Mitt Romney's First 100 Days and Beyond

You wouldn't know it by watching CorruptMedia or by reading most of the polls, but it's my opinion that this election is basically over and Romney is going to win.  It may not even be that close.  The polls are too skewed and are painting an incorrect picture of the race.

It's time to start thinking about the all-important first 100 days for the new administration. The economy is number one.   You can only do so many things in the first 100 days of a new administration and only about 3 or 4 things in the first 6 months of a Presidency, so one has to be judicious in choosing the most important things.

Here's my suggestion for Romney's first 100 days and for his first 6 months.  As you read it, imagine if the recommendations would happen with Obama in the White House.  If I'm proven wrong, the blog recommendation stands.  The agenda items below stand as the most important matters of our day.

Romney's First 100 days

1. Sponsor the first federal budget in 4 years.  Freeze Federal spending on all programs for one year. Freeze benefit increases for federal workers at the same time. 
2. In his inauguration, Romney should hark back to the days of John F Kennedy and call for this decade's version of JFK's ambitious goal to "Land a Man on the Moon in 10 Years" by calling for energy independence for the US (maybe independence from OPEC oil?) in ten years.  Open the US East and West coasts to energy exploration by re-initiating permitting on those offshore areas. Open ANWR to exploration.  Accelerate delayed permitting that has been bogged-down by the Obama Administration in the US Gulf Coast.
3. Invite Boone Pickens and energy company leaders to the White House and support a private enterprise plan to build CNG filling stations (compressed natural gas) across the country to enable substitution of natural gas for gasoline and diesel transportation fuels.  Converting cars to CNG could be a good growth industry as conversion kits are available.
4. Work out a Grand Bipartisan Compromise on Individual and Corporate Tax Reform.  As in Simpson Bowles, reduce marginal rates but broaden tax collection.  Limit individual tax deductions at some maximum amount at $15,000 or $17,000. Limit and/or eliminate certain tax credits  Maybe eliminate all deductions/credits for incomes over $500k?   
5. Work out a Medicare and Social Security compromise by means testing both of these programs right away. 
6. With Corporate marginal tax rates lowered, make a patriotic call for bringing manufacturing and jobs back to the USA from Asia.  Make a deal with WalMart to re-institute a "made in USA" policy again.  Make a big patriotic splash on the steps of the White House to make republicans, democrats and business leaders look like heroes.
7. Approve the Keystone Pipeline extension.  
8. Call for a moratorium on increased business regulation.  Reverse EPA's regulation of carbon dioxide since carbon dioxide in flue gas is not harmful to human health in any reasonable sense of the term.

Romney's First Six Months

1. Repeal or scale-back ObamaCare and pass a new version that focuses on medical cost reductions such as tort reform, encourages competition where possible, and expand the number of doctors through immigration and more MD graduations.  
2. Pass a long term Medicare Reform that caps government cost growth and garners bipartisan support. 
3. Plan to increase the Social Security eligibility age slowly over time starting 10 to 12 years from now.
4. Modify Dodd Frank and/or break up the big banks into investment and banking entities and limit leverage to about 12 times capital, require everything to be indicated on-balance sheets, and mark-to-market all hedges daily.  Pass financial malfeasance laws that require jail terms and 7 year salary claw-backs for bank executives and high level management should a bank fail or serious fraud occur.
5. Eliminate a number of Federal government departments including Dept of Education, NLRB, Dept of Energy, Homeland Security, and the Dept of Agriculture.  Consolidate and reduce the size of the various intelligence agencies.
6. Eliminate agriculture subsidies to large corporate farmers.
7. Invite population growth by encouraging qualified immigrants with valuable skills. Offer 10 year work permits and visas for 'qualified' foreigners who buy a USED house in the US.
8. Replace Bernanke with someone who is committed to normalize monetary policy and raise interest rates to more "normal" levels relative to inflation.
9. Eliminate money in politics. Go with all Federal money for national campaigns--no private contributions permitted. Ban lobbyist money too. No SuperPacs.  Make 2012 the last year of billion dollar campaigns! 

If Romney is not elected, I will leave this agenda posted as a reminder of what could have been.  Don't be shy and give me your suggestions for the next presidential term---regardless of who wins!  Thanks in advance.

It's Over For Obama: Romney Will Win

It's all over but the crying now.  Romney is ahead in early voting, ahead by double-digits with independent voters, ahead with likely voters, ahead in favorability and helped by a large shift of the voting population to the Republican party.  His momentum in swing states continues. Finally, undecideds usually break for the challenger by a large margin--meaning many of the close states will go to the Romney camp.

Romney Winning in Early Voting
According to Gallup and Breitbart's John Nolte:

Romney currently leads Obama 52% to 45% among voters who say they have already cast their ballots. However, that is comparable to Romney's 51% to 46% lead among all likely voters in Gallup's Oct. 22-28 tracking polling. At the same time, the race is tied at 49% among those who have not yet voted but still intend to vote early, suggesting these voters could cause the race to tighten. However, Romney leads 51% to 45% among the much larger group of voters who plan to vote on Election Day, Nov. 6.

The fact that Romney is leading in early voting makes Democratic claims that they are leading with early voters sound like another "fabrication."  (I'm trying to be kind.)  Nationally, Romney has been over 50% in likely voters at Gallup since October 15th while Obama has been stuck in the mid 40s since then.   Obama is not making it to 50% in most swing state polls either---even when most polling is over-sampling democratic voters.

Romney Momentum Continues in Swing States
The races are close in several swing states. There is basically a tie in Iowa, Wisconsin, Ohio, Michigan.  The undecided usually break for the challenger, meaning Romney will very likely carry those states.

According to Rasmussen as of today Oct 30th, Romney has a 2 point advantage in Ohio. Romney has had a 2 point advantage in Florida for several weeks now. Obama has basically conceded Florida.

The Number of Republicans Voting is Way Up from 2004 and 2008
The electorate is moving Republican in a big way--the most in recent history. According to Gallup and Dick Morris:

Gallup reported on Friday that the likely 2012 electorate will be among the most Republican in history. 

In 2008, 12 percent more self-described Democrats voted than Republicans (54-42). In 2004, the electorate was 48-48 evenly split between the parties. In Gallup’s poll they found that in 2012 it will be 46-49 for the Republicans — a fifteen point swing from 2008!  (a three point swing from 2004)

The reason most other polls are wrong is that, seeing this Republican surge, they discount it as sampling error in their polls and re-weight the data to make it conform to the traditional partisan divisions, thus obliterating the real trend and obscuring what is actually going on.

Obama won by 7 points in 2008, so with a 15 point swing, one should be able to predict a Romney win by 8 points!  

Romney is Winning a Large Majority of Independent Voters

According to most polls, Romney is up by double-digits with Independents. This is devastating news for the Obama camp.  

From Chris Cillizza at the Washington Post, on October 29,  he reports that Romney has huge lead with independents. Note that Independents make up about 28% of the electorate according to polls in the past three presidential elections.

In the last three releases of the tracking poll conducted by The Washington Post and ABC News, Obama has trailed former Massachusetts governor Mitt Romney among independent voters by between 16 and 20 percentage points.

According to a Public Policy Poll, an Obama-friendly pollster, Romney has a 16 point lead over Obama with Independents!  An IBD/TIPP poll, also kind to Obama and showing Obama winning overall but shows Romney winning independents by 46% to 38%.

Romney Winning on Favorability

RealClearPolitics has Romney with a +2.6% advantages (on average) in favorability compared to Obama as of today Oct 30.  

So, Romney is ahead in the polls of likely voters, ahead by a large margin with Independents, has higher favorability ratings than Obama, and is aided by the shift of the voting public to the Republican party.  All of this spells a comfortable win for Romney. 

But why wouldn't this result have been expected?  The 2012 is just a continuation of the 2010 "shellacking" when Republicans re-took the House by gaining 63 seats and gaining seats in the Senate.  It's highly possible, even probable, that the Republicans will win the Senate as other elections are swept in Romney's coattails.

Obama Received His 3 AM Call...and Failed

For weeks we heard from the President, Hillary Clinton, UN Ambassador Rice and the entire administration claim that an amateurish internet video on YouTube was the reason for the attacks on our embassy and deaths of our ambassador and 3 others in Benghazi. They claimed for weeks, that it wasn't a planned terrorist attack.

Obama Administration Contradicting Libyan President
But even within a day or two after the attack,  the President of Libya,  was saying that it clearly was an organized and planned attack--probably by Al Qaeda.   President Obama and UN Ambassador Rice, for several days and even weeks, continued to contradict the President of Libya!

This administration was already trying to cover up the facts in the case.  But for what reason?

Incriminating Email Trail
Fox News has reported that State Department emails indicate that, within 1 1/2 hours of the attack,

A series of internal State Department emails obtained by Fox News shows that officials reported within hours of last month's deadly consulate attack in Libya that Al Qaeda-tied group Ansar al-Sharia had claimed responsibility.

Fox states that 300 to 400 people, including the White House, Defense Department, the FBI, the State Department, and the Director of National Intelligence, received the emails nearly in real time as events were unfolding in Libya.  So why the persistence with the mob violence explanation??

The fighting at the CIA annex (safe house) continued for about 7 hours after the initial attack and was the time that Tyrone Woods was killed.  There was a long window of opportunity to assist those fighters since there is a base in S. Italy, just 675 miles away.

Blaming the Intelligence Community
Then came UN Ambassador Susan Rice's revised explanation that all she was just relaying what she was given from the intelligence community--the CIA.  But the intelligence community knew within hours that this was a planned terrorist attack and told the Administration this.

Joe Biden, in his debate with Paul Ryan was repeating this new explanation of the confusion:

Vice President Joe Biden's claim in his debate with Congressman Paul Ryan that "we said exactly what the intelligence community told us" to be another outright untruth. The e-mails from that very intelligence community show specifically that the White House was told almost immediately of Ansar Al-Sharia that "the group claimed responsibility on Facebook and Twitter and has called for an attack on Embassy Tripoli."

Forces on the Ground Were Told to 'Stand Down' and Requests for Assistance Denied

On Friday 26 October, Fox News reports that forces on the ground defending the embassy and CIA Annex, in continuous contact with their chain of command were continuously told to "stand down" and any and all frantic phone calls and requests for assistance were ignored or denied.

Fox News has learned from sources who were on the ground in Benghazi that an urgent request from the CIA annex for military back-up during the attack on the U.S. consulate and subsequent attack several hours later on the annex itself was denied by the CIA chain of command -- who also told the CIA operators twice to "stand down" rather than help the ambassador's team when shots were heard at approximately 9:40 p.m.[2:40 pm ET] in Benghazi on Sept. 11.

Former Navy SEAL Tyrone Woods was part of a small team who was at the CIA annex about a mile from the U.S. consulate where Ambassador Chris Stevens and his team came under attack. When he and others heard the shots fired, they informed their higher-ups at the annex to tell them what they were hearing and requested permission to go to the consulate and help out. They were told to "stand down," according to sources familiar with the exchange. Soon after, they were again told to "stand down."

Woods and at least two others ignored those orders and made their way to the consulate which at that point was on fire. Shots were exchanged. The rescue team from the CIA annex evacuated those who remained at the consulate and Sean Smith, who had been killed in the initial attack. They could not find the ambassador and returned to the CIA annex at about midnight [5 pm ET].

At that point, they called again for military support and help because they were taking fire at the CIA safe house, or annex. The request was denied. There were no communications problems at the annex, according those present at the compound. The team was in constant radio contact with their headquarters. In fact, at least one member of the team was on the roof of the annex manning a heavy machine gun when mortars were fired at the CIA compound. The security officer had a laser on the target that was firing and repeatedly requested back-up support from a Spectre gunship, which is commonly used by U.S. Special Operations forces to provide support to Special Operations teams on the ground involved in intense firefights.

If you're pointing a laser at a target in battle, it's because you're expecting air support---air support that never came.   There were forces in Signorella Italy that could have responded.   The attack began at 2:40 pm Washington time, so it wasn't happening in the middle of the night in Washington as Obama has tried to imply.

The CIA Says That "It Wasn't Us Who Refused to Help"

From Weekly Standard, a CIA spokesman presumably speaking for Director Petraeus

"No one at any level in the CIA told anybody not to help those in need; claims to the contrary are simply inaccurate. ”

Live Video Feed of Events on the Ground in Benghazi

Now we know that there was one or even two drones, almost certainly from Italy, that were already in the air at the time of the attack and were diverted to site of the conflict.  There would have been live video feed at the White House, State Department, and Defense Department.   For the drone to have been there,  there must have been some concern about activity in Libya.  Mind you, this is happening during daylight working hours in Washington, but at night in Libya.  Presumably the drone could see something at night?   From Red State,

What we now know is that the attack was monitored, in real time, in the State Department, the Pentagon, the White House, and at Africom HQ in Germany. We know there was a Predator drone overhead and we know the consulate provided live audio feed of the attack until the end.

Predators don’t just magically appear on the scene. They have to be launched and they have to have a mission when they are launched. A Predator UAV has a range of 675 miles with a max speed of 135mph. The UAV almost certainly had to have been launched from the US facility at Signonella in Sicily.

This means that the UAV was launched over three hours before the attack began and the operation order issued some time before launch. This implies that hours before the attack was launched there was sufficient concern about something in Benghazi that a UAV was tasked to be on station.

The Lies Just Keep Mounting From This Administration
It's getting so bad now, with a steady stream of lying and covering-up, that the President himself had better explain himself. But he's avoiding interviews with the press now.  He's hoping this whole thing will blow over until after his re-election.  The problem is that it won't "blow over" thanks to our only opposition news outlet:  Fox News.  Further, this lying and CYA is causing his approval rating to plummet.  Gallup has shown the President's approval rating to fall 7 percentage points in the past 3 days.

The original "lie," that it was a spontaneous riot in response to a silly video was supported by Jay Carney, Susan Rice, Hillary Clinton and her State Department, and of course the President himself.  They continued in this lie for weeks while it was clear that it was a total falsehood.  Then the administration's narrative, once emails made it clear that they were lying, was that the intelligence community is at fault.  General Petraeus has clarified that as untrue.

It's time for the President to come clean about what really happened.  Someone, either him, or Panetta at Defense dropped the ball.   Meanwhile, two things that we know are true for certain is that People Died, Obama lied.

Obama Fibs, Flubs and Fabrications

Whoppers

Obama "bragging" about increased oil and gas production in the US as if he were somehow responsible!  Gulfcoastcommentary  Oil and gas production is higher despite the President and the Interior Department.  Permits for oil and gas exploration on Federal land are down 40%.  Oil/gas production on Federal land is down significantly.

We have an “all of the Above” energy strategy. But he said that he will drive coal burning power plants out of business and he has!  He said that, under his plans, electricity costs would “skyrocket”.

"You can’t drill your way out of this"  or,  "We have run out of places in the US to drill for oil."
Obama’s oval office speech in June 2010     How many times did you hear this?  Meanwhile, there are thousands of people drilling their way to prosperity.  He knows?  No one will know until we lift the drilling ban on the entire west coast and the entire east coast.

My Green energy plan will create 5 million new jobs  Politifact 

The Rich don't pay their fair share.  Wrong, the top 10% of income earners pay 70% of the taxes.  Gulfcoastcommentary

Reset of relations with Russia is a continuing disaster  Japan Times, Heritage.org
Add the reset with Iran and the "reset" with China to the list too.

The Benghazi attack is not a planned terrorist attack.  ABCNews

I don’t Have Lobbyists. Romney will Let Lobbyists back in the White House!  Obama's White House has at least 55 registered lobbyists working. See Washington Examiner

Number one, we inherited a $1.3 trillion deficit. … That wasn’t me.”Congress, under Democratic control in 2007 and 2008, controlled the purse strings that led to the deficit Obama inherited.Obama supported the emergency bailout package in Bush’s final months — a package Democratic leaders wanted to make bigger.

Fabrications Fibs and Flubs From Obamalies.net: 

Obama claims that the fence between US and Mexico is “now practically complete” thanks to his Administration.   It's about 5% complete.  It'll never be built--it's too impractical.

GOP Responsible for Obama Jobs Bill Not Passing
Dems Rejected Jobs Bill  There has been little appetite for additional taxes for Obama's first term.

Romney and Ryan will gut pell grants for low-income college students.
Factcheck.org

My budget will cut the deficit by $4 Trillion over 10 years.
Factcheck.org

Because of Obamacare, “over the last two years, health care premiums have gone up — it’s true — but they’ve gone up slower than any time in the last 50 years.”
Politifact.com

I think it’s important for us to understand that the Fast and Furious program was a field-initiated program begun under the previous administration
abcnews.com

I’ve done more for Israel’s security than any President ever
Obama aided Islamic Extremists take over of Egypt/ Libya – Weapons pour into Gaza

Obama met highly qualified out of work teacher Robert Baroz
He wasn’t out of work and Obama never met him.

The health care bill will not increase the deficit by one dime--either now or in the future..
Gulfcoastcommentary

If you like your plan you can keep your plan. If you like your doctor you can keep your doctor
TownHall

Under our plan, no federal dollars will be used to fund abortions, and federal conscience laws will remain in place.
U.S. Capitol, Washington, D.C., September 9, 2009.

ObamaCare ia not a new tax
Oh really? That's not what the Supreme Court says! Obama denies healthcare is a new tax on all Americans

Doctors choose amputation because they get better compensation. Greedy Doctors taking out tonsils for more money.
Claims never documented

The Health Care Package will pay for itself
Time

Republicans don’t have a single idea that’s different from George Bush’s ideas — not one.
Hmm Immigration?

We shouldn’t Mandate the purchase of health care
Democratic Debate Lies

And one more misunderstanding I want to clear up: Under our plan, no federal dollars will be used to fund abortion, and federal conscience laws will remain in place.

Politifact

Obama says he’ll save average family $8,000 in gas
Video Proof

I am immediately instituting PayGo “Pay as you go”
Said during a speech immediately after the Trillion Dollar “Shovel Ready” bill.

I got the Message from Massachusetts (refers to Scott Brown's election to Senator Kennedy's seat)
Daily Bail

No more wiretapping of citizens
Youtube

Mr. Ayers as “a guy who lives in my neighborhood,” but “not somebody who I exchange ideas from on a regular basis.
News Busters

Obama campaign would accept public funding
ABC

Minimum Wage will increase to $9.50/hr
A Socialist

Ann Dunham spent the months before her death in 1995 fighting with insurance companies that sought to deny her the coverage she needed to pay for treatment.
Mounting Heath Care Lies

Didn’t know Jeremiah Wright was Radical
Dreams of My Father – A radical Socialist.

Would have the most transparent administration in History
Cato Institute

We will go through our federal budget – page by page, line by line – eliminating those programs we don’t need, and insisting that those we do operate in a sensible cost-effective way.
Boston Globe
I really wish this one were true, but it's not.

I have visited all 57 states.
Snopes

I’ll get rid of earmarks
Source: Any bill passed during presidency

When a bill lands on my Desk, The American people will have 5 days to review it before I sign it.
Campaign Speech

My father served in World War II.
The Videos and the Facts

Have troops out of Iraq by March 31, 2009
News Video

Seniors Making less than $50,000 will not have to pay taxes
YouTube

I Have Always Been Against Iraq
Washington Post

My Wife Didn’t Mean What She Said About Pride In Country
CNN

Barack was never an ACORN trainer and never worked for ACORN in any other capacity.
Obama Campaign Video

I Barely Know Rezko
Sun Times

My Church Is Like Any Other Christian Church
ABC News

Cut Deficit in Half by end of first term
Associated Press Video

Health Care deals will be covered on C-span
Obama Lies

Recovery Act will save or create jobs
ABC News

Unemployment rate will be 8.5% without stimulus.
Obama Lies

No Earmarks in the $787 Billion Stimulus
CNN

I happen to be a proponent of a single payer universal health care plan
Specator.Org

We have launched a housing plan that will help responsible families facing the threat of foreclosure lower their monthly payments and refinance their mortgages.
Obama Lies

Guantanamo bay to be closed within a year
Council on Foreign Relations.

Won’t Raise taxes on those making less than $250,000 per year.
Businessweek: Obama Agnostic on taxes
List of Tax Promise Violations

Regarding the debt ceiling debate that had ground to a halt. "I cannot guarantee that those checks go out on August 3rd if we haven’t resolved this issue. Because there may simply not be the money in the coffers to do it."
Even with the debt ceiling showdown, there was money for Social Security and Medicare and Defense (but nothing else).

Presidential Polls Are Skewed

Many pollsters are using highly unusual Democratic turnout in 2008 as their basis for sampling and predictions this year.  The problem is that this is totally wrong for this election-the Democratic enthusiasm is much lower than 2008 and Republican enthusiasm is much higher.  Most of these polls are misleading the public; giving too optimistic results to the Obama camp.  So slim leads shown by Obama in some of the swing states are giving the Democrat a fictitious lead.

One possible problem with this exaggeration is that when Obama loses, there could be violence in response to the results as if Romney somehow stole the election.  It could even be a GOP blowout, which would be more consistent with the "shellacking" in the 2010 election when the GOP regained the House.

It goes beyond voter enthusiasm.  The shear numbers of Republicans has drastically increased since 2008 compared to Democrats according to Gallup data.   From Mike Flynn at Breitbart:

In 2008, according to Gallup, 54% of likely voters identified as Democrat or lean Democrat. 42% of likely voters identified as GOP or lean GOP. In other words, the electorate, including independents who lean towards a particular party, was D+12. This year, however, the Democrat advantage has disappeared. 49% of likely voters today identify as GOP or lean GOP. Just 46% of likely voters are or lean towards the Democrats. This is a 15-point swing towards the GOP from 2008 to an outright +3 advantage for the GOP. By comparison, in 2004, when Bush won reelection, the electorate was evenly split, with each party getting support from 48% of likely voters.

If these numbers are within even a few points of what this survey suggests, then Romney will win decisively and the GOP will pick up the Senate. We are likely standing on the edge of another GOP wave election.

Keep in mind, the Gallup survey suggests that voter turnout among Obama's biggest supporters, i.e. minorities and young voters, will generally match 2008 levels. Obama's problem is that, relatively speaking, there just aren't that many of these voters. Voters under 30 will make up 13% of the electorate, one point below '08 and even with '04. Minorities will make up 20%, up 5 from '04 and only up 1 point from '08.

Obama's chief problem is that everyone else in the electorate has become much more Republican.

Gallup, using a larger sampling than other polls and better grasp of the current electorate,  is already showing Romney consistently polling above 50% nationally with the latest numbers saying Romney 51% and Obama 46%.   This lead is beyond the polls +/- 2% margin of error meaning that Romney has the lead in the nationwide popular vote.  Rasmussen shows a similar but slightly smaller lead.

You'd better get used to saying President Romney.

Perils of "Soaking" The Rich

One of the few items on Obama's 2nd term agenda is to let the Bush tax cuts expire and raise taxes on "the rich" or those earning over $250,000.    This was scored by the CBO to give about $83 billion dollars per year in extra revenue.  That's not much when you have a $1.1 Trillion or $1.2 Trillion deficit.  It's something, or so it appears.

Those revenues may or may not materialize. Don't be surprised if the revenues disappoint. The new president of France recently called for a marginal tax rate of 75% on extremely rich citizens to address yawning deficits there.  He's had to back off this threat when wealthy French citizens openly made plans to relocate to other, more tax-friendly, locales.

Be careful about plans to "soak the rich," they can backfire.  Here's a couple of cautionary tales of ill-advised taxes on the "rich."

Luxury Yacht Tax
From Ralph Reiland at American Spectator

In 1990, Congress passed a 10 percent "luxury tax" on high-end jewelry, aircraft and yachts as a way to force "the rich" to pay their "fair share."

Taxing away another $2 million from a rich guy when he buys a $20 million yacht was supposed to create more heaven on earth.

Instead, 81 percent of the 1,400 workers at Viking Yachts, the largest yacht manufacturer in the United States, were laid off within eight months of the enactment of the yacht tax -- and "the rich" still had their money, and their old yachts.

Egg Harbor Yacht, one of the oldest boatyards in South Jersey, filed for bankruptcy a year after the yacht tax was enacted and laid off its 250 workers.

By the time the law was rescinded in 1993, Viking Yachts was down to 68 employees.

"When it was all over, 25,000 workers had lost their jobs building yachts, and 75,000 more jobs were lost in companies that supplied yacht parts and materials," reports economics professor Walter Williams at George Mason University. "The Joint Economic Committee concluded that the value of jobs lost in just the first six months of the luxury tax was $159.6 million."

The impact on the federal deficit during the first year of this shot at creating more "fairness"? Instead of adding a projected $31 million to the government coffers, the net effect of the luxury tax was $7.6 million more in federal red ink.

Luxury Car Tax
A similar thing happened to the tax on luxury cars.  From AIADA.org

To refresh your memory, Congress in 1990 established a Vehicle Luxury Tax on any car sold in the United States for more than $30,000. The 10 percent tax applied only to the amount paid past $30,000; so a person who bought a $35,000 vehicle would have to pay $500 to the U.S. government on top of already existing taxes.

As many predicted, the tax was a bust. Consumers hated it. Dealers hated it. Manufacturers hated it. Ultimately, the government brought in a nominal amount in tax revenue but lost money in other tax revenue areas such as payroll, duties, and income tax. A 1991 study by AUS Consultants showed that the tax led to a 20 percent drop in sales of international brand luxury cars like BMW and Mercedes-Benz. Finally, in 2002, after much lobbying from AIADA, the federal government fully repealed the law.

US Stock Market Commentary 23 Oct 2012

A few days ago, I published a blog saying that there is historical evidence that the market would likely be in a flat to downward trend for years to come. It wasn't easy to post that when it appears that the stock market is on the verge of new all-time highs.

My post mentions that the average bear market lasts something like 17 or 18 years. Since the stock market peaked in 1999, and we're still not at new highs, it means that we've been in a flat to declining market for 13 years already. So, we have 4 or 5 years to go in a flat or declining stock market (from peak) on average.

Declining Earnings And Endless Quantitative Easing
It's been my opinion that the stock market will not make significant new highs. Recently, we were getting close to all-time highs, but I don't think it's going to happen. This despite easy money "forever" from the Fed! I'll be willing to bet that the market rolls over here and now.

There's a serious and obvious "technical" problem now that we're making the 3rd and slightly lower top in 13 years. It's called a "triple top" in market technician terms. Let me re-phrase this:  it's a long-term MEGA Triple Top in market technical terms!  It's a very big deal to market professionals if we fail to make a new high here and go down from this price level.  This on top of the evidence that the bear market is likely to last many more years.

Figure 1:  A Chart of the S&P 500 Stock Market Index Since 1997 Showing Triple Top (http://www.ritholtz.com/blog/2012/10/market-returns-q3-2012/)

The Federal Reserve Is "All-In" 

The Fed appears to be "all-in" with ZIRP (zero interest rate policy) and QE (quantitative easing) basically "forever". That's it!  I don't think they have anything credible left. I think the Bernanke "put" to support the market is "kaput" and that's also very big deal.  Afterall, the Fed itself has given itself credit for the market being 50% higher than it would have been otherwise without Fed actions. If there's no more hope from the Fed, than a huge 'prop' is removed from the market.  Hopium infusions could never have lasted forever. Now corporate earnings are rolling over. So fundamentals and market "technicals" point down as far as I can see. So, I wouldn't be surprised to see a 15 to 20% correction--and maybe much more if financial distress in Europe or elsewhere develops. There are many financial distress hotspots that could emerge: Japan, China, Belgium, Spain, Italy. Such distress may come from a surprising place while everyone is looking in a different direction.

But a Stock Market Dip Should Probably Be Bought

Ironically Romney might mean "austerity" to the market, but Obama means a likely fiscal cliff "crisis,"  But I doubt if there will be real austerity in the US; where govt spending actually declines. There hasn't been real government spending cuts since the end of the Korean War. It's also a reasonable bet that Congress will kick the "fiscal cliff" down the road. Romney might also mean an attack on Iran by Israel--which is a big negative.

At 10% down, buy a tranche of the market. If it goes down 20% buy your second tranche. Something like that.

The October surprise for this election season may be a lousy and declining stock market.

Palestinians-100+ Years Of Hatred

The Palestinians are a "made up" people. There never really was a "Palestinian" identity for the Arabs living in the British Mandated Palestine region at the end of WWII nor was there was never any call for a "Palestinian" state at the time of Israel's creation in 1948. When the British left the region, the West Bank was absorbed by Jordan and Gaza was absorbed into Egypt. Even the name "Palestinians" was first used only after the 1968 Arab-Israeli war. And their claim to "ownership" of the land now part of Israel is a fiction used subsequently to promote the destruction of Israel by Israel's enemies.

A Century of Palestinian Rejectionism

There is a long history of Jew hatred and self-inflicted misery by the people in the area formerly known as Palestine. The current Palestinian movement, founded in the 1920s, has a sordid history including an alliance with Hitler and European fascism. In a recent book review of Sol Stern's book A Century of Palestinian Rejectionism in Real Clear Politics website, Siegel writes:

At the center of his account is the neglected and little known -- yet central -- figure of the Arab-Israeli conflict, Haj Amin al-Husseini. As the grand mufti of Jerusalem, he was the leader of the Palestinian movement from its inception in the 1920s in the wake of the British Balfour Declaration, into the 1950s, after which he was succeeded by his nephew Yasser Arafat......

Like Arafat and Abbas after him, time and again the mufti rejected any compromise. Driven by a sense of Islamic entitlement and Arab resentment of the West, insensible to the economic growth made possible by the relative prosperity of the Jews, the mufti urged his followers to embrace implacable hatred.

Siegel writes about the book:

In the Arab revolt of the late 1930s, Islamist crowds stormed through the streets of Jerusalem’s Jewish Quarter shouting slogans such as “Muhammad’s religion was born with the sword.” The mob killed, looted and burned. Two years of low-level war left the Jews stronger than ever and the local Arab economy in ruins, a scene that has recurred time and again. But the mufti saw hope for his cause in Hitler’s war against the allies and the Jews.

The Mufti of Jerusalem joined the Nazi's in Berlin during World War II and that by 1948, the British left the region and the state of Israel was founded, the

Arab Muslims living in that region were joined by Nazis, Polish reactionaries, Yugoslav Chetniks, and Bosnian Muslims flocked [into Palestine] for the war against the Jews to exterminate them. In the wake of the 1948 war, the West Bank now claimed by the Palestinians became part of Jordan and Egypt took Gaza. But there was no thought in Egypt or Jordan or the larger Arab-Islamic world of creating a Palestinian state.

So, the "Palestinian issue" is just a canard for a long history of hatred by Muslims and radicals who gathered in the region to fight and kill Jews before and after WWII. There is no change as of today.  Hatred rules. Compromise is an anathema.

Palestinians are bound by official agreements to negotiate directly with Israel and that they have twice in the last decade refused the very state they’re now asking for from the U.N.  In 2000 and 2008, Israel agreed to the creation of a Palestinian state with virtually all of the territory it had before the 1967 war. Unfortunately, Palestinian leaders have never been, and are not now, prepared to permanently give up the claim to all of the land first laid out by their Islamist leaders in the 1920s.

Any opportunity to make peace with Israel, in recent history, has ended in failure with Palestinian intransigence. They simply can't tolerate peace!

Forget the political correctness, Islam itself needs a radical reform. Otherwise, there will be wars fought against evil people who wrap themselves in the name of Islam. Unfortunately, there is little chance of reform or self-reflection.

We all reap the harvest of what we sow. Mature people accept that they themselves are responsible for their happiness or unhappiness. This applies to entire peoples.  Instead, Palestinians always blame Jews for their problems. On any fine morning the Palestinians could have decided (especially before walls were built) to give up their hatred and work with Israeli people and benefit from the only democratic and prosperous economy in the region. Yes, I said it, just give up! But instead, they are behind walls in a living hell, and ruled by thugs,

The "Palestinians" would starve except for International aid. This aid or "welfare" allows them to cling to their flawed and ruinous beliefs and hatred.--still blaming others for their suffering.  As it turns out, this misery extends back 100 and maybe 1000 years.

Obama Doing Putin's Bidding In Washington?

Why is Obama continuing to do Putin's bidding in Washington?  Obama has cozied up with Putin during his administration in his Russian "reset."  He has taken Putin's side in US legislation (Magnitsky Law) and has thrown asunder long-time trusted alliances in favor of warmer relations with our enemies since his inauguration.    I'm sure that much of this will come up for discussion in the final Foreign Policy debate on Monday.

We've heard of the off-mic comment captured where Obama, presuming that he will be re-elected, will have more "flexibility" with Russia with regard to negotiations on our nuclear arsenal.  It has made everyone wonder where Obama's allegiances lie.   But that's just the latest of a series of major foreign policy missteps by this administration that give one pause.

The Polish and Czech Missile Defense Debacle
You would have thought that Obama had learned his lesson in dealing with Putin in the aftermath of his sudden and unilateral cancellation of missile shields for Poland and the Czech Republic in September 2009, negotiated between those governments and the Bush administration.   Although the missiles are publicly "sold" as defense against an Iranian attack, they would presumably be a defense against Russia attack.  Why else would Russia object to them so strongly given they were strictly defensive?

So, apparently without regard for the facts, Obama cancels them.  He gave some flimsy excuse that Iran didn't have missiles to reach that far. This was untrue as Iran's solid-fuel Sejil missile launched in May 2009 could have reached Warsaw carrying a large payload.  And of course Iran continues to develop nuclear warheads to put on those missiles.  .

Presumably Obama expected Putin's acquiescence of stronger UN sanctions against Iran in return.  It didn't happen.  In fact, within just a few days, the Russians said that they would block any further sanctions against Iran at the UN.   So, we threw our staunchest allies "under the bus" for nothing.  Russia hated those missiles and, at a minimum, the US should have been able to use those missiles as a bargaining chip exacting some real concessions from Russia.  We didn't. They didn't.  

These aren't just great friends and our strongest allies, but they are NATO members!  Doesn't that mean anything to this President?   Those governments took substantial political risks in agreeing to these defenses.  In hindsight, given that Putin has continued to flex his muscles with neighbors since,  it was even more important to consolidate those allies into the NATO community.  The Wall Street Journal noted dryly,

Officials in Warsaw surely noticed that President Obama cancelled the missile system 70 years to the day that the Soviet Union invaded Poland as part of the Molotov-Ribbentrop Pact with Nazi Germany.

Obama Lobbies Against Magnitsky Human Rights Law
Fast forward to 2012, where a US Senate panel passes the Magnitsky Human Rights Law on June 26, 2012, sponsored by John McCain to honor the Russian lawyer, thrown into jail on trumped up charges and probably beaten to death.  Mr. Magnitsky was working to expose the vast corruption in Russia extending all the way to Putin and Medvedev.  Here's an extremely interesting account of the Magnitsky and events.

The Magnitsky Law is a bipartisan bill that seeks to publicly punish Russia's murderous and corrupt elite who murder opponents with impunity.  The bill specifically mentions and bans visas for 60 Russians implicated in Magnitsky's murder.   Obama has lobbied strongly against the law's passage--on Putin's side!   The law is stalled.  Mitt Romney has said that he demands passage of the bill.  

From the World Affairs Journal, the following quote is from an article discussing the extreme corruption in the Kremlin (and China) with an interesting observation about Obama's stance on the bill noting that Obama was against the bill, essentially on Putin's side, despite Russia's state-sponsored murders of journalists, whistle-blowers like Mr. Magnitsky, and political opponents both within and outside of Russia.

....Corruption paralyzes the Kremlin. The political system cannot be opened up without exposing the criminal networks that have infected every part of the bureaucracy, siphoning off billions of dollars in what should be public revenues....

A forward-looking US policy would aim at putting pressure on these obstacles to change. A good model is the bipartisan Magnitsky Bill, which has been moving through the US Congress this year. It mandates visa revocations and an asset freeze for Russian officials who are guilty of killing or persecuting people fighting corruption or abuses of human rights. It is named for Sergei Magnitsky, a lawyer who uncovered a $230 million embezzlement scheme by tax and Interior Ministry officials and then was imprisoned by those same officials and subjected to mistreatment that caused his death in 2009.

Tellingly, the prospect of such sanctions has shaken Moscow to its core. Putin issued a directive in May that listed stopping the bill as a top priority in relations with the United States. Equally remarkable, the Obama administration chose to take Putin’s side, and lobbied heavily on Capitol Hill to block the legislation.

We need someone in the White House to stand up to Putin and call things by their right name.  

Who's side is Obama on?  Mitt Romney is clearly for the law and basically calls Putin by his correct names: a murderer and a thug.

Expect A Lousy Stock Market This Decade

A new Federal Reserve study predicts that investors are in for a bear market in stock market valuations lasting another decade or more in part due to aging of the US population.  Notice I say a bear market in valuations.

The market is currently back to levels first seen in 1999, meaning that we've already been in a flat to declining market for 13 years now.   Even though the market is flat, the Price-to-Earnings (PE) ratio of the S&P 500 has come down by about 50% from it's peak valuation in 1999.  Note also that duration shown for average bear markets is about 18 years.   So, five more years of bear market can be expected as implied from history.

Have a look at the following graph from Sitka Capital Management showing the market's declining PEs and projecting a further PE decline if it were an average bear market.   We may see another 20% PE decline. With a lot of volatility, the market price will probably remain flat (the P in PE) to down in the years ahead.

Figure 6 Bear Market Valuation Contractions-Past and Present (http://www.sitkapacific.com/files/Sitka_Pacific_Capital_Management_June_2012_Client_Letter.pdf)

Demographics Are Now Very Unfavorable For America
Harry Dent, the famous Harvard-trained demographer, predicted in the early 1990s that, on or around 2012,  the aging of the baby boomers will cause the US economy to stagnate.  That remains his seminal forecasting achievement.

His research shows that, on average, people's personal spending peaks at about the age of 46 to 50 years old and declines thereafter.  It makes sense to me (I'm 55 years old).  After all, after the late 40s, children generally have graduated from school, have left the 'nest' and couples are starting to save in earnest for retirement---even downsizing their lifestyle and housing.   Demand for housing, furnishings, gasoline, retail items and many other things do indeed decline as you get older.

The peak of baby boomer population bulge has now passed this 46 to 50 age bracket as of 2011.  And sure enough the economy remains in the proverbial "crapper."   No one seems to understand why the recovery remains stalled even with $1+ Trillion dollar government deficit spending, zero interest rates and easy money ad infitum.  Harry Dent would reply that it's demographics (as well as the post-bubble debt overhang).

He's also long concluded that the stock market could easily fall 50% due to poor economic and profit conditions in a bear market caused by poor demographics.   Well, we already had our 50% decline in 2009! But it's recovered since.

The Federal Reserve Study Shows That Stock Market PEs Will Stay Depressed

The Sitka Capital report is not the only study predicting that the market valuation is heading lower.  None other than the Federal Reserve Bank of San Francisco agrees.

The Federal Reserve Bank of San Francisco has also published research that shows that the Stock Market will likely remain in a slump for years, even decades ahead.   They have shown that the ratio of older people (aged 60 to 69 years old) to middle (aged 40 to 49 old) people, called the M/O ratio,  is directly correlated to stock market Price-to-Earning ratios (PEs).  They figure that it explains about 60% of the movement of stock prices.  It's another way of saying that this study agrees with Harry Dent's demographic explanation.
See Figure 3 and 4 below.

Figure 3 Stock Market PE versus M/O  Shows the correlation between Stock Market PE and a ratio of middle aged population to older aged population (M/O).   

Figure 4 Projected Stock Market Price to Earnings (PE) Ratio.  Based on Projected M/O from demographics, it is possible to project Stock Market PEs based on correlations established in Figure 4.

According to their projections, you can expect the market's PE to decline and market prices to remain depressed through the current decade until 2017 or longer.  The good news:  Figure 1 and Figure 4 show the majority of the PE decline is over.   If the PE of the market declines further, this may mean that stock market prices may remain steady as earnings go up.    It also may mean that stock prices decline significantly.

Obama's Disastrous Drilling Ban

The Federal Government's ham-handed intervention into the offshore drilling business during 2010 has harmed the industry and offshore oil and gas production ever since. Drilling permits have remained stalled and oil/gas production on Federal lands has lagged the gains seen on private lands.  All this at a time of rising oil and gasoline prices.  Gulf of Mexico oil production during May, 2010 (Obama bans drilling in Gulf on May 2, 2010) is 47 million barrels. Gulf of Mexico oil production for July 2012 (latest month avail.) is 37 million barrels.

There is never an admission of responsibility or apology from this administration.  The pattern is that, everything gets fouled up with ham-handed regulation or outright malfeasance, then the cover-up and excuses continue until inconvenient events like re-election debates bring the issue back into the open.

Obama Shuts Down Drilling In The Gulf of Mexico
After the BP subsea well blowout in the Gulf of Mexico on April 20, 2010, the Obama administration banned all drilling in the Gulf of Mexico on May 2, 2010.  Rather than work with industry, the emotional overreaction has caused harm to the industry and loss of employment ever since.  The administration quietly lifted the ban on shallow water drilling a month later but permitting for all types of wells never recovered. This has lead to a 40% drop in drilling permits on Federal waters compared to the years prior to the BP drilling accident.

The initial ban was vastly too broad since there's a world of difference between the drilling of deep water wells (with subsea blowout preventers like the BP well) and the shallow water wells.  The shallow water drilling should never have been included. Drilling on fixed or mobile platforms and in shallow water is routine, safe and environmentally sound.  There's a also much higher number of shallow water wells being drilled than subsea wells, so the impact on ongoing oil and gas production has been great.

But even shutting down drilling for one day, week or a month is damaging to the industry--when those subjected to the ban don't have any idea how long the ban will be in effect.  Drilling rigs are very expensive and under day-rate contracts.  Even one day shutdown is serious to these operators.

An injunction against the overly broad drilling ban was issued by a Federal judge on June 22.  The Obama administration vowed to appeal.  Then a month later the Obama administration issued a new moratorium in July effectively the same as the old one to play "games" with the Federal judge.  It was rescinded in October 2010 before it too could be reviewed by the US Federal District judge.  

Obama Continues to Claim Everything's OK
On July 2 2010, Republican Representative from Louisiana, Bill Cassidy, said to Human Events,

It’s been over a month since President Obama claimed there’s no moratorium on shallow-water drilling. In the wake of the Deepwater Horizon explosion, all drilling in the Gulf was halted. The President announced that shallow-water drilling would resume but that companies would be required to re-permit under new safety guidelines.

But no shallow-water drilling permits—with the exception of two which were quickly rescinded — have been granted since the drilling moratorium was first announced on May 6th.

“We’re told by the government that the de-facto moratorium doesn’t exist,” Cassidy said.“By industry, by workers, we’re told that it does.”

Despite denials by Factcheck.org (they themselves had better get their facts straight) claimed that there are only permit delays, Louisiana Senator Vitter said on July 11

Louisiana is still suffering from the job-crushing moratorium put in place after the BP oil spill. The Obama administration shut down the entire offshore oil and gas industry and thousands of jobs were lost because of it. Many Louisianians, including myself, pleaded for answers to why this happened, but we could never get a clear one.

There was in fact a de facto drilling ban as the permit process had ground to a halt.  Over and over again, the Obama administration's words do not match their actions.  This has been the norm in the Obama Administration.   How much of this lying does it take for people to get wise to this?  Sometimes, as in this case, it shows the "ham-handed" incompetence of your Federal government and the subsequent lies designed to deflect criticism and cover-up incompetence.  You see the same pattern with regard to the US Embassy attack in Libya and the subsequent cover-up and lies about the causes of the death of the US Ambassador there.

Now, fast forward to February 2011 and permits have been stalled now for 9 months.  From Bloomberg News,

The Offshore Marine Service Association, a group representing offshore service vessels and shipyards, urged the president to end what it called an informal moratorium on offshore drilling.

“President Obama claims to have lifted the Gulf moratorium, yet not a single deepwater permit has been issued in nine months,” Jim Adams, the association’s president, said in a release after the ruling. “As a result, thousands of workers are out of jobs, Americans are paying more for gasoline and heating oil, and our nation is becoming even more dependent on unstable nations for our energy needs.”

The Obama Administration In Contempt Of The Federal District Court
The judge, Martin Feldman, said in February 2011, that the Obama administration and Interior Department have continued to act in contempt of his order.  From Bloomberg,

Interior Department regulators acted with “determined disregard” by lifting and reinstituting a series of policy changes that restricted offshore drilling, following the worst offshore oil spill in U.S. history, U.S. District Judge, Martin Feldman of New Orleans ruled yesterday.

“Each step the government took following the court’s imposition of a preliminary injunction showcases its defiance,” Feldman said in the ruling.

“Such dismissive conduct, viewed in tandem with the re-imposition of a second blanket and substantively identical moratorium, and in light of the national importance of this case, provide this court with clear and convincing evidence of the government’s contempt,” Feldman said. 

Obama Tries to Claim 'Credit' for Increased US Oil and Gas Production

Fast forward to Oct 2012, we have an election debate where Obama tried to take credit for overall increased oil and gas production in our country.  Gee, if I didn't know better, he sounded like he was a member of the Tea Party!  In response, Romney correctly called-out the president by pointing out that oil and gas production dropped in Federal land (offshore) during the Obama Administration but rose smartly on private land.  So the president "lied" and got caught for once, but not from the Media!

This is news to people because the media has failed in their jobs.  If it wasn't for Romney and the debate, the President would have continued to get away with presenting himself, erroneously, as somehow responsible for generally higher oil and gas production-which is not true in any sense. He didn't build that!  He just wants to falsely claim credit for one of the few success stories in the country. Obama made similarly claims in earlier State's of the Union addresses as well.  Where were the fact checkers then??

An "All Of The Above" Energy Policy?  Really?
Many times, Obama has given "lip service" in favor of an "all of above" energy policy: that he is somehow in favor of oil and gas production in combination with all other sources of energy. But he's been AGAINST an "all of the above"energy strategy and has actively worked against oil and gas production and exploration by his deeds.  Permitting on Federal land is down about 40%.

Obama said in March 2012 during his endless campaign "I don't control oil prices."  He also said that "you just can't drill your way out of high oil prices."  Oh really?  Ask the people in North Dakota as their oil production is rocketing skywards.

War On Coal and Electric Utilities
Not only is he against oil and gas, his administration is in an open war on the coal industry and against electric power utility companies that burn coal for power production. What important energy source is NOT under attack by this administration?  Obama talks about upgrading the nation's power grid. But who owns the power grid?  It's the very utility companies that he's attacking.  The incoherence in this administration is staggering.

Pro-growth Policies Are The Only Way Out

To get the US out of the economic and fiscal mess that we're in requires a comprehensive approach that involves a number of "moving parts". It will also be a delicate balance requiring some finesse as the economy is fragile--such is the peril a nation faces when "addicted" to debt and extreme deficit spending.  

Growth is the real goal as it's the only thing that will get us out of our mess.  Lack of growth and collapsed tax revenue is a big part of our problem right now. Business investment and hiring are depressed due to weak demand and uncertainty due to the unusual monetary policy experiments, threats of taxes, further regulation that continues to 'evolve' such as ObamaCare and DoddFrank, and a poor demographic backdrop.

But growth will not fix the budget deficit. There will have to be spending cuts and some revenue enhancements.

European-style Taxation Will Not Work
First of all, tax increases at this time, even if there were any appetite for them, will likely prove to be counter-productive. With a weak economy, there is a real risk that increased income taxes now will REDUCE revenues as growth will be stunted.  Europe is trying this now--using nearly all tax increases and very few spending cuts to try to reduce deficits--and the result is disappointing revenues leading for calls for even more taxes.  It just doesn't work in our current weak environment. It's what France is trying to do and failing.  This is also Schumer's and Obama's approach.  It won't work in a weak economy.  It would work in a stronger economy I admit.

A Comprehensive Plan--Many Parts To Make a Whole
I think the following is Romney's plan consisting of:

1. marginal tax rate reductions across the board with reduced deductions and tax credits to try to be somewhat revenue neutral on the upper class but tax cuts on the middle class. There's got to be some kick-start from tax reductions.  We need to limit tax deductions and credits across the board.
2. federal spending must begin to be cut; but taxes need to be reduced  (expansionary) more than spending cuts (contractionary).  The most wasteful tax credits must be eliminated or limited.  
3. Reduced marginal tax rates for small businesses (Subchapter S businesses) also matters even when revenue is neutral as some people/businesses are paying rates on the marginal rate.  This with the other reforms below improve the hiring situation for these entities.
4. entitlement reform that affects entitlement cost projections out in the future and eliminates some uncertainty, 
5. Romney's plan is also to NOT let taxes rise in the fiscal cliff in addition to the supply-side tax cuts as above.

Pro-Business, Pro-Growth Agenda
A pro-business agenda from a real businessman is also required:

1. less regulatory attack from government agencies especially EPA,  
2. reducing counter-productive government interference in the economy by revising or reversing ObamaCare and DoddFrank to fix known flaws,
3. corporate tax reform (lower marginal corporate rates) to help repatriate jobs and business back from Asia, less threats (and more clarity about further tax increases) from the White House.  
4. More jobs in energy should help. Just look at what's happened in North Dakota and Texas.  
5. I would add that we need to make reforms that focus on reducing costs in medical care now---medical costs are hurting families now.

Lower marginal corporate rates for business should help repatriate jobs and capital from Asia and elsewhere.  Romney wants improvements in the trade picture, and repatriating jobs by reducing corporate tax rates and Presidential "cheerleading" will be key.

Why not limit total deductions and credits? Why are we giving away tax credits to buy luxury electric sports cars from Tesla costing $100,000? or for $100,000 Fisker cars made in Finland? It's a subsidy for wealthy people. The mortgage interest rate deduction is essentially a subsidy to the wealthiest individuals as well.  Means-testing of Social Security and Medicare now also makes sense.  Just do it!

There's so much in play, that there needs to be one grand plan that will have to be formulated, negotiated, and compromised so that it passes.  The comprehensive plan will have to be bi-partisan.  It might need to be Simpson Bowles plan itself.

But tax reform won't work unless there's some tax reductions now. It always leads to more revenue later.  This is proven.  There can be no doubt now about the efficacy of tax cuts!  It's the only way to stimulate now.

That's my take on our difficult dilemma.

Sept 2012 Jobs Report: Even More Doubtful

A few days ago, in my Blog entitled The Unexpected Drop in Headline Unemployment, along with other people, I commented how the headline employment drop from 8.1% to 7.8% was very strange given everything we know about the economy this year.  Most economic commentators were in fact expecting the September unemployment rate to tick-up to 8.2% not drop to 7.8%! 

Now I wish that I had titled that blog, "The Unbelievable Drop in Headline Unemployment!" This because, thanks to the excellent TrimTabs website, the data behind the September 2012 unemployment headline number is even more unbelievable and extremely suspicious. Let me show you why.

The unemployment rate is the calculated by the dividing the number of unemployed by the sum of the employed PLUS the unemployed all converted to a percentage. So for the unemployment rate to drop, the number of unemployed must drop and/or the total number of employed (full and part-time) must rise--either will reduce the unemployment rate.  All this year, the unemployment rate has been drifting down because people are leaving the workforce and therefore are no longer counted as unemployed.

Figure 1 shows that the non-seasonally adjusted number of unemployed (the raw data) dropped by almost 1 million which is about double of any other September number since 1948!    

Figure 2 shows the number of employed for every September from 1948.   You can see from the data all the way back to 1948, that September is not a good month for employment except this month---when employment surges----right near a pivotal election!!  You'd have to be a fool not to see this as suspicious.

Figure 3 shows that part-time workers suddenly and unexpected surged this September for the second time in about 50 years!

Figure 1 Number of Unemployed:   Shows that the non-seasonally adjust number of unemployed (the raw data) dropped by almost 1 million which is about double of any other September number since 1948!

Figure 2 Number of Employed:  The number of employed surges at the highest September rate in 60 years making the unemployment figure go down.

Figure 3 Number of Part-time Workers (considered employed)  The number of part-time workers suddenly and unexpected surged this September for the second time in about 50 years!  Since part-time workers add to full-time workers, an increase in worker reduces the unemployment rate.

All in all, the BLS, has given what amounts to be the surprise of a half-century!   Is it data manipulation in time to re-elect the incumbent?   All this record improvement when everyone knows the economy is still sick and slow-growing!

It looks extremely fishy to me.  How does it look to you?

The Media's 'Sacred' Role In Democracy

“A democracy ceases to be a democracy if its citizens do not participate in its governance. To participate intelligently, they must know what their government has done, is doing and plans to do in their name. Whenever any hindrance, no matter what its name, is placed in the way of this information, a democracy is weakened, and its future endangered. This is the meaning of freedom of press. It is not just important to democracy, it is democracy.”
Walter Cronkite

The Media or "Free Press" should be skeptical, vigorous, free, independent, un-biased and investigative in their role. Not only do we need an "informed electorate" but "informed" applies doubly to the Media itself--as they are in a position to influence a large number of people on powerful media such as television. So add well-educated and competent to their important and necessary qualities.

Sadly I don't think we have so much of this now. There is no shortage of vigor in the media, but often it's vigor based in emotional and partisan reactions rather than dispassionate and logical reporting.

Everyone knows now that the Media has been generally biased against the Republicans (even back in 1979 election season) and often slavishly subservient to the current President and Democrats. It is acutely obvious in this election season.  When I say that "everyone knows," it's an observation that some media outlets such as the New York Times and MSNBC have even dropped all pretense of even trying to be politically neutral.

The Recent September Jobs Report Brouhaha 
The skeptical reaction of certain opinion leaders to the 2012 September job report, that it might have been manipulated to influence the election, then the emotional reaction by the Media is telling in a number of ways, as I reported several days ago.

Regarding the Jobs Report, whose headline unemployment number was a boost to the Obama campaign:

• There were some real "red flags" in the report that justified the suspicion, but rather than rational investigation of the BLS's methodology and reports on it, there were just barrages of opinions and hearsay in The Media to try to discredit their fellow citizens. Where was the vigorous investigation of the facts? Their response was strictly along the line of "how can you question the integrity of vast and wonderful government bureaucracy at the BLS?"   How many of those same people believe the government's inflation numbers??  Huh? 
• Second, it was the public that was skeptical, NOT the Media.   In fact, the Media, once again, showed it's true colors by attacking their fellow citizens who had the temerity to question the government. Maybe comfortable members of our media should go to Russia to report on events there to get a renewed appreciation of their important role?

Educated and Competent
There doesn't even appear to be sufficient intellectual capacity and integrity in The Media to handle complex issues of our day.  It's also clear that a journalism degree is simply not enough to become a Media teleprompter reader or writer. Maybe we need something other than just Journalism degrees in that business?  They need some serious intellectual diversity including experts in history, economics, and scientists.

Free and Independent
A Free and Independent press is not a 'mouthpeice' for either political side. But the Media today clearly supports Obama and Democrats against the Republicans and are continually guilty of  "fawning" over Obama--even when the weight of evidence (often suppressed) that this is the worst administration in since Carter.  During this election season, the media has tried to create a narrative against Romney in their reporting and create an impression of an inevitable election win by Obama by clever massaging of polling information. Funny thing though, the public awakened from this haze upon viewing this recent presidential debate to see both candidates "unfiltered" by media bias. And what a revelation that has been!

On Air Bias
Not a scientific study but I have often tuned into CNN and counted the racial makeup of "presenters" and "guests."  Very often, there is an over-representation of African Americans and Latino Americans on air. I'm referring mostly to MSNBC and CNN coverage.  A good example is where there is a panel of three, there is usually at least one African American.  Since African Americans are only 16% of the population, one-in-three is 33% and is therefore an over-representation. I've seen this so many times!  Since Polls indicate that 93 percent of African Americans are committed Democrats and slavishly support Obama, naturally a bias is introduced.  This biased is additive to the existing bias of the other "journalists" (if you can call them that).

The disastrous Obama administration continues----enabled by a non-independent, not-vigorous, and not-skeptical media.

"Big Bird" Richer Than Romney

Now, there's a silly jokes in the liberal media about Romney "killing" Big Bird.  As you recall, Romney mentioned in his first debate that the Government's $450 million per year subsidy to Corporation for Public Broadcasting is on his hit list.

It turns out that Sesame Street hardly needs any help anyway.   From John Nolte at Breitbart,

According to Senator Jim DeMint, shows like Sesame Street are multi-million dollar enterprises capable of thriving in the private market. According to the 990 tax form all nonprofits are required to file, Sesame Workshop President and CEO Gary Knell received $956,513 -- nearly a million dollars -- in compensation in 2008. And, from 2003 to 2006, "Sesame Street" made more than $211 million from toy and consumer product sales.

If you break that down, it works out to over $50 million a year "Sesame Street" is taking in from all that merchandising.

Yep, that one-percenter Big Bird makes about four times what Mitt Romney does annually and yet Barack Obama still wants you and I to still carry his freight

PBS and CPR Cuts are "Low Hanging Fruit" For Cuts
If you can't cut or reduce the proposed $450 million budget for the Corp. for Public Broadcasting, then you'll never be able to cut anything. We don't have the money! That million dollar salary for the CEO sounds too generous for a non-profit organization. It's a cheap shot, but PBS news tends to support Liberal politics not unlike most other networks.

A Billion Here And A Billion There.  Soon you're talking about real money!

$450 million is not a trivial expense. As a comparison, I believe that $450 million is what Obama is looking to give to the Muslim Brotherhood in Egypt. I question that spending too now they are reviving the lovely Sharia practice of crucifying and beheading people and terrorizing Coptic Christians. Why would we be supporting them?  We need to think already about regime change once again, now that we threw Mubarak "under the bus."  We don't look too smart now. But I digress.  We're also looking to give $2.2 billion to Pakistan too. In return for what exactly? But my main point is that we don't have the money plain and simple for any of this.  We have to "get real."  Reality is a harsh place I know.

The $450 million CPR subsidy should be cut or reduced and the same for subsidies to the terrorists in Egypt and Pakistan. There, that totals nearly $3 Billion in cuts. That leaves "only" $1,197,000,000,000 left to cut just to balance the budget!

We'll never get there!  It's never going to happen, especially if we can't even "get real" about even the CPR and PBS.

A Telling Incident At Bloomberg Website

Jack Welch expressed a knee-jerk skepticism of the Sept 2012 unemployment number in Twitter. The Left Wing media went after him right away calling him desperate and ignorant.  Bloomberg ran an article in it's online opinion section called "Jack Welch Doesn't Know What He's Tweeting About" by Deborah Solomon. It was a "hit piece" countering Jack Welch's opinion with just more opinions (not hard facts).

It was at the top spot for popular articles too.

I responded once to the article noting that Jack was an accomplished titan of industry and had earned his right to his opinion compared to "dime-a-dozen" journalists.   I got a couple of flippant and derogatory replies from a couple of readers.

I replied to these replies with the fact that Deborah Solomon's career was as an Art Critic!  I found out that she has an undergraduate degree in Art and a Masters in Journalism.   Her journalism career is nearly all in art criticism.  I found the irony delicious.   Here she was contradicting a distinguished titan of industry saying "he doesn't know what he's talking about" when her credentials are in art criticism!  Who doesn't know what they are talking about??

My observation and reply comment was "moderated" away and they didn't post it!   I again replied that, if not posted, that I would write the Bloomberg Editorial board.  But guess what? Deborah Solomon, the art critic, is on the Editorial Board!

Nobody will ever know that they were misled by a particularly unqualified writer.  A telling incident indeed!  Be skeptical my friends!  Stay skeptical!

The Unexpected Drop In Headline Unemployment Rate

Lies, Damned Lies and Statistics!
The September employment report was, for the most part, more evidence of the recovery is anemic. The surprise was the "Household Survey" showed the unemployment rate suddenly dropped from 8.1% to 7.8%. This number, of course, dominates the headlines. Needless to say there was (and should be) widespread skepticism. The Left calls the Right "nutty" for questioning such a fine bunch of professionals at the BLS.

I say, you'd be nutty not to be skeptical!  It's particularly disturbing when The Media is not skeptical. A vigorous, skeptical and investigative media is a vital part of our democratic freedom!  We don't have that now. The Media is not skeptical enough of Obama and not skeptical enough of it's own government.  But that's another blog.

The Data
The Household survey reported that 873,000 jobs were created including an unusual number of 600,000 part-time workers and a surprise increase of government employment of 187,000.  The government sector has been has been flat or losing jobs for years now as The States have been trimming employment.

The last time 873,000 jobs were created (forget that most were part-time; hamburger flippers?) was in 1983 when the economy was growing at 9.3%!  So, the Household survey suddenly has the strongest report in 29 years at a time when there is broad consensus that the economy is growing at about 1.5%?  That's a red flag.

If that's not enough, there were other red flags.

• The "Establishment" survey only reported 114,000 new jobs.  
• The broader measure of unemployment, the U-6 unemployment rate, which is supposed to include people working part-time but want to work full-time, didn't change from last month and stands at 14.7%.  If the majority of new jobs were part-time, they should have caused a drop in the U-6 rate as well.  
• The increase in government jobs is suspicious too.  

Yes, the Household survey is notoriously volatile, so we'll see how this evolves. But don't call me a "nut case" for having suspicions. I should be thanked for questioning and investigating this matter, not vilified!

A Telling Incident At Bloomberg Website
Jack Welch expressed a knee-jerk skepticism of the unemployment number in Twitter.  The Left Wing went after him right away calling him desperate and ignorant.  Bloomberg ran an article in it's opinion section called "Jack Welch Doesn't Know What He's Tweeting About" by Deborah Solomon. It was a "hit piece" countering Jack Welch's opinion with just more opinions (not hard facts).  It was at the top spot for popular articles too.

I responded once to the article noting that Jack was an accomplished titan of industry and had earned his right to his opinion compared to "dime-a-dozen" journalists.   I got a couple of flippant and derogatory replies from a couple of readers.

I replied to these replies with the fact that Deborah Solomon's career was as an Art Critic!   I found out that she has an undergraduate degree in Art and a Masters in Journalism.   Her journalism career is nearly all in art criticism.  I found the irony in this delicious.   Here she was contradicting a distinguished titan of industry saying "he doesn't know what he's talking about" when her credentials are in art criticism!  Who doesn't know what they are talking about??

My observation and reply comment was "moderated" away and they didn't post it!