The Dismal Political Economist

The Lost Decade – United States Economy Has Given Back 10 Years of Economic Progress

2012-03-02T05:25:00.003-08:00

Time to Party Like Its 2002

For those who have been economically successful in the United States for most of their lives, the economic and financial progress has been steadily upward. In fact, a majority of

U. S.

residents have experienced a life where each year brings higher income, a more expensive automobile, a better house, and an overall higher standard of living. Vacations have increased from one week to three or four, and camping has given way to resorts.

Most of those people who have enjoyed this success would argue that there is some unwritten rule that says economic conditions, at least for them, must improve every year. Alas there is no such rule. There is no guarantee that future generations will have better lives than current generations. In fact, over the last decade the level of economic conditions has actually regressed, and on average most western economies are lower today than they were a decade or so ago.

The Economist magazine has developed a set of measurements to determine the extent to which an economy has advanced or declined, and if it has declined, to what year it has declined back to.

In order to assess how much economic progress it has undone, The Economist has constructed a measure of lost time for hard-hit countries. It shows that Greece’s economic clock has been turned back furthest: it has been rewound by over 12 years. Elsewhere in the euro area, Ireland, Italy, Portugal and Spain have lost seven years or more. Britain, the first country forced to rescue a credit-crunched bank, has lost eight years. America, where the trouble started, has lost ten

Looking at the economy in terms of real GDP per person, which is the best measure of income per person adjusted for inflation and population growth we have this.

A different measure of GDP is needed to see how well consumers are doing. Inflation needs to be stripped out since it is higher output, not higher prices, that make people better off. Population growth also needs to be taken into account, since living standards are best measured on a per-person basis. Measured by real GDP per person a third of the 184 countries the IMF collects data for are poorer than they were in 2007. These 61 countries have each lost at least five years.

Some have not yet learned the lesson that economic growth is not inevitable. The IMF is one of them.

The IMF predicts that in three years Italy will be the only G7 country with real GDP lower than in 2007. Within this group, America, which is already growing again, is in a better position than Britain, which is not.

But exactly why that would be the case is not clear. It is certainly not the situation in Europe

Unlike income and GDP, there is no reason why unemployment statistics should improve year on year. But many advanced countries had managed to reduce joblessness to new lows in the years before 2007. The crisis blew all those gains away. In America the unemployment rate stands at 8.3% of the labour force, its 1983 level. In Britain it is at its worst for 17 years.

And what policy is Europe implementing. They are putting programs that will reduce rather than increase growth. The spectacular failure of Britain’s policy has resulted in even more austerity, and austerity in France, Spain, Italy, Portugal and Greece can only make things worse. Ireland is the only place of hope, not because of policy but because it is a small country whose economy may recover due to exports.

But one of the few absolutes in economics is that not every country can have a trade surplus. Really, it is, you can look it up.

Like Their Presidential Hopeful Counterparts, the Republican VP Candidates are Also Self Destructing

2012-03-02T05:21:00.000-08:00

Don’t Anybody Here No How to Play This Game?

As the Republican class of 2012 works its way towards the inevitable nomination of Mitt Romney for President, the race for the junior spot on the ticket seems to mimic the race for the senior slot. The four major contenders for the VP position along side of Mr. Romney (or if political junkies get really lucky, Mr. Santorum) is also pretty interesting in a macabre sort of way. Here is the status of the four major contenders.

Fla. Sen. Marco Rubio:

Sen. Rubio was the leading contender for the VP. His Hispanic background, his immigrant background as his family fled Castro’s Cuba and his appeal to social conservatives along with his possible ability to deliver Florida to the GOP all made him an ideal candidate. That is, until it turned out his story of his family fleeing Castro turned out to be completely bogus.

Of course a bogus background does not disqualify a person from Conservative candidacy, as long as the person is a Conservative, but independents might have a little bit of problem with a candidate who fabricates his own history. So Sen. Rubio is no longer the odds on favorite, but he is still a contender.

New Jersey Gov. Chris Christie

Gov. Christie has been a favorite of Conservatives more because of his tough talk then his actions. A blunt but effective bully, Gov. Christie has been a somewhat successful Governor in a Democratic state. His popularity has rebounded as he begins to restore funding to education and other programs, thanks to the success of national Democratic economic policy which has given his state greater revenues.

But Gov. Christie has at least one weakness that must bother Conservatives. He has a streak of tolerance, and has appointed a Muslim to a high court position and strongly defended his right to do so in the face of religious bigotry. He also is willing to let the people of the state vote on same sex marriage, instead of condemning it. Hence his stock as a VP candidate is falling.

Indiana Gov. Mitch Daniels

Gov. Daniels aroused opposition in Conservative circles last year by calling for the Republicans to put aside the culture wars. As the recent controversies over health insurance for family planning and abortion restrictions has shown, this was good advice. But good advice is something Conservatives hate so they downgraded him.

Now the Gov. has returned to the good graces of Conservatives by implementing an anti-union policy in the state. But his bland nature doesn’t fit well, he is sort of a Mitt Romney without the Romney charisma and personality. (yes, that is saracasm)

Virginia Gov. Robert McDonnell

After Sen. Rubio’s fall the first term (and not to be second term because of Virginia’s term limits) Governor of Virginia was the likely choice for the VP slot. Virginia’s economy has been strong because of the presence of large amounts of Federal spending, and this allowed the Governor to take credit for economic good times and at the same time rant against Federal spending (many Virginians are just not that bright).

But Mr. McDonnell now has his name associated with the terms “trans-vaginal” and "vaginal probe" and those arejust not terms any successful politician has ever been associated with. Gov. McDonnell is a closet radical masquerading as a rational conservative politician, but the publicity over his stand on pre-abortion ultra sound has made him a national joke. This is not to say being a national joke could prevent one from being a Vice President (see Quayle, Dan) but it gets harder because the media penetration of the national psyche is now greater.

So there it is, four flawed candidates all seeking to be the flawed Vice Presidential nominee of a flawed Republican Presidential candidate. Does anyone hear the name Jeb (No George is not my brother, we just have the same mother and father) Bush in the wind?

Casinos – A Growing Industry That Creates Jobs and Destroys Societies

2012-03-02T05:16:00.000-08:00

Here’s Hoping It Will Grow Itself to Death

At some time in the future the scientific community may discover the genetic defect that causes normally rational men and women to lose huge sums of monies to casinos. It is not gambling that takes place in places like casinos, it is the deliberate losing of money. For any given night and for any given amount wagered the casino can compute to the several decimal points exactly how much revenue the casino will have ~~earned~~ taken.

The Dismal Political Economist is a former instructor in statistics and probability. He once proposed to the Dean that the final exam in his probability course would be to take the students to a nearby casino, give them each $100.00 and any student who used the money to play any of the casino games instead of walking out with the $100.00 would be given an F in the course. The Dean was not amused.

The growth of casino gambling is an unexplained phenomena. On would think that after years of losing money to casinos the public would be fed up, but no, they just keep demanding more. And because state governments can get in on the action and use casino revenues in place of raising taxes, the parlors just keep coming.

After shunning the concept for years, Massachusetts, seeking solutions to its budget woes, last fall became the first New England state to pass a broad law allowing resort casinos. Now others may not be far behind.

Under the Massachusetts law, which allows for three casinos to be built in three different regions, the state will pocket 25 percent of the gambling proceeds, plus 40 percent of the proceeds from a separate slot parlor that it will also allow.

And the rest of New England is also taking a look at what Massachusetts is doing, and thinking , why not?

In New Hampshire, which dreads losing tourism money to Massachusetts, lawmakers are considering a bill that would allow up to four casinos there. Maine just granted its first casino license to a six-year-old Bangor slot parlor that will add table games next month, and a second casino is expected to open in Oxford this year. Both are the result of voter referendums. Rhode Island, which already has two slot parlors, will hold a referendum in November on whether to allow table games at one of them.

In Connecticut, the two tribes that offer gambling at Foxwoods and Mohegan Sun are now worried about losing patrons to Massachusetts. The Mohegan tribe is hoping to win one of the Massachusetts casino licenses and open a Mohegan Sun location in Palmer, a town of 12,750, which borders Brimfield.

The hope here, of course, is that overbuilding will result in severe harm to the industry, but that is not very likely. If, like The Dismal Political Economist believes, casino gambling is regarded as a “tax on stupidity” then it is probable that the industry has unlimited growth potential, the supply of stupidity being so great. Conservatives like to say that if you tax something you get less of it, in this case taxing stupidity seems to create more of it.

Dear Dismal Political Economist! – “No One Understands My Position on the Auto Bailout”

2012-03-01T04:56:00.000-08:00

An Advice Column for the Perplexed and Confused on Economic and Political Issues

[Editor’s Note: In his continuing effort to bring light and clarification to current events and current issues, The Dismal Political Economist is now answering reader’s questions on how the current political and economic climate affects them personally.]

Dear Dismal Political Economist

I have stated what I believe is a clear and unequivocal position on the government’s bailout of the auto companies GM and Chrysler. I wrote an opinion piece that said “Let Detroit Go Bankrupt” but by that I didn’t really mean they should go bankrupt. What I meant was that they should have a managed bankruptcy, whatever that is. I later said that the Obama program made the situation worse, but also that they did exactly what I proposed. I also said that the government should not have provided funding, but that they could provide funding at the end of the process.

For some reason even my supporters claim they don’t understand my position. What’s wrong with these people, how can I make this any clearer?

Signed

Mitt from Michigan (and Utah and California and New Hampshire and Massachusetts)

Dear Mitt:

While others would pull back from this challenge, The Dismal Political Economist can tell you exactly what to do.

You need to have your handlers come up with a set of stock phrases that you can use when this question of your position on the auto bailout comes up. For example when someone asks you to explain your position on the government’s support for GM and Chrysler you say

“You know my position on that”

“I think I have made my position clear”

“Check the record, my words speak for themselves”

“Read my past statements and you will see exactly where I stand”

and so forth and so forth until the questioner gives up in frustration. This will work, trust us.

Signed

The DPE

Million Moms for Bigotry Has New Target, Archie Comics

2012-03-01T04:54:00.000-08:00

Don’t Stop Them Now and Apple Pie and Chevrolet Are Next

The American Family Association, a group that advocates only for families that they think are morally fit has an offshoot group called One Million Moms. The one million moms, if they indeed have that many are out there protecting the rest of us from things they don’t like. For example, they have mightily protested the action by J. C. Penney to use Ellen Degeneres as their spokesperson. It seems they don’t approve of Ms. Degeneres’s private life.

The Offending Cover - Oh the Horror!!
Don't Tell the Children

Now the group is after Archie comics. While the rest of us see nothing but wholesomeness in the illustrated lives of Archie, Veronica, Betty, Jughead and the gang, it seems that the current issue of Archie comics has a cover that they do not believe is appropriate for children. This is not just their children, but everyone’s children, they being the moral arbiter of what your children should see.

After failing to convince JC Penney to fire Ellen DeGeneres as their spokesperson because she is openly gay, now the American Family Association’s group One Million Moms is putting Toys R Us in its crosshairs for selling an Archie comic book that features a same-sex marriage. The group demands that Toys R Us “remove all the same-sex ‘Just Married – Archie’ comic books immediately from your shelves” before children are “exposed to same-sex marriage.”

Here is the exact complaint from the million moms.

Select Toys 'R' Us stores are now selling 'Archie' comic books with a same-sex wedding displayed on the front cover. The front cover reads "Just Married" with two men marrying and one is wearing a service uniform. This comic book is being sold in select stores across the country. One example is the Queensbury, NY location in the upstate New York area.

The problem of course is that a family oriented publication like Archie comics thinks everyone should be allowed to follow their own personal beliefs when those beliefs do not injure or impinge on the lives and rights of anyone else. And thanks to Think Progress we have this eloquent response from the publisher.

Archie Comics co-CEO John Goldwater has a typically classy response to the kerfuffle. He says: “We stand by Life with Archie #16. As I’ve said before, Riverdale is a safe, welcoming place that does not judge anyone. It’s an idealized version of America that will hopefully become reality someday.

We’re sorry the American Family Association/OneMillionMoms.com feels so negatively about our product, but they have every right to their opinion, just like we have the right to stand by ours. Kevin Keller will forever be a part of Riverdale, and he will live a happy, long life free of prejudice, hate and narrow-minded people.“

Kinda hard to argue with that.

Uh Oh – Citi Economists Think Portugal is Next in Line to be the New Greece

2012-03-01T04:51:00.000-08:00

The Real Question – Who is Next in Line Behind Portugal

The Greek bailout is just about complete, with private investors getting ready to take a 50%+ haircut on the Greek sovereign debt that they own. The Troika (the IMF, the ECB and the European Union) has said that this will be the last time private investors have to take a haircut. Citibank economists say “no way”.

Citi analysts have attempted to explain the Portugal enigma, which they note now has the country’s 10-year bonds trading at some 1,000 basis points above Bunds.

The reason, Jurgen Michels and team say, is simply that the country is not on a sustainable fiscal path:

In earlier assessments of its debt position, we argued that Portugal would not be able to move on to a viable fiscal path without a haircut of 35% by the end of 2012 or in 2013. While we acknowledge that Portugal is in many aspects different from Greece, we now conclude that the size of the haircut will need to be raised to 50%, most likely taking the form of a reduction in the debt held by the private sector. We argue that the size of the haircut will depend on the macroeconomic situation, the amount of arrears that the government will need to settle, and the size of contingent liabilities that will require financing. In any case, assuming that market access cannot be regained before 2016, Portugal would need an extension in its official funding of between €50bn to €65bn.

Portugal is doing what the Troika said to do, and that is a large part of the problem. The country is forecast to be able to get money from the private credit markets in 2013, an outcome most of us say is impossible. So part of the problem is pure denial, and a position that hopes for the best while not preparing for the ~~worst~~ likely.

[thanks to Tyler Cowen]

Meanwhile Back in the Real World Does Anyone Notice that The Stock Market Has Endorsed the Obama Presidency

2012-03-01T04:50:00.000-08:00

No Wonder Republicans Hate Him

If you listen to Republicans the Obama Presidency has been an investor’s disaster. The deficit is out of control, unemployment is all Mr. Obama’s fault, and business has no confidence in the economy and so it will not invest. In fact investors just hate Mr. Obama and will flee the markets.

The only problem with this scenario is that things are not working out quite that way. The Dow Jones is now in the 13,000 range. On Tuesday

After bouncing up and down around the 13000 level for a week, the Dow Jones Industrial Average finally closed above that psychologically important mark for the first time since May 2008.

Hm, May 2008, we wonder what party controlled the Presidency in that month?

So looking at the chart of the market can anyone see where Mr. Obama took office? Yeah, right about at the low point.

Any explanation why Wall Street is raising money to defeat Mr. Obama? Well he does want them to pay their fair share of taxes, and everyone knows that Wall Streeters would rather have lower after tax income than higher after tax income as long as taxes are lower. Everyone recognizes Wall Streeters are rich, nobody thinks they are smart.

Mitt Romney on the Daytona 500 NASCAR Race – “I Just Love Cars”

2012-03-01T04:49:00.000-08:00

No, Make that Car Team Owners

The fact that Mitt Romney is very rich does not disqualify him from being President of the United States. Franklin Roosevelt and John Kennedy were great leaders who came from very wealthy families. The fact that Mr. Romney has no clue about the part of the world that is not rich does not make him a very attractive candidate. Here is Mr. Romney waxing poetic on the sport of stock car racing.

Romney was at Daytona last year and said he also has been to the track in New Hampshire. Does he follow the sport?

"Not as closely as some of the most ardent fans," he said. "But I have some friends who are NASCAR team owners."

In this same vein one can easily imagine the answer Mr. Romney might give to similar questions. For example on baseball

Romney was in New York and was asked if he followed the Yankees.

“Not as closely as some of the most ardent fans” he said, “But I have some friends who are Major League team owners.”

And on foreign policy

Romney was at the United Nations and was asked if liked foreign countries.

“Not as much as some” he said, “But I have some friends who own several foreign countries.”

And on Real Estate

Romney was asked how many homes he owned and said

“Only five or seven, but I have some friends who own ten or twelve.”

And whether or not he likes a nice meal

Romney was asked if he likes a good steak dinner

“Not as well as some meat lovers” he said, “but I have some friends who own chains of restaurants, and two who own about a third of the state of Texas.”

So there you have it, Mitt Romney, just one of the regular guys.

Mitt Romney’s Double Win in Michigan and Arizona Puts the Emphasis on Ohio and the South For Next Week’s Super Tuesday

2012-02-29T05:28:00.001-08:00

And Nate Silver’s Early Weekend Analysis Was Right On

Looking at the Primary results in Arizona it’s too bad Mr. Santorum did not beat 99 to 1 odds and win the state, but then nobody really beats 99 to 1 odds. Of course it didn’t help that Mr. Santorum spent the last week of the Michigan/Arizona campaign building his lack of electability. One wonders what the results would have been in these two states had Mr. Santorum been prepared for the lone debate, and had decided not to make a bunch of idiotic statements. But then, he would not have been Rick Santorum, would he.

In Michigan it probably would not have made any difference. Mitt Romney did what he had to do, which was to generate turnout in his strong areas. Actually, it looks like Mr. Santorum may have generated the turnout for Mr. Romney by disgusting voters with his recent comments. No matter, Republican voters turned out for Mr. Romney.

The Detroit area came out heavily for Mr. Romney, and his vote total in Michigan was more in 2012 then it was in 2008. This dashed the media’s hope for a really close election, and while Mr. Romney did not win by as great a percentage as he did in 2008, he will claim momentum going into next Tuesday’s Super Tuesday primaries.

This Forum has followed the forecasting models of the New York Times’s Nate Silver, whose Five Thirty Eight is the place to go for objective quantitative analysis. Before the weekend Mr. Silver had Mr. Romney up about 4 points, pretty close to the actual result. Over the weekend the polls showed a closing of the race, but turnout for Mr. Romney and the stupid remarks by Mr. Santorum made those polls incorrect. As this Forum stated, when a race is projected to be very close it is very easy for the polling and the projections to be wrong. Here are the comments that were made here three days ago.

This Forum has often lauded the analytical abilities of Five Thirty Eight’s premier political analyst Nate Silver, for the simple reason that he is the most accurate forecaster of election results. Mr. Silver uses quantitative models of polling and other data to forecast the percentage a candidate will get and the probability that the candidate will win.

Because the models used by Mr. Silver rely on data as it becomes available, they are not good predictors until just before an election. So now we have the best forecast available for the Republican primaries in Michigan and Arizona, a day before the election. The expectation is that Mr. Romney will win Michigan by about 4 points.

Michigan	VOTE PROJECTION	CHANCE OF WIN
Mitt Romney	38.9%	77%
Rick Santorum	34.6	23
Ron Paul	15.6	0

The Romney win was 3.2% points, 41.1% to 37.9% pretty close to what Mr. Silver's model was saying. Both candidates picked up votes from the collapse of the Paul and Gingrich vote (although Mr. Paul, like Mr. Santorum is claiming victory because they having a different defintion of winning then the rest of us.) Below the surface are some very important results that the major commenators will miss. Foremost of these is that Mr. Romney won amongst Catholic voters, and he won the anti-abortion vote. The point, Mr. Santorum's appeal on social issues is a loser in a state like Michigan. The contests in March will now determine if that is a permanent state, or if social issues can propel Mr. Santorum in other, more conservative states.

As far as projecting Super Tuesday, it will no be until the weekend for polls to be reliable. The voters will have to digest the results of the Michigan and Arizona primaries, and this will take a few days. So don’t pay any attention to what anybody says until Saturday at the earliest. Then look at Mr. Silver’s modeling results. That should tell you what to expect.

Newt Gingrich May Be Selling His Candidacy to Various Businesses

2012-02-29T05:15:00.000-08:00

Is This the Real Reason Newt ~~is Running~~ Ran for the Nomination?

When Newt Gingrich announced that he was running for the Republican nomination for President for 2012, a lot of us, ok, make that all of us, thought that he was not a serious candidate. The thinking was that Newt was basically using the political campaign to sell Newt, Inc. because that’s what Newt does for a living. And he does it very well. He makes a lot of money selling Newt.

This hypothesis was largely confirmed when Mr. Gingrich immediately went on a long vacation after announcing his candidacy, and his staff quiet en masse. In late 2011 Mr. Gingrich’s candidacy actually had the aura of being a real campaign, but this caused voters to actually consider Mr. Gingrich, and that immediately spelled the end of any serious consideration by any serious considerators.

So we are back to the original theory, that Mr. Gingrich is running to enhance the Gingrich brand, and maybe pick up some small change. Businessweek reports how he is leveraging his candidacy to promote a concept called “Lean Six Sigma”. Here is what Lean Six Sigma means.

Last year, Mike George, a former management consultant, began approaching Republican Presidential candidates about signing his pledge to eliminate the national deficit using Lean Six Sigma, a strategy he developed in the 1990s. Enrollees in Lean Six Sigma courses learn ways to cut waste in their companies and make their workers more effective, earning “green belt” certification for one to two weeks of training and “black belts” for four.

Mr. George has tried to sell his concept to Republican candidates, and finally formed a PAC to support Mr. Gingrich. So Mr. Gingrich has returned the favor.

So the 72-year-old Texas businessman decided to form a super-PAC and get behind one candidate: Gingrich. The candidate has name-dropped Lean Six Sigma in campaign appearances, media interviews, and Republican debates no fewer than 28 times since mid-2011, according to a Bloomberg News review of transcripts and news reports

Of course everyone denies there is any quid pro quo, but

More than anything, the relationship illustrates a new way for a wealthy donor to leverage an election as a public-relations tool for a product or message. It’s “kind of amazing,” says Craig Holman, a lobbyist with Public Citizen in Washington, a group that advocates for more regulation of political donations. “I could easily see it catching on: ‘You tout my book, and I’ll provide you with a portion of my proceeds.’”

And maybe it is perfectly innocent. Yeah, right.

Sears is in Serious Trouble – Cash is Threatened – Company Selling Valuable Real Estate and Stores

2012-02-29T05:12:00.000-08:00

Stock Has More than Doubled Since January 2012

Go Figure

The signs of failure of hedge fund manager Edward Lampert as CEO of Sears are everywhere. The Company is hemorrhaging cash and having to sell assets to build its cash levels back up to a safe level.

For the year, Sears reported a loss of $3.14 billion, a number that included $2.7 billion of charges, compared with a profit of $133 million for 2010. The fourth quarter had a $2.44 billion loss, compared with a profit of $382 million the previous year.

The Chairman of Sears, Mr. Lampert and his hedge fund own about 61% of the company. And since he has become chairman, Sears has not done all that well.

The company also reported an annual decline in revenue, its fifth in a row. Such trends are a stark reminder that Sears’s problems have deepened since it came under Mr. Lampert’s control.

Critics say that under Mr. Lampert the company has not spent enough to update its stores and that now, in the face of intense competition, Sears is in danger of permanently falling out of shoppers’ favor.

Pure speculation would say that when those hedge fund managers who have large egos (all of them do) try to actually operate a business they fail miserably. And that’s what seems to be happening with Mr. Lampert. The company has a great number of assets, and like every other entity, both personal and business ones, get into trouble they start selling those assets.

One of the asset sales appears to be in the bag. General Growth Properties, a mall operator, has agreed to buy 11 Sears properties, which will raise $270 million.

However, the other deal — which aims to raise as much as $500 million and is slated for later this year — is less straightforward. In effect, Sears aims to sell its smaller Hometown and Outlet stores to any interested Sears shareholders. The company said Mr. Lampert’s hedge funds expected to participate and exercise their rights in full.

But the danger is that Sears may be selling some of its best properties, which could mean even worse operating results in the future. On the conference call on Thursday, a Sears executive declined to say what proportion of its stores was profitable.

This story raises even more red flags, Sears is going to sell very profitable stores to Mr. Lampert’s hedge fund. Really, what possible conflict could exist there? But the really interesting part of all of this is the stock price, which has increased dramatically since the beginning of 2012.

Shares are up 6% at $65.41. The stock is up 106% in 2012, the top performer in the S&P 500. Netflix is the only other stock within the index that has had at least a 50% run-up this year.

What possible explanation could there be for that? Well it could be that investors are not all that bright. See, EBITDA is positive if you don’t list all of the expenses.

Sears said it had $277 million of adjusted earnings before interest, taxes, depreciation and amortization, or Ebitda. But Ms. Ross Gilbert said that excluded $383 million of cash contributions to its pensions. Including that would put Ebitda deep in negative territory. And if Sears’s top line continues to decline, the loss could be even deeper this year.

But not everyone is fooled.

The sharp rally still hasn’t prompted Credit Suisse analyst Gary Balter to change his stance on Sears.

“We believe the equity valuation is well out of line with comparable retailers,” he says, while reiterating an underperform rating and $20 price target.

Sears’ transformation and planned asset sales “buy time, they do not buy success,” Balter adds. “They are steps in the right direction but we believe that the hole that has been created will not be as easy to climb out off as investors believe.”

Balter says the stock remains “very expensive” based on traditional measures and would take more than a six-fold increase in EBITDA to come in line with its competitors.

“Investors need to separate liquidity concerns from valuation, with our near term focus being much more on valuation,” he says.

Good analysis there, and it is free! So what explains the huge rise in Sears stock? Well, a lot of Madoff investors have gotten some of their money back, and they have to invest it someplace, don’t they.

A Final Look At Michigan – It’s a Toss Up

2012-02-28T05:07:00.000-08:00

If Mr. Romney Loses – It’s a Throw Up

The final poll for the Michigan Primary has now been factored into the forecasting models that Nate Silver of the most accurate political Forum, Five Thirty Eight, produces, and the race at this point is too close to call. Here is the final quantitative analysis of that crucial primary.

Michigan	VOTE PROJECTION	CHANCE OF WIN
Mitt Romney	38.7%	55%
Rick Santorum	38.0	45
Ron Paul	12.6	0

The race is essentially a dead heat, with Mr. Romney at about 39% of the vote, Mr. Santorum at 38%. The probability of Mr. Romney winning is 55% over Mr. Santorum’s 45%, which says that Mr. Romney is still the slight betting favorite, but not by much. Do not be surprised though if the race is not close. Mathematical models like the ones Mr. Silver has developed are less accurate when the race is close, and the polling in Michigan does not have that high quality look, so the input data is not strong. The race could be that rare circumstance where polls and forecasters get it wrong.

The key is going to be turnout, and also whether or not enough Democrats, who can vote in the primary, go into the ballot booth and vote for Mr. Santorum out of a desire to scramble the race. There will be some rhetoric on this, but probably not enough Dems will vote to make a difference. If Mr. Romney loses though, expect this to be one of his excuses.

Turnout will also be the key factor in assessing the Michigan primary. If turnout is less than the 2008 race it will be an indication of the lack of interest in the Republican race by anyone other than diehard Republicans, and that in itself would be the major message from Michigan.

The other primary, Arizona, looks like a certain Romney victory. The models of Mr. Silver give Mr. Santorum only a 1% chance of winning. This motivates all of us to hope that Mr. Santorum does win Arizona, for everyone likes to see a 99 to 1 underdog pull it out.

Arizona	VOTE PROJECTION	CHANCE OF WIN
Mitt Romney	43.4%	99%
Rick Santorum	27.3	1
Newt Gingrich	19.2	0

REVEALED!!! Why Rick Santorum Talks About Contraception – He Doesn’t Know Anything About Anything Else

2012-02-28T05:05:00.000-08:00

A Candidate Exposes His Ignorance in the Opinion Pages of the Wall Street Journal – Where Ignorance Usually is Found

The Wall Street Journal editors are still not sold on Mitt Romney, even after he abandoned his own tax plan and replaced it with a tax plan specifically tailored for the Wall Street Journal. So now they have given space for Rick Santorum to spout his economic and tax views. This may well have an unintended effect for the Journal editors, because by allowing Mr. Santorum to discuss policy they do what many thought was impossible, they make Mr. Romney’s views look almost (but not quite) rational.

Mr. Santorum provides what he says would be his priorities for the first 100 days of office, should he be elected President of the United States. Here is a sampling with the appropriate derisive commentary.

sign an order on day one unleashing America's domestic energy production, allowing states to choose where they want to explore for oil and natural gas and to set their own regulations for hydrofracking

Uh, Mr. Santorum states already regulate hydrofracking.

All Obama administration regulations that have an economic burden over $100 million will be repealed

Ok, that should include all of them.

The corporate tax rate should be halved, to a flat rate of 17.5%. Corporations should be allowed to expense all business equipment and investment.

Wait, let’s see what he wants to do about the national debt which will of course be increased by this policy.

I'll propose spending cuts of $5 trillion over five years, including cuts for the remainder of fiscal year 2013. I'll propose budgets that spend less money each year than prior years, and I'll reduce the nondefense-related federal work force by at least 10%, without replacing them with private contractors

And once again a proposal to cut federal spending without identifying what programs will be cut. That’s allright, at $1 trillion a year that is just about all the non-defense discretionary spending. No education spending, no welfare spending, no spending on any government program. And he is going to fire a couple hundred thousand federal government workers, that should help the unemployment rate (get bigger).

I'll submit to Congress a budget that will balance within four years and call on Congress to pass a balanced-budget amendment to the Constitution which limits federal spending to 18% of GDP.

Well a $1 trillion in spending cuts would do, but all those other tax cuts will wipe out those savings, even if they could be done, which they cannot.

Revive housing. I'll submit plans to Congress to phase out within several years Fannie Mae and Freddie Mac's federal housing role, reform and make transparent the Federal Reserve, and allow families whose mortgages are "underwater" to deduct losses from the sale of their home in order to get a fresh start in difficult economic times.

Apparently Mr. Santorum doesn’t understand basic housing economics, and doesn’t realize the Fannie and Freddie are right now critical to reviving the housing industry. As for allowing families to deduct the losses on their homes when they owe more than they receive from the sale, exactly how does that work? See the banks won’t let them sell the houses because they are underwater, and so people either stay in them until the bank defaults or walk away from them and give them back to the bank. Being wealthy and having a million dollar income insulates Mr. Santorum from the realities of the housing world.

So there you have it, what millions of people thought was impossible. Rick Santorum makes Mitt Romney’s policy prescriptions look good, if only in comparison to the undiluted pure idiocy of what Mr. Santorum would do and why he would do it.

In South Florida Federal Housing Support is Being Cut in One of the Nation’s Poorest Areas

2012-02-28T05:02:00.000-08:00

In Other News, Mitt Romney Proposes to Drop Top Tax Rate for the Wealthiest Americans from 39.5% to 28%

One of the great surprises that the American people are going to have when or if Republicans (or even Democrats) start cutting the discretionary part of the Federal budget is what that will actually result in. On an unscientific basis, the opinion of this Forum is that most people think the Federal Government employees tens of millions of bureaucrats who sit around and waste taxpayer monies. The truth is the Federal government’s non defense discretionary spending largely consists of transfer payments to state and local governments and to non-profit organizations who do much of the work, and to profit making firms who supply goods and services.

Case in point is housing and low income assistance. In South Florida we have this situation.

Four cities in Miami-Dade County are bearing some of the deepest cuts in the country in federal housing money designated for nonprofit groups that serve the poor, the elderly and the developmentally disabled. Several of the groups’ directors said they had no choice but to turn more poor people away, at a time when services are in greater demand. Layoffs are also likely, they said.

It is not clear why Miami-Dade has been hit hard, but here is the reason why somebody had to be hit hard.

The city has been fighting cuts for the last two years but stepped up its battle in January, when it was told that it would receive even less than it had expected. Congress has cut more than $1 billion from the program during that same time.

Yep, if $1 billion was going to be cut, somebody was going to suffer. Here is a brief picture of that suffering.

“A 34 percent cut — that almost closes our doors,” said Lavern Scott, the executive director of Curley’s House, a food bank based in Miami that serves people in some of the poorest neighborhoods. “We help people who have less than $600 a month in income. How can you pay your rent and eat? How you pay your rent and afford your medication? It hurts us and every other agency.”

And what about children?

“We had 100 children in our day care center 10 years ago,” said Madelyn Rodriguez Llanes, program administrator for a center run by Centro Mater, a nonprofit group that tends to Miami’s poor in Little Havana. “Now we have 50. Soon it will have to drop to 10. The families that we see are people with real needs. They don’t have cars. They have already been cut from other services. They can’t pay for child care.”

The logic behind this is just about incomprehensible. Conservatives want people on welfare and government support to get jobs. To do that they need low cost or free day care. Eliminate low cost and free day care and you make it impossible for those folks to work.

The Obama administration must take a large part of the blame here. It is not clear how much clout they have with a stingy and miserly Congress but surely they have enough to prevent this sort of thing. What are they thinking?

A lot of this is coming because the programs are “block grant” programs, where the Feds just give the states and local government some money and let them decide how it is spent. In this way Congress and the President can say its not their fault if some agencies are decimated. Block grants are a great way to avoid blame, which is why the devastating cuts coming in Medicaid will be implemented by converting it to a block grant program.

And remember Mitt Romney, he’s the guy who says he’s not worried about the very poor, because they are taken care of. Mitt Romney, please beam yourself down from whatever point in outer space you reside and back to Earth.

What is the Real Conservative Tax Policy – Take a Look at the Proposals in Kansas

2012-02-28T05:00:00.000-08:00

Small Tax Increase on Low Income Taxpayer; Huge Tax Reduction on the Wealthy – That’s What We’re Talking About

Kansas is now firmly in the control of Conservative Republicans, and Conservative Republicans love nothing more than fiddling around with the tax system. In Kansas they are proposing the tax policy everyone else would call unfair. This is the rationale of their plans

State Republicans have been campaigning to overhaul the tax code in Kansas to spur growth. The idea is that, by eliminating income taxes for residents and small businesses, lowering the sales tax and ditching a host of tax credits, Kansans will have more money and thus stimulate the economy.

So what is the result of such a program as Kansas Republicans see it

A Kansas House tax committee passed a bill in which anyone making less than $25,000 a year — roughly half a million of the state’s 2.9 million residents — will pay an average of $72 more in taxes, while those making more than $250,000 — about 21,000 people — will see a $1,500 cut, according to Kansas Department of Revenue estimates cited by the Kansas City Star.

Well that seems fair, really it does, compared to the policy proposed by the state’s Neanderthal Conservative Governor.

The Kansas House bill, still under review by legislative leadership, is actually a less-ambitious version than one initially proposed by Republican Gov. Sam Brownback in which the poorest would pay $156 more in income taxes while those making $250,000 a year would pay $5,200 less.

Where could such an idiotic and punishing program come from? Kansas employed the most discredited economist in the universe, the aptly named Art Laffer (Laugher)

Reaganomics mastermind Art Laffer is getting paid $75,000 to consult on the state’s overhaul, and he ran into some flak in January when he arrived to give testimony on the new plan, according to the Kansas City Star.

And the state’s Governor has argued that the policy will make Kansas look much more like Texas.

"Our goal is for our economy to look more like Texas, and a lot less like California," Brownback said in a Wall Street Journal editorial praising the anti-income-tax plan.

How much like Texas? Kansas’ unemployment rate is among the lowest in the nation, with 6.3% unemployed, according to the U.S. Bureau of Labor Statistics; Texas’ is 7.8%. The USDA’s Economic Research Service estimates Kansas’ poverty rate to be 13.5%, while Texas’ is 17.9%.

Yep, as soon as Kansas’s unemployment rate increases and poverty rate increases they will declare the program a success.

Mr. Romney Has a Narrow But Solid Lead in Michigan, Large and Uncertain Lead in Arizona

2012-02-27T05:42:00.002-08:00

Quantitative Analysis from Nate Silver Points to a Good Tuesday for Mitt

[Update: New polls have caused Mr. Silver’s mathematical models to rate the Michigan race more of a toss up.

Since we ran the Michigan numbers early Monday morning, three new polls are out that make the state look more like a true toss-up and less like one that favors Mr. Romney.

Two of the surveys, from Mitchell Research and American Research Group, in fact give Rick Santorum a nominal lead in Michigan, by 2 and 1 percentage points respectively. The third, from Rasmussen Reports, gives Mr. Romney a 2-point advantage.

We also added a hard-to-track down survey from Baydoun Consulting, which gave Mr. Romney an 8-point advantage. However, it is less recent than the others, having been conducted on Thursday night rather than over the weekend.

Here is the way the race looks at midday Monday before the primary.

Michigan	VOTE PROJECTION	CHANCE OF WIN
Mitt Romney	38.8%	64%
Rick Santorum	36.7	36
Ron Paul	13.2	0

Getting that sweaty feeling yet Mr. Romney? You should.]

Because the models used by Mr. Silver rely on data as it becomes available, they are not good predictors until just before an election. So now we have the best forecast available for the Republican primaries in Michigan and Arizona, a day before the election. The expectation is that Mr. Romney will win Michigan by about 4 points.

Michigan	VOTE PROJECTION	CHANCE OF WIN
Mitt Romney	38.9%	77%
Rick Santorum	34.6	23
Ron Paul	15.6	0

The new polls, from Public Policy Polling and We Ask America, gave Mr. Romney leads of two and four percentage points, respectively, over Rick Santorum. They join two other polls released after Wednesday’s Republican debate, from Mitchell Research and Rasmussen Reports, that gave Mr. Romney leads of two points and six points, respectively.

There is less probability of an election night surprise when the polls are fairly consistent with one another, as they are in this case. That’s why our model makes Mr. Romney a 77 percent favorite to win Michigan even though he has a relatively tenuous 4-point advantage there.

A key factor to look at in Michigan will be turnout. If turnout is down substantially from 2008 this will be an indication of trouble for Mr. Romney in the general election. Most analysts ignore turnout because it is not an interesting subject, but here it is an important one.

In Arizona Mr. Romney has a large lead for a number of reasons. One is that Mr. Santorum has not spent much time in the state. Another is that Mr. Romney’s anti-immigrant image plays well with the anti-immigrant fervor of the Conservative base in that state and now the state’s radically Conservative, anti-Obama Governor has endorsed him. Look for Mr. Romney to win the state, but it may be closer than Mr. Silver’s models, which do not have the benefit of recent polling.

Arizona	VOTE PROJECTION	CHANCE OF WIN
Mitt Romney	43.4%	99%
Rick Santorum	27.1	1
Newt Gingrich	19.3	0

Two Romney wins will set the stage for an interesting Super Tuesday next week. In those contests the geography is more favorable to Mr. Santorum, but Mr. Romney’s momentum with two wins in Arizona and Michigan may offset that. Who knows, which is why they have elections.

European Central Bank Head Mario Draghi Condemns Europe to Long Term Economic Decline

2012-02-27T05:25:00.000-08:00

Maybe He Thinks This Will be Good for the Continent

Recently the European Central Bank was given a new Chairman, Italian financial expert Mario Draghi. One would have thought that given the problems of the Italian economy Mr. Draghi would be focused on implementing policies designed to improve Europe’s staggering economy. One would be wrong.

Mr. Draghi has taken the position that only austerity, primarily cutting government expenditures, raising the unemployment rate, reducing the middle class to near poverty like conditions and doing little or nothing to stimulate growth is what is needed in Europe.

There are no quick fixes to Europe's problems, he said, adding that expectations that cash-rich China will ride to the rescue were unrealistic. He argued instead that continuing economic shocks would force countries into structural changes in labor markets and other aspects of the economy, to return to long-term prosperity.

There can be no doubt in Mr. Draghi’s mind that he has the right policy

"There is no feasible trade-off" between economic overhauls and fiscal belt-tightening, Mr. Draghi said in the interview, his first since Greece sealed its second bailout.

"Backtracking on fiscal targets would elicit an immediate reaction by the market," pushing interest-rate spreads higher, he said.

Yes you are reading that correctly. “Economic shocks” by which he means recession are the tool that will force Europe to reform and return to prosperity. Of course, Mr. Draghi himself is completely immune to such shocks, having a nice job as head of Europe’s central bank.

Mr. Draghi is concerned about youth unemployment.

Mr. Draghi, Not Explaining How he
will Alleviate Youth Unemployment in Europe

He said Europe's vaunted social model—which places a premium on job security and generous safety nets—is "already gone," citing high youth unemployment; in Spain, it tops 50%. He urged overhauls to boost job creation for young people.

Now Mr. Draghi is correct in that labor markets need to be liberalized so that employers can hire workers without fear that they can never ever be terminated, but exactly why any business will hire any workers when business conditions are abysmal is not something people like Mr. Draghi understand.

A former IMF economists has stipped the rhetoric down to its core

"He's just sugar coating the message," said Simon Johnson, former chief economist at the International Monetary Fund.

"A lot of this structural reform talk is illusory at best in the short run…but it's a better story than saying you're going to have a terrible 10 years," he said.

Oh, and the ECB which owns a lot of Greek debt protected itself when Greek debt had to be written down.

In the interview, Mr. Draghi defended the ECB's decision to shield its €50 billion Greek bond portfolio from the steep losses private-sector bondholders face as part of a separate deal between Greece and its creditors to write down €107 billion in debt. He said the ECB "is committed to protect the taxpayers' money."

The person who is President in 2013 is going to face the repercussions of Europe’s policies, which will spill over and weaken the rest of the world’s major economies. Of course, if it is Mitt Romney then he will be adopting those same European policies, so at least the rest of us will know what results to expect.

Mitt Romney’s Fallacious Tax Plan Gets No Media Scrutiny – The Numbers Don’t Add Up, The Concepts are Erroneous

2012-02-27T05:21:00.000-08:00

But It Please One Target Audience, The Editorial Writers of the Wall Street Journal

The old Mitt Romney tax plan the one that is really not that old, in fact the one that isn’t even 6 months old is now largely gone. It’s death was Mr. Romney's need to appeal to the radical economic Conservatives in general and the editorial writers of the Wall Street Journal in particular. As such, with that target audience it really didn’t matter that the plan does not make much sense, because that audience really doesn’t care about what makes sense.

The key element of the plan is the proposal to reduce tax rates by 20% for each bracket. But if this sounds like a hug tax cut for the wealthy, Mr. Romney says no. He says his plan is revenue neutral meaning it will raise just as much revenue as the old system, and that it will be “distributional neutral” meaning income groups will pay the same under the Romney plan as they do under the existing plan. This of course is patently ridiculous.

Mr. Romney will accomplish this alchemy by changing deductions and other provisions of the tax code that will increase taxable income by supposedly an amount that will offset the lower tax rates. Of course, since Mr. Romney has not detailed what these will be or how much or who will be impacted, it is impossible to render an objective measurement of his plan. So he can say it is revenue and distributional neutral and only logic and intelligence can demonstrate that he is wrong, which of course they do.

The plan also brings back what must now be called “zombie economics”, zombie economics being a false idea that just will not die. In this case it is what is called “dynamic scoring” This discredited idea states that the higher growth generated by the lower tax rates will generated enough new revenue to offset some (if not all) of the revenue lost by the lower rates. No serious non-ideological economist believes this, but Conservatives love the concept since it allows them to claim that cutting rates will reduce the deficit.

If the plan were truly revenue neutral, then its only possible benefit would come from the idea that lower marginal rates will stimulate the economy. At some level this is true, but at current levels this is stupid beyond belief. The idea that lower marginal rates will stimulate investment goes against Econ 101, which as everyone knows states that investment is driven by demand. Remember what happened when marginal rates on the wealthy increased during the Clinton administration? The economy boomed.

There is another problem with lower marginal rates. They weaken what Economists called automatic stabilizers. When marginal rates are high, they result in a disproportionate increase in taxes and revenues as the economy recovers. This acts to reduce the deficit and to slow the economy and fight inflation. Similarly, when the economy is slowing taxes are reduced by a greater rate than the slowdown, and this helps the economy have a shorter and less severe recession.

So if Mr. Romney’s plan is implemented the deficit will increase, possibly to the level of $2 trillion and the natural decline in the deficit as the economy increases will not happen. If you need to see details on the Romney plan, look in the economic cookbook under “recipes for fiscal disaster”.

President Obama’s Interesting, Constructive and Futile Attempt at Corporate Tax Reform

2012-02-27T05:19:00.000-08:00

Giving Opponents What They Asked For – Except They Will Not Want It

As an election year gimmick, tax proposals are pretty interesting, at least more interesting than most election year gimmicks. This year we have Republicans racing each other to eliminate as much tax revenue as possible, never mind the deficit, Mr. Romney flip flopping on his own plans, and now Mr. Obama proposing corporate tax reform.

The Obama plan is labeled reform rather than reduction because it claims to be revenue neutral. In this way it changes the tax system but does not change the amount of revenue the government collects from the corporate income tax. For this reason alone it is DOA at the Congress, where Republicans would like to reduce the tax burden on “people” (“Corporations are people my friend”). However there are some interesting aspects to the President proposal.

The first thing to note is that the President’s plan lays out the difference between statutory tax rates and actual or effective tax rates. While the

U. S.

has high statutory rates, it doesn’t really matter because a lot of corporations don’t pay those rates. The effective rate, what the corporations really pay is just about equal to the average of major economies. As everyone can see, that argument about the U. S. having the highest rate is just not true, not that this fact will stop politicians from claiming it to be true.

TABLE 1: 2011 G-7 STATUTORY CORPORATE TAX RATES (IN PERCENT) Country	Statutory Corporate Tax Rate (including subnational taxes)	Effective Marginal Tax Rate (including subnational taxes)^b
Canada	27.6	33.0
France	34.4	28.3
Germany	30.2	23.3
Italy	31.3	24.0
Japan	39.5	42.9
United Kingdom	26.0	32.3
United States	39.2	29.2
G-7 average excluding the U.S.^a	32.3	31.9
^{a. The G-7 Average is calculated using 2010 gross domestic product (in current US dollars) as weights. Source: OECD.}
^{b. See Table A1 in Appendix I for an explanation of the methodology for calculating the effective marginal tax rate.}

However, even as the United States has among the highest statutory corporate tax rates, the effective marginal tax rate on corporate investment in the United States is similar to that in other competitor countries (see Table 1). The effective marginal rate represents what businesses would actually expect to pay on a marginal investment. The discrepancy between where the United States ranks in terms of the statutory rate and in terms of the effective marginal rate comes about for a number of reasons.

So what else is in the proposal that is of interest? Well there is some silly stuff, like changing the way corporate aircraft are treated for tax purposes, some serious stuff like making wealthy buy-out fund managers pay income tax on their income and some strange stuff. What is an example of some strange stuff? Well the program would change accelerated depreciation which allows for investment to have a shorter depreciation life than its physical life.

In an increasingly global economy, accelerated depreciation may be a less effective way to increase investment and job creation than reinvesting the savings from moving towards economic depreciation into reducing tax rates

This is strange because the President just finished implementing a policy that allowed for immediate write off of investment, the greatest accelerated depreciation there can be.

There is some really good stuff in here, like requiring corporations to pay a minimum tax on their foreign earnings, eliminating tax deductions for moving production offshore, and giving a tax credit for moving production from off shore to the United States. All good proposals that will fail to gain Republican support, probably because they are good proposals and one thing Republicans do not want is to ever do what’s good for the country if it means giving the President an accomplishment.

Dear Dismal Political Economist! – Are Republicans in Favor of Health Care Mandates?

2012-02-26T05:50:00.000-08:00

An Advice Column for the Perplexed and Confused on Economic and Political Issues

Dear Dismal Political Economist

I have just recently converted to the Republican party but I am unsure about some of the principles that we have. For example, for several years the party has said they are against “mandates” with respect to health care. I am also against mandates but I don’t understand why they are now in favor of mandates.

For example, they would mandate that a woman seeking an abortion have an ultrasound even if the procedure is not approved, recommended or suggested by her physician. They would also mandate that the patient be given certain information by the doctor. And in Virginia they want to mandate what goes into a person’s medical records. In fact it looks like they want to mandate a lot of aspects of a person’s medical care.

Can you explain to me how Republicans are against mandates when they seem in favor of all these mandates?

Signed

Confused in Carolina

Dear Confused

There are several aspects of the Republican opposition to mandates. One part of their opposition is that they are opposed to men having mandates, because that is gay stuff. They believe it is okay for women to have mandates as long as it doesn’t involve contraception.

But as far as mandates for health care is concerned, Republicans are only against mandates that Democrats are for. In fact, they believe that the government knows far better what should go on in a doctor’s office than the doctor or the patient. This is particularly true with respect to women, who according to many Republicans are just too emotional and weak to make their own health care decisions. So what you may call a mandate is for them just the natural result of protecting women, something they believe that a kind and compassionate government should do.

As a newcomer to Republican politics you should expect to be confused by these contradictory positions. Don’t worry, after a while you won’t even notice the inconsistencies in policy recommendations from the GOP, in fact you will come to find that it is one of the endearing qualities of that party.

The DPE

Substantial Support for Obama Health Care Law Exists Amongst Religious Groups, Including Catholic Organizations – Wait, That Can’t Be Right

2012-02-26T05:48:00.000-08:00

If That Were So Wouldn’t the Media Have Reported It? (No, Not Really)

As the controversy over health care, the President’s health care reform law, contraception and the role of government in family planning has erupted over the past several weeks, anyone who receives their news from the main stream media would have been under the impression there were two separate sides. On one side would be the President and his supporters, arguing for the extension of health care access to every American and the requirement that all American have health insurance. On the other side would be all the religious leaders and groups who felt the health care reform improperly restricted their right to deny access to certain health care procedures to people.

As it turn out, in the real world the opposition to the current Affordable Care Act is not universal within the religious community. Think Progress has called everyone’s attention to a brief filed on behalf of a large number of diverse religious organizations supporting the ACA. That brief was filed on behalf of groups including Catholics, Jews, Muslims, and Protestants.

The basis of their support is their belief that a truly devout and religious person would support access to quality and affordable health care for all, and that Medicaid and Medicare are key elements to that access.

Our organizations, as well as people of faith throughout our society, strongly support Medicaid and Medicare. In the faith community, we are often the first to witness need and distress from all causes. As providers of services and care, both physical and spiritual, our members, congregations and institutions, including religiously affiliated health care providers, are very familiar with the importance of Medicaid and Medicare.

And they go on to say

All individuals, regardless of their age, income, gender, gender identity, sexual orientation, race or ethnicity, geography, employment status, or health status, deserve equal access to quality, affordable, inclusive and account-able health care. Reducing health care options for some based on any of these factors is profoundly unjust.

And in case anyone is worried that tax exempt dollars paid for the legal expertise to file legal briefs, there is this

Counsel for the parties filed blanket consents to amicus briefs in this case. Counsel for amici timely notified counsel of record of its intent to file this brief. No party’s counsel authored this brief in whole or in part. No party or party’s counsel contributed money to fund preparation or submission of this brief. No person, other than amici’s counsel, contributed money intended to fund preparation or submission of this brief.

But don’t look for this aspect of the argument in any of the major newspapers, television networks to other major sources of news. They are not interested in fairly reporting the news, just in sensationalizing the news to sell papers and get viewers. Besides, reporting this aspect of the story might be considered bias in favor of the truth, and no one wants that.

Martha Stewart Continues to Prosper Based on the Martha Stewart Brand

2012-02-26T05:45:00.000-08:00

A Comeback Story That Says – Well We Don’t Know What it Says

Martha Stewart is an American story. Ms. Stewart moved from being a baby sitter for Mickey Mantle's kids and a model to being a household guru. She had her own TV show, her own product line and her own public company. She also got involved in an insider trading scheme, and she was ultimately tried and convicted of lying to the government.

Why Is This Former Convict Smiling?

Ms. Stewart served her time in a not particularly pleasant women’s prison in West Virginia. Her public complaints were relatively mild and few, and when released she resumed her career of marketing “Martha Stewart”. This has been a tremendous financial success. Ms. Stewart and Macy’s teamed up, with great results for both parties.

In 2005, Martha Stewart’s company approached Macy’s (M) with an intriguing proposition. It offered the nation’s second-largest department store chain the chance to sell a wide range of home goods bearing the name of the style doyenne. Stewart was already a household name, with a successful TV show and magazine and a line of housewares sold by discounter Kmart (SHLD). There was one possible downside: Stewart had just been released from a federal prison after serving five months for obstruction of justice. Nonetheless, Macy’s bit, and what followed was a partnership that made the Martha Stewart Collection one of the chain’s most visible brands.

Now Ms. Stewart is moving up to J.C. Penney

The chain agreed to buy a 17 percent stake in MSLO for $38.5 million and, starting next February, will open hundreds of mini-stores devoted to all things Martha. According to the companies, the partnership will generate more than $200 million in revenue over 10 years for MSLO. “Penney offered to buy a chunk of stock and infuse a bunch of money, and gave a great opportunity to grow,” says Margaret Gilliam, founder of an eponymous retail consulting firm.

Naturally all of this has Macy’s upset, and naturally all of it will end up on court, and naturally all of the rest of do not really care what the outcome of that court battle will be. Of greater interest though is how a former convict has been able to do so well with her personal brand. Here’s one explanation.

That Stewart can flex her muscles against a major licensee so responsible for much of her past exposure is due in part to a big shift in U.S. retailing. Since the Great Recession, stores have been luring balky consumers with merchandise they can’t find elsewhere, often hooked to a famous name—Kim Kardashian at Sears stores, for example. Retail consultant Robin Lewis says exclusive merchandise inoculates retailers against an increasingly common consumer practice: comparing prices on smartphones. That’s one reason it’s hard to go shopping these days without encountering Stewart’s towels (Macy’s), doggie raincoats (PetSmart) (PETM), build-it-yourself furniture (Home Depot) (HD), craft kits (Michaels Stores), and desktop organizers (Staples) (SPLS). Her brand even transcends retail, with signature houses in subdivisions built by KB Home (KBH) and destination weddings at Sandals Resorts.

And as for the socio-economic meaning of all this, well it’s hard to say. On one hand one has to admire Ms. Stewart for fighting back from a prison sentence and being an even stronger brand name. There is no question Ms. Stewart was made an example by the government, that’s what the government does with celebrity defendants. Their rationale is that high profile cases help deter crimes, and they may be right and no its not fair to the Martha Stewarts of the world, but that is part of the price of fame.

On the other hand it is hard to see why consumers will purchase a brand just because a celebrity’s name is attached to it. Are American consumers that shallow? Apparently they are. And so Martha Stewart has probably eclipsed an American icon like Betty Crocker as a marketing persona. And even that was hard for Ms. Stewart, because Betty Crocker is a fictional person whose life is infinite. Of course, one suspects people will buy Martha Stewart products long after she has passed away, and when they do few if any will even know she was once a real person.

Michele Bachmann to Run in Congressional District in Which She Does Not Reside

2012-02-25T04:57:00.000-08:00

Maybe the People in the District Where She Does Reside Know Her Too Well

Most people, The Dismal Political Economist included have always felt that one feature of American democracy was that the Congress was composed on Senators, who represent an entire state and Members of the House who represent a Congressional District. This structure was the result of one of the many compromises that created the United States Constitution, giving disproportionate representation to smaller states in order to help protect their rights from infringement by a larger state.

It seems only natural and fair that the people in a Congressional District elect one of their residents to represent them in the House. After all isn't that exactly what the term “representation” means. But it turns out that in Minnesota one does not have to reside in the Congressional District that one chooses to represent. For example for former (thank you) Presidential candidate Michele Bachman

Members of Congress don't have to live in the district they represent, so Bachmann is free to run wherever she likes in Minnesota.

And so Ms. Bachman will not run in the 4^th Congressional District of Minnesota, where she resides. Instead she will run in the 6^th Congressional District where she does not reside.

A Minnesota judicial panel on Tuesday released new political district lines that place U.S. Reps. Michele Bachmann, a Republican, and Betty McCollum, a Democrat, into the same congressional district, according to Bachmann's office.

Bachmann said that she will run for her old 6th District seat even though newly drawn congressional maps put her home in the 4th District, currently represented by McCollum.

"I'm announcing today that I will be running in the 6th Congressional district. I'll continue my service to the people in the district where I essentially went to junior high, high school, college, had my babies born and we built our business and we have our church and our family," Bachmann said

This Forum has frequently commented on how politicians in general and Republican specifically do not really like this “democracy” thing all that much. And as for the people of the 6^th District in Minnesota, well if they elect Michele Bachmann to represent them even though she does not represent them, well, they are getting what they deserve. Actually they will not be getting what they deserve, that is, representation in the House of Representatives but that is there fault, no anyone elses.

There is Bad News and Bad News on Unemployment in Europe –

2012-02-25T04:55:00.000-08:00

Why Can’t We Have Good News? – Because European Economic Policy is Producing the Bad News

If anyone wants to contrast the economic situation in Europe with that of the United States, he or she would find out that while employment is growing and the unemployment rate is falling in the U. S., the opposite is happening in Europe. Even worse, the burden is not spread evenly, young people are bearing the brunt of the suffering, with the youth unemployment rate in Spain and Greece above 40%.

Spain

has recently voted in a center-right government that is trying to tackle the problem by instituting reforms in the labor markets and employment agreements. The problem for most of Europe is that once a person is hired, it is extremely difficult to get rid of them if they are not appropriate for the job or if their services are no longer needed.

Everything the government is

Spain

is trying to do makes sense, because the structure of employment rights in that country and most others does not leave business management in charge of the hiring decision.

By cutting red tape, the new law makes it easier and cheaper to lay off workers. For most firms, maximum lay-off payments will be reduced from 42 months’ pay to 12 months, says Mr de Guindos. That may not immediately affect growth, he adds, but it will hugely boost business confidence. “The reform changes the idea companies have that labour rules are an obstacle,” says Salvador del Rey, of the Cuatrecasas International Institute, a think-tank. Another measure tackles Spain’s top-heavy collective-bargaining system. Whereas unions and employers previously imposed terms from above, companies can now break free of them. This means employers can negotiate shorter working hours or lower wages.

The labor laws that Spain is trying to be rid of are a great example of the law of unintended consequences. By trying to make employment more secure, unions and government made employment less secure. The proof, if the existing system were working to preserve employment there would not be charts like this.

But despite the policy of changing the labor markets and the way they function, one cannot be optimistic things will improve. This is because there has to be a demand for that labor when the labor markets are freed up. And Spain, along with most other European countries is adopting policy to reduce demand for labor. This is being done in the name of “austerity” and bringing the fiscal house in order.

How well does that policy work. Well ask the Greeks, they have been trying it for several years with catastrophic results.

Another Thing to Worry About – The Universe is Not Only Expanding, It is Expanding at an Increasing Rate

2012-02-25T04:53:00.000-08:00

Just What Everyone Needed – Another Useless Issue to Throw Money At

The current issues facing Americans are pretty severe. There is the question of Iranian nuclear capability, the decreasing functionality of the federal government, and the quest to find out why anyone would ever vote for Rick Santorum amongst others. Now a new issue has been added to the list of worries, the state of the universe.

This is a problem out there that has been known to scientists but for some reason has been kept from the rest of us.

It has been known since the late 1920s that the universe is getting bigger. But it was thought that the expansion was slowing. When in 1998 two independent studies reached the opposite conclusion, cosmology was knocked head over heels.

Okay maybe it hasn’t been kept from anybody,

Since then, 5,000 papers have been written to try to explain (or explain away) this result. “That’s more than one a day,” marvels Saul Perlmutter, of the Lawrence Berkeley National Laboratory, who led the Supernova Cosmology Project—one of the studies that was responsible for dropping the bombshell.

Maybe it’s just nobody cared. But it turns out this is a big deal amongst scientists who have nothing better to do, like finding a cure for cancer or trying to determine what genetic defect has caused European governments to try to destroy the European economy. After all, 5,000 papers and counting have been published on this problem which affects the lives of exactly zero of the billions of inhabitants of the planet.

For everyone who is wondering, here is the explanation of the issue.

Relativity says that for the universe to be flat, it has to have a very particular density—which in relativity is a measure not just of the mass contained in a certain volume, but also of the energy. The puzzle was that various lines of evidence showed that the universe’s endowment of ordinary matter (the stuff that people, planets and stars are made of) would give it just 4% of that density. Adding in extraordinary matter—“dark matter”, not made of atoms, that interacts with the rest of the universe almost only by means of gravity—gets at most an extra 22%. That left almost three-quarters of the critical density unaccounted for.

Wow, you would think is scientists are looking for something unaccounted for, they might focus on the $1.2 billion and growing missing funds from MF Global. That’s where we would look if we had scientific expertise and credentials.

But not to worry, a solution may be in hand. The scientists are going to take pictures of the universe with a digital camera. No not the one you carry in your man purse or woman purse, this is a really big digital camera.

AT FIVE tonnes and 520 megapixels, it is the biggest digital camera ever built—which is fitting, because it is designed to tackle the biggest problem in the universe. On February 20th researchers at the Cerro Tololo Inter-American Observatory (pictured), which sits 2,200 metres (7,200 feet) above sea level in the Atacama desert of northern Chile, will begin installing this behemoth on a telescope called Blanco. It is the centrepiece of the Dark Energy Survey (DES), the most ambitious attempt yet to understand a mystery as perplexing as any that faces physics: what is driving the universe to expand at an ever greater rate.

Really, the biggest problem in the universe is to understand why the universe is expanding at a greater rate? No, sorry scientists, that is not the biggest problem in the universe, and besides if you really want to know the answer, just call the universe and ask it. It’s in the yellow pages, under the category “Universes” and it has an 800 number so the call will not even cost you anything.

As Mitt Romney Tries to Shift the Debate to Tax Cuts for the Wealthy, Social Issues Like Pre-Abortion Testing in Virginia Present a Challenge to His Candidacy

2012-02-24T05:24:00.000-08:00

Mitt and His Potential VP Mate Va. Gov. Robert McDonnell Face an Unpleasant Choice

Republican controlled states have moved around the Supreme Court’s guarantee that a woman is the one in charge of her body by enacting all sorts of restrictions on the right to an abortion. The idea is to make it so difficult to obtain an abortion that abortion rights will be eliminated de facto if not de jure.

Virginia is a moderate state that for reasons beyond understanding has turned it government over to radical Conservatives. These radicals are not representative of the state’s electorate, yet the state voters continue to elect them. This results in Virginians getting the government they deserve, but not the government they want. Case in point is abortion rights. Here is the rather ugly description by Think Progress of the policy Conservatives want to put into place in Virginia. (accompanying graphic diagram is omitted)

a probe is inserted into the vagina, and then moved around until an ultrasound image is produced.”

As might be expected, there has been a substantial backlash against the proposed legislation and stalwart radical Conservative Gov. Robert McDonnell of Virginia, who covets the second spot on a Romney ticket has been forced into reconsideration of his support.

Gov. Robert F. McDonnell is backing off his unconditional support for a billrequiring women to have an ultrasound before an abortion, focusing new attention on one of the most controversial pieces of legislation in Virginia’s General Assembly this year.

Until this weekend, McDonnell (R) and his aides had said the governor would sign the measure if it made it to his desk. McDonnell, who strongly opposes abortion, will no longer make that commitment.

There is a whole bunch of other objectionable material in the proposed legislation, like requirements for what is put in a person's private medical file. One would think that Conservatives more than anyone else would reject the idea that government should control what goes in a persons medical records, but then Conservatives don't really believe in limiting government intervention into citizen's lives, do they.

Mr. McDonnell would obviously like a compromise to make the issue go away and is now supporting a bill which drops the highly odious provisionss and retains only the mostly odious positions. But the key factor here is Mitt Romney. Mr. Romney needs to avoid even being asked the question of whether or not he supports the Virginia bill. Mr. Romney is trying to make tax and economic policy the center of the campaign, because he cannot challenge Mr. Santorum on conservative issues as even Mr. Romney cannot change his positions to such a degree as to be more preferable to social Conservatives on social issues than Mr. Santorum.

But if Mr. Romney has to answer the question of whether or not he supports the Virginia policy his candidacy will suffer from whatever answer he gives. So look for Mr. Romney to be prepared to totally duck the issue if he cannot prevent it from being brought up. And since Mr. Romney has had rather a bad time of it recently, The Dismal Political Economist will, as a goodwill gesture free of charge, provide the answer he can give. (It’s just not hard to come up with a weasel like answer).

“Virginia has the right to do whatever they want, I support their policy of anti-abortion rights and may or may not agree with their specifics”.

And so for everyone else, when you hear Mr. Romney say something like that you all will know where it came from.

In Florida the Policy on Higher Education: Cut State Support, Deny Tuition Increases and Create a New State College

2012-02-24T05:20:00.000-08:00

Maybe the Legislature Needs a Higher Education

Colleges and Universities are wasteful and inefficient. They have bloated administrations, unproductive tenured faculty members and their costs have been rising faster than general inflation for decades. But college and universities are essential for an economic system, they fuel growth and development, they make the workforce more productive and they enhance the culture of the nation. They are also one of the few portals through which men and women whose parents are not wealthy can enter into a life of financial success.

In spite of all of this, or maybe because state colleges and universities serve ordinary citizens, the Republican legislature of Florida has been cutting state support of public higher education for years.

The cuts in Florida began four years ago and have continued unabated. Since 2008, state spending on education has dropped by 24 percent and is now at 2003 levels. Meanwhile, universities have raised tuition every year, putting many students in a financial bind. Florida’s 11 public universities have been raising tuition 15 percent a year for the past four years, and some of them for five years, although they still rank among the least expensive in the nation.

The current impetus in the state is to cut even more.

A proposal in the House would reduce state financing by nearly $250 million next year and would allow universities to increase tuition by as little as 8 percent and as much as 15 percent. A measure in the Senate would cut more than $500 million and would allow smaller institutions that are defined as colleges to raise tuition by 3 percent (the full-scale universities would not be permitted to raise tuition).

But as one would notice, the state legislature knows that raising tuition is not popular, so they would put limits on that. So what happens if financial support for the colleges is cut and tuition is not raised. Hm, maybe the schools would have to cut back resources for higher education. Yep, that must be it.

So given a legislative climate highly hostile to higher education, why would the state consider adding a 12^th college to the lineup.

Mr. Alexander, who is serving out his final year in the Senate because of term limits, has pushed for independence for the Lakeland campus, the University of South Florida Polytechnic, which has 4,400 students. He wants to make it the state’s 12th university, but the University of South Florida opposes the idea.

See, if the colleges and universities are already administratively bloated, why would someone want to add to that problem? Oh, that’s right we are dealing with egomaniacal politicians who think government serves to glorify them.

“The whole notion that we would set up a 12th university when we are cutting the budget for the other 11 is ridiculous,” said Pam Iorio, who served two terms as Tampa’s mayor and left the job last year. “This is just something that he wants. He wants it as a legacy project, to be able to leave office and to say in his hometown that this university was created by him.”

And just to show he is serious, State Senator Alexander has targeted the University of South Florida because of its opposition to the glorification of State Senator Alexander

For some universities, the situation is dire. The University of South Florida in Tampa stands to lose a crippling 58 percent of its financing under the Senate bill. It was singled out as the result of a fight with Senator JD Alexander, chairman of the Budget Committee, over the university’s unwillingness to sever its ties with its Lakeland branch.

As for the state’s conservative governor, this is about all he has to say

The governor also strongly opposes letting universities raise tuition again.

Presumably this policy of cutting support for the future is popular with Florida's wealthy retirement citizens. After all, they got theirs, why should they care anything about those coming after them. Really, they are not called the "selfish generation" for nothing.

Here’s a Great Idea – File a Class Action Lawsuit – Reach a Nice Settlement – And

2012-02-24T05:17:00.000-08:00

The Lawyers Get All the Money – The Clients Get Nothing

For anyone looking for (another) reason to dislike the legal profession, there is this. Following a merger the tradition in this country is for the shareholders of the selling company to sue for some reason or other. Usually the basis for the suit is that somehow the shareholders of the selling company did not get fair value. The basis for the lawsuit doesn’t really matter, the origin of the suit is to generate legal fees for the firm representing the class of plaintiff’s, with some money, of course, left over for the plaintiffs.

But for some law firms the money going to the plaintiffs just gets in the way of money going to the law firms. So it turns out that a Businessweek investigation found that in a large number of cases the settlement proceeds all go to the plaintiff’s attorneys.

In the last two years, 57 investor class actions filed against merging companies settled with court approval. Of those, 40 cases, or 70 percent, included money for plaintiffs’ lawyers and none for clients, according to court data compiled by Bloomberg. The lawyers’ take in those cases: $32.4 million.

Now one might thing that such a situation is illegal. Apparently not. One might think that such a situation is unethical. Apparently not. Here’s the way the scam works.

Two hours and 27 minutes after a Dec. 27 announcement that Ventas (VTR), a Chicago-based owner of senior housing and medical properties, would acquire Cogdell Spencer, the law firm Rigrodsky & Long posted a notice that it was investigating whether directors had shopped for the best price. The notice invited shareholders in Cogdell, a medical building owner in Charlotte, N.C., to call Rigrodsky & Long for information. Within a week, 11 more law firms posted similar notices. Lawsuits followed. “Every single deal, as soon as it gets announced, websites go up and notices go up on the Internet that this and that plaintiffs’ firm is investigating,” says Jim Woolery,JPMorgan Chase’s (JPM) co-head of North American mergers and acquisitions and a former partner at Cravath, Swaine & Moore. “What they are doing is trolling for plaintiffs.” He adds, “The overwhelming—overwhelming—majority of these cases do not result in any substantive benefit for shareholders.”

Of course, Delaware could crack down on this process. And maybe they are doing so with this result

“Delaware could risk losing its status as the de facto national corporate law court,” according to the study by Northwestern’s Black and law professors at the University of Cambridge and the University of Oxford. One possible factor is that Chancery judges have gotten tougher on lawyers who produce meager results for their clients, lawyers and academics say.

As for the legal profession itself, well it is self regulating, as should be obvious from this news story.

Letter from Investment Management Firm Zilch Capital Sheds Light on Wall Street Practices

2012-02-24T05:15:00.000-08:00

The Economist Magazine Invents a Better ~~Mousetrap~~ Satire

Many times this Forum is forced to admit that someone else does better what the Forum is trying to do. In this case it is The Economist with an unreal communication from an investment management firm to its investors. It is presented in full because it is to be enjoyed that way.

The lexicon of hedge funds

From alpha to smart beta

The industry’s language is changing

Feb 18th 2012 | from the print edition

Dear investor,

In line with the rest of our industry we are making some changes to the language we use in our marketing and communications. We are writing this letter so we can explain these changes properly. Most importantly, Zilch Capital used to refer to itself as a “hedge fund” but 2008 made it embarrassingly clear we didn’t know how to hedge. At all. So like many others, we have embraced the title of “alternative asset manager”. It’s clunky but ambiguous enough to shield us from criticism next time around.

We know we used to promise “absolute returns” (ie, that you would make money regardless of market conditions) but this pledge has proved impossible to honour. Instead we’re going to give you “risk-adjusted” returns or, failing that, “relative” returns. In years like 2011, when we delivered much less than the S&P 500, you may find that we don’t talk about returns at all.

It is also time to move on from the concept of delivering “alpha”, the skill you’ve paid us such fat fees for. Upon reflection, we have decided that we’re actually much better at giving you “smart beta”. This term is already being touted at industry conferences and we hope shortly to be able to explain what it means. Like our peers we have also started talking a lot about how we are “multi-strategy” and “capital-structure agnostic”, and boasting about the benefits of our “unconstrained” investment approach. This is better than saying we don’t really understand what’s going on.

Some parts of the lexicon will not see style drift. We are still trying to keep alive “two and twenty”, the industry’s shorthand for 2% management fees and 20% performance fees. It is, we’re sure you’ll agree, important to keep up some traditions. Thank you for your continued partnership.

Zilch Capital LLC

Dear Dismal Political Economist! – The Shelf Life of a Mitt Romney Position

2012-02-23T05:06:00.000-08:00

An Advice Column for the Perplexed and Confused on Economic and Political Issues

Dear Dismal Political Economist

My husband and I are thinking of buying into a policy position of Mitt Romney. We have researched policy positions by major candidates on the Web, and we have looking at reliability ratings from folks who previously purchased policy positions from various candidates. We have also read Consumer’s Reports and other publications and contacted the Better Business Bureau for further guidance.

Based on our research we now feel a Mitt Romney position is right for us. We want to buy now, while the values of Mr. Romney’s positions are heavily discounted but we will not be using the policy position until much later in the year. Our question is what should be use as the shelf life of the position, that is, how long can we wait before the position goes bad and is repudiated by Mr. Romney?

Signed

Concerned in Albuquerque

Dear Concerned

You are right to have qualms about accepting a position from Mr. Romney and having it go bad before it is implemented or even repeatedly endorsed by him. It used to be that Mr. Romney’s positions had a shelf life of several years, and that it would be as much as three or more years before Mr. Romney determined that his particular position was not politically conducive, and that he had to disavow it, rendering that position spoiled and useless.

These days it appears the shelf life of a Romney position can be measured in months rather than years. His tax policy of last September lasted only six months before it spoiled and was inedible. You really want to check the label on the policy you are considering before you purchase it.

Fortunately there is a way to estimate the shelf life of Mr. Romney’s proposals. If they contain 60% or more pander to the right wing of the Republican party, they may well last 12 months or more. If they are less than 60% pandering, then they should not be consumed more than 6 weeks after opening.

Many consumers are worried that a Romney position based on principle and independent of political gain for Mr. Romney spoils immediately, but you should not be concerned. Those positions were removed from the shelves over a decade ago, and are not expected to be available any time soon.

The DPE

Conservative Opinion Writer Kathleen Parker Tries to Save Rick Santorum from Rick Santorum and Fails

2012-02-23T05:04:00.000-08:00

Some Things Just Cannot Be Done

The recent furor over the comments of Republican Presidential hopeful Rick Santorum have lead to rather substantial criticism of Mr. Santorum. There is good reason for this, as Washington Post columnist Kathleen Parker explains.

It is easy to pound Santorum, and no one makes it easier than Santorum himself. Nevermind that he invokes Satan, claiming that the “Father of Lies” has his sights on the United States, as Santorum did in 2008 at Ave Maria University in Florida. He has never met a question he wouldn’t answer or a combatant he wouldn’t engage.

But Ms. Parker, is a Conservative and like all Conservatives she feels the problem is just that the national press mis-understands what Mr. Santorum is saying, particular with respect to whether or not a state government may ban all forms of birth control.

Thus, when a reporter asks whether he thinks states should be able to ban birth control, Santorum says yes, but . . .

HEADLINE!!! “Santorum says states should be able to ban birth control!!!”

Except that’s not what he meant, nor is it what he intends.

Well if that is not what he means, what does he mean. Here is Ms. Parker’s explanation.

Santorum was expressing a legal opinion, and his answer was within the context of whether states have any regulatory jurisdiction over the question.

Okay, he was expressing a legal opinion, which means the supposed headline that Ms. Parker says is incorrect is exactly what he means. Her faux headline summarizes Mr. Santorum’s position exactly. His position is that states have the right to completely ban birth control.

Mr. Santorum himself is on record as not favoring a ban on birth control, just giving the states the right to do so. Even with his feeble political skills and rabid adherence to government control over personal behavior he knows that political position is not tenable’ a national candidate cannot succeed if he calls for government bans on family planning. So his position is the states should have the right to do so, and then let others do the dirty political work that he will not do himself.

The argument here is similar to the arguments against Civil Rights legislation in the 1960’s. At that time Conservatives who were opposed to Civil Rights protection argued that while they themselves were in favor of equal rights, government should not enforce that policy. This policy position allowed them to take the anti-prejudice position while at the same time supporting policy that allowed racial discrimination to continue.

Such an argument with respect to family planning is just as disreputable today as that argument on Civil Rights was then.

Deathly Ill, Newt Gingrich Campaign Finally Succumbs – Autopsy Concludes Self Inflicted Wounds Were Fatal

2012-02-23T05:01:00.000-08:00

Final Blow Was Accurate Reporting on Mr. Gingrich’s Career by the Washington Post

This Forum has consistently criticized the Washington Post for its lack of journalism, so it is only right that we commend the Post when it does conduct what used to be called investigative reporting. The Post has researched the career of former House Speaker Newt Gingrich using archival materials at the University of West George, material stored there by a Gingrich supporter and biographer.

Here is some of what the Post found, starting with as good a summary of the article as there can be

When Gingrich was in the House, his chief of staff noted at a 1983 staff meeting that his boss frequently derided Reagan, along with then-White House Chief of Staff James A. Baker III and Robert H. Michel, the House Republican leader.

Gingrich “assumed that he’s the whole Republican Party,” said the Gingrich aide, Frank Gregorsky, according to a transcript of the meeting. “He knows more than the president, the president’s people, Michel, Baker. He calls them stupid all the time, and I think that’s going to get him into big trouble someday.”

Okay Mr. Gregorsky, you win for best prognosis of 1983. And as far as the icon of the Republican Party is concerned, here is what Mr. Gingrich said about Mr. Reagan

Ronald Reagan’s “weakness,” Gingrich told the National Academy of Public Administrationin Atlanta, was that “he didn’t think government mattered. . . . The Reagan failure was to grossly undervalue the centrality of government as the organizing mechanism for reinforcing societal behavior.”

Yep, that did it.

Services for the Gingrich campaign have not yet been scheduled, but are expected to take place soon, with formal burial expected some time after the Super Tuesday primaries. Although brain dead, the campaign is being kept technically alive on life support transfusions of money from a billionaire who believes a zombie* Gingrich campaign will help stave off the challenge of Rick Santorum to the nomination of Mitt Romney.

*Technical Note: Zombies are not real, they are just entertaining fiction.

Discussions on the Economy Are So Interesting You Could Sell Tickets – An Absurd Statement That is Actually True

2012-02-23T05:00:00.000-08:00

Paul Krugman is Popular – Because Paul Krugman is Right

Suppose for some reason that the Metropolitan Museum of Art of all people held a panel discussion on the economy. No, we don’t know why that institution would do so, but they did. Also suppose for some reason that the panelists were noted economists like Edmund Phelps and Jeffrey Sachs. The questions is, how much would you have to pay people to attend such a session?

However, add Nobel Prize winning economist Paul Krugman to the panel and that question changes. Now the question is how much would people be willing to pay to attend the session. Well you could charge $25.00 and see if anyone would buy them. It turns out, they would and more.

Advance tickets cost $25 and were sold out, and standing- room tickets offered the same day also sold out an hour before the panel began.

That is, of course a testament to the intelligence of Mr. Krugman and the fact that he has been “right on” in his analysis of the economy and of economic policy. The reason for this is not that Mr. Krugman is smarter than the rest of those folks, it is that he is developing economic analysis based on economic principles. His critics, like Mr. Sachs

Sachs, an economics professor at Columbia University who also spoke on the panel, criticized Krugman earlier this month for not paying enough attention to the growing federal debt. Sachs said the government should focus more on investing in long-term programs like education instead of short-term stimulus measures.

are driven by ideological positions, and force their analysis to conform to pre-determined conclusions. This results in bogus commentary that results from bogus conclusions.

Mr. Sachs has called Mr. Krugman out for being a “crude Keynesian”.

“Krugman has staked out a rather crude Keynesian position and unrelentingly so,” Sachs said Feb. 9, referring to John Maynard Keynes, the British economist who advocated government spending to spur growth during the Great Depression. Krugman “knows one thing, which is stimulus, stimulus, stimulus and expand deficit spending,” Sachs, 57, said in the television interview on “Bloomberg Surveillance” with Ken Prewitt and Tom Keene.

And Mr. Krugman has taken that criticism with his usual good charm

“So I’m the Keynesian on this panel,” Krugman said yesterday after fellow panelist and Nobel-prize winning economist Edmund Phelps also referred to “crude” Keynesianism. “I’ve been saying that the next guy who calls me ‘crude,’ I’m going to call him out and punch him in the schnoz,” he said to laughter from the audience of more than 700 in the museum’s Grace Rainey Rogers Auditorium.

But the reality is this. Mr. Krugman has a long record of commentary, and he has been right. He said that the Stimulus package of the Obama administration was good, but insufficient, and he was right. He said that European policy of trying to grow their economies by austerity would lead to recession, and he was right.

Maybe this is the problem with his opponents, they cannot attack Mr. Krugman on his positions and analysis, which have been proven accurate so they resort to terms like “crude Keynesian”. Wow, that must really hurt.

Think There is a Smart Investment Advisor Out There to Pick Winning Stocks for You – Think Again

2012-02-23T04:58:00.000-08:00

You Cannot Beat the Market – So Join It

There are two major competing ideas in the investment world. One is that there are a bunch of smart people out there who can pick stocks and put them into a portfolio that will consistently perform better than the market as a whole. The way to find these smart people who manage mutual funds available to the public is to look at past performance and pick funds that did better in previous years.

The second theory is that it is impossible to consistently create a portfolio that will perform better than the market, that on average about half of the managed portfolios will do better than the market, about half will do worse, and that past performance is no indicator of future performance. Under this theory it is impossible to determine in advance which funds will do better than the market.

The logic behind the second theory is compelling. Since large managed portfolios like mutual funds are diversified, not only will they on average fail to beat the market, they will on average underperform the market average. The reason is that these funds charge up to 2% of the portfolio as fees. So in order to just equal the market they have to do 2% better than the market.

The statistics are clear on this, as this report shows.

According to James Bianco of Bianco Research, 2011 was a particularly rotten year for stock pickers: Only 17% of more than 4,000 funds that invest in large U.S. stocks beat their benchmark. In most years, fewer than half do.

What!!! Only 17% of the people paid huge sums to pick the winning stocks did better than simply investing in the market as a whole, something that can be done by buying an index fund who performance matches the market.

Now you all know the basis of the (very) old joke, “If you want to make a small fortune by letting someone who is an “expert” invest your money, you need to start with a large fortune”. Or as a statement attributed to Warren Buffet goes, “when a person with money meets a person with experience, the person with experience gets the money and the person with the money ends up with an experience”.

Is Mitt Romney Getting Ready to Flip-Flop on Mitt Romney’s Tax Plan

2012-02-22T05:38:00.000-08:00

Documenting the Old Plan Before the New Plan is Released and the Old Plan Goes Down the Memory Hole

Last September Mitt Romney released a 59 point economic program. This was going to be the program that propelled Mr. Romney to the nomination, by making him the “expert” on economic policy. It hasn’t worked out quite that way, and now Mr. Romney is telegraphing that he will release a new and improved plan. Because once the new plan is announced it may be impossible to find the old plan, as a public service here is the old plan. (note, if the link no longer works it’s because Mr. Romney’s campaign wants everyone to forget the old plan.)

Individual Taxes

Mitt Romney believes in the conservative principle that Americans, to the maximum extent possible, should be able to keep the money they earn. Unfortunately, as Benjamin Franklin wrote, there are only two things that are unavoidable: death and taxes. We need taxes to pay for the operations of government. But they should be collected by a system that is simple and fair, and that causes the least possible disruption to the productive economy.

· • Maintain current tax rates on personal income

· • Maintain current tax rates on interest, dividends, and capital gains

· • Eliminate taxes for taxpayers with AGI below $200,000 on interest, dividends, and capital gains

· • Eliminate the death tax

· • Pursue a conservative overhaul of the tax system over the long term that includes lower, flatter rates on a broader base

Corporate Taxes

Our system of corporate taxation is also in urgent need of an overhaul. Right now, with a top marginal rate of 35 percent, it vies for the developed world’s highest, placing our companies—indeed, our entire country—at a competitive disadvantage. That is the bad news. The good news is that with the rate set so high, there is a lot of room to bring it down.

· • Reduce corporate income tax rate to 25 percent

· • Pursue transition from “worldwide” to “territorial” system for corporate taxation

Incidentally that “death tax” thing is what the tax code and rational people call the Estate Tax. Eliminating it could save Mr. Romney and his family over $100 million. But it would not be nice to mention that, so we won’t.

So what is everyone expecting now? Well Larry Kudlow, one of the typically wrong Conservative business and financial commentators is expecting a big change.

"Team Romney tells me there will be a bolder tax-cut plan released either at the debate tomorrow night (if Mitt gets it in) or more formally at his Detroit Economic Club speech on Friday. I'm embargoed from releasing details until tomorrow. But I can say that the new plan will be across-the-board with supply-side incentives from rate reduction, and that it will help small-business owners as well as everyone else."

With a tough Michigan primary ahead does Mr. Romney once again abandon his previous positions to appeal to the Conservative voting base of the Michiganders? Stay tuned, but really, is it all that suspenseful?

Supreme Court to Finally Rule Against Affirmative Action of Any Type

2012-02-22T05:36:00.000-08:00

Ready or Not Actions to Redress Discrimination Are Going to Be Ruled Unconstitutional

The proponents of Civil Rights and using government power to end discrimination have been both Democrats and Republicans. Laws that prohibited discrimination based on race were passed on a bi-partisan basis. Opposition to such laws were also bi-partisan, and that opposition was from Conservatives. In some cases the opposition was principled and in many cases the opposition was the result of racial bias.

Simply ending discrimination did not end the damage of discrimination. Affirmative action laws were enacted to help offset the damage done by decades of discrimination. The result was that suddenly Conservatives determined that using the law to prohibit discrimination was not all that bad an idea after all, that civil rights laws should be used to protect the majority. While Conservatives opposed civil rights legislation that protected minorities, they found they had no problem and in fact were avid supporters of legal action to protect the majority.

As the Supreme Court has been slowly taken over by Conservatives, the Court has ruled against Affirmative Action. It is now poised to once and for all end an action that seek to redress the huge damage done by racial discrimination. It will rule on a case in Texas where a person claims they were discriminated against as part of an Affirmative Action program.

Opponents of affirmative action hope that the current court, more conservative than the one that made the 2003 decision, will rule out the use of race.

Justice Sandra Day O’Connor, who wrote the 5 to 4 decision in Grutter v. Bollinger , was replaced by Justice Samuel A. Alito Jr., who in past decisions has opposed the use of race in education decisions. And one of the court’s liberals, Justice Elena Kagan, has recused herself from the Texas case, presumably because of her previous job as President Obama’s solicitor general.

There should be little suspense over the outcome of this case. The Supreme Court, dominated by Conservatives, will rule that any and all Affirmative Action programs are Unconstitutional. Whether or not minorities can overcome the residual racism (or in some cases residual traditionalism where institutions act in a prejudicial manner not because they are racist, but because they have always favored certain groups) and prosper without Affirmative Action is no longer the issue. They will have to, those programs will no longer be in place.

Before There Can Be an Election in America There Has to be an Election in France

2012-02-22T05:33:00.000-08:00

This One We Can All Sit Back and Enjoy – Center Right vs Center Left

France

is going to have its Presidential election in April and May. The reason for the April and May situation is that the French election is a two step process. The first stage involves all of the candidates, the second stage is a run-off with the two top vote getters for the first stage.

Unless there is a major upset, the two candidates facing each other in the second round will be the current President, Nicolas Sarkozy and the Socialist candidate, Francois Hollande. The reason why we all want to sit back and watch this one, it promises to be a vitriolic campaign, and everyone loves bitter vitriol in their politics, despite what they say.

Here is the incumbent commenting on his likely run-off opponent.

In three days of frantic campaigning since he finally entered the race, President Nicolas Sarkozy has called the Socialist front-runner, François Hollande", a "liar, both morning and night", part of an "immobile elite" and a member of an arrogant "caste" that opposes the real interests of the French nation.

One reason for this attack is that Mr. Sarkozy is losing big time in the polls. He is close in the first stage

Mr Hollande, holding a substantial but narrowing lead in the polls nine weeks before the first round of voting on Sunday 22 April – there will be a second round on 6 May for the two leaders – already looks a little shell-shocked

But he is not looking good in a one-on-one contest. So he is going to run as an outsider.

You have to hand it to Mr Sarkozy. As the most unpopular president in recent French history, he plans to fight an unashamedly populist campaign. From his guerrilla base inside the Elysée Palace, he plans to run as an outsider or, in his own phrase, "an ordinary Frenchman among the French".

And the French President is taking his cue from American politics,

A man widely seen as having governed on behalf of a small tribe of his rich friends has cast himself as the candidate "of the people" fighting a "statist and corporatist elite". A president who has sworn to defend "French values" and "French national identity" has modelled his campaign on the tar-brush politics of the American right.

Which is not complimentary to either Mr. Sarkozy or the American right. And the incumbent President is apparently going to “go ugly” even more.

Mr Hollande will be painted relentlessly in the next couple of weeks as "immobile", "mendacious" and the representative of "powerful interests and castes who oppose all change". President Sarkozy will, equally energetically, push hot-button, right-wing "value" issues such as family, discipline, work and identity.

France

has an ultra right wing party, whose leader Martine Le Pen is expected to gain substantial votes in the first round, but not enough to enter the second round. It is obviously Mr. Sarkozy’s plan to get her votes in the second round, meaning he will run a strong right wing campaign.

The Socialist opponent is running as a moderately left winger,

Mr Hollande is running a tortoise-against-hare campaign. In conversation with British and US media correspondents over lunch last week, the front-runner was charming, funny, approachable, eloquent and knowledgeable. He came close to admitting that his moderate, safe-pair-of-hands, "normal" candidature would perhaps not work in any other year; or against any other candidate. "I decided to run," he said, "because I felt that, at this time, and perhaps no other, I happen to offer the blend of qualities which... the electorate is seeking and would allow [France] to succeed: stability, serenity, respect, restraint."

But this has its risks also

But in trying to be all things to all men, Mr Hollande may end up annoying both the further left and the centrist voters that he needs

So there is an election where the incumbent will move away from the center to pick up the extremist votes, and the opponent will run to the center and endanger his popularity amongst the left wing votes. All in all a nice political diversion and preliminary event (except for the French for whom it will be the main event) while we all wait for the U. S. general election to take the stage.

Texas Republican Senator Stops Defense Department Appointment in Order to Pressure Administration to Sell Taiwan Jets Built in Texas

2012-02-22T05:31:00.000-08:00

The Combination of Pork Barrel and Partisan Politics Produces an Ugly Result

Foreign policy is conducted by the President and his administration, not by the Senate. But the arcane and ridiculous rules of the Senate allow a single Senator to block the appointment of a person to a position in the administration, so a single Senator can exercise a huge amount of power if he or she is craven enough to do so.

Earlier the Obama Administration decided to upgrade fighter jets that are used by Taiwan for its defense, rather than sell them new jets. Sen. John Cronyn was offended, probably not so much about Taiwan as about the fact that had new planes been authorized they would have been built in his political backyard. This would have resulted in Sen. Cronyn being able to gain political points, which as everyone knows is the real purpose of holding public office.

So Sen. Cronyn is going to block the appointment of a defense department official.

Sen. John Cornyn (R., Texas) speaks
at the Conservative Political Action Conference
(CPAC) in Washington, Feb. 11, 2012.
(AP Photo/J. Scott Applewhite)

Last fall, the Obama administration informed Congress of plans to upgrade Taiwan’s existing fleet of F-16 fighters, instead of selling brand-new models. That move angered some lawmakers, and Sen. Cornyn responded Friday by placing a hold on the nomination of Mark Lippertto be assistant secretary of defense for Asian and Pacific Security affairs.

That makes good on a threat Sen. Cornyn made in a November letter to PresidentBarack Obama requesting a plan to address what he called “Taiwan’s looming fighter shortfall.”

The U.S., Sen. Cornyn wrote, “should not give in to intimidation and threats from China, nor should we cede regional leadership there,” he wrote.

Even the Wall Street Journal recognizes this for what it is.

Arms sales to Taiwan are a longstanding point of friction between the U.S. and China, and Sen. Cornyn has been a persistent backer of the sale of new F-16s, which are built in Fort Worth, Texas.

The interesting thing is that while Sen. Cornyn does not want the U. S. to give in to intimidation and threats from

China

, he expects the Obama Administration to give in to threats and intimidation from Sen. Cornyn.

For most of us this is just another example of blatant political obstructionism. For the U. S. Senate and for elected officials, it is just business as usual.

What If Republicans Are Deliberately Trying to Lose the 2012 Presidential Election

2012-02-21T05:15:00.001-08:00

Note to Mr. Romney: It’s Not a Fantasy Conspiracy If They Are Really Plotting Against You

[Update: Mr. Silver's 538 now has Mr. Romney tied and with a slightly favorable probability of winning Michigan.]

Michigan	Vote Projection	Chance of Win
Rick Santorum	35.5%	49%
Mitt Romney	35.4	51
Ron Paul	13.3	0

There is some good news for Mr. Romney in the state of Michigan. The race is tightening and the once huge lead that Mr. Santorum had is very narrow. Nate Silver of 538 Blog of the New York Times shows the state of the race at this moment. Just a week ago Mr. Santorum was up by a large amount and his probability of winning was 77%. Now it is less than 60% and falling.

Mr. Romney is benefiting from the time factor. After Mr. Santorum’s triple win in Missouri, Colorado and Minnesota he jumped ahead in Michigan. But time has a way of catching up with flawed candidates. As voters, even highly conservative voters contemplate the concept of a Santorum nomination a Romney nomination starts to look better. By the weekend Mr. Silver’s 538 Forum will have the likely outcome and it could be very close.

So what is going on here? Well suppose the Republicans have decided that 2012 will be a better year for them if they lose the Presidency with Mitt Romney as the nominee. This does a lot of things for the party.

Republicans do a lot better in non-Presidential elections with Democrats in the Presidency. With Mr. Bush in office Republicans were blown away in 2006 and 2008. With Mr. Obama in office Republicans had a huge win in 2010.

Looking ahead, if Democrats are in the White House, Republicans could win a massive victory in 2014, with a huge majority in the House and a strong majority in the Senate.

If Mr. Romney loses that would be the end of any Republican whose is considered “moderate”. Mr. Romney’s loss would be blamed on the fact that the Republicans did not nominate a true Conservative. This would make a true Conservative a lock for the 2016 nomination.

A 2016 lineup could be a lot stronger than the 2012 candidates (really, how could it be weaker). The big four, Jeb Bush, Chris Christie, Mitch Daniels and Robert McDonnell would all be considered strong candidates, particularly compared to Michele Bachmann, Donald Trump, Herman Cain and Newt Gingrich. The Democrats have no bench strength, no strong candidate waiting for 2016.

So by losing in 2012 Republicans could be set up for game changing victories in 2014 and 2016. How would they engineer the defeat in 2012? It’s not too difficult. The strategy would be to weaken Mr. Romney to the point that while he wins the nomination, he loses the general election. This would involve temporarily supporting candidates like Mr. Gingrich and Mr. Santorum who would force Mr. Romney into making statements and taking positions that make him an unelectable nominee.

Of course, to accomplish this strategy it would require that people like Michele Bachmann, Herman Cain, Rick Perry, Newt Gingrich, Rick Santorum and even Mr. Romney to be “Useful Idiots”. Wow, this theory gets stronger and more believable every day!

It is Not a Violation of Free Speech for TV Networks to Boot Those Who Present Hateful and Bigoted Views – Pat Buchanan is Still Free to Speak Whenever and on Whatever He Wants

2012-02-21T05:10:00.000-08:00

MSNBC Strikes a Blow for Freedom of Intelligent Speech

The Announcement that MSNBC has terminated its relationship with incendiary commentator Pat Buchanan is a welcome statement. It is a statement that while diverse views should be presented on network news and commentary programs, there is no right to the airways for a person whose views promote racial and religious and ethnic prejudices and divisions. Pat Buchanan can speak and write as he want, but he can no longer do so on MSNBC.

An interesting reaction to the firing of Mr. Buchanan has come from his colleagues. They support him. Let’s look at this set of comments from a Democratic party leader who has worked with Mr. Buchanan and who opposed the decision by MSNBC to fire him. Peter Fenn says this

In my view, MSNBC caved to pressure that was unjustified and has continued down the road toward "niche TV," lacking in true dialogue and opposing viewpoints.

First of all, there was no pressure on MSNBC, heck hardly anybody even watches or cares about the network. And as for MSNBC not wanting opposing views, Mr. Fenn is apparently not aware of the hours the network devotes to Joe Scarborough and his show, or the regular appearances of Michael Steele, a former Republican National Committee Chairman and others on the network.

Pat was always willing to go the extra mile, the go-to person who would drop everything to run into the studio at a moment's notice, never angry, never complaining.

Obviously Mr. Fenn doesn’t really know of Mr. Buchanan. He is one of the angriest commentators out there. That’s the problem, he has anger at non-Caucasians, Jews and Gays just to name a few.

The powers-that-be at MSNBC did not treat him fairly in my view and his firing was not based on any views or opinions that he had not been espousing for years.

On the contrary, Mr. Buchanan had been told many times that if he continued to publish his hate, his position at the network would be in jeopardy. Mr. Buchanan did continue to proclaim his message of hate, which he has every right to do. He just does not have the right to a regular TV appearance.

The point is not that Pat hasn't made statements that are insensitive or controversial, we all have. But should his voice be silenced? Should it be banned?

This comment is ridiculous. Mr. Buchanan is not silenced. He is not banned from speaking or publishing his views. His freedom has not been impinged. He can and probably will continue to speak and write and spew his message.

Mr. Fenn was an adviser to the John Kerry campaign. So now we have another insight as to how that candidate could lose to George W. Bush.

Amazon Purchases 3 Million Sq. Ft. of Office Space in Seattle

2012-02-21T05:08:00.000-08:00

Maybe the Company Will be a Success and Stick Around After All

When Amazon first got started a lot of people (including this one) really questioned whether or not the company could succeed. After all they were selling books over something called the Internet, and there were plenty of bookstores all over the country. The company raised millions in public stock sales, and was spending the money just as fast as it came it.

It turns out that maybe Amazon will not fail, in fact they may just make it after all. Why do we say that now? Well it turns out Amazon is buying much of Seattle. Okay, maybe not most of Seattle, but a pretty large chunk of downtown Seattle.

Amazon.com Inc. is purchasing property in central Seattle with plans to construct about 3 million square feet of office space, a move that could have the online retail bellwether owning its corporate headquarters for the first time amid dramatic expansion.

Amazon is buying three large contiguous blocks in central Seattle—a short walk south of where it leases its current headquarters—from Clise Properties Inc.

Real estate developer Seneca Group Inc., which is working with Clise, has filed papers with the city to build three office towers on the properties, each of which could include 1 million square feet of office space.

Three million square feet – are you kidding us.

Here’s Today’s Headline in the WSJ on the Political Fight in Michigan - Santorum, Romney Again Slam Auto Bailouts -

2012-02-21T05:07:00.000-08:00

How Exactly Does That Help Republicans Win That State in the Fall

The battle for the Republican Presidential Nomination is now between Rick Santorum and Mitt Romney. Newt Gingrich’s campaign is dead, the coroner is about to rule that it was suicide. So Mr. Santorum and Mr. Romney are battling for the ultra right wing vote and each one is claiming to be more opposed to saving the auto industry than the other one.

Republican presidential candidate Rick Santorum told a business audience here Thursday that he opposed the government's $80 billion bailout of two Detroit auto makers, as he competed with Mitt Romney for conservative voters in a state where the car industry has staged a rebound.

Yes, Mr. Santorum is in Michigan home of the auto industry and campaigning on the position that the government should have allowed Chrysler and GM to fail, be liquidated and cost Michigan and the economy maybe a million jobs between the direct and indirect jobs associated with the auto industry. And everyone knows Mr. Romney’s position which is “Let Detroit Go Bankrupt”. The Dismal Political Economist is confused.

Just a Regular Guy Making Lunch
You Would Think with $250 million
Someone Could Make Lunch for Him

See even among Conservatives in Michigan it is hard to imagine that their ideology is so strong that they would choose collapse of the state’s economy over a program of support from the federal government. And in fact, they don’t. The state’s radical conservative Governor supports the government’s programs which saved the two companies.

In November there will be a general election. People of all political positions will be allowed to vote. And in Michigan exactly how many of those are going to vote for a candidate that wanted to shut down the state’s biggest private employers. And guess what, auto manufacturing and related jobs are big in Ohio and other states. So how exactly does attacking a successful program that saved hundreds of thousands of jobs help elect Republicans in the Fall?

The problem with these candidates is that they could not bring themselves to say the right thing, both from a policy and a political point. It would be something like congratulating the industry, talking about how they might have done it slightly differently and at less cost (even though that is not true) and then moving on. When you get a losing hand, you congratulate the winner and get ready to play the next hand. You don’t raise.

News Media Has Huge Bias in Favor of Rick Santorum – Mainstream Media is Not Reporting What Mr. Santorum is Saying

2012-02-20T05:33:00.000-08:00

Maybe They Just Don’t Believe He is Saying What He Says

Conservatives always cry “media bias” whenever a news story is critical of Conservative dogma, which they will be by just reporting the facts of Conservative dogma. In truth, the media is highly biased in favor of Conservatives, in large part to try and avoid the criticism that Conservatives level at them. The Washington Post is one of the biggest offenders, in fact it employees a columnist, Jennifer Rubin, whose sole job is to funnel spin from the Romney campaign and present it as independent commentary.

A large part of the media bias is contained in what the news media fails to report. By either ignoring or burying news stories on what Conservatives are actually saying out there, they provide cover for the ridiculous positions that Conservatives often take, and by portraying these people as legitimate they distort elections in favor candidates whose true positions would be an anathema to the voters, if only the voters were honestly informed by the media.

Case in point is Rick Santorum. Over the recent weekend the New York Times has reported what he has been saying, but not as a headline story, but in a “sidebar” where the outrageous positions will viewed by the few, and not the many. Here is just a few examples of comments by Mr. Santorum that will lose an election, if there were real reporting.

Rick Santorum on Sunday tried to clarify his comment that President Obama subscribed to a “phony theology,” saying he was referring not to the president’s faith but to his view of man’s relationship to the world.

It was during a campaign stop in Ohio on Saturday that Mr. Santorum described what he called the “phony theology” of Mr. Obama’s agenda. “It’s about some phony ideal, some phony theology. Oh, not a theology based on the Bible, a different theology,” he said. “But no less a theology.”

That’s right, Mr. Santorum has set himself up as judge of the President “theology” as a way to explain and support his policy differences with the Obama administration. But wait, there’s more. Mr. Santorum it seems is kinda down on public education.

Mr. Santorum, at another appearance on Saturday, in Columbus, Ohio, called the idea of schools being run by the federal government or by state governments “anachronistic.” Mr. Santorum did not say public schools were a bad idea, and he said that there was a role for government help in education.

Notice how the author defends Mr. Santorum, even though Mr. Santorum later goes on to say

“But the idea that the federal government should be running schools, frankly — much less that the state government should be running schools — is anachronistic. It goes back to the time of industrialization of America when people came off the farms where they did home-school or have the little neighborhood school, and into these big factories, so we built equal factories called public schools. And while those factories as we all know in Ohio and Pennsylvania have fundamentally changed, the factory school has not.”

Of course the Federal government is not running the schools, in fact the only major recent program involving the Federal government in public education was No Child Left Behind enacted by the Bush administration. The Obama administration has handed out waivers like a neighborhood mom on handing out candy on Halloween. And while everyone has issues with the public school systems, is there anyone who wants to eliminate public schools or state and federal financial support for them? Really, anyone?

Ok, Mr. Santorum does not want to end government funding so he says this

While he said he did not oppose government financing of schools, Mr. Santorum said that “public education should be a dynamic process that’s locally run.”

“I think the parent should be in charge,” he added, “working with the local school district to try to design an educational environment for each child that optimizes their potential.”

Now at least as far as everyone knows, every school district in the nation is controlled by a locally controlled school board, meaning Mr. Santorum is either ignorant or a fool. And finally Mr. Santorum says this.

Mr. Santorum also defended his criticism of a requirement in the president’s health-care policy that insurance companies to cover prenatal testing. He had said earlier that the policy was included to save money “because free prenatal testing ends up in more abortions and therefore less care that has to be done, because we cull the ranks of the disabled in our society.”. . .

Asked whether he was suggesting that Mr. Obama lacked sympathy for the disabled, Mr. Santorum did not back down, saying, “I think the president has a very bad record on the issue of abortion and children who are disabled.”

So we have one of the vilest accusations of modern American politics, that the President wants pre-natal testing made available to women so they can abort disabled children to save money and cull the population of disabled children. Gee Mr. Santorum, why not just call the President a pureveyor of Nazi eugenics policy and be done with it.

Reporting such comments as part of a regular news story would be detrimental to the candidacy of Mr. Santorum, so the unspoken agreement of the press is that they will not publicize these positions. After all, accurately reporting what Conservatives like Mr. Santorum actually say would be a terrible bias.

Study Finds Huge Errors and Illegal Practices in Foreclosures – People Were Wrongly Thrown Out of Their House – Just Paperwork Errors?

2012-02-20T05:26:00.000-08:00

Doesn’t Look Like It

A few days ago the Wall Street Journal editorial pages, or as they are known in key circles, the mouthpiece of Wall Street was aghast, literally aghast that banks were willing to pony up $25 billion to settle claims that the banks had not followed legal procedures and due process in their foreclosure activities. To the Journal this was just a bunch of sloppy paperwork, and no big deal.

The banks did have sloppy paperwork practices, but they were also dealing with a historic wave of foreclosures created in large part by government-backed Fannie Mae and Freddie Mac. To date there's no evidence that borrowers current on their mortgage payments were improperly ejected from their homes

Well now there is evidence, substantial evidence that at least in one jurisdiction almost no foreclosure were following practices and procedures required by law.

Commissioned by Phil Ting, the San Francisco assessor-recorder, the report examined files of properties subject to foreclosure sales in the county from January 2009 to November 2011. About 84 percent of the files contained what appear to be clear violations of law, it said, and fully two-thirds had at least four violations or irregularities.

Kathleen Engel, a professor at Suffolk University Law School in Boston said: “If there were any lingering doubts about whether the problems with loan documents in foreclosures were isolated, this study puts the question to rest.”

Wow, 84% had clear violation of the law. Boy that is some sloppy paperwork. Of course it is not sloppy paperwork, it was the illegal action by banks to foreclosure without following the right procedures. And it may well have amounted to having thousands of people, maybe hundreds of thousands nationwide if the California practices were representative of the nation being illegally evicted.

In a significant number of cases — 85 percent — documents recording the transfer of a defaulted property to a new trustee were not filed properly or on time, the report found. And in 45 percent of the foreclosures, properties were sold at auction to entities improperly claiming to be the beneficiary of the deeds of trust. In other words, the report said, “a ‘stranger’ to the deed of trust,” gained ownership of the property; as a result, the sale may be invalid, it said.

In 6 percent of cases, the same deed of trust to a property was assigned to two or more different entities, raising questions about which of them actually had the right to foreclose. Many of the foreclosures that were scrutinized showed gaps in the chain of title, the report said, indicating that written transfers from the original owner to the entity currently claiming to own the deed of trust have disappeared.

And how are banks handling the problem now. Are they fixing the problem? No they are requiring borrowers to give them carte blanche to do this all over again.

Banks involved in buying and selling foreclosed properties appear to be aware of potential problems if gaps in the chain of title cloud a subsequent buyer’s ownership of the home. Lou Pizante, a partner at Aequitas who worked on the audit, pointed to documents that banks now require buyers to sign holding the institution harmless if questions arise about the validity of the foreclosure sale.

That’s right, to get a loan you have to sign over your rights to have a claim against the lender if the lender improperly and inappropriately and even wrongly forecloses. But theWSJ and Wall Street will be ecstatic, after all this will legalize the $25 billion worth of “sloppy paperwork”.

Here is the Typical Sunday Lineup on Political Talk Shows – Republicans, Republicans, Republicans and Some Token Democrats

2012-02-20T05:24:00.000-08:00

Democrats Don’t Need Media Bias – They Just Need Media Fairness

The unceasing refrain from Republicans and Conservatives is that the national media is biased against them. In their minds that’s the only reason their ideas and ideology are accepted by a majority of the population, it must be bias on the part of the communications industry.

So to confirm that bias here is the lineup of the Sunday talks shows that just took place.

On NBC’s “Meet the Press,” House Budget Committee Chairman Paul Ryan (R-Wis.) and the committee’s ranking Democrat, Maryland Rep. Chris Van Hollen, debate the president’s spending plan and discuss the just-passed deal to extend the payroll tax cut and unemployment benefits.

Okay, that looks about right, but then NBC always has had a bias against Conservatives by giving equal time to the other side. Here’s CBS’s Face the Nation

Meanwhile, CBS’s “Face the Nation” hosts former Pennsylvania Sen. Rick Santorum, who’s surging in Michigan and nationally in his bid for the GOP presidential nomination.

And of course there is the always reliable Fox News, ready to give airtime to a wide variety of opinions, Conservative Republican opinions that is.

“Fox News Sunday” has another White House hopeful, former House Speaker Newt Gingrich (R-Ga.), as well as House Majority Leader Eric Cantor (R-Va.).

And CNN who greatly envies Fox News and their ratings had two people who are just about totally irrelevant in national politics and in the Republican race

And CNN’s “State of the Union” features yet another presidential contender, Rep. Ron Paul (R-Texas), as well as Rep. Michele Bachmann (R-Minn.), who dropped her bid last month.

Yes, Michele Bachmann, a person whose only talent seems to be an inexplicable ability to get on the national news shows.

And what Sunday would be complete without the appearance of John McCain

ABC’s “This Week” hosts Arizona Sen. John McCain, the 2008 Republican presidential nominee, and former White House press secretary Robert Gibbs, now an adviser to the president’s reelection campaign.

C-SPAN’s “Newsmakers” has House Energy and Commerce Committee Chairman Fred Upton (R-Mich.), interviewed by Mike Lillis of The Hill newspaper and Sean Lengell of The Washington Times.

along with C-SPAN’s interview with the always newsworthy Fred Upton (who?).

But wait, it is not all Republicans

And TV One’s “Washington Watch” interviews California Attorney General Kamala Harris about the lingering housing crisis.

which is important because just last week TV One doubled their viewership, from 2 people to 4 people, although to be fair one of the new viewers was really looking for re-runs of Scoobey Doo.

Municipal Bond Insurer Resents Being Called Upon to Make Payments After Bonds It Insured Defaulted – Company Doesn’t Understand Why Anyone Would Expect Payments

2012-02-20T05:21:00.000-08:00

This Does Not Affect Premiums Of Course – Continue Sending the Checks

Jefferson County, Alabama borrowed billions of dollars, in large part to build a municipal sewage treatment facility. The project was fraught with difficulties, illegal activity and all sorts of other things, the result being that the county had to file for bankruptcy protection. Still until recently the county was paying its debt service, but now that has been compromised.

Bondholders, who are owed more than $3 billion stemming from upgrades to the county's sewer system, have recently been getting smaller monthly payments from Jefferson County. Since the county took back control of the sewer system's finances last month in the wake of a bankruptcy-court ruling, it has deducted about $9 million in additional operating expenses.

But that shouldn’t hurt the bond holders, because the bonds were mostly insured.

As a result, the bondholders have turned to Syncora to make up the difference,

But (yes, whenever there is a “but” there is sometimes a second “but”) the insurance company may not have the money to pay the bond holders.

In court papers, Syncora said it agreed in 2004 to back more than $1.14 billion worth of Jefferson County sewer bonds. "Syncora believes that its very viability as a going concern may be threatened because of the heavy burden it must shoulder," the bond insurer's attorneys said in court documents, adding that the company has agreed to back nearly 80% of Jefferson County's sewer bondholder payments.

Now everyone should remember that Syncora did not insure the bonds out of the goodness of their heart, or to be a nice company and help out the county. They provided insurance in return for a premium. And now they are saying maybe they can’t live up to their end of the bargain. Maybe they didn’t understand how insurance works, maybe they just thought they were getting all that nice premium income just for being a nice company.

Of course the matter is now back in the courts, and it may be that the bondholders will get their money and Syncora will be ok. But if anyone is looking for a class of voters who feel that regulation of the financial industry, such as regulation of municipal bond insurers is not appropriate for government, well, don’t call on the Jefferson County bondholders insured by Syncora. They would be just fine with government regulation that insured their insurance was real.

Why Is Roscoe Bartlett (who) Still in the U. S. Congress? And Why Do Any Voters Want Him to Remain?

2012-02-20T05:19:00.000-08:00

When It is Time to Go – Please Go

There are a great number of members of the House of Representatives who are not distinguished and who have done little or nothing for anybody anytime while in public service. This is not a partisan characteristic, these hacks spew forth over the party lines and the ideological lines. One of them is Roscoe Bartlett, Republican from western Maryland.

Mr. Bartlett has been in the House a long time, for almost 20 years. He is 85 years old. He is apparently running for re-election and even though his district has been gerrymandered by Democrats, he may win.

At one point last fall, he asked National Republican Congressional Committee Chairman Pete Sessions (Texas) to name the Republicans who could hold the seat if he retired. Sessions presented with him Maryland GOP Chairman Alex Mooney and Bartlett's now-former chief of staff, Bud Otis.

Bartlett decided then that he was the only Republican who could win the 6th district — which was made 16 points better for Democrats in redistricting, based on the 2008 presidential results.

Bartlett was quickly placed in the NRCC's incumbent protection Patriot program, a move that an NRCC spokesman said reflected the committee's belief that Bartlett is the best Republican candidate.

The story in the non-partisan site characterizes Mr. Bartlett as the typical Conservative

He advocates the elimination of corporate tax rates, he is staunchly anti-abortion, and he is against same-sex marriage. When speaking of his date to the State of the Union, House Minority Leader Nancy Pelosi (Calif.), he said, "She's a very nice socialist."

And he is old

Mr. Bartlett - Enough Said

A few years ago, a website chronicling "100 Things Younger Than Roscoe Bartlett" surfaced. Included among the items that came to be after the octogenarian Maryland Republican's birth are penicillin, Scotch tape, talkie movies, Fidel Castro and the "American Gothic" painting.

Also on the list: the car radio and Model A Ford.

and while age itself should not a disqualification for high office, does anyone really want an 85 year old person passing on the nation’s legislation, regardless of party of philosophy?

But the real reason why Mr. Bartlett should not be returned to the House is not his age, it’s that apparently he has not accomplished a single notable thing during his sojourn in that body. There is absolutely nothing in the article that even suggests or hints at a legislative accomplishment.

But there is this

He ran into trouble in 1993 with an off-color statement about Asian-American students, and his interviews are some of the most unfiltered among any candidate for Congress.

Staffers assume he will be tracked by opposing campaigns and parties, but they express confidence that it will not be his downfall.

As Bartlett has buckled down, he seems willing to try any strategy, new or old, to win the campaign. Even so, he remains feisty and unfiltered, and Republicans are refraining from showing public concern. His campaign staff and Washington supporters seem to have adopted a "Let Bartlett be Bartlett" strategy.

Or as he puts it, "I am who I am."

Really, that is about the best anyone can say about this gentleman, and that is hardly a reason he should be in the House of Representatives.

The Sunday Opinion Writers in the New York Times, Dowd, Friedman and Douthat, go 0 for 3, and Strike Out

2012-02-19T05:56:00.000-08:00

If This is the Best Journalism, No One Wants to See the Worst

The Sunday opinion pages of the New York Times used to be great. They are not great anymore, they are rarely good and this week they are truly awful. Maureen Dowd, Thomas Friedman and Ross Douthat embarrass themselves and the paper to such a degree that the only proper response can be a cringe, along with a wish that someone at the Times would just fix this.

First up we have Maureen Dowd, a very good writer who used to be insightful and relevant. This week she devotes a column to Delores Hart (who?). It turns out Ms. Hart was a movie star for whom great things were predicted. However Ms. Hart joined a convent instead, and as Ms. Dowd relates, apparently has lived out here life in a fulfilling manner.

Hart soldiers on at the bucolic Abbey of Regina Laudis, a Benedictine monastery and working farm in Bethlehem, Conn., which observes three periods of silence a day. She is a mother prioress and spiritual guide to 38 other nuns (and she is the only nun who is a voting member of the Academy of Motion Picture Arts and Sciences).

All of the column is a very nice story, and we should all be happy that Ms. Hart got to lead the type of life she wanted to, but the story has absolutely nothing to do with the national scene. It is irrelevant, and the same can be said for Ms. Dowd.

Next comes Thomas Friedman, who also used to be a great columnist and whose musing on the internationalization of the world provided great insights. Now Mr. Friedman is pining for a third party candidate. He has his choice, David Walker (who?)

Walker was the country’s chief auditor, serving from 1998 to 2008 as the U.S. comptroller general. He is currently the chief executive of the Comeback America Initiative (http://www.tcaii.org/), a nonpartisan group dedicated to getting America’s fiscal house in order. Walker — who came in second to Hillary Clinton in a reader poll that Politico conducted last October for favorite Third Party candidate — told me that he has no desire to run but that he’s been speaking across the country, trying to do what Perot did.

So Mr. Friedman wastes his space by promoting the third party candidacy of a person no one knows, no one has even heard of and who would be a zero factor if he did run. Just what planet does Mr. Friedman reside on that he thinks time and space should be given to contemplating a run by David Walker as a third party candidate?

Finally we come to Ross Douthat, whose column on abortion and abortion rights is so lacking in logic one wonders how it got past an editor, or even if it was indeed subject to editing. Mr. Douthat starts out by accurately describing how the abortion rights issue is also about how to reduce abortions and that

Even the most pro-choice politicians, for instance, usually emphasize that they want to reduce the need for abortion, and make the practice rare as well as safe and legal.

which is absolutely correct. No one is in favor of abortions for the sake of abortions, it can be a terrible thing for a woman and her family to endure. The argument is about who makes the decision, the woman with consultation from her family and her physician and others, or the government. Abortion rights advocates believe the decision should be made by the individual, that government has no right to impose its will on the individual.

But Mr. Douthat then goes on to say what can only be described as surely some of the dumbest things ever to grace a respected paper like the New York Times. First of all he refutes an argument that no one is making, that lack of access to contraception is what causes unwanted pregnancies

To begin with, a lack of contraceptive access simply doesn’t seem to be a significant factor in unplanned pregnancy in the United States. When the Alan Guttmacher Institute surveyed more than 10,000 women who had procured abortions in 2000 and 2001, it found that only 12 percent cited problems obtaining birth control as a reason for their pregnancies. A recent Centers for Disease Control and Prevention study of teenage mothers found similar results: Only 13 percent of the teens reported having had trouble getting contraception.

But then he goes to make the totally idiotic argument that socially liberal policies are associated with “blue” states and those “blue” states have more abortions.

At the same time, if liberal social policies really led inexorably to fewer unplanned pregnancies and thus fewer abortions, you would expect “blue” regions of the country to have lower teen pregnancy rates and fewer abortions per capita than demographically similar “red” regions.

which of course they don't. But the reason that these more liberal states have more abortions is that the “red” regions have very effectively made abortions extremely difficult to obtain. This is one absurd argument. The real conclusion here is this: in states which radically restrict access to abortion services there are fewer abortions. Why someone should be granted the right to publish in the New York Times to make such an obvious statement is beyond the logic of all of us.

And finally there is this idiocy, which sums up the entire lack of intelligence in the Conservative argument

These are realities liberals should keep in mind when tempted to rail against conservatives for rejecting the intuitive-seeming promise of “more condoms, fewer abortions.” What’s intuitive isn’t always true,

That’s right, Mr. Douthat, is saying having access to condoms and using condoms does not result in fewer abortions. What logic would support that?

Here is a message to Mr. Douthat: Never, ever in the history of the world has a woman who is not pregnant ever had an abortion. Really, that’s true you can look it up. And in your case, Mr. Douthat, you probably have to, since the logic of that position is apparently beyond you.

Conservatives Were For the Health Care Mandate That Everyone Have Insurance Before They Were Against It – And Democrats Were Against It Before They Were For It

2012-02-19T05:48:00.000-08:00

Funny How History Has a Way of Remembering

The New York Times occasionally engages in actual reporting, and recently it reported on the history of the policy idea that individuals should be required to have health insurance. The rationale behind this policy is and has always been that since society will not deny health care to anyone in dire need, allowing some individuals to go without insurance just place the burden of the cost of their care on the rest of us.

As the Time story reports, Republicans and Conservatives originated the idea of the mandate and at one time vigorously supported it.

The concept that people should be required to buy health coverage was fleshed out more than two decades ago by a number of conservative economists, embraced by scholars at conservative research groups, including the Heritage Foundation and the American Enterprise Institute, and championed, for a time, by Republicans in the Senate.

The basis for requiring insurance is contained in this oft repeated hypothetical

“If a young man wrecks his Porsche and has not had the foresight to obtain insurance, we may commiserate, but society feels no obligation to repair his car,” Stuart Butler, a distinguished fellow at the Heritage Foundation, said in a 1989 lecture on how to ensure affordable health care for all Americans. “But health care is different. If a man is struck down by a heart attack in the street, Americans will care for him whether or not he has insurance.”

Part of Mr. Butler’s solution back then? “Mandate all households to obtain adequate insurance.”

But of course people like Mr. Butler have changed their minds

The Heritage Foundation has taken pains to distance itself from its past support of an individual mandate: it wrote a court amicus brief noting its change of heart, and Mr. Butler wrote an op-ed article in USA Today this month headlined “Don’t blame Heritage for ‘ObamaCare’ mandate.”

Democrats have gone in the opposite direction,

After Mr. Clinton’s health care proposal died, Democrats began searching for more politically palatable solutions.

But there was still little Democratic support for an individual mandate, as Senator John Breaux of Louisiana found when he proposed one several years later. But officials, centrist policy groups and even liberal research organizations slowly warmed to the idea.

And even Mr. Obama has changed his position.

When Mr. Edwards ran for president again in 2008, his health plan called for an individual mandate for all. Mrs. Clinton followed suit. But Mr. Obama resisted the idea as a candidate, calling for a mandate for children only.

The difference in all of this is that while both sides have changed positions, Democrats seem more willing to openly admit that fact, and to try to make people understand why they changed. Conservatives just want to argue against reality, and never ever admit that they were wrong.

Finally the best statement can be made by this individual.

Mark V. Pauly, a professor of health care management at the University of Pennsylvania’s Wharton School who was a co-author of an influential 1991 paper that called for an individual mandate, said that he was discouraged to see so many Republicans shunning an idea they had once supported.

“My view was, I still agree with myself,” he said in an interview. “ (emphasis added)

You have to like that last sentiment, that a person still agrees with himself or herself. Maybe that’s something Mr. Romney ought to try sometime.

Public School Teacher Unions Starting to Work to Improve Quality of Education – Cooperating on Teaching Evaluations in New York and New Haven

2012-02-19T05:45:00.000-08:00

What! – That Cannot be Right - According to Conservatives They Only Care About Themselves

One of the better columnists for the New York Times is Nicholas Kristof, and what he writes frequently reflects what the rest of would like to say, if only we had his skill and ability to communicate. Here’s his opinion of public education teachers.

I lost patience with teachers’ unions when union officials in New York City defended a teacher who had passed out in class, reeking of alcohol, with even the principal unable to rouse her.

Not to mention when union officials in Los Angeles helped a teacher keep his job after he allegedly mocked a studentwho had tried to commit suicide, suggesting that the boy slash his wrists more deeply the next time.

In many cities, teachers’ unions ensured no one was removed for mere incompetence. If a teacher stole or abused a student, yes, but school boards didn’t even try to remove teachers who couldn’t teach.

Yep, all of us who have either experience stuff like this directly, or read about it over and over again agree. But Mr. Kristof documents at least one success story, in New Haven, Connecticut where the teacher’s union is working with school officials to put objective teaching criteria into evaluations, and to get rid of non-performing teachers.

New Haven may be home to Yale University, but this is a gritty, low-income school district in which four out of five kids qualify for free or reduced-price lunches. Eighty-four percent of students are black or Hispanic, and graduation rates have been low.

A couple of years ago, the school district reached a revolutionary contract with teachers. Pay and benefits would rise, but teachers would embrace reform — including sacrificing job security. With a stronger evaluation system, tenure no longer mattered and weak teachers could be pushed out.

Roughly half of a teacher’s evaluation would depend on the performance of his or her students — including on standardized tests and other measures of learning.

Teachers were protected by a transparent process, and by accountability for principals. But if outside evaluators agreed with administrators that a teacher was failing, the teacher would be out at the end of the school year.

And getting praise is the national and local teacher’s union.

Last year, the school district pushed out 34 teachers, about 2 percent of the total in the district. The union not only didn’t object, but acknowledged that many of them didn’t really belong in the classroom.

“We all use the same litmus test: Would we want our kid in that room?” says David Cicarella, president of the New Haven Federation of Teachers, the local union. “We all recognize that we need to do something. Tenured teachers who are ineffective — that is an issue. We want to do something about it. But it’s not fair either to blame all teachers.”

Mr. Kristof still has his wait and see attitude,

If the American Federation of Teachers continues down this path, I’ll revisit my criticisms of teachers’ unions. Maybe even give them a hug for daring to become part of the solution.

But at least now there is something to wait and see about.

And in neighboring New York there has been a huge breakthrough of a similar nature. There school officials and the teacher’s union have also reached an agreement on how teacher’s will be evaluated,

The agreement, announced at a news conference in Albany, allows school districts to base up to 40 percent of a teacher’s annual review on student performance on state standardized tests, as long as half of that portion is used to analyze the progress of specific groups of students, like those who are not proficient in English or have special needs. It also offers other options: base 20 percent of the score on state test results and the other 20 percent on exams developed by the districts or by a third party, provided that the exams are approved by the state.

The remaining 60 percent of a teacher’s score is to come from subjective measures, like classroom observations and professional development projects.

Prior to this agreement the union and the school administrators were at each others throats, and in court. Now they are all celebrating.

“Historic,” Mr. Bloomberg said, “is probably not too strong a word to use.”

The mood at the Albany news conference was festive; everyone made sure to thank Mr. Cuomo.

“It would not have been possible to get to this day without the governor’s extraordinary leadership,” Mr. Iannuzzi said.

Notice that all of this is taking place in states that are controlled by Democratic administrations. Yes, it doesn’t have all the drama and the confrontation and the political bile where Republican Governors have taken on the teacher’s unions and are trying to destroy them, but it does have one thing those states do not have. Accomplishments.

Revisiting Griswold v. Connecticut – Because Its Statement of Freedom is Something That Seems to be Forgotten – Particularly by Mr. Santorum

2012-02-18T05:13:00.005-08:00

Limited Government Involvement In People’s Private Lives Should be a Conservative Cause – Why Isn’t It

"Any person who uses any drug, medicinal article or instrument for the purpose of preventing conception shall be fined not less than fifty dollars or imprisoned not less than sixty days nor more than one year or be both fined and imprisoned." - Connecticut Law in the 1960's.

As the culture wars have supplanted, at least temporarily the war on the poor and the economic wars in the current campaign, it seems necessary to go back to one of the source documents in the culture wars, the Supreme Court decision in Griswold v. Connecticut. Republican Presidential hopeful Rick Santorum has made a part of his campaign the idea that the case was decided incorrectly.

Tapper asked, “Democrats say that one of the reasons you lost that year was because you are, in their view, out of the mainstream and they talk about the Griswold v. Connecticut case--that was an issue that Casey used against you--about whether or not a state has the right to make a law against married couples using contraceptives. Is that something you’re at all concerned about?

“The state has a right to do that,” said Santorum. “I have never questioned that the state has a right to do that. It is not a constitutional right. The state has the right to pass whatever statues they have.”

“That is the thing I have said about the activism of the Supreme Court--they are creating rights, and they should be left up to the people to decide,” he added.

So what was this case all about? Well it was a decision by the Supreme Court on this law in Connecticut.

The statutes whose constitutionality is involved in this appeal are §§ 53-32 and 54-196 of the General Statutes of Connecticut (1958 rev.). The former provides:

Any person who uses any drug, medicinal article or instrument for the purpose of preventing conception shall be fined not less than fifty dollars or imprisoned not less than sixty days nor more than one year or be both fined and imprisoned.

That’s right, in 1965 (yes, 1965 not 1865 or 1765) it was illegal to use birth control pills or even condoms in the state of Connecticut. Do so and you could go to jail for a year. Here is Justice Douglas stating his reasons for declaring such a vile and foul law Unconstitutional. It is indeed an eloquent defense of Conservative doctrine, that the government may not invade the privacy of the individual and the family without just cause.

The foregoing cases suggest that specific guarantees in the Bill of Rights have penumbras, formed by emanations from those guarantees that help give them life and substance. See Poe v. Ullman, 367 U.S. 497, 516-522 (dissenting opinion). Various guarantees create zones of privacy. The right of association contained in the penumbra of the First Amendment is one, as we have seen. The Third Amendment, in its prohibition against the quartering of soldiers "in any house" in time of peace without the consent of the owner, is another facet of that privacy. The Fourth Amendment explicitly affirms the "right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures." The Fifth Amendment, in its Self-Incrimination Clause, enables the citizen to create a zone of privacy which government may not force him to surrender to his detriment. The Ninth Amendment provides: "The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people."

The Fourth and Fifth Amendments were described in Boyd v. United States, 116 U.S. 616, 630, as protection against all governmental invasions "of the sanctity of a man's home and the privacies of life."^[*] We recently referred [p485] in Mapp v. Ohio, 367 U.S. 643, 656, to the Fourth Amendment as creating a "right to privacy, no less important than any other right carefully an particularly reserved to the people." See Beaney, The Constitutional Right to Privacy, 1962 Sup.Ct.Rev. 212; Griswold, The Right to be Let Alone, 55 Nw.U.L.Rev. 216 (1960).

We have had many controversies over these penumbral rights of "privacy and repose." See, e.g., Breard v. Alexandria, 341 U.S. 622, 626, 644; Public Utilities Comm'n v. Pollak, 343 U.S. 451; Monroe v. Pape, 365 U.S. 167; Lanza v. New York, 370 U.S. 139; Frank v. Maryland, 359 U.S. 360; Skinner v. Oklahoma, 316 U.S. 535, 541. These cases bear witness that the right of privacy which presses for recognition here is a legitimate one.

The present case, then, concerns a relationship lying within the zone of privacy created by several fundamental constitutional guarantees. And it concerns a law which, in forbidding the use of contraceptives, rather than regulating their manufacture or sale, seeks to achieve its goals by means having a maximum destructive impact upon that relationship. Such a law cannot stand in light of the familiar principle, so often applied by this Court, that a

"governmental purpose to control or prevent activities constitutionally subject to state regulation may not be achieved by means which sweep unnecessarily broadly and thereby invade the area of protected freedoms."

NAACP v. Alabama, 377 U.S. 288, 307. Would we allow the police to search the sacred precincts of marital bedrooms for telltale signs of the use of contraceptives? The [p486] very idea is repulsive to the notions of privacy surrounding the marriage relationship. (emphasis added)

And there is also this statement that everyone should know and support\

We deal with a right of privacy older than the Bill of Rights -- older than our political parties, older than our school system. Marriage is a coming together for better or for worse, hopefully enduring, and intimate to the degree of being sacred. It is an association that promotes a way of life, not causes; a harmony in living, not political faiths; a bilateral loyalty, not commercial or social projects. Yet it is an association for as noble a purpose as any involved in our prior decisions.

Gosh, doesn’t that sound a lot like something Mr. Santorum would agree with (and it doesn’t even mention same sex marriage!).

The dissent by Justice Stewart goes to the core of the arguments by Conservatives, that the rights granted to Connecticut residents in Griswold are not enumerated in the Constitution,

"What provision of the Constitution, then, does make this state law invalid? The Court says it is the right of privacy "created by several fundamental constitutional guarantees." With all deference, I can find no such general right of privacy in the Bill of Rights, in any other part of the Constitution, or in any case ever before decided by this Court"

But if there is no right to privacy from government interference in the lives of people where government has no basis for conducting that interference, what does freedom basically means? The opinion in Griswold ends with this quote from a much earlier case, words which effectively destroy the position of people like Mr. Santorum who would allow the use of government power to force their positions onto individuals who do not share those positions.

"The principles laid down in this opinion affect the very essence of constitutional liberty and security. They reach farther than the concrete form of the case then before the court, with its adventitious circumstances; they apply to all invasions on the part of the government and its employees of the sanctity of a man's home and the privacies of life. (emphasis added)

It is not the breaking of his doors and the rummaging of his drawers that constitutes the essence of the offence, but it is the invasion of his indefeasible right of personal security, personal liberty, and private property, where that right has never been forfeited by his conviction of some public offence -- it is the invasion of this sacred right which underlies and constitutes the essence of Lord Camden's judgment."

There Mr. Santorum, is your answer. That is why if you were President you cannot Constitutionally inflict your religious and moral views upon the nation and why you cannot use the power of government, any government to do so.

You have no right to do so sir, you have no right.