Friday, February 5, 2016

GMOA - A Jewel! Unemployment and Market Commentary


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If you missed the debate.                                            I too "have a dream."
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I just returned from Athens and a Board Meeting of GMOA.

I have been on the State Museum's Board for many years and every time I attend a meeting or view their art and various shows I remain enthused.

Our state may be known for football but Georgia has a great deal of culture and the University of Ga. has become outstanding  over the years beginning with Gov. Carl Sanders efforts and to get the ball rolling.

If you have not visited GMOA, I urge you do so and let me know and I will arrange a private tour. A tour of thecampus also is a special addendum to one's visit.
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The impact of Obama will last long after he is gone. (See 1 below.)
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Bill Whittle on Trump:
 
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Thoughts from the son of a long time friend and fellow memo reader. (See 2 below.)
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Caroline Glick on Obama apologetic's. (See 3 below.)
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Can we at least thank Obama for this? (See 4 below.)
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It might not pay to be a friend of the Clinton's (See 5 below.)
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A market and economic discussion:

Figures do not often lie but how one interprets them is another matter.

Today the unemployment level improved and Obama took advantage to boast how well his economic policies have been.

I would make the following observations:

a) Obama compared our economy to that of other nations and said because they embraced what Republicans had proposed that explained why they were behind our's. That is a lie but , of course, he is very good and clever at explaining things by lying about them.

Republicans have proposed reducing government spending in order to keep our deficit from ballooning and to reduce the cost burden on business by eliminating the deluge of new rules, regulations and red tape.

They also knew their ideas and proposals would be rejected.

b)  Factually speaking, our recovery is one of the weakest in history and still is well below where it needs to be, because 1 and 2% growth is anemic. Though, unemployment is now below 5% that does not tell the entire story.

c) Bernie and Hillarious are campaigning and saying the middle class has been decimated so is Obama correct or are they?  Cannot have it both ways.

The truth is, the middle class has been decimated and far too many are still seeking employment at former income levels they are unlikely to achieve. Also, too many are no longer employable because they lack the required skills for the type of economy we have and, in that regard, Obama was correct to call attention to this fact.

d) Obama also spoke about the 17 million now on a health plan but he did not give the number of those who lost their plans, were unwilling to join Obamacare nor did he discuss the rising embedded health costs after he leaves office.

Had he been truthful and done so, the picture would not be as bright as he painted.

e) There was good news on the wage front but some of the rise could be attributable to the raise in the minimum wage and if that is the case business earnings could either suffer or wage costs could be passed along in higher prices resulting in reduced demand.

f)  As for the burgeoning deficit, Obama did not touch that hot wire which remains a time bomb that ticks louder each day and will restrain any recovery because it sits like lead on our nation's shoulders.

g)  Obama did respond to a question about his proposal to add an oil surcharge of $10/bbl.  Yes, we need to address the problem of our decaying infrastructure but taxing the oil industry, and particularly at this time, is a questionable approach. 

I suspect his, beneath the surface goal, is to drive more oil companies out of business in order to "fuel" his desire to fund alternative energy in keeping with his climate change goals.

So what about the markets?  Not in any order this is my perspective:

1) Interest rates:

Today's  below expectation non-farm employment figure allows The Fed to revisit its desire to raise rates but I still doubt they will be aggressive.

2) Stock market:

Valuations have come down but the earning outlook remains subdued and investor psychology remains hesitant and suspect.  One after another sectors are coming in for punishment and I believe this will continue until all have been downsized in valuation.

Then, we have Bernie and Hillarious campaigning against 16% of our economy with their attacks on the drug and banking sectors as well as their general attacks on Wall Street.  This has investors uptight.

3) China and the world economic outlook:

Certainly not bright and it could eventually bring our own recovery down because of the linkage.  

There are some prominent investors who believe we could return to a recessionary state should the world recovery weaken.

4) The dollar:

If/when The Fed raises rates this should strengthen the dollar as money would flow here and the downside of that is it would impact American Corporations who have prominent sales and generate profits overseas.

5) Terrorism:

This remains the unpredictable fly in the ointment and a continuing psychological depressant.

As long as Obama remains in office I seriously doubt he will engage in a manner that is optimum.

6) Commodities:

Continued weakness in commodities suggest we remain in a deflationary environment. Yes, gold is recovering but copper, aluminum, oil and natural  gas prices remain subdued because there is insufficient demand and nations need income so they continue to produce.

7) Conclusion:

We are much closer to the end of the market correction, assuming the world economy stabilizes at current levels and shows some signs of stabilizing and modest improvement.

As interest rates rise this would be a challenge for elevated stock prices and particularly so is earnings continue to retrench, even modestly. 

Any stock purchases should focus on quality, balance sheet strength and multiples at or below market levels and in sectors that have already undergone correction.

I still favor BAC, ABBV, MRK, AB (for income), MFC, OPK (speculation) and have added AAPL but no longer am interested in accumulating T .  Should there be an infrastructure opportunity CAT would be a company to think about among several others.
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Have a nice weekend and enjoy The  Super Bowl.
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Dick
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1)

U.S. ATTORNEY GENERAL TO 'INSTITUTIONALIZE' OBAMA GUN LAWS

Effort to make immigration orders permanent also underway


U.S. Attorney General Loretta Lynch became the latest Obama appointee to admit that one of her top priorities is to make sure President Obama’s policies live on long after she and her boss leave power.
Lynch is quoted in the latest issue of New York Magazine saying: “My goal is to position the [Department of Justice] where it will carry on in all of these issues long after myself and my team have moved on.”
She was speaking specifically about Obama’s executive orders on gun control, which he announced last week.
Lynch made the comment in response to a question about how she planned to prosecute gun sellers under the new executive actions.
Leading Republican presidential hopefuls Donald Trump, Ted Cruz, Marco Rubio and Ben Carson all vowed to overturn the Obama orders if elected. But if Lynch gets her way, that will be easier said than done.
And Lynch is not the first Obama appointee to make such a comment.
WND reported in April 2015 Obama’s top domestic adviser, Cecilia Muñoz, said she was also working to institutionalize Obama’s policies. Only in the case of Muñoz, her focus would not be on gun control but on immigration.
Muñoz, a former executive with the National Council of La Raza, said it was her job “to make sure we build this really into the DNA across the federal bureaucracy, at a leadership level, but much more importantly to make sure that when political appointees like me are no longer here this (immigration strategy) is built into what those agencies do and think about every day.”
Muñoz said it was important for all 18 federal agencies to standardize, set benchmarks and “measure successes,” ensuring states and localities create the desired “welcoming communities” for refugees, asylum seekers and immigrants of all types, including those not in the country legally.
Writing for Breitbart, Ben Shapiro, author of “The People vs. Barack Obama: The Criminal Case Against The Obama Administration,” said these efforts by Obama bureaucrats across the board offer a sobering backdrop for the next president, even if it should be  Trump, Cruz or some other leading conservative.
“For all those who revel in the fact that there are 374 days until President Obama finally gets the hell out of the White House, a cautionary note: Obama and his colleagues are rigging the bureaucracy so that their unique brand of ‘hope and change’ extends far beyond their tenure,” Shapiro wrote.
Lynch has already made an imprint for Obama on the nation’s law enforcement.
She “spent time opening federal cases on the Baltimore Police Department after the in-custody death of Freddie Gray and against 14 officials in international FIFA corruption as though Americans care deeply about the nature of corrupt international soccer,” Shapiro writes.
Lynch also threatened to prosecute those who use “anti-Muslim rhetoric” that “edges toward violence” and said that her “greatest fear” is the “incredibly disturbing rise of anti-Muslim rhetoric.”
Those fears, apparently, keep Lynch up at night more consistently than the fears of another jihadist attack against American citizens, such as those that took place in 2015 in Chattanooga, Tennessee, and San Bernardino, California, leaving a total of 19 dead.
Only after conservative media outcry and pushback from prominent GOP political figures such as former New York Gov. George Pataki, did Lynch walk back her comments about prosecuting Americans for anti-Muslim speech. She later said she would only prosecute “deeds, not words.”
Lynch and the FBI waited more than five months to determine that the Chattanooga shooter, Mohammad Abdulazeez, was indeed an ISIS sympathizer engaged in an act of terror when he shot four Marines and a sailor in May 2015.
Lynch then refused to tell Americans after the San Bernardino terror attack whether the perpetrators, Syed Farook and Tashfeen Malik, were engaged in Islamic terrorism
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2)

Winners capture minds and hearts

By Michael Rubenstein
imagesA funny thing happened last month while the media obsessed over presidential primary horse races:  President Obama’s approval ratings ticked up.  The latest Real Clear Politics average of polls now shows virtual parity between people who approve of the president’s overall performance and those who don’t.  This after over a year of approval deficits ranging from 5% to 8%.
As far as I can tell, nothing good has happened in 2016 to justify Americans raising their appreciation for our commander-in-chief.  To the contrary, economic and foreign policy troubles continue to weigh on the minds of voters.  By margins of 2-1, they continue to see things in our country “off on the wrong track”.
So what gives?  Why might people be softening their views of the president even as the race heats up to take his job?
On the left, the president’s approval ratings have remained consistently high, just as they remain consistently low on the right.  What’s changed is the view of independent voters.  The primary campaign must be having an impact on them.
Notwithstanding Ted Cruz’s theory about the missing conservative voter, it’s fairly well-established that these independent votes swing elections.  And while it doesn’t determine outcomes itself, the approval rating of the incumbent president is a fairly good indicator of his party’s chances in the election that follows.
Herein lies the quandary for true believers.  Independent voters make the difference, and yet they don’t line up neatly with the ideology of either “movement conservatives” or the “progressive left”.
Donald Trump generates mass appeal because he speaks to the anxieties and aspirations of people who resent the government’s failures — not those who findsalvation in lower marginal tax rates.  Hillary Clinton does throw a few leftist barbs at Bernie Sanders for his more measured views of gun control.  By and large, though, while Sanders calls for a revolution, Clinton wraps herself in virtues of the status quo.
So as partisans descend into petty attacks and ideological purity tests, the president’s even-keeled demeanor begins to resonate again with the mushy middle.
The people do want change.  Most of us just won’t run off a cliff with a pied piper who divides us into camps of us and them.  Especially if too many of us find ourselves in the camp of “them”.
Assuming she dodges the criminal investigations surrounding her mishandling of classified information while serving as Secretary of State, Hillary Clinton still has a good chance to win both the Democratic primary and the general election.  Yes, people may find her untrustworthy and uninspiring, but at the end of the day she projects an image of stability that will ultimately win out over rabble rousing by the likes of Sanders on the left, Cruz on the right, and Trump in the populist middle.
You can see the outlines of Clinton’s stay-the-course strategy taking foot in her stump speeches and among her media advocates.  Supporters tout the perceived successes of the Obama administration:  ending wars, disarming Iran, increasing health care coverage, reining in Wall Street.
For a challenger to knock Clinton off her game, it will take more than piling on her negatives.  These are too easily dismissed as rants of the Fox News-talk radio industrial complex — partisan and self-serving, rather than thoughtful and substantive.
Here is where I take issue with the Trump phenomenon and ill-consideredcomparisons to the campaigns of Ronald Reagan.
Like Trump, President Reagan connected with the middle class.  He was an iconoclastic entertainer who mastered the media channels of his generation.
Unlike Trump, however, Reagan disarmed his adversaries and appealed to the better natures of us all.  More important, he upended the status quo by touching the minds as well as the hearts of the people.
To dislodge the liberal establishment from the levers of power in Washington, a conservative candidate must use more than sloganeering.  He or she must dismantle the fallacies of Obama era success by picking them off one by one with an unapologetic but rational and good humored argument.
Don’t give us platitudes.  Explain the reasons in a way everyone can understand.
Why does disengagement in the Middle East make us less safe at home?  Why does government interference undermine our prosperity?  Our health care?  Our ability to make ends meet?  Spell it out in plain English and don’t make us turn against our neighbors to pursue a better life for ourselves and our loved ones.
For this reason I applaud Rich Lowry for engineering National Review’s online symposium Conservatives against Trump.  To its credit, NRO assembled a diverse collection of voices, ranging from talk-radio mavericks (Glenn Beck), to neoconservative defenders of the establishment (William Kristol), to heroes of the tea party grassroots (Erick Erickson).  Each took a measured and thoughtful shot at the reality-show blowhard — his lack of principle, his authoritarian impulses, his betrayal of conservative norms.  Anyone taking the time to absorb this multifaceted critique would see virtue in backing another horse.
But pundits do not turn elections.  The candidates themselves must embrace a rational and uplifting message to match their bouts of righteous indignation.  This is why I was rooting for Carly Fiorina early on, but now her time has passed.  Of the candidates with a realistic pathway to the nomination, Marco Rubio is the only one who fits the bill.  If Republicans hope to win back the White House, they better fall in line.
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3) The flipside of Obama's apologetics for radical Islamists

Caroline B. GlickBy Caroline B. Glick

On Wednesday the US media interrupted its saturation coverage of the presidential primaries to report on President Barack Obama’s visit to a mosque in Maryland. The visit was Obama’s first public one to a mosque in the US since entering the White House seven years ago. The mosque Obama chose to visit demonstrated once again that his views of radical Islam are deeply problematic.

Obama visited the Islamic Society of Baltimore, a mosque with longstanding ties to the Muslim Brotherhood and Hamas. During Operation Protective Edge, the leaders of the mosque accused Israel of genocide and demanded that the administration end US support for the Jewish state.

According to The Daily Caller, the mosque’s former imam Mohammad Adam el-Sheikh was active in the Islamic American Relief Agency, a charity deemed a terror group in 2004 after the US Treasury Department determined it had transferred funds to Osama bin Laden, Hamas, al-Qaida and other terrorist groups.

El-Sheikh left the Baltimore mosque to take over the Dar el-Hijra mosque in northern Virginia. He replaced Anwar al-Awlaki as imam after Awlaki moved to Yemen in 2003. In Yemen Awlaki rose to become a senior al-Qaida commander.

Awlaki radicalized many American jihadists both through direct contact and online. He radicalized US Army major Nidal Malik Hasan, and inspired him to carry out the 2009 massacre of 13 US soldiers and civilians at Fort Hood in Texas. Awlaki was killed by a US drone strike in 2011.

In 2010, a member of the Islamic Society of Baltimore was arrested for planning to attack an army recruiting office. According to the Mediaite news portail, the mosque reportedly refused to cooperate with the FBI in its investigation.

Obama’s visit to the radical mosque now is a clear signal of how he intends to spend his last year in office. It tells us that during this period, Obama will adopt ever more extreme positions regarding radical Islam.

Obama’s apologetics for radical Islamists is the flipside of his hostility for Israel. This too is escalating and will continue to rise through the end of his tenure in office.

The US Customs authority’s announcement last week that it will begin enforcing a 20-yearold decision to require goods imported from Judea and Samaria to be labeled “Made in the West Bank,” rather than “Made in Israel,” signals Obama’s intentions. So, too, it is abundantly clear that France’s plan to use the UN Security Council to dictate Israel’s borders was coordinated in advance with the Obama administration.

Part of the reason Obama is acting with such urgency and intensity is that he knows that regardless of who is elected to replace him, the next president will not be as viscerally hostile to Israel or as emotionally attached to Islam as he is.

On the Democratic side, neither candidate is a particularly energetic supporter of Israel or counter- jihad warrior. Former secretary of state Hillary Clinton’s recently released email discussions of Israel with her closest advisers indicate that all of Clinton’s closest counselors are hostile to Israel.

For his part, Vermont’s socialist Sen. Bernie Sanders harbors the far Left’s now standard anti-Israel attitudes. Not only did Sanders – like Clinton – support Obama’s nuclear deal with Iran. He boycotted Prime Minister Benjamin Netanyahu’s speech before the Joint Houses of Congress where Netanyahu laid out Israel’s reasons for opposing the deal. Sanders gave television interviews condemning Netanyahu for making the speech, accusing him of electioneering on the back of the US Congress. Sanders criticized Israel during Operation Protective Edge and supports decreasing US military aid to Israel.

For all their anti-Israel sensibilities, though, neither Clinton nor Sanders gives the impression that they are driven by them as Obama is
Unlike Obama, neither appear to be animated by their hostility toward Israel. Neither seem to be passionate in their support for Muslim Brotherhood- affiliated groups or in their desire to realign the US away from Israel, from its traditional Arab allies and toward Iran. This lack of passion makes it safe to assume that if elected president, while they will adopt anti-Israel policies, they will not seek out ways to weaken Israel or strengthen its sworn enemies.

On the Republican side, the situation is entirely different. All of the Republican presidential candidates are pro-Israel. To be sure, some are more pro-Israel than others. Sen. Ted Cruz, for instance, is more supportive than his competitors. But all of the Republicans candidates are significantly more supportive of Israel than the Democratic candidates. So it is simply an objective fact that Israel will be better off if a Republican is elected in November no matter who he is and no matter who the Democratic candidate is.

It hasn’t always been this way. And it doesn’t have to remain this way.

Back in 1992 when Bill Clinton was running against George H.W. Bush, if Israel was your issue, you voted for Clinton because he was rightly viewed as more pro-Israel than Bush.

Twenty-four years ago, supporting Israel carried no cost for Clinton. According to Gallup, in 1992, 52 percent of Democrats were pro-Israel.

On the other hand, Bush was probably harmed somewhat for the widespread perception that he was anti-Israel. In 1992, 62% of Republicans were pro-Israel.

Over the past 15 years, the situation has altered considerably.

Today, Republicans are near unanimous in their support for Israel. According to a Gallup poll from February 2015, 83% of Republicans support Israel.

Only 48% of Democrats do. From 2014 to 2015, Democratic support for Israel plunged 10 points.

The cleavage on Israel is particularly acute among partisan elites.

Last summer, pollster Frank Luntz conducted a survey of US elite partisan opinion on Israel. His data were devastating. According to Luntz’s data, 76% of Democratic elite believe that Israel has too much influence over US foreign policy. Only 20% of Republicans do.

Nearly half (47%) of highly educated, wealthy and politically active Democrats think that Israel is a racist country. Thirteen percent of their Republican counterparts agree.

And whereas only 48% of Democrats believe that Israel wants peace, 88% of Republicans believe that Israel wants peace with its neighbors.

These trends affect voting habits. According to Luntz, while only 18% of Democrats say they would be more likely to vote for a politician who supports Israel, 31% said they are less likely to vote for a pro-Israel candidate. In contrast, 76% of Republicans say they want their representatives to support Israel.

Forty-five percent of Democrats said they would be more likely to vote for a politician who is critical of Israel and 75% of Republicans said they would be less likely to vote for an anti-Israel candidate.

These data tell us two important things. Today Democratic candidates will gain nothing and may lose significant support if they support Israel.

In contrast, a Republican who opposes Israel will have a hard time getting elected, much less winning a primary.

Partisan sensibilities aren’t the only reason that Israel is will be better off if a Republican wins in November. There is also the issue of policy continuity.

Even though neither Clinton nor Sanders share Obama’s anti-Israel passion, their default position will be to maintain his policies. Traditionally, when an outgoing president is replaced by a successor from his own party, many of his foreign policy advisers stay on to serve his successor.

Moreover, if American voters elect a Democrat to succeed Obama, their decision will rightly be viewed as a vote of confidence in his policies.

Obama has radicalized the Democratic Party in his seven years in office. When Obama was inaugurated, the Blue Dog caucus of conservative Democratic members of the House of Representatives had 54 members. Today only 14 remain.

Obama’s Democratic Party is not Bill Clinton’s party.

A party that isn’t forced to pay a price for its policies isn’t likely to change them. If the Democrats are not defeated in the run for the White House in November, their party will not reassess its shift to radicalism and reconsider its increasingly hostile stance on Israel.

That then brings us to the state of the presidential race following the Iowa caucuses and ahead of next Tuesday’s primary in New Hampshire. The Iowa caucuses showed a significant gap in enthusiasm among partisan voters. Participation rates in the Republican caucuses were unprecedented.

Cruz shattered the record for vote getting in the state that saw participation rates up 30% from 2012. On the Democratic side, participation rates were below the 2008 level.

On the Republican side, the three top candidates – Cruz, businessman Donald Trump and Sen. Marco Rubio – are all backed by committed, fervent supporters. On the Democratic side, Clinton’s supporters are reportedly diffident about her. And while Sanders enjoys enthusiastic support from voters under 45, he can’t seem to convince people who actually know what socialism is to support him.

If Sanders wins the Democratic nomination, on the face of it, it is difficult to see his path to victory in the general election. Whereas Obama was elected by hiding his radical positions, Sanders is running openly as a socialist and attacks Obama from the Left. Whether America is a center-right or center-left country, the undisputed truth is that it is a centrist country.

As for Clinton, the likelihood grows by the day that by the general election, her inability to inspire her base will be the least of her problems.

The FBI’s ongoing probe of her use of a private email server during her tenure as secretary of state is devastating her chances of getting elected.

The State Department’s revelation last week that 22 of Clinton’s emails were too classified to be released, even with parts blacked out, makes it impossible to dismiss the prospect that she will be indicted for serious felony offenses. Yet, as Jonah Goldberg argued Wednesday in National Review, with her narrow victory in Iowa, Clinton blocked the opening for a less damaged candidate – like Vice President Joe Biden or former New York mayor Michael Bloomberg – to step into the race.

In other words, the Republican nominee will have an energized base and will face either a legally challenged or openly socialist Democratic opponent.

According to terrorism expert Steven Emerson, before Obama visited the Islamic Society of Baltimore, he asked the FBI for its opinion of the mosque. FBI investigators informed Obama of the mosque’s ties to terrorism. They urged him not to confer it with the legitimacy that comes with a presidential visit.

Obama ignored the FBI’s advice.

The next 11 months will be miserable for Israel.

But we should take heart. By all accounts, next year will be better. And judging by the way the presidential race is shaping up, next year may be a much, much better year.
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4)Barack Obama’s presidency has been a very good thing for Republicans
  
redstatebluestate
For the first time since Gallup began measuring party affiliation nationwide,there are now more red states than blue ones. Twenty states are either solidly Republican or leaning Republican, while just 14 are solidly or leaning Democratic. The remaining 16 are competitive between the two parties.
"This is the first time in Gallup's eight years of tracking partisanship by state that there have been more Republican than Democratic states," writes Gallup's Jeffrey M. Jones. "It also marks a dramatic shift from 2008, when Democratic strength nationally was its greatest in recent decades." (Gallup defines a state as "solid" for a party if that party has a 10-point or larger voter ID edge; a "leaning" state is one where a party has a five to 10 point edge.
The shift in party affiliation over the past seven years is absolutely incredible. In 2008, there were 35(!) states that were either solidly or leaning Democratic, five solid or leaning Republican and 10 judged as competitive. The following year there were 33 Democratic states, 12 competitive states and, still, five Republican ones.
From 2008 to 2015, Democrats went from a 30-state lead to a six-state deficit when it comes to states solidly or leaning their way on party affiliation. That is simply stunning.
Gallup's findings are in keeping with what I think is the most under-told story of the Obama years: Republicans have made massive gains at virtually every level of government other than, of course, the White House.
Republicans have their largest House majority since World War II, having retaken the majority in the 2010 election. They hold a four-seat majority in the Senate, having seized control of the world's greatest deliberative body in the 2014 midterms.
At the state level, Republicans have 31 governorships -- almost two-thirds of all the governor's mansions in the country. Republicans are even more dominant at the state legislative level; the GOP holds total control over 30 of the 50 states' legislatures and has partial control in another eight states -- meaning that more than three-quarters of the country's state legislatures are controlled by the GOP.
Want another way to visualize just how much electoral ground Republicans have gained -- and Democrats have lost -- during the Obama presidency? Check out this chart via Republican lobbyist Bruce Mehlman. (Note: The chart does not include gains and losses in the 2015 elections.)

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