Why No One Should Feel That Mr. Santorum Should Receive Any Consideration for President

And Why He Does Not Deserve His Brief (Hopefully) Moment in the Sun

The “Anybody but Mitt” forces are now down to their last at-bat, and with two strikes against them trailing badly in the bottom of the ninth (a baseball analogy for the winter season) they have finally gotten around to former Pennsylvania Senator Rick Santorum.  Mr. Santorum rose in Iowa, largely because the formerly strong candidates like Mr. Gingrich, Ms. Bachmann and Mr. Perry have had their weaknesses exposed.

The Dismal Political Economist like many others would like to be favorablely disposed towards this brief recognition for Mr. Santorum. After all, he has previously lost his race for re-election to the Senate by a massive amount, and for some reason in his own mind, and no others, this qualified him to run for President.  He has had no support, no recognition and no respect.  So it only seems appropriate that for a few days or even a week the political world would give him a little of that.

Mr. Santorum deserves no support, no recognition and no respect.  The reason for this is shown in an interview Mr. Santorum did with NBC political reporter Chuck Todd. The former Senator’s main campaign theme has been opposition to the gay and lesbian community in general, and virulent opposition to same sex marriage in particular. As reported by Think Progress, Mr. Santorum would push for a Constitutional Amendment to ban such marriage, and even more

Santorum explained that not only would he support a federal constitutional amendment banning same-sex marriage, he supports invalidating all currently legal same-sex unions:

This is odious to the extreme.  It is not just that such an amendment to the Constitution would be an historic first, taking away rather than conferring rights.  The fact that Mr. Santorum would, solely on the basis of his own anti-gay bigotry and hatred take away the marriage rights of tens of thousands of couples who have been legally married is deplorable.  It is a position that shows absolutely no concern or consideration for the happiness of others, only a dogmatic hatred of people that lives their lives in a way that has no impact on others, but with which Mr. Santorum disagrees with.  Mr. Santorum would use the highest powers of government, the Constitution, to destroy lives and rights.

For this reason Mr. Santorum does not deserve any consideration and no one should grant him any recognition.  Soon he will return to his natural state of political oblivion, and that moment cannot come too son.  Particularly for those who value the core concept Conservative ideology that says whenever possible individuals should be left alone to their own lives without government interference.

Wonder Why Italy Has To Reform Its Economy – The Government Subsidizes Newspapers

Something That Doesn’t Belong in Politics or Economics

The drive to fix Europe is two pronged.  One prong is the attempt to fix fiscal matters, namely that budget deficits and debt levels of many countries like Spain, Italy, Greece, Portugal etc are driving away private financing of the governments.  The second requirement is that the countries reform their economies, make them more pro-growth and reduce excessive government interference in the economy (the problem conservatives think we have in the U. S, but don’t).

Emblematic of the problem is the fact that Italy provides government support for newspapers.  Now this is about as great a violation of democratic principles as one can find, a free and independent press being essential to the operation of a democracy.  So by ending the subsidies Italy would move towards strengthening democratic institutions in the country and positively impacting its budget problems, albeit by a small amount.

The cuts in newspaper subsidies, from €170m in total to €53m budgeted for next year, were ordered by the previous government of Silvio Berlusconi – the billionaire TV magnate with no great love for the print media he does not own – and confirmed by Mr Monti’s administration, which took office last month.

Of course, like all businesses who receive government subsidies, they justify it as for the good of the nation,

“We are defending democratic pluralism,” says Guido Caldiron, a reporter with Liberazione, also in conflict with its owners, the Communist Refoundation party, which argues that it can no longer afford to finance its loss-making mouthpiece without government help.

And just in case anyone thinks the government’s policy is done for the right reasons,

The government is also aware that it is only the smaller papers – left and rightwing – that are voicing any serious opposition to its tough reforms and spending cuts and does not want to be seen to be silencing them.

The smaller titles point out that the mainstream newspapers – such as Corriere della Sera and La Repubblica – continue to benefit from indirect subsidies, such as VAT waivers on copies sold by subscription and reduced postal delivery costs. They also complain that the advertising market is dominated by two companies, one of them owned by Mr Berlusconi.

Italy is trying to curb the subsidies.  But it is nice to know that even when a government does something good, it does it for the wrong reasons.

Ending the Year with Sarah Palin – As Bad as the Republican Field Is, It Could Have Been Worse

One Final Act of Self Promotion Before 2011 is Forgotten

In a near futile attempt to find something of interest to report on the political scene withthe largely meaningless Iowa caucuses now gone, the Washington Post has asked several Republicans who declined to run for President to make a statement on the race.

Second up, probably because she elbowed her way to near the front, but could quite make it to first place  is former Alaska Governor Sarah Palin.  What does Ms. Palin have to say to the candidates who actually chose to run rather than quit their elected jobs (them that had them) and go around making money? Why it’s “read my book”.  (Available at fine book stores and rummage shops everywhere.)

Given the concerns I have for some of the Republican field’s focus thus far, I must implore the candidates to do something that sounds self-promoting, but whatever. Candidates, please turn to Chapter Three of“Going Rogue” and read what it takes for our country to step toward energy independence. Note the lesson I share in the same chapter about taking on the “elite,” the crony capitalists and the permanent political establishment to get a job done.

When hearing Ms. Palin say something like this, one is reminded of Shakespeare, “Get thee to a nunnery”.  Really and don’t come out until you know how to play nicely with the grownups.

In typical Washington Post shlocky journalism the article entitled "If I were campaigning for President..." ends with something from Herman Cain.  Uh, WP, Mr. Cain was campaigining for President until he made an ass out of himself.  Being a newspaper we thought you might have known that.

As Iowa Prepares to Caucus, A Summary of the Characteristics of the Republican Candidate

Why Would the Great People of Iowa Vote for Any Of Them?

The Iowa Caucuses will take place soon and for a few days the top candidates will bask in the glory, until the New Hampshire and South Carolina primaries attract attention.  With the vote imminent, here is a capsule description of the candidates.

Mitt Romney:  Mr. Romney, in an attempt to prove his Conservative bona fides has said he would veto the Dream Act, a law that would allow men and women who were brought to this country at a very young age to stay here if they served in the armed forces.  Mr. Romney would wage war on children in his near decade long quest for the White House.  As a candidate Mr. Romney has abandoned every position he ever held that would put him into conflict with the Republican base.

Ron Paul:  A homophobic bigot, Mr. Paul would allow Israel to perish and did not support the hunting and killing of Osama bin Laden.  He would dismantle every single regulatory activity by government.

Rich Santorum:  A so-called Conservative, the centerpiece of his campaign is to deny rights to gay and lesbian citizens.  He would use the power of the Federal government to not only deny marriage to future same sex couples, but to also take away the marriage status of existing lawful unions.  He would persecute people who have done no harm to him or others or to themselves, simply because they do not behave according to his moral code.

Newt Gingrich:  A supposed man of big ideas, one of his biggest is that as President he would be free to disregard court decisions with which he disagreed.  One hopes that in the future he will run for Fearless Leader of North Korea, where his philosophy is main stream.

Rich Perry:  As Governor of Texas he reveled in executing criminals, and now wants to use the power of the Federal government to force women who were made pregnant because they were the victims of rape or incest to carry the baby to term rather than have an abortion.  This cruel and inhumane act would never affect Mr. Perry because of his gender.

Michele Bachmann:  Her false pronouncement that a cancer vaccine could cause mental retardation may well cause thousands of women to avoid the vaccine, thus dooming many women to a cancer that could have been avoided. 

If you look at the main complaints these people have against Mr. Obama, it is that he passed a health care law that requires every American to have health insurance, a reasonable position that until recently was supported by Mr. Romney and Mr. Gingrich.  He also took almost a year to stop the economy from losing hundreds of thousands of jobs each month, and since then the economy has created several million jobs.  He also wants to raises taxes on the very wealthy to pay for government operations.

There are plenty of reasons to be dissatisfied with Mr. Obama, but everyone would agree that he is a decent and caring person, something that cannot be said about any of the above. 

Iowans, your choice is easy in the Republican Caucuses, None of the Above.

Remember How Greece’s Problems Were Fixed by Creditors Taking a 50% Decrease in the Value of Greek Debt?

Neither Does Anyone Else

Now that the old year is over and the New Year is beginning everyone can get back to last year’s problems, which unfortunately were not solved last year.  As far as Greece was concerned, everyone thought they would be solved.  Private creditors “voluntarily” agreed to take a 50% reduction in the value of their Greek bonds, which would reduce Greece’s debt and that along with austerity and economic reform would fix Greece.

Well the austerity part is working.  The International Monetary Fund has these predictions for the Greek economy.

The fund said in a report prepared last month that if a 50% write-down was universally subscribed by private holders, Greece's debt could reach a long-term sustainable level of around 120 percent of gross domestic product. Then, it expected for Greece's economy to contract by 5.5% this year and 3% next year

But like all good forecasters and policy makers, the IMF hedged

It warned, however, that "Results remain sensitive to growth outcomes ... and even small deviations from the macro and program targets would not bode well for debt sustainability."

A "low-growth case would produce an unsustainable outcome," the IMF said then.

 And now the IMF is getting ready to harvest that hedge

The International Monetary Fund recently told the Greek government that a worsening economic outlook suggests the beleaguered nation may be unable to reduce its debt to sustainable levels even with a planned 50% write down in privately-held Greek government bonds, according to two officials familiar with the conversations.

"A 50% haircut may no longer be enough" to bring Greece's debt to sustainable levels given the new IMF economic forecasts, said one of the officials.

An official at the IMF confirmed staff are working on starker economic assessment than outlined last month in its loan-program review for the country. Some IMF officials think "the debt sustainability analysis is not valid anymore" under the new economic forecasts, the official said. For Greece's debt to be sustainable now "requires either a deeper haircut or additional loans from Europe," he said.

Well anyone who thinks that there will be additional loans from Europe also thinks that Donald Trump is Presidential material.  As for the private lenders, well, their holiday season got a whole lot worse.

Private creditors are hoping to soon conclude negotiations with Greek officials on the details of a planned debt-reduction program. In late October, euro-zone governments called on Greece to secure a 50% writedown on the debt held by private creditors as a condition for payouts under the existing €130 billion ($168.49 billion) bailout package to continue. The debt deal was also seen as essential for any potential expansion of the program.

So the private lenders will soon have the worst of all worlds, they will take a huge write down in the value of their assets that are comprised of Greek government debt, and that write down won’t even fix the problem.

Of course, how a country whose economy is contracting at a rate of 5.5% can be expected to be better rather than worse able to pay its debts is something that only happens in miracle stories.  And this holiday season, that’s not the miracle that is going to happen.

Massachusetts Republican Senator Scott Brown Plays the “Whine” Card – the Media is Too Nice to His Opponent

Mr. Brown Forgets the Compliant Media He Had in His Election

The most difficult thing for all politicians, but Conservative idealogues in particular is to admit that maybe, just maybe, some of their radical ideas are not all that popular.  So when their appeal to the electorate goes down, it cannot be their fault, or the fault of their positions, it must be the media’s fault.  Richard Nixon made a career off of this strategy, Newt Gingrich is a modern master and now Massachusetts Senator Scott Brown takes up the mantle.

Mr. Brown was a surprise winner of the seat held by the last Edward Kennedy.  He election was largely the result of in inept Democratic opponent and a fawning media that cast Mr. Brown as some type of pickup truck driving macho hero. The portrait that was portrayed of Mr. Brown was he was a man of the people, but when in office whenever his vote was need to support anti-people legislation, it was there.

Now Mr. Brown is in a very tight race with Harvard Professor Elizabeth Warren, and he complains about media coverage of Ms. Warren.

“It’s all fluff. It’s all fluff. Gimme a break,” said an exasperated Brown about the media’s coverage of Warren, a former Obama administration official. “I just think that if you’re going to find out where people stand, you gotta ask them tough questions like you guys ask me every single day. Every single day of my existence I get tough questions from you guys.”

The first term Senator also poor mouths his situation,

“She’s going to have every advantage. ... I don’t have a machine behind me like she will, and she does clearly,” Brown said. “It would help if you guys would ask her some tough questions, too, and ask her about how she would vote on things and why.”

conveniently ignoring the fact that he has raised a gazillion dollars and will have massive Tea Party, Wall Street, Radical Conservative Group and other support that will far outgun Ms. Warren.  Anti-Warren ads have already been run by outside groups, who view Ms. Warren as political enemy Number 1 because she supports the people against the bail out hungry Wall Street firms.

The good news in all of this is that this type of talk is usually a sign of desperation.  The election will be close, but if Mr. Brown is already in whining phase then the signs are positive for Ms. Warren’s uphill campaign to unseat an incumbent.

Verizon Reacts to Its Third Cell Phone Outage in December by Imposing $24/year Fee

And If the Service Gets Any Worse, They Will Raise Prices Even More

Verizon is a cell phone operator whose marketing efforts tout the reliability of its service.  That really isn’t true.

Verizon Wireless has built its reputation on the quality of its cellular network, touting its reliability over rival AT&T Inc., but a series of outages this month threatens the largest U.S. wireless carrier's image.

On Thursday, Verizon Wireless said its engineers had fixed the third outage in December for its new high-speed data network. Some customers had complained they were getting slower connections or no signal at all.

Now a normal, decent, customer caring company would be concerned about customers.  But Verizon’s reaction is to put a bill payment fee in place for customers who pay by phone (does Verizon charge for the call?  Probably) or on the company’s website.

Verizon Wireless further frustrated customers Thursday by disclosing it would impose a $2 fee on those paying their bills by phone or on Verizon's website starting Jan. 15. The company said it was necessary to help pay for "single-bill payment options."

Customers can avoid the new fee by paying electronically through their bank or by mailing a check. But some cried foul over the fee, which effectively amounts to a $24 annual surcharge. "I'm getting a little tired of businesses figuring out ways to get their hands in my pockets," wrote one customer on a Verizon forum.

And of course, like everyone else in today’s era of personal responsibility, Verizon took full blame for the problems.  Well maybe not.

Verizon Wireless called the outages "regrettable" and vowed to improve its 4G service to be on par with its more broadly used 3G service. "Certainly we've shown we're not there in some aspects," said Mike Haberman, vice president of network operations.

The disruptions "were unforeseen despite careful and diligent planning" and each incident was prompted by a different technical glitch, such as software problems, said Mr. Haberman. "When you're operating the biggest, most advanced network there are growing pains."

Verizon is descended from former Bell company local monopolies.  Looks like they haven’t quite shed that monopoly heritage completely.

Update:  Verizon has recently rescinded the charge, citing public pressure.  Amazing what competition can do for an economy.

Wall Street Journal Features Newt Gingrich Opinion Piece to Promote Anti-Romney Candidate – Impact is Just the Opposite

How Stupid do Gingrich and the WSJ Editors Think Voters Are?  - See Answer at End

The editors of the Wall Street Journal do not like Mitt Romney.  Mr. Romney should be a natural for the Journal but he has refused to say his health care mandate in Massachusetts was a mistake.  Instead he says he is against Mr. Obama adopting the Massachusetts plan for the nation, and that each state should do their own plan.  This bit of nonsensical reasoning is too much for even the Journal to tolerate from a pro-business Republican.

In a last gasp effort to save the dying candidacy of Newt Gingrich the Journal has turned over its editorial page column to the former House Speaker.  Mr. Gingrich tries to invoke Ronald Reagan, what he does instead is invoke laughter.  Here are some of the priceless gems of Mr. Gingrich.

But Reagan enacted historic income tax rate cuts, regulatory reforms and spending controls. The recession officially ended in November 1982, and in the following two and a half years the unemployment rate dropped 3.6 percentage points, more than eight million Americans went to work at new jobs, and the longest period of economic growth in American history commenced.

Uh, no.  Taxes were cut in 1981, but were raised with the blessing of Mr. Reagan in 1982 and the longest, strongest period of economic growth took place after Mr. Clinton raised taxes on wealthy people in 1993. Too bad Mr. Gingrich is not a Historian or he would know this.

First, we must reduce the federal business tax rate to 12.5%, eliminate the capital gains tax as a double tax on capital income, and eliminate the estate tax. We must allow immediate expensing (writing off the costs in one year) for investment in capital equipment so American workers can continue to be the most productive in the world, using the latest and most advanced technology.

Uh, sorry Mr. Gingrich, there is no “federal business tax”, there is a corporate income tax but as a man of “big ideas” you really cannot be expected to know details like that, can you?  As for immediate expensing, that is part of the Obama program that was enacted at the end of 2010, but then you were probably too busy planning moon colonies at that time to notice.

On the personal income side, I propose an optional 15% flat tax, allowing those American taxpayers who prefer it to file their returns on a postcard. This will save close to half a trillion dollars annually in tax-compliance costs.

These tax reforms are not designed to be revenue-neutral, but to maximize job creation, wages and economic growth. We will balance the budget with the revenues from such growth and spending cuts

So let’s see, massive tax cut for the rich from the top marginal rate of 35% to 15%, along with the elimination of capital gains taxes and we balance the budget.  Even Bush economists have long ago accepted the reality that tax cuts do not pay for themselves.  But reality is not the long suit of Mr. Gingrich.  As for spending cuts.

My economic plan includes sweeping entitlement reforms that would altogether cut federal spending in half over the long run, entirely solving the nation's entitlement and fiscal crisis.

Hm, that would mean the end of all social programs, huge decreases in defense spending, Medicare and Social Security.  Of course, like every other budget cutter Mr. Gingrich fails to identify a single program he would cut.  The conclusion is this.

These policies will ignite another record-smashing, and world-leading, 25-year economic boom, restoring the American Dream and rebuilding the America we love.

What, not a 24 year boom or a 26 year boom?  Exactly a 25 year boom!  Well that will show Mr. Clinton and Mr. Obama, won't it. 

So in the end, anyone who carefully reads what Mr. Gingrich has to say will come away with the conclusion that this delusional politician should never, ever hold elected office ever again.  For anyone to conclude otherwise must mean, as the Wall Street Journal must feel, that the American voter is really, really stupid.  Well, the voters can be fooled some of the time, but sorry WSJ and Mr. Gingrich, they are no where close to being that stupid.

On the positive side though, one can be certain that unlike the newsletters that Mr. Gingrich authored and now has said he didn’t author, there can be no question that this piece was indeed written by Mr. Gingrich.  No ghost writing hack, no matter how bad, could have penned these words, it is pure, unadulterated Newt Gingrich.  And that’s a good thing, for the world to see what Mr. Gingrich really is about.

U. S. Economy Getting Boost From Unlikely Sector – the Energy Sector

Why It Is So Difficult to Prognosticate on the Economy

One of the reason why the United States imports so much of its energy is that demand has been rising and supply has been falling.  The supply that remains in the U. S. is expensive to develop and not all that competitive in price with the rest of the world.  In the past several years this has changed.

Shale gas and oil, gas and oil trapped in rock formations deep below the earth are being developed at an ever increasing rate.  This is reducing the price of natural gas and stimulating industries dependent upon natural gas. (Exactly what one would expect in Econ 101, but always a surprise to many people).

Shale-gas production is spurring construction of plants that make chemicals, plastics, fertilizer, steel and other products. A report issued earlier this month by PricewaterhouseCoopers LLC estimated that such investments could create a million U.S. manufacturing jobs over the next 15 years.

Even better for economic development, the gas is being found in areas of Appalachia and the industrial Midwest and the sparsely populated northern plains states.  These area have suffered more than other parts of the country from bad  economic times, and if better times are to be had, this is the place to have them.

West Virginia's legislature, meeting in a special session, passed a bill this month setting rules for shale gas drilling and production. The legislation ensures "a reliable supply" of shale gas in West Virginia and should dispel regulatory uncertainty that could slow investment, Keith Burdette, the state's commerce secretary, said in an interview.

Because the increased production of lowers energy costs for everyone, the economic benefits will go beyond the local areas where the gas is produced or where investment in manufacturing that uses natural gas is taking place.  Prices are low for gas, and the change in gas prices is in stark contrast to the price of other carbon based energy sources, as this set of charts show.

So what’s the problem?  (There’s always a problem).  Producing and transporting gas and oil from shale deposits is horribly destructive to the environment.  The potential exists for massive environmental disasters, and this is going to be a major cost of this new energy.  But this cost will be borne by future generations, so a lot of people are not going to worry about that now.  After all, that is just one more cost the current folks are shoving onto the kids, like huge student debt, huge national debt, and huge environmental problems. 

They can thank us later.

Spain to Take Bigger Steps to Expand the Its Economy By Contracting Its Economy

And One Piece of Logic Does Creep Into the Policy

The many countries of Europe that are having problems with government deficits and rising government debt have implemented policy to reduce growth in the hopes that somehow that will cause the financial markets and capital markets to regard these countries as safe investment areas, and that it will cause a balanced budget.  Ok, who can name countries where this policy instead has created lower growth and higher deficits and higher unemployment?  Portugal, Ireland, Britain and Spain come to mind.  Who can name countries where the policy has worked? 

Can we get back to you that?

Now Spain and Italy are joining the “Hope Over Reality” club by implementing austerity programs and expecting the economies to grow and deficits to be reduced.  Spain just recently found out that its government deficit is going to be higher than originally thought

Spain's new government Friday said the country will miss its budget-deficit target by a wide margin, and announced spending cuts and tax increases valued at about €15 billion ($19.4 billion) to stem the tide of red ink.

One week after conservative Prime Minister Mariano Rajoy took his oath of office, his government said Spain's budget deficit will be about 8% of gross domestic product 2011, well above the 6% target the previous government of Socialist Prime Minister José Luis Rodríguez Zapatero had committed to with the European Union and financial markets.

 (wow, who could have seen that coming) and so the country is implementing this policy.

Madrid proposed about €8.9 billion in spending cuts for 2012 that ranged from trimming public-sector employment to curbing subsidies for political parties. It also went back on a campaign pledge of Mr. Rajoy's and approved tax increases valued at about €6 billion. The total budget adjustment represents about 1.5% of GDP.

Ok, let’s do the math.  The deficit is 8% of GDP, and the reduction in spending/incrase in taxes will be 1.5% of GDP.  So a 1.5% reduction in spending as a percent of GDP is supposed to eliminate an 8% deficit.  This must be some of that new math they are talking about.  Oh, maybe not.

Still, Spain's latest measures will likely be insufficient to slash the budget deficit from 8% of GDP in 2011 to the target 4.4% in 2012, a gap of about €36 billion. The government will present a new 2012 budget in March. Ms. Saénz de Santamaría hinted there is more austerity to come.

The clear implication is that Spain is about $26 billion (in dollars, not Euro’s) off.

Of course, economies are dynamic, so maybe growth will take place in GDP, reducing the deficit as a percent of GDP.  Well why exactly should that happen?  The combined package is not large, comparable to about a combination of spending decreases/tax increases of $225 billion for the U. S., but does anyone think that if the U. S. cut spending and raised taxes by that amount the economy would grow faster?  Really, anyone?

The one good piece of news in all of this is that Spain’s new government has been hit over the head by reality.

"We were not in favor of tax hikes," said government spokeswoman Soraya Saénz de Santamaría at a news conference. "They were forced by the size of the [budget] gap we encountered."

And since raising taxes is far less detrimental to an economy than cutting government spending, the collision with reality is forcing Spain to at least move somewhat in the right direction.  But European government have also pledged to reform their economies in addition to fiscal austerity.  So far in Spain, and Italy and Greece and Portugal and wherever, no reforms in site.

And yes, this story about the need to raise taxes was in the Wall Street Journal, just don’t tell the editors.

The Dismal Political Economist to Newt Gingrich: We Were Just Making Things Up When We Said Sarah Palin Was on Your List to be VP

Boy, Some People Just Cannot Take a Joke

Earlier The Dismal Political Economist posted a supposedly secret list of the Vice Presidential Choices of Newt Gingrich.  This list was not real, it was sarcasm, it was irony, it was satire, it was facetious – it was not real.  Here is what it said about one potential Gingrich running mate.

Sarah Palin:  Newt Gingrich is all about attention and publicity, and this pick would give him an unlimited amount of both.  Mr. Obama would be relegated to the back page of the newspaper and the Republican convention would be a love fest.  Even his opponents would label Mr. Gingrich a man of big ideas,  stupid ideas yes, but definitely big.

Apparently Mr. Gingrich did not realize this was fiction, because, as reported by Taegan Goddard.

Gingrich Would Consider Palin for Veep

Newt Gingrich said he "would consider asking Sarah Palin to serve as his number two or in his Cabinet if he became president," CBS News reports.

Said Gingrich: "She is certainly one of the people you would look at. I am a great admirer of hers and she was a remarkable reform governor of Alaska, she's somebody who I think brings a great deal to the possibility of helping in government and that would be one of the possibilities."

A spokesman for Mr. Gingrich said that in the future greater disclosure notice would be required of the Dismal Political Economist because, to quote the spokesperson “we can’t tell if you are making fun of us or if you are just ridiculing us with this stuff.” 

Government Needs Only $1.2 Million New Debt to Get Through 2012

 Oops.

The New York Times has a story on the President’s request for an additional $1.2 billion increase in the statutory debt ceiling so that the Federal Government can finance its operations in 2012.

This would be the final increase allowed under the budget agreement reached in August after the government came close to default. Since signing legislation to codify that agreement on Aug. 2, Mr. Obama has obtained two increases totaling $900 billion.

The budget agreement largely pre-empts the partisan debate over federal deficits and debt that the request might otherwise have touched off in Congress.

The increase is almost automatic, since it would take a measure approved by both Houses of Congress to prevent it.  A vote will be taken and this way Republicans and a few Democrats can vote against the increase, without suffering any of the ill effects if the increase did not take place.  Politics as usual.

As for the amount, there is this at the end of the Times article.

Correction: December 27, 2011

A Web site summary with an earlier version of this article incorrectly listed the amount of the debt limit increase sought by President Obama. It is $1.2 trillion, not $1.2 million.

Darn it, for a minute there . . .

Mr. Obama To Try Again to Get Appointees Confirmed to Federal Reserve Board – Senate Previously Blocked Nobel Prizing Winning Economist

President Gets A for Effort – Probably an F on Results

Earlier in 2011 the President of the United States nominated a gentleman by the name of Peter Diamond to a seat on the Board of Governors of the Federal Reserve System. Mr. Diamond, in addition to being an outstanding and accomplished economist had also been awarded the Nobel Prize in Economics.  To Senator Richard Shelby, Republican of Alabama Mr. Diamond was unqualified and so using the idiotic and arcane and out-of-date rules of the Senate Mr. Shelby was able to block a vote on Mr. Diamond’s appointment.  Mr. Diamond consequently withdrew giving the National Association of Ignoramus’s a victory in their quest to impose ignorance on the nation.

Now Mr. Obama is trying a different tact in attempting to win Senate confirmation of Fed nominees.  He has nominated two individuals to the Board, one a Democrat and the other a Republican.

The nominees are Jeremy Stein, 51 years old, a Ph.D. economist who did a five-month stint in the Treasury and White House early in the Obama administration, and Jerome Powell, 58, who was undersecretary of the Treasury for domestic finance under President George H.W. Bush.

The strategy has several aspects.  Part of the hope is that by nominating a Republican and a Democrat the Senate will confirm both in the spirit of compromise  that has been the hallmark of American government until Republicans decided on a different hallmark.

A recent administration attempt to navigate the contentious Senate confirmation process by packaging Republican and Democratic nominees to the Federal Deposit Insurance Corp. board failed when Senate Republican leader Mitch McConnell of Kentucky blocked a vote.

Another part of the strategy is this.  After rejection of Mr. Diamond, who on paper was eminently, even spectacularly qualified for the Board seat, Mr. Obama has nominated someone who on paper does not appear to have any special qualifications.

A graduate of Georgetown University's law school, Mr. Powell worked before and after his Treasury stint at investment bank Dillon Read & Co. He also has worked at private-equity firms Carlyle Group and Global Environment Fund, and at Bankers Trust Co. Known as Jay, Mr. Powell lately has been a visiting scholar at the Bipartisan Policy Center, a Washington think tank, where he took a high-profile role over the summer warning about the adverse consequences of a failure to lift the federal debt ceiling.

The strategy of packaging two candidates who each can appeal to separate groups in the Senate seems destined to fail.  Republicans hope that their party will take over the government in 2013, and want to leave as many vacancies as possible to be filled by Republican candidates.  Besides, to them there is no need to hurry with respect to economic policy,

Sen. David Vitter (R., La.), a Banking Committee member who has been critical of the Fed, said he would "certainly review these nominees' records, but I don't see any need to rush them through confirmation."

because its not like there is any problem with the economy.  Sen. Vitter, a great champion of family values was re-elected after admitting to numerous “incidents” with prostitutes.  That thoroughly qualifies him to pass on the suitability of Fed nominees.

Predicting 2012 – The Details of the Romney/McDonnell Victor

How Exactly Do M and M Defeat Mr. Obama – Here’s How

Although it is more than 10 months until the 2012 Presidential election, The Dismal Political Economist has gone on record (to be erased, if necessary) that Mitt Romney will easily win the Republican nomination for President, that he will choose Virginia Governor Robert F. McDonnell as his Vice Presidential running mate and that the team of Mitt and McDonnell (hence the M and M) will defeat the team of Obama and Biden. 

The question as to “why”  make a prediction at this time is easy to answer.  There is no downside.  If the prediction is wrong, well who cares, and besides in the tradition of Newt Gingrich and Ron Paul, we can say we never said these things, didn't read them, don't know who wrote it and deny everything.  Of it is correct then in postings after November 2012 we can brag incessantly and obnoxiously about how we knew how things were going to turn out.

The question as to “how” M and M win requires a more detailed explanation.  Here are the major factors.

1. Money:  The Republicans will have an unlimited amount of money to spend in large part because of unlimited contributions in negative advertising from wealthy donors who fund programs like Karl Rove’s 501(c)(4) organizations.  No matter how much the Obama people project what will be spent against, the actual number will be more.

2. The Debates:  Mr. Obama is being touted as a great person in debates, but Mr. Romney will have spent the past year before the first Presidential debates constantly debating his Republican rivals, while Mr. Obama will have done none of that.  This experience will allow Mr. Romney to be comfortable and confident, and Mr. Obama will be like a highly regarded but inexperienced rookie quarterback going up against an old pro.

The second aspect of the debates is that Mr. Romney will win them. This will not be because he will be a superior debater, or even a more knowledgeable contestant.  It will be because the debates will be debating the Presidency of Mr. Obama, who will be constantly on the defensive.  With no offensive weapons Mr. Obama will lose by default.

3. Lack of government experience by Mr. Romney:  The fact that Mr. Romney’s only other job in government was as Governor of Massachusetts will give Mr. Obama little opportunity to attack Mr. Romney.  In fact, Mr. Romney’s signature accomplishment is something Mr. Obama emulated, and he readily admits this, so he will have no Romney record to attack.

4. Impression of Moderation:  Mr. Romney has run the primary campaign as a moderate, at least compared to his opponents.  Every single competitor to Mr. Romney ran as a more Conservative Republican than Mr. Romney.  While this is damaging to Mr. Romney in his effort to secure the nomination, as long as it is not fatal it will be immensely helpful to Mr. Romney in the general election.

Mr. Romney’s flip flopping is old news.  Many voters will simply assume that Mr. Romney shares their views, since he will have some evidence that at some time he did.  Mr. Romney’s Medicare plan reforms say that traditional Medicare will still be available (it won’t, it cannot be sustained in a premium subsidized system) so no attack can come from that direction.  He tax plan is so vague it cannot even be scored and other than elimination of the Estate Tax, which no one cares about except the very rich, the plan has tax cuts for the middle class.

5. Enthusiasm:  Republicans will be far more enthusiastic than Democrats.  This will show up once the polling goes to likely voters and away from registered voters.

6. Political Incompetence:  Mr. Obama not only does not enjoy politics, he is very poor at practicing the art of politics.  His failures as President have been largely failures of a political nature.  He does not understand the opposition and has the wrong strategy (bi-partisan cooperation rather than confrontation). 



Mr. Messina - Good Grief!



Mr. Obama’s campaign strategy looks incredibly naïve.  A report in the L. A. Times gives an inside look into the campaign. 

Team Obama lays out electoral map strategy

And somebody named Jim Messina explains how Mr. Obama can win.  The strategy starts this way.

The Obama campaign likes to start with the states that John Kerry won in the 2004 election, on the theory that these rock-solid blue states are a lock for the Democratic nominee. Building on the 251 electoral votes that Kerry received, the Obama campaign believes that it can win a second term if any of the following strategies pans out. 

This is incompetence of such a magnitude that one wonders if it is a deliberately misleading disclosure, designed to lull the Romney people into complacency by pretending to be completely inept.  Unfortunately there is not indication that the Obama team is that smart.

The problem is that the Kerry states are not rock solid.  Look at the map. Look at the large swath of red, that's territory the Dems are conceding to the Republican.  Look at the blue.  Does Mr. Messina not know that Minnesota, Wisconsin, Michigan and Pennsylvania were swept by Republicans in 2010. Does he not know that New Jersey elected a Republican Governor and that Democrats suffered a huge defeat in 2010.  Is he ignorant of the fact that in 2004, which was 8 years ago, an eternity in politics, Mr. Kerry was running against George W. Bush who even then was unpopular.

In 2008 Mr. Obama won because in large part he was not George W. Bush or his alter ego, John McCain.  Independents and many Democrats did not vote for Mr. Obama because they wanted Mr. Obama, they voted for him because they did not want Bush/McCain.  If Mr. Obama and his advisors are so naïve as to believe that the election will be anything other than a referendum on Mr. Obama, then they deserve to lose.

Ok, is the election a lock for Mr. Romney?  No, Mr. Obama cannot win the election but Mr. Romney and the Republicans can still lose it.  If the independent groups go over the top and create a reaction against their vicious and misleading ads or if Republicans cannot hide their true positions of how they would govern or if the Dems can effectively attack Mr. Romney or  if there is an event that somehow allows Mr. Obama to demonstrate Presidential leadership, then Mr. Obama can indeed come out ahead. 

Mr. Obama, like Mr. Clinton before him has squandered one of the largest stocks of political capital that anyone has ever assembled.  He can get it back, but don’t bet the farm.

Fearlessly Forecasting the 2012 Election

Remember Where You Read This – Unless It Turns Out to be Wrong

This being the beginning of a new year  and a year with a Presidential election it seems only correct to forecast the outcome of that election and the Congressional races that will take place in November. Forecasting politics is a fool’s errand, hence the unique qualifications of The Dismal Political Economist.

In the House of Representatives Republicans will win an additional 15 to 25 seats and increase their majority.  This will be a result of several things, one of which is favorable redistricting.  North Carolina, Ohio and Pennsylvania and other states, where Dems andRepublicans are about even will have heavily Republican delegations for example.  If, as only The Dismal Political Economist so far expects, the Supreme Court ends or cripples the Voting Rights Act and Federal regulation of re-districting in Texas, the size of the Republican victory could be even greater.

Note that the only impact of a larger Republican majority is that it will take that much longer, for Democrats to recapture the House.  A minority party has no power in the House, and so the shrinkage of that minority is of no real consequence for legislation in 2013.

In the Senate the numbers highly favor the Republicans.  They have 47 seats, and are assured of victories in Nebraska and North Dakota.  Their only vulnerability is Massachusetts and Nevada, and they have the potential to gain seats in states like Florida, Missouri, Ohio, Virginia, Hawaii, Montana and others.  The likely outcome is a Senate with between 52 and 55 Republicans. 

This will make an impact, and although Democrats may comfort themselves with the fact that in the Senate the minority can block things, they are likely to find that Republicans will be much less tolerant of Senatorial privilege than Democrats were.  A big win in 2012 will position the Republicans to get to 60 filibuster proof votes in 2014, when the Senate number are again highly favorable to the GOP.

The big news of course is the Presidential race.  Mitt Romney is almost assured the nomination.  Even if he finishes third in Iowa to Mr. Paul and a rising Mr. Santorum, he will win the nomination because there is simply no plausible alternative.  It takes hard work and luck to win a Presidential nomination, and Mr. Romney has both, particularly the luck in that he is campaigning against the likes of Mr. Gingrich, Mr. Paul, Mr. Perry etc.  As one of his aides said, it is impossible to imagine a scenario in which he loses the nomination.

The Vice Presidential pick of Mr. Romney will be Gov. Robert McDonnell of Virginia.  Freshman Senator Marco Rubio of Florida was the front runner until the revelation that he embellished his family’s history. Lack of truthfulness does not hurt him with the Republican base, but many Independents still have some desire for at least a minimum level of integrity.   Gov. McDonnell is a stealth Conservative, one with radical views that he successfully hides behind a façade of pragmatism.  The GOP base knows this and will rally to Mr. Romney’s side with this selection.

As for Mr. Romney himself, he will be much more comfortable with a person like Gov. McDonnell than with Mr. Rubio for obvious reasons.  And Mr. McDonnell will bring the state of Virginia with him, leaving Mr. Romney with one less swing state to worry about or spend money in.

Mr. Romney will easily defeat Mr. Obama.  (A coming post will provide more details as to the how and why).  The major reasons for this will be money and negative attacks.  For the first time in history there will be an unlimited amount of money directed at defeating an incumbent President.  Estimates that outside groups will spend a few hundred million are woefully incorrect.  The number is going to be closer to $500 million and maybe even be close to $1 billion. 

Mr. Obama’s election team will be unprepared for this onslaught, because they cannot imagine or grasp how big and how vicious it will be.  The campaign against Mr. Obama will have no monetary constraint and no factual constraint, and no lie will be too blatant for the outside groups to promote.  Mr. Romney will likely disband his own super Pac, take the high road with positive ads and let people like Karl Rove, the Koch Brothers and others run nearly unlimited negative ads against the Democrats.

While the popular vote may be close, the electoral vote will not be.  Mr. Romney will take all of the John McCain states, plus Virginia, Indiana and Florida.  He will also take some of the Midwestern states from the great lakes group.  In what might be the ultimate political irony, if the electoral college vote is close Michigan, whose auto industry was saved by Mr. Obama could be the deciding electoral votes against him.

So in January of 2013 the nation will have complete Republican rule.  And the country will once again have to learn the painful lesson of why it rejected the party and policies of George W. Bush, only this time the pain will be much greater and last much longer.

Happy New Year everyone.

A Follow Up on the Commentary of Ron Paul Background of Homophobia, Racism and Anti-Semitism

A Posting from the Frum Forum – In Its Entirety

In the preceding post The Dismal Political Economist admitted to his failing to adequately examine the positions of Republican Presidential candidate Ron Paul, whose Libertarian philosophy masks his previously published bigotry.  Mr. Paul has denied these charges, and claimed that the newsletters published under his name in the 1990’s that espoused such position were not his writings, that he had never seen them and that he disavowed those positions.

This conversion of convenience is not credible.  Weighing in on the issue is David Frum, a Republican, a Conservative, a former Bush adviser, a former WSJ Editorial writer and a person whose blog, the Frum Forum is highly respected, as well it should be.  Here is his post on the issue of Mr. Paul.  It is published here for the reason that when someone else can say and present something better than The Dismal Political Economist can, he thinks he should give them the honor of doing so.  Yes, in case you were unsure, the first sentence is sarcasm.

“Here’s another tragic misunderstanding of Ron Paul’s message of human freedom: Paul has just gained David Duke’s endorsement. This week, the former KKK Grand Wizard telephoned into the radio show hosted by Stormfront founder Don Black to announce his support, and the two men had the following conversation.”

Ron Paul was a hot topic this week on the talk radio show hosted by prominent white supremacist Don Black and his son Derek. Mr. Black said he received Mr. Paul’s controversial newsletters when they were first published about two decades ago and described how the publications were perceived by members of the white supremacist movement. Former KKK Grand Wizard and Louisiana Congressman David Duke also phoned in to explain why he’s voting for Mr. Paul.

“Everybody, all of us back in the 80′s and 90′s, felt Ron Paul was, you know, unusual in that he had actually been a Congressman, that he was one of us and now, of course, that he has this broad demographic–broad base of support,” Mr. Black said on his broadcast yesterday.

Mr. Black is a former Klansman and member of the American Nazi Party who founded the “white nationalist” website Stormfront in 1995. He donated to Mr. Paul in 2007 and has beenphotographedwith the candidate. Mr. Paul has vocal supporters in Stormfront’s online forum.

“Black said on air he does not regard Paul as “currently” a white nationalist. To which David Duke answered:”

Again, I go back to that, you know, traditional topic that I always talk about, you know, the powers of international Zionism–a power in banking, a power in media, a power in government influence, in campaign finance–a power that’s, you know, hurting the values of this country on behalf of Israel,” Mr. Duke said. “So, I would vote for Ron Paul at this moment because he’s one of the few candidates who have policies in this regard and this realm that I wholeheartedly support, and that’s why I’d vote for him.”

“A politician isn’t answerable for the antics of every one of his supporters. But there’s surely a reason, isn’t there, that racists, anti-Semites, 9/11 Truthers, and Holocaust deniers are so strongly attracted to the Paul campaign. They hear something. They continue to hear it too, no matter how firmly Ron Paul’s more mainstream supporters clamp their hands over their own ears.”