Wednesday, March 31, 2010

A trip down memory lane

As CNN is accusing Sarah Palin and the Tea Partiers of inciting violence, Harry Reid supporters are accusing Andrew Breitbart of throwing eggs and the Huffington Post is lecturing that "Political violence is not an American value," Scott Johnson at Powerline highlights Evan Coyne Maloney's "A trip down memory lane."
Evan Coyne Maloney is the documentary filmmaker and proprietor of Brain Terminal. During the Bush administration, Evan was out in the field with his camera observing protests and interviewing protesters. He is therefore in a good position to recall the signs and symbols of the left-wing opposition to the Bush administration's post-9/11 national security policies. How do they compare to the Tea Party protesters expressing their opposition to Barack Obama's program of national socialism?

Evan has now produced a timely new video splicing together footage that he calls "A trip down memory lane." He describes it as four minutes of nonstop examples of violent imagery and extremist rhetoric employed by left-wing anti-Bush protesters. He writes: "For some reason, despite it being well documented at the time by me and many others, the media chose to ignore it." Indeed.
Here it is:



The tossed about phrase "double standard" doesn't even begin to describe the parallel universe of the MSM.  I would rather call it "the complete and total censorship of any inconvenient truth."

Private payrolls dropped in March


ADP released its March National Employment Report this morning which states that nonfarm private employment decreased 23,000 from February to March on a seasonally adjusted basis (photo Getty Images):
The March employment decline was the smallest since employment began falling in February of 2008. Yet, the lack of improvement in employment from February to March is consistent with the pause in the decline of initial unemployment claims that occurred during the winter.

Since employment as measured by the ADP Report was not restrained in February by the effects of inclement weather, today’s figure does not incorporate a weather-related rebound that could be present in this month’s BLS data. In addition, today’s figure does not include any federal hiring in March for the 2010 Census. For both these reasons, it is reasonable to expect that Friday’s employment figure from the BLS will be stronger than today’s estimate in the ADP National Employment Report.

March’s ADP Report estimates nonfarm private employment in the service-providing sector increased by 28,000, the second consecutive monthly increase. However, this employment growth was not enough to offset job losses in both the manufacturing and construction sector. Employment in the goods-producing sector declined 51,000, with employment in the manufacturing sector declining by 9,000.

Large businesses, defined as those with 500 or more workers, saw employment decline by 7,000 while small-size businesses with fewer than 50 workers, declined 12,000. Employment among medium-size businesses, defined as those with between 50 and 499 workers, declined by 4,000.*

In March, construction employment dropped 43,000. This was the smallest decline since July of 2008, but basically unchanged from the decline of 44,000 during February 2010. Employment in the financial services sector dropped 8,000.
This report comes two days before the Labor Department issues its own, broader jobs report.  From The Wall Street Journal:
The Labor Department's report, which is still expected to show job gains, includes government workers and is influenced by factors that don't show up in the survey released Wednesday by payroll processor Automatic Data Processing and the forecasting firm Macroeconomic Advisers. The Labor Department's report is expected to show a sharp jump in government hiring—mainly workers needed to conduct the Census—and a bounce-back from the decline in jobs believed to be caused by winter storms in February.
So unemployment numbers released by the Bureau of Labor Statistics on Friday will be lower due to government hiring.  This will extend an illusion of economic recovery and evidence of an unsustainable trend of job shifting from the private sector to the public sector.

So here's the question of the day: When everyone works for the government (that produces nothing, invents nothing, controls everything but our thoughts and spends trillions), who will provide the funds to make payroll?

Boeing expects $150 million health care charge

The list of American corporations announcing large charges against earnings due to the new health care law got longer today with the following news release:
Boeing (NYSE: BA) today announced that it expects to recognize an income tax charge of approximately $150 million as a result of the recently enacted Patient Protection and Affordable Care Act, as modified by the Health Care and Education Reconciliation Act. Beginning in 2013, Boeing will no longer be able to claim an income tax deduction related to prescription drug benefits provided to retirees and reimbursed under the Medicare Part D retiree drug subsidy. Although this tax increase does not take effect until 2013, accounting standards require that a deferred income tax asset be written down in the period legislation changing the tax law is enacted.

The charge is expected to reduce net earnings by approximately $150 million, or $0.20 per share, in the first quarter of 2010 as an increase to income tax expense and a reduction to the deferred income tax asset. Cash impacts of this charge will be realized over many years beginning in 2013.

This impact was not contemplated in the guidance issued by the company on January 27, 2010. Guidance will be updated when results for the first quarter are released.
I'm sure the Boeing execs will be getting an indignant letter from Senator Waxman any day now for having the audacity to restate their earnings.  Calling all these corporate leaders on the carpet for doing their jobs is pure theater on the part of the Democratic leadership who knew or should have known full well what the ramifications of this tax change would be.  They were certainly forewarned:
Boeing was among 10 signatories to a letter sent to House Speaker Nancy Pelosi (D., Calif.) and Senate Majority Leader Harry Reid (D., Nev.) lobbying against the changes to retiree prescription costs. Two other signatories, Caterpillar Inc. and Deere & Co., announced a combined $250 million in charges, while 3M Co. said it would incur a charge of $85 million to $90 million.

AK Steel Holding Corp. was the first company to announce a charge, of $31 million.

Other companies with large ranks of retirees and generous pension plans are expected to follow suit. An estimated 1,400 for-profit companies are exposed to the tax change, according to benefits consultant Towers Watson.

Since the Medicare Part D program was enacted in 2003, the federal government has been providing the tax-free payments to the companies as an incentive to maintain their drug-benefit programs.

MetLife Inc. and Exelon Corp., which also signed the letter to congressional leaders, have said they are still evaluating the potential impact.
One paragraph of the letter sent to the Democratic congressional leadership on December 11 stated:
Further, this change would result in large earnings statement reductions due to U.S. GAAP income tax accounting rules, which would require employers to immediately account for the present value of this tax increase.
Duh.

US test fires Trident missile in Saudi Arabia

From The Washington Post:
The United States test-fired a submarine-launched ballistic missile capable of carrying nuclear warheads during a joint military exercise Wednesday with Saudi Arabia, a Western military official said.

The Trident missile launch was carried out in the kingdom, the official said, but he would not give a precise location. He spoke on condition of anonymity because of the sensitivity of the issue.

The U.S. has been strengthening missile defenses in allied Arab nations in the Gulf to help counter any potential missile strike from Iran. Like its nuclear work, Iran's missile program is of top concern to Washington and Arab nations wary of Tehran's growing influence in the region.

A defense official in Washington confirmed the missile launch on condition of anonymity because he was not authorized to speak on the record. He said, however, that it took place late last week and was part of a demonstration.
Saudi Arabia has long warned that a nuclear Iran would result in a nuclear arms race in the Middle East.  In addition to "rattling the biggest sabre of all in Iran's face" as Closing Velocity puts it, the U.S. launch of a Trident missile in a joint drill with the Saudis suggests that both countries believe that a nuclear Iran is inevitable.  In an interview with Fox News this morning, former U.S. Ambassador to the U.N. John Bolton reiterated his conclusions that any sanctions effort against Iran is doomed to fail and that the Obama administration is prepared to accept a nuclear Iran.

Danielle Pletka from the American Enterprise Institute agrees that sanctions will fail and ponders what comes next:
Some Gulf states (including, some say, Qatar, which hosts American forces and equipment) have begun to openly propitiate the Tehran regime, anticipating its regional dominance once it is armed with nuclear weapons. Others, not reassured by Clinton drop-bys and ineffectual back-patting, have begun to explore their own nuclear option. Repeated rumors that Saudi Arabia is negotiating to buy an off-the-shelf Pakistani nuclear weapon should not be ignored.

What of Israel? The mess of U.S.-Israel relations has ironically only bolstered the fears of Arab governments that the current U.S. administration is a feckless ally. If the U.S. won't stand by Israel, by whom will it stand? Conversely, our adversaries view both the distancing from Israel and the debacle of Iran policy as evidence of American retreat. All the ingredients of a regional powder keg are in place.

Finally, there is the military option. Israeli Prime Minister Bibi Netanyahu left Washington last week befuddled by Mr. Obama's intentions on Iran. Should Israel decide to attack Iran, the shock waves will not leave the U.S. unscathed. Of course, Mr. Obama could decide that we must take action. But no one, Iran included, believes he will take action.

And so, as the failure of Mr. Obama's Iran policy becomes manifest to all but the president, we drift toward war. The only questions remaining, one Washington politico tells me, are who starts it, and how it ends.

Headfake on offshore drilling

Today the Obama administration will announce an apparent reversal in its stance on offshore oil and gas drilling.  From The Wall Street Journal:
The Obama administration will propose allowing offshore oil and natural-gas exploration and development in a large swath of the eastern Gulf of Mexico, after months of criticism from Republicans who have made expanded offshore drilling a political rallying cry.

In addition, the administration plans to announce new steps to determine how much oil and natural gas is buried off the coasts of Middle and Southern Atlantic states, where oil-reserve estimates are decades out of date.

At the same time, Mr. Obama's plan wouldn't allow new oil and gas development off the coasts of Northern Atlantic states or California, whose political leaders have long opposed offshore drilling. The administration will call off a plan drafted by the administration of former President George W. Bush that would have given oil companies access to Alaska's Bristol Bay, an area teeming with wild sockeye salmon and many commercial fishing interests concerned about the impact of drilling on their livelihoods.
The media is casting this move as a compromise to big oil and domestic "drill baby drill" advocates.  However, skepticism abounds.

Commenter stopevhillary, at Lucianne.com notes:
Didn't Obama yank drilling rights to leases already explored? (which means co's paid for the priveledge of exploring w/o any hope of drilling)

How can any company do business in the age of Obama Bait and Switch?
Another veteran Ldotter, Photoonist, remarks:
According to an article from the other day this administration has increased the fees per well and drill site which is making such ventures increasingly uneconomical. Typical for he First Marxist who previously promised to make the cost of energy skyrocket.
Photoonist is correct.  In a speech earlier this month, Interior Secretary Ken Salazar defended his plan to increase the fees on oil and gas drilling operations:
During Wednesday's hearing, Salazar also defended the administration's plans to impose new fees on drilling leases and increase royalty rates for companies that produce oil and natural gas from public lands.

The administration's budget proposal includes:

• • A new $4-per-acre fee on nonproducing oil and gas leases on federal lands and waters.

• • A new inspection fee for onshore oil and gas drilling that the administration estimates would bring in $10 million in the 2011 fiscal year that begins Oct. 1.

• • Raising existing inspection fees for offshore oil and gas drilling to raise an estimated $20 million in fiscal 2011.

• • Continuing a 1-year-old $6,500 fee for processing drilling permits, expected to bring in $45.5 million in the next fiscal year.

The administration is also considering an increase in the 12.5 percent royalty rate charged for oil and natural gas produced on federal lands, which dates back to 1920 and is far lower than what some states charge. Texas, for instance, collects a royalty rate of 22.5 percent.

Salazar said the proposals were prompted by the need to raise money to pare the deficit in a “tough budget.”

Noting Exxon Mobil Corp.'s record-breaking 2008 $45  billion profit, Salazar said: “I don't think that frankly any of these fees that we are talking about here are going to put anybody out of business.”

“These fees will be part of doing business, but it's not going to have a negative effect” preventing companies from going forward with development, Salazar said.

“We are not — as some people have claimed — taxing the oil and gas industry to death,” he said.

Several oil patch senators said they were concerned that a related administration plan to get rid of tax incentives long used by the oil and gas industry to defray the high capital costs of drilling would curb domestic production.

Sen. Mary Landrieu, D-La., called the budget plan a collection of “draconian taxes on the oil and gas industry.”
Joe Weisenthall at the Business Insider asserts that the President's move is a pure political gambit:
Ok, so the Obama administration is going to allow some offshore drilling.

The surprise decision is being couched in language about creating jobs and reducing dependence on foreign oil.

Yeah yeah.

The real story is that Cap & Trade is back on the table, as Ken Salazar is stating on CNBC right now.

Obama gives a gift to oil drillers, and in exchange he gets the equivalent of an energy tax (though not actually an energy tax) with some corporate support.

Actually, cap & trade has already enjoyed significant corporate support from the likes of Goldman Sachs (GS) and GE (GE), which are eager to make a market in carbon offsets. Now, presumably, we'll see more corporate support.
Finally Barbarian Heretic at Lucianne sums it up nicely:
Be suspicious of this tactic:

-Admin announces 'opening up' to exploration.

-While levying costly fees and restrictions

-One year from now, Obama points finger at Big Oil for not acting on his generous offer.

This is triangulation, nothing more. Obama is preparing to move to the center to win re-election after he gets creamed in mid-terms...

Marine's father continues his fight against Westboro Baptist Church

Albert Snyder's son, Marine Lance Cpl. Matthew A. Snyder, was killed in a non-combat related vehicle accident in Al Anbar province in Iraq in 2006.  His son's military funeral procession was disrupted by protesters from the infamous Westboro Baptist Church of Topeka, Kansas.  In case you aren't familiar with the "mission" of the WBC, brace yourself  and take a look at its disturbing website.


Mr.Snyder sued the WBC and was awarded $11 million by a jury in 2007.  The U.S. Court of Appeals for the Fourth Circuit dismissed the case on First Amendment grounds, and on Friday ordered Snyder to pay over $16,000 in court costs to Fred Phelps, the founder and leader of WBC.  Fox News reports that Snyder will defy the order:
The father of a Marine killed in Iraq whose funeral was picketed by anti-gay protesters told Fox News he will defy a court order and not pay the protesters' appeal costs.

Albert Snyder, of York, Pa., told Fox News he does not intend to pay $16,510 to Fred Phelps, the leader of Kansas' Westboro Baptist Church, which held protests at Marine Lance Cpl. Matthew Snyder's funeral in 2006.

"I don't think I'm going to be writing a check until I hear from the Supreme Court," Snyder told Fox News on Tuesday. "I'm not about to pay them anything."
People have stepped up across the country to help Mr. Snyder.  Bill O'Reilly announced on his show Tuesday that he would write a check to cover the $16,500 legal bill.  The American Legion's Burn Pit has stepped forward to help Mr. Snyder raise the funds to file an appeal with the Supreme Court, that has already agreed to hear the case in its October term.  You can also contribute to the Al Snyder legal fund here.

Tuesday, March 30, 2010

Democratic Senator: Health care bill was "political folly"

Newsweek's Howard Fineman reveals the post-purchase remorse of an unnamed Democratic Senator who voted in favor of the health care reform bill (via Allahpundit):
A Democratic senator I can't name, who reluctantly voted for the health-care bill out of loyalty to his party and his admiration for Barack Obama, privately complained to me that the measure was political folly, in part because of the way it goes into effect: some taxes first, most benefits later, and rate hikes by insurance companies in between.

Besides that, this Democrat said, people who already have coverage will feel threatened and resentful about helping to cover the uninsured—an emotion they will sanitize for the polltakers into a concern about federal spending and debt. (emphasis added)
Spot on, esteemed and wise anonymous Senator.  And by the way, Americans also feel threatened and resentful about paying the mortgage payments of people who bought homes they could not afford, and do not appreciate the fact that federal construction jobs will soon be denied to 85 percent of non-unionized construction workers, many of whom are unemployed.

Merriam-Webster provides one definition of folly as "criminally or tragically foolish actions or conduct."  The new health care law is, indeed, political folly.  And you, honorable anonymous senator, are a coward.

The Egg Man of Searchlight, Nevada

In a telephone interview, Andrew Breitbart described the "welcome" he received from Harry Reid supporters during his recent visit to Searchlight for the kickoff of the latest Tea Party Express tour.  Andrew Marcus at Big Government has posted some video evidence to back up Breitbart's version of those events:



Pay particular attention to the frozen frames at the very end.

Searchlight vs L.A.: Photo essays reveal stark left/right divide

Zombie at PajamasMedia has discovered two revealing citizen journalist photo essays which illustrate stark differences in the recent rallies held in Searchlight and Los Angeles (h/t Michelle Malkin):
On March 27, 2010, thousands of people gathered in the small town of Searchlight, Nevada, for a political rally.

Just 250 miles away and seven days earlier, there was another political rally of similar size in Los Angeles on March 20, 2010.

The Searchlight rally was generally oriented toward the political “right.”

The Los Angeles rally was generally oriented toward the political “left.”

Now, if you had only the entrenched media as your sole source of information about these rallies, you might likely assume (without even bothering to investigate) that the right-wing rally was an epicenter of hate, racism and craziness, whereas the left-wing rally was undoubtedly about peace, tolerance and rationalism.

Luckily, we no longer have to rely on the mainstream media. In both cases, citizen journalist bloggers were on hand to document the proceedings with eye-opening photo essays:

El Marco: Tea Party Express rally, Searchlight, March 27

Ringo: Anti-war rally, Los Angeles, March 20

Two rallies, not very far apart in time or location — and yet they couldn’t be more different.

I consider myself neither left-wing nor right-wing, and I disagree with one side or the other on various issues — but after viewing these images, I don’t think there’s any question where I’d feel more at ease.

Below is a sampling of images from each rally. (Click on the links above for the full reports.) Scan them and tell me: At which rally would you feel more comfortable?

Show this essay to people you know who are liberals, or conservatives, or middle-of-the-roaders, and ask them: In all honesty, if you had to choose to be associated with the protesters at either rally, which would make you least embarrassed?

They say you are defined by the company you keep. Time to choose:
Go take a look!

Companies push for repeal of health law provision

The American Benefits Council, an association representing 300 large corporations, urged the President and the Congress on Monday to repeal the part of the new health care law which reduces tax deductions for companies that provide prescription coverage for their retirees  From The New York Times:
James A. Klein, the president of the American Benefits Council, called the provision “a serious mistake that is having negative and unintended consequences.”

White House officials defended the provision, saying it was a deliberate effort to eliminate what they said was an unusually generous tax loophole.

They said the overall health care overhaul would save businesses more than $150 billion over the next decade by reducing health care inflation.

“We’re confident that the benefits are going to accrue and strengthen business’s bottom line,” said Linda Douglass, the communications director for the White House Health Reform Office.

When Congress and President George W. Bush enacted a prescription drug plan for seniors in 2003, the legislation encouraged companies to continue providing prescription coverage to retirees, instead of shifting retirees to Medicare Part D, by having the government give those companies large subsidies for each retiree — and also allowing them to deduct those subsidies from their income taxes.

Under the health care overhaul, the federal government will continue providing those subsidies — amounting to 28 percent of a drug plan’s costs — but companies will lose the tax break.

In a telephone news conference on Monday, Mr. Klein cited a study by Towers Watson, a consulting firm, saying the loss of the deduction would cost companies $14 billion in future years.

“Particularly in this economic environment, it makes no sense to impose this type of a hit on companies’ financial statements,” Mr. Klein said. The provision takes effect in 2013, but accounting rules require companies to take immediate charges equal to the current value of any known hit to future profits.

Defending the provision, White House officials said it was rare for companies to obtain a tax-free federal subsidy and be able to deduct it as well.
Ezra Klein at The Washington Post defends the elimination of the corporate tax deduction, and suggests that critics of this provision of ObamaCare are defending corporate welfare, not free markets.  Mr. Klein misses the point entirely.

This monstrous health care bill was sold (not very successfully) to the American people based on financial projections that did not account for market realities.  Whether the Medicare prescription plan and its attendant incentives to corporations was "a bit nuts" at the time is entirely irrelevant.  What is relevant is that when those incentives are reduced, or in the case of the subsidy deductibilty, removed altogether, it alters the financial landscape for corporations providing prescription drug coverage to their retirees.  It may come as a shock to the White House, but the executives of these large companies answer to their boards of directors, that in turn, answer to shareholders.  Shareholders, like it or not, are looking for profits, appreciation of their equity, dividends.  Evil stuff like that.

The inevitable result will be the eventual elimination of these private prescription plans, and the wholesale entry of these people into Medicare D.  While I am quite certain this outcome fits nicely into the left's ultimate vision of single-payer health care, I am equally sure the CBO wasn't permitted to include the costs of this increased Medicare enrollment in its carefully manipulated, fictional  financial projections.

Monday, March 29, 2010

Senate puts lipstick on cap and trade; states not impressed

I have written extensively about climate change legislation over the last two years, and you can easily search this site by entering "cap and trade" "climategate" or "EPA carbon" to read those entries, if you are so inclined.  The conventional wisdom in recent months has been that cap and trade legislation is permanently stalled in the Senate in the wake of leaked emails from the University of East Anglia Climate Research Unit (aka Climategate), multiple erroneous or fraudulent data citations from the U.N. IPCC, and the worst economy since the Great Depression.  Don't believe it.  From The Financial Times (UK):
Three senior US lawmakers are piecing together a sweeping bipartisan energy and climate bill, which looks set to include sweeteners to galvanise support among Republicans and industry groups.

The proposed legislation, encouraged by President Barack Obama, dilutes a climate bill that stalled last year in the Senate. The senators have hosted meetings with industry groups over the past two weeks, revealing details about their plan that would cap carbon emissions while expanding offshore oil drilling and nuclear power generation.

Nearly six months have passed since the Senate’s last climate bill failed to win over conservatives and moderates, a political stalemate that cast a shadow on America’s presence at the Copenhagen climate summit. But some Democrats say the passage of healthcare reform has opened the door for climate change legislation, while acknowledging tradeoffs will be needed to secure 60 Senate votes. “They know that to pass a comprehensive bill they will have to ease concerns of some special interests and mid-western senators whose states have manufacturing-oriented economies,” said Daniel J. Weiss, senior fellow at the Center for American Progress Action Fund, a liberal think-tank.

Environmental groups are divided over the bill, with some decrying the push to pre-empt existing state and federal greenhouse gas regulations. But many moderate groups are withholding judgment until the bill is introduced, saying concessions to industry bodies will be necessary. According to people briefed by the senators, the bill aims to cut carbon emissions from 2005 levels by 17 per cent by 2020 and 80 per cent by 2050, largely by implementing separate caps on utilities and manufacturers. The federal government would sell separate pollution permits to each sector, using a “hard price collar” to limit greenhouse gas allowances to between $10 (£6.70) and $30 per ton, and committing to flood the market with credits if the price ceiling is exceeded.

The bill’s sponsors – John Kerry, the Massachusetts Democrat, Joseph Lieberman, the Independent from Connecticut, and Lindsay Graham, the South Carolina Republican – said the new sectoral approach would begin imposing carbon caps on utilities in 2012 and manufacturers in 2016.
If legislative initiatives fail, the Obama administration will certainly fall back to its backup plan of using the unelected regulatory agencies of the federal government to do his bidding.  Thankfully, the States are already mobilized to block this statist effort:
Illinois state Rep. Dan Reitz, a Democrat and a former coal miner, is worried that pending federal climate change rules will cripple the economy, and he wants Congress to step in and stop it.

Reitz, who represents the 116th District in southern Illinois, launched his own assault against U.S. EPA climate rules when he introduced a resolution urging Congress to postpone greenhouse gas regulations for factories, power plants and other so-called stationary emission sources. The Illinois House approved his resolution earlier this month.

"I believe that Congress should adopt legislation if we're going to regulate greenhouse gases from stationary sources," Reitz said in an interview. "We should be able to do that within the context of a bill and not do it within the regulatory measures that are out there right now."

Reitz is among at least 25 legislators in 17 states who have introduced measures aimed at blocking or limiting EPA's authority to regulate greenhouse gases. Five of those bills came from Democrats.

At least seven such measures have been adopted. In addition to Reitz's resolution in Illinois, legislators in Alabama, Kansas, Kentucky, South Carolina, Tennessee and Utah have passed measures encouraging Congress to step in and block EPA climate rules or for the agency to halt its regulatory plans.

EPA this week is planning to issue the first national greenhouse gas standards for automobiles, a rule that will ultimately require the agency to regulate stationary sources' emissions of the heat-trapping gases. The Supreme Court ordered EPA in 2007 to determine whether greenhouse gases pose a threat to public health. EPA did so last year, paving the way for new emission rules.

The Obama administration and environmentalists argue EPA is compelled by the law and by science to begin clamping down on the emissions. EPA officials insist that they can do it in a way that won't cripple the economy.
Reitz, an elected Democratic legislator and former coal miner from the President's home state of Illinois has the audacity to challenge federal climate change regulations.  That shows personal courage and gives me hope for our Republic.

Call your Representatives and Senators and tell them to vote "no" on the new and improved cap and tax.

Case against three Navy SEALS weakened

The courts martial case of three Navy SEALS accused of striking a most-wanted terror suspect after his capture in Iraq has been weakened by a recent military judge's ruling.  From The Washington Times:
Maj. Gen. Charles Cleveland last week signed grants of immunity for five Navy colleagues of the accused.

Some of those five, three enlisted men and two officers, are expected at trial to flatly contradict the prosecution's key witness, according to a Navy source close to the case, which centers on the September 2009 capture of Ahmed Hashim Abed.

The witness, the master-at-arms at the base in Anbar province where the captured terrorist was brought, told investigators that he saw Abed being struck by one SEAL. One of the immunized witnesses identified by the master-at-arms for corroboration is not expected to support his testimony. The military has not released witness statements.

In addition, the defense has requested that the judge order the government to turn over the name of the Army officer who interrogated Abed once he was brought to Baghdad, where he remains in custody on order of an Iraqi judge. The disclosure would mean that defense attorneys may call him as a witness to testify about Abed's appearance after he left the SEALs' custody.

A judge has ruled that the military must produce Abed as a witness for courts-martial, scheduled to be conducted in Baghdad perhaps as early as next month. Defense attorneys, in front of a military jury, can expose Abed's history as the suspected mastermind of the 2004 Fallujah atrocity that left the bodies of U.S. contractors hanging mutilated on a bridge.

The master-at-arms told investigators that Abed was punched in the gut by Special Operations Petty Officer 2nd Class Matthew McCabe. Petty Officer McCabe denies hitting Abed.

"We're pleased about the immunity grants," said Neal Puckett, Petty Officer McCabe's attorney. "They allow witnesses who have favorable testimony to testify."
Hopefully the testimony of these new witnesses will bring an end this long nightmare for these brave Navy SEALS.

Sunday, March 28, 2010

Pennsylvania Appropriations Chair threatens to cut off funds to AG's office

The chairman of the Appropriations Committee of the Commonwealth of Pennsylvania has challenged Attorney General Tom Corbett's decision to join the multi-state lawsuit to block the new health care law, and threatened to cut off all state funding to the AG's office.  From Nathan A. Benefield at Big Government:
In a response to Pennsylvania Attorney General Tom Corbett’s decision to join 13 other states in filing a lawsuit against the federal health care legislation, PA House Appropriations Chairman Dwight Evans threatened to “do whatever it takes” to thwart the AG’s efforts. Incensed, Evans even went so far as to say he would be willing to cut off all state appropriations to the Office of the Attorney General to prevent Corbett from fighting this legislation. Here is the key quote from Evans:

We are accountable to the voters of this state. He [Corbett] cannot think that he can do whatever he wants with taxpayer money. No one can protect him from being accountable.

For starters, Evans should think about following his own advice, as he is one of the most notorious proponents of “WAMs” in the Pennsylvania Legislature, using taxpayer dollars going to fund his own community group and a failed nightclub venture.

Second, President Obama, Gov. Rendell, and others used far more taxpayer funding – with no objection from Evans – on their public relations campaign on health care reform than any lawsuit by the AG would cost. Tax dollars were used for everything from rallies to newsletters to press conferences.

Furthermore, Evans’ threat seems a clear violation of the separation of powers, and threatens the independence of the Attorney General. Indeed, it seems particularly curious, coming a mere two days after Corbett secured a conviction against Evans’ former House Democrat colleague Mike Veon, and is continuing his investigation and prosecution of House Democrats.
If you haven't heard of it, WAM is an acronym for "walking around money." 

Pennsylvania Governor Ed Rendell followed up a verbal appeal with a written one telling Corbett, whom he himself described as the favorite to be the next governor, to drop the health care lawsuit:
Mr. Rendell made a verbal appeal to Mr. Corbett on Monday not to join a lawsuit filed by attorneys general of 12 others states, all but one of them Republican. But on Tuesday Mr. Corbett said he is indeed going to be a plaintiff, arguing that the new federal law could cost Pennsylvania taxpayers to pay more than $1 billion in extra Medicaid costs for lower-income people without health insurance.

Mr. Corbett also argued that the federal government is "overreaching" its powers and violating the 10th Amendment to the U.S. Constitution, which reserves many rights for states. Mr. Corbett charged the Obama administration is improperly inserting itself into matters of interstate commerce where it doesn't belong and, basically, telling people to buy a product -- health insurance -- whether they want to or not.

The lawsuit by Mr. Corbett and the others "is focused on the principle of defending the Constitution," said Corbett aide Kevin Harley.

But that didn't stop Mr. Rendell, who leaves office in January, from changing his protest from verbal to written on Thursday. He sent a letter to Mr. Corbett, one of two Republicans who is running for governor in the May primary, asking him to withdraw from the suit. He said the federal affordable health care act "will have an enormous positive impact on the lives of every single Pennsylvanian."

Andrew Breitbart describes Searchlight Reid supporters: "Children of the Corn Meet River's Edge"

Jim Hoft at Big Government provides us with Andrew Breitbart's account of his welcome to the Tea Party showdown in Searchlight, Nevada:
“I can just say that the irony could not be greater. The press is barking up the tree that the tea party movement is the one that is unhinged, that is frothing at the mouth, that is violent… I could just say that the irony could not be greater.”

Andrew Breitbart
After Harry Reid Supporters Attacked the Tea Party Bus
Searchlight, Nevada

Andrew Breitbart witnessed first hand today the cunning manipulation and violence of the unhinged left. Harry Reid supporters stood on Highway 95 outside of Searchlight, Nevada and held signs steering tea party protesters heading to the Tea Party Express Showdown in Searchlight Rally in the wrong direction. Andrew also witnessed these violent leftists attacking the Tea Party Express bus with eggs as it drove by. The Harry Reid supporters then swarmed him, harassed him, threatened him and made false statements to the police.




My blog title comes from my favorite line of the conversation occurring around 1:52.

John Bolton: Obama resigned to a nuclear Iran?


In an interview with Army Radio, former U.S. ambassador to the U.N. John Bolton expressed his concern that President Obama is willing to accept a nuclear Iran.  From The Jerusalem Post:
Former US ambassador to the UN John Bolton expressed concern Sunday that Washington was coming to terms with a nuclear Iran.

“I very much worry the Obama administration is willing to accept a nuclear Iran, that's why there's this extraordinary pressure on Israel not to attack in Iran,” Bolton told Army Radio.

The former envoy claimed that this pressure was the focus of last week's meetings in Washington between Prime Minister Binyamin Netanyhau and US officials, including President Barack Obama.

Bolton said that the Obama administration had embraced the view, prevalent in Europe, that the Israeli-Palestinian conflict was the key to the resolution of all other conflicts throughout the Middle East, including the Iranian conflict.

He added that the rift in US-Israel relations stemmed from a fundamental difference in the understanding of the Middle East and Israel's role in the Middle East, and is not really about east Jerusalem at all.

Bolton said that the treatment Netanyahu received during his visit "should tell the people of Israel how difficult it's going to be dealing with Washington for the next couple of years."
After repeated toothless warnings, meaningless deadlines, and warm and fuzzy New Year video greetings, Americans can similarly infer how President Obama will be dealing with Iran for the next couple of years.  By then as Ambassador Bolton predicts, our next president will likely be dealing with a nuclear Iran.

Shocker: CNN lowballs tea party turnout in Searchlight, NV

The kickoff to the next circuit of the Tea Party Express was held yesterday in Senator Majority Leader Harry Reid's hometown of Searchlight, Nevada.  Not surprisingly, it was sparsely or overwhelmingly attended, depending on where you get your news.  From Jeff Poor at News Busters:

If the media outlets are going to report on tea party events, they're not likely to get any benefit of the doubt much of the time.

Case in point - at the Tea Party Express event on March 27 in Searchlight, Nev., which former Alaska Gov. Sarah Palin spoke, CNN's Fredericka Whitfield wasn't quite prepared to give the rally credit it was due as far as participation. She estimated that hundreds, but if not, "at least dozens of people" were in attendance. (h/t fstaff with assist from Mark Finkelstein)

"Former vice presidential candidate Sarah Palin there in Searchlight, Nev., was the backyard of Senate Majority Leader Harry Reid, but today it's the backdrop of this Tea Party Express - making a stop here," Whitfield said. "Hundreds of people, at least dozens of people - we haven't gotten a count of how many people turned out there. We heard Sarah Palin talk about everything about the campaign, to unseat Sen. Reid to what she calls ObamaCare, on the heels of that health care vote and even talking about her definition of her love of America."

Politico's Kenneth Vogel had a little higher number, saying "an estimated 20,000 tea partiers gathered for a rally in a windswept desert lot," in his March 27 report on the event.
So predictable.

Is the health care insurance mandate unenforceable?

The federal Joint Committe on Taxation issued a report last week which calls into serious question whether the insurance mandate in the new health care legislation is enforceable under the law:
Individuals who fail to maintain minimum essential coverage in 2016 are subject to a penalty equal to the greater of: (1) 2.5 percent of household income in excess of the taxpayer’s household income for the taxable year over the threshold amount of income required for income tax return filing for that taxpayer under section 6012(a)(1);67 or (2) $695 per uninsured adult in the household. The fee for an uninsured individual under age 18 is one-half of the adult fee for an adult. The total household penalty may not exceed 300 percent of the per adult penalty ($2,085). The total annual household payment may not exceed the national average annual premium for bronze level health plan offered through the Exchange that year for the household size.

This per adult annual penalty is phased in as follows: $95 for 2014; $325 for 2015; and $695 in 2016. For years after 2016, the $695 amount is indexed to CPI-U, rounded to the nextlowest $50. The percentage of income is phased in as follows: one percent for 2014; two percent in 2015; and 2.5 percent beginning after 2015. If a taxpayer files a joint return, the individual and spouse are jointly liable for any penalty payment.

The penalty applies to any period the individual does not maintain minimum essential coverage and is determined monthly. The penalty is assessed through the Code and accounted for as an additional amount of Federal tax owed. However, it is not subject to the enforcement provisions of subtitle F of the Code.68 The use of liens and seizures otherwise authorized for collection of taxes does not apply to the collection of this penalty. Non-compliance with the personal responsibility requirement to have health coverage is not subject to criminal or civil penalties under the Code and interest does not accrue for failure to pay such assessments in a timely manner.
Morgen Richmond at Big Government believes this is really bad news for advocates of the mandate and the bill in general:
Because without an effective mechanism of enforcing the individual mandate, the entire system is likely to collapse. (The individual mandate is the “third leg of the stool” as many a liberal has been pointing out for months.) Given that the bill also bans insurance companies from denying coverage based on pre-existing conditions, WHY WOULD ANYONE OBTAIN INSURANCE COVERAGE PRIOR TO NEEDING IT? This was already going to be a problem with the relatively low cost of the penalty, but take away any meaningful enforcement of it and it is a complete and total joke.

The net result will be an ever increasing shift of healthcare costs on to those who remain in the insurance system (or to tax payers), and possibly even the bankruptcy of the insurance industry. Given all the double-talk the past year over the public option, and the demonizing of private insurers, it is hard not to wonder whether this was by design. But let’s give our Democratic friends the benefit of the doubt, in which case this represents an inexcusable level of incompetence from the people we have just entrusted with overseeing one-sixth of the economy. Nice job guys.
Daniel Foster at the Corner see the potential for "a pretty big moral hazard."

Ya think?

Democrats threaten companies hard hit by ObamaCare


On Friday, I told you about companies warning of large accounting writedowns related to the new health care law.  The executives of these blue chip American corporations are fulfilling their fiduciary responsibilities to their stockholders and their legal obligations to the Securities and Exchange commission by immediately restating their earnings to reflect changes to their long-term health care liabilities.  Remember, these are companies that voluntarily provide prescription drug coverage to their retirees, keeping them off the government-sponsored Medicare prescription plan.  And what do they get for their swift execution of their responsibilities under the law?  Threats and intimidation for their audacity (photo Susan Walsh/AP).  From Byron York at The Washington Examiner:
Rep. Henry Waxman, chairman of the House Committee on Energy and Commerce, has summoned some of the nation's top executives to Capitol Hill to defend their assessment that the new national health care reform law will cost their companies hundreds of millions of dollars in health insurance expenses. Waxman is also demanding that the executives give lawmakers internal company documents related to health care finances -- a move one committee Republicans [sic] describes as "an attempt to intimidate and silence opponents of the Democrats' flawed health care reform legislation."
Waxman's letters can be accessed here.

Who in the hell does Henry Waxman think he is?  Under what authority does the Congress summon private sector executives to Washington to explain their obvious displeasure with this disastrous legislation?  Is the United States of America turning into a gestapo state?  The Wall Street Journal expresses well my outrage and frustration:
Meanwhile, Henry Waxman and House Democrats announced yesterday that they will haul these companies in for an April 21 hearing because their judgment "appears to conflict with independent analyses, which show that the new law will expand coverage and bring down costs."

In other words, shoot the messenger. Black-letter financial accounting rules require that corporations immediately restate their earnings to reflect the present value of their long-term health liabilities, including a higher tax burden. Should these companies have played chicken with the Securities and Exchange Commission to avoid this politically inconvenient reality? Democrats don't like what their bill is doing in the real world, so they now want to intimidate CEOs into keeping quiet. [snip]

The Democratic political calculation with ObamaCare is the proverbial boiling frog: Gradually introduce a health-care entitlement by hiding the true costs, hook the middle class on new subsidies until they become unrepealable, but try to delay the adverse consequences and major new tax hikes so voters don't make the connection between their policy and the economic wreckage. But their bill was such a shoddy, jerry-rigged piece of work that the damage is coming sooner than even some critics expected.
It is probably no coincidence that all of the companies being called on the carpet by Congress are members of the Employers' Coalition on Medicare, an organization that lobbied for the Medicare prescription benefit and the attendant corporate subsidies.  Its membership list suggests that Waxman may be sending out a lot more letters in the coming days and weeks.

But on the bright side, it is unlikely that he will have to send one to General Motors or Chrysler.

Obama's big labor payback

President Obama made 15 recess appointments on Saturday, bypassing the Congress during its Easter recess.  The most controversial of these is Craig Becker whom the President placed on the National Labor Relations Board after his nomination was scotched by the Senate in a failed 52-33 cloture vote last month.  Becker is a leading lawyer for the AFL-CIO and Service Employees International Union, has a long and very public history of holding extreme pro-union positions.  The Wall Street Journal claims that Becker's appointment will have a devastating effect on workers rights:
Mr. Becker has written extensively about the National Labor Relations Act, the law that the NLRB interprets and enforces. In a 1993 Minnesota Law Review article, he said that the "core defect in union election law . . . is the employer's status as a party to labor representation proceedings" and that "employers should be stripped of any legally cognizable interest in their employees' election of representatives." In other words, employers should be barred from telling their employees they shouldn't unionize.

During his Senate confirmation hearing, Mr. Becker tried to walk back this and other oft-expressed views, including a prior assertion that union-election rules can be rewritten by the NLRB without the consent of Congress. Now he says he'll defer to Congress if appointed, but the modern union movement is bloody-minded about the will to power and Mr. Becker is one of its fiercest partisans.

Time is running out—it has until Election Day—for Big Labor to get a vote in Congress to rig labor laws in its favor. Mr. Becker would give unions a majority at the NLRB and is their political Plan B. Recess appointments are the President's prerogative, but overriding the bipartisan Senate opposition to Mr. Becker would show once again that this White House dances to the tune of the left.
The National Right to Work Committee blogged about Becker before the appointment:
In other words, you can forget about employees getting truthful and non-coercive information about the downsides of unionization.

But there's more. Becker has publicly argued union goons should have the privilege to repeatedly harass workers at home until the workers sign "card check" union authorization cards; advocated allowing government arbiters impose contracts on workers without even allowing the workers to vote on the contract; and has even compared union organizing elections to US Congressional elections, stating that the only question decided in such elections should be which union gets monopoly control over workers, not whether they wish to remain independent and union free.
Mr. Becker's appointment is only part of Obama's payback to Big Labor that was essential to his election.  The Washington Times reminds us of an executive order the President signed last year:
Worse, Mr. Becker's appointment would not mark the end of the payback. An executive order Mr. Obama signed last year will go into effect soon, requiring federal contractors to have project labor agreements that effectively shut out the 85 percent of construction workers who are nonunionized and requiring contractors to make contributions to union pension funds. In other words, Big Labor will cash in while taxpayers are stuck with bills some 20 percent higher.
Rick Moran sums up the President's strategy succinctly at American Thinker:
Do we detect a pattern here? Obama can't get cap and trade through the senate so he tasks the EPA with doing the dirty work. Now that it looks like card check is stalled, Obama is "reaching out" to the NLRB to fulfill his dream of the Unionized States of America.

Oh, by the way - if Mr. Becker isn't radical enough for ya, how about Lesbian activist Chai Feldblum for EEOC commissioner who has promised never - repeat never - to rule in favor of religious liberty when opposed to sexual liberty.

Welcome to the new Mainstream.
This is unsettling announcement is unlikely to get any traction.  In addition to the fact that it was made under the news radar on a Saturday, it was made the day before the President took a surprise trip to Afghanistan.

Brilliant.

Friday, March 26, 2010

The great grocery smackdown

As a regular and long time Wal-Mart shopper, I was amused to the point of laughter to read this reluctant review from Corby Kummer at The Atlantic.  Here's a representative excerpt:
Buy my food at Walmart? No thanks. Until recently, I had been to exactly one Walmart in my life, at the insistence of a friend I was visiting in Natchez, Mississippi, about 10 years ago. It was one of the sights, she said. Up and down the aisles we went, properly impressed by the endless rows and endless abundance. Not the produce section. I saw rows of prepackaged, plastic-trapped fruits and vegetables. I would never think of shopping there.

Not even if I could get environmentally correct food. Walmart’s move into organics was then getting under way, but it just seemed cynical — a way to grab market share while driving small stores and farmers out of business. Then, last year, the market for organic milk started to go down along with the economy, and dairy farmers in Vermont and other states, who had made big investments in organic certification, began losing contracts and selling their farms. A guaranteed large buyer of organic milk began to look more attractive. And friends started telling me I needed to look seriously at Walmart’s efforts to sell sustainably raised food.

Really? Wasn’t this greenwashing? I called Charles Fishman, the author of The Wal-Mart Effect, which entertainingly documents the market-changing (and company-destroying) effects of Walmart's decisions. He reiterated that whatever Walmart decides to do has large repercussions — and told me that what it had decided to do since my Natchez foray was to compete with high-end supermarkets. “You won’t recognize the grocery section of a supercenter,” he said. He ordered me to get in my car and find one.

He was right. In the grocery section of the Raynham supercenter, 45 minutes south of Boston, I had trouble believing I was in a Walmart. The very reasonable-looking produce, most of it loose and nicely organized, was in black plastic bins (as in British supermarkets, where the look is common; the idea is to make the colors pop). The first thing I saw, McIntosh apples, came from the same local orchard whose apples I’d just seen in the same bags at Whole Foods. The bunched beets were from Muranaka Farm, whose beets I often buy at other markets — but these looked much fresher. The service people I could find (it wasn’t hard) were unfailingly enthusiastic, though I did wonder whether they got let out at night.
 To make a long story short, the author recruited a team of foodies and chefs to stage a gourmet taste test judged by a group of local (Boston) food experts, and horror of horrors, Wal-Mart held its own.  Read the whole thing if you want the details.

On a kinder note, I am very impressed that Mr. Kummer had the courage to write this article, and more impressed that he actually took the time to visit one of the most beautiful cities in my home state, Natchez, Mississippi.

Fox cancels "24"

Today Fox announced that it has canceled the series "24" effective when the season ends its eighth season in May.  I must confess, I am totally pissed.  Forgive my language.  Here's the scoop:
Star Keifer Sutherland says he's "really nostalgic and really sad" at the show's demise. But executive producer Howard Gordon says the cast and crew agreed the time was right, as the show's real-time format became limiting: "We've really had what feels like our last day."

The series, which premiered in 2001, played an important role in the rebuilding of the Fox network, and was a groundbreaking drama in its early seasons, even though initially low ratings left its future uncertain. But critics seemed to tire of repetitive plots in recent seasons, ratings have faded, and the network wants to build new shows in the key Monday time slot behind hit medical drama House.

Although Gordon's contract to oversee the show expires this year, studio 20th Century Fox unsuccessfully tried to pitch the show to NBC when Fox bailed. Gordon calls that plan "a challenge," and NBC wasn't interested.

Now the cast and crew will turn their sights on a long-discussed feature film, which would send Sutherland's Jack Bauer to Europe for a story set in single day that avoids its current format, in which each episode represents a single hour. Though a first-draft script has been written by Billy Ray (State of Play), the movie has not yet been greenlit.

In the meantime, the series will come to a more "definitive" end than in past seasons, Sutherland says, that makes it clear hero Jack Bauer can't continue in his role as CTU's action hero. The series wraps production on April 9 and will air its two-hour finale on May 24.
Thanks, Jack Bauer.  It was a great ride.

AP finally reads the health care bill....I mean law. Update: AT&T to take $1 B writedown


Someone at the Associated Press finally read the health care bill, and discovered that all the talk about eliminating the "doughnut hole" in the Medicare prescription benefits overshadowed the truth that up to 2 million retirees could be forced from the prescription drug coverage provided by their former employees, leaving them the only option of enrolling in Medicare's program:
The health care overhaul will cost U.S. companies billions and make them more likely to drop prescription drug coverage for retirees because of a change in how the government subsidizes those benefits.

In the first two days after the law was signed, three major companies — Deere & Co., Caterpillar Inc. and Valero Energy — said they expect to take a total hit of $265 million to account for smaller tax deductions in the future.

With more than 3,500 companies now getting the tax break as an incentive to keep providing coverage, others are almost certain to announce similar cost increases in the weeks ahead as they sort out the impact of the change. [snip]

When Congress approved the Medicare prescription drug program in 2003, it included government incentives for employers to provide drug benefits to retirees so the public system wouldn't be overwhelmed. Employers that provide prescription drug benefits for retirees can receive subsidies covering 28 percent of eligible costs; those subsidies totaled $3.7 billion in 2008.

Under the 2003 law, companies could deduct the entire amount they spent on the drug benefits from their taxable income — including the government subsidy, an average of $665 per retiree.

The health care law signed by President Barack Obama on Tuesday prohibits companies from writing off the subsidies starting in 2011, meaning they will no longer be able to deduct them from their taxable income.

For example, if a company spent $100 on benefits, including a $28 government subsidy, it could write off the full $100 on its taxes under the old rules. The new rules would allow the same company to write off only $72.
This is what Ed Morrissey at Hot Air calls the "dangers of static tax analysis."  He explains:
Over the past year, I’ve repeatedly warned about the dangers of static tax analysis. That process considers changes in tax policy without considering its impact on behavior. The closure of this “loophole,” as Robert Gibbs called it yesterday, is a perfect example of this stunted thinking.

The Democrats in Congress argued that they would gain $5.4 billion in revenue by eliminating the tax break enacted in the 2003 Medicare Part D program as an incentive for businesses to keep their retirees out of the Medicare system. Instead, they have given businesses a reason to dump their retirees out of the private networks and into the Part D system now. Not only will the expected tax revenues never appear, but now we will have to spend a lot more money covering those prescriptions out of public funds. The seniors in these programs will suffer most of all, as the Part D coverage is vastly inferior to the private plans offered by businesses in the private sector.
Ed hits the nail on the head as usual, but he is entirely too kind with his delicate description.  I call it the "dangers of allowing ideologues and lobbyists who have never signed the front of a paycheck or balanced a budget to write 'transformational' legislation."

Update:  AT&T announced this afternoon that it will take a $1 billion non-cash expense in the first quarter due to the newly passed health care law.

Obama mortgage debt relief plan announced

Today the Obama administration announced plans to slash mortgages for unemployed homeowners.  From The Washington Post:
The Treasury Department said adjustments to the Home Affordable Modification Program and the Federal Housing Administration program would help "responsible homeowners who have been affected by the economic crisis through no fault of their own" by expanding flexibility for mortgage servicers and originators to assist more people who are unemployed and who have been hit by falling home values.

"These changes will help the administration meet its goal of stabilizing housing markets by offering a second chance" to as many as 3 million to 4 million struggling homeowners through the end of 2012, Treasury said in a statement. It said costs would be shared between the private sector and the federal government, with the federal costs funded through a $50 billion allocation for housing programs under the Troubled Asset Relief Program.

Banks and other lenders would have to reduce the payments to no more than 31 percent of a borrower's income, which would typically be the amount of unemployment insurance, for three to six months. In some cases, a lender could allow a borrower to skip payments altogether under the plan.
 In addition to helping the unemployed the program features four other key provisions:
The first key is that the government will provide financial incentives to lenders who cut the balance of a borrower's mortgage. Banks and other lenders will be asked to reduce the principal owed on a loan if the amount is 15 percent more than their home is worth. The reduced amount would be set aside and forgiven by the lender over three years, as long as the homeowner remained current on the loan.  [snip]

Second, the government will double the amount it pays to lenders who help modify second mortgages, such as piggyback loans, which enabled home buyers to put little or no money down, and home equity lines of credit. [snip]

Third, the new effort also increases the incentives paid to those lenders who find a way to avoid foreclosing on delinquent borrowers even if they can't qualify for mortgage relief. For example, the administration is scheduled to launch a program next month encouraging lenders to have borrowers sell their homes for less than the mortgage balance in what is known as a short sale.

Fourth, the administration is increasingly turning to the Federal Housing Administration to help underwater borrowers who are still keeping up their payments. The aim is to help these borrowers refinance into a more affordable loan. The FHA will offer incentives to lenders that reduce the amount borrowers owe on their primary mortgages by at least 10 percent.
Kevin D. Williamson at the NRO Corner is skeptical:
Indeed, the administration is clearly having night terrors about a second financial crisis being spurred by a deepening wave of mortgage defaults, so the program is full of Rube Goldberg stuff to bribe and cajole bankers and keep them from foreclosing on defaulting borrowers. The Post reports that the "new effort also increases the incentives paid to those lenders who find a way to avoid foreclosing on delinquent borrowers even if they can't qualify for mortgage relief."

Let's repeat that. These borrowers: A., are delinquent; B., don't qualify for any existing mortgage-restructuring programs; so, C., Uncle Sam is just going to keep throwing money at the bankers, basically shelling out whatever it takes to keep these delinquent borrowers in their houses, these delinquent loans on the books, and housing prices leaning on yet another political manipulation of the real-estate marketplace. And the theory is: this will stabilize the market. Real-estate investors may seem kind of stupid sometimes, but they are not that stupid.
Let's hope that in November, voters are not that stupid either.

Senator Coburn blocks extension of unemployment benefits

The Senate adjourned Thursday for a spring recess that will last until April 12 without extending unemployment benefits that expire at the end of the month for some Americans.  The reason:  Senator Tom Coburn blocked the measure from coming to the floor for a vote.  Jon Ward at The Daily Caller explains:

Coburn, an Oklahoma Republican, blocked the Democrats’ bill from coming to the floor for a vote, after Democrats rejected a Republican effort to pay for the $10 billion in benefits with unspent money from the $787 billion stimulus bill.

Coburn said in a nearly hour-long speech on the Senate floor Thursday afternoon that to bypass the pay-as-you-go law signed by President Obama in February – which Democrats wanted to do for the fourth time since then by declaring the expenditure an emergency – would be “immoral.”

Senate Republicans said that Senate Majority Leader Harry Reid, Nevada Democrat, had approached House Speaker Nancy Pelosi, California Democrat, with a bipartisan proposal to extend jobless benefits for two weeks and pay for it as Coburn wanted, but that she rejected it. But Pelosi and Reid spokespersons both said that was untrue.

“Senator Coburn has decided to stand in the way of Americans receiving needed benefits. The House passed unanimously a 30-day extension and any claim that there was an agreement reached in the Senate on a shorter bill is noting more than spin by Republicans,” said Pelosi spokesman Nadeam Elshami, who accused Coburn of “grandstanding.”

Coburn said he agreed that as the nation deals with 9.7 percent unemployment “we ought to be helping those people,” but said that giving aid to the jobless was “less good” than starting to make tough choices about paying for government expenditures, which he said is “absolutely necessary.”
If the government's Recovery.gov Track the Money website is to be trusted (humor me), $485.8 billion of the $787 billion stimulus funds have not been spent as of March 12, and yet our elected officials would not approve spending $10 billion of it for the extension of unemployment.   Coburn and Kentucky Senator Jim Bunning understand that our government cannot keep spending money it does not have.

What possible logic can there be to continue borrowing unrecoverable funds in a tepid treasuries market, while hoarding stimulus funds that have already been allocated?  Well I think I can venture a guess.  That $485.8 billion will be divvied up among the states and congressional districts of endangered Democrats just in time for the November election.  Let's just call it the Pelosi/Reid public war chest.

When you hear the mainstream media castigate Coburn in the coming weeks (just as they did Jim Bunning last month when he tried to do the same thing), don't fall for it.  These Republicans are willing to stand up for the truth and make the difficult and moral decisions that our nation's precarious fiscal footing demands.

The VAT cometh


In February the President announced the formation of a deficit-reduction panel to make recommendations to deal with our government's surreal budget problems, and ordered it to deliver a solution by December 1, well after the fall elections.  Charles Krauthammer predicts that the solution will include the value-added tax.  From Real Clear Politics:
What will it recommend? What can it recommend? Sure, Social Security can be trimmed by raising the retirement age, introducing means testing and changing the indexing formula from wage growth to price inflation.

But this won't be nearly enough. As Obama has repeatedly insisted, the real money is in health care costs -- which are now locked in place by the new Obamacare mandates.

That's where the value-added tax comes in. For the politician, it has the virtue of expediency: People are used to sales taxes, and this one produces a river of revenue. Every 1 percent of VAT would yield up to $1 trillion a decade (depending on what you exclude -- if you exempt food, for example, the yield would be more like $900 billion).

It's the ultimate cash cow. Obama will need it. By introducing universal health care, he has pulled off the largest expansion of the welfare state in four decades. And the most expensive. Which is why all of the European Union has the VAT. Huge VATs. Germany: 19 percent. France and Italy: 20 percent. Most of Scandinavia: 25 percent.

American liberals have long complained that ours is the only advanced industrial country without universal health care. Well, now we shall have it. And as we approach European levels of entitlements, we will need European levels of taxation.
As the Obama administration forges ahead with its plans to transform this country with universal health care, carbon taxation and amnesty for illegal immigrants, it is difficult to argue with Mr. Krauthammer's logic.  The VAT will further stifle economic growth and job creation as it has done in Europe.

Max Boot worries that the explosion of entitlement spending will also have a devastating effect on America's global power:
In other words, ObamaCare will likely continue the trend already evident during the first year of the administration—when, thanks to the bank bailout and stimulus bill, federal spending as a share of GDP soared to 24.7%, unprecedented in peacetime. If you add in state and local spending, the government as a whole consumes 37.5% of GDP, up from 34.7% in 2008. Prepare for those figures to climb further as government takes on new health-care obligations.

To consider the implications for defense, look at Europe. Last year government spending in the 27 European Union nations hit 52% of GDP. But most of them struggle to devote even 2% of GDP to defense, compared to more than 4% in the U.S.

When Europeans after World War II chose to skimp on defense and spend lavishly on social welfare, they abdicated their claims to great power status. That worked out well for them because their security was subsidized by the U.S.

But what happens if the U.S. switches spending from defense to social welfare? Who will protect what used to be known as the "Free World"? Who will police the sea lanes, stop the proliferation of weapons of mass destruction, combat terrorism, respond to genocide and other unconscionable human rights violations, and deter rogue states from aggression? Those are all responsibilities currently performed by America. But it will be increasingly hard to be globocop and nanny state at the same time. Something will have to give.

Thursday, March 25, 2010

Andrew Breitbart offers $10,000 reward for evidence of racial slur

It's been a busy news week, and with the demands of life in a difficult economy, it's often difficult to keep up.  I want to make sure you are aware of Andrew Breitbart's post at Big Government wherein he offers a $10,000 reward to anyone who can substantiate that Tea Partiers hurled the n-word at Georgia Representative John Lewis outside the Capitol on Saturday.  It's Breitbart at his very best.  Here's a small excerpt:
There is no reason in 21st century America on an issue that is not a black or white or a civil rights issue to have a bloc of black people walk slowly through a mostly white crowd to make a racial point. The walk in and of itself — with two of the participants holding their handheld cameras above their heads hoping to document “proof” — was an act of racism meant to create a contrast between the tea party crowd and themselves.

This is the same failed symbolism that Janeane Garofalo and MSNBC have been trying to implant for the last year. The only supposed evidence of white-on-black racism at a tea party that MSNBC was able to find was a man carrying a gun at an Arizona Obama rally. But, wait, MSNBC cut off the man’s head with a photo editing software. That Second Amendment fan was actually black. Never mind.
It's high time that conservatives take off the gloves and fight fire with fire. The survival of our Republic depends on it.

Please read the whole thing.

U.S. bond rates rise after third day of weak auctions

As blogging topics go, U.S. treasury auctions are not really very interesting to my readers, or, for that matter to me.  But recent auctions that will fund the out of control spending of our Democratic Congress, should warrant your attention.  From Reuters:
Prices of U.S. government debt fell on Thursday as demand for Treasuries waned for the third day in a row.

Prices fell further following a weak auction of $32 billion in seven-year Treasury notes. The high yield on the auction came in at 3.37 percent, above the market's expectations.

"The auction went terribly," said Tom Simons, money market economist at Jefferies & Co. "It appears the foreign bid was on the sidelines again as we approach Japanese year-end (March 31)."

Thursday's auction capped a week of $118 billion in new supply which met with a lukewarm reception in the marketplace.

Benchmark 10-year Treasury notes US10YT=RR fell 6/32 in price to yield 3.89 percent, up from 3.86 percent at Wednesday's close. In intraday trading, 10-year yields reached a nine month high of 3.93 percent.

The seven-year note US7YT=RR dropped 6/32 to yield 3.33 percent, up from 3.29 percent on Wednesday.

Fresh worries about government bonds issued by Greece and Portugal contributed to investors' wariness of sovereign debt, analysts said.

The price of insuring U.S. debt against default rose. Credit-default swap spreads grew to 40 basis points, while the yield on U.S. 30-year bonds reached a nine-month high.
Translation:  Demand for U.S. debt instruments is weak.  The supply of U.S. debt is growing (exponentially).  The government will be forced to increase the incentive (interest rate) to purchase U.S. debt.  Budget deficits will increase.  National debt will increase just to service the debt we have.

Au Revoir, Carbon Tax!

As the Obama administration is ramping up efforts to ram cap and trade legislation through the Senate, the French are throwing similar legislation overboard.  From The Wall Street Journal:
Only two days after a crushing defeat in regional elections, France's center-right government regained common sense and scrapped its carbon tax plans. Burdening already overtaxed households and businesses with yet another levy in the midst of an economic crisis is one reason why the ruling UMP lost all but three of 26 regions to the Socialists and Greens.

"We have to amplify measures that help reinforce the competitiveness of our economy," Prime Minister Fran├žois Fillon told parliament Tuesday, as if he had alighted upon some previously hidden truth. Paris now insists on a European Union-wide tax to reduce CO2 emission because a unilateral move would "widen our gap in competitiveness with our neighbor Germany." Luckily, there is little appetite in the rest of the EU for this sort of economic masochism.

Originally, the carbon tax was supposed to have come into force in January to raise €3.5 billion by collecting €17 per ton of CO2 emitted. Because of the many loopholes for big industry, France's highest court struck down the legislation as unconstitutional. President Nicolas Sarkozy, however, pledged a reworked law by July. In a speech last year, he said no less than the "survival of the human race" was at stake.

Perhaps such hyperbole was designed to stoke existing French anxiety about global warming, which Mr. Sarkozy apparently misread as a mandate to reach into taxpayers' pockets. But turning into an eco-warrior was simply not quite the "rupture" with the political past that the president had promised, nor, apparently, the sort of change voters could believe in.
Investor's Business Daily notes that the French government is heeding the forecasts of leading American research institutions and the dire warnings from experience of Spain:
Nick Loris at the Heritage Foundation reports that a Center for Data Analysis study on the Waxman-Markey cap-and-trade bill found that net job losses (after green-job creation) would approach 1.9 million in 2012 and could reach 2.5 million by 2035, with manufacturing accounting for 1.4 million of them.

Loris notes that Spain spends about $8 billion a year on green energy subsidies, which Kerry and the Obama administration would call "investments." Spain's experience is that 2.2 jobs are lost for every green job created because the push for green energy siphons off resources and commitment from genuinely productive sectors of the economy. The French noticed. Will we learn from the mistakes of others?
If my calculations are correct, and assuming the economy continues to stagnate, the dire job loss projections cited above would raise unemployment to 11% in 2012 and 11.3% by 2035.  And for what?  The reduction in a ubiquitous atmospheric gas with debatable effects on climate change, that will have negligible effect on global temperatures.
 
When the U.S. Congress is tacking to the left of France, it's time for a new Congress.  Wake up and smell the cafe', people!