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Richard Pollock

Richard Pollock is the Washington, D.C., editor for PJ Media and the Washington bureau chief of PJTV.
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Steve Jobs May Have Changed the World But Not the Federal Government, Which Resists iPhones

Thursday, October 6th, 2011 - by Richard Pollock

As we remember Apple creator Steve Jobs, it is interesting to note that his legacy did not extend to innovation within the antiquated federal government. He may have changed the world, but not Washington.

Today the vast majority of government departments and agencies have firmly resisted Apple iPhones and Android smart phones. The wondrous, innovative Jobs could not penetrate the static and slow-to-change federal bureaucracy.

The federal government still is dominated by the use of the Canadian manufactured Blackberry, made by RIM.

Only this year, in an experimental program dubbed Federal Government 2.0 have a small number of government agencies entered the 21st century and tentatively moved to smartphones.

The federal workforce has been rebelling, even if it means using underground, “unsanctioned” smart devices

The 2.0 move to smart phones is going at a snail’s pace.  Only 50 iPhones and iPads are being used at the Bureau of Alcohol, Tobacco & Firearms.  There are about 5,000 ATF employees.

The State Department, which has been diplomatically slow on reacting to Libya and Syria, reports it is “testing” the use of iPhones and iPads.

The Department of Veteran Affairs is permitting some of its clinicians to voluntarily try out iPhones and iPads.

To get around the restrictions many federal employees carry two phones — a government issued Blackberry and an iPhone for personal use.  But this may cause security problems as many government workers see their secure and sometimes classified information bleed into the AT&T iPhone — and into the public domain.

As an innovator Steve Jobs may have changed the world. But unfortunately he had yet to make a real dent on our antiquated federal bureaucracy.

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Occupy DC Protestors Claim Many Rights if Confronted by Police

Wednesday, October 5th, 2011 - by Richard Pollock

The anti-capitalist OccupyDC street demonstrators in Washington aren’t just idealistic.  They are tough about their street rights.

Today at 15th & K St, NW in downtown Washington some organizers were handing out laminated cards from the Washington Legal Clinic for the Homeless to make sure activists know how to assert themselves when confronted by police or city authorities.

The organizers hope their liberties — tied to the rights of the homeless — can be used as they try to set up a tent city or a 24-hour presence at McPherson Square in downtown Washington, two blocks from the White House. A flyer handed out by “OccupyDC” urges citizens to “camp out overnight at McPherson Square” if they wish. The flyer says the occupation period will be “indefinite.”

Among the rights they say demonstrators should assert if confronted:

- “‘Vagrancy’ or loitering is not a crime — you can’t be stopped or arrested simply for being in a public space like a sidewalk pro park.  Police cannot force you to move from public property if you are doing nothing illegal.

- “You generally have there right to lie down or sleep in public (except on federal parkland) as long as you are not blocking the sidewalk.

- “If  you are approached or questioned by an MPD (Metropolitan Police Department) officer or are not told you are suspected of a crime, you do not have to answer any questions or give any information.

- “If the police ask or order you to move from a particular area, you do not have to move unless you are violating the law by being there.

- “If you are stopped by the police, always ask for the names and badge numbers of the officers and write this down immediately.”

Throughout the afternoon there were about ten to twenty protestors, waving signs on K Street.  They are mostly young students and a few jobless people. All insist they will be peaceful. A number of those present had just come from the Occupy Wall Street demonstration in New York. One boasted he had been arrested twice by New York City police.

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Occupy Wall Street Movement Hates Democrats and Obama

Wednesday, October 5th, 2011 - by Richard Pollock

The emergence of angry anti-capitalist street fighters from the Occupy Wall Street demonstrations may not be a godsend for either the Democratic Party or for President Obama.

Consider this post yesterday by David Swanson, a nationally known progressive blogger for the October 2011 march in Washington, D.C., which is to be held tomorrow. He argues there is little difference between Republicans and Barack Obama:

“Richard Nixon gave us the EPA.  Barack Obama is giving us a tar sands pipeline, lower air standards, and more nuclear power.  George W. Bush took the trouble to lie to Congress when starting wars. Barack Obama goes out of his way to not consult Congress at all.”

This is the emergence of the angry and hardened socialist underground that has operated from the shadows for decades.  They do not represent the fresh new kids who used to attend an MTV “Rock the Vote” rally. They actually represent a genuine political danger  for Barack Obama.

Swanson most vociferously objects to the incipient movement being hijacked by Democratic Party progressives as the new “anti-tea party.”  Calling the new establishment Democratic organizations “electoral political groups,” Swanson gives them a kick in the pants.

“As we watch electoral-political groups swoop in to join Occupy Wall Street, you’ll notice attempts to label this Occupation movement the anti-teaparty, followed in the next breath by attempts to define the duty of the anti-teaparty as electing Democrats.  No matter how well-meaning this may be, if you agree with me that what we desperately lack is non-electoral politics, then you have to see this “support” as an act of betrayal.”

He is particularly loathsome of Democrats who have taken Wall Street money like the president, saying they are the same as Republicans.  He writes “Well, you know, only Republicans do have money; some of them are just called Democrats.”

Swanson is not a marginal figure in the Occupy movement. He is a major voice for it. His progressive credentials are impressive.

For three years he was the communications coordinator for the now defunct ACORN and has been a chief advisor to Dennis Kucinich’s for his many Presidential forays. His pushes many sites, including WarIsACrime.org and ProsecuteBushCheney.org. His sites have been hailed by The Nation magazine.






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House Armed Services Committee asks Rep. Issa to investigate LightSquared-Obama scandal

Friday, September 23rd, 2011 - by Richard Pollock

Expect the brewing Obama administration LightSquared “pay to play” scandal to be front and center later this Fall.

Today, Congressman Mike Turner (R-OH), Chairman of the House Armed Services officially asked on the House Oversight and Government Reform Committee, chaired by Rep. Darrell Issa, to launch an investigation into the charge that the Obama administration put Democratic party politics ahead of national security.

Rep. Turner and five other lawmakers from the House Armed Services Subcommittee on Strategic Forces asked Issa (R-CA) to investigate the Obama administration’s fast tracking of a broadband wireless system supported by a big Democratic donor that could jeopardize national security.

Specifically, they asked the oversight committee to examine the roles played by the Chairman of the Federal Communications Commission, the White House, and LightSquared. The White House’s Office of Management and Budget, its science policy office and the FCC were involved in accelerating approval for LightSquared’s wireless program.  Air Force General William Shelton, the commander of the U.S. Space Command had objected to the program saying it would interfere with military’s Global Positioning System.

OMB tried to get Gen. Shelton to change his testimony and secretly passed onto LightSquared the general’s congressional testimony that was to be delivered before the Armed Services Committee.

Commercial telecom companies have complained that the LightSquared program would interfere with aviation, marine and consumer GPS systems too.

Earlier this year, the FCC issued an unusual waiver of its own long established rules even after the Deputy Secretary of Defense William Lynn warned the FCC Chairman LightSquared would interfere with national security.

LightSquared executives each gave the Democratic Party more than $30,000 in the hopes they could grease the skids on getting the fast track FCC approval.  The relationship between the wireless company and President Obama goes back to 2005 when then Senator Obama briefly invested $50,000 in LightSquared’s predecessor company. The President’s personnel director also invested a half a million dollars in the earlier wireless company.

LightSquared positioned itself to be the company to erect 400,000 wireless towers throughout the country to meet an ambitious Obama goal of providing broadband wireless to 98% of the American people.

Members of the House subcommittee said in a letter to Issa and ranking Democrat Rep. Elijah Cummings, “It is troubling to see reports of high dollar donors being given unusual consideration in the regulatory process, especially when the consequences entail what Air Force General William Shelton called ‘significant interference to military GPS.’”

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White House Releases Passive Statement on Iran’s Release of U.S. Hikers

Wednesday, September 21st, 2011 - by Richard Pollock

In welcoming the release of Shane Bauer and Joshua Fattal, two American hikers who have spent 26 months in an Iranian prison on bogus spying charges, the White House released the following statement in the name of President Obama:

“We are deeply grateful to His Majesty Sultan Qaboos bin Said of Oman, Iraqi President Jalal Talabani, the Swiss government, and to all our partners and allies around the world who have worked steadfastly over the past two years to secure the release of Shane and Josh.”

Notice anything missing?  There is no comment about the administration’s fight to seek the hiker’s release.

This final declaration has to be little comfort to other American families working to free their loved ones imprisoned in totalitarian societies.

One such family that has to be especially worried is that of Alan Gross, the American U.S. government worker charged with crimes against the Cuban state for distributing satellite telephone equipment to Jewish groups in Havana.

Gross’ family has fought their battles with Cuban authorities all alone with little aggressive Obama administration support.

Gross last month was sentenced to 15 years by Cuba’s highest court.

The White  House comment is passive — a pretty accurate reflection of the administration’s foreign policy with its adversaries.


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LightSquared Scandal: Solyndra, Plus Harm to the US Military’s Technological Advantages?

Friday, September 16th, 2011 - by Richard Pollock

Did the White House pressure a prominent Air Force four-star general to change his testimony about a wireless project that could cripple the Pentagon’s Global Positioning Satellite system, but enjoys ties to President Obama? General William Shelton says yes.

This charge, revealed Thursday by the U.S. House Armed Services Committee comes on the heels of the Solyndra solar scandal, in which the White House pressured the U.S. Department of Energy to provide a half billion dollar grant to a financially questionable solar energy company that ended in bankruptcy.

Like his promotion of solar and other green technologies, the president and his administration have vigorously pushed to extend broadband coverage, especially wireless broadband, to more than 200 million Americans.

The latest potential scandal relates to a satellite broadband company in Virginia called LightSquared. LightSquared’s majority owner is Philip Falcone, a billionaire investor who made his wealth shorting subprime debt.  He is worth $2.2 billion and has been close to the administration, including President Obama.

General William Shelton, the head of the U.S. Space Command, was prepared to tell Congress that LightSquared’s system could compromise military GPS operations. Gen. Shelton and his staff believed the project would interfere with the military’s sensitive Global Positioning Satellite capabilities, which control missile targeting.

But the Office of Management and Budget  pressured General Shelton to go easy on LightSquared despite its potentially harmful impact on the military.

The Virginia-based satellite and broadband communications company has plans to build a nationwide, next-generation, 4G phone network that many, including Shelton, think would seriously hinder the effectiveness of high-precision GPS receiver systems, a product used most commonly by the United States military.

A source familiar with the technology told Fox News that the LightSquared spectrum would be 5 billion times stronger than the military’s GPS system, rendering the military’s system almost useless.

“Imagine trying to have a telephone conversation while your neighbors are hosting a rock concert,” the source told Fox News. “That’s the situation the military is facing.”

Shelton, in testimony Thursday before a House Armed Services subcommittee, refused to suggest that interference problems could be mitigated, as he allegedly was being pressured to say.

Military training that relies on precision GPS, such as dropping ordnance, potentially could cease to exist in the United States. Many farmers who also rely on the systems would also be affected. It’s estimated this system is used by as many as 1 million people.

I have much more on LightSquared here.

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Letter from Kabul: Lessons of the Taliban Attack

Thursday, September 15th, 2011 - by Richard Pollock

My American source who has worked in the U.S. Government in Kabul has this to say about the lack of safety in the U.S. Embassy zone, a massive highly fortified compound. It is allegedly one of the most secure locations in all of Kabul:

“The lesson there is that no place, and I mean no place in Kabul issafe any longer.  Two RPGs landed onto three houses from the compound.  It is the very first time our staff had to retreat to the compound’s “safe” rooms. And, the fact that the bad guys stockpiled weapons in the building being constructed over several days shows that security at all levels failed. Then, the bad guys also took control of “Swimming Pool Hill,” just behind my house. That is also a very bad sign as that is s very strategic point.  The fact that those guys escaped from that high ground is also an indicator that “security” was complicit.

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Kabul Taliban Attack Terrorizes Institute for Peace Staff

Thursday, September 15th, 2011 - by Richard Pollock

Tuesday’s spectacular Taliban attack on the U.S. Embassy and NATO military headquarters in Kabul seems to have touched a nerve with the staff of the U.S. Institute for Peace who work in the Afghan capital.

The Institute for Peace is a $39 million federally funded government program that favors “conflict resolution” to the tactics of its military counterpart working across the Potomac River, the Pentagon.  The taxpayer-supported agency has been a darling of pacifists and peace groups across the nation.  Not surprisingly, the Institute was the brain child of the Carter administration.

With much regret no one can point to any reduction of war since the agency’s creation in 1984.

This shortcoming may have been on the mind of Hamid M. Khan, a a rule-of-law adviser in the Kabul at the Institute of Peace as Taliban suicide-bombers and heavily armed terrorists stormed the military center of NATO and the U.S. Embassy in Kabul on Tuesday. The Washington Post described Hamid’s less than peaceful experience:

Hamid “said he and his colleagues spent hours huddled in a safe room at their compound as blasts and gunshots thundered nearby at the site of the main attack.

“The entire staff is hunkered down,” he said, using BlackBerry Messenger to communicate. “We’re very tense and alarmed by how close the rocket attacks and gunshots keep coming.”

Like most unarmed people in Kabul that day, Hamid and his staff were understandably terrorized. They were saved by NATO, U.S and Afghan military forces carrying real guns, supported by American helicopter gunships.

The Tatler is wondering how, at that moment, they may have felt about the effectiveness of their conflict resolution strategies.

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It’s Deja Vu: Obama Delivers Stimulus Speech and Dems Lose Elections Again

Wednesday, September 14th, 2011 - by Richard Pollock

It’s  Ground Hog Day for the White House.  And the ramifications are being felt like Washington’s second earthquake in a month.

Last week the president unveiled a $450 billion jobs bill.  Last night in New York, the nation’s most reliable liberal congressional district rejected President Obama, voting for a Republican for the first time since 1923. Most disturbing for White House political advisers was that the loss occurred with Jewish voters abandoning the Democratic Party for an unknown Republican. Indeed, the president has a “Jewish problem.”

Another special election in Nevada last night also turned in favor of Republicans as Democratic strongholds did not come out in favor of the Democrat. Nevada will be a key “must win” state for the president.

And polls show Americans continue to express deep pessimism about the future.

Sound familiar?  It is a reprise of 2009, when Barack Obama, sagging in the polls, lost liberal New Jersey and Massachusetts to unknown Republican candidates.  At the time, the president did not “pivot” after the losses and he lost big in last November’s midterm elections.

One week after the president delivered a speech before a special session of Congress, the defeat has to count as another rebuke to the president’s performance.

This morning Politico reported that the mood among Democrats is morose: “On a high-level campaign conference call Tuesday afternoon, Democratic donors and strategists commiserated over their disappointment in Obama. A source on the call described the mood as ‘awful.’ ‘People feel betrayed, disappointed, furious, disgusted, hopeless.’”

Democrat Minority Whip Steny Hoyer conceded to Politico that the twin electoral losses last night would be regarded as a rejection of the president: “Do I think it will be interpreted as being a statement on Obama? That’s probably correct.”

Bloomberg this morning also reports on the darkening mood of the electorate: “Pessimism Surges as 72% See U.S. Economy on Wrong Course,” reports Mike Dorning. “Just 9 percent say they are confident the economy won’t slide back into recession, in a Bloomberg National Poll.”

But it was the huge upset in New York that was most remarkable. It was a 54-46 Republican landslide victory in New York’s 9th congressional district, which was vacated by uber-Democrat Rep. Anthony Weiner after his sex scandal. My colleague Jennifer Rubin this morning notes that this is a double dose of bad news for the president. New York-9 is not only the most reliably Democratic district in the nation — it is the most Jewish congressional district too.

This vote now proves Obama has a real “Jewish problem.” Republican Jewish Coalition Executive Director Matt Brooks said the vote was a warning to Obama stalwarts who refuse to see the writing on the wall. He said the bruising loss in New York contains “huge implications for 2012 races in states with large Jewish communities, such as Florida, Ohio and Pennsylvania.”

Still Democrats at the top still don’t seem to get it.  DNC Chair Debbie Wasserman Schultz told the New York Times there are no worries: “In this district, there is a large number of people who went to the polls tonight who didn’t support the president to begin with and don’t support Democrats — and it’s nothing more than that.”

Also, behold the Left’s spin machine in action.

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White House refuses to predict number of jobs that will be created by new “jobs bill”

Tuesday, September 13th, 2011 - by Richard Pollock

How many jobs will President Obama’s new $450 billion jobs program create?

Despite last week’s high profile speech before a special joint session of Congress, this week the White House says it does not know.  Or, having been burned by its previous predictions, it refuses to offer a number.

This was uncomfortably discussed yesterday at the White House briefing room by Obama’s budget chief Jack Lew. Asked directly by reporters, Lew specifically refused to say how many new jobs would be created by the new jobs program.  Here is his exchange with one reporter in the White House briefing room:

“Q How many jobs will be created with this plan?

MR. LEW: We have not put out an official administration estimate –

Q Why not?

MR. LEW: Well, we just don’t do official job estimates. And –

Q Do you have numbers?”

Lew and later press secretary Jay Carney steadfastly refused to get stuck with any job creation numbers. They did so because they have been previously burned by White House chief economist Christine Romer who had predicted that unemployment would be below 8% if the original $850 billion stimulus was passed.  At one point Romer actually claimed the jobless number could actually fall as low as 6.8%.

Unemployment now is above 9.1%, a number the White House admits will not fall before the next Presidential election in November 2012.

Echoing this sentiment Lew told reporters, “So my own view is and always has been that it’s a dangerous thing to try to pinpoint predicting unemployment rates.”

When pressed, Lew quoted Moody economist Mark Zandi, who claims the Obama new jobs program will create 1.9 million jobs.

Zandi, a Democratic economist has previously defended the original stimulus, saying it worked exactly as planned.  In July 2010 he co-authored with economist co-author Alan Blinder that the stimulus kept unemployment down.  Blinder, now a Princeton university professor was an economic adviser to President Clinton and to Presidential candidates Al Gore and John Kerry.  Zandi and Blinder wrote in July 2010:

“(T)he effects of the fiscal stimulus alone appear very substantial, raising 2010 real GDP by about 3.4%, holding the unemployment rate about 11⁄2 percentage points lower, and adding almost 2.7 million jobs to U.S. payrolls.”

In yesterday’s White House briefing Lew told reporters, ” It’s always a challenge with these kinds of projections,” adding “I think that the American people don’t want us to be standing here kind of arguing over estimates but getting the job done to create jobs.”

When pressed by other reporters Lew testily replied ” I’m not making any other predictions.”

The bottom line: the administration will not put out any official estimate of how many jobs will be created by it’s “job’s bill.”



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Syria Has the Largest and Most Advanced Chemical Weapons Stockpile in the Middle East

Monday, August 29th, 2011 - by Richard Pollock

A front page WaPo article this morning warns that Syria has the largest confirmed stockpile of chemical weapons throughout the Middle East. Syria has repeatedly refused to sign the U.N. chemical weapons convention barring use of the weapons.  The government of Syria’s Bashar al Assad is estimated to have also amassed the most advanced chemical weapons including weaponized Sarin-based warheads. The newspaper citing the CIA as its source says most of Syria’s current chemical arsenal was built by the Russians. Sarin was used by Japanese terrorists in a Tokyo subway in 1995 killing 13 people and blinding or sickening 1,000.

The WaPo’s article is another article subtly supporting the Obama administration’s cautious policy on the Syrian crackdown by pro-democracy demonstrators.  Like most of the pro-democracy movements, President Obama has been slow to embrace the protests in Syria, although his Ambassador Robert Ford has bucked the regime by twice traveling to Syrian cities in support of the demonstrators.

The article warns that if Assad’s regime falls there is the possibility the chemical depots could fall into terrorist hands.  The article by Joby Warrick warns, “it is not inconceivable that weapons could vanish amid the chaos of an uprising that destroys Syria’s vaunted security services, which safeguard munitions.”

The CIA estimates that the regime has “tens of tons of highly lethal chemical agents and hundred of Scud missiles as well as lesser rockets, artillery rockets and bomblets for delivering the poisons.”

The same security services have reportedly killed more than 2,000 civilians in the government’s violent clampdown against protesters and their families.

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President May Propose Stimulus II as His New ‘Jobs Plan’

Thursday, August 18th, 2011 - by Richard Pollock

The Tatler has learned President Obama’s new jobs program might be unveiled right after Labor Day. The White House has gone silent for a long time while unemployment remains above 9% and economic growth slumps to .4%.

What could be his new, imaginative idea?”

Could be Stimulus II?

Yes, after the failure of the first $800 billion round of stimulus, the President’s best idea may be to recommend more stimulus spending.

Today’s Washington Post is floating a trial balloon from White House aides that report:”President Obama has decided to press Congress for a new round of stimulus spending.”  No dollar amounts were mentioned.

Yesterday during his bus tour in Atkinson, Illinois the President prepared his audience for his new economic policy, saying he would cut spending by spending more.  The two, he said, are not inconsistent. “When Congress gets back in September, my basic argument to them is this: We should not have to choose between getting our fiscal house in order and jobs and growth.”

Meanwhile in reaction to a slew of bad economic reports and the news of a new stimulus plan, Wall Street is experiencing another meltdown.

The Dow Jones average swooned at the opening bell, down at least 450 points. Adding to the downturn were the weekly jobless claims report showing an increase of 9,000 new unemployment claims, topping to a monthly total of 408,000. In other bad news home sales dropped 3.5% and factory activity in the Mid-Atlantic region tumbled to  a two year low.

The President will be able to munch on all these new economic reports while he luxuriates on a tony vacation.  Today the President lands on Cape Cod via Air Force One, then hops onto a Marine One helicopter to land on the celebrity island of Martha’s Vineyard.


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New York Times Hit Piece on Issa Found Riddled with Errors

Monday, August 15th, 2011 - by Richard Pollock

I woke up this morning to see another sad example of Washington’s pervasive”gotcha journalism” that passes as news. This time it was a New York Times voluminous 2,700-word front page slam on Rep. Darrell Issa (R-CA), the chairman of the House Government Operations and Reform Committee.

The Times‘ meme by reporter Eric Lichtblau was that Mr. Issa, a self-made millionaire who grew up in poverty, was a corrupt political predator who enriched himself by mixing political power with his private company and financial empire.

It made for riveting reading. But as the day wore on it was disclosed that much of it was patently false. Moreover, pieces of it had been lifted entirely from left wing web sites who had previously made wild, unsubstantiated accusations about Mr. Issa’s finances.

The Times money quote is here:

“As his private wealth and public power have grown, so too has the overlap between his private and business lives, with at least some of the congressman’s government actions helping to make a rich man even richer and raising the potential for conflicts.”

To set the scene Lichtblau gives us an opening scene of the luxurious lifestyle of the California congressman:

“Here on the third floor of a gleaming office building overlooking a golf course in the rugged foothills north of San Diego,Darrell Issa, the entrepreneur, oversees the hub of a growing financial empire worth hundreds of millions of dollars.”

Now it appears that the article is riddle by many factual errors that it takes your breath away.

Among the errors identified today:

  • Rep. Issa’s office does not overlook a golf course.  It is surrounded by office and apartment complexes and a highway. The closest golf course is 20 minutes away.
  • The Times charges, “Mr. Issa has … spilt a holding company into separate multibillion-dollar businesses.”  Issa does not own a single multibillion-dollar business.
  • The Times claims Issa has gone easy on Toyota because of “his electronics company’s role as a major supplier of alarms to Toyota . Rep. Issa’s former company, Directed Electronics, is not a “major supplier” or even a supplier to Toyota.
  • The Times claims Issa made a financial killing on an AIM fund investment, converting a $19,000 investment into a $357,000 profit. In fact the investment was a family investment $500,000 that was later sold for $375,000 resulting in a $125,000 loss.
  • The Times’ charged the value of a medical complex and other properties owned by Issa “has soared, at least in part because of the government-sponsored road work.”  The story alleges that Issa’s 2008 purchase of the property was  “for $10.3 million and now assessed “at $16 million – a 60 percent appreciation.” However, Issa’s company paid exactly $16.6 milliion, the current tax assessment. As most real estate novices, know southern California’s commercial real estate market has collapsed and property purchased in 2008 has not appreciated 60%.

To top it off, Lichtblau’s article seems to be a product of plagiarism. He apparently lifted whole passages from left wing blogs, including one by the left wing Center for American Progress (CAP) and the Citizens for Responsibility and Ethics in Washington (CREW). As Rob Bluey of the Heritage Foundation noted today CAP’s Lee Fang called him out on Twitter, noting “your NYT Issa piece looks awfully familiar.” CREW also charged that Licthblau lifted whole accusations from their web site.

Frederick Hill, an Issa spokesman said “It’s disappointing that the so-called ‘paper of record’ has decided to publish a story that is nothing more than a compilation of left-wing blog posts that are easily found by a simple Google search.”

For the record, the Times is standing by its article.

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Postal Service Tears Up Collective Bargaining and Drops Its Health Care and Retirement Programs

Friday, August 12th, 2011 - by Richard Pollock

Bowing to reality yesterday the U.S. Postal service notified its half million employees that they were tearing up their union collective bargaining contract and withdrawing from the federal government’s massive health and retirement plans.  The postal service also announced 120,000 layoffs in addition to the 100,000 that will leave the service through attrition.

But its decision to end its collective bargaining agreement with government unions and to end the highly vaunted federal health care program are the most revealing. Wisconsin Governor Scott Walker was assailed for ending that state’s collective bargaining agreements with state unions.  The Governor and Republicans faced weeks of violent protests by union rank and file members.  The Wisconsin case was a rallying point for leftist activist groups and union bosses.

Since Wisconsin’s initiative, other elected officials including those from liberal Democratic Montgomery County, Maryland just outside the nation’s capital have followed Walker’s initiative.  They are proceeding across the country to tear up collective bargaining agreements to cancel lavish health and pension programs.

But the termination of the large postal service participation in the government health plan is a killer. It also could further doom the prospects for Obamacare which goes into full effect in 2014.

Officially the postal service is withdrawing its 480,000 pensioners and 600,000 active employees from the Federal Employees Health Benefits Program and replacing the program with a cheaper, more efficient health program.

Liberals have hailed the FEBHP program for decades and said it was the “model” for all future private and public plans.  In 2003, for example, three liberal health care reform academics led by former Carter Health and Human Services official Karen Davis  published a study on behalf of the liberal Commonwealth Foundation.  They heaped praised on the program for its low cost and affordability

“Largely because of its ability to constrain cost growth reasonably well with limited government intervention, the program has been proposed by some political leaders and analysts as a model to replace the current Medicare program, to cover small businesses and the uninsured, or, in some cases, to cover the entire nation. “

This was just wishful thinking.  Today the postal service demolished all the rosy projections about cost benefits. Anthony J. Vegliante, the USPS chief of human resources officer said it does not meet private sector health care standards and it is far more expensive than private insurers. He concluded ”So cost may be above the private sector, while value may be below the private sector.”

Government unions have vigorously opposed any changes or reform in the federal health program, which covers 8.5 million federal workers.  But the postal service was aware the health costs were sinking them and a cost saving effort had to be implemented. They also were going to require that employees actually pay co-pays and premiums.  How about that for radical change?

The Washington Post acquired a copy of a devastating financial analysis of the postal service.  In the last four years it has lost $20 billion, including $8.5 billion in 2010.  Over the same period mail volume has dropped 20%.

In deciding to tear up its health and pension plans, the postal service said it can do so because “exceptional circumstances require exceptional remedies.”

The document obtained by the Washington Post darkly concluded “The Postal Service is facing dire economic challenges that threaten its very existence. . . . If the Postal Service was a private sector business, it would have filed for bankruptcy and utilized the reorganization process to restructure its labor agreements to reflect the new financial reality,”

This is D-Day for government unions.  Congress will have to approve the changes and you can expect an all out lobbying war by the unions and their political allies later in the fall. But the writing is on the wall.



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HuffPost and AOL Lose Quarter of Market Value

Wednesday, August 10th, 2011 - by Richard Pollock

Since AOL acquired the Huffington Post, its stock price has been hammered, losing 50% of its market value.  Yesterday after the company released earnings, owners of the stock gave up on the company.  The firm lost more than 26% of its market price in a single trading day. The stock closed at $11.10 per share.

Part of the problem was in plunging advertising revenue. Huffington Post was supposed to breath life into the sagging internet company.  But so far there have been no positive results, only losing numbers.  Revenues for the quarter fell 8.4%.

As one analyst explained yesterday, “its overall revenues fell, to $542 million from $592 million in the same quarter a year ago — a performance that also came in below most Wall Street estimates.”

The marriage between HuffPo and AOL was regarded by many as a last desperate move by the former internet giant to revive its fortunes. But it does not appear that the partnership has helped the company with traffic and ad revenue.

At least one analyst believes that at a relatively cheap price, Time Warner should buy back the company and dump HuffPost. Noted analyst Peter Yard from Venture Beat “If you were betting on the future of news, would you pick Time or HuffPo? Time Warner is going to have to make a move here, and AOL just got a whole lot cheaper than Say Media or Glam.”


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Obama Chooses Poorly, Quotes Warren Buffett

Monday, August 8th, 2011 - by Richard Pollock

While the world waited for a defense of America’s credit worthiness, the president unfortunately chose to quote a businessman who may be flirting with a credit downgrade too.

During his Presidential remarks the president quoted billionaire Warren Buffett about the quality of America’s credit rating.  Buffett said if the United States deserves a AAAA rating if such a rating exited.  On Friday Standards and Poor’s downgraded U.S. sovereign debt from AAA to AA+.

Bad decision on the president’s part.

This morning Standards and Poor’s issued a “negative” rating for Buffett’s Berkshire Hathaway company.  The rating agency has downgraded some insurance companies from AAA to AA+.  Buffet’s company holds deep positions in those firms.  A credit downgrade is expected to follow the S&P’s negative rating.

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Dow Declines More Than 300 Points and Falls Below 11,000 Following Obama Speech

Monday, August 8th, 2011 - by Richard Pollock

On the basis of its market reaction, Wall Street clearly rejected President Obama’s first comments on Standard and Poor’s historic downgrade of U.S. sovereign debt from AAA to AA+. During his address the Dow drop accelerated and dropped below 11,000.

When the president was scheduled to speak at 1:00 pm, the Dow was down 300 points.  By the end of his speech it had dropped 150 points to 450.  Twenty minutes after the speech the Dow dropped declined by 600 points.

The Nasdaq also dropped from the beginning of his speech from negative 98 to 156.

So far the market response is a massive vote of no confidence of the president’s remarks.

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Online Campaign Seeks Resignation of Treasury Secretary Geithner

Monday, August 8th, 2011 - by Richard Pollock

Over the weekend two small conservative grass roots organizations launched an online campaign called “Time to Fire Timothy Geithner” seeking the resignation of President Obama’s Treasury Secretary. Secretary Geithner is the last remaining member of the president’s original economic team.  All other economic advisers have resigned in the wake of a faltering economy and high unemployment.

“Geithner has to go, he has failed our country and our economy,” said Amy Kremer, Chairman of American Grassroots Coalition.

The secretary had recently told advisers he would leave the administration following passage of a debt ceiling agreement.  That agreement was finalized last week.

However since Standard & Poors’ move to downgrade U.S. credit worthiness on Friday, President Obama has convinced Geithner to stay in the post. He says he will remain through the 2012 presidential election.

“After insisting that America’s credit rating would not be lowered it was lowered, and Timothy Geithner shares the blame for this terrible development,” said Ryan Gill, Vice President of The Campaign to Defeat Barack Obama.

Since launching the website on Friday more than 11,000 people have signed the petition.


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S&P downgrades Fannie Mae and Freddie Mac

Monday, August 8th, 2011 - by Richard Pollock

This morning Standard & Poor’s announced that it was downgrading federal housing giants Fannie Mae and Freddie Mac.  The two government housing agencies were the initiators of sub-prime mortgages.  Both federal agencies were the prime movers of the housing collapse.

The S&P ruling is a follow-on of Friday’s downgrade of the U.S. sovereign debt from AAA to AA.  Both Fannie Mae and Freddie Mac were downgraded to AA from AAA.

Under the Bush administration, there were unsuccessful efforts to reform both Fannie Mae and Freddie Mac.  These efforts were thwarted by Democrats led by Rep. Barney Frank (D-MA) and former Senator Chris Dodd (D-CT).

Since the crash of the housing market, both Fannie and Freddie faced heavy declines and substantial government bailouts.  In June 2010 Fannie Mae and Freddie Mac were de-listed from the New York Stock Exchange when its value fell to below $1 per share.

Since assuming office the Obama administration has continued one failed housing assistance program after another. It is now in its eighth homeowner’s assistance program to help those facing foreclosure.  None have helped hard pressed home owners or resuscitate the depressed housing market.

Standard & Poor’s also is downgrading a host of other U.S. Government agencies as part of the general rating downgrade for the U.S. Government. These smaller federal agencies include the Depository Trust Co. National Securities Clearing Corp., Fixed Income Clearing Corp. and the Options Clearing Corp. All, including Fannie and Freddie  were cut one notch to AA-plus.  But the biggest downgrade was for Fannie and Freddie.

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IMF’s Christine Lagarde in New Trouble While She Collects $550K Salary

Friday, August 5th, 2011 - by Richard Pollock

Christine Lagarde, the International Monetary Fund’s new managing director has landed in trouble only a month after getting her new job. Her name popped up in the news yesterday when a special French court ordered an investigation into a $400 million settlement paid to a billionaire when she was the French Finance Minister.  She denies any impropriety.

Which brings us to Madame Lagarde’s salary in these tough times.  As the first woman to serve as the managing director of the non-profit IMF, Lagarde has broken all records in salary compensation at the institution, of which the U.S. is the largest contributor. She exceeded the stratospheric salary and perks of her immediate predecessor, Dominique Strauss Kahn. DSK abruptly resigned earlier this year and is currently free on his own recognizance in the United States for sexually assaulting a hotel maid in New York.

According to IMF records, Ms. Legarde will receive $468,000 in tax free salary, plus an extra $84,000 in an “allowance. ” This is more than DSK, who only received $421,000 in salary and a measly $75,000 in allowances. She will receive $45,975 per month in tax free income.

Both Lagarde and DSK earn nearly three times the $179,000 salary the U.S. Government pays Federal Reserve Chairman Ben Bernanke.  High salaries are notorious at the IMF and at its sister organization, The World Bank.  Both are supposed to be non-profit organizations but you wouldn’t quite know it from the executive salaries.

When Congress reconvenes in the fall some members of Congress may examine the high IMF and World Bank salaries to determine if they are excessive.


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Reich: New jobless report means the chance of double dip recession is 50-50

Friday, August 5th, 2011 - by Richard Pollock

The weak unemployment numbers came in this morning at 117,000 new jobs for the month of July.  Many economists are breathing a little easier this morning as the numbers were considerably better than the near death numbers in June of 18,000. Those numbers were revised to 46,000 newly employed.

But the Bureau of Labor Statistics glumly reported that “Since April, the unemployment rate has shown little definitive movement.”

Prior to the release of the numbers, former Clinton Labor Secretary Robert gave his own downbeat interpretation: @RBReich: “If [today's] job number is below 125,000, chance of double dip goes up to 50-50. ”

Unemployment remains at 9.1%. Nearly 14 million are unemployed, 6.3 million are long term unemployed for more than 27 weeks and 2.8 million are discouraged workers who have given up looking for any work.


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Wall Street rains on President’s Birthday: Huge Sell Off

Thursday, August 4th, 2011 - by Richard Pollock

Today President Obama turns 50.  He will be in Chicago for a national series of big donor birthday parties. Entry fee for the exclusive dinner: an eye popping $38,500 per person or a $77,000 per cool couple.

But many investors seem to be raining on the the President’s parade.  Around Noon Eastern time there was an unwelcome 370 point sell off in the Dow Jones index. That’s more than a 1,10 point drop since July 21.

Tomorrow new unemployment numbers are also expected.

Happy Birthday, Mr. President.


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More bad economic news for Obama

Monday, August 1st, 2011 - by Richard Pollock

We apologize for that brief interruption to our normal downbeat economic news with coverage of the debt ceiling crisis.  We now return to our regular news:

This morning Wall Street was taken aback with more bad news about the general economy.  The Institute for Supply Management’s manufacturing index plummeted to 50.9 from 55.3. The index monitors the growth in the manufacturing sector.

Today’s ISM number was the lowest level since July 2009. Market analysts had expected the number to small dip only to 54.9.

Combined with last quarter’s anemic 1.3% growth and a June report of only 18,000 new jobs, the public can return from the debt ceiling debate just in time to be reminded of why President Obama’s approval ratings are at all time low.

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Senator McConnell: The Shrewd Adult in the Room

Sunday, July 31st, 2011 - by Richard Pollock

At first glance Senator Mitch McConnell (R-KY) appears to be an unassuming,  bland, and soft spoken southern good old boy. McConnell is  a dream stereotype for Lorne Michaels at Saturday Night Live. You can imagine SNL depicting McConnell as the poster child for any thick headed,  slow talking southern conservative.  Admittedly the Kentucky senator is a slow and can look a bit goofy

But don’t be fooled. Mitch McConnell is one of the shrewdest political tacticians in the United States Senate. And he is exactly where the wants to be.  After outmaneuvering Senate Majority Leader Harry Reid (D-NV) last night by calling for a cloture vote in which Reid lost, today he pivoted to announce that he had secretly opened up direct talks with President Obama, leaving Reid out in the cold.  Earlier today he announced that he is “very close” to a deal with President Obama.

As he did last December when he crafted a deal to preserve the Bush tax cuts, McConnell is in his prime at the negotiating table. Even WaPo’s Paul Kane concurred writing today that “McConnell’s fingerprints are on every big bipartisan deal and every key spending bill to emerge from the Congress in recent years.

All eyes including this writer expected the Republican to begin direct talks with Senate Majority Leader Reid (D-NV). Instead, he shrewdly reached out to the White House and said let’s make a deal.  This was a brilliant move. It means whatever agreement is sealed, President Obama will be co-owner.

McConnell holds the important cards at the table.  As he demonstrated last night on the Senate floor, he has a united caucus of at least 41 Senators behind him. This will deny the Senate Democrats the 60 votes needed for any deficit vote.  So today McConnell is the kingmaker.  While we don’t know the final outlines, we can be assured it will be a creative resolution that can hand the best deal to his fellow Republicans.

This worries the Democratic party base.  They have harshly criticized White House Chief of Staff William Daley as a weak negotiator and complained that he already has made too many concessions to the Republicans, including the pledge of no new taxers.  Of all the scenarios to unfold, a McConnell-Daley-Obama  deal strikes fear in the hearts of many progressive activists.

As McConnell has said today, whatever the outlines of the deal there will be no new taxes.  “We’re not going to raise taxes in this deal,” said on the Sunday morning talk shows. “I just said that, and I will say it again. There are no tax increases in this bill.”

Among the betting is that the outlines of a broad $3 Trillion plan might emerge that will cut short term spending and set up a structure for further debt reduction including entitlements. Significant liberal sacred cows will be sacrificed and conservatives could see the first down payment on real deficit reduction.  In return, there will not be another debt limit vote until the next presidential election.

If this political deal holds Obama will be seen as moving to the center while his hard core political base is left out in the cold.  He could get a nice short term bounce up in the polls except for The Nation crowd.  This would be be good news  to deliver to Monday morning’s Wall Street opening, although it is possible that it could still result in a credit rating downgrade by October.

McConnell is a no patsy.  The 69 year old Senator served as a judge and Deputy Attorney General under President Gerald Ford. His stint at Justice was at a delicate  political time for the country when the nation was dealing with many post-Watergate legal issues.  He floor managed President Bush’s Iraq and Afghanistan policies after September 11.  He was the key player in shaping the financial bailout bill when the Congress failed to pass it and the stock market fell 700 points.  And he delivered the final post-election deal with President Obama last December.

A cool and shrewd negotiator, Mitch McConnell may emerge as the true adult in the room.

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Now the ball is in Reid’s corner. The interesting part begins.

Friday, July 29th, 2011 - by Richard Pollock

A pretty chaotic chapter in the deficit debate ended tonight with passage of a Republican bill in the House of Representatives.

Now the most important — and perhaps most entertaining — chapter is about to begin.  For political cover Senate Majority Leader Harry Reid (D-NV) will seek to kill the House legislation. His act will get cheers from his party and from his activists.

But Sen. Reid will have to craft a Democratic bill that also can attract at least seven Republican senators.  This is no small feat. He will need 60 votes to pass the debt reduction bill in the Senate.  He already lost one cloture vote on Friday night. And West Virginia’s Democratic Senator Joe Manchin has declared his opposition to the Reid bill. This means the Democrats need to entice, seduce or bribe eight Republicans.

In private Reid will be sit down with Senate Minority Leader Mitch McConnell (R-KY) and deal. He’ll have to present a proposal that can attract bi-partisan support. In effect it is Reid’s bill that’s dead on arrival.

Most of the media bought into a Democratic narrative that ridiculed the seeming futility of House Republicans.They ignored the reality that once a bill passes from one chamber to another the political calculus changes. The Senate rules favor the minority.

Over the weekend something else also may become apparent. President Obama will be permanently sidelined as an observer. Of course he’ll be informed about the negotiations and his staff will stay in touch. But the President will be largely invisible and out of the talks.

Which is where the President sat throughout the historic debt reduction debate. He never presented a public plan. He never accepted the tough recommendations of his own deficit reduction commission.

Obama understands that cutting spending and entitlements is the third rail of politics. He refused to become the author of any proposition that would slash federal programs and entitlements. Cutting sacred federal programs would burn him with his base.

So he decided to let others carry the water.  The President played the detached and aloof spectator.  He pretended to be a frustrated observer. Most likely he hoped the issue would disappear.  But he won’t be able to escape the crippling reality of our ballooning budget.

In the end it may be ironic that President Obama may preside — unwillingly — as the overseer of the end of the modern welfare state.  He overplayed his hand in his first two years in office. Now the sheer financial math is against him. As Roger Simon wrote earlier today, “The welfare state is kaput. It’s gone — probably for generations to come.”

When might Democrats acknowledge it?

It could happen as early as this weekend when Senator Reid sits down in his Capitol Building hideaway and looks at the options before him — and before our nation.


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FreedomWorks Launches Last Ditch Effort to Kill Boehner Bill

Friday, July 29th, 2011 - by Richard Pollock

As a last ditch effort to scuttle House Speaker John Boehner’s deficit bill, the Tea Party activist group FreedomWorks has dispatched a hard-hitting a letter to all Republican House members urging them to vote No.

The letter says “The revised plan still fails to fundamentally change the way Washington spends. Anything less than that, FreedomWorks cannot and will not support.”

The group is urging that Republicans stand by the original “Cut, Cap and Balance” legislation that passed the House earlier in the month. “We will be engaging our activist network of over 1.4 million grassroots volunteers to provide state and local support for Rep. Jordan and Sen. DeMint, and to remind Speaker Boehner and the rest of the Republican establishment that the ‘Cut, Cap, Balance Act ‘ is both good politics and good policy.”

Most observers say Cut, Cap and Balance does not have the 60 votes needed to pass the Senate.  There are only 47 Senate Republicans in the upper chamber.

Ther are numerous reports, meanwhile that many wavering Republicans have begun support the Boehner bill and defect from the ranks of the Tea Party.

Representatives Jeff Flake (R-Ariz.), Scott Garrett (R-N.J.) and Louie Gohmert (R-TX) all flipped from opposition to support of the Speaker’s bill.  Gohmert told Politico he “liked what I’m hearing so far.”

“Let’s go vote 100 percent for this bill,” Georgia Rep. Phil Gingrey, one of the last holdouts is also quoted by Politico. Boehner also reportedly received a standing ovation from Senate Republicans during a lunch meeting today.

If the Boehner bill dies in the House the only option is to vote on a bill offered by Senate Majority Leader Harry Reid (D-NV).  While only $2 billion differs in spending between both bills, the accounting rules for the two are completely different. Republicans claim that the Reid bill is filled with “gimmicks.”

The House vote is scheduled to begin at 7 or 8 pm this evening.

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President’s Strangely Aloof and Passive Press Remarks

Friday, July 29th, 2011 - by Richard Pollock

As the country goes careening forward toward a credit abyss President Obama continues to remain strangely inert and passive.

He said a few impromptu comments this morning to reporters without taking questions.  They are filled with cliches, but the most striking thing is how thoroughly disengaged he appears. Excerpts:

“The time for putting party first is over. The time for compromise on behalf of the American people is now,” Mr. Obama said. “And I’m confident that we can solve this problem.”

“My door is open,” Mr. Reid said as the Senate convened. “I will listen to any idea to get this done in a way that prevents a default and a dangerous downgrade to America’s credit rating. Time is short, and too much is at stake, to waste even one more minute.

“The last train is leaving the station,” he said. “This is our last chance to avert default.”

Then he asked the American people to tweet their elected representatives.

In the middle of a crisis you ask people to Tweet?

This reminds me of “Daily Show’s” Jon Stewart’ remarks the other day after the President’s address to the nation in which he appealed to citizens to call Congress.

“Did the president just quit?” he said of the idea. “Seriously, you’re the president. You’re asking us to call Congress?”

At this moment of crisis this is one detached and aloof President.

Even as he expressed optimism, however, Mr. Obama delivered a stern warning to Congress: “For all the intrigue and all the drama that’s taking place on Capitol Hill right now, I’m confident that — but as I said earlier, we are now running out of time. It’s time for everybody to step up and show the leadership the American people expect.”

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The Emergence of President No

Thursday, July 28th, 2011 - by Richard Pollock

For a president who claims to be open to compromise, Barack Obama is beginning to morph into a “President No.”

This is where we are in the last moments of the debt ceiling debate. The Democrats have turned nasty, dirty and ugly.

With an American credit downgrade looming, Democrats now pledge to defeat any Republican solution that seeks to reach the president’s desk.

The “No sentiment” emerged in mid July when the President vowed to veto the House deficit bill, “Cut, Cap and Balance.”

Today White House Senior Adviser David Plouffe boasted that Speaker John Boehner’s bill, if it is sent to the Oval Office it would be “dead on arrival.” Senate Majority Leader Harry Reid (D-NV) expressed the same exact sentiment to reporters.

So the president now has his choice of two House debt reduction bills to veto: last week’s adopted Cut, Cap and Balance bill or the Budget Control Act, Speaker Boehner’s newest bill.

Joining the “No chorus” was New York’s polite Democratic Senator Chuck Schumer.  Here are his words of “compromise:”

““It  won’t make a darn bit of difference because it’s not going to pass this house,” Senator Schumer told NBC News. “We have made that clear in the letter that 53 of us signed yesterday and nothing has changed.  The idea that we will take Boehner’s bill and pass it or take Boehner’s bill and tweak it and pass it is not what is going to happen.”

The capital issue circulating in D.C. is whether the president is serious about vetoing the Boehner bill. Or is he bluffing? Many Washington observers (here and here for instance) suggest that trotting out an aide to say they would “recommend” a veto is not real veto talk.

In the waning hours of this monumental battle Reid may now realize that while he can defeat Boehner’s bill he will not have the votes to pass his own version.  As the Washington Post’s Marc Thiessen observes:

“Reid does not have the votes to overcome a GOP filibuster in the Senate — and if Reid cannot pass his plan, then the Boehner plan is the only game in town.”

This may explain why in the last hours of this drama Democrats are “going negative.” They are losing the battle. They don’t have the votes.

If the Democrats do go negative in the eleventh hour it could be a huge strategic mistake. Changing the tone from “let’s get along” to shrill denunciation diminishes their political power. Then Democrats could surrender the political high ground and alienate independent voters.

As the election of 2010 shows, that would not be a good thing.



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New Miracle Drug from Washington: Spenditol!

Thursday, July 28th, 2011 - by Richard Pollock

In the midst of the tense political warfare being waged by all sides in Washington there is a refreshing new video poking fun at the way D.C. spends money. Released by Concerned Women for America, this video touts a new miracle drug that can wipe away all our problems: Spenditol.

It’s a entertaining take off of those ubiquitous pharmaceutical TV ads touting results and side effect. With the voice of a soothing, upbeat mom, it’s clear Spenditol is absolutely the wrong medicine.

YouTube Preview Image

A few excerpts of the 60 second ad:

“I was in chronic pain and my family struggling to make ends meet.  Food and gas prices going up, even keeping my job was iffy.

“Then I learned about a new miracle drug made in Washington, DC: Spenditol.

“Spenidtol is Wshington’s answer to all the problems American face.”

A male  voice intones the possible side effects: “Spenditol is not for everyone. Side effects may include a mountain of government piled on our kids….higher prices for everything, leaving our kids a lesser American than we had. Ask your doctor or congressman if your conscience is strong enough for Spenditol”

Mom, thrilled with the results concludes, with children playing in the background:

“Spenditol: makes you feel better now, and pushes the really bad stuff to later, for them to deal with.”



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Democratic Leaders Suggest Undemocratic Measures to Raise Debt Limit

Thursday, July 28th, 2011 - by Richard Pollock

Do Democratic lawmakers have undemocratic instincts? Perish the thought!

Mother Jones is reporting that top House Democrats are continuing to suggest that President Obama should turn to autocratic rule if there is no agreement between the House and Senate on the debt limit.  They suggest that Democrats should interpret the 14th Amendment as permitting the President to automatically raise the $14.3 debt ceiling.  In polite circles, this is known as the “nuclear option.”

Mother Jones’ Andy Kroll advocated the nuclear option in a blog post on Wednesday afternoon:

Rep. Jim Clybourn (D-SC), the assistant house minority leader, and Rep. John Larson (D-Ct.), chair of the House Democratic Caucus, both held up the 14th Amendment—which commands that “[t]he validity of the public debt of the United States…shall not be questioned”—as a “fail-safe mechanism” to prevent catastrophe from failing to increase the government’s borrowing limit by Aug. 2.

Here’s Larson and Clybourn, via ThinkProgress:

LARSON: If a small group is really that intent on destroying government, and is intent on saying they don’t believe there are any ramifications for their irresponsibility then we have to have a fail-safe mechanism, we believe that fail safe mechanism is the 14th amendment and the president of the United States.

CLYBURN: So I would say to the president, if that’s what lands on his desk, a short-term listing of the debt ceiling—he should put it on his desk next to an executive order he will have drawn up. And with the same pen that he vetoes that short term debt ceiling extension, he should sign an executive order invoking the 14th Amendment to this issue. I am convinced that whatever discussions about the legality of this issue can continue.

So far President Obama has rejected this awful advice.  If the White House was to implement extra-constitutional measures, it would trigger a national uproar that would haunt the remainder of the Obama Presidency.

On the other hand, after watching Speaker Nancy Pelosi (D-CA) and Senate Majority Leader Harry Reid (D-NV) ram through the 2,000-page Obamacare health bill last year you can understand their natural instincts to seek extra-constitutional measures.

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White House Invites Groups to Oval Office in PR Debt Ceiling Campaign

Tuesday, July 26th, 2011 - by Richard Pollock

The White House has begun to deploy its large Oval Office stage as part of a PR campaign to cause anxiety about the possibility of a federal default and a government-wide shutdown.

The Tatler has learned that the White House will be inviting many groups that depend on federal assistance to the White House in a PR effort to pressure lawmakers on the debt ceiling. Officially the meetings are being organized to “brief” different groups about the impact of a default.

Republican lawmakers say the White House is employing scare tactics.

One of the first groups invited to the White House were veterans.  They have invited veteran groups to the White House for a late afternoon meeting. The topic is to brief them on veteran disability payments and other veteran benefits if Congress does not pass legislation raising the debt ceiling.

While default could occur after August 2, many government functions would continue.

Apparently the White House moved  its media campaign into high gear yesterday evening while the President was delivering his address to the nation.  David Autry, a spokesman for the Disable American Veterans told CNN, “We were notified late last night of the meeting” at the White House for veterans.

On Wednesday, the DAV said it is preparing to lead an all day “Virtual March on Washington” calling for the protection of veterans benefits and compensation.

Today the Capitol Building reported a large incoming number of phone calls to the Congress. The calls had temporarily overwhelmed the congressional telephone system.  Capital sources said they were recording the rate to be about 35,000 per day.  While high, it is still under the record 50,000 daily calls that came in to capital hill during the Obamacare debate.  Last night the President asked citizens to call to Congress about the debt crisis.

The type of drama employed by the White House can generate fear among vulnerable constituencies.  This can be powerful political theater especially when it is elevated to the most visible stage in the country, the White House.

If there is a default some but not all government programs will be cut back or suspended. Those on the cutback list probably include such non-essential government functions such as national parks, the Smithsonian Museum or long term scientific or medical research.

However essential operations will continue.  They include social security and disability payments, military operations, the postal service and air traffic control systems.

Because any shut down involves both huge civilian bureaucracies and unionized workers, the steps toward shut down are cumbersome, complex and filled with acrimony.

During the last threatened government shut down the federal Office of Personnel Management declined to inform unionized workers of its plans.  Many government unions sued the government in federal court and filed Freedom of Information Act requests  to discern their plans. The administration did not reveal their plans to the unions.

This time, however, the White House has decided to publicize its shut down plans prominently. It’s a powerful weapon that can intimidate many lawmakers.

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Last Night was Obama Positioning Himself for Failure?

Tuesday, July 26th, 2011 - by Richard Pollock

The morning after his televised address it is becoming increasingly clear this the president’s goal was to position himself for defeat. It may have marked his final end- game play before the Treasury declares national default.

Among the most compelling post-speech assessments this morning is that of The New Republic’s senior editor Jonathan Chait.  He concludes that last night Obama merely was “positioning himself for failure.”

Here is a portion of Chait’s unsettling but on-target analysis:

“I’m not really sure what Obama was trying to accomplish in his speech. I thought he would try to find some kind of lowest common denominator between the Reid and Boehner plans that would stand a chance of passing Congress. He didn’t. Instead he appealed once again to the Grand Bargain. If Obama thinks Congress will pass something like that, he’s nuts. … The most rational explanation for Obama’s speech is that he’s positioning himself for failure. He’s explaining his position so that when Congress fails to lift the debt ceiling, Americans will blame the Republicans and not him. … I expect a week from now we’ll be bracing for disaster.”

The president may try to blame recalcitrant Republicans, fellow Democrats, Congress or the Tea Party. But it happened on his watch.  He is the President of the United States, not a referee.

If Chait is right this could be the most spectacular Oval Office economic failure since the Great Depression.

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Joblessness hits 9.2%, weakening President Obama’s hand in deficit negotiations

Friday, July 8th, 2011 - by Richard Pollock

This morning’s new government report of only 18,000 new jobs created  in June substantially weakens President Obama’s hand as he enters weekend negotiations with Republicans on raising the debt ceiling.

Today’s dismal employment numbers, which kicked up joblessness up to 9.2% from 9.1%, will give the president less ability to insist on raising taxes as part of an overall debt reduction deal.

The June jobs number means that the economy is weakening at a quicker pace than expected and that the president’s economic recovery program continues to fail.  The June jobs report was less than May’s weak numbers of only 25,000. Wednesday in a presidential “Twitter Townhall,” House Speaker John Boehner (R-OH) asked the President, “where are the jobs?”

The job report is likely to strengthen Republican hands in the tense negotiations.  Republicans insist that no tax hikes are part of the formula for the deficit reduction plan.

The government also reported that state and local governments shed 39,000 jobs in June.  It is an indication that state government are accelerating layoffs in the face of rising debt and falling tax revenues. More layoffs among government employees are expected as local and state governments try to live within their own budgets. Public employees who are members of government unions are a major base for the Democratic Party.

President Obama has insisted that raising taxes should be part of the package to cut down the cumulative federal deficit, which tops $14.2 Trillion on August 2.  The president wants to raise the debt ceiling to about $16 Trillion.

Republicans have called for sharp cuts in federal spending amounting to $4 trillion over ten years, all from cuts and downsizing government.  President Obama has agreed with the $4 trillion number, but wants to close the gap by raising taxes.

However Republicans refuse to add taxes during an economic downturn.  ”Why would you want to raise taxes in an ailing economy,” asked House Majority Leader Eric Cantor (R-VA) yesterday at a meeting with reporters on Capitol Hill.


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Oil prices climb back up after Obama taps reserve

Friday, July 1st, 2011 - by Richard Pollock

One week after announcing he will drain the U.S. Strategic Petroleum Reserve of a record 30 million barrels of oil to lower prices at the pump, oil prices have returned to their previous levels.

According to CNBC data when President Obama announced he would tap the oil reserve the price of light crude was at  $95.70, well off its $115 high on April 28.

On June 27, five days after the release, the price of crude continue its downward spiral settling to a low of $89.61. Since then, however, it has continued to creep up.

Today crude returned to $95.14 a barrel, virtually the same price the day before the oil release program began.

Most oil analysts believe tapping the federal reserve at best would temporarily reduce oil prices. But the presidential decree does help consumers during the high drive Fourth of July weekend…and it could improve the president’s popularity numbers too.

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U.S. combat missions in Libya nearing 3,500 flights

Friday, July 1st, 2011 - by Richard Pollock

The U.S. Air Force and Navy are flying hundreds of missions over Libya despite the claim by President Obama this week that our military role there is “”limited in time and scope” and not covered under the War Powers Act.

This morning Air Force Times reports that in fact since March 31 U.S. military forces are nearing 3,500 combat flights over Libyan airspace.  Eight hundred of those have constituted “strike sorties,” not surveillance flights. The Times says those bombing flights continue.

AFRICOM spokeswoman Nicole Dalrymple said in an emailed statement to the Air Force Times: “As of today, and since 31 March, the U.S. has flown a total of 3,475 sorties in support of OUP [Operation Unified Protector.] Of those, 801 were strike sorties, 132 of which actually dropped ordnance.”

The president refuses to send a war resolution to Congress as required under the War Powers Act, arguing that U.S. involvement is limited.

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