1) Federal debt is up some 35% and going higher.
2) General unemployment is up some 15%, youth unemployment is up far greater.
3) The cost of most commodities and energy are up substantially.
If this had been achieved during a Republican presidency the press and media would be howling for his/her scalp.
Can you imagine what would have happened had 'President Palin' brought about these changes?
These are statistics that happened while one of our allegedly 'most intelligent' presidents has been sitting in the Oval Office. Perhaps we need to elect someone who is considered dumb - perhaps we need to re-elect GW.
Or better still, perhaps we need to just keep electing people with no experience, whose rhetoric send chills down our legs and allow them to escape any consequences of their misbegotten policies. That way we can keep deluding ourselves into believing things will improve if we just spend more money and fight more wars and liberate more Muslims who hate us and want to see our nation go down the tubes.
See 1 below.)
Our twitting president is a twerp. I did not know he was doing a tweeting yesterday and I do not tweet anyway but had I known how to tweet I would have asked this: You wanted to bring about change when do you plan to stop?(See 1a below.)
Also click on PJTV.com and watch: "PJTV Report: Obama's Twitter Town Hall: Tweeting for Higher Taxes?
Danika Quinn brings you the big stories on PJTV. Obama held a twitter town hall, but who was asking the questions? Plus, Zo explores the abortion epidemic in black communities."
---
Finally Israel hits it big time in energy discoveries and a small Canadian company could be positioned to benefit according to this analyst. (See 2 below.)
---
This is a repeat and it pertains to some budget cuts proposed by Republicans. I assure you this is just the tip of the iceberg because you could shut down three or four entire Government agencies and they would not be missed, ie. Departments of Energy, Education, Indian Affairs and parts of OSHA, Health and Human Services, Interstate and Commerce and you could still keep going. Even The Pentagon could produce huge savings if run more efficiently.(See 3 below)
---
Avi Jorisch discusses how the message from the U.S. to those businesses who bank with terrorists you do so at your peril.(See 4 below.)
---
Larry Sabato specs the upcoming election. (See 5 below.)
---
Victor Davis Hanson must have been attending the same baseball game I alluded to several memos ago. (See 6 below.)
---
Dick
-------------------------------------------------------------------------------------------------------------------------
1)Obama's Debt-Ceiling Opportunity
He could do a lot for his re-election prospects by getting more serious about spending cuts.
By KARL ROVE
The weaker the hand Barack Obama has to play, the more sanctimonious he becomes. That was clear in his news conference last week when the president lectured Congress that "there's no point in procrastinating," and argued senators and representatives "need to do their job" and raise the debt ceiling. He presented himself as a model of fiscal discipline, the one serious adult in a city full of distracted children. This claim is detached from reality.
It is Mr. Obama who proposed—and Democratic congressional majorities that passed—the spending bills in 2009 and 2010 that are pushing the federal government up against the current debt ceiling of $14.3 trillion. It is Mr. Obama who started the year by demanding Congress pass a "clean" debt ceiling increase to $16.7 trillion—"clean" meaning no cuts or restraint, just a blank check to keep spending. Mr. Obama is the one without a budget, the Senate having sent his to the bottom of the Potomac by a 97-0 vote. And he has yet to publicly offer a real plan to cut spending, as House Republicans did months ago.
Thus, in backroom negotiations recently, the administration offered roughly $1 trillion in phony savings—mostly money that would never have been spent in Iraq and Afghanistan over the next 10 years anyway, along with $500 billion in interest savings on the trillion. It has also offered another supposed trillion in domestic and entitlement savings, but with cuts starting in 2014 and unlikely ever to be realized.
If the administration's spending cuts are mostly fake, its desire for tax increases is not. While the proposals are constantly shifting, you can be sure the president is looking to grab big chunks of cash from lots of people (and small businesses) who make less than a million a year.
There's still time for the president to make history's largest debt-ceiling increase a moment when spending is curbed, a debt crisis averted, entitlement programs saved, and a fraying social safety net repaired.
As a liberal Democrat, this could be Mr. Obama's Nixon-to-China moment. He could draw on ideas with fairly broad bipartisan support, including changing the way benefits are indexed for inflation, raising the age at which people start receiving benefits, and modest means-testing. These reforms wouldn't make Medicare or Social Security permanently solvent, but they would put the programs on firmer financial ground for decades. It would be good for the country, to say nothing of Mr. Obama's re-election chances.
To date, the president has convinced himself his political self-interest is best served by savaging his GOP opposition and insisting, as he did in last week's press conference, that gigantic tax increases must be part of any "balanced approach."
In fact, there is zero appetite on the Republican side for tax increases and little enthusiasm among Democrats either. If there were, Majority Leader Harry Reid would already be moving tax legislation through the Democrat-controlled Senate.
Even former President Bill Clinton called for lower corporate tax rates at last weekend's Aspen Ideas Festival. His remarks are evidence that comprehensive tax reform could be accomplished with a bill that cleaned out preferences, erased carve-outs, and killed special provisions in return for lower rates on the corporate and personal side. This, in turn, might actually result in more revenue through faster economic growth.
Mr. Obama could secure America's future prosperity and, perhaps, even his own re-election by reining in spending. He'd find receptive allies in his political opposition. Instead, he is blustering and preening for the cameras, demanding action of others and pressing for measures that will further hinder an already anemic recovery.
Americans want their president to agree with them on important issues and demonstrate strong leadership. But when there is disagreement, a strong executive can create confidence and change public opinion, especially if he performs well in crisis. The debt-ceiling debate is such a test for Mr. Obama. The odds are against him seizing this opportunity, but stranger things have happened.
Mr. Rove, the former senior adviser and deputy chief of staff to President George W. Bush, is the author of "Courage and Consequence" (Threshold Editions, 2010).
1a)Obama’s Twitter Town Hall
By Charlie Cooke
Barack Obama today held a “Twitter Townhall,” at which the president agreed to answer questions posed to him on Twitter (marked by the #AskObama hashtag). The tweets were filtered by “a Twitter Search algorithm” that aimed to “identify the most engaged-with Tweets,” but were also subject to further filtering by a panel. So no one will have been surprised by the absence of anything particularly damning or controversial.
Here are a collection of the tweets the president would presumably rather had not been posted:
Rep. Paul Ryan (R., Wisc.), chairman of the House Budget Committee, asked:
#AskObama Senate hasn’t passed a budget in 798 days. House passed plan 2 lift debt&spur job creation–what is your jobs plan?
#AskObama Fearmongering won’t solve our debt crisis. Americans deserve a real debate. You pick: when and where? #2Futures
Speaker of the House John Boehner (R., Ohio) chipped in:
With 9.1% unemployment & “shovel ready” jobs a bust, will you admit the ‘stimulus’ was a mistake?http://bit.ly/oTK17f #askobama
Rep. Darrell Issa (R., Calif.):
#AskObama: are you in as much denial as your ex-auto #czar on “success” of #bailout? http://bit.ly/nesnzD #tcot #jobs #GM #Ford #Chrysler
South Carolina governor Nikki Haley (R.) stayed close to home:
Why is your administration supporting the NLRB’s job killing policies in South Carolina? #AskObama
And even the supposedly Obama-friendly AFL-CIO weighed in with the simple but pointed:
Where are the jobs? #AskObama
Quite.
PBS’s Gwen Ifill asked “why we thought #askobama would be more than a tech platform for the WH.” This was a fair comment, but it didn’t prevent some amusing tweets, none of which made it onto the screens at the event:
David Burge (@iowahawk) published a stream of witty and biting questions, amongst which our favorites were:
#askobama Is this a Town Hall or a Potemkin Village Hall?
#askobama Who are these “those who say”?
#askobama if punishing employers results in more employment, can you also punish beer makers?
#askobama I really need to start living within my means. Do you recommend I start holding up banks or convenience stores?
Andrew Breitbart asked:
When Jeffrey Tobin appears on CNN as a pompous, morally compromised legal expert do you giggle like the rest of us? #AskObama
Explain how attending Hawaii’s elite private Punahou School informed your anti-school choice agenda. #AskObama
@irishspy posed a geography question:
What are the capital cities of states 51 through 57? #askobama
And ranging into the surreal, @thecultureofme asked:
#AskObama how can we kill spiders on a global scale like we’ve done to bees?
Tweet of the Day, however, goes to the unknown Kevin Smith, whose verdict read:
I have never seen anyone who can talk so much and still say absolutely nothing of any intelligence #askobama
----------------------------------------------------------------------------------------------------------------------
2)“According to the World Energy Council, Israel’s massive oil discovery could ultimately yield as many as 250 billion barrels of oil … worth over $27 trillion.”
There’s even a surprising quote from the Wall Street Journal (surprising, at least, for those of us who are accustomed to thinking of Israel as among the least-blessed countries in terms of natural resources):
“… this could turn Israel into one of the world’s leading oil producers.”
Man, if we think the fight over borders and security between Israel and its neighbors is bad now … just wait and see how bad it gets if it turns out the land is actually worth something.
He quotes Dr. Vinegar, who used to be at Royal Dutch Shell and is now with Israel Energy Initiatives, as saying that this might give Israel oil reserves that are second only to Saudi Arabia — and far larger than the remaining reserves in the Saudi Ghawar field.
We’re told that the oil was unreachable until fracking made this oil discovery, which is “under Israel’s sacred ground,” accessible at a reasonable cost.
And yes, as usual, there’s a “tiny Canadian company” in the profit crosshairs over this, according to Mr. King:
“I was ecstatic when I uncovered ONE tiny, little-known Canadian company that recently won the rights to a sizeable piece of Israel’s MASSIVE oil find.”
It’s a company that has a market cap of under $75 million (which, since the ad has been running for a couple days, has probably changed — it doesn’t take much attention to spike a tiny stock), with a stock price under 85 cents per share. And that has a $2.76 billion oil find.
Notice that $2.76 billion? Yes, that’s much, much smaller than $27 trillion … though it still sounds quite impressive compared to a $75 million market cap.
There have been two major oil and gas stories from Israel in the last couple years — the first was the discovery of the Leviathan field, found and being exploited by Noble Energy and Delek, which itself was just the most recent iteration of several discoveries in the eastern Mediterranean, where commercial gas production has been underway for six or seven years. The next gas field coming online is the Tamar field, and it’s expected that production from the Leviathan field and other potentially larger finds in the Levant basin, most of which is in Israeli waters, will proceed apace.
But that’s mostly natural gas — which is obviously important, and could bring Israel some energy security and even turn them into an energy exporter in fairly short order … but it’s not as sexy or profitable as a big oil discovery would be, given the relative pricing of those two commodities.
So the second attention-getting story was that Israel can possibly become a major oil shale player — which is where the story of the $27 trillion and the 250 billion barrels of oil comes from, the stories that really headline this ad.
This is not shale oil that’s extracted by fracking, as we find in the Bakken — flipping those words makes a big difference. This is oil shale, oil that is not trapped by rock layers but that is actually embedded in the rock (that’s probably not exactly accurate, this is just the best way I can describe it). It’s an important distinction — oil shale is found around the world, including huge potential reserves in Colorado, Russia and elsewhere, and the latest oil shale discoveries in Israel put them in the top tier of potential, estimates that I’ve seen say they have the third largest oil shale field … but no one is going out of their way to explore for oil shale, since it hasn’t been particularly feasible to extract it in commercial quantities.
Companies keep trying, and this general idea has been teased before particularly for those Colorado projects, which have been attempted since the 1970s with no real success, but so far no dice.
The problem with oil shale is that the only way you can really separate the oil from the shale is with heat — so most projects have been designed to superheat the shale either underground or after mining it, to extract the oil, which is obviously both very technically challenging and very energy intensive. To my inexpert mind it seems sort of like the Canadian oil sands, only more difficult and extreme, and no one has so far decided that it’s worth turning the Rocky Mountains into rubble in order to extract the oil trapped in the rock via mining, so “in situ” solutions have been the focus of study and pilot projects.
This is very different from shale oil, which has been relatively easy to extract thanks to new horizontal drilling and fracking technologies, and which has turned North Dakota into a booming state ripe with oil millionaires — shale oil is more like shale gas, it’s in there and liquid, you just have to figure out how to release it from the less permeable rock that traps the hydrocarbons, which is what high-pressure fracking does — it blasts holes in the rock and the proppants hold those holes open, and then the gas and/or oil can escape up the drill pipe.
As far as I know no one has talked about hydrofracking in Israel, this big 250 billion barrel find is all about oil shale, the hard stuff.
So which company is King pitching here? Well, when we get into the details it turns out that King’s promo was a bit, well, disingenuous. That’s fancy talk for “misleading.”
Because when he teases the specific company details, here’s what we learn:
This small firm’s Israel position is just a small part of their portfolio, they apparently have oil and gas interests in Colombia, Brazil, Argenitna, the United States, and Canada.
And they have just 15% of this giant Israeli oil field, which King says is estimated by USGS at 1.7 billion barrels.
So what happened to that 250 billion barrels and 27 trillion dollars, you ask? That’s where it’s a bit misleading.
Because King mentions that the properties around this company’s project also have a ton of natural gas. He said USGS estimated 122 trillion cubic feet alongside this tiny Canadian company’s holdings.
Which means that this stock is not at all involved with Israel’s way-in-the-future oil shale potential, that “maybe as big as Ghawar” oil shale field with potential for 250 billion barrels that’s largely located to the southwest of Jerusalem, and which was what got us excited about the $27 trillion stuff.
No, this one is involved in a small portion of the offshore Israeli licenses covering the Leviathan field and the rest of the eastern Mediterranean — an area that does, indeed, have estimated technically recoverable but undiscovered oil of about 1.7 billion barrels, according to the USGS. And that, also according to this same USGS estimate from last year, has about 122 trillion cubic feet of natural gas. Note that this is what the USGS thinks should be there and recoverable, not what has been found — and the folks at the USGS don’t have to worry about their share price if they’re wrong.
So that means for this teaser we’re looking at a little company that does indeed have a 15% share of some offshore oil fields in the eastern Med, a company called Brownstone Energy (BWN in Toronto, BWSOF on the OTCQX, the high class section of the pink sheets).
Brownstone is a global company, though a teensy one — their two core assets are shares in licenses offshore Israel and blocks in Colombia. The Israeli stuff is all offshore, and it includes two blocks in the deep water where they have a 15% working interest that are between the Gaza Strip and the huge Leviathan discovery, along with some others that are closer to Leviathan and on which they have far smaller working interest (less than 1% for the two most exciting areas, which combined, they say have over 7 trillion cubic feet of risked gas potential), and a 6.75% stake in the Samuel block that’s immediately offshore in shallow water.
They believe that either their Colombian assets or the Israeli assets could be “company makers,” though they appear to be further along with the Colombian blocks — and with the joint ventures in both of these countries they have been able to get experienced operators on board to do much of the work and keep their costs relatively low. They also have joint ventures in Quebec, Argentina, Brazil, India, Oregon, and Colorado — so the teaser matches that as well, though those projects are either so small or so preliminary that they aren’t even included in the latest corporate presentation.
The company has some pretty good connections, particularly because their Chairman and CEO is also the founder, Chair and CEO of the natural resources venture capital firm Pinetree Capital, Sheldon Inwentash (Pinetree and Intenwash together held about 15% of Brownstone shares as of last year). And I like the general idea of working in the prospective Israeli and Colombian energy patches, as well as the idea of having joint venture partners in these kinds of projects, but I don’t actually know much more about Brownstone Energy than that — interesting, but I don’t know that they’re particularly close to announcing huge news (there is continuing exploration going on in most of their major blocks this year, both seismic and some drilling) … and I do know that they aren’t anywhere near Israel’s 250 billion barrel oil shale assets.
Which is probably a good thing, given that the huge oil shale field will be many, many years from development even if they can get a pilot project to work — the pilot is apparently underway now, but unless I’ve misread the articles on this it sounds like it will require heating the rock for two years before they produce anything. That oil shale stuff, by the way, is being done by that same group mentioned in the teaser, Dr. Vinegar’s Israel Energy Initiatives, which sounds like a government agency but is in fact the Israeli oil shale pilot project owned by Genie Oil & Gas, which itself is a division of the mostly-telecom company IDT Corp (IDT). Phew. The basics of that oil shale project (and the big picture for the offshore blocks) are touched on in this article, if you’re curious to know more.
Brownstone’s latest investor presentation goes into the details of their Israeli and Colombian assets pretty well, and according to the latest quarterly report their balance sheet looks quite clear and they should have enough cash on hand to cover their planned exploration costs in at least one of those countries this year, though probably not both. It wouldn’t be surprising to see them raise some more money soon — particularly if King’s recommendation helps their share price to stay elevated, though there are also some near-the-money warrants expiring over the next year or so that could bring in additional capital.
----------------------------------------------------------------------------------------------------------------------
3)These are all the programs that the new Republican House has proposed cutting. Read to the end.
Corporation for Public Broadcasting Subsidy. $445 million annual savings.
Save America's Treasures Program. $25 million annual savings..
International Fund for Ireland. $17 million annual savings.
Legal Services Corporation. $420 million annual savings.
National Endowment for the Arts. $167.5 million annual savings.
National Endowment for the Humanities $167.5 million annual savings.
Hope VI Program.. $250 million annual savings.
Amtrak Subsidies. $156.5 billion annual savings.
Eliminate duplicative education programs. H.R. 2274 (in last Congress), authored by Rep. McKeon, eliminates 68 at a savings of $1.3 billion annually.
U.S. Trade Development Agency. $55 million annual savings.
Woodrow Wilson Center Subsidy. $20 million annual savings.
Cut in half funding for congressional printing and binding. $47 million annual savings.
John C. Stennis Center Subsidy. $430,000 annual savings.
Community Development Fund. $4.5 billion annual savings.
Heritage Area Grants and Statutory Aid. $24 million annual savings.
Cut Federal Travel Budget in Half. $7.5 billion annual savings
Trim Federal Vehicle Budget by 20%. $600 million annual savings.
Essential Air Service. $150 million annual savings.
Technology Innovation Program. $70 million annual savings.
Manufacturing Extension Partnership (MEP) Program. $125 million annual savings.
Department of Energy Grants to States for Weatherization. $530 million annual savings.
Beach Replenishment. $95 million annual savings.
New Starts Transit. $2 billion annual savings.
Exchange Programs for Alaska, Natives Native Hawaiians, and Their Historical Trading Partners in Massachusetts .. $9 million annual savings
Intercity and High Speed Rail Grants. $2.5 billion annual savings.
Title X Family Planning. $318 million annual savings.
Appalachian Regional Commission. $76 million annual savings.
Economic Development Administration. $293 million annual savings.
Programs under the National and Community Services Act. $1.15 billion annual savings.
Applied Research at Department of Energy. $1.27 billion annual savings.
FreedomCAR and Fuel Partnership. $200 million annual savings.
Energy Star Program. $52 million annual savings.
Economic Assistance to Egypt. $250 million annually.
U.S. Agency for International Development. $1.39 billion annual savings.
General Assistance to District of Columbia. $210 million annual savings.
Subsidy for Washington Metropolitan Area Transit Authority. $150 million annual savings.
Presidential Campaign Fund. $775 million savings over ten years.
No funding for federal office space acquisition. $864 million annual savings.
End prohibitions on competitive sourcing of government services.
Repeal the Davis-Bacon Act. More than $1 billion annually.
IRS Direct Deposit: Require the IRS to deposit fees for some services it offers (such as processing payment plans for taxpayers) to the Treasury, instead of allowing it to remain as part of its budget. $1.8 billion savings over ten years.
Require collection of unpaid taxes by federal employees. $1 billion total savings.WHAT!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Prohibit taxpayer funded union activities by federal employees.. $1.2 billion savings over ten years.
Sell excess federal properties the government does not make use of. $15 billion total savings.
Eliminate death gratuity for Members of Congress..
Eliminate Mohair Subsidies. $1 million annual savings.
Eliminate taxpayer subsidies to the United Nations Intergovernmental Panel on Climate Change. $12.5 million annual savings
Eliminate Market Access Program. $200 million annual savings.
USDA Sugar Program. $14 million annual savings.
Subsidy to Organization for Economic Co-operation and Development (OECD). $93 million annual savings.
Eliminate the National Organic Certification Cost-Share Program. $56.2 million annual savings.
Eliminate fund for Obamacare administrative costs. $900 million savings.
Ready to Learn TV Program. $27 million savings..
HUD Ph.D. Program.
Deficit Reduction Check-Off Act.
TOTAL SAVINGS: $2.5 Trillion over Ten Years
-------------------------------------------------------------------------------------------------------------------------
4)Toxic Assets:Why banking with Hezbollah is bad for business
By Avi Jorisch
As mass protests and violence continue to take place throughout the Middle East, US and European policy makers have been called on to take action. Many have assumed this would take the form of military action or diplomacy. In the case of Libya, it has taken both. But as events drag on there and elsewhere, the appetite in Washington is actually turning increasingly towards economic means of achieving policy objectives.
In recent years, the US has engaged in economic warfare against rogue actors around the globe. A targeted financial sanctions regime has been put in place against countries that include Iran, Syria, Sudan and Myanmar, and groups classified by the US as terrorist organizations, such as Al-Qaeda, Hamas and Hezbollah. The banking sector, in particular, has been used by Washington and other world capitals to target countries, entities and corporations engaged in illicit finance.
Targeted financial measures have been taken against Libya's Qadhafi regime, but perhaps the best recent example of how the US puts the economic screws to unsavory actors has taken place in Lebanon.
In addition to being one of the world's most notorious militant groups (and political parties), Lebanese Hezbollah runs a massive finance operation. For years, it has abused the formal and informal financial sectors around the globe, and continues to move money to further its Islamist agenda. In February, the US Treasury Department named and shamed a Lebanese financial institution, the Lebanese Canadian Bank (LBC), for providing Hezbollah with banking services. Last week, lawyers for LCB called the charges "inaccurate, misleading, and on several occasions, simply incorrect."
While not surprising that a Lebanese bank may have played such a role for Hezbollah, clearly the US was putting Lebanese banks on notice that providing Hezbollah with banking services will get you cut off from the US financial system.
In its action, the US Treasury blacklisted LCB and its subsidiaries under Section 311 of the Patriot Act for aiding and abetting acts of money laundering, terrorist financing and narcotics trafficking on behalf of Hezbollah to the tune of hundreds of millions of dollars.
Other banks that have earned this distinction include the Commercial Bank of Syria, Banco Delta Asia and Myanmar Mayflower Bank. According to the US Treasury, LCB helped Hezbollah move funds with the sale of illegal drugs from South America, Europe, West Africa and the Middle East, as well as move value through commodities like used car dealerships in the United States.
Whether most Lebanese like it or not, Hezbollah is a designated terrorist organization in the US. Today, there are reportedly Hezbollah-trained guerillas attacking coalition forces in Iraq. The group has also killed and kidnapped a great number of Europeans and other nationals throughout its sordid history. It is only natural, therefore, that the US government would blacklist a bank that has acted on Hezbollah's behalf.
As importantly, it is worth remembering that LCB was blacklisted not only because it stands accused of serving as Hezbollah's bankers, but because they were facilitating criminal activity.
The US government—and the US Treasury Department in particular—is tasked with ensuring the safety and soundness of US financial markets. When any financial institution engages in illicit activity, the US reserves the right to block their access to its market. In fact, the US has blacklisted approximately 250 financial institutions around the world for their role in activities that include proliferating weapons of mass destruction, terrorism and narcotics trafficking.
After the designation, Societe Generale won a bid to merge with LCB. It has been reported that LCB was put up for sale immediately after the Treasury designation, which essentially cut off the bank from the international market.
Societe Generale's governor recently made comments that his bank made the offer to buy the bank with the understanding that they will ensure "a clean balance and [that it] is well managed despite the accusations leveled by the US Treasury." Reading between the lines, Societe Generale was apparently promising to clean up LCB's act.
Lebanese Central Bank Governor, Riad Salameh, recently stated that Washington has no intention of targeting the Lebanese banking sector. And he admitted that the US Treasury requested the merger as a way to "remove the scandal-hit administration and resume confidence in the bank." LCB reportedly sold for as much as $620 million.
What can the Lebanese government do to avoid such embarrassments in the future? Treasury officials have warned foreign banks and companies that do business with Hezbollah that they could lose access to the US market. Lebanese banking authorities and government officials may wish to inform Lebanon's 52 commercial banks that when they offer banking services to Hezbollah-linked companies, officials or any other "terrorist" entity, they are helping to circumvent US sanctions.
There are international organizations such as the Financial Actions Task Force (FATF), whose mission is to help countries and their banks comply with international standards. The Lebanese government and its banks might wish to avail themselves of their assistance.
The US government could not be more clear: Bankrolling "terrorism" is toxic for business if you carry out transactions with American entities or the US dollar. It's a lesson bankers in Lebanon understand, and others during this Arab Spring may soon come to realize as well.
-----------------------------------------------------------------------------------------------------------------------
5)What’s the Magic Number? Predicting 2012 With Economic Data
By Larry J. Sabato, Director, U.Va. Center for Politics
A recent New York Times story ricocheted around the political community after opening with this revelatory sentence: “No American president since Franklin Delano Roosevelt has won a second term in office when the unemployment rate on Election Day topped 7.2 percent.”
There is the magic number! If unemployment is higher than 7.2% as we head into the general election in 2012, we know President Obama is a goner. If it is lower, Obama gets an encore term. Can it really be this simple?
First, note the necessary qualifier, “since FDR.” That is because Roosevelt was reelected to the White House in 1936 despite estimated unemployment at about 17%, but that was down several percentage points from Herbert Hoover’s Waterloo in 1932. Again in 1940, Roosevelt won a third term with unemployment at 15%. Maybe these data are too outdated to matter, but they certainly suggest it may be the trend of unemployment that makes the difference. Is the rate going up or down? Are people optimistic or pessimistic about their economic future?
FDR gave people hope. Of course, President Obama famously ran on “hope and change” in 2008, and his problem in 2012 is that, so far on the economy, Americans have little hope and haven’t seen much change. If the nation remains as glum as it is today, and if the current 9.1% unemployment rate fails to drop significantly, Obama may well get the boot in ’12 as long as Republicans nominate a mainstream candidate.
But our point is this: No way is 7.2% the magic number. Take a look at Chart 1, which shows the unemployment rate at the time of each presidential election since 1960. Generally, a relatively high unemployment rate is predictive of the incumbent party’s defeat. This happened in 1960, 1976, 1980, 1992 and 2008 (on the chart, green represents elections where the incumbent president’s party won the election; orange represents elections where the incumbent party lost).
Chart 1: November unemployment rates in presidential election years
Source: U.S. Bureau of Labor Statistics
That isn’t the whole story, however. Unemployment was at 7.2% in 1984 when Ronald Reagan ran for reelection, and he won a landslide. Why? Because unemployment was falling noticeably from its recession high of 10.8% in December 1982.
George H.W. Bush lost his presidency in 1992 with an unemployment rate scarcely different from Reagan’s in 1984. Why? Because the rate had accelerated from the 5.3% when Bush was first elected. Ronald Reagan’s 1980 debate line resonated anew in 1992, to the detriment of his chosen GOP successor: “Are you better off today than you were four years ago?”
And look at the flip side of the employment coin. If unemployment were the alpha and the omega of presidential politics, then the Democrats would have won landslides in 1968 and 2000. Instead, Hubert Humphrey and Al Gore lost (the latter, one admits, on a technical knockout). HHH had as strong an employment picture as a candidate could hope to see; the nation was at almost full employment (3.4% unemployment). But the Vietnam War dominated the election, and produced the Nixon presidency. In 2000, ethics and personality arguably counted for as much as the Democrats’ low 3.9% unemployment rate, getting George W. Bush within striking range.
It’s now clear that unemployment is an imperfect forecasting tool for presidential elections. What about overall economic growth, usually represented by the gain or loss in Gross Domestic Product (GDP)? Let’s go to Chart 2.
Chart 2: Third quarter GDP growth in presidential election years
Note: Green represents elections where the incumbent president’s party won the election; orange represents elections where the incumbent party lost.Source: U.S. Department of Commerce Bureau of Economic Analysis
We might have chosen to focus on GDP growth in the election year taken as a whole, but that average can hide the real trend during the most critical election months. So here, we’ll look just at the quarter closest to the actual election day: the third quarter, July 1 to September 30, which gets reported before people vote and almost always is used by one side or the other on the campaign trail to describe the shape of the economy.
GDP growth in the third quarter is actually a better indicator than unemployment of forthcoming election results. The three worst years for growth jump off the chart: 1960 (2.1%), 2000 (2.8%), and 2008 (a miserable 0.4%). In this trio of years, the incumbent White House party lost the presidency.
However, even the GDP measure is far from a slam-dunk predictor. Near 7% growth in 1968 couldn’t negate Vietnam as an election factor. Watergate and the Nixon pardon, as much as anything else, sunk Gerald Ford in 1976, despite a healthy 7.6% GDP gain in the third quarter. And look at Jimmy Carter in 1980: An 8.6% growth rate — the best on the chart — couldn’t save a president stuck in the malaise of high inflation, high interest rates and an insoluble Iranian hostage crisis.
Similarly, a solid 6% growth rate was unable to rescue Bush Sr.; the economy had been too sluggish for too long, and Bush didn’t appear to “get it.” Bill Clinton actually had a lower economic growth rate in 1996 for his successful reelection (4.8%) than Bush had in his losing race (6.1%). The difference? Perceptions of the economy were better. Voters felt the modest growth surge and believed America had finally turned the corner.
Whether voters are looking at unemployment or growth rates, they are asking themselves whether conditions are improving (meaning the incumbent party is reelected) or stagnating and worsening (incumbent party is defeated).
Even that common sense model is oversimplified. If a big scandal or an unpopular war takes center stage, the economy can take a back seat. It is not always the economy, stupid.
If you insist on looking at just one number for an incumbent president seeking reelection, it is probably best to choose presidential popularity — the answer to the question, “Do you approve or disapprove of the job President X is doing?” This is a marvelous summary statistic, because it forces voters to take all the issues of the day into account, projecting their own issue priorities onto the president. When reliable polls show the proportion approving of presidential job performance is 50% or above, the incumbent is highly likely to win. The further the number falls below 50%, the less likely the incumbent is to get his second term.
Chart 3: Gallup approval ratings of incumbent presidents prior to presidential elections
Note: The most recent Gallup polling before the presidential election was used. Green represents elections where the incumbent president’s party won the election; orange represents elections where the incumbent party lost.Source: Gallup Presidential Job Approval Center
Notice that presidential approval cannot always be transferred to the non-incumbent candidate of the president’s party. Dwight Eisenhower had a very healthy job approval before the 1960 election (58%), but his candidate, Richard Nixon, lost. Bill Clinton was at 57% right before the 2000 election, but that wasn’t enough to get Al Gore into the White House. Ronald Reagan’s role in delivering his third term to the senior Bush in 1988 was extraordinary, not the norm. More often, the converse is true: unpopular incumbents insure the defeat of their party’s nominees: Harry Truman in 1952, LBJ in 1968 and George W. Bush in 2008.
Finally, let’s remember that third-party candidates can add to the unpredictability of allegedly predictive numbers. While the available research doesn’t fully support the conclusion, it is at least possible that George H.W. Bush would have won a second term without the presence of Ross Perot on the November 1992 ballot. And Ralph Nader may have received just 2.7% of the vote in 2000, but it was enough to deprive Gore of both New Hampshire and Florida, either of which would have given the Democrat the presidency. For 2012, one could conjure up a multi-candidate field — say, including an independent Tea Party contender or a Green party nominee — that could produce an odd outcome.
So data crunchers, continue your search for the magic number. We do it ourselves. These analyses are always fun and sometimes enlightening. But to a degree, this is a search for El Dorado, the mythical city of gold that tantalized — and ultimately frustrated — European explorers in the sixteenth century. Maybe it’s truly there, but nobody ever found it.
-----------------------------------------------------------------------------------------------------------------------
6)Illiberal Immigration
By Victor Davis Hanson
Recently, in symbolic fashion, spectators of Mexican ancestry in Pasadena's Rose Bowl did not merely cheer on the Mexican national soccer team in a game against the U.S. national team - such nostalgia would be natural and understandable for recent immigrants - but went much further and also jeered American players and, indeed, references to the United States.
Which was the home team?
Was America to be appreciated for accepting poor aliens, or resented for not granting them amnesty? Is the idea of the United States to be conveniently booed or opportunistically thanked - depending on whether you are watching a soccer match or, for example, entering a Los Angeles emergency room with a life-threatening injury?
This otherwise insignificant but Orwellian incident reminds us that illegal immigration in the 21st century is becoming an illiberal enterprise.
Consider the prevailing myth of Mexico as America's "partner." Aside from the violence and drug cartels, an alien from Mars who examined the relationship would instead characterize it as abusive. Close to a million Mexican nationals annually try to cross illegally into the United States, aided and abetted by a cash-strapped Mexico - in a fashion that the latter would never permit on its southern border with Guatemala. Indeed, if Guatemala had published an illustrated comic book instructing, in pictures, its presumably illiterate emigrants how to enter Mexico illegally - as Mexico actually did - the Mexican government would have been outraged. So is the surreal logic of Mexico City summed up by something like, "We value our own people so much that we will help them break laws to go elsewhere"?
In the old immigration narrative of the 1960s and 1970s, affluent, profit-minded white American employers often exploited cheap workers from Mexico. But that matrix has been largely superseded. So-called whites are no longer a majority in California, where large Asian and African-American populations often object to illegal arrivals from Mexico who cut in front of the legal-immigration line, tax social services, and raise costs to the detriment of American citizens.
Even the notions of "white" and "Latino" are becoming problematic in today's intermarried and interracial society. Does one-quarter or one-half ethnic ancestry make one a member of the "minority" community? And, if so, by what logic and under which convenient conditions? For the purposes of hiring or college admission, should we apply one-drop rules from the Old Confederacy to measure our racial purity?
Poverty is no longer so clearly delineated either. In an underground economy where wages are often in cash and tax-free, and entitlements are easier than ever to obtain, well over $20 billion a year in remittances are sent southward to Mexico alone - maybe double that sum to Latin America as a whole.
Something here once again has proven illiberal: Does a liberal-sounding but exploitative Mexican government cynically encourage its expatriates to scrimp and save in America only to send huge sums of money back home to help poor relatives, so that Mexico City need not? In turn, do an increasing number of illegal aliens count on help from the American taxpayer for food, housing, legal, and education subsidies in order to free up $20 billion to send home?
The paradoxes and confusion never end these days. Do today's immigration activists work to grant amnesty on the basis of a legal philosophy and principled support for open borders, or just because of shared ethnic identity? If there were now 11 million East Africans in America illegally, would today's Hispanic immigration lobbyists seek amnesty, bilingual services in Swahili, and yet more illegal immigration from Kenya and Uganda? Would they ever seek racially blind legal immigration into the U.S., based on education and skills rather than point of origin?
The yearly arrival of hundreds of thousands from Latin America, mostly without English-language skills, high-school diplomas, or legality, has also challenged old ideas of everything from the assessment of U.S. poverty rates to affirmative action. Once an impoverished resident of Oaxaca crosses the border, does his lack of education and his modest income immediately help cement the charge that the American Latino population has not achieved economic parity?
Or, in the first nanosecond after illegally crossing the border, do a Mexican national and his family in theory become eligible for affirmative action, on the basis of past historical underrepresentation or present-day discrimination or poor treatment in Mexico - in a way not extended to the Arab-American or Punjabi-American citizen?
Why does the present administration oppose new anti-illegal-immigration laws in Arizona and Georgia that are designed to enhance existing federal law - but not so-called "sanctuary city" statutes that in some municipalities deliberately contravene federal immigration law?
The old liberal ideal of a racially blind, melting-pot society where the law is applied equally across the board has descended into the new postmodern practice of enforcing many laws only selectively - and based entirely on politics, matters of race, ethnic chauvinism, and national origin.
In sum, yesterday's immigration liberals have become today's illiberals.
Victor Davis Hanson is a classicist and historian at the Hoover Institution, Stanford University, and author, most recently, of "A War Like No Other: How the Athenians and Spartans Fought the Peloponnesian War."
--------------------------------------------------------------------------------------------------------------
No comments:
Post a Comment