So much for Obama's promise not to interfere with GM's business decisions

Obviously this promise has already been broken multiple times, but now the Obama administration is interfering with GM's attempt to go back to private ownership. Public and partially publicly owned companies earn less money than privately owned ones. If you want to increase the stock price, sell off all the company right now. Selling off small portions of the company will maintain government control and will not raise the price. This piece in the NY Times tows the Obama administration line on all this. Saying that the sale was being done to get "higher fees for the bankers" sure sounds like Obama administration class warfare rhetoric.

The initial public stock offering by General Motors will be smaller than previously suggested, and the federal government will most likely sell a relatively small portion of its 61 percent stake in the company, according to people with knowledge of the preparations.

To fetch the highest possible price for the government, G.M. is planning an overall offering of stock valued at $8 billion to $10 billion, which is lower than previous internal targets, according to the people, who spoke on the condition of anonymity because of restrictions on public comments before an offering.

Earlier, there were suggestions the stock offering could rival the largest in United States history, when the credit card giant Visa raised more than $19 billion in 2008. G.M. and its bankers had been pushing for the largest possible offering because that would mean higher fees for the bankers and a larger pool of investors for G.M.

But the Treasury Department has made it clear to G.M. and its underwriters that the government is more interested in setting the highest price possible for the stock rather than maximizing the size of the offering. While both G.M. and the Treasury still hope to reduce the government’s stake in the company to less than 50 percent and rid the company of its Government Motors nickname, that goal may not be met, one of the people said. . . .

Lucky that this homeowner had a gun with him

Here is a dramatic defensive gun use.

Homeowner wins gun battle with would-be intruders
By KIM BELL • kbell@post-dispatch.com > 314-340-8115 | Posted: Thursday, September 23, 2010 10:00 am
ST. LOUIS -- A homeowner wasn't buying the excuses of two men who came to his door early Thursday.
First, they said someone was trying to tamper with the homeowner's car. Then, they asked for a jumpstart to their own car. And finally, they asked for a drink of water.
. . . the homeowner in the 2600 block of James Cool Papa Bell Avenue waved off each story and tried to shut the door.
As he was trying to get the door shut for the last time, one of the men on his doorstep reached in with a gun and started firing, about 5:40 a.m. Thursday.
But the 49-year-old resident had a quick answer for that. He was armed, too, and fired back.
He hit one of the would-be intruders in the abdomen. That suspect, 27, was captured by police who found him seriously hurt and hiding behind a home a few blocks away.
The second man got away.
Charges are expected against the wounded man who tried to break in and opened fire. Police say they won't release his name until charges are filed. . . .

Son of RFK denies William Ayers Emeritus Status

This is pretty astounding. I don't know if I have ever known of a professor being denied emeritus status. Apparently Obama's friend was too much for some other Democrats.

In a very unusual move, University of Illinois trustees today denied giving emeritus status to controversial retired professor William Ayers.

The vote, at a U. of I. board meeting in Urbana, was unanimous and came after a passionate speech by board chair Christopher Kennedy, who invoked the 1968 assassination of his father, Sen. Robert F. Kennedy in saying that he was voting his "conscience."

The other trustees, without comment, also voted against the appointment.

Ayers, the Vietnam War-era radical, had been an education faculty member at UIC since 1987. He retired effective Aug. 31 and then sought the emeritus faculty status, a largely honorific title that includes some benefits such as library privileges.

A co-founder of the Weather Underground anti-war group, Ayers was frequently in the media spotlight and, as such, was one of the university's best known faculty members.

While trustees regularly vote on emeritus appointments, they rarely comment about them.

But in an emotional statement, Kennedy discussed his reasons for voting against Ayers' request.

"I am guided by my conscience and one which has been formed by a series of experiences, many of which have been shared with the people of our country and mark each of us in a profound way," Kennedy said.

He said he could not confer the title "to a man whose body of work includes a book dedicated in part to the man who murdered my father." . . .

69% of Canadians think that the long gun registry has had little or no beneficial effect on crime

Angus Reid Public Opinion has a new survey:

More than a third of Canadians (38%, -5 since August) believe the registry has been unsuccessful in preventing crime in Canada, while three-in-ten (31%, +2) think it has had no effect on crime. Only 16 per cent of respondents (+3) believe the Canadian Firearms Registry has been successful.

Almost half of Canadians (46%, +2) call for the long gun registry to be scrapped—including large majorities in the Prairies (65%) and Alberta (69%). Two-in-five respondents (40%, +5) are opposed to this course of action, including 59 per cent of Quebecers. . . .

"Spitzer: Cuomo ‘Dirtiest, Nastiest’ Of Politicians"

This is probably one thing that Spitzer knows about:

Former New York Gov. Eliot Spitzer said he will back Democrat Andrew Cuomo come November, but it sure didn’t sound like much of an endorsement.
“Everybody knows that behind the scenes that he’s the dirtiest, nastiest political player out there,” Spitzer said of Cuomo Thursday. . . .

Democrats won't let vote occur on keeping tax rates low

Obama has frequently attacked Republicans for wanting to "Cut taxes, especially for millionaires and billionaires" (he claimed this in Cleveland, Ohio on September 8 and at his press conference on September 10 ("they're insisting we’ve got to give tax relief to millionaires and billionaires to the tune of about $100,000 per millionaire")). Of course, this is really a question of whether one wants to raise taxes. The New York Times notes: "It also raised a political risk for Democrats that they would be seen as wavering on one of President Obama’s signature campaign promises and abandoning a fight that could have mobilized the party’s base ahead of the elections."

After all that we now find that Democrats won't let Congress hold a vote on stopping the tax increase.

Democratic leaders and President Barack Obama made the proposal to extend the middle-class tax breaks a centerpiece of their midterm campaign strategy. They now face the possibility their members are vulnerable to Republican charges that they have failed to prevent taxes from rising for almost everyone. . . . .

A similar statement here from Politico:

Indeed, Democrats were locked in an internal back-and-forth debate over the political consequences of holding a vote before the Senate adjourns next week for a one-month campaign sprint ahead of a difficult Election Day. Most Senate Democrats steadfastly believe that they are on the right side of public opinion: that tax cuts should be extended for all income levels expect for families making more than $250,000. But some fear that Republicans would use the vote to make the case that Democrats are out to raise taxes in the middle of a recession – at a time when voters are giving Democrats poor grades on their handling of the economy. . . .

The internal Democratic debate over the vote’s timing generally broke along ideological lines, with some of the more liberal senators seeking a vote now and some moderates asking for the party to hold off until a post-election lame-duck session. But it’s been complicated by the fact that six Democrats are facing tough reelection battles, and several of those members are worried about any sort of tax vote before November. . . .

Making the calculations even trickier for Democratic leaders is their expectation that they’d get even more votes after the elections since they expect to lose some wavering moderates – like Sen. Blanche Lincoln (D-Ark.) – if they were to have the vote now. That would potentially lock those wavering senators into a position, preventing them from voting with their party when they’re freer to do so after November. . . .

Do you think that Democrats have something to hide about how they want to vote?

Several senators said the issue should absolutely wait until after the midterms, including Sen Mark Pryor, D-Ark.

"You have to remove the politics from this. I think both parties like the politics of it. My view is, this should not be a political issue. This does have implications for our economy, for our recovery. We don't need to play politics with this," Pryor said. . . .

The Lone Ranger Rides to the Rescue

"Police: Gun-carrying couple stops beating"

This is a neat story. I think that it may be the first one that I have done on a couple carrying guns.

09/21/2010
Cristin Severence, ONN
WADSWORTH, Ohio - Wadsworth police say a gun-carrying couple helped them catch a man who was allegedly beating his girlfriend in a parking lot in front of her two small children.

Officers said the couple pulled into the Wadsworth McDonald's on High Street Sunday and saw a man hitting a woman in another vehicle.

Police said the couple, who each have a permit to carry a concealed weapon, called 911 then pulled out their guns and ordered the man to the ground.

"My husband and I both have CCW licenses and we were in fear of her life, and we drew our weapons on him," Heather Evans told the 911 dispatcher.

Police said the man, 18-year-old Anthony Konopinski, then ran off. A third witness then ran after Konopinski, calling police to tell them where they were headed. . . .

Media on Thursday

Thursday at 10:30 AM EDT I will be on Fox News' Strategy Room with Heather Nauert. We will discuss my piece "The Recession May Be Over -- But the 'Recovery' Is Very Weak." We will also be evaluating President Obama's claim:

We went through the worst recession since the Great Depression. Nothing has come close. In fact, if you look at the consequences of the recession in the ‘80s, the recession in the ‘90s, and the recession in 2001, and you combine all three of those, it still wasn’t as bad as this recession that we went through.

So the month I was sworn in we lost 750,000 jobs; the month after that 600,000; the month after that 600,000. This is before any of our plans had a chance to take effect. The financial markets were on the verge of meltdown and the economy was contracting about 6 percent -- by far, the largest contraction we've seen since the ‘30s.

Isn't $22,000 per student (and that excludes capital costs) enough for K-12 schools?

This doesn't seem like the wisest donation. If you have an average class of 14.2 students, that comes to almost $312,400 plus the costs of buildings. Probably half goes to non-teacher salaries (note compared to administrative costs in private schools of about 14%). Still, $156,200 should be able to hirer a good teacher (say, $117,150 with benefits equal to a third of the salary).

Mark Zuckerberg, the 26-year-old founder and chief executive of Facebook Inc., plans to announce a donation of up to $100 million to the Newark schools this week, in a bold bid to improve one of the country's worst performing public school systems.

Newark spends about $22,000 a year on each of its 40,000 pupils, but only about half of its students graduate. Of those who do, only one-fifth go on to four-year colleges. More than 85% of the Newark students at community colleges need remedial help in math and English.

The state took control of the troubled Newark system in the 1990s, and this month Gov. Chris Christie informed the city's superintendent that his contract wouldn't be renewed after June 2011. Mr. Christie has vowed to implement forceful changes, portending an agenda that includes stronger teacher evaluations and merit pay.

Mr. Zuckerberg is setting up a foundation with $100 million of Facebook's closely held stock to be used to improve education in America, with the primary goal of helping Newark.

Mr. Zuckerberg has had a long-standing interest in education, particularly teachers' low salaries, according to a person familiar with the discussions. Over the last year, he had a series of meetings with people involved in education and developed a relationship with Newark Mayor Cory Booker. . . . .

Differences in state income tax rates

I was just looking around the internet tonight, and it is pretty astounding how large the difference in state income tax rates are. Florida and Texas have no income tax rates. California's top rate hits 10.55%. Hawaii's and Oregon's hits 11% at an incomes of $200,000 and $250,000 respectively. For the state of New York, the top rate hits 7.85 percent unless you live in NYC where you have to add on the additional city taxes.

A military plan in Afghanistan that avoids trying to produce victory, what is the point?

Fighting a war where soldiers are just biding time?

President Obama urgently looked for a way out of the war in Afghanistan last year, repeatedly pressing his top military advisers for an exit plan that they never gave him, according to secret meeting notes and documents cited in a new book by journalist Bob Woodward.

Frustrated with his military commanders for consistently offering only options that required significantly more troops, Obama finally crafted his own strategy, dictating a classified six-page "terms sheet" that sought to limit U.S. involvement, Woodward reports in "Obama's Wars," to be released on Monday.

According to Woodward's meeting-by-meeting, memo-by-memo account of the 2009 Afghan strategy review, the president avoided talk of victory as he described his objectives.

"This needs to be a plan about how we're going to hand it off and get out of Afghanistan," Obama is quoted as telling White House aides as he laid out his reasons for adding 30,000 troops in a short-term escalation. "Everything we're doing has to be focused on how we're going to get to the point where we can reduce our footprint. It's in our national security interest. There cannot be any wiggle room." . . .

This is nuts. Stronger after the terrorist attack?

Woodward's book portrays Obama and the White House as barraged by warnings about the threat of terrorist attacks on U.S. soil and confronted with the difficulty in preventing them. During an interview with Woodward in July, the president said, "We can absorb a terrorist attack. We'll do everything we can to prevent it, but even a 9/11, even the biggest attack ever . . . we absorbed it and we are stronger."

Stuart Taylor on how the Supreme Court will rule on Obamacare

Whether one disagrees with Mr. Taylor or not, he is always worth reading.

. . . . David Rivkin, a Washington lawyer who argued the case last week on behalf of the 20 states challenging the law. He says that upholding it would obliterate all limits on the commerce power, a step that Justice Kennedy and his four more conservative colleagues have repeatedly eschewed. Such a step would cross an important line and make America less free, Rivkin and his allies stress, by empowering Congress to require even the purchase of health-club memberships or, say, cars to stimulate the economy.
At the same time, leading centrist-to-conservative legal experts . . . doubt that the justices would or should strike down such a hugely important enactment with so vast an impact on interstate commerce. Others stress that Congress's sweeping authority to tax and spend for the general welfare—on which the somewhat analogous Social Security and Medicare taxes are based—provides ample authority for the penalty tax imposed by the new law on people who refuse to buy health insurance.
The justices have not struck down a major piece of legislation, let alone a president's signature initiative, as beyond Congress's power to regulate commerce in some 75 years.
Still, much may depend on where things stand when the issue reaches the justices. How popular or unpopular will the president's new law be then? How costly? How effective? What if the voters have by then elected a more conservative Congress that wants to repeal the law? Such factors are not supposed to influence constitutional interpretation, but sometimes they do.

US Household Wealth Fell by $1.5 Trillion during the Second Quarter

If you felt poorer over the last few months, you are not alone. Apparently, people lost about $5,000 per person during the second quarter. This is probably a much more important measure of how well off we are than GDP. Wealth is the present value of all future income. GDP is just the income at some point in time. Of course, at the same time that are wealth is declining our government debt is soaring.

U.S. household wealth fell by $1.5 trillion in the second quarter, according to Federal Reserve data on Friday that showed the strain a slow-paced recovery and high unemployment are putting on Americans.

Household net worth fell to $53.5 trillion, well below the $64.2 trillion it had reached at the end of 2007 when the recession officially began, according to the central bank's quarterly flow of funds report.

Declines in the value of financial assets -- especially in stocks and mutual funds -- accounted for much of the decline in second-quarter net worth. Stocks alone were down $1.9 trillion to $14.9 trillion, more than offsetting small gains in other areas like state and local government retirement funds.

Consumers pared debt at a seasonally adjusted annual rate of 2.3 percent, the ninth consecutive quarter in which they did so. Home mortgage debt fell at an annual rate of 2-1/4 percent after a 4-1/4 percent drop in the first three months this year.

During the financial crisis that wracked the country from 2007 to 2009, trillions of dollars in housing and financial market wealth was wiped out and heavy household and financial sector indebtedness was exposed. . . .

So far this year US Household wealth has fallen by about $100 billion.

The decline in wealth wiped out the first quarter’s $1.4 trillion gain, leaving households 19 percent short of the $65.9 trillion peak in the second quarter of 2007, before the recession began. Net worth bottomed at $48.3 trillion in the first quarter of 2009, when the economy contracted at a 4.9 percent annual pace. . . . .

Confidence among U.S. consumers unexpectedly fell in September to a one-year low, according to a separate report today.

The Thomson Reuters/University of Michigan preliminary index of consumer sentiment dropped to 66.6 following a reading of 68.9 in August, the group said. Economists forecast the measure would rise to 70, according to the median estimate in a Bloomberg News survey. . . . .

The Business Insider notes that the drop since the beginning of the recession has been $12.3 trillion:

This is the Households and Nonprofit net worth as a percent of GDP.

This includes real estate and financial assets (stocks, bonds, pension reserves, deposits, etc) net of liabilities (mostly mortgages). Note that this does NOT include public debt obligations.

Note that this ratio was relatively stable for almost 50 years, and then we saw the stock market and housing bubbles. . . .

NY Times media bias

Politico wants to spin this as the NY Times being attacked from all sides. But it seems that both show that the NY Times is closely linked with the Obama administration. 1) The Rattner case shows the NY Times running the news exactly as the Obama administration wants. 2) The other case shows something similar. Apparently someone in the administration told the paper that they were going to link the Tea Party and the Republican Party. The administration objected and the NY Times changed the story to saying that they were only considering it. But other interpretations were possible, such as the administration changing its mind once he was caught.


To accept that the first claim is a problem, one has to assume that the NY Times got the story wrong. It is quite possible that some in the WH leaked the information to the NY Times

In the span of 48 hours, the New York Times was blasted for a story a White House official deemed to be “100% inaccurate,” and then embarrassed by a dishy new book by former car czar Steven Rattner that describes how the White House orchestrated an exclusive background interview with him and a Times reporter, and was rewarded with an article showing President Barack Obama “just as the White House had hoped.” . . .

"Price Of Health Reform: Insurers Ask Higher Rates Than Expected"

SO much for Obama's health care promises on insurance premiums.

Sept. 19--As health insurers file their first post-reform rate-hike requests, a rift is becoming clear: Insurers such as Aetna and Anthem are seeking far higher increases than federal officials and consumer advocates had anticipated.

At the same time, the years-old debate continues to rage about whether medical costs justify the upward march of health premiums.

For Connecticut employers and insurance customers anxiously awaiting prices for 2011, there is no simple rule of thumb. Some plans will rise sharply if they didn't previously offer features now mandated by reform, while others will see only minor adjustments, according to regulators, company filings and industry experts.

But one thing is clear -- the rate increases will heighten an already fevered debate about whether the health insurers are bilking the public or just passing along costs they cannot control.

Connecticut regulators in recent days approved increases of more than 20 percent on some health plans starting Oct. 1, including a series of rates requested by Anthem Blue Cross & Blue Shield, by far the largest health insurer in the state. The immediate changes mostly affect new customers buying health insurance on the individual market, not those who are in group plans through employers, or existing members of individual-market plans.

The higher prices, however, are a glimpse of what may be in store later this year when insurers propose new rates for 2011. . . .

New Fox News piece: The Recession May Be Over -- But the 'Recovery' Is Very Weak

My new piece at Fox News starts this way:

With the recession officially over, how does it stack up to previous ones? And how has the recovery been going? The National Bureau of Economic Research, a private organization, has declared that, according to their measures the recession ended in June 2009. Since then, we supposedly have seen over a year of "recovery."

How bad the recession has been depends on what you look at. The Carter recession during the early 1980s produced a higher unemployment rate, with unemployment rising to a peak of 10.8 percent compared with the peak this time of 10.1 percent. The recent recession also did not come close to reaching the 14 percent annual inflation rate that we reached during the end of 1980.

On the other hand, the recent drop in GDP was larger. The three worst quarters of this recession saw drops in GDP of 6.8, 4.9, and 4 percent, exceeding the 6.5, 4.9, and 3.2 percent drops during the early 1980s.

The most striking difference between these two recessions is how the economy recovered after they ended. . . .

Obama's spin on the new numbers is here.

Stimulus job bust

Again these numbers never take into account the jobs lost from the stimulus taking money from someplace else in the economy. In any case, these are the "positive" examples.

Biden’s latest campaign prop is a list of 100 of the “most innovative and effective” projects across the country that are “changing America.”

Five Massachusetts projects are highlighted on the list, including a lead paint mitigation project in Malden, a new wind-blade testing facility in Boston and a Superfund cleanup project in New Bedford.

The five projects alone represent a total of $135 million in direct investments and another $43 million in loan guarantees. And the total number of jobs associated with them is . . . oh, give or take 500. . . .

Some of the projects are not considered such successful ones to brag about.

"I'm disappointed that we've only created or retained 55 jobs after receiving $111 million," said Wendy Greuel, the city's controller. "With our local unemployment rate over 12 percent we need to do a better job cutting red tape and putting Angelenos back to work."

According to the audit, the Los Angeles Department of Public Works spent $70 million in stimulus funds -- in return, it created seven private sector jobs and saved seven workers from layoffs. Taxpayer cost per job: $1.5 million.

The Los Angeles Department of Transportation created even fewer jobs per dollar, spending $40 million but netting just nine jobs. Taxpayer cost per job: $4.4 million.

Greuel blamed the dismal numbers on several factors:

1. Bureaucratic red tape: Four highway projects did not even go out to bid until seven months after they were authorized.

2. Projects that were supposed to be competitively bid in the private sector went instead went to city workers.

3. Stimulus money was not properly tracked within departments

4. Both departments could not report the jobs created and retained in a timely fashion..

"I would say maybe in a grade, a B- in creating the jobs," Greuel told Fox News. "They have started to spend those dollars but it took seven months to get some of those contracts out. We think in the city that we should move quickly and not in the same usual bureaucratic ways." . . .

A grade of a "B-"?

Did Obama purposefully misquote the Declaration of Independence?

Given the ruckus about Obama and religion, one would think that he would be more careful about these things or that at the very least the WH would quickly say he misspoke. Why he does these things isn't obvious unless he and his aides think that this will let them paint the opposition as kooks. But, with weeks to go before the election, I have a hard time believing that is really what is happening. This is how it should read:

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are life, liberty and the pursuit of happiness.

"Missouri Tells Judges Cost of Sentences"

This seems reasonable, but what other costs should the judges be told about? For example, if they are going to be told the cost of prison, shouldn't they also be told the expected loss of tax revenue from the person being imprisoned?

When judges here sentence convicted criminals, a new and unusual variable is available for them to consider: what a given punishment will cost the State of Missouri.

For someone convicted of endangering the welfare of a child, for instance, a judge might now learn that a three-year prison sentence would run more than $37,000 while probation would cost $6,770. A second-degree robber, a judge could be told, would carry a price tag of less than $9,000 for five years of intensive probation, but more than $50,000 for a comparable prison sentence and parole afterward. The bill for a murderer’s 30-year prison term: $504,690.

Legal experts say no other state systematically provides such information to judges, a practice put into effect here last month by the state’s sentencing advisory commission, an appointed board that offers guidance on criminal sentencing. . . .

For some reason I suspect that these are not the present discounted value of those costs. For the 30-year prison term, that is likely to make some difference.

The gun sale increases so clearly timed with the November 2008 election are continuing

The increase in sales that clearly started in November 2008 are continuing. See also here.

UK: "The nightmare of union power is back again"

Given all the money that Obama is pumping into unions, is this the type of powerful unions that Obama would like to see in the US?

Seeing the trade unions rise up like the undead has been a salutary experience. Following the horror show of threats and blackmail staged by the TUC last week, we have had a specific notice of intent from the GMB to call a national dustmen’s strike, thus conjuring up one of the great iconic images of the winter of 1979: those vistas of overflowing refuse bags piled high in London’s West End. What a political gift this is to the Conservatives, whose glory days were built on the blood-curdling tactics of an earlier generation of union headbangers. . . . .

The Change in Unemployment by Country from January 2009 to July 2010

These data were acquired from The Economist magazine.

There is no increase in inequality among 99 percent of the population

So much for concerns about the poor getting poorer than everyone else.

In a recent paper weaving together several strands of new research, Mr Gordon reports that improved use of income datasets "shows that there was no increase of inequality after 1993 in the bottom 99 percent of the population, and can be entirely explained by the behavior of income in the top 1 percent." So we are left needing an explanation for the rise of "the stinking rich", as Mr Noah calls them. But when it comes to rising inequality, that's all there is to explain. Maybe the subject doesn't merit a ten-part series after all.

Mr Gordon's surprising conclusion is based upon recent studies showing that measured income inequality has been overstated due to inadequacies in traditional methods for constructing price indices and estimating real income. In the latest version of a much-discussed paper Christian Broda and John Romalis find that

the relative prices of low-quality products that are consumed disproportionately by low-income consumers have been falling over this period. This fact implies that measured against the prices of products that poorer consumers actually buy, their “real” incomes have been rising steadily. As a consequence, we find that around half of the increase in conventional inequality measures during 1994–2005 is the result of using the same price index for non-durable goods across different income groups.

. . .

Using an updated price index, Christian Broda, Ephraim Leibtag, and David Weinstein find that

the real wages at the 10th percentile increased by 30 percent from 1979 to 2005. In other words, the real wages of low earners have not remained stagnant, as suggested by conventional measures, but actually have been rising on average by around 1 percent per year.

From the Broda et al. article:

Past research suffered from the problem of being unable to match data on prices paid with the households that actually make the purchases. As a result, prior work focused on inferring the linkages between prices paid and household characteristics—for example, by using approaches based on neighborhood effects and unit costs. Here, we first describe household-level data that allows us to look at the linkages between prices paid and household characteristic. We then use that data to reconsider the commonly held notion that the poor pay higher prices than those with high incomes and that this behavior is driven by the larger share in expenditure of the poor in high-priced convenience stores.