Questions and Observations

Free Markets, Free People

Dale’s Observations For 2010-08-12

RT @dmataconis: Employment Picture Looking Even Bleaker http://bit.ly/aYtjrB #RecoverySummer #

Is this finally the economic collapse? http://bit.ly/avLkzW #

The average 30-year mortgage rate fell to 4.44 %, the lowest since Freddie Mac records began in 1971. http://bit.ly/cznNk1 #RecoverySummer #

Jobless claims jump to 5-month high, with 484,000 new claims for unemployment. http://bit.ly/aDoxgB #RecoverySummer #

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Dear GOP – don’t get too froggy thinking you’re the “solution”

Because most Americans don’t share your evaluation of yourself.  In fact, because of the dismal performance of the Democrats, you’re only slightly more “acceptable” than they are:

Americans are growing more pessimistic about the economy and the war in Afghanistan, and are losing faith that Democrats have better solutions than Republicans, according to a new Wall Street Journal/NBC News poll.

Underpinning the gloom: Nearly two-thirds of Americans believe the economy has yet to hit bottom, a sharply higher percentage than the 53% who felt that way in January.

The sour national mood appears all-encompassing and is dragging down ratings for the GOP too, suggesting voters above all are disenchanted with the political establishment in Washington.

In fact, just 24% have positive feelings about the GOP, which according to the WSJ, is a new low in the 21 year history of the poll.  In fact, the only reason you’re under any sort of consideration at all is because we’re stuck with a two-party system –something you and the Democrats have been careful to manage – and you’re the only other choice.

If you’re thinking “mandate” in November, I’d change my thinking.  I think it may be better described as “your last chance” … or maybe your “next to last chance”, the last chance coming on the heels of the 2012 presidential elections.

"The Republicans don’t have a message as to why people should vote for them, but it’s pretty clear why you shouldn’t vote for the Democrats," said poll respondent Tim Krsak, 33, a lawyer from Indianapolis and independent who has been unemployed since January. "So by default, you have to vote for the other guy."

Great reason to vote, isn’t it?

You guys better buy a clue (and if you do, use your own money).

~McQ

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The classy left: If you can’t beat ’em, just insult them

You know you have an opponent on the run when that opponent is reduced to puerile, schoolyard insults.  That would be the left.

The first indication that the Tea Party had their goat was when they decided to use a sexual slang as their mocking moniker – Tea Baggers.

Now they’ve managed a new low. Ben Smith at POLITICO has the story:

Last summer, Democrats argued that the Tea Party movement was the astroturf creation of corporate groups. Now that the grass-roots conservative resurgence has emerged as a clear force on the right, the left is making a different case: That tea parties are simply the enemy.

To that end, the Agenda Project, a new, progressive group with roots in New York’s fundraising scene and a goal of strengthening the progressive movement, has launched the "F.*.c.k. Tea project," which is aimed, the group’s founder Erica Payne wrote in an e-mail this morning, "to dismiss the Tea Party and promote the progressive cause."

""We will be launching new products in the next several months to help people all over the country F*ck Tea," Payne told POLITICO. "Products like a Glenn Beck Bowl Buddy (Beck B Scrubbin) and others are perfect holiday gifts or just a great way to say, ‘I love you and our country’ to your spouse, friend or family."

You know, I enjoy a clever turn of phrase as well as the next guy – an imaginative and witty answer to some question, etc.

This is just the left being the left.  And, of course, when it comes to their favorite ox being gored by the right, they’ll somehow manage to talk about “class and respect” with a straight face.

Amazing.

18 months ago they were the toast of the town, bringing “hope and change”.  Now they’ve self-destructed and are back to their old rude and crude selves.  How “progressive”.

~McQ

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Is the US bankrupt?

A good number of voices are beginning to say that technically, if not in fact, the country is bankrupt.

For instance:

America is a "Mickey Mouse economy" that is technically bankrupt, according to Jochen Wermuth, the Chief Investment Officer (CIO) and managing partner at Wermuth Asset Management.

"America today looks like Russia in 1998. Consumers, companies and the government are all highly indebted. America as a result is a bankrupt Mickey Mouse economy," Wermuth told CNBC.

Wermuth goes on to say that if the same IMF team that managed the 1998 Russian financial crisis in Russia were to walk into the US Treasury today, “they would withdraw support for current US policy”.

And don’t forget Mort Zuckerman who called the present policies our “economic Katrina”.

But as bad as present policies are, they aren’t solely the reason we’re in the awful economic shape we’re in.  We have a history of that.

"Even before the (Troubled Asset Relief Program) and the expansion of the Fed’s balance sheet, total US public and private debt as a percentage of GDP in the US stood at 290 percent, that figure is now far higher," Wermuth added.

Laurence Kotlikof explains it in terms of a “fiscal gap”. 

The fiscal gap is the value today (the present value) of the difference between projected spending (including servicing official debt) and projected revenue in all future years.

The IMF pointed out in its last report that the US must close this fiscal gap to “stabilize the debt to GDP ratio”.  The IMF estimates ““closing the fiscal gap requires a permanent annual fiscal adjustment equal to about 14 percent of U.S. GDP.”

So what does that mean in dollars?

To put 14 percent of gross domestic product in perspective, current federal revenue totals 14.9 percent of GDP. So the IMF is saying that closing the U.S. fiscal gap, from the revenue side, requires, roughly speaking, an immediate and permanent doubling of our personal-income, corporate and federal taxes as well as the payroll levy set down in the Federal Insurance Contribution Act.

Note the two words – “immediate” and “permanent”.  In order to pay off the huge debt our “betters” in Washington DC have run up over the years, strictly from the revenue side, our taxes would have to see an “immediate” and “permanent” doubling.

Sounds like bankruptcy to me.

Kotlikof also tells us about the shady book keeping Congress has been engaged in for decades and what the books probably really look like:

Based on the CBO’s data, I calculate a fiscal gap of $202 trillion, which is more than 15 times the official debt. This gargantuan discrepancy between our “official” debt and our actual net indebtedness isn’t surprising. It reflects what economists call the labeling problem. Congress has been very careful over the years to label most of its liabilities “unofficial” to keep them off the books and far in the future.

But of course, “official” or “unofficial” it is still debt.  Whether Congress will admit to it doesn’t change the fact that it is future debt that Congress has incurred through its profligate policies.

And what’s going to bring this all crashing down, despite the smooth and reassuring words of politicians without a clue?  Promises made with no fiscal ability to keep them because, in reality, they’re Ponzi schemes:

We have 78 million baby boomers who, when fully retired, will collect benefits from Social Security, Medicare, and Medicaid that, on average, exceed per-capita GDP. The annual costs of these entitlements will total about $4 trillion in today’s dollars. Yes, our economy will be bigger in 20 years, but not big enough to handle this size load year after year.

Got that – government promised $4 trillion a year that it doesn’t have and never has had.  And, thanks to Congressional Democrats, it just expanded that bill under ObamaCare.  The system, much like an engine running at hight RPMs with no oil, is going to stop and stop abruptly:

The first possibility is massive benefit cuts visited on the baby boomers in retirement. The second is astronomical tax increases that leave the young with little incentive to work and save. And the third is the government simply printing vast quantities of money to cover its bills.

The result of any of those, of course, would be economically catastrophic.  And the results among the citizens of this country would be horrible:

Most likely we will see a combination of all three responses with dramatic increases in poverty, tax, interest rates and consumer prices. This is an awful, downhill road to follow, but it’s the one we are on. And bond traders will kick us miles down our road once they wake up and realize the U.S. is in worse fiscal shape than Greece.

For years and years, politicians have claimed all is well with these programs, that we can afford them and that they’ll always be there for those who need them.  None of the above is or has been true since their inception.  If any private business operated as these programs have, the CEOs would be under the jail and wouldn’t see daylight until our sun exploded.

For years, the left and Democrats have made war on corporations and businesses all the while it has been government leading us to financial ruin.  This debt isn’t debt run up by the private side of the economy.  It is purely government’s doing.  Now, given the gravity of the situation, we have very few options and the future does not look bright.

Next time you see your Congressional representative or Senator, thank him or her for the mess they’ve had a hand in creating and ask them how they are going to fix it.  Don’t be surprised by the blank stare you receive in return.  They haven’t a clue.

~McQ

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No wonder Congressional Dems want to run against George Bush

Because, according to Rasmussen, their agenda is considered by a good majority of likely voters to be "extreme":

Most U.S. voters believe the Democratic congressional agenda is extreme, while a plurality describe the Republican agenda as mainstream.

A new Rasmussen Reports national telephone survey finds that 57% of Likely U.S. Voters think the agenda of Democrats in Congress is extreme. Thirty-four percent (34%) say it is more accurate to describe the Democratic agenda as mainstream.

That’s the message. And how is it received. Well, one of the more useful things Rasmussen does is also show us the poll of what it calls the "political class". I.e. our betters inside the beltway who certainly have a much better feeling of what is in our best interests than we do. Rasmussen compares the "Political Class" with the "Mainstream voters, and demonstrates the size of the disconnect we suffer under:

The Political Class, however, has dramatically different views of the agendas of the two parties from what Mainstream voters think. Ninety-one percent (91%) of the Political Class say the Democratic agenda in Congress is in the mainstream, but 70% of Mainstream voters see that agenda as extreme.

You may be asking yourself how it is 57% in one paragraph and 70% in the next.  The top number are Mainstream voters and the Political Class added together.  The second number is Mainstream voters alone.

And yes, the gulf is huge.  It explains the anger in America and the cluelessness in Washington.  The Political Class think they’re doing the people’s work.  The people think the Political Class is a bunch of elitists bent on taking more and more control and ignoring what the people actually want.

Moving on to the “Republican agenda” (which I’d love to see stated somewhere) the results are quite different:

Voters are more narrowly divided when it comes to the agenda of congressional Republicans. Forty-five percent (45%) of voters view the GOP agenda as mainstream, but nearly as many (40%) say it’s more accurate to call it extreme. Fifteen percent (15%) are undecided.

But again, when you break it out by Mainstream voters and Political Class, the numbers widen:

While 53% of Mainstream voters see the Republican congressional agenda as in the mainstream, 81% of Political Class voters regard it as extreme.

So among Mainstream voters, the GOP agenda enjoys a slight majority.  Among the Political Class – not so much.  My guess is you would also find a close association between Mainstream voters and Political Class and Tea Parties and Progressives.

~McQ

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The Republicans are lost: a continuing saga

It looks like the GOP might very well take back the House this fall. They even have an outside shot at the Senate. If some of the dynamics, such as the results in Missouri last week, continue to move in their direction, this could be an historic election.

My reaction to that is basically “So what?”

As I’ve said before, when it comes to any serious change in direction for the country, the current crop of Republicans is not the solution, they’re part of the problem.

It’s no better now than when I wrote the earlier post. The oleoginous Cantor is still in the House leadership. You can seem him in a picture associated with this article in the Washington Examiner, which points out that the GOP has absolutely no idea what to do if they happen to get back the Congress.

To me, the following sentence in that article was most telling:

Some young House Republicans have put out a call for voters to e-mail their ideas.

In other words, even the newest current GOP members of Congress don’t have a clue what to do.

If these young Congressmen are sincere, it means they’re unqualified for their jobs. Why are they doing in their seats if they don’t have a clue what to do to lead the country?* Plus, you can sum up what should be their highest priority in two words: cut spending. There are already plenty of ideas on how to do that, and if they need more, placing a list of federal programs on a dartboard and throwing darts would probably work pretty well.

Their second highest priority can also be expressed in two words: repeal Obamacare. Among Republican politicians, that one should not even be controversial. All the polls we’ve seen say that Republican voters are foresquare for that option.

The more likely interpretation of their email appeal, though, is that it’s just a cynical way to look as though they are listening to their constituents. They know they aren’t going to do anything of importance, but they’re too cowardly to admit it.

So they’re just playing politics as usual, every chance they get. Here’s another example, in which you can see Cantor railing about Rangel and his ethics violations:

Personally, I think “Chollie” Rangle is a snake, but I get a lot less incensed over his extra apartments than I do over the fact that he has spent forty years trying to figure out ways to take money from people he doesn’t like and give it to people he does. That, plus his complete indifference to the long term damage to American society of those thefts.

Likewise, this “drain the swamp” rhetoric from Republicans like Cantor means nothing to me. I consider the revolving door between politicians and high-paid lobbyists to be just as ethically wrong as more direct means of appropriating other people’s money. We’ve seen people like Trent Lott use that door recently, and I’m expecting Cantor to use it at some point later in his life. So of course, he’s not going to say anything about that problem, and that makes his lamentations about Rangel nothing more than political theater.

It’s all intended to paper over the problem that the current crop of Republicans is clueless about where to go from here. The know if they just go through the motions, as Cantor is doing above, they’ll probably get back control and the perqs that go with it. So, in their minds, why should they risk such a windfall from the Democrat’s blunders? Why should they actually stand up for proposals that might really make a difference but are guaranteed to make some constituency mad and endanger their chances of recovering Congressional dominance?

For establishment Republicans, the name of the game is not leading the country. It’s gaining and holding onto power. That, of course, is why so many of us see so little difference between the parties – the Democrats have the exact same goal.

The time is almost certainly coming when that game makes our economic and political system so unstable that establishment politicans get their playing field yanked out from under them. However, I don’t think more than one in ten of them have the imagination to envision such an outcome, and the rest are just hoping to push it down the road until they’re gone. It’s going to have to get a lot worse before establishment GOP politicans either wake up or get kicked to the curb.

Until then, enjoy the football game this November, and cheer for your team as you watch the election returns, but understand that we won’t get any difference that really matters. Yes, Obama’s hard left ideology will be blunted, and I also prefer divided government to what we have now. But the big goal is reversal, and we’re just not yet in bad enough shape for that to happen. A GOP victory this fall just means a small delaying action against the coming reckoning.

After all, the Republicans could repeal Obamacare, sell off huge government interests in automotive and finance industries, cut a trillion dollars in spending and they would be… back where we were nineteen months ago when Obama took office. I consider it preposterous that they’ll even do a fraction of that.

We’ll have to do much, much more to regain a stable long term government, because the debt bomb ticks louder every month. Social Security and Medicare are going to blow up in our faces; the math and demographics are simply inescapable.

I’d like to be optimistic and presume that the GOP is working to establish a base, and gearing up for serious action after hopefully winning the White House back in 2012. But I’m not. They’re just floating along, riding their perqs, and waiting for the Democrats to keep looking bad. Based on everything I’ve seen about the establishment GOP, they never intend to do anything that seriously reverses the growth of spending and debt. Even if a Pawlenty or Daniels were sitting in the White House, these drones in Congress like Cantor are never going to take the risky and painful actions needed to avert the consequences of too-large-and-ever-growing government.

(*) I ask this rhetorically, of course. Many of them are members of the parasitic political class, and considerations of how to lead the country had little or nothing to do with their decision to run.

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Gibbs lights a fire (update)

As presidential spokesmen go, Robert Gibbs is among the worst I’ve ever seen. Yesterday, without provocation or necessity, he proved the point – he picked a fight with what he calls, "the professional left". That would be the part of the progressive left that has been pounding Obama for not being "progressive" enough. Not being progressive enough is exemplified by the lack of a public option in the health care bill, gay marriage, DADT, and Guantánamo Bay.

Said Gibbs in an interview with The Hill, Gibbs said of the criticism from that quarter:

“I hear these people saying he’s like George Bush. Those people ought to be drug tested,” Gibbs said. “I mean, it’s crazy.”

On healthcare:

“They will be satisfied when we have Canadian healthcare and we’ve eliminated the Pentagon. That’s not reality.”

[…]

“They wouldn’t be satisfied if Dennis Kucinich was president.”

I don’t know about you, but I have gotten a huge chuckle out of his comments.  Now they know how Joe Lieberman felt (while his boss was piling on at the time).  But grins and chuckles aside, this points to something many people have noted about this White House – it is as thin skinned as any I’ve ever seen. 

Gibbs is a true believer – he’d have to be to say much of what he does each day.  And he is only the most visible of a bunch of true believers who work within the inner circles of the administration.  They cannot believe that those who should be their ideological soul mates are constantly criticizing them.  For instance, much of the “professional left” has criticized the administration’s two Supreme Court appointees for not being liberal enough.

My goodness – they’re women and one is of Hispanic heritage.  What more do they want!  They’ve hit all of the “progressive” diversity buttons and those people want more!

As for the “professional left” they’re in a frenzy today (well, name a day they’re not in a frenzy).

Firedoglake:

Maybe Mr. Gibbs it’s because the unions are losing power and you aren’t helping us. Maybe it’s because finance reform does little to impact those suffering from out and out mortgage fraud. Maybe it’s because medical costs and insurance are too high.

[…]

It seems to me that while your administration has put a bandaid on my gaping 10-inch surgical wound, you have done very little to treat the underlying problem that corporate America has too much control over our lives. We want to see you fight corporate America, not bloody the eyes of left-wing liberals and then kick us to the curb calling us drug addicts if we complain.

Because “corporate America” is the real villain.

John Aravosis, who admits to doing “dirty work” for the Obama campaign when they requested it:

The left isn’t upset with the President because we’re just too darned demanding. We’re upset with Barack Obama because he never seems to try. He talks a good talk, but when it comes time to actually follow through on his promises, he winces.

Point Aravosis.  Something many of us have noticed and commented on.  It’s called lack of leadership.  But hey, “dirty work” Aravosis helped put the man in the position so my sympathy is limited, if non-existent.  Because of the John Aravosis’ of the world, we’re stuck with this administration for two more years.

Jane Hamsher says the problem is Obama:

Gibbs does the only thing you can do when trying to defend a record of corporatist capitulation: triangulate against your critics as extremists. But the fact is, the positions Obama has abandoned aren’t the exclusive territory of Dennis Kucinich. Standing up to the banks and the insurance companies, reducing the political influence of corporate money, defending Social Security and ending the wars are issues that are broadly popular with the American public. That’s why Obama campaigned on them in order to pave his way to the White House.

And she notes:

Gibbs’ slam on progressives just as the August break begins means that Congressional Democrats across the country are going to have to bear the brunt of his comments as they try to whip up enthusiasm for their campaigns. They’re going to have to explain why they deserve support even as the White House holds progressives in contempt. Progressives are the people who volunteer, who donate, who vote, and the polls show a serious enthusiasm gap. Members of Congress are already angry that the president blames “Washington DC” for the country’s ills, and that’s a group that includes them. Pissing off the base like this isn’t going to help — it’s a self-indulgent, petty and ill-timed move.

The biggest problem faced by Democrats, if primary turnouts are any indication, is a lack of enthusiasm.  This particular bone-headed (but welcome) move doesn’t help that problem at all.

Which is what Digby at Hullabaloo also points out:

There is also a case to be made that the Democratic establishment should be concerned about enthusiasm — that the activist base needs to be handled with a little bit more respect because they are the ones who knock on doors and make the calls. There’s something to that, of course, particularly in the mid-terms which depend so heavily on getting the base out.

But what’s dangerously myopic about going ballistic as Gibbs did in his statements is that just 10 years ago we had a little event in which only a tiny portion of the base went with a third party bid from the left — and the consequences were catastrophic. Democrats, of all people, should remember that every vote matters.

Indeed.  So it is interesting that the frustration with their base boils over at the most inappropriate time of all.  Message discipline – something at which the Obama campaign was very good – seems to have become a lost art within the White House.  Instead their immaturity is more and more evident every day.  As Ezra Klein points out, when compared to Ronald Reagan, Obama’s poll ratings are almost exactly the same.  Yet we see this whining petulance from the likes of Gibbs which obviously mirrors his boss.  If Reagan was bothered by his critics, his critics surely never knew that.  It’s called “maturity” and “leadership”.

Of course course Gibbs is “walking back” on his comments, calling them “inartful”.  Hate to tell you buddy, but your entire tenure as White House press secretary has been the definition of “inartful”.

And, of course, this will all blow over.  Despite Digby’s implied threat that some of the “professional left” could seek a third party on the left, that’s not going to happen.  Like co-dependent drug addicts (speaking of drug testing) these two groups need and depend on each other.  The “professional left” with whine about the White House and the White House will whine about them.  But when push comes to shove, the professional left will line up behind their only choice.  Maybe not in the numbers they could once muster, but still there.

Meanwhile, righteous rants will continue on the lefty blogs, hurt feelings will be displayed, promises about not supporting Obama anymore will be made and then forgotten.  Like I said, these folks really don’t have anywhere else to go.

UPDATE: What would a post on the “professional left” be without a word from Keith Olberman (via Ragspierre in comments):

~McQ

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Dale’s Observations For 2010-08-10

.@dmataconis Did someone say, "Captain Obvious"? http://twitpic.com/2dh7gp #

MV Agusta really DID screw Harley-Davidson! H-D had to pay the Italians $20 million to take it back. http://bit.ly/axjvRS #

After 9 years of pay and benefit increases, Federal workers are now earning double their private counterparts. http://usat.me?39636276 #

FOMC statement says no change in interest rates are in the offing, as economic growth remains slow. http://usat.me?39645182 #

Note to @DerSPIEGEL: Its not really appropriate for Germans to make moral pronouncements about WWII actions. http://bit.ly/brpxDF #

Is America heading for a "lost decade" similar to Japan's? http://bit.ly/9jmAHT #

These people have the power to put you in jail for years. But don't dare think that you can hold them accountable. http://bit.ly/bkk3a3 #

The National Federation of Independent Business said its optimism index fell 0.9 to 88.1 in July. http://bit.ly/b0hO8f #RecoverySummer #

The productivity of U.S. workers unexpectedly fell last quarter, increasing cost-cutting pressures. http://bit.ly/cOCkDJ #RecoverySummer #

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So how is November looking for the two parties?

Well, the POLITICO is reporting that, against all odds, the Democrat’s Senate majority may be in jeopardy. Apparently,a Republican polling firm, looking at 13 of the races, found them all to be within the margin of error (however the poll was so small that margin of error is huge). Another – American Crossroads – came up with similar results in a larger poll. As POLITICO points out, both together do suggest there’s an opening for Republican Senate candidates that wasn’t really visible previously. All 13 hot races seem to be very, very competitive.

Then there’s the House. Gallup has the generic Republican up by 6, 49% to 43%. In terms of the "generic" polling, that’s a huge gap. And watching the Democrats thrash around for something to run on beside their record tells you pretty much all you need to know about how the House should go.

Also in play are 37 governor’s races.  Scott Walker, a Republican candidate for governor in WI, makes the point that has elected other governors like Chris Christie of NJ – “austerity is ‘in’”.

And the focus of the people – almost all the people – is the economy.  Most are in no mood, given the shape of the economy, to hear about grand new spending programs or the cost of more government.   What they are interested in hearing about is how government is going to get its books balanced without again reaching into their wallets.

That naturally plays much better for Republicans than most Democrats.  Consequently you could see a good majority of those governor’s races going to the GOP.

So to answer my question in the title – not so hot for the Dems, looking pretty darn good for the Reps.  Of course, winning is step one for the GOP – if they don’t step up and do whatever is necessary to rein in this government, cut spending and work toward reducing the debt, they’ll be looking at a bloodbath as well, two year’s hence.

There’s very little patience among the populous these days.  For the GOP, be careful of what you wish for.

~McQ

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