Questions and Observations

Free Markets, Free People

SEIU = thugs

Last Sunday, while you were enjoying the day off and the mild weather with your family, SEIU thugs were in the process of trying to intimidate the family of a Bank of America executive.  They did it without the press (well, they had a friendly HuffPo blogger there to whom I’m not going to link) and they showed up without notice.  They, the 500+, did it strictly to intimidate the executive (a “we know where you live” type of demonstration).  This, apparently, is the new tactic of the thugocracy.  Unfortunately for the SEIU, Nina Easton of Fortune happened to be the bank exec’s next door neighbor and she writes about it.  She also snapped this pic:

As it turns out, the only occupant of the home at the time was a terrified 14 year old boy, the bank executive’s son, who locked himself in the bathroom. The rest of the family apparently was at the Little League game of a younger son.

While the executive, Greg Baer, is the deputy general council for corporate law at BoA and based in DC, it’s unclear what the SEIU and the Chicago based group called “National Political Action” targeted his house other than it was convenient. Why not BoA headquarters or some other BoA institution? Because, as Nina Easton says, this was an attempt at nothing more – nothing more – than pure intimidation. 14 school bus loads – 500 people – on your porch banging on your door and terrifying your family.

There’s some irony here. The Baer family is not exactly the scripted “evil Republican corporate capitalist” family that thug organization like the SEIU like to portray as the enemy of “the people”.

A lifelong Democrat, Baer worked for the Clinton Treasury Department, and his wife, Shirley Sagawa, author of the book The American Way to Change and a former adviser to Hillary Clinton, is a prominent national service advocate.

This is and always will be unacceptable behavior from any group. But it seems to be something the SEIU and other unions have decided is fair play. Easton sums it up nicely:

In the 1990s, the Baers’ former bosses, Bill and Hillary Clinton, denounced the “politics of personal destruction.” Today politicians and their voters of all stripes grieve the ugly bitterness that permeates our policy debates. Now, with populist rage providing a useful cover, it appears we’ve crossed into a new era: The politics of personal intimidation.

It is an “era” which needs to be nipped in the bud now. If ever there was a group displaying fascistic tendencies, it is the SEIU and the groups like National Political Action with which it is associated. This is unacceptable behavior and we need to let the SEIU know it and know it now. Politics is a rough and tumble game – we all know that. But keep families out of it.

Action like the SEIU and NPA took last Sunday were the tactics of thugs. And and unless and until those tactics are abandoned and an apology issued to the family the union attempted to terrorize, they’ll continue to be referred to as thugs.

~McQ

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Quote of the Day – opposing Obama borders on “sedition” edition

MA governor Deval Patrick, a crony of Barack Obama’s, has decided that Republican opposition to what Obama’s agenda borders on the criminal:

Patrick said that even “on my worst day, when I’m most frustrated about folks who seem to rooting for failure,” he doesn’t face anything like the opposition faced by the president.

“It seems like child’s play compared to what is going on in Washington, where it is almost at the level of sedition, it feels to like me,” Patrick said.

Funny how that’s always a problem when the opposition party opposes the party in power.

When asked afterward if he thought the opposition  truly bordered on sedition, he said:

“That was a rhetorical flourish,” Patrick said.

Or, in flyover country language – “no, that was BS”.  But then, we in flyover country knew that when he said it.

~McQ

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Dale’s Observations For 2010-05-24

Despite economists' previously noted optimism, is a double-dip recession now assured? http://bit.ly/ddxR7W #

10-year note yield approaches 3%, 2- to 10-year spread narrows on fears of slowing US growth. http://bit.ly/bEnJrV #

Economists predict solid US growth. Happy days are here again. Right? http://bit.ly/cNKmqi #

The Euro takes a hammering on news of Spain's central bank taking over Cajas, regulatory moves & new recession fears. http://bit.ly/d5f4Lv #

The #Lost finale really worked for me. The sideways timeline is neither sideways nor a timeline. For the rest, whatever happened, happened. #

And, lo! The tomb was empty. #Lost #

So, the sideways world in #Lost clearly isn't sideways. It's something…else. #

Lapedus is a good pilot. #Lost #

Lapedus is going to "back" a 767 up? He must have the extra special #Lost 767, with the reverse gear. Unlike every other one in the world. #

Jack: Worst. Locke-Killer. Ever. #Lost #

So far, Jack sucks at Locke-killing. #Lost #

Don't go towards the light, Desmond! Even if it IS the entrance to #Lost heaven. #

It's good to see Jack and Locke together on #Lost again, isn't it? Just like it used to be in the old days. Good times. Good times… #

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Oil spill – Katrina II? Where is Obama?

Peter Daou has a piece in the Huffington Post discussing the on-going oil spill disaster and asking:

Where is the outrage? Where are the millions marching in the streets, where is the round-the-clock roadblock coverage tracking every moment of the crisis, every effort to plug the leak, every desperate attempt to mitigate the damage?

Where is the White House? Where are Republicans? Where are Democrats? Where is the left? Where is the right? Where is the “fierce urgency of now?”

Where’s Geraldo Rivera on a boat in the Gulf holding up an oily pelican and weeping in his whiskers? Where’s CNN and MSNBC covering every drop of oil gushing from the blown casing with ominous sounding music and an intro that says “Oil Catastrophe, Day 36 of the underwater BP disaster”?

And, where is the government? Of course they’re right where I figured they’d be, but then I don’t have the faith in the magic competence of government that others do seem to have.

Look, I’m on record being displeased with the response of BP specifically and the oil industry in general. I’ve been clear that I think what is going on now is a result of a lack of planning and testing a “go-to-hell” plan that addressed a deep water blowout. And because of that we continue into day whatever of oil gushing from a broken riser and polluting the Gulf of Mexico. There’s no way to play that down. There’s no way to “spin” that. Because of a failure to anticipate this sort of problem and be prepared to mitigate the results, we have anywhere for 5,000+ barrels a day pumping out into the waters of the Gulf.

But that said, where is the government? Well, lucky us, they’re setting up a commission. No, really. A commission.

US President Barack Obama signed an executive order on May 21 creating an independent commission to investigate the Gulf of Mexico crude oil spill and offshore exploration and production. He named former US Sen. Bob Graham (D-Fla.) and former US Environmental Protection Agency Administrator William K. Reilly as its co-chairmen.

“While there are a number of ongoing investigations, including an independent review by the National Academy of Engineering, the purpose of this commission is to consider both the root causes of the disaster and offer options on what safety and environmental precautions we need to take to prevent a similar disaster from happening again,” the president said on May 22 in his weekly radio address.

Meanwhile, in the Gulf, oil continues to spew, wetlands and marshes are endangered and the EPA is yelling about the toxicity of the dispersant – like the oil will be good for sea life. And Ken Salazar is making noises about “pushing BP out of the way.”

And then what?

Even Daou has picked up on the problem:

Leadership is virtually non-existent. Blaming BP for being greedy and destructive is the least we should do, not the only thing we do. We need to turn the tide once and for all against those whose ideological rigidity is ravaging the planet.

Of course, he and I differ on his plan of action, but we certainly agree on his contention that “leadership is virtually non-existent”. As it has been for 16 month. Instead we’ve gotten staged anger and finger pointing and blame shifting from the President and, mostly, other than the Coast Guard, almost nothing in terms of a reasonable and expected government response to the disaster. Daou is, rightfully I think, very unhappy with the response:

Lawmakers can say that the law mandates BP take responsibility for clean-up and costs; federal officials can list all the things they’re doing to fix the problem; President Obama can launch as many fact-finding commissions as he sees fit. But we shouldn’t be impressed that they are doing what we elected them to do – it’s their job to deal with emergencies promptly and effectively. Far more is called for in this uniquely cataclysmic circumstance: a level of outrage, alarm, intensity and focus worthy of the size and scope of the spill.

But he, and I, are not seeing it. As James Carville said, the administration is treating it as almost an annoyance, keeping them from other things they’d rather be doing.

Daou too believes that to be evident in the administration’s response:

The administration seems miffed and mystified that it is being criticized. After all, it can reel off dozens of swift actions taken in the aftermath of the spill. The White House’s defenders want the spotlight aimed exclusively at BP. But this is a situation where body language and words are just as important as actions. Scheduling an ‘angry’ presidential news conference weeks after oil started gushing into the Gulf waters is exactly the wrong thing to do. Authentic anger isn’t something you turn on for the cameras and leak to the press the previous day.

But this isn’t something new, although it appears that elements of the left are just now catching on to the act – and the lack of leadership. Daou wants to blame all of this on “Green-haters” who’ve managed, apparently, to desensitize politicians and the public to the dangers of those who would rape and destroy the planet. And he’s using this disaster to, as he says, “rise in righteous anger” in order to “salvage and protect our earth”.

It certainly seems he’s angry, and he aims at the usual suspects, but it is interesting to see his inclusion of the Obama administration as part of the problem instead of being part of the solution.

Daou is finally reduced to an emotional appeal after producing his list of those who are responsible for this travesty. Two of the bullets could have come from any green talking point list and were essentially boilerplate nonsense one-over-the-world generalizations. But three of them caught my attention:

# Democratic leaders have been blindsided by this spill, having just come out in favor of offshore drilling to appease Republicans.

# The press and punditry are busy chasing the story du jour.

# Defenders of the administration are loathe to critique it, out of a sense of loyalty.

The first has some substance to it, but it wasn’t “Democratic leaders” who came out in favor of offshore drilling (something I still support – but with the mother of all go-to-hell plans in place first), it was Barack Obama.

And that brings us perfectly to numbers 2 and 3. The reason 2 is occurring is because the media is as much a part of 3 as anyone.

Daou’s overwrought and overstated conclusion give an idea of the depth of damage the non-response may be doing to the Obama administration (remember Carville’s words) among the “green left”:

This isn’t Katrina II, it’s worse. As the oil keeps gushing and the damage keeps growing, we are squandering a rare chance to turn the tide against those whose laziness and greed and ignorance is imperiling every living thing on our wonderful and beautiful – and wounded – planet.

My guess is it will be worse unless BP has some success killing that thing tomorrow. But even then, you still have a huge battle for containment and clean up. Huge.

And where is government?

~McQ

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More good news vis a vis ObamaCare – Small business’s won’t grow (update)

Or at least they won’t be given much of an incentive to do so if they provide health care:

A study by the National Center for Policy Analysis shows that tax credits in the new healthcare law could negatively impact small-business hiring decisions.

The new law provides a 50 percent tax credit to companies offering health coverage that have fewer than 10 workers who, on average, earn $25,000 a year. The tax credit is reduced as more employees are added to the payroll.

The NCPA study finds the reduction in tax relief to be a cost concern for companies looking to hire additional workers, but operate on slim profit margin yet still provide employee health coverage.

A couple of points – A) the tax credit is temporary (until 2016), and, only covers a small part of the cost of hiring an employee. However, B) it is a available to all small companies with 25 employees or less already offering health insurance. The stated purpose of the tax credit is to encourage those small businesses who fit the template (10 or fewer workers averaging about $25k a year, up to 25) to continue to provide health care and encourage those who aren’t to do so. But it provides the tax credit on a sliding scale, and that scale discourages hiring at the scale breaks:

Using insurance premium cost projections supplied by the nonpartisan Congressional Budget Office (CBO), the study states that the credit reaches its optimal point at 13 workers, with relief peaking at $36,400 for qualifying business.

After the 13th worker the economics surrounding the credit change, the study says.

For employers with 15 workers, taking on an additional hire will reduce the credit by $1,400. For a company looking to expand from 20 to 21 workers, the credit will shrink by $3,733. And businesses will take a $5,600 reduction on the credit when hiring the 25th worker.

The credit phases out for companies with at least 26 employees.

If the company is already at 13, it most likely won’t hire 14, or 15. If it is at 20, it’s most likely not going to hire 21. And 26 is most likely out of the question.

Bill Rys, tax counsel at the National Federation of Independent Businesses, told The Hill that while demand is the primary driver for hiring decisions, costs related to new hires is a key factor.

“To the extent that a tax credit is related to the benefits that you’re paying your employees, it is going to be a factor in determining what is the cost of the employee,” he said. “The fact that you’re losing a portion of the credit because you brought in a new employee is going to have to factor into the cost of who you’re hiring.”

So there is a negative incentive – at least as long as the tax credit exists – to hire people if it will lessen the tax credit. Instead:

“If a business can make a decision to substitute capital for labor – say, contract the procedure out or automate it – I believe [losing the tax credit] will play an important part in the reluctance to hire,” Villarreal said, adding, “It’s puzzling that we have this perverse incentive not to have businesses grow by not encouraging them to hire additional workers.”

Brilliant.

UPDATE: Even more good news as companies read through the legislation and discover little hidden nuggets of penalty and cost.  For instance:

About one-third of employers subject to major requirements of the new health care law may face tax penalties because they offer health insurance that could be considered unaffordable to some employees, a new study says.

It seems the law deems insurance that is unaffordable by a family to be an insurance cost that is more than 9.5% of their household income. Of course, few if any companies know the “household income” of their employees. That’s because, mostly, it’s none of their business. But also because it may be comprised of a second or third income, dividend, disability or even retirement income.

But, if it is over 9.5% of that household income, companies can be fined up to $3,000 per employee. Of course they won’t know that until and unless the employee files for a federal tax credit because he or she has determined their insurance cost is over 9.5% of their household income (is that gross or AGI?):

If an employer’s health plan is deemed unaffordable, the worker may qualify for a federal tax credit, or subsidy, to buy coverage in a new state-based marketplace known as an insurance exchange. A person claiming a credit must disclose income information to the exchange. The exchange will then notify employers if any of their workers qualify for subsidies.

Along with notifying the employer of this info, I suppose the “exchange” will also notify the appropriate government agency that is responsible for levying the fine.

Wow – no incentive there to just drop coverage for everyone, is there?

What a monstrosity the Democrats have brought upon us.

~McQ

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The economy – what we’re facing right now

Despite all the assurances by politicians that “things are turning around” and that while “we still have a long way to go”, we’ve “survived the disaster”, I’m not at all sure that’s true.  Nor are a number of other people, to include Hale Stewart at FiveThirtyEight.  He does an extensive analysis of why unemployment had “unexpectedly” stalled out after showing signs of recovery.  He accompanies his analysis with a number of charts that demonstrate his point, but in essence his finding supports what we talked about last night on the podcast – the decline of the euro:

So, the central issue is a decreasing euro, which has led to an increasing dollar, which in turn has led to decreasing commodity prices. Recent reserve tightening issues in China have added downward pressure to commodity prices, which adds further evidence to the argument the US is facing an increased possibility of deflation.

That and a decrease leading economic indicators lead him to caution us that  we may see a lack of further economic growth in the next 3 – 6 months unless a few things happen:

1.) A decrease in initial unemployment claims below the 450,000 level. In addition, the economy needs to keep up its current pace of job creation. Last month we had a great employment report. That needs to be repeated in the next report.

2.) The euro needs to stabilize. The European Union has proposed a massive $1 trillion dollar package, which was announced several weeks ago. However, the euro has continued to drop since that announcement. Markets are now concerned that austerity programs will hurt overall economic growth.

3.) Commodity prices need to rebound. An across the board drop in commodity prices indicates the markets think decreased demand is an issue going forward. An increase in commodity prices will indicate demand is picking up.

Keep your eye on number 2, because if the euro doesn’t stabilize the chances of 1 and 3 happening aren’t good.  And that brings us to the second part of the story.  Europe.  It is there our fate lies at the moment.  And it is a fragile thing:

If the trouble starts — and it remains an “if” — the trigger may well be obscure to the concerns of most Americans: a missed budget projection by the Spanish government, the failure of Greece to hit a deficit-reduction target, a drop in Ireland’s economic output.

But the knife-edge psychology currently governing global markets has put the future of the U.S. economic recovery in the hands of politicians in an assortment of European capitals. If one or more fail to make the expected progress on cutting budgets, restructuring economies or boosting growth, it could drain confidence in a broad and unsettling way. Credit markets worldwide could lock up and throw the global economy back into recession.

For the average American, that seemingly distant sequence of events could translate into another hit on the 401(k) plan, a lost factory shift if exports to Europe decline and another shock to the banking system that might make it harder to borrow.

“If what happened in Greece were to happen in a large country, it could fundamentally mark our times,” Angelos Pangratis, head of the European Union delegation to the United States, said Friday after a panel discussion on the crisis in Greece sponsored by the Greater Washington Board of Trade.

If you’re in the US that is not something you want to read. We’re talking, of course, of the possibility of a double dip recession with the second recession most likely more devastating than the first.

The writers of the Washington Post piece cited above don’t feel the “worst-case scenario” is a high probability noting that European countries have pledged hundreds of billions of dollars to fix the economic problems. And they repeat the assurance that the US economy “has been strengthening through the year” to include adding jobs and with higher consumer spending and better industrial output.

But, as FiveThirtyEight notes, that’s not at all what the leading economic indicators promise will continue. Manufacturer’s orders and supplier deliveries have dropped. Commodity prices have continued to slide (indicating demand has dropped) and building permits are way down. None of those promise that the economy is strengthening.

The Post goes on to paint Europe’s travail is at least temporary good news for the US. But I don’t see it – certainly not in the numbers Stewart cites. In fact I see it as more whistling past the grave yard. As they mention in their opening paragraphs, this all depends on a number of things going right among a group of European nations at financial risk for not doing what they should have been doing for years. My confidence in the ability of “the experts” to successfully negotiate the financial and economic mine field – given their history – is not at all as great as the Post’s. And, I’d further note, that while everyone is assuring everyone else that they have this crisis in hand, they’re winging it, having never done or had to do anything like this to the scale they’re now involved. The law of unintended consequences is sitting in waiting salivating at the possibilities this crisis presents.

Bottom line – keep your eye on the Euro and hope like hell the Europeans can pull off what they have to do to keep us out of a double-dip recession.

~McQ

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What would we do without activist entertainers?

I always love it when entertainers suddenly awaken and decide they must get involved in saving the planet.

This time it is Jeremy Irons.  He’s decided there are just too many people on our little blue globe.  Our lot’s numbers are “unsustainable”, although he’s pretty convinced some “big outbreak of something” will most likely happen because, you know, “the world always takes care of itself”.  Of course, because Mother Gaia is a living breathing thinking world.

What he wants to do is make a film (naturally) which will be like Al Gore’s “An Inconvenient Truth”.  A “documentary about sustainability and waste disposal in the vein of Michael Moore – but “not as silly”.  Of course.

Irons describes himself as “deeply socialist” and is also concerned about world hunger.  In a stirring and deeply touching (/sarc) call to action, Irons says on the website 1billionhungry.org:

“People around the world suffer hunger — 1 billion. Now that’s bad, worse than bad, that’s crazy! We’ve got to get mad. I want you to get mad. I want you to get up right now, stick your head out of the window and yell, ‘I’m mad as hell’.”

Original, edgy, a real difference maker.  Of course it remains to be seen if Irons understands that the reason 1 billion are hungry has little to do with resources and much to do with politics.

Irons announced his new endeavor from one of his 7 houses:

The ultimate solution, he says, is for us all to live less decadently — growing our own food and recycling instead of replacing goods: “People must drop their standard of living [so] the wealth can be spread about. There’s a long way to go.”

James Delingpole shakes his head at the usual hypocrisy:

And just as soon as you show us the way by flogging at least six of your houses, foregoing air travel, subsisting on berries, wild garlic and road kill, and dressing in polyester cast offs from your local charity shop, we’ll take you more seriously still.

Exactly.   Delingpole wonders:

Could it be that “sustainability” is a concept one only truly understands when one has grown so incredibly rich that one is able to shelter from the consequences of one’s eco-fanaticism in the seclusion and comfort of one’s many agreeable homes?

Apparently.  Delingpole points out that the UK’s new enviroment minister, Chris Huhne has that number of homes.  And we know that Al Gore, the Pince of Wales and Zac Goldsmith aren’t far behind.  And how knows how many Michael Moore has.

~McQ

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Quote of the Day – Iraq irony edition

It begins with a quote from President Obama’s West Point commencement speech:

Mr. Obama all but declared victory in Iraq, crediting the military but not Mr. Bush, who sent more troops in 2007. “A lesser Army might have seen its spirit broken,” Mr. Obama said. “But the American military is more resilient than that. Our troops adapted, they persisted, they partnered with coalition and Iraqi counterparts, and through their competence and creativity and courage, we are poised to end our combat mission in Iraq this summer.”

It ends with our quote of the day from one of my favorite milbloggers, Greyhawk of the Mudville Gazette:

Speaking for myself only, you’re welcome. Ignoring who – besides the troops – does or doesn’t get the credit, it absolutely was a bitch to fight an enemy overseas while a lot of sh*tbags in our own Congress kept saying they had won.

And, of course, one of the “s-bags” in question was the speaker at the West Point commencement.

~McQ

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Observations: The QandO Podcast for 23 May 10

In this podcast, Bruce, Michael, and Dale discuss Rand Paul, this week’s elections, and the stock market.

The direct link to the podcast can be found here.

Observations

The intro and outro music is Vena Cava by 50 Foot Wave, and is available for free download here.

As a reminder, if you are an iTunes user, don’t forget to subscribe to the QandO podcast, Observations, through iTunes. For those of you who don’t have iTunes, you can subscribe at Podcast Alley. And, of course, for you newsreader subscriber types, our podcast RSS Feed is here. For podcasts from 2005 to 2009, they can be accessed through the RSS Archive Feed.

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