Questions and Observations

Free Markets, Free People

CNN Poll: 67% Unhappy With How Federal Government Works

That isn’t particularly surprising since we recently cited a Gallup poll saying the number was 75%.  Suffice it to say the vast majority of the country doesn’t like how the federal government is doing its job.

What’s even more fascinating though is how CNN chooses to report that:

But the ABC News/Washington Post survey, released Thursday morning, suggests a partisan divide, with 8 out of ten conservative Republicans viewing how the federal government works in a negative way, but nearly 6 out of ten liberal Democrats saying they were enthusiastic or satisfied.

The 67 percent dissatisfaction level is the highest in ABC News/Washington post polling since it peaked at 70 percent in March 1996, in the months after the a federal government shutdown led by Republicans.

So which political party gets blamed for this dissatisfaction? A recent CNN/Opinion Research Corporation poll indicated that nearly half the public said they were angry at both political parties, with 11 percent angry only at the Republicans and 9 percent angry only at the Democrats.

So assuming, given the first paragraph, that “conservative Republicans” and “liberal Democrats” cancel each other out, what is the source of all this dissatisfaction? Well never mentioned are the independents. Obviously this number is being driven primarily by the dissatisfaction of independents who, as any political neophyte knows, are the key to elections.

And I’m sure there are a number of politicians out there who will misinterpret the part which says only “11 percent angry only at the Republicans and 9 percent angry only at the Democrats.” That’s not good news for either party – they don’t like any of you. See again “Tea Party”. Understand they are only the tip of the iceberg the good ship USS Congress is blithely approaching at full speed.

For the CNN poll, these are the highest dissatisfaction numbers since 1996 when they peaked at 70%.

This is another in a long line of polls which seems to be pointing to a very interesting midterm election season. It’s not going to be exclusively a “throw the Democrats out”. I think we’re going to see more of a “throw the incumbents” out. And I think the driving issue for most of the public – you know the teabagging, unwashed, clueless electorate – is fiscal sanity. They just aren’t seeing it, and they want it and they want it now.



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Quote Of The Day – Joe Biden/Iraq Edition

Wow.  This just takes, well, you name it.  From Katherine Jean Lopez at The Corner:

Joe Biden told Larry King last night: “I am very optimistic about — about Iraq. I mean, this could be one of the great achievements of this administration.”

That is just freakin’ breathtaking in its audacity. More here.

I guess Iraq wasn’t Bush’s fault. Instead it’s Obama’s triumph?




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The “Jobs” Bill Sham

Yes, another in a long line of spending bills which has a purported purpose it won’t accomplish.  What it will accomplish is an increase in the debt.

None other than Nancy Pelosi is troubled by the fact that it appears the proposed “jobs” bill being rushed through Congress doesn’t create, uh, jobs.

The White House session with congressional leaders was supposed to be a step toward bipartisanship, with a focus on jobs. But Pelosi made it clear that there’s disagreement, even among Democrats.

White House economic advisers Christina Romer and Larry Summers defended the administration’s proposal to give employers a $5,000 credit for each new worker they hire as well as help with Social Security taxes.

Pelosi countered that no one she’s consulted believes that the plan will actually lead to the creation of new jobs, sources said.

“She questioned the efficacy of it,” one Democratic aide said.

For once, Pelosi is right – any jobs created will be at the margins. In fact, the centerpiece of the “jobs” bill is – wait for it – and extension of unemployment benefits.

And, of course, you remember the big “we’re concerned about the deficit” announcement not long ago where Congressional Democrats again said they were instituting PAYGO (a means of forcing Congress to pay for new spending by cutting the budget elsewhere or raising taxes) as a means of controlling it? Yeah, except for this boondoggle. Here’s from the last page of the draft bill:

(a) IN GENERAL.–One-half of the amounts in each of titles V and VI are designated as an emergency requirement pursuant to section 4(g) of the Statutory Pay-As-You-Go Act of 2010, and designated as an emergency requirement pursuant to section 403(a) of S. Con. Res. 13 (111th Congress), the concurrent resolution on the budget for fiscal year 2010.

In case you’re wondering what titles V and VI are, Jamie Dupree fills us in:

Title V of the jobs bill deals with expiring tax credits and tax breaks known as “tax extenders” – which Congress constantly renews every year or two, always resisting talk of making them permanent.

Those provisions are said to be worth about $33 billion, so one half of that would go to the deficit.

Title VI of the draft bill centers around extended jobless benefits and extra health (COBRA) provisions for the unemployed. That’s another big chunk of money.

The estimated total for the bill is $104 billion with little if anything in it which will actually create jobs.



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Musings, Rants and Links over the 18th Fairway: February Housing Edition

On the heels of last weeks delightfully mixed bag of employment data (job creation looks like it may be out of reverse and into neutral) we get some new housing data. There the signals are more disquieting, if expected (at least by me.) The housing market may now be heading back down.

The interesting aspect of this is that so many people see this as unlikely. So let us list some reasons why this is a real risk, if probably not as rapid a fall as we saw previously.

  • Prices are still above a long term stable level. This could be taken care of by stagnating prices and inflation, but there is little inflation right now.
  • The price to rent ratio is out of whack, and rents are still falling, in fact, accelerating. Little wonder, since there is an 11% vacancy rate.

Source: Gary Shilling

  • There are 231,000 newly built housing units sitting vacant.
  • There are 3.29 million vacant homes for sale.
  • Then there is the shadow inventory of homes that are off the market for various reasons (such as foreclosed homes banks are unwilling to sell yet to avoid realizing losses.)
  • Defaults are accelerating, with the largest source of pain now prime loans. As I have maintained for a long time this is not, and never has been, a subprime problem. Subprime was just what collapsed first being the weakest link in the housing market.

Source: Gary Shilling

  • That acceleration is unlikely to slow any time soon as not only are workers still losing jobs and few new potential owners getting jobs, but the length of unemployment is unprecedented in the post war era. The longer a worker is unemployed, the more likely they are to default.

Source: Gary Shilling

  • Lending is still tight for many mortgage seekers.
  • We are forming households at a reduced rate, thus lessening demand for new homes.

Source: Gary Shilling

  • More than 20% of homeowners are currently underwater. Nothing correlates more closely with default rates than negative equity.
  • Worst of all, we need to revisit an old topic of mine that is no longer a longer term risk, but right around the corner. The likely huge wave of defaults represented by Alt-A and Option Arm Loans about to reset. Defaults have followed with a lag each wave of resets, and the largest wave, from the era with the worst underwriting is about to hit. Notice, subprime is receding. With the system as fragile as it is now, what will this wave bring on?

I always am nervous about calling anything a prediction, but further housing deterioration is a very grave possibility.

Needless to say, this has led to further problems at Fannie, Freddie with more to come. Not that you should be concerned about that, the mission has changed. On their way to probably 400 billion in losses (I remember when I was an alarmist claiming that the losses would be far more than the 20-30 million the government was claiming, probably 200 billion. It turns out I was a cockeyed optimist) the government has officially eliminated any limit on their exposure. Why? It seems to be so that they can take losses!

Freddie’s federal overseers nevertheless have instructed Mr. Haldeman to focus on something that isn’t likely to make the bleak balance sheet look any better: carrying out the Obama administration plan to allow defaulted borrowers to hang onto their homes.

On a recent afternoon, employees at Freddie’s headquarters here peppered Mr. Haldeman with concerns about the company’s future. He responded that they were “fortunate” to have such a clear mission—the government’s foreclosure-prevention drive. “We’re doing what’s best for the country,” he told them.

Then there is the poor FHA:

FT Alphaville is certainly in the skeptical camp referred to by Ms Burns, and we were not reassured when the housing agency released its December monthly report on Tuesday.

According to the report, the default rate in the FHA’s single-family portfolio hit 9.12 per cent in the fourth quarter of 2009, compared with 6.82 per cent in the same period a year prior.

In absolute terms, that means the number single-family mortgages insured by the FHA and in default reached 531,671 in the fourth quarter of 2009. That’s a 66 per cent increase versus the same period in 2008.

The agency is being hit hardest by the 2007 and 2008 mortgage vintages; the performance of these loans is so dismal the FHA expects to have to pay claims on at least one out of every four loans made in those years.

Cross Posted at: The View from the Bluff

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The War Against The Filibuster (Update)

Scott Brown wins in Massachusetts and already those rowdy Republicans are filibustering.  Now that they have that 41st vote, by gosh they are committed to saying no to everything, to include a “routine” nomination of some poor inconsequential slob (lead counsel for the SEIU) to a nothing job (National Labor Relations Board) where his power is limited (has indicated he’d find a way to implement “card check” without Congressional approval).

That’s what you’d believe if you listened to the left today. Craig (let’s unilaterally expand the bureaucratic powers of the NLRB) Becker’s nomination didn’t garner the 60 votes necessary to pass and thus it’s the Republicans fault. The vote?

52 -33.

But wait, you say, that’s only 85. Aren’t there 100 Senators? Well yes. But 15 didn’t vote.

Really? And now many of those were Republican?

I’m glad you asked. 10 were Republican.

So, obviously then 5 were Democrats.

Well 4 Democrats and a Socialist Independent. And had those 5 voted “yea”, the Democrats would have had 57.

Uh huh. So were all those who voted “nay” Republicans?

Well, no. 2 were Democrats.

So let me get this straight – if every Democrat and “Independent” had voted “yea” yesterday, they’d have had 59 votes, correct?


But they didn’t. Two Democrats voted “nay”.


And 31 Republicans voted “nay”.


So with 10 Republicans not voting, how are we sure the Republicans “filibustered” this vote? Were they just assumed to be a nay vote? And isn’t it true that even if the Democrats had retained their 60 vote filibuster proof majority it appears only 58 would have voted “yea” on this nomination?

Uh, yes.

Just sayin’.

UPDATE: The Hill identifies what happened yesterday for what it really was – the result of a “hold”:

On Tuesday, Republicans successfully blocked the nomination of Craig Becker to the National Labor Relations Board by using a hold, which is similar to a filibuster in that it requires that 60 senators vote to break it.

Remember, it’s “like a filibuster”, but not a filibuster.  Regardless note who is on the blame line.  However, the same argument applies. Even with 60 votes it appears the Dems would have only been able to muster 58.  As a commenter said, it was a bi-partisan rejection.

In another development, it appears the White House plans on using the filibuster as a campaign issue.  That whine is sure to garner tons of sympathy and votes.  Especially among the majority who think the country is headed in the wrong direction and the 75% who are angry at government.

Lastly, John Cornyn makes the appropriate points about the filibuster on of all places, Twitter:

Cornyn: RT @thenote: re: filibuster. Bipartisan support for protecting minority rights. What goes around comes around.

Indeed (and Republicans will surely see it come around again to the benefit of Democrats – we call that gridlock and we find it to be good). And good luck trying to get it changed anytime soon – to do so would take a 2/3rds vote (67).



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What Bi-Partisanship Really Means

Especially in cases like this. Mark Knoller nails it:

When a sitting president calls for bipartisanship by the opposition – he really means surrender. And if they block his proposals, its “obstinacy” and not political views they hold as strongly as he holds his.

Bingo. Spot on. So why, again, are the Republicans agreeing to this televised “bi-partisan” health care summit?

“At this late date, it is hard to see how bipartisanship is going to occur,” said Ron Pollack, the executive director of the healthcare reform activism group Families USA. “Quite frankly, I don’t understand how this dialogue is going to move the process forward other than by demonstrating that the opposition only cares to derail reform.”

Liberals see the summit as a chance for Obama to be seen responding directly to Republican critiques and for him to critique their ideas. “It isn’t going to change the prospects of passing reform,” said Richard Kirsh, national campaign manager of Healthcare for America Now, a union-affiliated activism organization. “It’ll be one more chance for people maybe to understand that Republicans have no ideas to actually solve the healthcare crisis.”

That last line is it’s purpose and, if it is anything like the performance at the Republican retreat, that will be the outcome. With the president saying he won’t reset the process or trash the present version of the bill, it should be obvious that this isn’t really about bi-partisanship or any desire to include the GOP or its ideas. It is a plan to embarrass them publicly and gain political points.

House Republicans are fresh from an encounter with the president at their retreat in Baltimore last month, where he garnered rave reviews for his performance taking questions from GOP lawmakers on live television.

“It may be that the president came off looking pretty good during the Republican retreat and maybe they think there is a political gain to be had from this. My side needs to plan very carefully for this,” said Rep. Michael Burgess (R-Texas). “It’s a press event, not a policy event.”

Of course it is. So again, why has the GOP agreed to participate?

And, of course, the irony is that a process which has been entirely closed to the public, after a campaign promise of transparency, is now suddenly thrown open to the cameras? Yeah, no reason to be suspicious about that, is there?

The Republicans: Oz’s scarecrow of politics.



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Quote Of The Day – Debt Edition

Has anyone ever considered the fact that so much debt and borrowing is a national security problem?

“From 1789 through 2008, the U.S. government borrowed a total of $5.8 trillion. In 2009, the federal budget deficit exceeded $1.4 trillion. The administration now expects the 2010 deficit to break that record, topping $1.6 trillion. And in 2011, it would only fall to about $1.3 trillion. Thus, in just three years, the debt will have jumped an astonishing $4.2 trillion.” – James Capretta, a Fellow at the Ethics and Public Policy Center

Those to whom we own money – especially as much as we do – hold some pretty powerful leverage. The Chinese military has been stomping around all week urging their government to use it. They want China to sell some US bonds to deliver a little “economic punch” to get our attention, apparently.

“Bush made me do it” won’t work when piling up this much debt.  The GOP’s ready-made economic and national security issue is found within the quote.  That assumes they don’t just placidly go along with the mammoth increase in the debt.  And that’s never a safe assumption.



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Stimulus Watch: Green Jobs Created Overseas

I’m sure the politicians who wrote, didn’t read and passed the $787 “Stimulus” bill would tell you they never intended for your hard earned tax dollars to “stimulate” foreign manufacturers. But in the field of wind energy, that’s precisely what has happened.

Nearly $2 billion in money from the American Recovery and Reinvestment Act has been spent on wind power, funding the creation of enough new wind farms to power 2.4 million homes over the past year. But the study found that nearly 80 percent of that money has gone to foreign manufacturers of wind turbines.

“Most of the jobs are going overseas,” said Russ Choma at the Investigative Reporting Workshop. He analyzed which foreign firms had accepted the most stimulus money. “According to our estimates, about 6,000 jobs have been created overseas, and maybe a couple hundred have been created in the U.S.”

In fact, the American Wind Energy Association has reported a drop in U.S. wind manufacturing jobs last year. Again, our central planners have screwed up. And what do they have to say? Well let’s hear from one of the more vocal ones who usually never misses a chance to tell everyone how well he does his job:

Sen. Chuck Schumer, D-N.Y., called the flow of money to foreign companies an outrage, because the stimulus, he said, was intended to create jobs inside the United States.

“This is one of those stories in Washington that when you tell people five miles outside the Beltway, or anywhere else in America, they cannot believe it,” Schumer told ABC News, “It makes people lose faith in government, and it frankly infuriates me.”

Yeah – like this is the first time the results of actions by Schumer and his colleagues has caused people to “lose faith” in government. Seen the polls lately Chuckie?

Meanwhile the administration is engaged in pure and unadulterated lying about the subject:

Matt Rogers, the senior adviser to the Secretary of Energy for the Recovery Act, denied there was a problem.

“The recovery act is creating jobs in the U.S. for American workers,” said Rogers, “That is what the recovery act is about, that is what it is doing. Every dollar from the recovery act is going to create jobs for the American workers here in the U.S.”

Really Mr. Rogers? Then explain this:

Iberdrola, one of the largest operators of renewable energy worldwide, is based in Spain and has received the most U.S. stimulus dollars — $577 million. It buys some of its turbines from another Spanish manufacturer, Gamesa, which has a U.S. connection. Gamesa has two facilities to manufacture turbine blades in Pennsylvania, but the company said the market forced it to temporarily lay off nearly 100 workers.

Half a billion dollars plus to a foreign manufacturer and the net result is 100 US workers end up being layed off.

Your tax dollars at work, spent by an inept and out-of-touch Congress and administered by a clueless administration who will tell you with a straight face that they’re “creating and saving” jobs when the facts say otherwise. The same administration which is now threatening increased taxes for US companies with overseas operations is handing out borrowed money in the billions to wholly owned foreign corporations.

Now, with this new “jobs bill” they’re going to want more money (anywhere from $85 to $150 billion) when only a 1/3 of the previous “stimulus” has actually been spent, and, as indicated above, not very well. Naturally, the GOP is making noises about supporting the latest effort.

And they wonder why there are Tea Parties.



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Quote Of The Day

The QOTD for today actually comes to us from a NY Times editorial in 2005 which clearly states their understanding of the job of an opposition party:

Mr. Bush has reacted by railing against Democrats for obstruction — as if Democrats are duty-bound to breathe life into his agenda and, even sillier, as if opposing a plan that the people do not want is an illegitimate tactic for an opposition party.

Why I believe that is exactly the point the right is now arguing.  As witnessed by the editorial, the Democrats, lefty blogs and much of the media thought it was fair play in 2005.  Take heed, Republicans and don’t end up breathing life into a corpse.  The Democrats didn’t apologize for killing Social Security reform.  And it obviously didn’t hurt them electorally.

Question: did killing SS reform in 2005 make America “ungovernable?”

More importantly, did that mean the NY Times wanted the Bush agenda to “fail”?

Heh … Archives are a bitch, aren’t they?



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Destroying The “Ungovernable” Canard

Jay Cost at the Real Clear Politics blog takes on the emerging liberal canard about America suddenly becoming “ungovernable”:

Recently, some analysts have suggested that the lack of major policy breakthroughs in the last year is due to the fact that America has become ungovernable. Ezra Klein argued that it was time to reform the filibuster because the government cannot function with it intact anymore. Tom Friedman suggested that America’s “political instability” was making people abroad nervous. And Michael Cohen of Newsweek blamed “obstructionist Republicans,” “spineless Democrats,” and an “incoherent public” for the problem.

Nonsense. America is not ungovernable. Her President has simply not been up to the job.

Cost goes on to lay out, in some pretty good detail why he claims Obama hasn’t been up to the job. And I think he does a pretty thorough job. Be sure to read it all.

He also mentions something in there that I think is lost on the left and sometimes the right. While for many of us, we’ve seen government grow well beyond what we find acceptable or prudent, we actually could be worse off. And one of the reasons we’re not is the inherent design of the system of government we have. The same design many on the left now find frustrating and obstructive.

Let’s acknowledge that governing the United States of America is an extremely difficult task. Intentionally so. When designing our system, the Founders were faced with a dilemma. How to empower a vigorous government without endangering liberty or true republicanism? On the one hand, George III’s government was effective at satisfying the will of the sovereign, but that will had become tyrannical. On the other hand, the Articles of Confederation acknowledged the rights of the states, but so much so that the federal government was incapable of solving basic problems.

The solution the country ultimately settled on had five important features: checks and balances so that the branches would police one another; a large republic so that majority sentiment was fleeting and not intensely felt; a Senate where the states would be equal; enumerated congressional powers to limit the scope of governmental authority; and the Bill of Rights to offer extra protection against the government.

The end result was a government that is powerful, but not infinitely so. Additionally, it is schizophrenic. It can do great things when it is of a single mind – but quite often it is not of one mind. So, to govern, our leaders need to build a broad consensus. When there is no such consensus, the most likely outcome is that the government will do nothing.

The President’s two major initiatives – cap-and-trade and health care – have failed because there was not a broad consensus to enact them. Our system is heavily biased against such proposals. That’s a good thing.

So, as Cost points out, governing America is hard. But that’s a feature not a bug. It is intentionally hard because within that system is a means for the minority to be heard. That’s a critical feature. Because of that feature, the majority isn’t able to ram through legislation that isn’t acceptable to a broad base of the voting constituency. Health care reform and cap-and-trade represent legislation that has been found wanting in that regard. So the left, who used it like a Stradivarius when they were in the minority, now want that check eliminated in the Senate (kill the filibuster) and pine for the good old days of elite rule when, they claim, ramming through major legislation was so much easier.

No real surprise there.

Which brings me to Richard Fernandez’s take on this subject. He agrees with 99% of what Cost says, but says there is 1% where he’d differ:

The Left doesn’t want to govern, it wants to rule given the chance. It is as always willing to leave its own Big Tent behind at the decisive moment. The continual calls from the Democrat Left for Obama to ‘grow a spine’ are really coded calls to say that the moment is now; that the President must ‘’seize the day, seize the hour”. It’s not as Cost imagines, a call to compromise. It’s a call to say that the time for compromise is over. They can drop the mask; they can hoist the Jolly Roger.

I think Fernandez is right. Remember “I won” soon after Obama’s assumption of power? That bit of gloating was a moment the mask dropped.

The left would much rather rule than govern. It is certainly easier. And it tends to agree more with their authoritarian bent.

Governing is a messy and hard business in which they must listen and react to constituents. It means they actually are servants to the public. On the other hand, ruling means the elite choose what the constituency should live with since it is believed by them that the elite know best what that should be. Those they represent exist only to justify the presence of their rulers. The only difference between our left wing and that which founded the USSR is ours haven’t ever had the chance to effect the change those in Soviet Russia did. To this point, our system has mostly prevented it. But redistribution of income, more government intrusiveness and more government control are certainly the obvious desired results of most of the left’s agenda.

And, much to the frustration of the left, the system is preventing it again (with the stipulation that the GOP doesn’t find a way to cave and pass the unpopular bills cited above).

I’m not sure what Barack Obama thought he’d be able to do in terms of “ruling” instead of “governing”, but I’m sure that those who supported his “hope and change” agenda weren’t looking for a ruler. However it is clear, per Cost’s article, they’ve not gotten someone who can govern either (back to the leadership problem again). And, somewhat surprisingly, Obama doesn’t seem to understand the situation he’s put himself in as he doubles down on the leftist agenda he’s allowed liberal Congressional Democrats to craft. He, like so many deluded politicians, is convinced the problem with lack of popular support for the agenda is to be found with the message’s delivery, not with the message itself.

Cost concludes with an answer that I think fairly well destroys the “ungovernable” canard:

This remains a divided country, which creates complications in a system such as ours. The President should have recognized this, and governed with a view to building a broad coalition. But he has not.

America is not ungovernable. Barack Obama has so far failed to govern it.

Here’s to further frustration to the left and their agenda by the “ungovernable” among us.



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