"Moody's: Neither debt plan protects the nation's AAA rating"

Trillion dollar cuts or even a few trillion dollar cuts in the deficits sound big until you realize that those cuts are out of $46 trillion in spending over the next decade and that Obama's budget released in February scheduled deficits of $10.3 trillion over that period of time. Moody's points out the real problem with the current debate isn't this coming Tuesday, the real problem is that not enough money is being cut.

The "limited magnitude" of both debt plans put forward by congressional leaders would not put the nation's AAA credit rating back on solid footing, Moody's Investors Service announced Friday.

"Reductions of the magnitude now being proposed, if adopted, would likely lead Moody's to adopt a negative outlook on the AAA rating," the credit rating agency said in a new report. "The chances of a significant improvement in the long-term credit profile of the government coming from deficit reductions of the magnitude proposed in either plan are not high."

It added that "prolonged debt ceiling deliberations" have increased the odds of a downgrade, but that the firm is still confident policymakers will avoid a default.

"It remains our expectation that the government will continue with timely debt service," the firm said.
It also clarified that as far as it is concerned, the nation will only default if it misses an interest or principal payment on U.S. debt, not if it misses payments on other obligations like federal employee salaries or Social Security benefits. . . .

"Washington Is Annoyed at Wall Street's Failure to Panic"

Politicians in Washington are upset that financial markets aren't panicking. Possibly the politicians might realize that the markets aren't upset because they don't believe all the scare stories politicians use to worry many voters. From CNBC:

I just got off the phone with a source on Capitol Hill who has spent the past few days trying to convince Republicans to vote for a debt ceiling hike.

He told me that the biggest obstacle he faces has been "market complacency."

"Frankly, a bit of panic would be very helpful right now," he said.

As he explained it, lots of people in Washington, D.C. expected that this would be a week marked by panic in the markets. Stocks would tank. Bonds would get clobbered. The dollar would do something dramatic. And all of this would help convince reluctant lawmakers that they had to reach a compromise on the debt ceiling. . . .

Instead, the market has just been on a quiet, non-panicked slide.

Stocks have sold off by a couple of percentage points, but nothing that indicates a real fear trade in the works.

Everyone in D.C. has a theory about this. Some believe the market is sending a message that a deal will get done. Others think the market doesn't understand politics. . . .

Politicians might not want to believe it, but there is a third option. Politicians don't know what they are doing.

More on this belief that financial markets think that it is so crucial that a deal be made.

Republicans are losing support from some of their strongest backers and concede there must be some answers before financial markets open Monday, one day before threatened default. . . .

Democrats in Senate Filibuster their own Debt bill

After quickly moving to kill the House Republican debt ceiling bill, Senate Democrats are refusing to have a vote on their own bill. Twice now the Senate Democrats have rejected House Republican proposals, but have yet to vote on their own plan. This is the first time that Democrats have put up a plan of their own, but they want to wait to vote because they know that the Senate will also vote down the Democrat plan. From Stephen Dinan at the Washington Times' Inside Politics page:

Senate Republicans want a 60-vote threshold for a debt-limit bill to pass the chamber, but it's actually Democrats who are enforcing the filibuster on their own legislation, insisting on delaying a vote until 1 a.m. Sunday morning.

Republicans offered to let the vote happen Friday night, just minutes after the chamber voted to halt a House Republican bill. All sides expect Democrats' bill will fail too, and the GOP said senators might as well kill both at the same time so that negotiations could move on to a compromise.

"We would be happy to have that vote tonight," Sen. Mitch McConnell, Republicans' leader, offered.

But Senate Majority Leader Harry Reid objected, even though the vote would occur on his own bill. He instead said the chamber would have to run out the full procedural clock, which means a vote in the early hours Sunday morning. . . .

Norway killer, Anders Behring Breivik, not Christian, not right-wing

Ann Coulter has some very useful information available here.

In fact, however, Americans who jumped to conclusions about Hasan were right and New York Times reporters who jumped to conclusions about Breivik were wrong.

True, in one lone entry on Breivik's gaseous 1,500-page manifesto, "2083: A European Declaration of Independence," he calls himself "Christian." But unfortunately he also uses a great number of other words to describe himself, and these other words make clear that he does not mean "Christian" as most Americans understand the term. (Incidentally, he also cites The New York Times more than a half-dozen times.)

Had anyone at the Times actually read Breivik's manifesto, they would have seen that he uses the word "Christian" as a handy moniker to mean "European, non-Islamic" -- not a religious Christian or even a vague monotheist. In fact, at several points in his manifesto, Breivik stresses that he has a beef with Christians for their soft-heartedness. (I suppose that's why the Times is never worried about a "Christian backlash.")

A casual perusal of Breivik's manifesto clearly shows that he uses the word "Christian" similarly to the way some Jewish New Yorkers use it to mean "non-Jewish." In this usage, Christopher Hitchens and Madalyn Murray O'Hair are "Christians."

I told a Jewish gal trying to set me up with one of her friends once that he had to be Christian, and she exclaimed that she had the perfect guy: a secular Muslim atheist. (This was the least-popular option on the '60s board game Dream Date, by the way).

Breivik is very clear that you don't even have to believe in God to join his movement, saying in a self-interview:

Q: Do I have to believe in God or Jesus in order to become a Justiciar Knight?

A: As this is a cultural war, our definition of being a Christian does not necessarily constitute that you are required to have a personal relationship with God or Jesus.

He goes on to say that a "Christian fundamentalist theocracy" is "everything we DO NOT want," and a "secular European society" is "what we DO want."

"It is enough," Breivik says, "that you are a Christian-agnostic or a Christian-atheist." That statement doesn't even make sense in America. . . .

The really, really bad GDP numbers

GDP grew by only 0.4 percent at an annual rate in the first quarter. The key here is to understand that GDP really didn't grow by 0.4% during the first quarter. It would only have grown at that rate if it had grown that way for over an entire year. GDP actually grew at 0.1%. That is as close to zero as one can get. The reason for the reduction in estimated GDP annualized growth from 1.9% down to 0.4% is basically for two reasons: business investment and net exports. Firms were apparently becoming very pessimistic about the future at the very beginning of this year. For the first half of 2011, GDP has grown by just 0.8%. Here is a useful discussion of the revision.

In June, the first quarter's growth in business investment was estimated to be $52.4 billion, annualized. Instead, economists now say it was just $16.4 billion. Investment in equipment and software was little changed, however. Home sales were also estimated pretty accurately.

The main reason why business investment was worse than we thought was due to inventories. Instead of growing at the annualized rate of $39.5 billion, they grew at the rate of just $10.8 billion. This indicates that firms weren't ramping up their inventories as rapidly as thought.

Due to this correction, instead of adding 1.5% to GDP, business investment added just 0.5%. So now we know where 1% of the growth went. . . .

The rest of the revision is mostly accounted for in the worse result of net exports. But really, it can be mostly isolated to imports. They were higher than we thought, which means that net exports were lower.

In particular, imports grew by an annualized $16.3 billion more than initially estimated. As a result, instead of adding about 0.14% to growth, net exports brought GDP down by 0.34%. Th revision to net exports cut growth by about another 0.5%. . . .

So what about the future? It can't be good that the Consumer Confidence Index is near its lowest level in two years. Rasmussen finds:

Just 13% of adult consumers say the U.S. economy is getting better these days, while 64% say it's getting worse. In the beginning of 2011, 30% said economic conditions in the country were getting better and only 45% said they were getting worse. . . .

Gallup finds that Obama's approval rating has dropped to a new low of 40%. Unbelievably, in the generic ballot, Gallup finds 39% would vote for Obama, 47% would vote for the unnamed GOP candidate.


A new Rasmussen poll shows that most Americans think that Obama is doing a poor job on the economy.

The latest Rasmussen Reports national telephone survey shows that 36% of Likely U.S. Voters give the president good or excellent marks when it comes to the economy. But 50% say the president is doing a poor job, up seven points from 43% two weeks ago. . . .

The Obama administration adjustments to GDP have lowered GDP in 2008 and 2009 and raised it in 2010 (see Table 2A). Boy, isn't that a convenient result for the Obama administration while they redid these numbers? Previously, GDP growth in 2008 was equal to zero, and now it shows a drop of 0.3 percent.

Jokes on the Debt Ceiling Limit Debate

Here were a couple of jokes in a Politico story that I found most amusing. The Leno joke though is probably pretty old.

"Democrats warned that if the debt ceiling isn't raised, the government would cease to function. How would you be able to tell?" said Jay Leno on NBC's "The Tonight Show." . . .

Conan O'Brien of the "Conan" show on TBS said, "The government is one week away from running out of money to pay its bills. So basically, our nation has become Nicolas Cage." . . .

Only Bachmann is speaking out forcefully on Debt Deal, Romney keeping quite

Questions of leader on show here.
"Romney, particularly, has been absent."

Scientist responsible for Gore's claim about Polar Bears under investigation for claims

From the Associated Press:

A federal wildlife biologist whose observation in 2004 of presumably drowned polar bears in the Arctic helped to galvanize the global warming movement has been placed on administrative leave and is being investigated for scientific misconduct, possibly over the veracity of that article.
Charles Monnett, an Anchorage-based scientist with the U.S. Bureau of Ocean Energy Management, Regulation and Enforcement, or BOEMRE, was told July 18 that he was being put on leave, pending results of an investigation into "integrity issues." . . .
Documents provided by Ruch's group indicate questioning by investigators has centered on observations that Monnett and fellow researcher Jeffrey Gleason made in 2004, while conducting an aerial survey of bowhead whales, of four dead polar bears floating in the water after a storm. They detailed their observations in an article published two years later in the journal Polar Biology; presentations also were given at scientific gatherings. . . .
The article and presentations drew national attention and helped make the polar bear something of a poster child for the global warming movement. Al Gore's mention of the polar bear in his documentary on climate change, "An Inconvenient Truth," came up during investigators' questioning of Gleason in January. . . .

Climate models predicting Global Warming have a BIG problem: much more heat being lost by earth into space than models assumed

So much for long term predictions:

NASA satellite data from the years 2000 through 2011 show the Earth's atmosphere is allowing far more heat to be released into space than alarmist computer models have predicted, reports a new study in the peer-reviewed science journal Remote Sensing. The study indicates far less future global warming will occur than United Nations computer models have predicted, and supports prior studies indicating increases in atmospheric carbon dioxide trap far less heat than alarmists have claimed.
Study co-author Dr. Roy Spencer, a principal research scientist at the University of Alabama in Huntsville and U.S. Science Team Leader for the Advanced Microwave Scanning Radiometer flying on NASA's Aqua satellite, reports that real-world data from NASA's Terra satellite contradict multiple assumptions fed into alarmist computer models.
"The satellite observations suggest there is much more energy lost to space during and after warming than the climate models show," Spencer said in a July 26 University of Alabama press release. "There is a huge discrepancy between the data and the forecasts that is especially big over the oceans." . . .
the central premise of alarmist global warming theory is that carbon dioxide emissions should be directly and indirectly trapping a certain amount of heat in the earth's atmosphere and preventing it from escaping into space. Real-world measurements, however, show far less heat is being trapped in the earth's atmosphere than the alarmist computer models predict, and far more heat is escaping into space than the alarmist computer models predict. . . .

Why the US Bond Ratings may fall

This could be much clearer. Unfortunately, I agree with what he said on Fox News.

Charles Krauthammer: "The reason the ratings will drop -- and I think it will within a year, if not less -- is because one of the two major parties in every argument, every negotiation, every plan it's offered, has been looking for loopholes as a way to appear to cut spending when it doesn't. And the worst example is the Reid plan, which has a trillion dollars of cuts for a 10 year extension of the surge in Iraq and Afghanistan -- a phony cut from a phony spending idea. And that's I think the reason why nobody has confidence. It can't happen if one of the two parties is clearly unserious about debt reduction."

What happens if you act defensively in the UK

A shopkeeper in the Old Trafford area stabbed a robber to death. The shopkeeper was "confronted by a group of masked men, one of whom had a machete." Originally, this was the decision:

Last week, the Crown Prosecution Service said Flanagan, 59, would not face charges because he had used reasonable force and had acted in self-defense.

Now he has been arrested:

A shopkeeper has been arrested on suspicion of attempted murder after a man trying to rob his shop was stabbed to death.

Police were called to the shop, in Old Trafford, Greater Manchester, at about 9.40pm on Tuesday after reports that a man had been injured. It is understood a number of men had attempted to rob the shopkeeper.

The injured man was taken to hospital with a stab wound, and died a short time later.

Police sources said a 72-year-old man, understood to be the shopkeeper, was arrested. He has not been identified.

A spokesman for Greater Manchester police said: "A 30-year-old man with serious injuries was taken to hospital, but he died a short time later. A 72-year-old man was arrested on suspicion of attempted murder."

Chief Superintendent Mark Roberts added: "The investigation is in its early stages, and we are still trying to establish the circumstances of what has happened. . . .

Politico: Obama's press secretary "misfired all over the place"

From Politico:

The Obama administration has never been backward about leaning forward on Fox News. The network has proven a durable, go-to villain to rally the base and stoke indignation against a perceived antagonist on the right.

But White House press secretary Jay Carney, going after Ed Henry from Fox News on Wednesday, misfired all over the place by also insulting House Speaker John Boehner for being a "showboat" and exposing a level of secrecy and political calculation in the debt limit negotiations that runs counter to promises President Obama ran on.

The day after the two tangled over Henry's request for specifics on Obama's plan, Carney and Henry were back at it again. Henry asked at the briefing when Obama's plan might be submitted to the Congressional Budget Office. . . .

New Piece in the Philadelphia Inquirer: Risk of a U.S. default has been exaggerated: History and the bond markets contradict the hype

My piece in the Philadelphia Inquirer starts this way:

A failure to raise the federal debt ceiling could "roil the financial markets and cause severe economic problems," "cause profound damage to our country," and have "dire consequences." So wrote the Los Angeles Times, the Washington Post, and the New York Times - in 1995.

Other ills predicted at the time were rising unemployment, reduced economic growth, and soaring interest rates. This was as President Bill Clinton and other Democrats were fighting off Republican attempts to link increasing the debt limit to cutting the budget deficit.

Then, as now, there was a widespread misperception that failing to raise the debt ceiling would lead to a default. The Washington Times reported that "congressional Republicans are threatening to provoke the nation's first-ever default." The Los Angeles Times warned of "the first real risk of a government default." Even Federal Reserve Chairman Alan Greenspan said Republicans should back down because, "To default for the first time in the history of this nation is not something anyone should take in any tranquil manner." . . .

Proof that not raising the debt ceiling will be a disaster?

The Washington Post and other publications are all excited that they have found proof that not raising the debt ceiling immediately will be a disaster. There is a big problem though, everyone is assuming that there will be default.

The Sunday airwaves brimmed once again with talk of what would – or would not – happen if lawmakers fail to meet the Aug. 2 deadline to raise the nation’s legal limit on borrowing. Unmentioned by either side was an obscure bit of budgetary history in which the country did default on some of its bills, and wound up paying the consequences.

Treasury Secretary Timothy F. Geithner said on CBS’s “Face the Nation” that inaction “would be catastrophic for the economy” and added that “no responsible leader would say the United States of America, for the first time in its history, should not pay its bills, meet its obligations.” . . .

In fact, there was one short-lived incident in the spring of 1979 that offers a glimpse of some of the problems and costs that might arise if the stalemate on Capitol Hill continues. Then, as now, Congress had been playing a game of chicken with the debt limit, raising it to $830 billion – compared with today’s $14.3 trillion – only after Treasury Secretary W. Michael Blumenthal warned that the country was hours away from the first default in its history. . . .

Zivney said that the 1979 incident, which pales in comparison to the size and scope of payments the Treasury could have to forego if it can no longer borrow money come Aug. 2, offers a useful case study in the real-world consequences that result when the U.S. government doesn’t seem like the sure bet it has always been.

“It creates doubt, and I think that’s the real lesson,” he said. “The market has a much longer memory than individuals.” . . .

Another problem is that the problem with the 1979 payments had nothing to do with the debt ceiling. It came about from an error in word-processing. From an NPR interview:

SIEGEL: And take us back to the spring of 1979. How was it that the Treasury did not redeem some Treasury bills that came due in April and May?

Prof. ZIVNEY: Well, that's a little bit of a mystery even to me. I believe it was similar to the situation we have now, where Congress was debating raising the debt ceiling. And in the process of all these - the wrangling going on, some of the little paperwork details, like writing checks, got lost in the process. And so they didn't get written.

SIEGEL: The Treasury actually pleaded that they had bookkeeping problems, computer problems in paying off people.

Prof. ZIVNEY: Oh, they said, yes. They said there were technical errors, word-processing errors. But I'm sure the thousands of people that did not receive their $120 million were not, you know, mollified by hearing it was just a technical difficulty. . . .

Ezra Levant on Canada's Sun TV: did gun control fail Norway?

Obama administration warns witnesses to limit testimony in Fast and Furious probe

Issa warns that the Obama administration is intimidating witnesses in ATF gun probe. From the Washington Times (July 26, 2011):

The Obama administration sought to intimidate witnesses into not testifying to Congress on Tuesday about whether ATF knowingly allowed weapons, including assault rifles, to be “walked” into Mexico, the chairman of a House committee investigating the program said in an interview Monday.

House Oversight and Government Reform Committee Chairman Darrell E. Issa, California Republican, said at least two scheduled witnesses expected to be asked about a controversial weapons investigation known as “Fast and Furious”received warning letters from the Bureau of Alcohol, Tobacco, Firearms and Explosives to limit their testimony.

Mr. Issa's committee is set to hear testimony from six current or former ATF employees, including agents and attaches assigned to the bureau’s offices in Mexico, about the operation — in which, federal agents say, they were told to stand down and watch as guns flowed from U.S. dealers in Arizona to violent criminals and drug cartels in Mexico.

The six-term lawmaker aired his concerns about the program in a wide-ranging interview with reporters and editors at The Washington Times on Monday. . . .

May be they have a reason to intimidate witnesses. Los Angeles Times: FBI report at odds with ATF claim on weapons

The claim by senior ATF officials that none of the weapons lost in the botched Fast and Furious sting operation were used in the shooting of a Border Patrol agent is not supported by FBI ballistics tests, according to a copy of the FBI report on the shooting.

Last week, spokesmen Scot Thomasson and Drew Wade of the federal Bureau of Alcohol, Tobacco, Firearms and Explosives told The Times that the FBI had assured them that neither of the two Fast and Furious weapons found at the scene of Border Patrol Agent Brian A. Terry's death were the ones that killed the agent.

"We're not aware of any forensic evidence that would link these guns to the homicide," they said.

A copy of the FBI report obtained by The Times' Washington bureau shows ballistics tests did not rule out the Fast and Furious guns.

Experts went to work on tests on Dec. 17, three days after Terry was killed, FBI records show. On Dec. 23, the FBI's "Report of Examination" said the fatal bullet came from a semiautomatic rifle, but that "due to a lack of sufficient agreement in the individual microscopic marks of value" on the weapons, "it could not be determined" which gun fired it. . . .

Soros gives back investor money so as to avoid Dodd Frank reporting requirements

Soros gave back enough money to investors to avoid the new reporting requirements. From The Street:

George Soros, the billionaire hedge-fund manager and philanthropist best known for breaking the Bank of England in 1992, will return capital to investors in order to avoid reporting requirements under the Dodd Frank reform act.

Soros will return money to investors by the end of the year, Bloomberg reported Tuesday, citing two people briefed on the matter. Soros Fund Management will focus on managing assets for his family, according to a letter to the firm's investors. Soros will turn 81 on August 12. . . .

Initial media reports trumpeted the end of Soros' 40-year career as a hedge-fund manager, although the billionaire investor's firm is far from being done. Soros will return less than $1 billion to external investors, a drop in the bucket compared to the firm's total assets of more than $25 billion.

The reason? Under new requirements from the Dodd Frank act, hedge funds are required to register with the Securities and Exchange Commission by March 2012 if the fund continues to manage more than $150 million in assets for outside investors. The new requirements would call for funds to report information about the assets they manage, potential conflicts of interest, and information on investors and employees. The act allows an exemption for what the Commission considers "family office" advisers.

"We have relied until now on other exemptions from registration which allowed outside shareholders whose interests aligned with those of the family investors to remain invested in Quantum," the letter continued, according to the Bloomberg report. "As those other exemptions are no longer available under the new regulations, Soros Fund Management will now complete the transition to a family office that it began eleven years ago." . . .

Obama's warning in the Polls

New Polls Confirm Obama's Democratic Base Crumbles

More Americans unhappy with Obama on economy, jobs

Americans Believe Obama Made Economy Worse

Two recent Fox News pieces

"Pelosi Is Right -- The Gang of Six Plan Is Not Ready for Prime Time"

Democratic House Minority Leader Nancy Pelosi (D-Calif.) has it right. The so-called "Gang of Six" proposal to increase the debt ceiling is "not ready for prime time."
The extremely short document is vague, and if six Senators can't agree on what the individual income and corporate tax rates are going to be or how much some of the cuts will be or where they will really be made, how does anyone expect the Democrat Senate, the Republican House, and President Obama to agree on anything.
For a proposal whose text is just over two pages long, one wonders why they need to have a slightly longer than one page executive summary. Take some of the central proposals:
-- Reform of individual income tax must generate $1 trillion in additional revenue through the elimination of tax deductions. The elimination of deductions is to be partially offset by "establishing three tax brackets with rates of 8 [to] 12 percent, 14 [to] 22 percent, and 23 [to] 29 percent."
-- There is a similar reform of corporate income taxes with the new rates to be "between 23 percent and 29 percent, rais[ing] as much revenue as the current corporate tax system." . . . .

Congress Can Learn From 1995-96 Debt-Ceiling Debate

Failure to raise the Federal debt ceiling limit could "roil the financial markets and cause severe economic problems," "cause profound damage to our country," and have “dire consequences.” So wrote the Los Angeles Times, Washington Post, and New York Times. But the year was 1995, not 2011.
Other ills predicted during that contentious debate were rising unemployment, reduced GDP growth, and soaring interest rates. That was at a time when President Clinton and Democrats were fighting off attempts by Republicans to link cutting the deficit to the increase in the debt ceiling and a continuing resolution on spending.
Then as now, there was a widespread misperception that failure to increase the debt ceiling would produce a default: "congressional Republicans are threatening to provoke the nation's first-ever default" (Washington Times). The Los Angeles Times reported: "the first real risk of a government default could occur November 15 [1995]." Even the then Chairman of the Federal Reserve, Alan Greenspan, warned that congressional Republicans should drop their efforts, declaring: "To default for the first time in the history of this nation is not something anyone should take in any tranquil manner." . . .

Will voters hold Obama's scare tactics against him?

I almost hope that the August 2nd deadline is passed without an agreement. Obama's claims about default, higher interest rates, disaster befalling unemployment and the economy general couldn't have been stronger. From Bloomberg:

The U.S. government can avoid a default for at least a month after the Aug. 2 deadline to lift the debt ceiling set by the Treasury Department, said John Silvia, chief economist at Wells Fargo Securities LLC.
“The Federal Reserve and the Treasury can work together to generate enough cash probably for the next two or three months to avoid any kind of automatic default on the Treasury debt,” Silvia, who is based in Charlotte, North Carolina, said in an interview on Bloomberg Television’s “In the Loop” with Betty Liu. “There’s a way of getting around this issue for at least another month or two.” . . .

In his speech last night Obama used the term default 6 times, higher interest rates from default 3 times, unemployment, and a "deep economic crisis."

Some of the Multiple Victim Public Shootings in Europe

One has to understand that this data on gun ownership rates per hundred people is from the Small Arms Survey, a group closely linked with George Soros. If you look at their website, you will see that they reference Open Society publications and the work of gun abolishionist Wendy Cukier. As if that wasn't enough of a warning, look at their statement of purpose: "The proliferation of small arms and light weapons represents a grave threat to human security." To put it mildly, I am very dubious about their data.

In any case, the data in the figure purports to show two things. Civilian guns owned per 100 people is the number shown for each country. Each circle represents a multiple victim public shooting and the number in the circle indicates the number of people killed in the attack. Unfortunately, they seem to have missed some multiple victim public shootings in Europe.

"Gang of Six Not Ready For Prime Time?"

More Problems with Brady Background checks

Previously I wrote about how virtually all those stopped by background checks were false positives. Now we find that they are letting criminals buy guns who shouldn't have been allowed to. From Fox News:

In the latest chapter of the gunrunning scandal known as Operation Fast and Furious, federal officials won't say how two suspects obtained more than 360 weapons despite criminal records that should have prevented them from buying even one gun.
Under current federal law, people with felony convictions are not permitted to buy weapons, and those with felony arrests are typically flagged while the FBI conducts a thorough background check.
However, according to court records reviewed by Fox News, two of the 20 defendants indicted in the Fast and Furious investigation have felony convictions and criminal backgrounds that experts say, at the very least, should have delayed them buying a single firearm. Instead, the duo bought dozens of guns on multiple occasions while federal officials watched on closed-circuit cameras.
Congressional and law-enforcement sources say the situation suggests the FBI, which operates the National Instant Criminal Background Check System, knowingly allowed the purchases to go forward after consulting with the Bureau of Alcohol, Tobacco, Firearms and Explosives, which initiated Operation Fast and Furious. . . .

Convicted Felons are now a protected class?

Taxes are virtually always born by both consumers and producers

One wonders if any reporters have ever taken any economics. From the SF Chronicle:

American, United, Continental, Delta, US Airways, Southwest, AirTran and JetBlue all raised fares, although details differed. Most of the increases were around 7.5 percent.

Only a few airlines were still passing the tax break on to passengers Saturday night, including Virgin America, Frontier Airlines and Alaska Airlines.

The expiring taxes can total $25 or more on a typical $300 round-trip ticket. They died after midnight Friday when Congress failed to pass legislation to keep the Federal Aviation Administration running.

That gave airlines a choice: They could do nothing - and pass the savings to customers - or grab some of the money themselves.

Tom Parsons, who runs the Bestfares.com travel website, said consumers should get the tax break.

"Why would the airlines deserve it?" he said. "They already hit us with enough fees. Now they're keeping the government fees too." . . .

Hint: draw a positively slopped supply curve and a negatively sloped demand curve. Now impose a tax. It should be pretty obvious that both the consumer and producer surpluses have been reduced by the tax.

Do leaner times lead to more corruption of the police?

There is a widely accepted argument among economists that if you want to eliminate corruption, raise salaries and then punish and fire those caught engaged in corruption. This piece at Fox Business seems related.

. . . . A report released this week by the County of Los Angeles Office of Independent Review makes a strong, albeit anecdotal, argument that complaints against sheriff's deputies have increasingly turned from "minor theft-type allegations" to allegations of more-serious financial crimes, because...well, times are tough and they have bills to pay, too.
Last year, the Los Angeles County Sheriff got hit with a $100 million budget cut. So now deputies can't get the extra pay they came to depend upon, says the report, which was first reported by the Los Angeles Times.
"Four or five years ago, most deputies who wanted to work overtime to earn extra money ...could generally do so quite easily," the report reads.
"While some deputies worked overtime...to earn extra money to save for leaner times," the report says, "other deputies may have adopted a lifestyle beyond that which their regular salary afforded.
"Regrettably, the current financial crisis...may have contributed to the rise in poor decision-making..."
The report cites examples without mentioning names of the accused.
Mirroring the times, two deputies are under federal indictment for alleged mortgage fraud--taking out loans that exceeded the sales prices of homes they flipped. One faces 40 years in prison, the other 105, the report said.
Other cases involved insurance fraud:
One deputy allegedly set his car on fire. "In addition to the three vehicles he owned, the deputy had a home with a substantial mortgage and three credit cards with balances of over $1,000 each," the report noted.
Another staged a burglary. Another ditched his car in Mexico and claimed it was stolen.
Until recently, fallen deputies were more likely to be accused in petty offenses such as shoplifting, said Michael Gennaco, chief attorney for the oversight office that produced the report, but financial pressures have led to larger frauds. . . .

Copy of Boehner's response to Obama on July 22, 2011

REP. John Boehner (R-OH), Speaker of the House: I want to be entirely clear. No one wants to default on the full faith and credit of the United States government. And I'm convinced that we will not. Starting tonight I'll be working with colleagues here in the Capitol, both the House and the Senate, to find a responsible path forward. And I have confidence in the bipartisan leaders of the Congress that can come together and to ensure that we have an agreement that will allow the country to avoid default and meets the principles that we've outlined.
Spending cuts that must be greater than the increase in the debt limit and no tax increases. The discussions we've had with the White House have broken down for two reasons. First, they insisted on raising taxes. We had an agreement on a revenue number. A revenue number that we thought we could reach based on a flatter tax code with lower rates and a broader base. That would produce more economic growth, more employees and more taxpayers.
And a tax system that was more efficient in collecting the taxes that were due the federal government. And let me just say that the White House moved the goalpost. There was an agreement, some additional revenues, until yesterday when the president demanded $400 billion more which was going to be nothing more than a tax increase on the American people. And I can tell you that Leader Cantor and I were very disappointed in this call for higher revenue.
But secondly, they refused to get serious about cutting spending and making the tough choices that are facing our country on entitlement reform. That's the bottom line. I take the same oath of office as the president of the United States. I've got the same responsibilities as the president of the United States. And I think that's for both of us to do what's in the best interests of our country.
And I can tell you that it's not in the best interests of our country to raise taxes during this difficult economy, and it's not in the best interests of our country to ignore the serious spending challenges that we face. I want to say this is a serious debate, and it's a debate about jobs, and it's a debate about our economy, and frankly it's also a big debate about the future of our country. You know, until recently the president was demanding that the Congress increase the debt limit with no strings attached. As a matter of fact, the treasury secretary sent me a letter two days after we were sworn in, in January demanding that we give him a clean increase in the debt limit. I immediately responded and told the treasury secretary that the American people would not tolerate a clean increase in the debt ceiling unless there were serious spending cuts attached and real reforms to the way we spent the American people's money. I went to New York City in May, gave a speech to the New York Economic Club, where I outlined the challenges we were facing and I made it clear that we would not increase the debt limit without cuts that exceeded that increase in the debt limit.
That there would be no new taxes and that there would be serious spending reforms put in place. Listen it's time to get serious and I'm confident that the bipartisan leaders here in the Congress can act. The White House won't get serious. We will.