Remember the 2010 State of the Union address when Pres. Obama took the unprecedented step of criticizing the Supreme Court while they were sitting in the audience as distinguished guests?
Do you think Obama would like to have that shot back now that the fate of ObamaCare is in the Justices’ hands?
OK, so anybody who wants to keep using fossil fuels, to drill for oil and gas in the U.S., and to buy gas for a couple of bucks per gallon is a member of the flat earth society, lacking the the President’s vision.
Why Obama wants to insult the vast majority of Americans is beyond me, but that’s his tactical choice.
So far, the GOP has simply thrown back softballs: Solyndra, the Volt and the many other alternative energy busts.
Given my lack of tact, if I were a Romney adviser, here’s the line I’d offer up to Mitt:
“President Obama and I both have pipe dreams … mine in the Keystone Pipeline bringing oil from Canada … his goes back to his college days, I guess.”
Two for the price of one.
Keeps focus on the money wasted and lack of results from the President’s alternative energy gambles … and dregs up some old stuff re: Obama’s drug use that got wiped under the carpet in 2008.
Not rumors… straight from the horse’s mouth.
Obama first told of his early drug use in his 1995 memoir, “Dreams from My Father: A Story of Race and Inheritance” … published audaciously just after he became president of the Harvard Law Review.
He wrote re: his personal experience:
“Pot had helped, and booze; maybe a little blow when you could afford it.”
Picture source: Coed Magazine,
“10 Most Influential Pot Smokers”
Hmmm.
I guess that I hadn’t thought of the full range of hardships inflicted by the bad economy …
In a TV interview, President Obama responded boldly re: rising gas prices:
“The only way to stabilize gas prices is to reduce our dependency on foreign oil … In the meantime, because I know people are hurting right now and it feels like a tax out of their paychecks, what we’re doing is looking at every single area that can affect gas prices … we’ve set up a task force.”
I assume it’ll be modeled after the Jeffrey Immelt-led Jobs Task Force.
That’ll let us all sleep a little easier, right?
Soon after taking office, President Barack Obama crowed that he’d cut the deficit in half by the end of his first term.
He made the pledge not as a candidate but as president.
It came in the East Room of the White House at the opening of his Fiscal Responsibility Summit on Feb. 23, 2009.
I want to be very clear: We cannot, and will not, sustain deficits like these without end.
Contrary to the prevailing wisdom in Washington these past few years, we cannot simply spend as we please and defer the consequences to the next budget, the next administration, or the next generation.
We are paying the price for these deficits right now.
In 2008 alone, we paid $250 billion in interest on our debt — one in every 10 taxpayer dollars. That is more than three times what we spent on education that year; more than seven times what we spent on VA health care.
So if we confront this crisis without also confronting the deficits that helped cause it, we risk sinking into another crisis down the road as our interest payments rise, our obligations come due, confidence in our economy erodes, and our children and our grandchildren are unable to pursue their dreams because they’re saddled with our debts.
And that’s why today I’m pledging to cut the deficit we inherited in half by the end of my first term in office.
Now, the President and his shills are hitting the talk shows asking for a pass on the pledge, saying that “nobody knew how deep the economic crisis was”.
Say, what?
Well, except for the Federal Reserve Board … as reported in their annual report … before Obama made the pledge.
Here’s the essence of the report:
The unemployment rate has risen to its highest level since the early 1990s, and other measures of labor market conditions—for example, the number of persons working part-time because full-time jobs are not available—have worsened noticeably.
The deteriorating job market, along with the sizable losses of equity and housing wealth and the tightening of credit conditions, has depressed consumer sentiment and spending; these factors have also contributed to the continued steep decline in housing activity.
In addition, businesses have instituted widespread cutbacks in capital spending in response to the weakening outlook for sales and production as well as the difficult credit environment.
In all, real gross domestic product (GDP) in the United States dropped at an annual rate of 3-3⁄4 percent in the fourth quarter; real GDP seems headed for another considerable decrease 2009.
Hmmm. Sounds like the Fed knew.
If you don’t like the Fed, see the Kiplinger Report “They Called It Right (Predictions for 2009)”.
Here’s a sampling:
ROBERT SHILLER, professor at Yale University: ” The present situation has many similarities to the Great Depression.”
PETER SCHIFF, president of Euro Pacific Capital: “”We’re going to be in a depressionary environment. Our economy will be a mess for years and years to come. ”
NOURIEL ROUBINI, chairman of RGE Monitor and professor at New York University: ” I expect that the recession will be very severe and that it won’t be over before the end of 2009.”
BOB RODRIGUEZ & TOM ATTEBERRY, chief executive officer and partner, respectively, First Pacific Advisors: “Projections of economic growth have been far too optimistic. This is a multiple-year problem.”
DAVID TICE, chief equity strategist for , Federated Investors: “This will be a longer-term decline — you’ll see fits and starts … it’s likely going to take four to five to ten years (to recover).
Maybe Obama’s crack economic team didn’t know, but it looks like way more than “nobody” knew.
Nice, balanced retrospective in the NY Post re: Team O’s stimulus and why it didn’t — in Joe Biden’s words — “drop kick” the economic recovery.
First, where did the money go?
Biggest chunk to tax cuts that were so diffused — averaging $10 per paycheck — that they were either overlooked by folks or not enough to neutralize the impact of crushing debt loads or employment uncertainty.
Next biggest chunk to bail out states’ entitlement programs — mostly Medicaid and unemployment benefits. Just kept things even, no economic boost.
Thirdly, to teacher retention. Forestalled layoffs, but only temporarily since cash-strapped localities eventually had cut-back when the Fed funds stopped coming and locals couldn’t afford.
Lastly, to the so-called shovel ready infrastructure projects. Many of those that could of mattered either weren’t really shovel ready or got caught up in government red tape — i.e. the approval & permitting process. So, spending went to silly or half-baked initiatives — e.g. turtle crossings and bullet trains.
Since the “A” issue has been front and center the past couple of days – given the flaps between Komen and Planned Parenthood, and Team O and the Catholic Church – I got curious about the numbers.
Results of the the most recent Gallup survey …
Last point probably explains why Team O dropped the gloves for a fight with the Catholic bishops …
The Feds reported 243,000 new jobs in January … driving the unemployment rate down to 8.3%
Clear evidence that we’re on a roll, right?
Not so fast.
First, numerous sources have pointed out that another 1.2 million people got discouraged and stopped looking for work. They’re no longer counted as unemployed.
Second, as it does every year, the government revised its statistical methodology for the January report. The BLS footnotes say “As a result, household survey data for January 2012 will not be directly comparable with that for December 2011 or earlier periods.”
Hmmm.
Morw specifically, even the NY Times asks: Is the number real ?
How many jobs did the American economy add in January?
The Labor Department estimated on Friday that the economy gained 243,000 jobs.
The department also estimated that the economy lost 2,689,000 jobs in the month
The difference in the two numbers is in seasonal adjustment.
The actual survey showed the big loss in jobs.
The seasonal adjustments produced the reported gain of 243,000 jobs.
A reason to doubt the number is that there has been a tendency in this cycle for the seasonal factors to overstate moves, in both directions.
If the seasonal adjustment was too large, then the gain should be smaller.
Double hmmm.
That’s why I like to track Gallup’s unemployment estimates. Over time, they’ve seemed reliable and — call me cynical — but, they’re less likely to be subject to political manipulation.
For openers, here’s what Gallup said prior to the government release:
The U.S. government’s January unemployment rate that it will report Friday morning will be based largely on mid-month conditions.
The mid-month reading normally provides a pretty good estimate of the government’s unadjusted unemployment rate for the month.
At mid-January, Gallup reported that its unemployment rate had declined to 8.3%, based on data collected through the 15th of the month.
OK, that squares with the Feds number.
But, importantly, Gallup also notes:
Gallup’s unemployment and underemployment measures show deterioration since mid-January.
While the unemployment rate of 8.6% for January is up only modestly from December, this overall increase subsumes the more negative trend of the most recent weeks.
In turn, this also seems consistent with Wednesday’s ADP report showing less job growth in January than in the prior month.
English translation: Expect February’s unemployment rate (reported first week of March) to bounce back up … unless there’s a flurry of new hiring in early February.
Here’s the data …
Ken’s Take:
Here’s what I said before, and I stand by it !
Pundits have been saying that Obama will be ok with a high unemployment rate in 2012 as long as the trajectory is in the right direction. That is, that unemployment is coming down.
Here’s my scenario: unemployment will creep back up and Obama will be facing a high unemployment rate that is rising.
That’s not good for the O-team.
Politically, Obama might have been better off if the rate had stayed closer to 9% for a while … he may be in the awkward position of having a high unemployment rate that’s going in the wrong direction.
It’ll be interesting …
During the SOTU address Pres. Obama warned colleges and universities that they risk losing federal funding if they do not keep tuition costs down.
Hmmm.
Loyal HomeFilers know that we rail often on the indefensibly high tuitions colleges are charging.
For example, see one of our all time favorite posts:
What do b-school profs and Lady Gaga have in common?
Many pundits are predicting that high-priced colleges will be the next bubble to burst. Students (or their parents, or their companies) have been paying an increasing amount of money to get a decreasing amount of relevant learning. That’s not a good formula.
Government subsidies, student loans and “full fare” foreign students keep pushing tuitions up to levels required to support lavish facilities, expansive athletic programs, outdated delivery methods (think classrooms vs. online), and light teaching loads for faculty journalists.
Let’s see if Obama follows through on his threat … and see if it has an impact.
I’m betting under on both counts.
Universities are hot beds of liberal thinking.
No way Obama puts them in his cross hairs.
One of Obama’s SOTU themes last night was jacked from the book Built to Last by Jerry Porras and Jim Collins.
I wonder if any of O’s speech writers have either read the book or, at least followed up on the companies cited in the book (list below).
I did, and guess what?
Built to Last has been roundly criticized because many of the companies it profiled have subsequently faltered.
According to FastCompany:
Within 10 years of the book’s publication, almost half of the visionary companies on the list have slipped dramatically in performance and reputation, and their vision currently seems more blurred than clairvoyant.
At least 7 of BTL’s original 18 companies have stumbled (8 if you’re cynical about HP)
Each has struggled, and all have faced serious questions about their leadership and strategy.
Odds are, none of them today would meet BTL’s criteria for visionary companies, which required that they be the premier player in their industry and be widely admired by people in the know.
Jim Collins – one of the authors – counters that “The book never promised that these companies would always be great, just that they were once great.”
That makes more sense. Obama isn’t saying that his America is going to become great (again) and stay great …. just that it once was great.
Now, that’s something to rally around….
* * * * *
Here’s Collins and Porras’ BTL List
… draw your own conclusions.
3M
American Express <= TARP
Boeing <= NLRB target <= a good thing (unless you’re Team O chasing them)
Citigroup <= TARP
Disney <= struggling since Cap Cities acquisition
Ford <= least bad U.S. car company
General Electric <= TARP
Hewlett Packard <= CEO turnover
IBM
Johnson & Johnson
Marriott
Merck
Motorola <= corporate break-up
Nordstrom
Philip Morris (now Altria)
Procter & Gamble
Sony <= lost its mojo
Wal-Mart <= evil empire
Irish bookies are laying odds on which clichés President Obama will drop first and say most often in tonite’s State of the Union address.
Why not turn it into a game …. like students do with boring profs.
Randomly post the most likely clichés to squares on 5 x 5 game cards.
First player to score a row, a column, a diagonal or the 4 corners with “he said it” marks wins the game.
Below are the official odds on what Obama will say first.
Note My “lock” prediction isn’t even on the list: “Let me be perfectly clear” … a couple of my other favorites are bolded.
Odds Cliché
8/1 We have more work to do
10/1 Health care reform
10/1 As I stand here today
12/1 Fundamental belief
12/1 God bless America
12/1 Crossroads of history
12/1 Defining moment
12/1 Make Washington work
14/1 Common purpose
16/1 Pursuit of happiness
16/1 Building a better America
16/1 Reduce the deficit
18/1 War on terror
18/1 It won’t be easy
18/1 Hungry for change
18/1 My civil liberties
20/1 Honor for me
20/1 I have a dream
20/1 Willing to listen to each other
20/1 Yes, we can
20/1 Don’t get me wrong
25/1 Hard to believe
25/1 I’m fired up
25/1 Withdraw our troops
25/1 There are better days ahead
25/1 Do-nothing Congress
25/1 We’ll have to make hard choices
25/1 We can be one people
25/1 A new direction
33/1 For far too long
33/1 Safe from harm
33/1 Jobs to the jobless
33/1 Reshapes our economy
40/1 Deepest gratitude
40/1 Greatness of our nation
40/1 Possibilities of this nation
40/1 Florida primary
50/1 Believe in what this country can be
50/1 Unity is the great need of the hour
50/1 In the face of despair, you believe there can be hope
50/1 We can work together to keep our country safe
50/1 Abiding faith
66/1 Brighter day will come
66/1 Publish tax returns
66/1 Washington has a long way to go
80/1 Overcome the adversity
80/1 Bloated federal government
100/1 Diversity of my heritage
100/1 Yes, we might
250/1 Life is like a box of chocolates
According to the NY Times …
A CNN poll released Friday found that 49 percent of Americans have a favorable view of President Obama and 49 percent an unfavorable view.
Hmmm.
For comparison, 43 percent of Americans have a favorable view of Mitt Romney and 42 percent an unfavorable view.
Hooray.
Big victory for the middle class.
President Obama got his 2-month payroll tax holiday.
So, 150 million folks get $1,000 in 2012 tax savings.
Oops.
The program is only for 2 months, so the committed tax savings are only $167.
Still better than nothing, right?
Not so fast
How is it being paid for?
Well, first, “paid for” is a misnomer … it’s being offset in the governments 10 year hypothetical budget.
Hypothetical because the Senate hasn’t passed a 2012 budget, let alone a 10-year budget.
OK, let’s pretend.
The 2-month payroll tax holiday is being offset (over 10 years) by an increase in mortgage fees,
Every new or refinancing loan going through Fannie Mae or Freddie Mac – that’s over 90% of all mortgages – get tagged with an added fee (20 basis points, .2 %)
According to NPR, the added fee works out to about $17 per month for an average mortgage of about $200,000.
So, let’s work the nums.
“Average” folks who don’t have or don’t get or don’t refinance a mortgage walk away with $167 free and clear.
That’s a good deal.
“Average” folks who initiate a loan or refinance through Fannie or Freddie get hit with $17 in added monthly fees as long as they hold a mortgage … assuming that the added fee never goes away – a pretty safe bet.
Let’s pretend the average guy stays mortgaged for 30 years.
What’s the financial impact?
Well, the nominal cost of the mortgage adder is over $6,000.
But, to be fair, let’s discount it back to a present value.
For 30 years, the mortgage cost adder has an PV of over $3,100.
So, for the average guy with a new or refinanced mortgage, the payroll tax holiday will COST him a NPV loss of almost $3,000.
Still wonder why the economy is in trouble?
Someone just said in a press conference that the proposed 2-month 2% payroll tax holiday would save an average family earning $50,000 per year about $1,000.
Hmmm. Annualizing a 2 month program. Clever arithmetic.
Perhaps, sensing that’s misleading, he went on to clarify: that works out to about $40 per week.
Hmmm.
Let’s do the math: $40 times 52 weeks = #2,080 … that can’t be right.
$1,000 divided by 52 weeks is less than $20.
Huh?
I hate to get petty, but if the “someone” had been Rick Perry, the gaffe woulda made headlines.
If it had been Joe Biden, everybody would have just shook their heads and said “again?”.
But, it was Barack Obama, so it’ll get ignored by the press … but not by the Homa Files.
I’ve said before: I have run into folks who voted for Obama in 2008 who say they won’t vote for him in 2012, but haven’t run into anybody who didn’t vote for him in 2008 who say they will in 2012.
Data seems to confirm my random anecdotal evidence …
From the latest Allstate/National Journal Heartland Monitor poll:
Not only is Pres. Obama’s overall approval rating lagging, but he’s lost as much (or even more) ground among groups that favored him in 2008 as among those who resisted him last time.
Overall, Obama has slipped from 52.8 percent of the vote in 2008 to 44 percent approval in the new survey with 49 percent disapproving.
As the chart below shows, Obama has declined not only in the groups that were always dubious of him, but also with several that enthusiastically joined his winning 2008 majority.
The groups that have proven most resistant to this trend are Hispanics (where Obama’s latest approval rating has slipped just three percentage points from his 2008 vote share); seniors (where he’s actually running slightly ahead) and families earning at least $100,000 annually (where he’s also fallen just three percentage points.)
Let’s set the stage: The President is caught between a rock (his unions) and a hard place (his enviromentalist supporters).
So, he punts the XL pipeline decision until after the 2012 election … telling both sides not to worry that he’ll take their side when nut-cutting time comes.
Everybody with an IQ over 50 sees the move as pure politics, but Obama’s boxed.
To the rescue: the GOP … by demanding that XL be part of the payroll tax cut extension legislation.
Of course, Obama plays the Brer Rabbit card and threatens a veto.
So, the GOP hardens its position … XL has got to be part of the package.
It will be.
Why?
Because O gets off the hook.
Even he knows the pipeline is a good idea – jobs, energy independence, etc.
He’d like to sign it, but can’t because of the pressure from the environmentalists.
He can’t, unless he’s painted into a corner, say, by the GOP demanding it to pass the payroll tax cut.
So, the bill will pass with XL in it, the President will sign it, and he’ll tell the environmentalists that he had no choice.
You heard it here in the HomaFiles …
During the 2008 presidential campaign, MSNBC’s Chris Matthews made headlines with his creepy comment “Obama sends a thrill up my leg”.
I have to tell you, you know, it’s part of reporting this case, this election, the feeling most people get when they hear Barack Obama’s speech.
My, I felt this thrill going up my leg. I mean, I don’t have that too often.
Well, it seems that the thrill is gone from Matthews leg.
Now, he’s criticizing Obama for being out-of-touch, ineffective, and shirking leadership.
Oh my. How things have changed in 3 years.
As a friend of mine observed:
I’ve talked to plenty of people who voted for Obama in 2008 who say they will not vote for him again.
I haven’t run into a single person who did not vote for Obama who say that they will vote for him in 2012
That says a lot, doesn’t it.
Back then, we were saying:
The bottom line: businesses will resist government policies passive aggressively.
Fewer jobs will get added back than history would suggest, and those that get added back will materialize later than past patterns. Businesses will add jobs as a last resort rather than trying to build capacity ahead of the economic growth curve.
Why should companies increase their costs and risks any more than is absolutely necessary ?
Companies will continue to off-shore jobs, but will be more clever and clandestine about it, e.g. by vertically disintegrating and simply buying goods and services from 3rd parties.
Given the Administration’s anti-corporate rhetoric, actions, and proposed game-changing rules, I doubt that many CEOs will be taking on added costs and risks to boost the administration.
More likely, they will let unemployment continue to creep up, and will slow roll the process of rehiring.
Corporate chieftains will sit back and watch the President squirm and spin his “saved you from a catastrophe” riff .
As Rev. Wright would say “the chickens will have come home to roost”.
Passively aggressive resistance at its very best.
There’s more in the original post.
Obama’s jobs plan has a smorgasbord of hiring incentives … all of which are 1-time credits (e.g. for hiring veterans) or 1-year tax incentives (e.g. eliminating half of employers’ FICA match).
Corp execs’ statements that they don’t hire based on 1-year incentives keep falling on deaf ears, and the Administration keeps serving them up.
Let’s look at a specific and do some simple arithmetic.
According to the Administration’s fact sheet on the Jobs Bill, the lead provision of the bill (about 15% of the $450 billion cost) is a payroll tax cut for businesses.
The President’s plan will extend the payroll tax cut to firms by cutting in half their payroll tax on the first $5 million in payroll. Next year, instead of paying 6.2 percent on their payroll expenses, firms would pay only 3.1 percent.
For example, a firm with 50 workers earning an average of $50,000 a year – for a total payroll of $2.5 million – would receive a payroll tax cut of 3.1% of its total payroll, or about $80,000 – $1,500 per average employee.
By intent, the cut doesn’t do much for big businesses. The maximum benefit that could go to a big company is only $155,000 ($5 million times 3.1%). That’s rounding rounding error – equivalent to maybe 2 “free” hires for 1 year.
Hardly a game changer.
So let’s look at a small business.
At the margin, continuing the fact sheet’s example, a new average employee’s base salary cost is $50,000. Fringes (e.g. health insurance) add on another $10,000. Payroll taxes (pre-credits) adds on another $3,000 … bringing the total to $63,000.
But, companies don’t hire people for 1-year. Once they’re added to the payroll, they stay there for awhile.
How long?
Well, the BLS says that the median tenure of employees is about 4.5 years … with almost 1/3 employees having been on payrolls for more than 10 years.
Let’s take the low number, 4.5 years.
When a company hires an employee, it is implicitly making a commitment of at least $285,000 ($63,000 times 4.5 years).
The Obama plan offsets the cost with $1,500 … a whopping 1/2 of 1%.
Does anybody really believe that will stimulate companies to hire in uncertain times?
I’m betting the under on this one.
Some political commentary from Obama-supporter Chris Rock.
Just can’t make this stuff up …
Chris Rock — comedian and actor – says that he’s “fine with the president,” because he understands that the president has to keep his most aggressive policies on the back burner until he earns a second term.
More specifically …
“There’s a f——— art to the first term because you’re always running for a second term the whole time. You can’t really do your gangsta sh— until your second term.”.
“ I want more action. But I understand that he’s trying not to piss off a lot of people. But I believe wholeheartedly if he’s back in, he’s going to do some gangsta sh—.”
Can’t you just imagine the bumper sticker?
Couple of wars, economy is tanking … let’s call it a day.
Reported by the NY Post (so it has to be true):
The president’s workdays are said to end early, often as early as 4 p.m.
He usually has dinner in the family residence with his wife and daughters, then retreats to a private office.
One person said he takes a stack of briefing books.
Others aren’t sure what he does.
True or not, most CEO’s don’t relish this kind of buzz …
Based on a new Gallup poll, 69% say that Bush gets at least some of the blame for the bad economy … that’s down 10 points from a couple of years ago … as memories fade.
And, for the first time, a majority of Americans (53%) thinks that President Obama has some culpability for the current condition of the economy. Only 25% of Dems think so, but 69% of independents give Obama some blame … apparently, blaming Bush, tsunamis, Arab Springs, etc. is running out of steam.
Headline: Pres. Obama hires, hangs with and pays off folks with “little or no credibility among grassroots businesspeople”
Interesting read with some notable snippets from Forbe’s: How The President Helped Kill Progressivism, Capitalism And Moderation
Obama’s progressivism is shaped by his fellow academics, who have enjoyed unprecedented influence in this administration, as well as closely aligned classes such as affluent greens, urban land interests, venture capitalists and the mainstream media.
Obama’s stimulus … largely missed the recession’s biggest victims: minorities, the working class and the young. The president instead chose to service the needs of organized constituencies such as public sector unions, large research universities and “green capitalists.”
Obama … has surrounded himself not with entrepreneurs but consummate crony capitalists — chief of staff Bill Daley (scion of the Chicago machine family), General Electric‘s Jeffrey Immelt and proposed Commerce Chief John Bryson, who has spent much time as a master manipulator for a large regulated utility.
These figures have little or no credibility among grassroots businesspeople. They are seen as being more adept at working the system than succeeding in the free market.
Ken’s Take: There won’t be a significant economic turnaround until business is on board. Period.
In his speech, the President’s teleprompter hammered that millionaires and billionaires have lower tax rates than teacher’s making $50,000.
Hmm.
Let’s think about that.
A high earner who makes all of his money from dividends and capital gains pays 15%. Maybe a tad less after deductions – but the deductions (charity, state & local taxes, mortgages) should be rounding error. So, let’s call it 15%
What about a teacher earning $50,000 – all from his teacher’s pay?
Well, let’s assume that he’s married with 2 kids.
What does he pay in taxes?
Answer: 5.5%.
A married person filing jointly gets a standard deduction of $11,400
A married taxpayer with 2 kids gets $14,600 in exemptions (4 times $3,650)
So, the taxpayers taxable income is $24,000 ($50,000 less $11,400 less $14,600)
Taxes on $24,000 are $2,762.50 ($1,675 plus 15% of the taxable income over $16,750)
That’s an effective rate of 5.5%
You see, the standard deduction and exemptions are what analysts call statistically significant.
Come on Mr. President … at least get the numbers right !
* * * * *
Relevant Tax Facts
http://www.irs.gov/pub/irs-pdf/i1040tt.pdf
Exemptions directly reduce your taxable income. You are allowed a personal exemption for yourself, your spouse if married filing jointly, and each person you can claim as a dependent. For 2010, the exemption amount is $3,650.
The Homa Files 