the moderate support…and as I mentioned early in this post, he ran as an unashamed liberal!  It’s obvious that for his efforts, McCain made no inroads of import to the moderate electorate.

It’s clear that McCain’s desire to court the moderates failed.  In fact, his focus on the moderates cost him his base and doomed his election

I’d have to check the archives but the only position, and I’m not even sure that it was that, that I disagree with him on was his commercials for global warming.

Newt has a solid finger on the pulse of the American public and the conservative core. While there may be others, Newt is the only person I know for certain who can take conservative principles and explain their benefit and purpose to the general public.

I do need to expand on a few items. I do wish Obama success in defending this country against whatever forces seek the overthrow of a part of government. I do also wish for the economy to not tank. I do not, however, wish Obama political success; indeed, so far as his policies are opposite my views, I wish him nothing but political failure. As John Hawkins said, “I’m not interested in bipartisanship. I want to defeat liberalism, not cooperate with it. I want to throw sand in the gears at every opportunity and if Obama wants to work with us, he’s going to move to the right.”

Another explanation, better than what I can offer, can be found at Blue Collar Muse. Says the Muse, “I say, Obama will be the President; but he will never be my President. Obama wants what he is unwilling to give. To get the job, Obama divided us. Now on the job, he yearns for unity’s strength. But leopards don’t change their spots. As he ran, so will he govern. I will not be a party to that.” (emphasis in the original)

All I have to do to justify my stance is look at what the Democrats did when President Bush offered his hand in “bipartisanship” during and following the 2000 election. Outside of a couple of weeks in September, 2001, and Bush calling the Rats’ 3 1/2-year-old bluff on Iraq, they have been nothing but obstructionists. Still, Bush and the Republicans insisted on “bipartisanship”. What did that get them? Tell me; what did that get them? It got them a one-way ticket to Minorityville, and the way out isn’t “cooperation”, but “victory”.