The Sark Economic Bailout Plan

I've been away for a while as some have suspected :) But I felt compelled to get this up at the request of some folks in a land far far away.

The administration is proposing $700,000,000,000 (thats what billiions looks like, or $2500 per every man, woman, and child in the U.S.) bailout of the Wall Street companies that hold the significant portion of CDS (credit default swaps) the little pieces of paper of sub-prime mortgages that the Investment banks have been trading with each other at ever decreasing value until they are nearly worthless, thus the inability to use them as collateral for future business operation or other loans.

What does this actually do? It provides a place (a Resolution Trust type entity) for these Wall Street banks to essentially dump suspect mortgage paper and get them written off the books (which will actually have to be written off causing significant losses) and free up generally acceptable mortgage backed securities (the non sub-prime) paper to be used as normal collateral for inter bank loans. The dumped "bad" mortgage paper is still "bad" and suseptable to mortgage defaults and foreclosures, but the big Investment banks are relatively unscathed, and we the working tax payers get stuck with the bill eventually. I say eventually, because the governement right now is not even concerned about any of the massively growing national debt, and this just adds to it.

Ok, the Investment banks get clear balance sheets, they can use normal mortgage loan paper as collateral, the government and us get stuck with $700,000,000,000 in suspect loans that people can still fall into foreclosure on, and the tax payers get the bill.

Now let's think about this from a what went wrong perspective. Banks gave out loans to people who probably couldn't afford them in the long run, but kept pushing for average and below average earning americans to keep buying houses and the more the banks pushed the requirements lower, the more risky financially capable americans bought into the hype and tried to buy their piece of the american dream. The banks and all their accountants, auditors, and executives should have known better. The Americans who over extended themselves should have known better, but let's face it, the average american doesn't have a CPA degree, or nearly the financial acuem that the banks should have had watching over things. If the people with the financial acuem and fancy banking related degrees thought it was ok, why wouldn't the average Jane and Joe out there trying to finally be able to buy a house of their own?

Now what to do. And this is where the Sark bailout plan comes into play.

Take the $700,000,000,000 and PAYOFF those risky mortgages to some degree at the home owner level, say mortgages of $250,00 or less. 50cents on the dollar, or some scaling so that the amount owed by the individuals put their overall financial state more in line with the 33% of gross income rule. Bring the amount of the loan principle down to the proper level, so that the mortgage becomes no longer "sub-prime". Do that with the money and we do more than just save the bacon of the Wall Street big shots, but we actually strengthen the underlying American Economy, by freeing up available consumer spending to nearly the same amount of money. The Wall Street investment banks now have the majority of their CDS converted to "normal" mortgage paper, easily used as normal loan collateral, there isn't nearly as much "bad" paper that needs to be dumped to some "Resolution Trust", and laid on the heads of the ever increasingly burdened tax payer. And the very sluggish underlying economy gets an immediate inflow of non home equity disposible income from consumers which drives 2/3rds of the economy.

ADDENDUM:
Available for PRIMARY home mortgages only

All renegotiated mortgages would be required to have PMI insurance.

At time of resale or refinancing of a "renegotiated" mortgage, the reduction in principle amount must be repaid to the Government

NO Home Equity loans could be made to homeowners of a "renegotiated" mortgage property.

The Sark plan is called "Trickle Up" Economics. And personally, I think it does a better job of solving more than just the one problem of some serious Wall Street Gambling that Tax Payers Anonymous have to end up footing the bill for.

Obama puts web site to work for flood relief

I've been a little busy the last few days, and haven't been able to post as frequently as I would like, but I wanted to pass on this information about what Obama is trying to do for the flood victims in the midwest.

Obama has dedicated the main page of his presidential campaign website and is sending emails out to his supporters asking for direct support for the flood victims.

Obama site

Let the economy positions begin

Seems Obama and McCain are both out expounding on their economic plans. Looks like they are going to be doing the rounds over the next couple weeks positioning their stands on the economy. While neither has the "official" title of nominee of their party, the general campaign seems to be gearing up pretty quickly and looks to be substantially different than previous elections.

Time gives a broad brush look at Obama's economic proposals, and CNN does a little comparison shopping between the two.

I can't remember the last time there were two candidates that differed so significantly on such a broad range of issues. Looking forward to watching the debating both in debates and in the point counter point press releases.

Where is that gas tax holiday Sen McCain?

I've looked all over the congressional record and I can't find your proposed gas tax holiday bill anywhere to be found? Please tell us this wasn't a campaign stunt. Of course a week after Memorial day that $30 savings we were going to get is getting smaller and smaller each day.

The Dem race is over, but Clinton still swinging?

I listened to the speeches given tonight by Clinton and Obama. I was listening to McCain's speech and dozed off... sorry.

But I have been thinking about the situation in the Democratic party and the impression that Clinton left with her speech, and what it could mean as far as VP positioning, and party unity. And one of the things that struck me was the tone and temperment of the Clinton speech which I thought was still confrontational to a large degree, and still beating the "I'm the more electable candidate" drum, on a night when Obama had actually passed the required number of delegates to claim the nomination in no uncertain terms.

There has been a lot of talk about Clinton floating the idea that she would be open to being VP, and doing her utmost to help unify the party. My sense is that she probably flushed any possibility of her being on the ticket away with her speech tonight. She is continuing to drive her electablity as the primary candidate. She through the primaries has tried to paint Obama as weak and inexperienced, and basically checked off all the chips she has on the table as leverage to be taken as the VP.

However, by continually painting Obama as weak, and effectively listing the reasons he HAS to pick her as VP she is putting him in a box where he has no choice but to select someone else. After her speech tonight, to select her as his running mate, will provide credence to her assertion that he is a weaker candidate by giving into the pressure of the nomination losing candidate. To take her on the ticket now as an apparent appeasment to political pressure, he would automatically lose any credibility of being able to stand up to foreign leaders. Some one on CNN said as much in their assessment, that if he can't stand up to the Clinton pressure, how can he stand up to foreign leaders.

Unfortunately, I think Clinton passed on a unique opportunity to gracefully exit the race with dignity, and recognize the historic significance of an African-American winning the nomination of a major political party for the first time, and strongly start building party unity, but focused still on why she is the better candidate.

My view is that Obama has no choice now, but to go elsewhere for a VP candidate.

Blitzer preaching the "dream ticket" again

Wolf Blitzer of CNN is once again dreaming of the “dream ticket”. Mr Blitzer has been beating this drum ever since the last Democratic debate that he moderated between Hillary Clinton and Barack Obama. I’ve never quite understood his almost insatiable campaigning for this particular scenario, but I’m pretty sure that it is purely wishful thinking on his part.

The original hoopla over the “dream ticket” of Clinton and Obama being on the same Democratic party ticket started with his last question of that debate, and he hasn’t let it die for more than a couple of days in the intervening time. More and more of the DNC members, specifically Pelosi have stated quite frankly that the possibility of a Clinton/Obama or Obama/Clinton ticket is probably not even a remote possibility. And quite frankly, from a objective political view, it benefits neither Obama, Clinton, or the Democrats in a November general election.

While I give Blitzer leave to voice his opinions and possible wishes, I think the media needs to reflect on exactly what it’s role is in our national debates and elections. I firmly think that Blitzer should stick to the proper role of reporting and analyzing election news, instead of trying to beat a drum to try and direct an outcome, that most political observers see as a non-starter.

Stick to reporting Wolf, that is what you are paid for.

Let's talk FL and MI come the 31st

The DNC rules committee will meet on the 31st to figure out what the heck to do with the Michigan and Florida delegation seating.

While we wait.. let's look at this from the two candidate's perspective.

Obama: There is absolutely no reason for him to want to compromise to get either delegation seated. There is no advantage in it for him in terms of the nomination. If the roles were reversed, and Clinton was ahead, and Obama had won MI and FL, does anyone think for a moment that she would be howling at the moon to count those votes and get the delegates seated, if they in anyway had a possibility of providing Obama with a reason to take it to the convention? I think not.

Clinton: Getting MI and FL seates as voted (with Obama off the MI ballot, and no campaigning in FL), is the only sliver of hope left for Clinton to even get close enough (getting both seated still won't let her overtake Obama), to make the "popular vote" argument to the super delegates. But if she can get them seated relatively close to how the original voting allocated, it opens the door for her slightly to take this thing to the convention for a floor fight which is something the DNC definately doesn't want to see happen. It would practically cripple the Democrats afterwards. If Obama was behind and had won MI and FL, I'm sure we would be seeing the very same arguments from him to get them seated, and Clinton would be fighting tooth and nail to scale back their impact.

So basically what we have here, is the person in front, having no logical reason to compromise, will probably have to. The person behind, absolutely needing them seated in their entirety, probably not willing to compromise, but will probably have to.

In the end we will probably see the GOP theory at work, seating half of them or some such percentage. Clinton will draw a little closer, but not close enough to catch up in the delegates count, the super delegates will weigh in after June 3rd at about a 50 50 split, and Obama still ends up the nominee, but Clinton will have fought the great fight, and be positioned to go at it again in 4 years should Obama not win in November.

The results of the 31st meeting should at least provide some additonal entertainment Because the Obama supporters won't like the outcome, and the Clinton supporters won't like the outcome, and we will be able to see both sides ridicule and spit at each other from afar until the convention in August

Attacks on Clinton's RFK comments asinine

Well we have finally reached a point in the Democratic nomination race where any statement by either of the candidates is ripped apart and spun in such a way to make it the most disgusting thing ever imaginable. Most of you who have read my blog know that I am an Obama supporter, and am not at all enthralled with the idea of Hillary Clinton getting the nomination, both on personal faults, and her stands on some of the issues.

With that said, I have to say the uproar over her recent comments about the RFK assassination is about as bogus as anything I’ve seen yet in these campaigns. The pundits and the bloggers would have you believe that she is somehow implying that she is staying in with the hope that Obama might befall the same fate as RFK, and making it out to be some heinous implication that it is one of the reasons she is staying in the race.

After reading her comments to the particular editorial board, how anyone can come to the conclusion that she is somehow awaiting Obama’s assassination is totally asinine. Her merely pointing out that previous Democratic nomination races have not been resolved before the middle of June, and turning it into some menacing meaning, shows the vitriol course that the media, the bloggers, and the political forum morons will go to try and twist any comment from a candidate into a blustering support for their candidate at the expense of any responsible judgment.

With the general election season gearing up to start, the viciousness of the media, and the campaign surrogates, can only be expected to increase to a more idiotic fever pitch. Anyone who needs to twist every comment made by a candidate into some sinister plan, is once again feeding on the propaganda of fear that has been the hallmark of the current administration, and should be viewed with proper scrutiny and cynicism.

When an election is decided by the pure unadulterated misdirection, and fear mongering of the media, the pundits, and the campaign surrogates, we all lose the view of facts. Be wary of falling for the despicable reporting of ALL of today’s media, both televised, and through the internet. Be cynical of their purpose and their agenda in reporting anything stated by any of the candidates.

The best defense for America is an intelligently cynical and informed electorate, who is unwilling to take the spoon fed pulp being fed up by today’s so called news sources. Research stands for yourself, make your own decisions. Only with those premises as our guide can we the true electorate make our impact on the direction of the country, and take back our government, and make it once again responsive to our needs.

More primaries and more damage to the Democrats

I’m watching the results from the Oregon primary come in, and it looks like Obama will win Oregon, while Clinton won another lopsided win in Kentucky tonight. I’m thinking about one of the most talked about, but less really focused on aspects of the exit polling from both West Virginia and Kentucky, and a somewhat disturbing bit of statistics keep coming back to what we have been hearing Clinton pound on for the last few weeks since Pennsylvania. She has sharpened her rhetoric that “working class whites” are voting for her, as a mantra to the super delegates that she is a more viable candidate against McCain in a general election. Her continual beating of the racial drum may have started to resonate with some of her constituency, and in doing so may be irreparably damaging the Democratic party in the process.

In Pennsylvania, 12% of the white voters that said that race was important to them, Clinton got 76% of the vote from that segment. In West Virginia, after campaigning for weeks that “white blue collar workers” were voting for her instead of Obama, 21% of white voters who said that race was important to them, Clinton got an overwhelming 84% of their vote. Now again in Kentucky, after another week of the same “white blue collar workers” are voting for her instead of Obama stumping, 18% of the white voters that said that race was important to them, Clinton got an even larger 88% of their vote. Not only has race shown to be a major factor in the campaign now, but it seems that Clinton has started to increase the wedge effect of race within her own voting constituency.

In the mean time to shore up her other core support base, Clinton has come out blasting the media for not showing the same concern over the sexist aspects of the campaign as they have been the race aspect. However, in the exit polling, on average, gender has no where near the direct block of voter impact that the growing percentage of whites who consider race to be an important part of their decision making is.

The Democratic party was always a loose coalition of factions, purporting to be the champions of the minorities, Blacks, Hispanics, Women, and the less affluent components of the American electorate. But what has happened during the Democratic nomination campaign, is that the party has fairly split itself along what can now be primarily viewed as racial lines, with Blacks voting for Obama, and blue collar whites voting for Clinton, and to a degree each voting block uses race as one of their major decision points.

Whether Clinton drops out of the race before the convention or not, is probably a moot point now. The damage to the Democrats may be irreparable, and to a large degree the fault for that has to lay firmly on Hillary Clinton’s side of the playing field. Her husband’s ill conceived words after the South Carolina primary, pretty much wrenched the traditional Black vote that she had counted on and drove it to Obama. Her recent, and continual beating of the “white blue collar workers vote for me” mantra over the last three or four weeks, has effectively driven an inescapable wedge between that Democratic group and Obama, that may not be able to be repaired.

Any way you slice it, and the Democratic pundits keep proclaiming that the Democrats will rally around the nominee, there may have been terrible damage done to the Democratic party base, that will probably not heal by November. And should the Democrats lose in November, the damage may be terminal to the party going forward.

Supporting Mark Udall for US Senate from CO

I've pretty much decided to support Mark Udall in his run for the US Senate seat from Colorado this November. While his congressional voting record of voting across party lines at a little under 5% is not what I would consider bipartisan, getting another Democrat into congress to break the GOP log jam is more important. Since I'm supporting Obama for president, trying to give him the majority in the congress that will be needed to get some things changed is a top priority for me. Plus I am so tired of the GOP political machine and it's campaigns of fear and division, that a clear message needs to be sent.

I haven't looked at the house seat yet, but will be doing that over the next week or so.

As for the State level houses, and the local elections, there is still a lot of investigation to do, but I doubt it will be quite as straight forward as the first two.

All I ask of anyone, is if you are going to vote.... get yourself informed, and make a decision based on verifiable information, instead of the innuendo, and garbage that the current political machines consider valid campaigning these days.

Bush manages to unify Democrats

In one masterful stroke, President Bush found probably the only way to unite the possibly fractured Democratic Party. Attack both the party and the possible Presidential nominee of the party from half way across the globe, and rationalize them being similar to those who appeased Adolf Hitler prior to WWII.

The violent and colorful retorts of Senator Biden, Clinton, and Obama blasting Bush for his comments before the Israeli Knesset proved once again what a unifying force Bush has become for the Democratic Party. And if Bush hadn’t done enough to give the Democrats something to unite around, Senator McCain helped himself to some of the Bush legacy by jumping on board for much of the same type of attack.

In one single afternoon, Bush managed to get Hillary Clinton to defend Barack Obama, something that hasn’t happened in over three months. And Senator McCain managed to once again link himself to the most unpopular president in modern history by jumping on the “appeasement” bandwagon started by Bush. You just couldn’t make up a scenario that would present a more unified target for the Democrats at a time when McCain has tried to significantly distance himself from Bush.

An election that exposes our nations racial divides

If you happen to be a person that believes that racial hatred is dead in America, this presidential election will be a shocking revelation to you. As a baby boomer who grew up in the south west and then later living in Colorado, the kind of blatant racial hatred that you read about in other places in the country was always a far off thing to me, and something I tended to see as isolated problems. For some reason I had made myself believe that ingrained racial hatreds were somehow a thing of the past, and that we as Americans had progressed beyond using the color of one’s skin as a measure of their ability to contribute to the country.

I was mistaken. If one thing has been highlighted for me in this presidential election, it is that there is still a serious, and deep, racial divide within the country. I have spent a lot of time over the last few months participating in political forums of different kinds, and one thing that seems to be a constant, is that there are still some blacks and some whites that can not or will not move past the color of other people when making decisions about who they will associate with, who they will support, and who they will talk to, and who they won’t.

Simply view the postings on many of the political forums going on these days, and you will be swamped by the racial rants both for and against Obama. Most of the posters in these forums who are decidedly against his candidacy for president, can not give issue related reasons, without eventually, falling into the same old diatribes of him being a Muslim, his association with his former pastor, his writing that he feels more comfortable with his black heritage than his white. Eventually, any discussion about Obama in these forums degenerates into insults, and racial slurs.

The underlying racial tone of this election is not just seen in the popular forums either. The Washington post did an article depicting what some of the Obama volunteers have had to endure on the ground soliciting support for their candidate, and it was wholly disgusting that at this time in our history, that we as a nation are still consumed with racial hatred.

If there is one thing that I hope comes of this election, whether Obama is the nominee, or even eventually our president, is that his campaign will have made America finally look at it’s self in the mirror and force it to recognize that we are not the paragons of virtue that we announce ourselves to be to the rest of the world. We have a very long ways to go, but perhaps we are in the process of taking another great step in moving past the long standing racial divides within our society.

I for one hope it is the case.

GOP to HQ... We have a problem

On March 9th a little-known Democrat named Bill Foster won a special election for the seat formerly held by former GOP house speaker Dennis Hastert over Republican Jim Oberweis. Hastert had held the GOP seat in the house for 20 years. McCain had personally endorsed Oberweis, while Obama endorsed and cut a TV ad for Foster.

On May 3rd a Democrat won a special congressional election in Baton Rouge Louisiana taking a seat the GOP had held since 1974. Democrat Don Cazayoux defeated Republican Woody Jenkins for the seat opened up when Republican Richard Baker a 20 year incumbent resigned. Cazayoux was attacked in ads that painted him as a supporter of Barack Obama and Speaker Nancy Pelosi. This was second special election for a long time GOP seat where negative campaigning from the RNC tried to force negative association with the Democratic candidate with Obama and the Rev Wright. In both cases the negative attack ads failed to secure a GOP win in a historically GOP congressional district.

While the rest of the nation was focused on the West Virginia Democratic presidential primary on May 13th, another special election was unfolding in Mississippi. And at this time CNN has projected that Democrat Travis Childers will defeat Republican Greg Davis in a GOP seat held since 1994. For the third time in as many special elections the RNC threw the book and a ton of money into this election. There were major negative ads run against Childers again linking him to aspects of Reverend Wright through the national picture of association with Barack Obama. Both the National Republican Congressional Committee and the conservative group Freedom Watch spent heavily on television commercials that linked Childers to Obama. While Obama had not endorsed Childers, it was obvious that the RNC thought such a linkage was going to be an effective campaign strategy leading up to the November elections. If that was their thoughts, they may be rethinking it now after three straight special election defeats.

If the GOP does not seem concerned about a national thrashing in November, they might want to start worrying a little bit more, as seats traditionally considered safe for the Republicans in the general election, may not be as safe as they once thought. A second repercussion of these three special elections, could be that the current conventional wisdom of the historic Red and Blue states may be a whole lot more Purple than the GOP, and even Hillary Clinton and the Democrats may be thinking.

Does the strict Red vs Blue state plans still work?

I’m beginning to wonder if the strict Red vs Blue state breakdown of states in a general election still follows the mapping that both major political parties have laid out. One of the possible benefits to the Democrats is that their primary race has brought both major candidates to states that normally would not have had a Democrat campaign in either in the primaries or the general election simply because they would be a foregone GOP state.

There are roughly twelve “swing” states that the previous winner in the previous two elections won by less than 5% of the vote. All of these states have been campaigned in by the Democrats and significant voter registrations have taken place due to the intense excitement of the Democratic nomination race. These states may be more in play in this election cycle than at any time in the past five elections.

As an Independent, I have the luxury of setting back from the overall fray and watching the intricacies of the developing race with a little bit more objectivity than the normal political party adhering voter.

One of the main things I will be watching come November, is the impact of the “swing” states, and even some of the more traditional GOP states as they come in on election night to see if the Red vs Blue slate has changed in it’s dynamics.

It should be a heck of a show regardless.

Clinton goes Nuclear on Race card

I have long held to the belief that once the Clinton political machine got backed into a corner, that something would be said that would finally show Senator Clinton to be a politician that would say or do anything to get elected. Yesterday it finally happened.

Yesterday in a USA Today interview she pretty much dismissed Obama’s ability to be elected president as he would have a hard time winning support from white Americans.

Interview excerpt:
"I have a much broader base to build a winning coalition on," she said in an interview with USA TODAY. As evidence, Clinton cited an Associated Press article "that found how Sen. Obama's support among working, hard-working Americans, white Americans, is weakening again, and how whites in both states who had not completed college were supporting me."

"There's a pattern emerging here," she said.
/end excerpt

Does anyone remember the off the cuff remarks of Bill Clinton’s after the South Carolina primary where he implied that Obama’s win was similar to that of Jessie Jackson previously? Doesn’t sound like such a mis-interpretation now.

Clinton has continuously run a more negative campaign. As the math kept developing into a nearly impossible path to the nomination for her, it was only a matter of time before the vindictive political shrew came out into the open.

In a country founded with a born sin of slavery, a civil war to expunge slavery, and a national movement for civil rights to force equal treatment, the idea that a presidential candidate at this juncture would resort to the obvious and misguided statement that a Black candidate can’t win white support is beyond stupid.

I had said in my previous post after the primaries on May 6th that Clinton was essentially a “Dead candidate walking”. After yesterday, I can only hope that I am correct. Unfortunately, for the Democrats, Clinton may have just put a dagger through the heart of their chance to take both houses and the presidency. She may have divided the Democrat party irrevocably.

Oh and Hillary, if you read this? I’m a White American that not only supports Obama, but will vote for him come November.

Dead Candidate walking

On a night when Hillary Clinton needed in her words a “game changing event” she failed to see it materialize. Barack Obama claimed the North Carolina primary with a convincing 14% win, and narrowly lost the Indiana primary by 2%. The more important fact of the May 6th primaries was that Clinton’s closing of the pledged delegate lead of Obama by 12 with her win in Pennsylvania was completely wiped out by Obama’s 16 pledged delegate difference in North Carolina.

At a time when Obama should have been at his weakest in this long Democratic party nomination race. With Obama on the defensive after the Reverend Wright debacle, the “Bittergate” stumble, Hillary Clinton needed to win both Indiana and North Carolina primaries to significantly close on Obama and continue her case before those undeclared super delegates, and it did not materialize.

What becomes an even more increasing problem for Clinton going forward is the issue of money. After PA, her campaign saw a dramatic $10 million dollars in donations over night immediately following her win there. I seriously doubt there will be that kind of “money bounce” after the results of yesterday. Her campaign is increasingly in financial straights, and is developing an ever increasing debt as she attempts to stay in the race with Obama.

I doubt that Clinton will quit the race until the DNC meets to decide the fate of Michigan and Florida delegates on May 31st. But even adding those contest results into the mix only decreases Obama’s lead, not pass him. I suspect that the trickle of super delegates lining up for support of the candidates to begin to turn into a faster flowing river, and I don’t think that will bode well for Clinton.

There is a dead candidate walking and her name is Hillary Clinton, she just can’t or won’t admit it.

Someone teach Clinton and McCain some economics please

Ok folks pay attention. I’m going to be discussing one of those subjects that made your eyes glaze over, and your head ache in high school and college….. Economics.

In the final days of the run up to the Indiana and North Carolina primaries we have three candidates slugging it out over a supposedly simple idea of removing the $0.184 federal gas tax for the upcoming three months of the summer. What surprises me more than anything about the entire discussion is how the two candidates favoring this “gas tax holiday”, John McCain, and Hillary Clinton, seem to be under the impression that a vast majority of us voters have less understanding of simple economic theory then what little they appear to have.

First let’s look at John McCain’s proposal. Just drop the federal gas tax, and don’t do anything else except promise to put the estimated $8.5 BILLION dollars in lost revenue for the Federal Highway Trust, back in from the general fund. I thought there were supposed to be fiscal conservatives in the GOP? So McCain wants to tack on another $8.5 billion dollars on to the already nearly $10 trillion national debt. If we calculate the additional interest payments on the additional $8.5 B, we are adding an additional $255 million dollars at just a 3.0% interest rate (pretty cheap interest eh?). From a economic principle viewpoint, this is not an incredibly sound idea. The US dollar is already falling in value against world currencies with our increasing debt and foreign debt ownership, that it may be impossible to ever have a “strong dollar” monetary policy again. And what does a weak dollar do to us average working Joes and Janes that the gas tax holiday is supposed to give some relief? It makes every barrel of imported oil more expensive when paid in US dollars. Now here is where a little economics come in. If the raw materials (imported oil) cost more to acquire (due to falling US dollar value), the end product costs more to purchase. So not only does the tax holiday put us farther in the hole with the national debt, but will likely end up actually causing an increase in imported oil. There are times when I really believe that John McCain was telling the truth when he said he didn’t understand the economy.

Now let’s look at Hillary Clinton’s proposal. Drop the federal gas tax, but put a “windfall profits” tax on the oil companies so that they pay the tax instead of you and me. So first off the process of taking the federal gas tax money from gasoline suppliers and depositing directly into the FHT will have to be replaced by some system of applying a “profit” tax on oil companies, collecting it, and then making sure that it gets into the FHT. So theoretically, we get that $0.184 off at the pump, but oil companies know that uncle Sam is going to be coming around to get it later from them, so to ensure that their shareholders aren’t getting shorted (after all, corporations really only answer to their shareholders), quickly pass on all or most of the gas tax back to their customers, which eventually ends up right back on the pump saving us absolutely nothing. Meanwhile everyday Joes and Janes thinking they are going to get a little more gas for the money, start driving more than they planned, and demand goes up. Now this is where we get back into economic theory again. If you have an already short supply product which is driving prices up do to over demand, and you increase the demand, the price continues to go UP. So not only are the oil companies making us pay the gas tax by passing their additional tax cost on to us consumers, the increase in demand simply continues the rapid push of prices upwards, making it worse than it was before.

But even with all this fundamental economic reasoning for the gas tax holiday being a really dumb idea, the problem becomes even bigger at the end of the three months when there hasn’t been any decrease in demand, the tax has been passed on to us anyways, and we have increased our national debt by $8.5 B. At the end of the three months, what then? Who is going to be the one to tell the American people, “well we gave you a break, it didn’t really help much, but we are sorry, we have to add the gas tax back in at the pump now”? Does anyone honestly think that during an election campaign for president that either Clinton or McCain are going to be willing to ADD the $0.184 back into the mix prior to the election?

I think not.

Now I’m concerned that neither McCain, nor Clinton, know anything about the economy. The only one of the three current candidates that seem to have this whole idea figured out right, and is against it, is the one that supported a similar idea in Illinois, until they found out it didn’t work. And they say he has no experience? At least he learned from previous attempts at this gas tax holiday hocus pocus.

The Internet generation and the Election of 2008

I've been thinking about this for a couple of weeks now. There is something fundamentally different between the election in 2004 and the one now. It is the broad integrated use of the internet to disseminate any and all information whether factual or not about every candidate. This phenomenon was not as prevalent just 4 years ago.

Now, almost every single day, there are Youtube snippets, blog postings, news blog postings, internet polling, political forums, facebook, craigslist, and upteen thousand "political" web sites with various political agendas and leanings.

McCain, Clinton, and Obama have been dissected, probed, prodded, examined, and xrayed by every single media type and political angle that this growing internet minded election can think of. If it wasn't for the internet explosion of information, would we even care about the documents appearing out of thin air that Clinton couldn't find? Would we even care or even remotely believe that McCain could possibly be a Manchurian Candidate possibility? Would we ever have heard or seen any candidates pastor's sermons?

Would FDR have been elected if the national press had presented his affliction with polio in the same manner as they do every blemish of candidates today? Would JFK have been elected if his indiscretions and “lack of experience” been chronicled on every blog, political forum, and media outlet in the country?

Can any candidate actually survive this kind of magnified scrutiny that can in a second disseminate every possible aspect of a candidates life to millions of people who then put their own perspective and pass it on to millions more?

Regardless of which candidate you may be supporting in this election, imagine what the next election may be like when even new and improved vetting (and I use that word loosely) avenues are around, and every piece of news, whether accurate or not is instantly downloaded to those cool video glasses with the little monitor that everyone will be wearing in 2012.

Can any candidate actually survive this kind of election? Could any of us survive that kind of scrutiny?

Earmarks need to be ended permanently

Earmarks are generally regarded as specific funding requests by a member of congress to be directed to a home state or district project or organization. These requests are generally outside of specific government agency funding requests and the federal government agency whose appropriation bill the earmark is included in has no authorization or control over the expenditure. According to Taxpayers for Common Sense (www.taxpayer.net) the current FY08 appropriations contain just a hair over $18 billion dollars in totaling $14.8 billion in sponsored congressional requests, and another $3.5 billion dollars in earmarks that had no congressional sponsor identified.

Earmarks are seldom added to an appropriations bill while it is being constructed, but rather during the conference phase where the two houses of the congress get together to work out differences between the two house’s respective legislation. And in this conference phase is where the real “you scratch my back, I’ll scratch yours” of our current political environment comes into play. This is where the seniority of a congress member comes into play, since the more senior a member of congress is, the more likely he or she is going to get their little pet project funding into a piece of legislation, because their support is needed either to support another piece of legislation, or their weight and support for an earmark for a lesser senior member of congress is desired to ensure that earmark gets included.

Much has been made this election year on earmarking by congress, particularly by Senator McCain, who had zero earmarks associated with the FY 08 appropriations, according to TCS, while Senator Clinton had $342.4 million, and Senator Obama had $98.6. Many projects or organizations funded through earmarks are truly worthwhile causes and do bring jobs, funding, and needed projects to the individual state or precinct. The problem with earmarks is that Citizens against Government Waste estimates that 98 percent of earmarks are added during the conference phase, and are not voted on by the full membership of either house as a stand alone appropriation. This behind the scenes back scratching between members of congress puts the rest of the members of congress in the situation of having to vote for critical federal funding legislation as a whole containing the earmarks. If a member decides to vote against a funding bill due to particular earmarks, they risk suffering the backlash from fellow house members, senators, and constituents for holding up needed government appropriations.

Each of the individual earmarks in and of themselves may not seem like a lot of money, but a couple million here and a couple hundred thousand there, multiplied by a little over eleven thousand individual items, and you start talking about real money. The need to remove the ability to insert earmarks into needed pieces of legislation is becoming more and more imperative, at a time when we are running such large deficits, and funding two external wars. If a particular project or organization’s funding is important enough to take a portion of everyone’s tax dollars, then it is important enough to stand alone as an appropriation line item and be subjected to full congress scrutiny as the spending bills are constructed. The time to eliminate earmarks from the federal budget process has come.

Clinton wins PA, Democrats sink more into quicksand

If the trend to this point continues, Hillary Clinton will win Pennsylvania by an 8 to 10 percent margin over Barack Obama. By winning the state, she does get to chalk up another “big” state win, but will probably fail to put any significant dent into Obama’s pledged delegate lead, and will probably only cut 200,000 out of his 700,000 or so popular vote lead.

While keeping her nomination race alive, it continues to complicate the problems with the Democrat party going into the general election in November whether she or Obama wins the nomination. The super delegates have not completely jumped into the fray and are likely to still end up holding the final trump cards on who gets the nomination in the end.

But the continued split personality of the Democratic party, should be causing some concern for the DNC as it starts thinking of some of the bigger issues that are going to be critical for it in the general election. Many people tend to focus only on the issues of the presidential election, but it is really only a single spoke in what the DNC has to focus on if it wants to break the traditional log jam in congress going forward and get the “super majority” that Pelosi and Reid want to take into the next congress.

If Obama wins, will the stalwart blue collar workers, and over age 65 Democrats of Clinton’s coalition close ranks and support an Obama run. If Clinton wins, will the large African-American, more educated, and youth coalition that he has forged close ranks and support a Clinton run. Neither of these questions can objectively be answered while the nomination race is still continuing.

Outside of the presidential race, the DNC wants to focus on a number of even more important strategies, and a cohesive Democratic party will be absolutely critical to achieve their goals.

If the DNC wants to get a “super majority” in congress they need a presidential candidate that can keep both of these very diverse coalitions together and pull in congressional races on the coat tail, and use the significant increase of registered Democrats to win state victories for the next level down Senate and House races.

In 2010 there will be a national round of reapportioned. To attempt to re-establish a solid Democrat party base across the US instead of the famous Red and Blue state division, they will need both coalitions to help take control of a majority of the State houses and Senates, which will be making the decisions on how districts are reapportioned.

In the next 8 years there is a possibility of 2 Supreme court justices needing to be appointed by the next president. If the DNC hopes to have a Democrat in the White House they will need the entire Democratic party working and driving together to ensure a victory over John McCain in November.

There is a more imperative need for the Democrats than the Republicans to vastly change the political landscape from the state houses, to the congress, and the white house if they are going to be able to overturn what has been a fairly consistent Republican control of congress and the state houses.

The longer this nomination race continues, and particularly if both candidates continue the last two weeks slide into the negative personalized attacks against each other to the point that party can not heal itself without losing half of the total coalition, the Republicans will take not only the White House, but the congress, and the state houses.

This is in my opinion a “do or die” election for the Democrats, and from my view from outside, they are playing with their own future under the sword of Damocles. It is a fine line they are now walking, and given the penchant for political parties to fail to see reality, they are more likely to blow the perfect opportunity than they are to seize it.

How ever it turns out… I’ll still be on the couch with the popcorn and beer, watching it all unfold in November.