Wotka World Wide

Friday, July 31, 2009

Democrats resist subpoenaing VIP mortgage records. Big surprise here! It is practically guaranteed that other members of Congress besides Senators Chris Dodd and Kent Conrad got special mortgages from Countrywide, which specialized in buying influence in Washington. I bet voters would like to know who was involved!
Yahoo has ceded its search operations to Microsoft under the aegis of Bing. This is either a brilliant move by Yahoo's new leadership or a major mistake from a floundering company, depending on who you ask. The interesting thing is, the day the deal was announced, Yahoo's market capitalization decreased by $2.9 billion while Microsoft's increased by the very same amount. That gives you some idea who investors thought won the deal. Still, time will tell and it can often pay to take the long view.

Thursday, July 30, 2009

Senate Republicans have finally convinced Baseball Hall of Famer Jim Bunning to retire and not run for reelection. He was showing an inability to raise any significant funds for his reelection efforts, and the Republicans need to field strong candidates in every race they can. A front-runner for the nomination has not emerged, but there are several candidates that have raised more campaign funds than Bunning had. Out with the old, in with the new. Now if only Mitch McConnell would take his own advice and retire as well...

Tuesday, July 28, 2009

Monday, July 27, 2009

Biden steps in it again: He insults Russia in his latest interview, contradicting a lot of what Obama had said three weeks ago in a make nice summit with Putin. The interview made headlines in Moscow, slamming the VP for his "boorish" statements. And they thought Dan Quayle was stupid...

Saturday, July 25, 2009

Robert Samuelson looks at the damage the recession has done to wealthier Americans:
With secure jobs and ample incomes, the rich and the near rich are supposed to be insulated from economic slumps. Well, not this time. Many feel fearful, threatened, and impoverished. In a recent Unity Marketing survey of consumers with incomes exceeding $250,000, 60 percent said their financial situation had deteriorated; 39 percent said bonuses or commissions had been cut; 29 percent said their regular income had been reduced; 8 percent said they'd lost their jobs; and 4 percent said their hours had been reduced. Even with a partial stock-market rebound, many of America's most affluent feel vulnerable to layoffs and lost income, just like other Americans. "This has been an equal-opportunity recession," argues Pam Danziger of Unity Marketing.
He also considers the impact it will have on the rest of the country:
Consumption spending, the economy's main engine, is skewed toward the upper classes, because they have most of the income. In 2009, households with more than $200,000 in income account for 3.4 percent of the total but will generate almost 14 percent of consumer spending, estimates economist Sterne. Households with incomes between $100,000 and $200,000 represent about 14 percent of the population and 34 percent of spending. Together, these groups generate nearly half of U.S. consumption, although they're only a sixth of the population.

Similarly, the rich pay most of the taxes. In 2006, the richest 1 percent paid 28 percent of all federal taxes, estimates the CBO. The richest 10 percent (including the top 1 percent) paid 55 percent. The system is progressive—that is, the richer people get, the more of their income they pay in taxes. In 2006, the effective rate for the top 1 percent was 31 percent, reflecting all federal taxes. By contrast, the poorest fifth paid an effective rate of 4 percent. (State and local taxes are less progressive, because they rely more heavily on regressive sales taxes.)

The wealthy dominate charitable giving. In 2004, families with a net worth exceeding $5 million made up about 1.5 percent of all U.S. families but accounted for 27 percent of contributions, according to the Center on Wealth and Philanthropy at Boston College. Those with a net worth between $1 million and $5 million, about 7 percent of all families, represented another 20 percent of contributions. So, a tenth of American families made nearly half of all gifts.

Wealthy individuals are an important source of money for venture capital—funds invested in startup companies. Individuals and families represent about 10 percent of VC money (most of the rest comes from pension funds, college endowments, and insurance companies).

Friday, July 24, 2009

Life imitates art: CEO Jeff Bezos apologizes after Amazon remotely deletes unauthorized copies of George Orwell's "1984" and "Animal Farm" from Kindle e-readers.

Thursday, July 23, 2009

As usual, Jay Nordlinger really nails someone when they deserve to be nailed:
Of all the things Obama has said in his half-year in office, I think the most offensive was his assertion that Israel must “engage in serious self-reflection.” The Israelis are experts in “serious self-reflection.” The Jewish people is expert in “serious self-reflection.” They have been seriously self-reflecting for several thousand years — they practically invented the practice. Israelis, since the founding — refounding — of that state, have had to do some urgent self-reflecting, and other reflecting. They live in a tinderbox; their existence and survival are threatened all the time. Barack Obama knows nothing about serious self-reflection compared with the average Israeli — compared even with a relatively unreflective Israeli. It’s their lives that are on the line, not Obama’s. It is they who have gone through war after war, not Obama. And those were wars of attempted annihilation: the annihilation of you-know-who.
Glad someone still has the balls to do it.
Only the AP could turn a British spy who gave crucial intelligence to the Soviets via the Kim Philby spy ring into a sympathetic figure. Fortunately, someone had other ideas:

He confessed to British spymasters, but in return for information was allowed to escape disgrace, keep his knighthood and continue as art adviser to the queen.

Blunt wrote that he believed, "naively," that the story would never be made public. However, in 1979 Prime Minister Margaret Thatcher publicly unmasked him as a Soviet spy, and he was stripped of his knighthood.

Thank goodness she was willing to call a traitor a traitor! Of course, the AP makes him just sound misunderstood. He deserved much worse.

Wednesday, July 22, 2009

China tightens web controls:
Two more Web sites dedicated to social networking went offline in China on Tuesday amid tightening controls that have blocked Facebook, Twitter and other popular sites that offered many Chinese a rare taste of free expression.

China's crackdown on social networking sites began in March, when Chinese Web users found they could no longer visit YouTube shortly after video appeared on the site purporting to show Chinese security officials mistreating Tibetans.

The blockages continued through the 20th anniversary of the Tiananmen Square demonstrations and the recent ethnic riots in Xinjiang, with homegrown and overseas micro-blogging and photo-sharing sites among those targeted.

Though cutting off access to sites can often be traced to a specific trigger — such as the June 4 Tiananmen anniversary — experts say the fact the sites are not coming back online shows the harsh measures are part of a long-term strategy to pare back the power of the Internet and silence some voices finding expression here.

They are afraid of the power of information. I can't see this government controlling an emerging population of 1.3 billion+ like this for too much longer. The human spirit yearns to be free.

Forbes has a great retrospective on the Moon landing anniversary, along with a number of forward looking pieces to stimulate the mind, like when to expect NASA's new Constellation spacecraft that can travel much, much farther that the current shuttle.

Tuesday, July 21, 2009

Inside the Monstrous Obamacare Bureaucracy, from Michelle Malkin. Just the projections and added layers of bureaucracy should be enough to dissuade anyone from voting for this nonsense:

If you think government is too big and too costly, wait until Obamacare kicks in. The Congressional Budget Office put the price tag of the House Democrats’ health care takeover plans at $1.5 trillion over 10 years. But the CBO’s fine print included a tell-tale caveat:

“We have not yet estimated the administrative costs to the federal government of implementing the specified policies, nor have we accounted for all of the proposal’s likely effects on spending for other federal programs.”

You don’t need an accounting degree or clairvoyant powers. The administrative costs and spillover spending effects will be astronomical. Look at existing federal programs. In 1966, the Office of Management and Budget put the total taxpayer costs for Medicare at $64 million. In 2011, Medicare costs are expected to balloon to nearly $500 billion. Medicaid cost $770 million in 1966. By 2011, that program will cost taxpayers an estimated $264 billion. The Virginia-based Council for Affordable Health Insurance estimated that the administrative expenses of both programs last decade were 66% higher than those of private sector health insurance companies.

And we ain’t seen nothing yet. House Republicans on the Joint Economic Committee sifted through their opponents’ 1,018-page health care bill and released a dizzying flow chart detailing the Byzantine bureaucracy Obamacare would create. Washington would become the home of at least 31 new federal programs, agencies, and commissions to oversee the government-run health insurance regime.

Because 32 “czars” isn’t enough, the Democrat plan would add another overlord to the Obama administration. The new “Health Choices Commissioner” would helm the new “Health Choices Administration” (Section 141 of the bill) – separate from the already existing Department of Health and Human Services, Centers for Medicare and Medicaid Services (formerly the Health Care Financing Administration), the Veterans Health Administration, and the Indian Health Service.

Read the whole thing. And call your Congressman.

This chart illustrates the new system nicely:

Monday, July 20, 2009

Again, why is the U.S. on the same side as Hugo Chavez in the Honduras situation? From the WSJ:
When Hugo Chávez makes a personal appeal to Washington for help, as he did 11 days ago, it raises serious questions about the signals that President Barack Obama is sending to the hemisphere's most dangerous dictator.

At issue is Mr. Chávez's determination to restore deposed Honduran president Manuel Zelaya to power through multilateral pressure. His phone call to a State Department official showed that his campaign was not going well and that he thought he could get U.S. help.

This is not good news for the region. The Venezuelan may feel that his aims have enough support from the U.S. and the Organization of American States (OAS) that he would be justified in forcing Mr. Zelaya on Honduras by supporting a violent overthrow of the current government. That he has reason to harbor such a view is yet another sign that the Obama administration is on the wrong side of history.

In the three weeks since the Honduran Congress moved to defend the country's constitution by relieving Mr. Zelaya of his presidential duties, it has become clear that his arrest was both lawful and a necessary precaution against violence.

Mr. Zelaya was trying to use mob rule to undermine Honduras's institutions in much the same way that Mr. Chávez has done in Venezuela. But as Washington lawyer Miguel Estrada pointed out in the Los Angeles Times on July 10, Mr. Zelaya's actions were expressly forbidden by the Honduran constitution.

Read the whole thing.

Sunday, July 19, 2009

Forget Goldman, Start Worrying About Government:

Look, everyone and his brother are jumping on the “Goldman is evil” bandwagon these days. Even Rupert Murdoch’s Wall Street Journal is talking about Goldman Sachs like they are “a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.” Well, I’m not. I’ve got news for you: you’re barking up the wrong tree.

It’s the U.S. government we should be pointing fingers at. While Goldman (GS) is crying out thank you sir, may I have another as everyone piles on, the U.S. government, which often seems bought and paid for by Wall Street and is the one actually running things here, is getting off scot-free.

Here’s a question for you, if Goldman made out like bandits from the AIG fiasco, who do you think allowed that? Government.

When Goldman’s Lloyd Blankfein was the only person in the room from Wall Street as AIG’s fate was debated, who do you think allowed him? Government.

When TARP funds were disbursed to re-capitalize Goldman and other banks, who made that decision? Government.

When Goldman repaid its TARP funds, paving the way for them to then hand out record bonuses, who do you think allowed this? Government.

When Goldman sold asset-backed securities to investors when it was net short the mortgage-backed market, whose rules do you think allowed this? Government.

Forget about Goldman Sachs. Start worrying about government.

They are the ones who regulate the financial services industry. Government is the one which makes laws governing how financial services companies can and cannot operate. Government is also the one which can change the ground rules going forward to help prevent a recurrence of this sort of financial crisis in future.

Hear, hear! Read the whole thing.

Saturday, July 18, 2009

Friday, July 17, 2009

Behold the power of moderate Democrats: From the NYT, the Senate has scrapped the "card check" provision from the Employee Free Choice Act that would have eliminated the secret ballot in unionization elections. This is great news, particularly for workers and businesses, as coerced unionization will not be a threat in the immediate future. The bill will eventually proceed, but in a much pared down format that focuses on shortening union election campaigns and allowing more access for union officials on company grounds. I suspect most business leaders can live with these provisions and the bill will eventually pass, but this is a clear loss for labor.

Thursday, July 16, 2009

Bloomberg slams Clinton: she stabbed NYC in the back:
Mayor Michael Bloomberg said her betrayal has cost the city $260 million in lost tax revenues and counting.

It didn't take long for Clinton to double cross New York City. Six months into her tenure as secretary of state she has suddenly exempted diplomats from paying some property taxes here.

"It is totally unfair," Bloomberg said.

The mayor said it's not only a double cross but a double flip flop. As New York's junior senator, Clinton fought to make diplomats pay up. And he said her reversal changes a longstanding policy.

"Since 1873 they've been saying this is taxable," Bloomberg said.

What's more, the mayor predicted that -- freed of paying property taxes -- some governments would see it as a business opportunity to buy up properties and make money renting them out.

"It's just patently unfair to New Yorkers and Americans and it contravenes established policy for 130-odd years and it just doesn't make sense," Bloomberg said.

Tuesday, July 14, 2009

26% of home mortgage defaults are strategic, according to a new nationwide study. Most strategic defaults involve homeowners that have significant negative equity, sometimes over $200,000. Can't say I blame them.
A review for Pontiac's last new model, the Solstice. And a great illustration of why the brand is being retired.

Saturday, July 11, 2009

Jonah Goldberg on Obama's reluctance to support the cause of freedom:
The past four weeks show how ideological Obama’s un-ideological view really is. In response to the revolutionary protests in Iran, Obama initially favored stability and preserving the fantasy of negotiations with the Iranian clerical junta. Not “meddling” was his top priority. Over time, the rhetoric improved, but the policy remained just as cynical.

Then, events in Honduras revealed that Obama really has no problem with meddling when a left-wing agenda is advanced. Manuel Zelaya, the president of Honduras and a Hugo Chávez wannabe, illegally defied the Honduran Congress, the Supreme Court, and the Constitution in an attempt to repeal term limits (which help sustain democracy in Central America by preventing presidents-for-life). The Supreme Court ordered the military to remove Zelaya from office and expel him from the country. A member of Zelaya’s own party replaced him, and elections were announced. But suddenly, Obama — taking much the same position as Fidel Castro and Hugo Chávez — thought America should join the coalition of the meddlers demanding Zelaya’s return to power. In Iran, Obama was terrified to do anything that might lead to a coup to bring about democracy. In Honduras, Obama was unwilling to let stand a coup that preserved democracy.

It sure seems like Obama has an ideological problem with democracy.
Glenn Reynolds on the hidden cost of national health care:

Lots of people are beginning to question the cost of President Barack Obama's healthcare "reform" plans, and with good reason. (Just compare the original projections for Medicare with what it wound up costing in reality).

But there's another cost that isn't getting enough attention. That's the degree to which a bureaucratized healthcare system will squash medical innovation just as we reach a point where dramatic progress is possible. To see how important that is, I don't have to look any farther than my own family.

Perhaps our medical history is more involved than most, but probably not by a lot. And yet many members of my family are living better, happier lives -- or, heck, just living -- because of medical innovations made in recent decades, innovations that probably wouldn't have been made under a government-run health system. And as medical technology progresses by leaps and bounds, the next few decades are likely to see much greater progress, unless it's throttled by bureaucrats.

President Obama talks about the importance of prevention in a way that suggests that when people have heart attacks it's their own fault. But my wife, a longtime vegetarian and marathon runner, had a freak heart attack at the age of 37.

It wasn't from too many Big Macs. After some rough patches, she's now doing well, thanks to an obscure and expensive anti-arrhythmic drug called Tikosyn, and an implantable cardioverter/defibrillator. Not too long ago, she'd have been largely bedridden. These medical innovations made the difference between the life of a near-invalid and a life that's close to normal.

Read the whole thing.

Thursday, July 09, 2009

More on Honduras from Mary Anastasia O'Grady. Why is the U.S. not supporting the rule of law?
Harvard economics professor Greg Mankiw in the New York Times on the perils of the public option in health care reform:

An important question about any public provider of health insurance is whether it would have access to taxpayer funds. If not, the public plan would have to stand on its own financially, as private plans do, covering all expenses with premiums from those who signed up for it.

But if such a plan were desirable and feasible, nothing would stop someone from setting it up right now. In essence, a public plan without taxpayer support would be yet another nonprofit company offering health insurance. The fundamental viability of the enterprise does not depend on whether the employees are called “nonprofit administrators” or “civil servants.”

In practice, however, if a public option is available, it will probably enjoy taxpayer subsidies. Indeed, even if the initial legislation rejected them, such subsidies would be hard to avoid in the long run. Fannie Mae and Freddie Mac, the mortgage giants created by federal law, were once private companies. Yet many investors believed — correctly, as it turned out — that the federal government would stand behind Fannie’s and Freddie’s debts, and this perception gave these companies access to cheap credit. Similarly, a public health insurance plan would enjoy the presumption of a government backstop.

Such explicit or implicit subsidies would prevent a public plan from providing honest competition for private suppliers of health insurance. Instead, the public plan would likely undercut private firms and get an undue share of the market.
Have changes in Iraq helped foster the discontent in Iran? From Christopher Hitchens:
Which brings me to a question that I think deserves to be asked: Did the overthrow of the Saddam Hussein regime, and the subsequent holding of competitive elections in which many rival Iraqi Shiite parties took part, have any germinal influence on the astonishing events in Iran? Certainly when I interviewed Sayeed Khomeini in Qum some years ago, where he spoke openly about "the liberation of Iraq," he seemed to hope and believe that the example would spread. One swallow does not make a summer. But consider this: Many Iranians go as religious pilgrims to the holy sites of Najaf and Kerbala in southern Iraq. They have seen the way in which national and local elections have been held, more or less fairly and openly, with different Iraqi Shiite parties having to bid for votes (and with those parties aligned with Iran's regime doing less and less well). They have seen an often turbulent Iraqi Parliament holding genuine debates that are reported with reasonable fairness in the Iraqi media. Meanwhile, an Iranian mullah caste that classifies its own people as children who are mere wards of the state puts on a "let's pretend" election and even then tries to fix the outcome. Iranians by no means like to take their tune from Arabs—perhaps least of all from Iraqis—but watching something like the real thing next door may well have increased the appetite for the genuine article in Iran itself.

Wednesday, July 08, 2009

Interesting take here on the Sarah Palin resignation:
You can roll your eyes and tease Palin’s supposed lightweight intellectual status. You can bury your head in shame when Charlie Gibson peers down his nose through his reading glasses and stumps her with international policy questions. You may say she had no business on the national stage from the get-go last fall when John McCain announced her as his vice presidential pick. But what you cannot ignore, nor take from her is what she is about to seize on in a big way.The dirty little secret is the 2010 and 2012 Republican candidates in both houses of Congress need Palin now more than ever. They need her just as John McCain needed her. Conservative voters both independent and Republican don’t trust the crew in Washington. Historically it is true they never have when asked. But this is not your typical “throw the bums out” mentality fomenting at tea party protests of late. This is a time when long term blue dog Democrat and Republican moderate office holders are nervously wondering, “Just how real IS the anger?” Bailouts, takeovers, stimulus spending, aggressive energy taxes, and nationalized health care have this electorate frightened and angry. The public is paying attention to their every vote, and those that are on the side of the American taxpayer will be rewarded in coming elections.
Read the whole thing. He makes some good points.

Monday, July 06, 2009

Ousted Honduran president expected in Washington: And I thought this new Administration wasn't going to interfere in the affairs of foreign countries... Oh wait, it is a leftist wannabee dictator backed by Chavez, Castro and Ortega, so it is ok. Are all our enemies now our friends, I wonder?
The Boston Globe has a great comparison of the Massachusetts health care plan and the proposals being discussed in Washington currently, and they make a plea for honesty about the cost. This is because it is doubtful the state can continue to afford the coverage levels mandated by their law. And there is currently no evidence whatsoever that the US can afford to take on these costs as well. Didn't we learn enough on this topic from the Medicare prescription drug bill, which ended up costing three times what was projected?

They are already cutting coverage in Massachusetts. And our national charge card is getting pretty full. But Obama and his allies in Congress want to ram through an expensive public option now anyways, costs be damned. That money will eventually have to come from somewhere besides having the Fed buy up the treasury auctions that don't sell. Sort of like your left hand taking money from your right hand and acting like you just made a profit.
Obama plan could trim back financial power houses:

Under the administration's proposal, companies such as Citi, Goldman Sachs and others in a broad top tier engaged in complex transactions would face stricter scrutiny and have to hold more assets and more cash as cushions against a downturn.

They also would have to anticipate their own demise, drafting detailed descriptions of how they could be dismantled quickly without causing damaging repercussions. Think of it as planning their own funerals — and burials.

Obama's plan, in short, aims to make it far less appealing to be so big. That was the middle ground the administration sought, a step short of an outright ban on systemically risky companies.

This is an interesting idea. I wouldn't mind seeing some of these entities cut down to size, as no company should be too big to fail. However, I don't see Congress being very active on this issue, since they shovel in so much money from the financial powerhouses. Plus, they are the ones that specifically passed legislation to allow them to get so big in the first place.

What acts caused this to happen, you may wonder? Well, for starters, the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 repealed key provisions of the Bank Holding Company Act of 1956, allowing interstate mergers between adequately capitalized banks, up to certain limits. One such limit was the ten percent rule, which stated that no BHC could hold more than ten percent of bank deposits nationwide. Within ten years, Bank of America was up to 9.8%.

Then there was the Gramm-Leach-Bliley Act, which repealed the Glass-Steagall Act, in 1999, allowing financial companies, BHCs, and insurance companies to merge. The biggest instigator of this change was Citigroup, which wanted to acquire Traveler's Insurance but couldn't. Didn't you ever wonder why Robert Rubin worked there following the end of the Clinton Presidency until last year?

These two acts alone are responsible for the majority of the consolidation that has occured in the last fifteen years. Everyone likes to blame Phil Gramm, and he holds some responsibility, but the 1999 Act passed by huge majorities and was signed by the President, while the 1994 Act was a Democratic-led initiative. There is plenty of blame to go around. This is why we should throw ALL the bums out in the next election. The corporate giants have too much influence to enact real change these days.

Friday, July 03, 2009

Colin Powell airs doubts on Obama agenda:

Mr. Powell expressed alarm at "budgets that are running into the multi-trillions of dollars" and "a huge, huge national debt that, if we don't pay for in our lifetime, our kids and grandkids and great-grandchildren will have to pay for it."

"So, I think the president, as he moves forward with his initiatives, has to start really taking a very, very hard look at what the cost of all this is. And, how much additional bureaucracy [will] be needed to make all of this happen?" Mr. Powell said.

What took so long for him to wake up? He owes the American people an apology.

Thursday, July 02, 2009

Tilting at Green Windmills, from George Will:
The Spanish professor is puzzled. Why, Gabriel Calzada wonders, is the U.S. president recommending that America emulate the Spanish model for creating "green jobs" in "alternative energy" even though Spain's unemployment rate is 18.1 percent -- more than double the European Union average -- partly because of spending on such jobs?

Calzada, 36, an economics professor at Universidad Rey Juan Carlos, has produced a report that, if true, is inconvenient for the Obama administration's green agenda, and for some budget assumptions that are dependent upon it.

Calzada says Spain's torrential spending -- no other nation has so aggressively supported production of electricity from renewable sources -- on wind farms and other forms of alternative energy has indeed created jobs. But Calzada's reportconcludes that they often are temporary and have received $752,000 to $800,000 each in subsidies -- wind industry jobs cost even more, $1.4 million each. And each new job entails the loss of 2.2 other jobs that are either lost or not created in other industries because of the political allocation -- sub-optimum in terms of economic efficiency -- of capital. (European media regularly report "eco-corruption" leaving a "footprint of sleaze" -- gaming the subsidy systems, profiteering from land sales for wind farms, etc.) Calzada says the creation of jobs in alternative energy has subtracted about 110,000 jobs elsewhere in Spain's economy.

Wednesday, July 01, 2009

For GE, it helps to have friends in high places:

General Electric, the world's largest industrial company, has quietly become the biggest beneficiary of one of the government's key rescue programs for banks.

At the same time, GE has avoided many of the restrictions facing other financial giants getting help from the government.

The company did not initially qualify for the program, under which the government sought to unfreeze credit markets by guaranteeing debt sold by banking firms. But regulators soon loosened the eligibility requirements, in part because of behind-the-scenes appeals from GE.

As a result, GE has joined major banks collectively saving billions of dollars by raising money for their operations at lower interest rates. Public records show that GE Capital, the company's massive financing arm, has issued nearly a quarter of the $340 billion in debt backed by the program, which is known as the Temporary Liquidity Guarantee Program, or TLGP. The government's actions have been "powerful and helpful" to the company, GE chief executive Jeffrey Immelt acknowledged in December.

Read the whole thing.

The real story in Honduras, from Mary Anastasia O'Grady at the WSJ. She frequently covers Latin America and is far more knowledgeable regarding that part of the world than just about anyone.