It should bother good citizens when those who are put up as our brightest leaders don’t “get” the lessons of history. Glenn Beck dismantles Colin Powell’s made up on the fly political analysis in the following video. I served under General Powell so I have followed his career since 1989. Unfortunately he has had too many moments like the following.
Recovery: After nearly all the stimulus money has been spent, the Congressional Budget Office now admits it cost more than advertised, did less to boost growth and will hurt the economy in the long run.
In its latest quarterly report on the economic effects of the Obama stimulus, the CBO sharply lowered its “worst case” scenario while trimming many of its upper-bound estimates for stimulus-fueled growth and employment.
The new report finds, for example, that the stimulus may have added as little as 0.7% to GDP growth in 2010 — when spending was at its peak — and created as few as 700,000 new jobs.
Both are down significantly from the CBO’s previous worst-case scenario.
The report also lowered the best-case estimate for added growth in 2010 to 4.1% from 4.2%.
In addition, the CBO says the extra infrastructure money didn’t boost growth as much as it previously claimed, because states reacted by spending less out of their own budgets on highways.
So in other words, the CBO now says it’s possible that the stimulus had virtually no meaningful effect on growth and employment despite its massive price tag.
All this comes after the CBO increased that price tag to $825 billion from its initial $787 billion — a 5% hike.
Adding insult to injury, the new report also says the stimulus will hurt economic growth in the long run because of “the resulting increase in government debt.” Each dollar of additional debt, it reports, “crowds out about a third of a dollar’s worth of private domestic capital.”
In our view, even the CBO’s downgraded estimates are too high, because they’re still based entirely on Keynesian economic models that simply assume extra government spending results in added economic growth.
You don’t have to look very hard to see this isn’t what happened.
While Obama promised the massive stimulus would “ignite spending by businesses and consumers,” unleash “a new wave of innovation, activity and construction,” and keep unemployment under 8%, what we actually got was the worst recovery since the Great Depression.
[All emphasis ours – Political Arena Editor]
Of course we cannot forget how the government likes to define “Jobs”. It can include one day jobs and short term temps as jobs created as well. Littering can creates a “job” because someone has to pick it up.
This is a talking point we are going to see a great deal of in coming months. It is a slick talking point with high propaganda value because it utilizes the careful omission of key facts to paint a false picture. Ed has a lefty blog and over the years has attempted to spar with me a few times, but the outcome was always the same.
But here in December 2011, we find that drill rig counts are through the roof — about double the equal period of the Bush 8 years, and equal to the total Bush 8 years — domestic oil production has increased each of the three years of the Obama administration, in stark contrast to the previous 7 straight years of decline, and in February 2011 the U.S. became an oil exporting nation again.
Gas didn’t hit $4 a gallon, and is declining now.
Would you like to join the Obama campaign?
Political Arena Editor Chuck Norton responds:
No we would not like to join, because we do not join liars. Domestic production in total is up because of permits approved under the Bush Administration. As Democrats always say, we should not drill for new oil because it takes five to ten years to get oil production going once it is approved.
Obama’s illegal offshore drilling ban has Gulf Oil production down by over 13%. He stopped the Canada pipeline project. He used a loophole in the EPA regs to shut down an oil field in Alaska causing Shell Oil to lose $5 billion. Obama is also yanking coal permits arbitrarily and is pushing to have power plants and refineries closed with regulatory catch 22’s.
Obama is also using some lizard as an excuse to shut down new oil finds in Texas.
Nice try Ed, but as usual, I am more informed and just plain more honest than you.
[Originally posted on my old college blog in April 2010, Newt Gingrich says that the CBO is next to useless and needs to go. It would seem that he is correct – Editor]
Amity Schlaes is perhaps the greatest living economic historian.
I like how Schlaes describes how the CBO works, they are asked to score what is placed in their box and that includes the assumptions they are asked to make in the request.
For example Ann Coulter once made the following analogy. If Congress proposed a new “green energy bill” that assumed that there was a car that ran on grass and got 1000 miles per gallon of grass the CBO would tell us that our dependency on foreign oil would drop significantly.
The question is how can lawmakers get away with their misrepresentation? One answer lies in the structure of the Congressional Budget Office, the government’s official accountant. Its job is to establish an honest price: to tell legislators and voters what a policy will cost in the short, medium and long terms. That CBO work is important because Americans rightly sense that the politicians’ math is rigged.
Amity Shlaes
“Nobody told me you were cheating.
Aww, it’s just a feeling I had.”
Flawed Assumptions
The CBO’s rules make it hard for the group to fulfill its own mandate. You’d think, for example, that the CBO would use its own parameters when it crunches numbers. Instead, the CBO must use the same mathematical assumptions supplied by the very lawmakers who wrote the bill the group is evaluating. No matter how improbable those formulas are.
Former CBO director Douglas Holtz-Eakin, writing in the New York Times, described the group’s process as “fantasy in, fantasy out.”
CBO rules often preclude common sense. Its forecasters can’t take into account any other legislation when studying the price tag of a proposed bill. That enabled the forecasters costing out House Speaker Nancy Pelosi’s bill to overlook this fact: Medicare spending increases will force tax increases, which in turn will hurt growth.
Political Salesmen
This dynamic is permitted because the answers the CBO supplies make it easier for politicians to sell their bills. They’re happy. And so, for the moment, are voters who are painfully aware that the U.S. federal budget can’t cover new entitlements, yet accept such legislation as a balm for that pain.
“So if I’m right, you got to lie to me
Then I won’t feel so bad.”
The CBO’s structural failure benefits the Democrats this week. Indeed, Pelosi is teaching Republicans something: the bigger the misrepresentation, the greater the credibility with voters. Croon to them a tune about entitlement, and they forget that you’re clearing a path for a tripling of the tax on dividends.
The CBO’s rules are bipartisan — they hold for whatever legislation lands in its in box. Congressman Paul Ryan, a Republican from Wisconsin, recently put forward a new blueprint for the federal budget. Ryan’s plan is less questionable than Pelosi’s because it’s relatively honest about costs. Ryan points out that the current unfunded part of the Medicare liability is in the trillions.
Welcome to yet another episode if Chicago style machine politics brought to DC by the Daley Machine Obama Administration. Lately we have seen one “Solyndra” after another.
Gen. William Shelton, commander of the Air Force Space Command,
told House members in a classified briefing earlier this month that he was pressured to change prepared congressional testimony in a way that would favor a large company funded by Philip Falcone, a major Democratic donor, congressional sources told Fox News.
Republicans have raised questions about whether the project pursued by the company, LightSquared, is being unduly expedited by the Obama administration, which has pushed for national wireless network upgrades.
Solyndra II? At a classified briefing, head of the Air Force Space Command Gen. William Shelton informed House members that he had been pressured to change prepared congressional testimony in order to better compliment a Virginia-based satellite and communications company funded by major Democratic donor Philip Falcone. The GOP has been wondering for some time now whether work done by that company, LightSquared, has been “unduly expedited” by the Obama administration in its push for nation-wide wireless network upgrades.
As Shelton sees it, the company’s plans for its national 4G phone network would seriously compromise the effectiveness of high-precision GPS receiver systems used by the military, given that its spectrum would be about 5 billion times stronger than the military’s GPS system.
Appearing before the House Armed Services subcommittee yesterday, Shelton alleged that he’d repeatedly been pressured to say that “the interference problems could be mitigated” and that he’d been “asked to say things I didn’t agree with.”
Many cases of more of the same. Of course another aspect of this story is that it is the view of this editor that the military’s reliance on GPS is a mistake. GPS jamming technology is cheap and easy to make or buy. In fact. most anyone with a little electronics and ham radio training could make one with ease. It is almost a certainty that potential targets of US missiles and smart bombs such as Iran have installed these jamming devices around their country.
The elite media would have you believe that the TEA Party is a mob of violent racists in spite of the fact that not a single TEA Party activist has ever been arrested at an event.
Yet look at the pro anarchist/Marxists occupy protesters and ask yourself why the elite media doesn’t show you this. Also notice that these groups are very small, usually composing of a few dozen people to about two thousand (many of whom are paid by unions to be there – LINK). At a single Glenn Beck TEA Party event about 1.5 million people showed up and nothing was trashed, there was no mess, and no one was arrested.
There is a reason why the GOP is called “the stupid party”.
Local GOP machines are often circular firing squads rife with clique’s and personality wars. Many of the best GOP candidates try to have nothing to do with their local machine. I cannot say for a fact that this is the case in Florida but GOP operatives are very aware that this is a nationwide problem.
And, in Florida the Republican-drawn map, which has to adhere to a new fair redistricting law, makes a tough reelection fight for Rep. Allen West (R) even tougher. His seat goes from one Sen. John McCain (R-Ariz.) would have won 48 percent to one in which the 2008 GOP nominee would have won just 44 percent.
While it’s just a first draft, the Republicans’ decision to weaken West doesn’t bode well for his chances under the final GOP plan.
Freshmen are generally more vulnerable in redistricting, lacking the senority [sic – Look a spelling error in the WashPo – Editor] to fight for safer seats. Outspoken tea party [Tea Party is supposed to be capitalized or can also be spelled TEA Party as TEA is an acronym – Editor] conservatives are in even more danger, because even in GOP-controlled states, establishment politicians are usually the ones drawing the maps.
This would move Florida 22 from a D+1 district to a D +5 which is almost impossible to win.
Good lord? Really? Crowley Political Report does not shock easily but Florida Republican Congressman Allen West raised a stunning amount of campaign cash during the three months ending Sept. 30.
$1.9 million. Yup. $1.9 million.
Consider this – Democratic U.S. Sen. Bill Nelson raised nearly $2 million. Let’s call it a tie.
There are two Democrats hoping to win West’s District 22 seat – former West Palm Beach Mayor Lois Frankel and Broward County businessman Patrick Murphy.
Frankel says she raised $415,000. Murphy raised $313,000. That would be a combined $728,000 for the two Democrats compared to West’s $1.9 million.
Should Frankel and Murphy just go home?
Frankel has raised a total of $1.1 million since starting her campaign. Murphy has raised $1.2 million.
West has raised $3.9 million.
Fun with math – Two Democrats total – $2.3 million. West – $3.9 million.
Fun fact – Much of the money Frankel and Murphy raised will have to be spent in the Democratic primary. West does not have, and is not like to have, a serious primary opponent.
Nope, West is just going to keep raking in the dough. A few more million for West and the DCCC may take West off their target list.
No matter how much Democrats would like to get that seat back, Frankel and Murphy are going to need a whole lot more cash to pull it off.
Unless of course the Florida GOP does the work for the Democrats. Take this seriously folks, there are many “establishment” GOP types who would rather see a Democrat elected than principled conservative. We have seen it in NY special elections, we have seen it with David Brooks and David Frum, and as Rush Limbaugh and so many others have pointed out for years, there are some in the GOP who believe that we are better off as a minority party in the US House. One of the reasons for that is because there are many in the GOP who talk conservatism but whose bread is buttered by government largess.
Florida Republicans need to start demanding some new party leadership and/or start opening your wallets and start funding challengers (or at least threatening to). They will tell you that “the rules are making us gerrymander him out”. Don’t you buy that for a minute.
In September, President Obama awarded the Medal of Honor, the nation’s most prestigious military award, to Sgt. Dakota Meyer, the marine who saved 36 of his comrades during an ambush in Afghanistan.
Obama called Meyer one of the most “down-to-earth guys that you will ever meet.”
But today Meyer, 23, is having trouble getting a job because of allegations by defense contractor BAE Systems that he has a drinking problem and is mentally unstable. Meyer filed legal papers Monday claiming the allegations were in retaliation for objections he raised about BAE’s alleged decision to sell high-tech sniper scopes to the Pakistani military.
After leaving active duty in May 2010, Meyer worked at Ausgar Technologies, a service-disabled veteran-owned small business in California, until April 2011.
“He exhibited a maturity for his age and an insightful capability to get the job done and provide recommendations to improve on what we are doing. I was very impressed while he was working for us. He was an outstanding employee,” Tom Grant, a retired military naval officer and a senior program manager at Ausgar Technologies, told ABC News.
When asked about the allegations of mental instability and a drinking problem, Grant said, “While Meyer was working for me, I never saw evidence of either of those issues.”
Family that raised Sgt. Meyer say that he doesn’t drink.
BAE Systems plc (BAES) pleaded guilty today in U.S. District Court in the District of Columbia to conspiring to defraud the United States by impairing and impeding its lawful functions, to make false statements about its Foreign Corrupt Practices Act (FCPA) compliance program, and to violate the Arms Export Control Act (AECA) and International Traffic in Arms Regulations (ITAR), announced Acting Deputy Attorney General Gary G. Grindler.
BAES was sentenced today by U.S. District Court Judge John D. Bates to pay a $400 million criminal fine, one of the largest criminal fines in the history of DOJ’s ongoing effort to combat overseas corruption in international business and enforce U.S. export control laws.
“Today, BAE Systems pleaded guilty to knowingly and willfully making false statements to U.S. government agencies. The actions of BAE Systems impeded U.S. efforts to ensure international trade is free of corruption and to maintain control over sensitive U.S. technology,” said Acting Deputy Attorney General Gary G. Grindler.
BAE Systems has agreed to pay about $16 million in penalties in response to federal charges involving bribes paid by Jacksonville-based Armor Holdings to secure international business.
BAE bought the company in 2007, after the incidents took place, but still operates a facility at the Jacksonville International Tradeport, employing about 350 people manufacturing body armor and forensics-related products.
The fines include $10.3 million to the U.S. Department of Justice and $5.7 million to the Securities and Exchange Commission.
BAE accepted responsibility for an Armor Holdings payment of more than $200,000 to a sales agent who it knew would pass a portion on to a United Nations official. In return, Armor received $7.1 million worth of contracts for a profit of $1.6 million, according to the SEC.
The company also admitted that $4.4 million in bribes were kept off its books.
In two separate announcements, BAE was fined £256million by the U.S. department of justice after pleading guilty to conspiring to make false statements to its government.
This fine relates to a claim that payments were made to a Saudi official in a £40billion contract to supply military equipment, including Tornado fighter jets, to Saudi Arabia.
The Americans were furious because the cash had been funnelled through U.S. banks.
They also wanted to make it clear to BAE that such tactics are not acceptable in the U.S. – where it is now a major player.
In Britain, BAE must fork out £30million. It reached an agreement with the Serious Fraud Office that it will plead guilty to a lesser offence under the Companies Act 1985 of failing to keep reasonably accurate accounting records for its activities in Tanzania.
This relates to an £88million contract in 1999 to supply a radar system to the country, which had no real use for such a state of the art system. A former marketing adviser in Tanzania is said to have pocketed payments of almost £8million.
BAE Systems has agreed to pay fines of up to $79m (£48.7m) to the US government for breaking military export rules, drawing a line under corruption investigations into the British company on both sides of the Atlantic.
Europe’s biggest defence company and a major supplier to the US military said on Tuesday that the latest penalties formed part of a civil settlement with the US state department. The decision comes after BAE, which makes around half of its revenues in the US, last year admitted making false statements over the sale of fighter planes to the Middle East and Eastern Europe. The latest penalty comes on top of $450m in fines from the US and Britain revealed by BAE last year, following long-running corruption investigations into defence deals in Saudi Arabia, Tanzania, Sweden, the Czech Republic and Hungary.
I have said before that President Bush was ill-served by former Treasury Secretary Hank Paulsen. This news about mass insider trading on government information by members of Congress and other officials detailed in Peter Schweitzer’s new book “Throw Them All Out” is merely the latest example of the degree of reform that is needed in Washington and the incredible influence that Goldman Sachs seems to have with administration after administration.
For readers not familiar with insider trading you can read up on it HERE. Make no mistake. If you or I had engaged in this behavior it could very well result in incarceration.
Treasury Secretary Henry Paulson stepped off the elevator into the Third Avenue offices of hedge fund Eton Park Capital Management LP in Manhattan. It was July 21, 2008, and market fears were mounting. Four months earlier, Bear Stearns Cos. had sold itself for just $10 a share to JPMorgan Chase & Co. (JPM)
Now, amid tumbling home prices and near-record foreclosures, attention was focused on a new source of contagion: Fannie Mae (FNMA) and Freddie Mac, which together had more than $5 trillion in mortgage-backed securities and other debt outstanding, Bloomberg Markets reports in its January issue.
Paulson had been pushing a plan in Congress to open lines of credit to the two struggling firms and to grant authority for the Treasury Department to buy equity in them. Yet he had told reporters on July 13 that the firms must remain shareholder owned and had testified at a Senate hearing two days later that giving the government new power to intervene made actual intervention improbable.
“If you have a bazooka, and people know you have it, you’re not likely to take it out,” he said.
On the morning of July 21, before the Eton Park meeting, Paulson had spoken to New York Times reporters and editors, according to his Treasury Department schedule. A Times article the next day said the Federal Reserve and the Office of the Comptroller of the Currency were inspecting Fannie and Freddie’s books and cited Paulson as saying he expected their examination would give a signal of confidence to the markets.
A Different Message
At the Eton Park meeting, he sent a different message, according to a fund manager who attended. Over sandwiches and pasta salad, he delivered that information to a group of men capable of profiting from any disclosure.
Around the conference room table were a dozen or so hedge- fund managers and other Wall Street executives — at least five of them alumni of Goldman Sachs Group Inc. (GS), of which Paulson was chief executive officer and chairman from 1999 to 2006. In addition to Eton Park founder Eric Mindich, they included such boldface names as Lone Pine Capital LLC founder Stephen Mandel, Dinakar Singh of TPG-Axon Capital Management LP and Daniel Och of Och-Ziff Capital Management Group LLC.
After a perfunctory discussion of the market turmoil, the fund manager says, the discussion turned to Fannie Mae and Freddie Mac. Paulson said he had erred by not punishing Bear Stearns shareholders more severely. The secretary, then 62, went on to describe a possible scenario for placing Fannie and Freddie into “conservatorship” — a government seizure designed to allow the firms to continue operations despite heavy losses in the mortgage markets.
Stock Wipeout
Paulson explained that under this scenario, the common stock of the two government-sponsored enterprises, or GSEs, would be effectively wiped out. So too would the various classes of preferred stock, he said.
The fund manager says he was shocked that Paulson would furnish such specific information — to his mind, leaving little doubt that the Treasury Department would carry out the plan. The managers attending the meeting were thus given a choice opportunity to trade on that information.
There’s no evidence that they did so after the meeting; tracking firm-specific short stock sales isn’t possible using public documents.
And law professors say that Paulson himself broke no law by disclosing what amounted to inside information.
Rampant Rumors
At the time, rumors about Fannie and Freddie were tearing through the markets. The government-chartered firms’ mandate, which continues today, is to buy mortgages from banks and repackage them into securities either for their own portfolios or to sell to others. The banks can then use the proceeds from those transactions to write new mortgages.
By mid-2008, delinquencies and foreclosures were soaring, and the GSEs set aside billions of dollars against future losses. In the first six months of 2008, they racked up net losses of $5.46 billion as they slashed dividends and marked down the values of their huge inventories of mortgage-backed securities.
On Wall Street, confusion reigned. UBS AG analyst Eric Wasserstrom on July 10 cut his share price target on Freddie to $10 from $28. The next day, Citigroup Inc. (C) analyst Bradley Ball reiterated a “buy” recommendation on the two GSEs. On July 12, the Times of London, without citing a source, reported that Paulson was contemplating a $15 billion capital injection into the firms.
Shares Rally
At the time Paulson privately addressed the fund managers at Eton Park, he had given the market some positive signals — and the GSEs’ shares were rallying, with Fannie Mae’s nearly doubling in four days.
William Black, associate professor of economics and law at the University of Missouri-Kansas City, can’t understand why Paulson felt impelled to share the Treasury Department’s plan with the fund managers.
“You just never ever do that as a government regulator — transmit nonpublic market information to market participants,” says Black, who’s a former general counsel at the Federal Home Loan Bank of San Francisco. “There were no legitimate reasons for those disclosures.”
Janet Tavakoli, founder of Chicago-based financial consulting firm Tavakoli Structured Finance Inc., says the meeting fits a pattern.
“What is this but crony capitalism?” she asks. “Most people have had their fill of it.”
If you can stomach it, you may read the rest at Bloomberg News.
“If you are not careful, the newspapers will have you hating the people who are being oppressed and loving the people who are doing the oppressing.” – Malcolm X
Political Arena 