Thursday, April 30, 2009

Harry Reid's interesting interview

Just when it was starting to look like the Democrats were going to have a free hand to ram through any kind of legislation on any kind of subject, something interesting happened.

Senate Majority Leader Harry Reid did a little promotional work for the paperback version of his book, "The Good Fight," which is coming out on May 5.

The paperback contains a new epilogue called "The Obama Era." In it, Senator Reid tells a story about the time Senator Barack Obama, then a freshman senator from Illinois, gave a speech on the floor about President Bush's war policy.

According to the Associated Press, Reid writes: "'That speech was phenomenal, Barack,' I told him. And I will never forget his response. Without the barest hint of braggadocio or conceit, and with what I would describe as deep humility, he said quietly: 'I have a gift, Harry.'"

The AP happens to know this because "A copy of the book's 15-page epilogue was provided to The Associated Press."

And just in case they didn't have time to read it, the Majority Leader gave them an interview.

"To be honest, my wife, she said, 'don't tell people that,'" Reid recalled. "She's afraid it could be taken the wrong way. But she's heard me tell lots of people that, and everytime she goes 'don't do that.' Now it's there for thousands of people to read."

Isn't that interesting?

Senate Majority Leader Harry Reid wants everyone to know that Barack Obama is a bragging, self-impressed, insufferable egomaniac.

He can describe it "as deep humility" all day long, he's not going to fool anybody in Washington.

Does it sound to you like Harry Reid has had just about as much as he's going to take?

It sounded a little like that at the other end of Pennsylvania Avenue Wednesday night, when President Obama held a news conference to mark his 100th day in office.

Answering a question from the New York Times' Jeff Zeleny about what has "humbled" him the most during his time as president, Obama said this:

"Humbled by the — humbled by the fact that the presidency is extraordinarily powerful, but we are just part of a much broader tapestry of American life, and there are a lot of different power centers. And so I can't just press a button and suddenly have the bankers do exactly what I want or, you know, turn on a switch and suddenly, you know, Congress falls in line."

At last, some good news out of Washington.


Copyright 2009

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Thursday, April 23, 2009

Jeff Immelt, Villain

General Electric Chief Executive Officer Jeffrey Immelt parroted the White House line at the company's annual shareholder meeting in Orlando Wednesday, saying the economic downturn has "fundamentally reset" the way companies do business and capitalism itself.

The Associated Press reported that Immelt predicted the current recession "would ultimately lead to changes such as greater government involvement in business and a restructuring of the financial services sector that was a root of the crisis."

What's this?

He's awfully quick to accept the kind of government strangulation that businesses pay lobbyists tens of millions of dollars to avoid.

Why is the CEO of one of the world's largest companies talking like a vagrant pickpocket pleading for a lighter sentence?

Funny you should ask.

Just a couple of paragraphs later the AP tells us, "Profits at the company's GE Capital lending arm have fallen sharply as losses on loans like credit cards, commercial real estate and overseas mortgages have grown. GE lost its rare 'AAA' credit rating earlier this year due to GE Capital's woes."

That's plenty of reason for a CEO to be currying favor with President Obama. Every company in the financial industry is either pleading for bailout money or lobbying for mercy from regulators.

Yet there's more.

"GE has positioned itself for an economic recovery," the AP says Immelt told shareholders, "with a new focus on products that could capture some of what GE estimates is $2 trillion worth of government stimulus spending worldwide. That includes windmills and other clean energy equipment and new health care technology to better diagnose illnesses like Alzheimer's disease."

No wonder Jeff Immelt, capitalist, publicly agrees with the president that capitalism as we know it is dead.

Jeff Immelt is on his knees to President Obama because he wants GE to get bailout help, regulatory breaks, and some of that $2 trillion of your tax money that the government is about to start throwing around.

He really ought to move his headquarters to Pahrump, Nevada. It's legal there.

Obviously Jeff Immelt has made a judgment that his company's fortunes are best served by flattering government officials and becoming a docile, compliant, and wildly prosperous government contractor.

There's just one problem.

General Electric owns NBC. And CNBC. And MSNBC.

That's a problem.

MSNBC is regularly accused of political bias, most recently at today's GE shareholders meeting. "The crowd was very upset with MSNBC because of its leftward tilt," one attendee told the Hollywood Reporter. The trade paper reported that the shareholders' microphone was cut off during the "umpteenth" question about MSNBC's political bias.

Then there's CNBC.

CNBC is a business news channel watched by traders and investors around the globe. If you watch it regularly you may have noticed, as we did, that the on-air talent at the network has been shilling like a late-night pitchman since last September.

They shilled for the bailout, they shilled for green energy, they shilled for the stimulus package. Every day, it seemed, the once-reliable news anchors on that network sounded more and more like Paul Begala or Mary Matalin, glib advocates paid to get their talking points in before the commercial break.

But the anchors on CNBC have a lot of time to fill, and they can't fill all of it just by talking to each other.

That's where the trouble started.

Rick Santelli, reporting from the floor of the Chicago Mercantile Exchange, couldn't take it anymore when President Obama announced his plan to help "struggling homeowners." He yelled out to the traders around him and asked if they wanted to pay their neighbor's mortgage on the house with the new bathroom addition. As the traders roared and applauded behind him, Santelli said he was organizing a tea party at Lake Michigan to protest the tax-and-spend-and-bailout policies of the government.

Maybe you saw the news on April 15, or maybe you were watching NBC, but there were an estimated 750 "tea party" protests across the country, all organized after Rick Santelli's rant was downloaded millions of times from the CNBC website and YouTube.

House Speaker Nancy Pelosi dismissed the protests contemptuously as "Astroturf," meaning a phony grass-roots protest that actually was organized by a lot of paid lobbyists.

We'll see.

In the meantime, CNBC's anchors began to have more and more trouble saying something nice about the new administration's handling of the economy. Apparently on orders to sound more optimistic, Sue Herera spoke nervously of trying to find "silver linings" and Erin Burnett tried gamely to locate "crocuses" and "green shoots."

Sometimes it was pretty funny.

After Tim Geithner horrified the markets with his big unveiling of no specific plan to deal with toxic assets on bank balance sheets, CNBC's air was filled with interview after interview of business executives and financial professionals slamming Geithner as an amateur and an incompetent.

"That poor kid," one commentator said, speaking of the Treasury Secretary of the United States.

File that under "Don't help me."

A business news channel can't get around the fact that it has to report business news, and business is bad. The people interviewed on CNBC increasingly blamed the gloomy economic outlook on President Obama's real or potential plans for taxes, deficits, bank nationalization, health care reform, labor union muscle, and a cap-and-trade system to penalize energy use, not to mention his unilateral decision to fire the CEO of General Motors.

And then, it happened.

General Electric CEO Jeffrey Immelt called CNBC on the carpet.

On April 16 the New York Post reported, "The top suits and some of the on-air talent at CNBC were recently ordered to a top-secret meeting with General Electric CEO Jeffrey Immelt and NBC Universal President Jeff Zucker to discuss whether they've turned into the President Obama-bashing network."

According to the Post's source, "It was an intensive, three-hour dinner" at NBC's New York headquarters. "There was a long discussion about whether CNBC has become too conservative and is beating up on Obama too much. There's great concern that CNBC is now the anti-Obama network. The whole meeting was really kind of creepy."

One topic discussed, the Post reported, was Rick Santelli's rant against the president's bailout program for overextended homeowners.

The Post's source told the paper that NBC Universal President Jeff Zucker was personally behind the meeting.

In the entertainment industry, where people get fired all the time for things that are totally out of their control--because this teen idol's sitcom was more successful than that teen idol's sitcom, or because more males age 18-34 watched the grotesque reality show than the grotesque autopsy show--the executives who make it to the top have one thing in common.

They know how not to get fired.

So NBC Universal President Jeff Zucker claimed to be the one who called the meeting to crack down on CNBC.

And GE Chairman Jeff Immelt, while confirming to angry shareholders that the reported meeting with CNBC did take place, piously said he "takes a hands-off approach to what is reported on the company's news networks."

They're not fooling anybody.

What they're doing is destroying the credibility of some very fine reporters and news professionals.

Capitalism will survive. But thanks to Jeffrey Immelt, NBC News has joined Tim Russert.


Copyright 2009

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Sunday, April 19, 2009

Jamie Dimon, Superhero

J.P. Morgan Chase CEO Jamie Dimon is not cooperating.

He wants to repay the TARP money before President Obama is willing to accept it. "We could pay it back tomorrow," he said on Thursday, "We have the money."

And he just sold $3 billion in debt without the backing of the FDIC.

And he said his company would not participate in the new Public-Private Investment Program that the Treasury Department insists is the only way to deal with the problem of "toxic assets" on bank balance sheets.

"We manage and control our own assets," he said on a conference call.

Jamie Dimon doesn't want the government's help, or its input, or its stigma, or its grandstanding statements denouncing the banks for trying to hold customers to the contracts they signed.

"He has privately grumbled that it isn't fair or accurate to paint J.P. Morgan with the same brush as weaker banks," the Wall Street Journal reported. "He has been particularly irritated when customers demand financial breaks because the bank is operating with taxpayer money."

No reasonable person could blame him.

Every day, in congressional hearings and public statements, another government official expresses outrage on behalf of people who are finding it tough to pay their credit card debt or their mortgages or their car loans. The latest to join the chorus was White House economic adviser Lawrence Summers, who said Sunday that President Obama will be "very focused, in a very near term, on a whole set of issues having to do with credit card abuses, having to do with the way people have been deceived into paying extraordinarily high rates that they wouldn't have paid if they knew what they were getting themselves into."

The president plans to support congressional efforts to "stop the marketing of credit in ways that addicts people to it," Summers said.

That kind of language makes the banks sound like evil drug dealers, ruthlessly corrupting your children with a free taste of pleasant poison.

It's no accident. It's part of a concerted attempt to divert public anger over government bailouts [Pennsylvania Democrat Paul Kanjorski said last fall the calls to his office were coming in fifty-fifty: half "no" and half "Hell, no"] into anger at bankers, anger which officials believe they can use to strong-arm banks into voluntarily agreeing to policies and practices that have never been signed into law. "My administration," President Obama told the nation's top bankers at a meeting in the White House state dining room late last month, "is the only thing between you and the pitchforks."

At the start of that meeting, Jamie Dimon handed a $25 billion check to Treasury Secretary Timothy Geithner in an attempt to repay the TARP money.

He was joking, ABC News reported.

They're never joking.

Jamie Dimon is not cooperating.

He refuses to feel guilty. He will not give the government what Ayn Rand called "the sanction of the victim." If President Obama wants to force the banks to keep TARP money so he can tell them who will get credit and on what terms, Jamie Dimon will not help him conceal the truth from voters, or from history.

America Wants To Know is Jamie Dimon's fan for life. In the interests of full disclosure, we'll tell you that we own a little bit of his stock, all his albums, and every issue of Tiger Beat magazine that ever had his picture on the cover.



Copyright 2009

Editor's note: You might be interested in the earlier posts, "And the Emmy for best villain goes to...." and "Hank Paulson's casting call." You might also enjoy the chapter, "How to Lose Money with Credit Cards" in our friend Babe Lincoln's new book, "How to Make Money and Lose Weight." Use Amazon.com's "Search Inside the Book" program to look it up at this link.

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The affinity for Zimbabwe

It's happening.

America Wants To Know warned in February that President Obama's gut-level decision to oust the bust of Winston Churchill from the Oval Office was a sign that he harbored a deep anger over historical colonialism. We wondered if he believed Europe and Anglo-America owed the Third World the equivalent of damages for pain and suffering, and if that would take the form of support for various transfer payments from U.S. taxpayers to the governments of undeveloped nations, as well as high taxes to punish success in the belief that wealth is the rotten fruit of an old imperialist tree.

"We may learn a lot about President Obama's beliefs by observing his policy on Zimbabwe," we wrote then. "If he holds the premise that historical colonialism is the cause of Africa's current problems, he may offer Zimbabwe's President Robert Mugabe some kind of financial aid or technical assistance. He may believe the U.S. is morally obligated to try to bring the country's devastated economy back to life.

"If, on the other hand, President Obama holds the premise that private property is the indispensable foundation of prosperity, he will refuse to assist the regime of President Mugabe, who seized the land owned by white farmers and gave it to other people in the name of fairness."

On Friday, the U.S. State Department announced that it has lifted the travel advisory that warned Americans against visiting Zimbabwe.

And on Saturday, the Associated Press reported this: "The U.S. on Saturday praised Zimbabwe's unity government for making progress toward reform as the African nation celebrated the 29th anniversary of its independence from Britain."

Secretary of State Hillary Clinton commended Zimbabwe for "the efforts the transitional government has undertaken and the progress it has achieved toward reforms that will benefit the Zimbabwean people. The United States encourages the government to continue those important steps as it works for a more promising future for Zimbabwe."

The AP said Zimbabwe's state newspaper recently reported that the government "intends to relax media restrictions as part of a plan meant to restore basic rights."

If that ousted bust of Winston Churchill could talk, it might point out that Zimbabwe is "celebrating" its 29th anniversary of independence from freedom of the press and basic rights, like property rights, for example.

"More than half of Zimbabwe's 12.5 million people face imminent starvation," reported Associated Press writer Terry Leonard in 2002, "Its once vibrant economy teeters on the brink of collapse. More than 70 percent of its people live in poverty. Most are unemployed. They lack proper housing, basic health care, clean water, sanitation, electricity and quality education for their children."

Before you blame it on colonialism, read on:

In just five years, Zimbabwe has fallen from a relatively prosperous and stable country to one wracked by economic despair and government-sponsored political violence.

Zimbabwe government statistics indicate the economy has shrunk by 28 percent and per capita income has been cut almost in half to $380 a year.

Inflation last month reached an annual rate of 123 percent.

Despite a looming famine in southern Africa, Mugabe has continued with the seizure of 95 percent of the white-owned farmland, bringing to a standstill an industry that once helped feed southern Africa.
Four years later, journalist Douglas Rogers visited Zimbabwe and lamented the unemployment rate of 70 percent, inflation so rampant that the cost of a beer was $150,000, and the collapse of Zimbabwe's "once-sound infrastructure," resulting in fuel shortages and electricity cuts.

"How did Zimbabwe get to this point?" he wrote in the Los Angeles Times, "It began in the late 1990s when, in order to pay for a costly military incursion into civil war-torn Congo, President Robert Mugabe ordered the printing of vast amounts of money, and inflation climbed steeply.

"But it has reached today's levels only since the commercial farm invasions, in which 4,000 out of 4,500 white commercial farmers were kicked off their land, beginning in 2000. White farmers accounted for an estimated 60% of the country's foreign currency earnings through the export of tobacco and other crops. The invasions not only crippled domestic production, they scared away foreign investment. To dig itself out of debt and pay its bills, the government has simply printed more money."

On Saturday, the Associated Press reported that Zimbabwe is "is desperate for foreign aid."

Well, whose fault is that?

Doesn't matter. You're going to pay.

Secretary Clinton said Saturday the U.S. "has long stood with the people of Zimbabwe in their times of need and will continue to do so."

The fig leaf of a "transitional," "unity" government is all the Obama administration needs to start the flow of your tax dollars to prop up the feet of Robert Mugabe, who remains in power and fully committed to the land-seizure policies that have destroyed the economy of the country and countless lives.

Secretary Clinton has given the first hint of what's coming. The wealth that was created where property rights were protected is about to be siphoned off and sent to a nation that became impoverished after it stopped protecting property rights.

No doubt the White House will attempt to sell this to the U.S. taxpayer as the best way to prevent the African nation from becoming the next failed-state-haven-for-terrorists-who- want-to-kill-Americans. If collectivism was a theatre district, "Pay Them or They'll Kill You" would be its longest-running hit.

More evidence of this fresh thinking was on display today at the Port of Spain in Trinidad and Tobago, where President Obama explained his view that Cuba is more popular in Latin America than we are because of "the thousands of doctors from Cuba that are dispersed all throughout the region, and upon which many of these countries heavily depend."

"It's a reminder for us in the United States," the president told reporters, "that if our only interaction with many of these countries is drug interdiction, if our only interaction is military, then we may not be developing the connections that can, over time, increase our influence and have -- have a beneficial effect when we need to try to move policies that are of concern to us forward in the region."

President Obama continued, "it's so important that in our interactions not just here in the hemisphere but around the world, that we recognize that our military power is just one arm of our power, and that we have to use our diplomatic and development aid in more intelligent ways so that people can see very practical, concrete improvements in the lives of ordinary persons as a consequence of U.S. foreign policy."

Completely omitted from the president's discussion of ways to improve the lives of ordinary persons was any mention of trade.

Trade, which means voluntary transactions between willing parties to the mutual benefit of both, just doesn't interest him very much.

He's more interested in "development aid," which means money is taken from U.S. taxpayers by government officials and then given to government officials in other countries.

The people who most dependably benefit from "development aid" are the government officials, the campaign donors who get the inside track for the contract to build whatever the potentates decide to buy with your money, and the lobbyists who introduce them to each other.

If President Obama achieves his agenda, we can look forward to more of this kind of government deal-making in health care, energy, banking, manufacturing, and education. Private trade for goods and services will increasingly be crowded out by government standards and requirements, all in the name of returning the nation, someday, to economic prosperity.

It is more likely to turn us into Zimbabwe.


Copyright 2009

Editor's note: You might be interested in the earlier posts, "Barack Obama, angry colonial" and "Atlas Shrugged: Now playing in Zimbabwe," and in "Defending Capitalism" at SusanShelley.com.


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Sunday, April 12, 2009

Tea parties with weapons

Just for the sake of argument, suppose people were upset about taxes.

Hypothetically.

Suppose Americans were alarmed enough about rising government spending and debt to organize tax protests, even "tea parties," and forcefully express their opposition to the constant whining from various quarters that taxes are not high enough.

Hypothetically.

Is there anything that could be done about it?

Glad you asked.

Back in the late 1970s, California voters were so outraged over skyrocketing property taxes that they used the initiative process to pass Proposition 13, an amendment to the state constitution that slashed property taxes to 1 percent of the 1975 assessed value or most recent sale price, allowing just the slightest increase every year to pay for bonds approved by the voters for specific purposes.

To this day, people who make a living by coaxing money out of Sacramento are furious about it.

That's just too bad, because Proposition 13 has more public support than a redwood tree in the path of a strip mall developer.

What does this have to do with federal taxes?

Did you know that the U.S. Constitution can be amended?

Did you know that a brand-new amendment has the same force of law as if it had been part of the original Constitution in George Washington's day?

Of course you did.

But did you know that the Constitution can be amended by the legislatures of the states, without the approval of Congress, the president, the Supreme Court, or any of the fifty state governors?

"The Congress, whenever two thirds of both Houses shall deem it necessary," Article V of the U.S. Constitution begins, "shall propose Amendments to this Constitution, or, on the Application of the Legislatures of two thirds of the several States, shall call a Convention for proposing Amendments, which, in either Case, shall be valid to all Intents and Purposes, as Part of this Constitution, when ratified by the Legislatures of three fourths of the several States, or by Conventions in three fourths thereof...."

Hypothetically, suppose the enraged "tea party" protesters gathering in cities across America on Wednesday were to decide to support anti-tax candidates for their state legislatures. Hypothetically, suppose these candidates got elected.

Suppose two-thirds of the state legislatures in the United States called a constitutional convention and proposed a flat-tax amendment.

Suppose the amendment cut federal income taxes to one percent of gross income.

Suppose the constitutional convention passed this amendment and sent it out to the states for ratification, and suppose three-fourths of the states ratified it.

Hypothetically.

The entire income tax code of the United States would go straight into the trash, and everyone in the country could stop thinking about it.

Every year, Americans would owe one percent of their income in federal income taxes.

And that's all.

You wouldn't have or need any deductions and you wouldn't have or need any tax shelters.

You could spend and invest without altering your decisions because of tax law.

It would be a good idea, hypothetically, for the amendment to include a provision that authorizes Congress to set the minimum income that would be subject to federal income taxes. For example, Congress might decide not to collect income taxes from people who earn the minimum wage for a forty-hour week.

Other than that, Congress would no longer have the power to reward and punish selected Americans by fiddling with the tax code every two years. Or every two months. Or every two hours.

If we used the amendment process to lock the tax code in place, taxpayers and investors would be able to make long-term plans without wondering what the law will be five years from now. The tax code would be out of reach of politicians of both parties.

That's because a constitutional amendment can only be changed with another constitutional amendment. A simple majority, even a two-thirds majority, in the House and Senate won't do it.

It's fine to carry signs and throw tea in the harbor, but if Americans really want a tax revolt, the constitutional amendment is the weapon that won the West.



Copyright 2009