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Archive for May, 2008

Obama the infallible

The guy is the new Teflon don.

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The Obama Gaffe Machine
By JOHN FUND
May 30, 2008

For months, Barack Obama has had the image of an incandescent, golden-tongued Wundercandidate. That image may be fraying now.

As smart and credentialed as he is, Sen. Obama is often an indifferent speaker without a teleprompter. He has large gaps in his knowledge base, and is just as likely to dig in and embrace a policy misstatement as abandon it. ABC reporter Jake Tapper calls him “a one-man gaffe machine.”

Take the Auschwitz flub, where Mr. Obama erroneously claimed last weekend in New Mexico that his uncle helped liberate the Nazi concentration camp. Reporters noted Mr. Obama’s revised claim, that it was his great uncle who helped liberate Buchenwald. They largely downplayed the error. Yet in another, earlier gaffe back in 2002, Mr. Obama claimed his grandfather knew U.S. troops who liberated Auschwitz and Treblinka – even though only Russian troops entered those concentration camps.

That hardly disqualifies Mr. Obama from being president. But you can bet that if Hillary Clinton had done the same thing it would have been the focus of much more attention, especially after her Bosnia sniper-fire fib. That’s because gaffes are often blown up or downplayed based on whether or not they further a story line the media has attached to a politician.

When John McCain claimed, while on a trip to Iraq in March, that Sunni (as opposed to Shiite) militants in Iraq are being supported by Iran, coverage of the alleged blunder tracked Democratic attacks on his age and stamina. (In fact, Iran may well be supplying both Sunni and Shiite militants.) Dan Quayle, tagged with a reputation as a dumb blond male, never lived down his misspelling of “potatoe.”

Mr. Obama, a former editor of the Harvard Law Review, has largely been given a pass for his gaffes. Many are trivial, such as his suggestion this month that America has 57 states, and his bizarre statement in a Memorial Day speech in New Mexico that America’s “fallen heroes” were present and listening to him in the audience.

Some gaffes involve mangling his family history. Last year in Selma, Ala., for example, he said that his birth was inspired by events there which took place four years after he was born. While this gaffe can be chalked up to fatigue or cloudy memory, others are more substantive – such as his denial last April that it was his handwriting on a questionnaire in which, as a state senate candidate, he favored a ban on handguns. His campaign now contends that, even if it was his handwriting, this doesn’t prove he read the full questionnaire.

Mr. Obama told a Portland, Ore., crowd this month that Iran doesn’t “pose a serious threat to us,” saying that “tiny countries” with small defense budgets aren’t much to worry about. But Iran has almost one-fourth the population of the U.S. and is well on its way to developing nuclear weapons. The next day Mr. Obama had to reverse himself and declare he had “made it clear for years that the threat from Iran is grave.”

Last week in Orlando, Fla., he said he would meet with Venezuelan dictator Hugo Chávez to discuss, among other issues, Chávez’s support of the Marxist FARC guerrillas in Colombia. The next day, in Miami, he insisted any country supporting the FARC should suffer “regional isolation.” Obama advisers were left explaining how this circle could be squared.

In a debate last July, Mr. Obama pledged to meet, without precondition, the leaders of Iran, North Korea, Syria and Cuba. He called President Bush’s refusal to meet with them “ridiculous” and a “disgrace.”

Heavily criticized, Mr. Obama dug in rather than backtrack. He’s claimed, in defense of his position, that John F. Kennedy’s 1961 summit with Soviet leader Nikita Khrushchev in Vienna was a crucial meeting that led to the end of the Cold War.

Not quite. Kennedy himself admitted he was unprepared for Khrushchev’s bullying. “He beat the hell out of me,” Kennedy confided to advisers. The Soviet leader reported to his Politburo that the American president was weak. Two months later, the Berlin Wall was erected and stood for 28 years.

Reporters may now give Mr. Obama’s many gaffes more notice. But don’t count on them correcting an implicit bias in writing about such faux pas.

Over the years, reporters have tagged a long list of conservative public figures, from Barry Goldwater to Ronald Reagan to George W. Bush, as dim and uninformed. The reputation of some of these men has improved over time. But can anyone name a leading liberal figure who has developed a similar media reputation, even though the likes of Al Gore, Harry Reid and Nancy Pelosi have committed substantial gaffes at times? No reporter I’ve talked to has come up with a solid example.

It’s clear some gaffes are considered more newsworthy than others. But it would behoove the media to check their premises when deciding just how much attention to pay to them. The best guideline might be: Show some restraint and judgment, but report them all.

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Obama gets endorsement…

From Castro! Sort of..

Its pretty fitting as I have noted before.
After all Obama is willing to open up trade with the aging dictator.

Castro Offers His Take On Obama
Here’s something Barack Obama could probably do without: Kind words from longtime Cuban president Fidel Castro, who recently stepped aside as his country’s leader.

In a column noted by the New York Times that was published in Cuban newspapers and is available in English here, Castro writes that Obama is “the most progressive candidate to the U.S. presidency” and suggests he possesses “great intelligence.”

“He is a talented orator and is ahead of his rivals in the electoral race,” Castro writes in the (long) column. “I feel sympathy for his wife and little girls, who accompany him and give him encouragement every Tuesday. It is indeed a touching human spectacle.”

The column is not exactly an endorsement, however, as Castro spends much of it criticizing the Democratic frontrunner for his stated Cuba policy. (Obama would not end America’s trade embargo against the country.)

“Obama portrays the Cuban Revolution as anti-democratic and lacking in respect for freedom and human rights,” Castro writes. “It is the exact same argument which, almost without exception, U.S. administrations have used again and again to justify their crimes against our country. The blockade, in and of itself, is an act of genocide. I don’t want to see U.S. children inculcated with those shameful values.”

Castro seems aware that any kind words he offers Obama might not be in the Democratic frontrunner’s best interest.

“Were I to defend him, I would do his adversaries an enormous favor,” Castro writes. “I have therefore no reservations about criticizing him and about expressing my points of view on his words frankly.”

Only thing is Castro is wrong.
Obama DID want to change his policy on Cuba.
He wanted and possibly still DOES want to end the embargo, but changed his position for obviously, political expediency.

More here

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Recession? What Recession?

WASHINGTON (AP) — The economy plodded ahead at a 0.9 percent pace in the first quarter — slightly better than first estimated — but still underscoring caution on the part of consumers and businesses walloped by housing, credit and financial problems.

The new reading on gross domestic product, released by the Commerce Department on Thursday, was an improvement from the government’s initial growth estimate for the January-to-March quarter as well as the economy’s performance in the final quarter of last year. Both periods were pegged at a 0.6 percent growth rate.

Gross domestic product, or GDP, measures the value of all goods and services produced within the United States.

The first-quarter performance matched analysts’ forecasts and offered a somewhat encouraging sign because it showed the economy was still growing at that time. The figure didn’t meet a definition of recession, which under a rough rule is two straight quarters of shrinking GDP, and might raise hopes the country can dodge a full-blown downturn.

Fallout from the housing crisis continued to be a big drag on overall economic growth.

Builders slashed spending on housing projects by 25.5 percent, on an annualized basis, in the first quarter. That was the most in 27 years.

Consumers — whose spending is the economy’s lifeblood — are feeling the pressure from the economy’s problems.

They increased spending at just a 1 percent pace in the first quarter. That was the slowest since the last recession in 2001. Consumers are pulling back as high energy and food prices leave them with less money to spend on other things. Falling home values are making many homeowners feel less wealthy and less inclined to spend. And, the credit crunch has made it harder to finance big-ticket purchases.

Businesses also showed some caution, cutting spending on equipment and software. However, investment in commercial construction wasn’t as weak as the government first estimated, contributing to the upward revision to first-quarter GDP.

One of the bright spots keeping the economy afloat in the first quarter was export growth. Exports grew at a 2.8 percent pace. Although that was not nearly as much as first estimated, exports still were a force for GDP growth. The falling value of the U.S. dollar has made U.S. exports less expensive to foreign buyers.

In other economic news, more people signed up for jobless benefits last week, the latest sign of softness in the employment market. The Labor Department said new applications filed for unemployment insurance rose by 4,000 to 372,000 last week. The increase left claims slightly higher than the 370,000 level that economists were expecting.

Looking ahead, top forecasters at the National Association for Business Economics predict the economy will eek along at a 0.4 percent growth rate during the April-to-June period, which is expected to be the weakest quarter of the year. Growth should pick up to a 2.2 percent pace in the third quarter, energized by the Fed’s powerful series of rate reductions and billions of dollars worth of tax rebates flowing into the hands of Americans from Uncle Sam.

The Bush administration and the Federal Reserve also are hoping for economic rebound in the second half of this year. That — along with inflation concerns — is why the Fed has signaled it isn’t inclined to lower rates further.

Even if economic activity strengthens later this year, the unemployment rate — now at 5 percent — is expected to climb to 6 percent or higher early next year. Businesses, which have trimmed their work forces to cope with the economic slowdown, will be reluctant to bulk back up until they feel certain the economy’s recovery will be enduring.

An inflation measure linked to the GDP report showed that prices grew at a rate of 3.5 percent in the first quarter. That was the same as initially estimated and down from a 3.9 percent pace in the fourth quarter.

Excluding food and energy prices, “core” inflation increased at 2.1 percent pace in the first quarter. That was down slightly from the government’s first estimate of a 2.2 percent increase for the period and also marked a moderation from the fourth quarter’s 2.5 percent growth rate. The core inflation figure, however, is still outside the Fed’s comfort zone. The upper level of the Fed’s inflation tolerance is 2 percent.

Looking forward, inflation pressures could get worse given surging food and energy prices. Oil prices, which have racked up a string of record highs, are hovering above $131 a barrel. Gasoline prices have marched higher, too, moving closer to $4 a gallon nationwide.

Those high prices are a double-edged sword for the economy. They can put a damper on growth and also can spread inflation if they force companies to boost their prices.

Like I have said to the nay sayers over the last 6 months to a year, we are NOT in a recession, we are in an ECONOMIC SLOWDOWN.

Most of which lately is now being caused by the HUGE cost of oil and the cost of people filling up their tanks instead of going shopping.

The housing market is cleaning ITSELF up, just like the free market is supposed to do. Its stabilizing prices of homes to REALISTIC LEVELS. Home builders are lowering the prices of their new homes, just as expected. In my area, new homes dropped 15K-25k in just 1 month to attract buyers. I myself am interested. The main problem now however is oil, slowing down the economy further from people needing to spend more money on Fuel then on buying crap.

I am sure the Recession screamers will commence soon enough once this story fades.
The media will undoubtedly not report this because it doesn’t hold true to what they have been screaming for the last year. The impending DOOM of the US economy.

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The gyrations continue and there’s little to do but watch it play out. For what it’s worth it sure likes like we have one heckuva struggle going on. The players are the economy, oil, and the dollar. On any given day, the order will change but we have a strange situation where the three are inextricably bound together and can’t get away from themselves. The categories aren’t simple and there can even be similar components but you get the sense that we are at a tipping point. Where it tips, and for how long, are the billion if not trillion dollar questions.

The Economy: I would put forward indicators like the stock market in here as well as house prices. Corporate profit erosion as well as corporate writedowns of bad debt also show up here. And just to make it even larger, the consumer winds up in here. Normally I would say that the economy is at the whim of the dollar and oil but we have a wonderful situation here where in the US at least, if the economy slows, oil demand could decline further while a more robust economy would increase demand. As oil is no longer dependent on the US for the majority of the demand component, this effect is somewhat less relevant as the gallons that the US consumer passes up don’t sit in the tanks and lower prices, they simply go to China. And the American consumer’s reward for cutting consumption? Just about nothing. Benny and the Feds are in the waiting game now as well as finding themselves between economic growth and inflation. Fortunately for them, the way that inflation is calculated, much like recession determination, undervalued the inflating of the real estate bubble so inflation didn’t get out of hand with skyrocketing house prices. Then again, there isn’t much to reap with falling real estate prices either. And energy has finally gotten to the level where it can exert its impact widely. Food costs are spiking up and there isn’t much that outsourcing is going to do to save it. Credit will remain tight for a while and while the economy, particularly Wall Street, can be a self fulfilling prophecy, there are a couple of things that keep things in check. Greed is still good on Wall Street but withering, prolonged decline is tough to handle. Can the US get through this slowdown and go back to business as usual? Good question. Will the consumer finally get his wings clipped as home equity languishes with salary increases and inflation with energy just keep eating up income? Another good question. Wouldn’t want to bet the farm answering either one.

Oil: Let’s recap. When oil hit 70, the experts said it would retrench possibly back to 20. When it hit 90 the experts once again expected it could slide all the way back to 40. And at 130 they are asking “Is this the top?” While trying to out-shout their competitors for camera time, rarely does one of them ask the economic question of what happens to the price of a natural resource that has a finite supply when you have unlimited demand? Whether 130 is a sustainable level, and we are no where the time where oil traditionally peaks in price, is yet to be seen. But the dour predictions of oil 150 or 200 or 300 will come true in a reasonable time frame while Dow 30,000 ain’t going to happen anytime soon. If the world economy slows, maybe there will be pressure on oil to come back down. But that’s a big if.

Will the consumer really get the word on oil consumption and force auto makers to offer product that gets over 30mpg real world average? If they do, they won’t do it quickly. The auto makers have been caught flat footed. In the US the consumer used his/her power to convince themselves that they not only needed that Hummer to take the kid to soccer practice but that the price of gas was trivial. How will the US consumer adapt to reality? Well, they don’t exactly have a good track record. There is no magic to higher gas mileage cars, they need to be smaller with smaller engines. There is no nanotechnology breakthrough that will rewrite some old rules of getting from A to B. Can the US consumer adapt to life as a European auto consumer where cars come with 2 to 2.5 liter gas and diesel engines instead of sneering at 300hp V6s as just not enough for my commute? My guess is they will finally get it and realize the price they pay for large powerful vehicles. But the product just isn’t here right now. The auto makers bring out new models slower than the ice caps are melting. And the folly of putting humans in the position of equating food with gasoline with moronic ethanol subsidies will be a shame for the politicians and the environmentalists for years to come. There just isn’t a silver bullet, the US doesn’t need to ween itself off of energy consumption but it has to become a lot smarter at making the energy decisions than it has shown itself capable of from historical analysis.

The Dollar: This for me is the new player. Benny and the Feds are in a wait and see mode as far as I am concerned. So the dollar strengthened by not having to deal with anymore rate cuts in the near term. The Fed has backed themselves into their own corner. By waiting so long to lower rates they had to move decisively and still have a fragile economy. They can take solace in the fact that the financial institutions are in a period of rocky stability, for lack of a better term. And inflation is in the 4 to 5% range which isn’t good but it isn’t “end of the world” bad either. At least if it stays in that range. But they have put themselves in the position of having almost a one for one impact with rate cuts on the dollar going forward. By that I mean that if they reduce rates at all, twenty five or fifty basis points, the dollar will weaken, oil will climb and the effect will be quickly measured on inflation. The gov typically declares victory and goes home regardless of the facts and that will likely be the outcome with the George W. Bush and Nancy Pelosi Memorial Tax Rebate Stimulus and Feel Good package of 2008. There are wild projections on the number of jobs that will be created by the checks and the numbers will probably be able to be tortured into appearing that way but the reality is more likely to be that the dollars will be spent, not saved, but that they won’t have any large or lasting effect on the economy. With the Fed on hold, the dollar is seeking a new level and that can vary on a day to day basis. Inflation in China in particular is a problem for the Chinese but they still aren’t the slightest bit interested in revaluing their currency. But according to the Economist, the price of Chinese imports into the US are already up over 4% this year. And many companies are finding that the labor rates in China are no longer an immediate given for low cost fabrication. After Rome and the British empire, the US is about 100 years into its run as the dominant power. Maybe that has already passed but I doubt it. But one thing is sure. The amount of time it takes to have an industrial revolution, create a middle class, have spectacular growth, become a dominant economic/political power, and then start declining is on a shortening cycle. And the Chinese are probably already at least ten years into their climb. The dollar is giving them fits as well. When you are used to running a country with a single party system, it is a bit tough to figure out what to do with outside factors.

So how long will the triangle of prosperity spin? Hard to say. As I said, I think we are at a tipping point. If I were a betting man, and I am getting too old to favor the risk side of the risk/reward equation, I would say that we have two likely scenarios. The first is an economic recovery starting now but going on agonizingly slow for quite a while. The second would be a double dip drop where some factor causes the fragile economy to decline again going into the end of this year and the beginning of next. Of course, with an election coming up, it gets even harder to judge. But DC isn’t on the sidelines anymore because they smell votes to be gotten. And with the Republicans in the disarray they are in, the Dems are surely to consolidate their gains whether or not they take the WH. Then the most feared words in the country may be “Hi, I’m from the government and I’m here to help you.”

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An excellent piece by Steve Huntley of the Chicago Sun Times.

News Link

Barack Obama says the United States should not negotiate with Hamas “unless they recognize Israel, renounce violence and are willing to abide by previous accords” that Israel reached with neighboring Arab states and the Palestinians.

Which of those objections does not apply to Iran? The Democratic presidential candidate has said he’s willing to meet, “without precondition,” with Iranian President Mahmoud Ahmadinejad.

The difference between Iran and Hamas, Obama says, is that Iran is a country and Hamas is a terrorist organization. It’s also true that the State Department describes Iran as “the most active state sponsor of terrorism,” a provider of “extensive funding, training and weapons” to Hamas, Hezbollah and other groups, and an opponent of the Middle East peace process with “a high profile role in encouraging anti-Israel terrorist activity — rhetorically, operationally and financially.”

Obama further muddied the waters last week when he told David Brooks of the New York Times that Hamas and Hezbollah need to understand “they’re going down a blind alley with violence that weakens their legitimate claims.”

What would be the “legitimate claims” of Hamas, an organization founded for the purpose of the destruction of Israel? What are the “legitimate claims” of Hezbollah, also dedicated to the death of Israel, as well as serving as the agent of Iran and Syria in trying to kill democracy in Lebanon?

Obama has asserted unequivocal backing for Israel. But his “legitimate claims” remark gives you pause, making you wonder a bit about his worldview. Would the “legitimate claims” of Hamas be on the table in “no precondition” talks with Iran? National security has been a weakness for Democratic presidential candidates and doubly so for Obama because of his inexperience. Only four years ago he was an Illinois legislator.

That vulnerability explains the touchy reaction from Obama and his supporters to President Bush’s speech in Israel likening negotiations with “terrorists and radicals” to the 1930s appeasement of the Nazis. Obama’s defenders immediately jumped to argue that the problem with British Prime Minister Neville Chamberlain wasn’t that he talked with Hitler, but what he did in those meetings.

The problem is a little more complicated than that. Chamberlain entered those talks without the simple precondition that the integrity of Czechoslovakia was not negotiable. Besides leading to the sellout of Czechoslovakia, Chamberlain’s flying to Munich to talk to Hitler undermined the fragile German opposition to Hitler. Military leaders, convinced his intention to go to war over the Sudeten issue would lead to defeat, plotted to overthrow Hitler.

William L. Shirer in The Rise and Fall of the Third Reich is scathing in condemning the generals for failing to depose Hitler, but he wrote, “If, as the conspirators claim, their plans were on the point of being carried out, the announcement of Chamberlain’s trip to Munich certainly cut the ground from underneath their feet.” He added “such a golden opportunity never again presented itself to the German opposition to dispose of Hitler.”

Presidential meetings carry consequences, for good and ill. Leaders are subject to misjudgment and miscalculation. Soviet boss Nikita Khrushchev saw John Kennedy as weak after the Bay of Pigs fiasco and left a 1961 summit over Berlin with his belief about the young president confirmed. According to the New York Times, “Kennedy naively thought he could make a breakthrough with face-to-face talks.” Two months later, the Berlin Wall went up. The next year, Khrushchev moved to put missiles in Cuba. He was wrong about Kennedy, but it took the Cuban missile crisis to convince him. This is not an argument against summits, only a cautionary tale of how they can go wrong.

The issue here is not whether America should at some diplomatic level engage rogue nations like Iran. The issue is whether a president should hold talks without preconditions with the world’s worst despots.

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The recent foreclosure ‘crisis’ is getting out of hand. Not because of the numbers involved, that was to be expected as the market corrects itself, but with people that were perfectly willing to buy a home not long ago and are choosing to walk away from their responsibilities on the properties.

News Link

Capitol Weekly reports that newly elected California Congresswoman Laura Richardson walked away from the mortgage on her $535,000 Sacramento home, letting the house slip into foreclosure and disrepair less than two years after she bought it with no money down.

“While being elevated to Congress in a 2007 special election, Richardson apparently stopped making payments on her new Sacramento home, and eventually walked away from it, leaving nearly $600,000 in unpaid loans and fees,” the publication reports.

Richardson, a Democrat from Long Beach, declined to comment for the Capitol Weekly story, and her office did not immediately respond to a request for comment from LA Land.

Capitol Weekly, citing tax records at the Sacramento County assessor’s office, reports “… in January 2007, Richardson took out a mortgage for the entire sale price of the house — $535,000. The mortgage amount was equal to the sale price of the home, meaning she was able to buy the house without a down payment, even though the housing market was beginning to turn. A March 19, 2008 notice of trustee’s sale indicates that the unpaid balance of Richardson’s loan, which is held by Washington Mutual, is more than $578,000 –$40,000 more than the original mortgage.”

In addition to 100% financing on the home itself, the report quotes the woman who sold the house to Richardson as saying she also gave Richardson $15,000 toward closing costs.

The weekly also reports Richardson’s residence quickly became an eyesore, angering neighbors. The report says she recused herself on two key house votes on government efforts to address the foreclosure crisis.

Nice way to set the example.
Not long ago Jose Conseco walked away from his mortgage and home as well saying “it didn’t make sense to keep making payments anymore on a home that was worth less”. People like this are going to DESTROY future home borrowers ability to get into a home.

The people walking away from these mortgages should be held personally liable from homes that they are willingly walking away from simply because the appraised value went down on the home. They should be forced to pay for the resale of the house to the bank, the fees involved in fixing the property for sale and held liable for the difference in the amount the home wound up selling for in foreclosure.

The recent passage of a bill in the Senate Banking committee which will probably pass in the house is also a dangerous precedent that I have spoken about before.

Under the bill, the Federal Housing Administration would back as much as $300 billion in new mortgages, allowing lenders to refinance the most threatened home loans. The cost of failed loans would be covered not by taxpayers but by fees paid by mortgage originators to Fannie Mae and Freddie Mac, the federally chartered companies that buy mortgages from banks and other lenders.

Lenders would have to refinance the loans at less than the home’s current value, taking significant losses. Borrowers would be required to split any profits on the eventual sale of the house with the government.

The days of self responsibility are gone. In comes the nanny state. This can’t possibly end well. I’ll await the bottom of the slippery slope.

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This is not the first time, nor the last time that we will hear of this but I read it today and found it to be so disingenuous that I wanted to share it.

News Link

“Let me be clear, privatizing Social Security was a bad idea when George W. Bush proposed it, it’s a bad idea today,” Obama said. “That’s why I stood up against this plan in the Senate and that’s why I won’t stand for it as president.”

Bush proposed a Social Security plan in 2005 that focused on creating private accounts for younger workers, but it never came up for a vote in Congress. Democrats strongly opposed the idea and few Republicans embraced it.

Obama said McCain would push to raise the retirement age for collecting Social Security benefits or trim annual cost-of-living increases. Obama has rejected both ideas as solutions to the funding crisis projected for Social Security in favor of making higher-income workers pay more into the system.

Actually it was Clinton whom first proposed Privatizing Social Security. A move that at the time was praised quietly by Democrats, and the suddenly the mood shifted when Bush mentioned it. Partisan politics at its best there folks.

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