Monday, October 31, 2011


So, John Edwards fathers a child out of wedlock, covers it up with the connivance of his campaign manager, while his wife is dying of cancer. He further sneaks into LA to visit the mistress while still campaigning. The mainstream press, including the Los Angeles Times, on whose beat much of the action took place, refuses to cover any part of the story, and its left to the National Enquirer to scoop them all.

Meanwhile, Herman Cain is alleged to have made ". . . physical gestures that were not overtly sexual but that made women who experienced or witnessed them uncomfortable and that they regarded as improper in a professional relationship," and the mainstream press seems to have nothing else to discuss.

Maybe the left is correct. Maybe there still is racism in America.

tea party Outreach to Occupy Wall Street

A guest at our Halloween party Friday night (not pictured, but that's your author on the right) had attended some of the Occupy San Diego events, and said that the press image of the movement distorted what they are trying to achieve. No surprise there, as I have seen the tea party movement's principles and activities similarly distorted. She said that the movement has serious demands that are the result of government enriching particular companies through undue influence. Further, she stated that one of the demands of the group is to prevent a revolving door between corporate lobbying and government. She also said that the Iraq war was the result of weapons contractors being highly placed in the Bush administration, a point on which I disagree. However, we had many points of agreement, but disagree fundamentally on what is to be done about government regulatory and tax policies, as well as subsidies and bailouts that enrich the privileged elite with the connections to benefit. The occupy movement seems to believe that we can build "good government" free from the influence of the wealthy and powerful, which will then regulate the activities of that group for the greater good of all Americans.

I fundamentally disagree that this goal is possible. What then is to be done? The fundamental problem is that the wealthy, and especially those in the financial sector, have benefited from government subsidies, bailouts and implicit guarantees. They make risky bets, knowing that the taxpayers will be on the hook to bail them out, while they still walk away rich. The only solution is to attack the source of the problem, which is to allow banks and other financial firms to fail. Further, we must ban subsidies and pork barrel projects. We must press for transparent and simple regulation that applies evenly to all businesses. To protect ourselves from financial meltdown from "too big to fail" we must enforce ever higher capital reserve requirements for ever larger firms, rather than execrable and impenetrable regulation like the 2319 page Dodd Frank bill.

The occupy movement targets the outrageous outcome of taxpayers bailing out the already wealthy. But there movement is being hampered by other deficiencies, and they could learn from the tea party movement. But I think they could get more traction and even tea party support if they made a few changes. On the other hand, the tea party should be thanking them for protesting the problem of crony capitalism. Crony capitalism and corporate welfare are a twin cancer on America, depleting our ability to grow the economy in a just way. However, the occupy movement is not getting the traction it deserves due to a number of distractions.
  • It seems that #occupy is protesting all wealth, not just the unearned wealth. Americans think that Steve Jobs, for example, deserved to keep the wealth he earned, Wall Street bankers with implicit guarantees from Uncle Sam, not so much.
  • Too many socialists in the movement call for the collapse of capitalism. The tea party purged racists from its movement, occupiers should purge the anarchists and socialists from theirs. (Yeah, I'm comparing socialism to racism. Various forms of socialism, such as national socialism and communism, have killed far more people than racism ever did. If you don't like the comparison, you're reading the wrong blog.)
  • The occupy movement is perceived as trashy, as in literally leaving trash in its wake. Be model citizens, and the 99% of the public that isn't protesting might take #occupy more seriously. It leaves the impression that you are spoiled children, not adults taking responsibility for changing the republic.
Taking a look at this Occupy Wall Street web site, I can find common cause with some of their complaints, such as:
  • They have taken our houses through an illegal foreclosure process, despite not having the original mortgage.
  • They have taken bailouts from taxpayers with impunity, and continue to give Executives exorbitant bonuses.
But some of the complaints seem shear fantasy:
  • They have used the military and police force to prevent freedom of the press.
Really? How are you able to publish your manifesto, and how am I able to read it?

So I will end with what I told our young guest, Friday.
It's the crony not the capitalism and its the corporate welfare not the corporation that are causing the problems in America today. You complain about money in politics, but after forty years of successive reforms, nothing has been done to stop it. At the end of the day, you never will because the rich have freedom of speech as well. The situation is like what Steve Forbes described. You have vermin in your kitchen. So you set traps, put out poison, and plug up the holes, but somehow the vermin keep coming back. That's because you have to stop keeping the cake under the kitchen sink! The cake is the largesse shelled out by government through crony capitalism and a regulatory excess that favors some businesses over others. The only way to get the money out of politics, is to get politics out of the business of dispensing money.
So how about it occupiers? Could we agree on ending all corporate subsidies, loans and tax loopholes as our common platform? Could we ask for a ban on government giving tax dollars to favored groups? Could we ask for regulatory simplicity, not complexity? Could ask for an end to "too big to fail?" I look forward to your response.

Friday, October 28, 2011

Quotes of the Week

Some great quotes about the state of the nation this week. First from Dean, on diagnosing the exact reason that the occupy movement appears to be careening out of control.

By rejecting the norms and institutions of civlized society they only find themselves recreating those institutions but without the underpinning of the rule of law. Without the rule of law, the Occupy "villages" become a study in the tyranny of the majority where pendulum swings in the "mood" of the General Assembly. . .

Next, from Peggy Noonan, quoting Paul Ryan on what should be the real object of our ire, both tea partyer and occupier:

The "true sources of inequity in this country," he continued, are "corporate welfare that enriches the powerful, and empty promises that betray the powerless." The real class warfare that threatens us is "a class of bureaucrats and connected crony capitalists trying to rise above the rest of us, call the shots, rig the rules, and preserve their place atop society."
Amen, brother.

Happy 125th to an American Inspiration

Today marks the 125th anniversary of the dedication of the Statue of Liberty. The statue has become synonymous with the aspirations of immigrants the world over coming to America's shores seeking refuge from the tyranny that has plagued most of mankind's history. Today's events include the swearing in of 125 new citizens of this Republic. As I have opined before, we need to have skilled immigrants on the order of millions to solve our economic woes in this country.

Weekend Music Chill - Halloween Edition

Probably light blogging as the youngsters are hosting a Halloween party tonight. A small sampling from the party queue on the Sonos playlist follows.

Thursday, October 27, 2011

Romney Quote on Mortgages

I earlier posted about Mitt Romney taking heat for getting it right on mortgages. I neglected to include his quote. He is responding to the question of what should be done about housing and foreclosures.
"One is, don't try and stop the foreclosure process. Let it run its course and hit the bottom. Allow investors to buy homes, put renters in them, fix the homes up. Let it turn around and come back up. The Obama Administration has slow-walked the foreclosure processes that have long existed, and as a result we still have a foreclosure overhang."
Anyone who doesn't think that is the swiftest way for the market to recover should demand their tuition back for their economics classes at Columbia and Harvard. If they took economics, because we don't know; there is no transcript available.

Wednesday, October 26, 2011

Obama Inflates the Education Bubble in the Name of Stimulus

What could go wrong? The President announced he is using his power to make a slight expansion in the program that the Democratic Congress passed in 2010, that basically allows students to never have to repay their student loans and gives them an incentive not to report income after graduation. Republicans should repeal this program after they gain control of the White House and the Congress in 2012. The President's idea is to cap student loan repayment rates at 10 percent of a debtor’s income that goes above the poverty line, and then limiting the life of a loan to 20 years. Take this example, even if not typical:
If Suzy Creamcheese gets into George Washington University and borrows from the government the requisite $212,000 to obtain an undergraduate degree, her repayment schedule will be based on what she earns. If Suzy opts to heed the president’s call for public service, and takes a job as a city social worker earning $25,000, her payments would be limited to $1,411 a year after the $10,890 of poverty-level income is subtracted from her total exposure.

Twenty years at that rate would have taxpayers recoup only $28,220 of their $212,000 loan to Suzy.

The president will also allow student debtors to refinance and consolidate loans on more favorable terms, further decreasing the payoff for taxpayers.
What's really wrong is that the cost of education has increased far faster than its value, in terms of increased earnings. There is in fact, an education bubble, that is already starting to collapse, if the complaints of those with master's degrees in comparative ethnic dance studies are to be believed. Check this graph from Carpe Diem:

If we had a housing bubble that burst in 2008; how would you describe the tuition graph? Clearly, the government subsidies are partially to blame for this increase. More importantly, the subsidies distort the economy and depress economic growth, because the supposed "investment" in college is providing the return on investment.

The Economist provides an excellent summary of the situation. The whole article is worth a read.
Mr Thiel believes that higher education fills all the criteria for a bubble: tuition costs are too high, debt loads are too onerous, and there is mounting evidence that the rewards are over-rated. Add to this the fact that politicians are doing everything they can to expand the supply of higher education (reasoning that the "jobs of the future" require college degrees), much as they did everything that they could to expand the supply of "affordable" housing, and it is hard to see how we can escape disaster.
Mary Lacey, at TechCrunch, interviews legendary venture capitalist and PayPal co-founder Peter Thiel, and has this to say.

Instead, for Thiel, the bubble that has taken the place of housing is the higher education bubble. “A true bubble is when something is overvalued and intensely believed,” he says. “Education may be the only thing people still believe in in the United States. To question education is really dangerous. It is the absolute taboo. It’s like telling the world there’s no Santa Claus.”

Like the housing bubble, the education bubble is about security and insurance against the future. Both whisper a seductive promise into the ears of worried Americans: Do this and you will be safe. The excesses of both were always excused by a core national belief that no matter what happens in the world, these were the best investments you could make. Housing prices would always go up, and you will always make more money if you are college educated.

Like any good bubble, this belief– while rooted in truth– gets pushed to unhealthy levels. Thiel talks about consumption masquerading as investment during the housing bubble, as people would take out speculative interest-only loans to get a bigger house with a pool and tell themselves they were being frugal and saving for retirement. Similarly, the idea that attending Harvard is all about learning? Yeah. No one pays a quarter of a million dollars just to read Chaucer. The implicit promise is that you work hard to get there, and then you are set for life. It can lead to an unhealthy sense of entitlement. “It’s what you’ve been told all your life, and it’s how schools rationalize a quarter of a million dollars in debt,” Thiel says.

That sense of entitlement explains a lot about the unemployed twenty-somethings who are occupying Wall Street.

Tuesday, October 25, 2011

Should the Rich Pay More Taxes?

Of course, they should. And in a growing economy they would be. But raising the marginal tax rates on the "rich" actually produces little extra revenue, especially, given the flawed, loophole riddled tax code that we have in the United States. The question of how to increase revenue without discouraging economic growth has fortunately been answered by our experience with the 1986 tax reform. Economist Martin Feldstein explains.
The Tax Reform Act of 1986, enacted 25 years ago last Friday, showed how a tax reform that includes lower rates can change incentives in a way that grows the tax base and produces extra revenue.
How does this work?
This dramatic increase in taxable income reflected three favorable effects of the lower marginal tax rates. The greater net reward for extra effort and extra risk-taking led to increases in earnings, in entrepreneurial activity, in the expansion of small businesses, etc. Lower marginal tax rates also caused individuals to shift some of their compensation from untaxed fringe benefits and other perquisites to taxable earnings. Taxpayers also reduced spending on tax-deductible forms of consumption.
The path ahead for the Congress to raise the revenue needed to run the government and grow the economy is straightforward. The Economist editorializes
Make sure the rich pay their share, but in a way that makes economic sense: you can boost the tax take from the wealthy by eliminating loopholes while simultaneously lowering marginal rates.
The growth that results from fewer economic distortions in the tax code can also spur job creation in the economy.

Serious talk about reforming our dysfunctional tax code is a winner for the Republican nominee for President. This is why I am encouraged to see Rick Perry come out for a flat tax, although I am less impressed to find that he would give taxpayers the option of filing under the old system. Since the wealthiest have the most impact on the economy, this undermines the outcome of increased growth from a flat tax. Herman Cain's 9-9-9 plan also pushes the conversation, but a new national sales tax, on top of income taxes is irresponsible because there is no limitations on future Congress' ability to hike both rates.

I think the best plan would involve lower marginal rates for all forms of income, but an end to all deductions and loopholes, including the mortgage interest rate deduction. I would be willing to consider a charitable deduction, but that might be all. The same is true for the corporate tax code. All of the special tax breaks need to come out and profit should be calculated using generally accepted accounting principles. Top marginal rates around 20% and a corporate tax rate of 20% would be achievable. I am in favor of keeping corporate taxes rates and personal income tax rates the same to prevent shifting between retained profits and income, available to owners of corporations. Better to cause all business decisions to be unbiased by tax code considerations. The only way I would favor a national sales tax would be if the 16th amendment were repealed.

Mr. Feldstein concludes.

Combining that base broadening with a 10% cut in all tax rates would be revenue neutral in a traditional static analysis. But the experience after the 1986 tax reform implies that the combination of base broadening and rate reduction would raise revenue equal to about 4% of existing tax revenue. With personal income-tax revenue in 2011 of about $1 trillion, that 4% increase in net revenue would be $40 billion at the current level of taxable income, or more than $500 billion over the next 10 years.

The Joint Select Committee should insist on counting that revenue as the starting point for a serious deficit reduction plan.

Monday, October 24, 2011

Romney Gets One Right

Supposedly, Mitt Romney gave a "political opening" to Obama when he suggested that the housing mortgage crisis should be allowed to run its course. I don't see how. As is typical, the White House obfuscates on this issue and makes a spurious argument. Here is Jay Carney:
What we firmly do not believe is that the answer is not to simply let the housing market bottom out and let investors come in and fix the problem. That’s not a solution. That’s a solution that basically says to middle-class Americans who have been responsibly paying their mortgage and who, through no fault of their own, have seen their economic situation get quite desperate because of the prices in the housing market that you’re on your own — tough luck, I’m not going to help you. That’s not this President’s approach.
The problem isn't the people who responsibly paying their mortgages. That sets up a straw man that doesn't exist to make it sound like homes are being seized illegally. The mortgage industry certainly bears investigation for certain practices, but for the most part, homes being foreclosed are in arrears. Whether the mortgage holder such as a bank, thinks it would be better to foreclose or renegotiate should be decided on a case by case basis. When a house is "underwater" the mortgage holder is going to take a haircut either way, so I don't see how they are not sharing in the losses.

The other issue is purely economic. Here is what the administration proposes.
The key to the new approach, hashed out by Housing and Urban Development Secretary Shaun Donovan in recent weeks: allowing homeowners to refinance at lower rates regardless of how far their home values have fallen, while reducing or eliminating prohibitive refinancing fees.
Sounds great, but the economic incentives don't add up for most homeowners who are underwater and behind. If someone has a mortgage on a home with a loan amount of $500,000 against a home valued at $350,000; it doesn't matter if the mortgage interest rate is 7% or 4.5%, there is little incentive to pay back the loan. Plus, many of these people can't repay, even if on favorable terms.

We have commented on this situation and our message remains the same, the sooner housing prices fall to market clearing prices to attract investors, the sooner we will start an economic recovery. Mitt Romney is essentially saying the same thing.

In an interview published Tuesday ahead of presidential debate, Romney told Las Vegas Review Journal's editorial board that solving the foreclosure crisis would require letting banks proceed against homeowners who have defaulted on their mortgages. New investors could then rent out the homes until markets adjusted.

"As to what to do for the housing industry specifically and are there things that you can do to encourage housing: One is, don't try to stop the foreclosure process. Let it run its course and hit the bottom," Romney said.

I like his competent understanding of the economy.

Caption Contest

Yes, that is a Mercedes SLK 320, sporting an Occupy home made window placard. Spotted today in Mission Bay Park. Your best caption wanted. Winner will get a free subscription to The Liberator Today and B-Daddy's Other Blog.

Honestly, I had promised myself I would stop blogging about Occupy Wall Street for a while, to at least see where that movement is headed.

Sunday, October 23, 2011

Explaining a Few News Items

Lots of articles about the problems besetting the Occupy movement, especially Occupy Wall Street. I take no pleasure in their difficulties, but this seems inevitable for a movement that has adopted the French Revolutionary model, with the whole Paris commune/General Assembly concept. It is good to remember that the French Revolution ended in slaughter and dictatorship. The American Revolution stood the test of time, because a constitutional republic with separation of powers restrains the worst impulses of the mob. Early on I had hoped that their movement would focus on crony capitalism and call for an end to cozy relationships between business and government, but they don't seem to be trending in that direction. I also could be wrong about that, because I don't trust the media to accurately portray them any more than the tea party movement was accurately portrayed.
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Much has been made of stagnating wages in the U.S., especially on the left. Professor Perry at Carpe Diem suggests that their may be a relationship to the number of workers entering retirement and stagnating incomes. I agree but not for the reasons cited by Perry. He suggests that the workers leaving the workforce see household incomes stagnate because they are now retired. But I don't think the statistics include retirees. However, there is an impact of the increasing number of retirees and the relatively fewer Gen Xers as compared to Baby Boomers. As the boomers retire, they leave the work force at their peak earning years. But there are fewer Xers to replace them, but more Millenials than Xers. This causes the average age of the work force to trend younger, and therefore less well paid. See the bulge of retirees at the 50-55 year old group below.

Opposition to the Keystone pipeline, designed to bring so called "tar sands" oil from Canada to the United States is usually couched in language about the potential impact to water supplies and the like. However, famous global warmist James Hansen, also director of the Goddard Space Flight Center, explicitly links opposition to the pipeline to preventing global warming.
Phase out of emissions from coal is itself an enormous challenge. However, if the tar sands are thrown into the mix it is essentially game over. There is no practical way to capture the CO2 emitted while burning oil, which is used principally in vehicles.
Note that this is a tacit admission that there is plenty of oil in the ground, by a leading warmist. It is interesting to note that the enviros try to have it both ways, arguing simultaneously that our dependency on oil will come a cropper as we run out of oil, and also saying that if we keep burning oil we will wreck the environment. If we were really running out, then they wouldn't have to worry, would they?

Friday, October 21, 2011

Stimulus Not Selling

I got an email from informing me of the defeat of more stimulus legislation in the Senate.

Last night, Democrats in the Senate tried to pass a simple piece of President Obama's jobs plan that shouldn't be controversial: provide money to prevent further layoffs of teachers, cops, and firefighters at the local level, and pay for it by taxing the income of millionaires an extra 0.5%.

This morning a lot of media outlets reported that the Senate "rejected" or "voted down" this proposal.

But that's not what happened. The measure didn't come to an actual vote.

That's because every single Republican senator filibustered the bill -- meaning they wouldn't even let an up-or-down vote happen. Republicans have unilaterally decided not to allow even that simple majority vote on anything that might help the economy before the next election.

To be clear: This bill would have created jobs, and both parties have supported similar measures in the past.
Note the demagoguery of going after millionaires to pay for temporary spending in an area that is not even the federal government's responsibility. I applaud the Republicans for not getting sucked into this. Since this is temporary spending, it only postpones the day of reckoning for states in dealing with budget problems associated with pensions of teachers, cops and firefighters. Better to allow these tough times to force state governments into action now.

Further, all of this stimulus spending is doing squat to increase private sector employment. At a time when we need to expand the tax basis by increasing private sector employment, employing more government workers isn't going to help the economy, because their pensions become a long term liability on the public purse.

The next gambit will be spending on "infrastructure" like roads and bridges. To some extent, this is a federal responsibility at least, but it should be adequately funded in ongoing budgets. Further, the same stupidity of taxing millionaires will be used.

Wonder why stimulus spending isn't helping the economy? The main reason is the temporary nature of the spending. Second, it is put to uses that primarily benefit various levels of government. Finally, the various program tend to be poorly administered. Consider, how the small business stimulus of $30 billion worked out. The Treasury actually only disbursed $4 billion. They only started approving applications in July, 2010, three months before the program ended. And consider this little gem.
More troubling, the $4 billion in loans the government did make might not really help small businesses anyway. A Wall Street Journal analysis of Treasury data found that about half of the banks that took cash from the fund used some of it to pay back the Troubled Asset Relief Program. Rather than giving money to the restaurant around the corner or the startup in your neighbor’s garage, the banks gave it right back to Uncle Sam, bettering their balance sheets but doing little to spur business expansion or job growth. The Chamber of Commerce howled, branding the program little better than a bailout for small banks.
TARP has been defended as a success because the loans are being repaid. But if GM and small businesses are just using government dollars to repay TARP, how is that a success?

The economy would recover on its own if the government would just get consistent tax and regulatory policies in place and start to deal with long term liabilities and debt. But perpetual short-sightedness seems to prevent that.

Weekend Music Chill

"Lost that lovin' feeling" is how I'm feeling about the Republican presidential field and the chances that the occupiers will embrace libertarian solutions to corporate greed (hint, it's competition and an end to bailouts, subsidies and loans.) Maybe its time for a new round of tea party protests focused on the stupidity of more stimulus and crony capitalism.

Lessons from the Greek Tragedy

Successive Greek governments borrowed heavily and lied about it to sustain spending on high wages for public sector employees, close to half the work force. Now that the bill has come due, a massive general strike, further reducing the output of the economy has been called to protest austerity measures the current government is putting into place to please creditors and the other European governments who are putting up rescue money. Seemingly no one is willing to face the essential fact, that no amount of rescue money can save the Greek economy, especially given the popular mood in Greece. The current government of George Papandreou has said that elections will be called early next year, but his party is unlikely to retain power. From the WSJ:
Greeks have become frustrated, suffering from rising crime and suicide rates as more shops are boarded up and personal bankruptcies spiral higher. The country has a young-worker unemployment rate of more than 40% and likely faces a fifth year of economic recession in 2012 amid deeper austerity measures.
Austerity is the word for what the government is doing, but unwinding the socialist economy might be a better plan. Corruption, bureaucracy and significant state ownership of telecommunications, tourism and energy companies have wrecked the Greeks ability to grow their economy.

Ultimately, the outcome will be a default which will impact the Greeks themselves, such as pensioners holding debt, foreign financial institutions, and international institutions such as the IMF. The fear is that banks in Europe, especially France will fail as a result, which would lead to a global financial melt down. Additionally, Greece itself would suffer as liquidity would seize up in that country.

But, too bad. This is unavoidable. Putting into household terms, what if you owned a house which kept rising in market value, due to a bubble, let's say? Let us further stipulate that you borrowed against that rising value to fund your current expenses. Your spending was your income (A) plus your borrowing (B). When the bubble burst, you would have two problems. First, you could no longer live at your prior high level of expenditure A + B. Further, the same problems that caused the bubble to collapse might also reduce your income. Finally, you are saddled with the debt from borrowing and lack the means to pay it back. Even if you file for bankruptcy and move out of your home, your new lifestyle is significantly less extravagant than before. Further, you will have a hard time getting new loans to finance a new business, for example, if you wanted to go for a higher income. This is the problem the Greeks are facing. They probably can't afford to pay back their debts unless they sell their assets, and even then, I am not sure that would work. They are going to face drastically reduced average incomes for some time to come. Right now they are striking and protesting, rather than dealing with moving away from the socialism that got them into this mess in the first place.

This also is essentially the message Chris Christie has for the union employees in New Jersey. You were lied to before, and the promises made cannot be kept. Unless we restructure pension deals you won't get paid at all. The earlier we start working on a solution the better, because the problems just keep getting worse the longer we put this off.

Wednesday, October 19, 2011

San Diego's Budget - Impact of Prop D Defeat

Last November's defeat of the half-cent sales tax measure, Proposition D, was supposed to be the warning shot across the bow that galvanized city leaders into drastic action to cut budget deficits. From the Citizen’s Fiscal Sustainability Task Force Analysis of FY2012 Budget Deficit:
In all frankness, the seeming absence of a sense of urgency demonstrated by the City leadership since the public’s November 2, 2010 rejection of Proposition D’s additional revenues as a deficit solution is disturbing. On November 3rd, the citizens of San Diego anticipated swift and aggressive actions from the City leadership to resolve what was advertised as a dire fiscal situation. With the prospect of $500 Million in new tax revenues coming from the passage of Proposition D, there was a commitment by the City to quickly implement the reforms articulated in our last report. Instead from November to December, little or no significant actions were taken by the elected officials to eliminate the Structural Deficit in 2012. When the 18 month budget was passed in December 2009, Councilman Young added an amendment requesting the Mayor present a plan by June 30, 2010 that would permanently eliminate the Structural Deficit. If Proposition D was that plan, then once Proposition D failed, it was anticipated that a new plan would be forthcoming. Instead, during the November Budget Committee meeting, when asked if the City would be developing a new mid-year budget to get a head start on new savings and reforms, City Management went on record indicating there were new positive economic results coming and a mid-year cut was not necessary (City Council Meeting November 11, 2010). In light of pre-election assurances by elected officials that Propositions D’s failure would result in drastic service and cost reductions, the decision to not address mid- year budget cuts given that Proposition D did in fact fail stands in stark contrast with these promised actions.
Almost a year later we get the following news report.
The San Diego city budget deficit for next year is shrinking and the future is a bit brighter with a projected surplus in 2017, according to the latest financial prognostications from Mayor Jerry Sanders Wednesday.
Maybe that's why the politicians didn't do much after the defeat of Prop D, they knew the situation wasn't as dire as they had claimed. But here is what Mayor Sanders had to say in 2010 about public safety if Proposition D was rejected.
Sanders says there will be significant cuts to public safety if Proposition D is rejected. “To date, we’ve spared them, by and large, but we don’t have a lot left to cut,” he said. “And there’s going to be some public safety implications, implications in terms of services throughout the neighborhoods.”
However, no such cuts materialized. Indeed, so the called fire station brown outs ended in July of this year. Clearly better not to listen to politicians asking for tax hikes to close budget gaps. Better to force them to reduce spending, it seems to work.

Tuesday, October 18, 2011

Miscellaneous Musings

I missed the Republican debate tonight, by all accounts, that now seems like a wise choice. Gary Johnson was excluded and CNN moderated, what were we to expect? Sarah Palin said that the winner on substance was Newt Gingrich? Maybe that's true, but that's a sad night indeed.

Douglas Schoen polls the OWS crowd and finds some interesting statistics. The one I found most perplexing was "And by a close margin, protesters are divided on whether the bank bailouts were necessary (49%) or unnecessary (51%)." I thought this was a protest against the greed of the financial sector.

Fire Dog Lake takes exception with Schoen's characterization of the protesters as leftist radicals.

Here’s one of the key questions in Schoen’s poll:

What frustrates you the most about the political process in the United States? {Open Ended}

30% Influence of corporate/moneyed/special interests
3% Our democratic/capitalist system
3% Stagnant middle class wages
21% Partisanship
15% Joblessness
6% Income inequality
7% Corruption
2% Entrenched bureaucracy
2% Bush tax cuts
2% Obama abandoned left
2% Military spending
2% Federal Reserve
5% Everything

Out of this, which is mostly a pro-jobs, anti-special interest message, Schoen sees left-wing radicalism.
Hard to know who is more accurate both sides have some reasons to exaggerate their point.

Meanwhile, the #OWS crowd discovers a certain love, for well, private property.

Greece is probably going to default on its debt, with massive strikes being called as the Greek parliament prepares to vote on austerity measures.
Greece is expected to grind to a halt, with a general strike that could ground flights, halt most public services and shut offices and shops.

The 48-hour strike comes as parliament prepares to vote on the latest round of austerity measures, including more tax hikes, pay cuts and job losses.
The irony of further damaging the economy and making their own situation even worse seems lost on the Greek unions. The dysfunction in the Greek political system is such that no amount of good news (Germans and French agreeing on new terms) on the next bailout will change my opinion that the Greeks will default. David Skeel in the WSJ argues that the Europeans have failed to learn the lessons of the Bear Stearns bailout.
Europe can't afford to bail out Italy, so it might as well send the right message now by forcing Greece to restructure its debt. Greece is Europe's Bear Stearns.
. . .
If the European Union continues to treat rescue as the principal option for Greece, and to treat "default" like a dirty word, it is headed down the same path the U.S. took in 2008. As bad as that sounds, the consequences of going the bailout route will be far worse than they were in the U.S.
. . .
The U.S. isn't setting the best of examples in this regard, of course. By continuing to inject the government into the economy and failing to allow the markets—especially the housing markets—to return to normal, we almost certainly have prolonged our own period of low growth.
With more economic turmoil in store, I can't see an improved economy saving Obama from being a one-term President, that can now only be achieved by Republican ineptitude, of which they appear eminently capable.

Monday, October 17, 2011

Why is This a Priority? Medical Marijuana Adverts to be Prosecuted

In another O > W moment, the U.S. Attorney for San Diego and Imperial counties, announced a crack down on publications that advertise medical marijuana. Flashback to 2009 and the administration was announcing that they were going to back off medical marijuana fights.
The government's top lawyer said that in 14 states with some provisions for medical marijuana use, federal prosecutors should focus only on cases involving higher-level drug traffickers, money launderers or people who use the state laws as a cover.
. . .
"it will not be a priority to use federal resources to prosecute patients with serious illnesses or their caregivers who are complying with state laws on medical marijuana."
I guess that advertisers who are letting those patients know where they can find the dispensaries aren't covered in that proclamation. Here is what U.S. Attorney Laura E. Duffy had to say.
. . . marijuana advertising is the next area she's "going to be moving onto as part of the enforcement efforts in Southern California." Duffy said she could not speak for the three other U.S. attorneys covering the state, but noted their efforts have been coordinated so far.

"I'm not just seeing print advertising," Duffy said in an interview with California Watch and KQED. "I'm actually hearing radio and seeing TV advertising. It's gone mainstream. Not only is it inappropriate – one has to wonder want kind of message we're sending to our children – it's against the law."

Of course, when it comes to deporting felons in this country illegally, there is prosecutorial discretion, but marijuana dispensaries, operating in accordance with state law are federal targets.

I wonder what the Occupy San Diego crowd thinks about this turn of events and how supportive of Obama they would be if they were aware.

As I have discussed before, I believe that ending drug prohibition is consistent with my tea party values. Further, this may not be the winning issue that the administration thinks it is. Gallup reports that the support for marijuana legalization is now at 50%.

Another reason to support Gary Johnson perhaps? Certainly he has been ahead of the curve on this issue.

Sunday, October 16, 2011

Quote of the Week - Occupy Wall Street

Nicolas Kristof, writing in the New York Times today, eloquently defines the common and legitimate complaint that both the Occupy Wall Street and tea party movement share.

More broadly, there’s a growing sense that lopsided outcomes are a result of tycoons’ manipulating the system, lobbying for loopholes and getting away with murder. Of the 100 highest-paid chief executives in the United States in 2010, 25 took home more pay than their company paid in federal corporate income taxes, according to the Institute for Policy Studies.

Living under Communism in China made me a fervent enthusiast of capitalism. I believe that over the last couple of centuries banks have enormously raised living standards in the West by allocating capital to more efficient uses. But anyone who believes in markets should be outraged that banks rig the system so that they enjoy profits in good years and bailouts in bad years.

The banks have gotten away with privatizing profits and socializing risks, and that’s just another form of bank robbery.

To steal a phrase, its the crony not the capitalism. And what enables the banks to manipulate the system to their advantage? In my opinion, the fiat money system, whereby the dollar is valued at whatever the Federal Reserve says it is. The more I think into these issues, the more I am convinced that a gold standard is necessary to prevent banking shenanigans. Some banks need to fail and bankers need to lose their jobs, before we are going to get a system that justly serves the interests of the all of these United States.

Further, when one looks at the tax code and regulatory landscape, its very complexity enables the bankers manipulation of the system. Better to have simple regulatory schemes, scrap the current tax code and start over with a simple system, in order to end the odious outcome that we currently suffer through. No extra-legal seizure of assets, as some in the occupy movement propose, but certainly we need to shut down the source of ill gotten wealth in the financial sector, when it accrues to the use of loopholes, bailouts and secret Federal Reserve funding.

Saturday, October 15, 2011

Occupy Wall Street and Social Security

The #OWS crowd doesn't seem to have coalesced around a coherent list of demands, but given the number of young people involved in the protests, I wonder why there aren't any demands for its reform. Consider the burden the young face, when they eventually get jobs. This chart is from the federal government's Social Security Administration, so it certainly does not overstate the problem.

The chart is actually misleading because it should use a log scale to express these ratios. The drop from 3:1 to 2:1 is what leads to this situation:

The Long-Run Financial Outlook

Social Security is not sustainable over the long term at current benefit and tax rates. Beginning in 2010, the program is projected to pay more in benefits and expenses than it collects in taxes each year. By 2036 it is estimated that the trust funds will be exhausted. At that point, payroll taxes and other income will flow into the fund but will be sufficient to pay only 77% of program costs. As reported in the 2011 Trustees Report, the projected shortfall over the next 75 years is 2.22% of taxable payroll.

So a twenty-something protester who starts working can look forward to significant increases in their payroll taxes, or inflation eroding their earning power as the federal government borrows more heavily to sustain benefits. If we don't act soon the electoral possibility for reform becomes grim. From Holman W. Jenkins.
We've mentioned before Henning Bohn, an interesting University of California at Santa Barbara economist, who argues that, precisely because of these demographics, a median-age voter in successive future elections will rationally vote for higher taxes in order to secure his or her expected Social Security and Medicare benefits.

This is one of the biggest dangers to our continued future. The demographic trends, coupled with current policies are turning the entire country into welfare dependents, or at least a large enough proportion that it skews elections. This is why I am adamant that we need to raise the retirement age now, as well as to start means testing social security. Those two actions will effectively reduce the numbers of seniors who are receiving social security, making further reform more achievable.

Who is going to push Mittens into proposing a real social security reform plan?

To be fair, here is what Romney has said.
“There are one of two ways you can make Social Security work forever.

“One of course is to raise the retirement age by a year or two,” said Romney. “The other is having slower growth in inflating the benefits of higher-income of Social Security recipients. Again, not current recipients but those in their 20′s, 30′s, 40′s and early 50′s.

“Those combined, represent the best course for us to be able to permanently solve our Social Security shortfall,” said Romney.

The Wartime President

Apparently, the President, not content to be involved in conflicts in Iraq, Afghanistan and Libya, announced that he is dispatching about 100 special forces units to Central Africa to assist with stamping out the rebellion of a group known as the Lord's Resistance Army. Why? MSNBC reports there is speculation that this is political payback.
Why is the U.S. sending its troops to finish off a fractured band of bush fighters in the middle of Africa? Political payback for the quiet sacrifices of Uganda's troops in Somalia could be one reason, experts say.
. . .
But capturing LRA leader Joseph Kony — a ruthless and brutal thug — remains the highest priority for Ugandan President Yoweri Museveni, a 25-year-leader who has committed thousands of troops to the African Union force in Somalia to fight militants from al-Shabab, a group with ties from al-Qaida.
I haven't had time to digest all the back story on this particular adventure, so it might be a good move in the grand scheme of things. But it sure does reinforce the O = W narrative, or as Dean put it O > W.

Since this effort is strategically linked to the efforts against al Qaeda, we have to ask, at what point do we wind down the GWOT? While al Qaeda is still operating, they seem to be a spent force politically. Perhaps giving them undue attention is counter-productive as it only enhances their street cred. If so, using proxies like the Ugandans against them seems wise. Of course, this will produce other unintended consequences.

Friday, October 14, 2011

Weekend Music Chill - Covers

This is a great song with an amazing cover done in a completely different style. Please enjoy Mad World, first by Tears for Fears, then by Gary Jules

Thursday, October 13, 2011

Talk of Joe Biden - Hillary Clinton Swap Annoying W.H.

They should be happy that the buzz isn't about a Barack Obama - Hillary Clinton swap. Here is the quote to support the headline.

The White House is getting irked about persistent speculation in the media that President Obama might dump Vice President Joseph R. Biden Jr. as his running mate in 2012 in favor of Secretary of State Hillary Rodham Clinton.

After hosts of NBC's "Today" show questioned both Mr. Biden and Mrs. Clinton on consecutive days about a possible switch, White House Communications Director Dan Pfeiffer posted this on his Twitter account Thursday morning:

"I have noticed a weird @todayshow obsession with faux story of Sec. Clinton replacing @VP...Have asked both about it last 2 days on the show."

But I wonder if the odds aren't developing for a nightmare scenario for the incumbent and by extension his party. I'm old enough to remember Lyndon Johnson declining to run after a poor showing in New Hampshire in 1968. I know that no one is challenging Obama in the Democrat party, but I wonder how bad it would have to be for him to announce he wouldn't be seeking a second term.

Official unemployment remains stubbornly stuck above 9% despite loads of stimulus. This chart is illustrative.

It is only a matter of time before there is default on euro zone debt, which will have a global chain reaction. Even though that is a necessary corrective, there will be short term negative consequences. I know that Franklin Roosevelt was re-elected with miserable economic numbers, but he was credited with making things better, regardless of whether he actually did so or not. Obama is not so widely perceived as handling the jobs problem well, given that he devoted the first half of his term to health care insurance reform. The percentage of people who "strongly disapprove" of his job performance is at a dangerously high 40%+.

While the topline numbers are troubling enough, dig deeper into them and the news gets no better for Obama. Forty-three percent of independents — a group the president spent the better part of the last year courting — strongly disapprove of the job he is doing. Forty-seven percent of people 65 years of age and older — reliable voters in any election — strongly disapprove of how he is doing his job.

Strong opposition to Obama has grown markedly since the start of the year.

Further, there is the steady drip of scandal from Solyndra and Fast and Furious, eroding his core strength of being perceived as a clean and different kind of politician. The OWS movement doesn't seem all that enamored of him either, check this video from, which seemed pretty balanced. Even though there are Obama supporters and detractors in this crowd, his supporters don't seem all that, well, ardent.

Interestingly, despite the potential for epic disaster, today's intrade odds put Obama at almost even money, 48.5% to re-elect.

But it still begs the question, how bad would it have to be for Obama to abdicate the nomination in favor of Hillary? Certainly not Biden. Or am I missing something?


I'm sure its just coincidence, but I got this email while I was putting this post together. Here is Chelsea Clinton, reminding us of how fabulous her father was.

B --

I knew that when my father left the White House 10 years ago, he was not going to stop working to give people the opportunities, health, and tools necessary to live a better life.

His vision of a more equal and prosperous world motivated his decision to run for his first public office (and all thereafter). It is that same force that motivates his work with the Clinton Foundation today.

As we celebrate 10 years of my father's foundation this year, we're looking to the future, and asking friends and allies to be part of creating that future.

Please share your thoughts on what challenges you think the Clinton Foundation should tackle in the next 10 years -- and please let my father know that you will stand with him in this work.

I recently had the honor of attending the Clinton Global Initiative (CGI) -- an annual meeting he organizes to inspire, connect, and empower a community of global leaders to forge solutions to the world's most pressing challenges.

The experience was invigorating, but it is the action that comes out of these meetings that is truly inspiring. Since the first meeting in 2005, members have made more than 2,000 commitments, which have already improved the lives of 300 million people in more than 180 countries.

That same commitment to meaningful and sustainable results can be seen in the remarkable work of the Clinton Foundation over the past decade -- transforming lives by giving people across the globe the tools they need to create better lives for themselves and their communities:

-- 4 million people in 70 countries are benefiting from lifesaving HIV/AIDS treatments at reduced prices;
-- 26,000 entrepreneurs, small business owners, and smallholder farmers are improving their families' livelihoods and their communities;
-- 30 million kids in the United States and Latin America are receiving more nutritious meals in schools; and
-- 4.5 million trees have been planted in Malawi and Rwanda, benefiting over 8,000 farmers.

I am very proud of the incredible work my father's foundation does -- every day, all year long, in every corner of the globe -- to change the course of people's lives for the better.

He inspires so many of us; he inspires me every day. So, let's give a little inspiration back as he embarks on his next 10 years of service to our global community.

Please send your thoughts about where the Clinton Foundation should go in the future -- and please let my father know that we'll stand with him as he continues his work around the world:

Thank you,

Chelsea Clinton

Quite interesting timing to be promoting the Clinton brand name.

Wednesday, October 12, 2011

Obama's Grades in College Were Terrible . . .

. . . at least compared to my own. How do I know this? I know my grades, and Obama won't release his; this is all you need to know. What got me thinking about this was a comment by Roger Hedgecock today that the Republican nominee will be subject to scurrilous attacks by the main stream media as they deploy legions of investigators to interview team mates from the candidates high school football team and former college roomies. Right on cue, we find this article from Maureen Dowd on Rick Perry's grades in college.

Studying to be a veterinarian, he stumbled on chemistry and made a D one semester and an F in another. “Four semesters of organic chemistry made a pilot out of me,” said Perry, who went on to join the Air Force.

“His other D’s,” Richard Oppel wrote in The Times, “included courses in the principles of economics, Shakespeare, ‘Feeds & Feeding,’ veterinary anatomy and what appears to be a course called ‘Meats.’ ”

He even got a C in gym.

Perry conceded that he “struggled” with college, and told the 13,000 young people in Lynchburg that in high school, he had graduated “in the top 10 of my graduating class — of 13.”

It’s enough to make you long for W.’s Gentleman’s C’s. At least he was a mediocre student at Yale. Even Newt Gingrich’s pseudo-intellectualism is a relief at this point.

But given Obama's known record and his failure to disclose all sorts of information about his past, the rebuttal should be relatively easy, as the headline of this post demonstrates. Given that more of such peurility will be coming from the left, the eventual Republican nominee needs to be ready. Here are some lines of attack and the easy counter-volley available to the Republican nominee.
  • The Republican is a friend of bankers and Wall Street. (Waiting for laughter to subside.) You mean like William Daley from JPMorgan, Geithner from the Fed, Peter Orzag, former budget director, now with Citigroup, Rahm Emmanuel earned $16.2 million at investment bank, Wasserstein Perella, Jacob Lew, the head of the Office of Management and Budget, at Citigroup?
  • The Republican's Uncle (fill in your favorite relative) was a tax cheat. (More laughter) Like Timmy "The Tax Cheat" Geithner, in charge of your collecting your taxes?
  • The Republican's uncle was arrested for DUI. Kind of like Uncle Omar? Was the Republican's brother also under a deportation order?
  • The Republican has some shady friends. Like Tony Rezko and Bill Ayers?
Please help out the eventual nominee and post your own examples in the comments.

Tuesday, October 11, 2011

Sadness over OWS - Leftists Appear Firmly in Control

Gateway Pundit is reporting that
The pro-Obama Working Families Party of New York, a group that shares the same address as the SEIU and ACORN in New York, posted this advertisement on Craig's list. They are looking for energetic progressives to help them to fight to hold Wall Street accountable. And the pay is $350-$650 a week depending on the responsibility and length of time of staff.

Gateway Pundit offers a screen capture of the Craigslist ad.

This saddens me, because I had previously posted about the possibility of a common agenda. Here in San Diego, the Voice of San Diego interviewed some of the protesters, and filtering out the stuff I couldn't understand we have:
  • Have student debt, no good job. (See Temple of Mut for discussion of education bubble.)
  • Corporations profited from Iraq war through no bid contracts. (There is actually some truth to that, but the dollar value is nothing compared to Wall Street bailouts.)
  • Inadequate health care for the poor. (No explanation of why Medicaid, America's largest program, let alone social program or health program, isn't providing care.)
Maybe I should have included injustice against LGBTQs of color, but I don't know what that means. However, there is little discussion of bailouts, the fed or crony loans to corporations, all of which are at the root of what's really wrong.

My offer of a coalition to deal with injustices that we can agree upon stands.

Monday, October 10, 2011

Time Warner Cable - Crap Service From a Monopoly Provider

On my other blog, I posted a short list of complaints about what is certainly the worst company I have ever dealt with in terms of customer service, Time Warner Cable. I note that they have a monopoly in their service area granted by the city of San Diego, so why should I expect good service.

Irony Defined

By this WaPo headline:

Al-Qaeda joins those questioning legality of U.S. killing of citizen Anwar al-Awlaki

No mention by al-Qaeda of illegal hijackings of airliners, killing of thousands of Americans, use of mentally challenged suicide bombers, blowing up mosques to foment violence in Iraq, etc. The list is long and tiresome. Even if one were to question the legality, and I have, hearing it from these scumbags is a little much to bear.

Surprising Veto by Jerry Brown - SB 469

I was alerted by a tweet from my councilmember Lorie Zapf that Governor Jerry Brown has vetoed the anti-Walmart legislation sponsored by Juan Vargas, SB-469. Despite any rhetoric to the contrary, this bill was designed to make it harder for cities to approve Walmart supercenters that sell groceries, in direct competition with the largely unionized grocers like Ralphs, Vons and Albertsons. Labor's support of the legislation is the key indicator that this bill was all about protecting union jobs from competition. From the U-T:
“We are disappointed but not surprised that we couldn’t defeat the millions spent by Walmart against this bill,” said Lorena Gonzalez, secretary-treasurer of the San Diego and Imperial Counties Labor Council. “We will continue to do more to work with small businesses and local decision makers to find a solution that protects local economies from supercenters.”
Protects local economies from supercenters? As long as the supercenters aren't given sweetheart tax deals, like say, sports franchises, then they will generate sales tax and property tax for local government, while saving shoppers real dollars due to increased competition. With the NY Times reporting that household incomes are continuing to drop, despite the "end of the recession," why wouldn't we want to help those hardest hit by getting more competition in the grocery business.

As an additional item that I find offensive, we have Juan Vargas explicitly using state legislation to meddle in local affairs.
The measure was introduced statewide after the San Diego City Council rescinded its ordinance that would have required superstores to undergo an extensive economic impact analysis as part of the permit process.

Despite all the rhetoric about how this is about transparency, it was not. It is commonly understood that adding bureaucratic layers of review is the best way to kill a proposed business project. Walmart's supercenters should enjoy equal protection under the law, and face the same scrutiny as any other land use proposal in any city. Is equal treatment for all businesses too much to ask?

Jerry Brown's second governorship is proving interesting if nothing else. He has vetoed legislation to allow card check to ease union organizing of farm workers, as well as legislation limiting paid signature gathering for petitions. On the other hand he signed the California Dream act legislation giving in state tuition rates to illegal aliens. He is certainly proving hard to predict. Exit question: How would a Meg Whitman governorship been substantially different?

OK, one more question, what do #OWS types think? Do they believe in equal treatment for all businesses?

Saturday, October 8, 2011

San Diego Tea Party and Occupy Wall Street Common Agenda - UPDATE

Update at bottom.

Temple of Mut has a great round up on the Occupy (insert your city here) events yesterday. Fellow SLOBs W.C. Varones and Left Coast Rebel both attended the San Diego event yesterday. W.C. has great video and LCR has revealing pictures. They are worth a review, because this movement is complex and even self-contradictory at times, see Thor's Assistant's comments on a related post, where their demands are listed.

Pictures from LCR's blog of yesterday's San Diego rally:

What are the red and black flags in the background? Glad to see the U.S. flag.

I am sympathetic to many of the complaints that motivate the Occupy Wall Street. Indeed, bailing out Wall Street and the banks with federal money was the initial event that inspired the tea party movement's beginnings in 2009. Unfortunately, OWS appears to be getting hijacked by the usual suspects on the left, the socialists, communists, labor unions and the Green party. This results in fundamental disagreement with those in the tea party on the means by which to end the injustice of government support for privileged corporations. When OWS protesters start talking about confiscation of wealth and trampling property rights, it reminds me of the horrors of the Russian revolution. However, the outrage that all citizens feel with a political class that looks first to the interests of itself, then of its large contributors is poignant and a basis for common ground.

Here is an agenda that we might all agree upon, because it attacks the root causes that led to both movements.
  • End the bailouts for financial firms and indeed all the failed corporations. Disabuse corporate CEOs of the notion that they can jet to Washington to save their companies.
  • Eliminate the special dispensations for favored groups and corporations in the tax code. Simplify the corporate tax code so that simple profit and loss, as measured by generally accepted accounting principles form the basis of taxation. No more special breaks because you lobbied Congress. Ethanol comes to mind.
  • End the secret bailouts by the federal reserve, which seem to involve more than just banks. Audit the fed.
  • While we are at it, restore the gold standard for our money so that banks can be held accountable and not get federal reserve bailouts.
  • Investigations and possible prosecutions for fraud in the manner in which mortgage backed securities were represented.
  • Prosecutions when banks foreclose on homes when they don't even own the mortgage.
  • End all government loans to corporations.
That's my short list, I hope those on the left can find some agreement.


I was alerted to a blog post by left of center, peak oil and "new urbanism" activist James Howard Kunstler, in the comments section of W.C.'s post. I am quoting one paragraph, because it shows that we can perhaps come to agreement with the left on some key issues.
For instance, what is Attorney General Eric Holder's program for prosecuting CDO swindles, the MERS racket, the bonus creamings of TBTF bank executives, the siphoning of money from the Federal Reserve to foreign banks, the misconduct at Fannie Mae and Freddie Mac, the willful negligence of the SEC, and countless other villainies? What is Barack Obama's program for restoring the rule of law in American financial affairs? (Generally, the rule of law requires the enforcement of laws, no?)
In case you can't follow the acronyms he uses.

CDO = Collateralized Debt Obligation. Similar in structure to a collateralized mortgage obligation (CMO) or collateralized bond obligation (CBO), CDOs are unique in that they represent different types of debt and credit risk. In the case of CDOs, these different types of debt are often referred to as 'tranches' or 'slices'.

MERS = Mortgage Electronic Registration Systems. A electronic registry designed to track servicing rights and ownership of mortgage loans in the United States. But consider this little gem in an appeals court ruling from Mortgage Electronic Registration Systems v LISA MARIE CHONG, LENARD E. SCHWARTZER, BANKRUPTCY TRUSTEE, et al.
Instead of presenting the evidence to the Bankruptcy Court, MERS attempted to withdraw the Motion from the Bankruptcy Court’s consideration, citing the failure of a MERS Certifying Officer to demonstrate that a member was in physical possession of the promissory note at the time themotion was filed. The only evidence provided by MERS was a declaration that MERS had been identified as a beneficiary in the deed of trust and that it had been named nominee for the originallender. Since MERS provided no evidence that it was the agent or nominee for the current owner of the beneficial interest in the note, it has failed to meet its burden of establishing that it is a real partyin interest with standing. Accordingly, the order of the Bankruptcy Court must be affirmed.
TBTF = Too Big To Fail. The doctrine that we can't allow some banks too fail or it will crash the whole economy. We have railed against that sufficiently in this space.

Friday, October 7, 2011

Quote of the Week

With Sarah Palin out, the theme of the last couple of weeks has been the weakness of the GOP field from the tea party perspective, commented upon previously. Over at Temple of Mut, the Mutnodjmet laments that her favorite, Sarah Palin is out of the race and offers this assessment of the field.
The rest of the GOP field is deeply flawed. Romney thinks man-made global warming is real and has Romneycare. Perry can’t debate effectively and just called reasoned citizens “heartless”. Cain presents as a radio talk show host, lacks depth on non-business issues, and besmirched Perry’s character falsely on a media constructed racial matter. Bachmann is a non-starter for her selection of Ed Rollins and the fact she is a Romney tool. Ron Paul is a no-go for his lack of sane messaging on important topics and foreign policy stances. Huntsman is an elite charlatan hack. Rick Santorum is too focused on social issues, and Gingrich is an beltway insider whose expiration date has passed (and who tried to usurp the tea party movement when it first arose).
She is left with Gary Johnson as the least objectionable candidate, a conclusion I have also reached. Read the whole piece here.

And to make sure you get your fill of Palin, because I won't likely be commenting on her much in the future, here is a video tribute to the former Governor of Alaska.

Weekend Music Chill

No back story on this weekend's music. I've been looking for some more modern music with high energy so here goes.

From Huntington Beach, here are The Offspring with Come Out and Play.

And from my birthplace, The White Stripes with Fell in Love with a Girl

Thursday, October 6, 2011

Question for Wall Street Protesters

If the Wall Street protesters were serious, they would be supporting a gold standard for our money. The Federal Reserve lends money to banks at artificially low interest rates that they use to finance deals or make loans and other investments. Given the fed's monopoly control of the money supply, this makes the whole banking system an insider's game. This allows the bankers to get rich and some of those ill gotten gains flow to Wall Street. A gold standard would force banks to rise and fall on their own and would return the money supply to a form that could not be manipulated.

So protesters, are you in favor of a gold standard?

More Obama = Bush: Gunwalking

Dean has been crushing the Fast and Furious story, since only CBS and the LA Times seem to want to cover it, and now CBS maybe not so much. Now, the administration is resorting to its first and last line of defense, blame Bush. The differences between this administration and the Bush administration shrink by the day. The only big difference? Obamacare. Other issues? Gitmo still open, even more wars in progress, use of secrecy to obfuscate legal justifications for prosecuting the war on terror, loads of bankers and Wall Street types in the administration, growing the size and scope of government, PATRIOT act extension, even higher deficits, lax border enforcement; the list is nauseatingly long. Now we can add gunwalking to the list, apparently. See all the latest gory details at Beers with Demo.

Wednesday, October 5, 2011

Palin Out, Front Runners Up

As I thought, Sarah Palin has said she won't run for President today. Her announcement was probably drown out by Steve Jobs' death, see previous post. I actually agree with her decision, because, as much as I admire her, I don't think that she had what it takes to be President. Leaving the Governor's mansion mid-term in Alaska was the final confirmation for me. I think she will continue to be effective in her role as community activist.
"I can be more effective and I can be more aggressive in this mission in a supportive role of getting the right people elected," she said. "I need to be able to say what I want to say and hold both sides of the aisle accountable."
Certainly her many fans will be disappointed, but her impressive media savvy will continue to make her a force to be reckoned with in American politics. I wish her well, she has a great message that I almost always agree with.

With Palin out of the race, Romney, Perry and Cain's odds have all improved, but Perry slightly more than the other two. According to today's Intrade, the odds for the Presidential nomination are:

Romney 57%
Perry 20%
Cain 7.5%
No one else clears 5%.

Temple of Mut is heartbroken. KT is plumping for Cain, and I can see why, given the distaste for Romney, and Perry's cronyism. I am really hoping Gary Johnson can break through. I think I am most impressed by his veto record as Governor of New Mexico. If there is anything that could help this country, it would be a halt to stupid new legislation and regulation.

Steve Jobs Passes

I want to join the many Americans, indeed, people all over the world, who mourn the passing of Steve Jobs today. His passing feels like the end of an era, even though common sense tells me it is not. It has been an era where American ingenuity fueled new products that the world craved. Steve Jobs epitomized the idea that business could be great, not through "lean six sigma," not by "listening to its customers," but by imagining and inventing new things that people would come to "need." He brought such creativity to our world and enriched the lives of billions of people. Can you even the same the same of any politician of the last 40 years?

I also wonder if the protesters on Wall Street today will realize that Jobs raised the capital he needed to fuel Apple's rise from the very place where they are tweeting their displeasure with America on their iPhones.

Rest in peace Steve, and know that you left the world a much richer place than you found it.

Tuesday, October 4, 2011

What if it's Mittens?

The intrade odds for a Romney nomination zoomed to 55% today with Christie's announcement that he's not running. (Why did Christie need to make an announcement?) Tea partyers need to start thinking about our strategy. Perhaps its not too early to coalesce around the most viable not-Romney candidate who is acceptable. Right now, I would say that Gary Johnson and Herman Cain are most likely. I'm assuming that Sarah Palin won't run.

The reason this is important is that Romney needs to be pushed towards making more shrink the government promises if he is to beat Obama. He won't win as Democrat-light. He made a good start with his promise to direct the HHS Secretary to grant Obamacare waivers to all 57 50 states. But other tea partyers have noted that he hasn't promised to sign a repeal. I know that you can't trust the promises of politicians, but we have to get him to start making the right promises if we are to have any hope of carrying out some of them. Romney's demagoguery over Perry and Social Security is especially unhelpful.

Here is Romney's very pathetic Florida ad, which lays out no plan whatsoever.

Interestingly, Obama's odds are down slightly on the Christie announcement. Maybe the money is on Romney to beat Obama and Christie leaving clears the field. Your thoughts?

Monday, October 3, 2011

Killng Americans Overseas in The War on Terror

The drone strike that killed Anwar al-Awlaki, U.S. citizen and likely traitor, caused me concern due to the legal issues involved. I believe there are circumstances under which U.S. citizens may legally be killed in combat operations. But just as I criticized Bush for asserting executive authority for wiretapping and Gitmo trials; I don't give this administration a free pass on killing Americans just because it's part of the war on terror.

The probable legal justification for the killing is that it is part of the war on terror and these Americans had participated in armed conflict against the United States. I say probable, because the administration isn't saying. The use of force appears to be authorized as part of the Joint Resolution to Authorize the Use of United States Armed Forces Against Iraq section 3.b.2:
acting pursuant to this resolution is consistent with the United States and other countries continuing to take the necessary actions against international terrorists and terrorist organizations, including those nations, organizations or persons who planned, authorized, committed or aided the terrorists attacks that occurred on September 11, 2001.
I quote this section because it was passed after the initial joint resolution regarding the war on terror. So is this the justification the White House is using to authorize the killing al-Awlaki?

No, because perhaps more problematic than the killings themselves, is the lack of transparency over the legal reasoning behind the decision. Supposedly a secret DOJ memo exists that provides legal cover for the decision, but no one is releasing it. Imagine that, Eric Holder not being forthcoming. Conor Friedersdorf in the Atlantic makes a good case that the lack of transparency is unacceptable in a constitutional republic.
What justification can there be for President Obama and his lawyers to keep secret what they're asserting is a matter of sound law? This isn't a military secret. It isn't an instance of protecting CIA field assets, or shielding a domestic vulnerability to terrorism from public view. This is an analysis of the power that the Constitution and Congress' post September 11 authorization of military force gives the executive branch. This is a president exploiting official secrecy so that he can claim legal justification for his actions without having to expose his specific reasoning to scrutiny. As the Post put it, "The administration officials refused to disclose the exact legal analysis used to authorize targeting Aulaqi, or how they considered any Fifth Amendment right to due process."
In a nation dedicated to the rule of law, a discussion of the legal issues are needed. There are some questions about whether al-Awlaki was a combatant, does merely encouraging others count? Tokyo Rose was convicted of treason after World War II, but there was a trial. I also question the use of CIA operated drones to prosecute the war on terror. How are they different from unlawful combatants, as we termed the al-Qaeda fighters in Afghanistan? They are not members of the military, customary international law forbids the use of civilians in armed conflict, so that they may be protected. A real discussion of these issues is needed, because we need to actually conduct combat operations within the Law of Armed Conflict and appear to do so as well. It is in our national interest that we be the strongest upholders of the rule of law in the world.

Ultimately, I think the Congress erred in giving the President open ended war powers to prosecute a world wide war on terror. In effect, the President can authorize drone strikes anywhere in the world if he "determines" that the target was involved in terror attacks directed against the United States. The only check on this power is that of public opinion and the Congress' eventually getting around to de-funding the operation. That is a pretty weak check in our constitutional republic. I think the President is narrowly within the letter of the law, here, but the law is a poor one. The Congress needs to declare the war on terror to be limited both in time and location to check the power of the Presidency to wage war. Further, a full legal debate about the means of prosecuting the war on terror is needed. Strong support for the rule of law is a conservative principle, but I don't see many conservatives asking these kinds of questions.

Meanwhile we continue with the irony of Obama looking very Bush-like in the use of state secrecy laws to shield inquiry into the legality of the administration's actions in the war on terror. What incongruity will we next face, perhaps anti-Wall Street protests supporting an administration filled with bankers and financiers?