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Monthly Archives: May 2011

Programing Note

May 31st, 2011 - 4:37 pm

It’s Rick Moran’s all-stars on tonight Rick Moran Show — that’s Jazz Shaw, Rich Baehr — inexplicably — myself.

You can tune in here, but Rick has been quite firm that there will be no Weinergate chatter. Quite firm.

CORRECTION: Ed Lasky is on tonight, not Rich. I need to pay more attention to those emails Rick sends out.

But of Course

May 31st, 2011 - 4:32 pm

Trifecta: Weinergate!

Worst Product Unveil Ever

May 31st, 2011 - 1:58 pm
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To be fair, it’s for what might be the worst product ever — the Asus Padfone.

It’s a tablet with a cell phone hidden inside, presumably so that when you answer the phone, your tablet receives lobotomies both frontal and backal.

I suppose there’s a market for this, of people who don’t know how to work pockets.

Here’s the distinguished congresscritter from Florida, speaking on illegal immigration:

“We have 12 million undocumented immigrants in this country that are part of the backbone of our economy and this is not only a reality but a necessity,” she said. “And that it would be harmful–the Republican solution that I’ve seen in the last three years is that we should just pack them all up and ship them back to their own countries and that in fact it should be a crime and we should arrested them all.”

Republicans think something is a crime just because it’s against the law. What will they think up next?

Out of the Frying Pan…

May 31st, 2011 - 10:41 am

About 28% of all mortgages are underwater and interest rates are at historic and extended lows. So surely people must be paying less for housing, yes? Um… no:

For all the attention given to almost $4-a-gallon gas, the biggest threat to containing U.S. inflation may be the shift away from homeownership, which is pushing up the cost of leases across the nation’s 38 million rented residences…

“They should have looked at rents,” said Maury Harris, chief U.S. economist in New York at UBS Securities LLC, whose team at UBS was the most accurate inflation forecaster over 2009 and 2010, according to Bloomberg calculations. “They’re putting too much weight on the ‘slack is all that matters’ theory. It matters but, for heaven’s sake, it’s not all that matters.”

Housing has become “a contributor to inflation, and it continues to rise,” agreed Bruce McCain, chief investment strategist at the private-banking unit of KeyCorp in Cleveland, with $22 billion in assets under management.

So you lose your house in foreclosure, only to find you can’t even afford a decent apartment.

Keep pushing on that string, Mr. Bernanke.

Obama’s Man No More

May 31st, 2011 - 8:17 am

Former China ambassador and future GOP hopeful John Huntsman sat down for a lengthy interview with RCP:

“We have no pro-growth policies,” he replied in a lengthy interview with RealClearPolitics when asked what was wrong with Obama’s approach to growing the economy and supporting business.

The line was so blunt it jerked several of those present — including his wife, Mary Kaye — into brief and startled laughter. (The interview took place in a campaign van as Huntsman’s entourage was making its way through the Granite State last Monday for an event here.)

“When was the last time we had a free-trade agreement?” Huntsman asked.

This guy is starting to grow on me.

Ask Not for Whom the Bellwether Tolls

May 31st, 2011 - 6:56 am

The lesson of history is…

After winning a congressional seat that had been in GOP hands since 1872 in New York’s special election, Democrats were exultant. Bill Clinton called the vote “a referendum on President Obama’s agenda for health care and on our entire progressive agenda,” and the New York Times gloated that the vote was a “setback for national conservatives.”

Those claims were made not last week, but in 2009 when Democrats won an upset victory in New York’s 23rd Congressional District — and deluded themselves into thinking the result was a bellwether for the 2010 elections. A year later, they suffered a historic shellacking at the polls — the largest turnover of seats in the House of Representatives since 1948.

…that you have to pay very close attention to learn the right one.

The above is from Marc Thiessen’s WaPo column from yesterday, and it’s worth reading the whole thing. The lesson I took away from the NY-26 election, is that the anti-incumbent mood is real, it is frustrated, and it is growing. No one is safe.

Required Listening

May 30th, 2011 - 3:41 pm

Tracks in the Dust: “an album put together by personnel (military and civilian) from five countries serving together in Afghanistan. (I know one of them.) The ten tracks sell for 99¢ each, and all proceeds go to the Wounded Warrior Project. Please give them a listen, and pass along.”

Consider it done.

An Unimpeachable Source

May 30th, 2011 - 3:00 pm

The economy will pick back up in the second half — honest:

“We can put our finger on the problems, and they’re temporary, I think,” said Mark Zandi of Moody’s Economy.com. “Oil prices were a blow. You can see that in the consumer spending numbers in Q1, and prices are coming back down.”

Here’s a nice bit from Zandi’s Wikipedia bio:

Zandi’s analysis of the impact of an economic stimulus package on the United States economy was cited by Christina Romer and Jared Bernstein in their report on President Barack Obama’s proposed American Recovery and Reinvestment Plan.[4] Zandi uses old-style Keynesian models in the spirit of Nobel Prize winner Lawrence Klein. The utility of such models to gauge the impact of fiscal stimulus has been questioned by Harvard economist Robert J. Barro.

Sigh.

Grrrrrrrrrrrrrrrrrr

May 30th, 2011 - 10:12 am

Trifecta: Grrrrrrrrrrrrrrrrrr.

It’s a Rhetorical Question

May 29th, 2011 - 1:37 pm

The new Egyptian government has gone ahead as promised and opened the border with the Hamas-controlled Gaza Strip.

Israel’s tenuous security situation just got worse. Will the Administration now make any new security-guarantee demands on Hamas?

Zombie Earmarks — You Can’t Kill Them

May 29th, 2011 - 10:45 am

Oh, fer cryin’ out loud:

The defense bill that just passed the House of Representatives includes a back-door fund that lets individual members of Congress funnel millions of dollars into projects of their choosing.

This is happening despite a congressional ban on earmarks — special, discretionary spending that has funded Congress’ pet projects back home in years past, but now has fallen out of favor among budget-conscious deficit hawks.

Every time I think that maybe John Boehner gets it, I see a story like this one and lose all hope. He either needs to shape up (if this slush fund is his doing) or crack the whip on the culpable squishes (if it isn’t his doing).

Sneaking Left from the Right

May 29th, 2011 - 7:22 am

Coast to Coast Tea Party: Meet Ana Puig, the hardest working woman in the Tea Party, as she uses Alinsky tactics to reform public education in Pennsylvania.

That cry of terror you hear is from public and private sector unions.

And Don’t Miss Those Winning Smiles

May 28th, 2011 - 7:17 am

Obamanomics gores an ox, Joe Stalin as a beat poet, and James Clyburn outs himself as an unrepentant racer — all on another exciting episode of… The Week in Blogs!

Bonus: A working Lego machine gun. Really.

Programing Note

May 27th, 2011 - 4:05 pm

I’m on the Tony Katz Radio Spectacular right about… now!

Happy Memorial Day Weekend, Suckers

May 27th, 2011 - 3:42 pm

It was a little surprising finding a New York Times reporter pointing out that the economy is “wavering” and then asking, “Does Washington Notice?” right up there in the headline. Here’s the meat:

Perhaps the most worrisome number was the one Macroeconomic Advisers released on Wednesday. That firm tries to estimate the growth rate of the current quarter in real time, and it now says annualized second-quarter growth is running at only 2.8 percent, up from 1.8 percent in the first quarter. Not so long ago, the firm’s economists thought second-quarter growth would be almost 4 percent.

We're EffedAn economy that is growing this slowly will not add jobs quickly. For the next couple of months, employment growth could slow from about 230,000 recently to something like 150,000 jobs a month, only slightly faster than normal population growth. That is certainly not fast enough to make a big dent in the still huge number of unemployed people.

Are any policy makers paying attention?

Oh, they’re paying attention, all right. As Jay Cost pointed out a couple weeks ago, “nobody gets reelected with employment way down, real income way down, and 14 percent of his fellow citizens on food stamps.” Nobody, he then reiterates.

Well, we’ll see about that — but the White House feels the pressure just as acutely Cost does, probably more so.

The problem for the Administration is, the President remains fully wedded to Obamanomics. We tried this stuff before, and as Glenn Reynolds noted earlier today, “the things I own are deflating, the things I buy are inflating.” None of this comes as much surprise to those of us who have been paying attention these past two-plus years. As I noted back when Obama still had that new president smell:

Add up all the [scary Washington] headlines and here’s what you have: The certainty that the government will screw up the markets, and uncertainty as to what new rules the markets will work under. Everyone is too scared to move, and for good reason. So there will be no new jobs, there will be no growth.

Back then, I called it “The Grand Unification Theory of Sucking,” and I’ve seen no reason to change my mind or the title. OK, there’s been some growth, but what little we’ve had is slacking off even before putting a major dent in unemployment. Obama knows what to do — push to get his agenda repealed, hike up interest rates to choke off inflation and return the dollar to sound footing, take his lumps and pray the economy rebounds in time for his reelection.

Would you like fries with your Notinthislifetimeburger? So, yes, Washington notices our difficulties. But there’s something of a gap between “noticing” and “taking proper action.” And my guess is that gap is just wide enough for the President’s ego to slip through.

I hate having to keep writing these doom-and-gloom articles about the economy — but what else is a concerned American to do?

Because We Care

May 27th, 2011 - 12:11 pm

Trifecta: This week’s Grab Bag is open to everyone, and we take your questions on Biden 2016, toasting the Queen, and Tim Pawlenty’s surprising resurgence.

The Obama Dilemma

May 27th, 2011 - 11:10 am

President Obama has a problem. No, not that one, although surely the economy isn’t doing his popularity any favors right now. When a President loses control of Congress midstream, typically he turns to foreign policy — where the President’s import can’t be understated — to gin up his numbers.

Let’s take a look around the world and see how that’s going for Obama, shall we?

Israel: The less said, the better. But the President just won’t shut up. Congress loves Israel. The American people love Israel. President Obama doesn’t — and it shows. This is not a place where his strong-arm “leadership” is helping.

Libya: “Days, not weeks.” Oops. True, this one is cheap and doesn’t cost us much. But Obama doesn’t seem to mind that he’s stretching Britain and French air forces to the breaking point. So much so, that you have to wonder if that’s a feature and not a bug. Anyway, America’s tiniest war is also America’s least popular war.

Iraq: Any news coming out of Iraq is going to be bad. Obama had better hope he doesn’t have to do anything more there than continue following Bush’s policies while taking credit for them.

Iran: Any news coming out of Iran is going to be bad, too.

North Korea: See Iran.

Afghanistan: With Osama bin Laden having achieved ambient water temperature and the misguided, halfhearted Afghan surge winding down, the President has probably done as much as he’s going to do in Afghanistan. So it’s probably safe to file this one under “Iraq.”

Pakistan: A petulant tar baby filled with nukes. Let’s label this one “Do Not Touch” for now.

Latin America: Where they don’t hate us, they no longer respect us. Still, it couldn’t hurt to try. However, what Latin America wants most with us is free trade — and Obama seems unlikely to do anything on that front. Despite promises early in April to finally move ahead with the Colombia Free Trade Agreement he put on the shelf for two years, Obama still refuses to push it along.

Egypt: With Mubarak thrown under the bus, there doesn’t seem much left to do here.

The Arab Spring: If we have a coherent policy, no one seems able to detect it.

Sub-Saharan Africa: Nobody cares.

China: Now exporting inflation to us and groping with structural economic problems while preparing for power changeover next year. There will be no major deals with Beijing for a while.

Japan: Hurting, becoming even more insular. Obama can help more, but not in a headline-making way.

Southeast Asia: Didn’t we fight a war there once?

Russia: Obama got his nuke treaty already.

Eastern Europe: When Lech Walesa won’t meet with you, you’ve pretty much lost your moral authority in that once devotedly pro-American region.

The Balkans: “Not worth the bones of a single Pomeranian grenadier,” is what Bismarck thought of the place 150 years ago. That’s still true today.

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Here comes inflation — from China? Yep. Glenn linked to a Business Insider report on how China cause global inflation. The second reason caught my eye:

China exports inflation: “This dynamic seems as inevitable as gravity itself.” Chinese demand for oil and steel has pushed prices up in those markets. Now it is effecting commodities like cotton and food products. That’s being passed on to developed markets like the U.S., and it will really hit home in 2012. This is in the process of happening.

At least since World War II, inflation has been America’s primary export, believe it or not. Follow closely here:

•The dollar is the global reserve currency.

•The dollar inflates.

•Everybody still needs dollars to buy everything from wheat to oil.

•Dollar demand is relatively inelastic.

I’m not saying we don’t feel the effects of our own inflation — anybody old enough to remember the ’70s knows that. But often the worst effects are felt by consumers outside our borders, who find that their gas and food prices are effected by the ever-shrinking dollar, year in and year out.

If the world decided to price things in, say, euros, suddenly we’d be importing inflation. The dollar’s real weakness would come home in a very sharp and sudden and painful way, as we were forced to stock up on euros by buying them with dollars that nobody wanted anymore. I suspect the dollar price of a barrel of would easily double or triple under that scenario.

But how does that relate to China?

Chinese (and Indian) consumer demand has been pushing prices up on all sorts of commodities, but the increases most keenly felt are on wheat and oil. Remember, that the Arab Spring began as poor Egyptians could no longer afford to compete with (comparatively) rich Chinese for wheat. We’re feeling the pain on oil prices.

I suspect there might soon be another element in play. As the link above details, China has been switching from export-driven growth to consumer-driven growth. They can’t sell much more to us with our anemic economy and still enjoy 10% growth year after year. And anyway, China now has a 300-million-member middle class — and they want iPads and Polo shirts, too.

Under export-driven growth, China needed dollars. Under consumer-driven growth, maybe not so much. That change alone might do much (or at least more than we’d like) to take away the dollar’s demand inelasticity. And that would take away much of our ability to export our inflation, and turn us into an inflation importer.

It’s a long process, to re-tool the world’s second-largest economy from exports to consumer-demand. We can see the change coming.

But what will we do to cope?

Anyone?

A Loss is a Loss is a Loss

May 26th, 2011 - 1:25 pm

Trifecta: Attention, MSNBC — Paul Ryan was not running for Congress in New York.

But can the Ryan Plan survive?

Any Excuse to Run This Clip

May 26th, 2011 - 11:27 am

Giant hedge fund manager to Microsoft CEO Steve Ballmer: Step down!

“His continued presence is the biggest overhang on Microsoft’s stock,” [David] Einhorn said in reference to Ballmer.

The comments by outspoken Einhorn, who made his name warning about Lehman Brothers’ financial health before the investment bank’s collapse, are the most pointed yet from a high-profile investor against Microsoft’s leadership.

Microsoft shares, which have been static for over a decade, gained 0.87 percent in after-hours trading after Einhorn’s comments, the most of any Dow Jones industrial average component.

Ballmer is a one-trick pony — and it isn’t even his trick. Find an existing market, throw money and talent at it until Version 3.0 is good enough to compete, then dominate the market and leverage for big profits. It’s a brute-force approach, which worked well enough in the Nineties (Windows) and the Naughts (Xbox), but has run out of steam for in the “post-PC” era.

People still want and need their PCs, and Microsoft will keep making tons of money on Windows and Office. But that market will change eventually, and with Ballmer at the top, Microsoft is uniquely unsuited to deal with that eventuality.

Honestly though, Ballmer is less of a dinosaur than he his an ungainly creature.

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They Keep Using That Word

May 26th, 2011 - 9:38 am

Sometimes there’s joy in being wrong. For example, last quarter’s weak 1.8% GDP was not unexpectedly revised downward as I feared it would be. Instead, it stayed the same.

But jobless claims are up — unexpectedly.

Durable goods orders are down — unexpectedly.

Food prices are up — unexpectedly.

And a weak dollar is pushing oil up yet again — unexpectedly.

Sigh.

Trifecta: Bibi Netanyahu wowed ‘em in Washington — and on the Trifecta set, too.

My longtime PJM stablemate Richard Fernandez found the most interesting video I’ve ever seen on YouTube — and that’s despite its dated presentation and unthinkable premise. I’ll let Richard set it up:

What would all-out nuclear war have looked like 50 years ago? It would have been fought with thousands of missiles and jet bombers sortieing from hundreds of airbases controlled by teleprinters, conference calls and video-link. Data would have been assessed on giant white boards and summarized in face-to-face briefings. At least one vision of how it would have played out is depicted in the 1958 Strategic Air Command simulation of a central nuclear war with the Soviet Union.

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That’s the first of six parts, but I suggest you click on the link above to see them all.

These were serious and — if you’ll pardon me using the word — sober men, faced with a terrible mess they’d inherited. Then they quite purposefully and methodically went about the business of preventing a third global war by making it too terrible even for Stalin’s heirs to contemplate.

It was a distasteful thing, at best, spending billions on nuclear bombs and bombers and fighters and missiles and submarines and all the rest. Many of our best minds were devoted to new forms of mass death, and the command and control technologies to make it all work, instead of pursuing business, politics or the arts. Many of our finest men were tasked to making sure all those bombs and delivery systems would work, 24/7, no excuses and at a moment’s notice — just in case we suddenly needed to wipe out a third of the planet.

Because they were serious and sober, because they didn’t flinch, because they were grownups — they succeeded in their primary mission of preventing The First World Nuclear War.

Now you can see how they did it.

Thanks, I Needed That

May 25th, 2011 - 10:05 am

Back home from Playa where the heat was hot and the skies were blue and the beaches were sandy — and back to the coldest, wettest spring in 17 years of living in southern Colorado.

But tanned, happy, and more relaxed than I’ve been in a couple years. Now I just need a topic for Trifecta. We shoot four of them this afternoon.

Anyone here remember how to tie a tie?

I can’t speak to the local flora, but the fauna are real and they’re outstanding.

Decompressing/Priorities

May 20th, 2011 - 4:49 pm

There’d better not be a Rapture tomorrow, ’cause I’ve still got three and a half days of all-inclusive drinking ahead of me.

Gone Fishin’

May 17th, 2011 - 5:46 am

Melissa and I haven’t taken a vacation in two years, and it’s been three since we had a proper, super-lazy vacation. You know, the kind with swim-up bars and beaches and room service and swim-up bars.

I will be checking in throughout the next week, most likely with pictures of the beach (wink, wink). And over on the PJTV side, we’ve already stacked up enough Trifecta episodes to last until my triumphant return.

By “triumphant,” of course, I mean, “Tan, rested, and very likely still inebriated.”

Hair of the Dog: Newt Gingrich wins a round against NBC, Harry Smith uses CBS’s secret shrink ray on John Boehner, and Nikki Haley inspires impure thoughts in the darnedest places.

Bonus: You won’t believe Ron Paul’s secret plan for Pakistan.

And Then the World Didn’t End

May 16th, 2011 - 10:39 am

So, we hit the debt ceiling — weeks earlier and weeks later than anticipated.

It’s almost enough to make you think Tim Geithner doesn’t really know what he’s doing.