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AUGUST 12,  2011

SHORT TAKES ON THE DRIFTING WRECKAGE – AT 11:23 P.M. ET: 

ECONOMIC INDICATOR – I've heard anecdotes about this, but now we know from an Associated Press study that Americans are canceling cable and TV satellite service in record numbers.  The reason appears to be high unemployment and a declining housing market that has many young people living with their parents, eliminating the need for their own TV service.  People are also watching free TV by computer, and there are constant complaints about the absurdly high cost of some cable and satellite service.  During the Great Depression, the entertainment industry did reasonably well, but radio was free, paid for by sponsors.  TV services, with many more offerings, takes a financial bite.

DEADLY TERROR THREAT – American officials are increasingly concerned that Al Qaeda is trying to produce ricin, a deadly poison, for attacks against the United States.  Al Qaeda operatives in Yemen have been seeking to buy castor beans, from which ricin is made.  Sources stress that the Yemen affiliates have shown an imaginative capacity to deploy weapons, such as a bomb sewn into the underwear of Nigerian man taking an airline flight, or explosives packed into printer cartridges.  The threat from Yemen is considered more pressing than that from Al Qaeda in Pakistan or Afghanistan, since the latter branch has been cut up badly by American attacks.

SHE HAS RETURNED – Sarah Palin returned to Iowa today and immediately made a big splash at the state fair.  She also hurled a dig at Governor Rick Perry of Texas, expected to enter the race tomorrow, contrasting her experience in a "strong governor" state to Perry's, who's presided over a "weak governor" state.  Palin also shrewdly played down her affiliation with Fox News, giving interviews to other networks instead.  She said she would decide on whether to run for president soon.  She may not have widespread support, but she certainly knows how to make a grand entrance and direct all the spotlights toward her.

SYRIA BOILS – At least 14 more protesters were killed by the government in Syria today, as crowds defiantly chanted for the death of President Assad.  At the same time, the United States has stepped up its rhetoric, now calling for Assad to go.  This rhetoric is having absolutely no impact.  Washington also called, many months ago, for Gadaffi of Libya to go.  At last report, Gadaffi was still in Tripoli, not going anywhere.  Who's afraid of the Obama administration and its "rhetoric"?

August 12, 2011       Permalink

OH PLEASE – AT 10:10 A.M. ET:   The Obama campaign is hitting the goodness and virtue button.  I remain to be convinced.  From The Hill:

Any member of President Obama's reelection campaign who works to slime former Massachusetts Gov. Mitt Romney (R) as a general election candidate risks being fired, senior campaign adviser David Axelrod said Friday.

Amid reports that the president's campaign was preparing a plan to "kill Romney" as a general election candidate, Axelrod stressed that they had no such plan in waiting.

Of course not.  These guys come from Chicago politics, where all opponents are referred to as "sir" or "madam."

"That doesn't reflect our thinking," Axelrod said Friday. "We have real, legitimate differences with Mitt Romney."

Politico reported, citing unnamed Democratic sources, that the president's reelection would focus on how Romney is "weird," focusing on his personal eccentricities and his record in the private sector rather than on the president's record. Axelrod called the sources in that story "garbage."

Asked if he would fire any staff member who engaged in such a campaign, Axelrod said: "I would. If someone used words like 'weird,' I would certainly do that."

Whoops.  He just used it.  Oh, come on.  This is one of the oldest gimmicks in the business.  If you want to hammer home the idea that someone is weird or strange, just say, "I'm shocked that anyone would refer to Senator Klaghorn as weird or strange.  Anyone on my staff who calls Senator Klaghorn weird or strange will be disciplined.  We don't have to call Senator Klaghorn weird or strange because there are so many other issues."  You've made your point.

Of course the Obama campaign is planning a slime campaign against any GOP nominee.  What is Obama going to run on, his record?  That's a two-minute campaign.

August 12, 2011       Permalink

SNIPPET OF THE DAY – AT 9:38 A.M. ET:

LOS ANGELES (Reuters) - Bert and Ernie may be best friends, but that doesn't mean the "Sesame Street" pals are gay. And whatever the puppets may or may not be, one thing is certain, they won't be getting married, producers of the long-running kids TV show made clear on Thursday.  The educational workshop behind the 40 year-old TV series dismissed the idea of a made-for-TV, same-sex puppet wedding in response to an online campaign and petition to have the two "Sesame Street" characters get married as a way to beat homophobia and encourage tolerance of gay people.

I'm so relieved.  You know how much time it takes to pick out a good gift?  There are so few useful things available for puppets.

HELLO FEDEX – AT 9:25 A.M. ET:   Will the Post Office go the way of the pony express?  The prospects are grim, and not likely to get better in this economy.  From the Washington Post: 

SEATTLE — The financially strapped U.S. Postal Service is proposing to cut its workforce by 20 percent and to withdraw from the federal health and retirement plans because it believes it could provide benefits at a lower cost.

I think they call that competition.  Glad the Postal Service discovered it.

The layoffs would be achieved in part by breaking labor agreements, a proposal that drew swift fire from postal unions. The plan would require congressional approval but, if successful, could be precedent-setting, with possible ripple effects throughout government. It would also deliver a major blow to the nation’s labor movement.

In a notice informing employees of its proposals — with the headline “Financial crisis calls for significant actions” — the Postal Service said, “We will be insolvent next month due to significant declines in mail volume and retiree health benefit pre-funding costs imposed by Congress.”

During the past four years, the service lost $20 billion, including $8.5 billion in fiscal 2010. Over that period, mail volume dropped by 20 percent.

COMMENT:  I suspect e-mail has a lot to do with dropping volume.  The Postal Service must make changes, and they will be painful.  Say goodbye to Saturday delivery.

Look, we aren't anti-union here.  I'm a union member myself.  Unions have done good things, and some not-so-good things.  There are fine unions, and shady ones.  But it's clear the Postal Service must make changes in work force rules to reflect the reality of market conditions.  There will be those who say that they can just keep raising rates.  But you can raise your rates to the point where you price yourself out of the market.  E-mails, after all, are seen as essentially free, or remarkably inexpensive as part of internet packages. 

We hope that labor changes produce as little pain as possible.  We also hope the Service comes up with new and innovative products that attract customers.  I'd hate to see the Post Office go, or be reduced to three-day-a-week delivery, which has been mentioned.  Watch for major changes.

August 12, 2011       Permalink

ET TU, NEW YORK? – AT 9:02 A.M. ET:  President Obama was here last night to pick up some heavy change from some of New York's movers and shakers.   But he now has a problem here, and it may take more than money to cure.  From the New York Post:

WASHINGTON -- President Obama might need to start taking a few more campaign trips to New York -- and not just to raise cash.

A stunning new survey gives the president a negative approval rating in the Empire State for the first time, with just 45 percent approval and 49 percent disapproval among voters, according to the latest Quinnipiac University poll.

That's a sharp turnaround from June, when Obama's New York popularity was a healthy 57-38.

In the 2008 presidential election, Obama carried New York with 63 percent of the vote.

The poll of 1,640 registered voters was conducted from Aug. 3-8, just after Congress approved the hard-fought debt legislation and before this week's market mayhem on Wall Street.

COMMENT:  We don't want to base assumptions on any one poll, and Quinnipiac has an erratic history.  But if the poll is anywhere near accurate, Obama could have big trouble in traditionally safe blue states.  There have been signs recently that he's dropping in both New Jersey and Pennsylvania. 

We'll wait for polls in the next month for verification. 

August 12, 2011       Permalink

DEBATE AFTERMATH – AT 8:34 A.M. ET:  An old theme is being played by some observers after last night's Republican debate in Iowa.

It goes like this:  Everyone did pretty well, and Romney survived.  But no one stood out as the candidate either.  In other words, none of the candidates is exciting the party, motivating the base to get out and work.  There is still a searching for the next Reagan.

That, in large measure, is why the arrival into the race of Rick Perry tomorrow is attracting so much attention, and creating so much anticipation.  Is he our version of the one?  Can he take on Obama?  Or will he be brought down quickly by the media and the opposition research?

Already Perry is diverting attention from tomorrow's Iowa straw poll, something which is not winning him many friends in Iowa.  He's a man of sharp elbows.  He's also a man who wins elections.  We'll be watching carefully to see how he introduces himself tomorrow, in his announcement speech in South Carolina, and in his follow-up speech in New Hampshire.

What Perry must do is show that he is a complete human being – a man who created jobs in Texas, yet a man who shows the compassion that his religious beliefs require.   We loved Reagan in part because we felt he knew us.  We felt he loved the American nation and its people.  Many who disagreed with Reagan still voted for him because they had a kind of gut confidence in him.  Some had been Democrats all their lives and became the Reagan Democrats.  Perry must now convince a nation, not just the base of his party, that he has that Reaganesque quality if he is to stand out from the crowd and become the candidate.  I'm not sure he has the stuff.  I want to be convinced, and I'll be watching tomorrow for the first indication.

August 12, 2011     Permalink

AUGUST 11,  2011

THE DEBATE – AT 11:25 P.M. ET:  The Iowa debate is over.  Here are my reactions:

It's hard to say, with so many candidates up there, that anyone "won."  You know what happens with these debates – your eyes glaze over after 45 minutes, especially when the number of participants gets beyond two or three.  However, I think that Mitt Romney came out somewhat ahead, overall.  He didn't whip up much enthusiasm – he never does – but no one else weakened him by their attacks.  For a presumed frontrunner, even a tenuous one, that's a plus.

Michele Bachmann turned in her usual good performance, but it wasn't as much of a standout job as she did in the first debate, in New Hampshire.  Didn't hurt herself, didn't help herself.

Tim Pawlenty tried to create traction by taking on Bachmann, but it just made him look smaller.  She is an excellent debater who parried his attacks smoothly.

Newt Gingrich came off as the most knowledgeable candidate on the platform, and the clearest thinker.  But he's a voice from the past, and not all that likeable.  I don't really think he has a chance, although he is always educational.

This was Jon Huntsman's first time out debating the other candidates.  He is the former governor of Utah, and held his own, but didn't stand out.  For a while he reminded me of the late comedian, Don Knotts, somewhat nervous and on edge.

Rick Santorum has no chance, and neither does Herman Cain.  But I must say that both were articulate and forceful.

Ron Paul, who had his usual claque in the audience, is a nutbag whose foreign policy is indistinguishable from that of Code Pink.  He's an isolationist and anti-defense "libertarian" (not really) who'd take us back to the policies of the 1930s.  He's the kind of a guy who would have rooted for the Japanese at Pearl Harbor, and I wish the men in white suits would cart him away.

The man who wasn't there was Rick Perry, whose name hung over the place like a low-flying cloud.  He enters the race on Saturday, and he will have to show up for the next debate in September.  Sarah Palin and Rudy Giuliani also weren't there, but their names are not generating the kind of buzz that Perry's generates.

So, on balance, not much changed.  Romney came off well enough to stay the tentative frontrunner.  Michele certainly stayed near the top.  The others, except for Paul, were respectable. 

The Iowa straw poll is Saturday.  Perry and Palin will be in the state over the weekend.  A lot of politics.  We'll be covering.

August 11, 2011        Permalink 

SHORT TAKES ON THE DRIFTING WRECKAGE - AT 8:45 P.M. ET:

GAME ON – The Republican debate from Iowa begins in just a few minutes, carried on Fox.  The big name is the one who won't be there, Rick Perry, who announces on Saturday.  And the big question is whether Perry will destroy Mitt Romney, supposedly the frontrunner, but a frontrunner who arouses very little real enthusiasm, and who seems coy about addressing controversial issues.  (One pundit says that he's been in the Mittless Protection Program.)  We'll be back after the debate with some deep and brilliant observations.

ANOTHER GAME, OR RACKET – The Dow soared 423 points today, after dropping more than 500 yesterday, after soaring more than 400 the day before, after dropping more than 600 the day before that.  This, I guess, is what they call "investment."  No it isn't.  I always laugh when the financial "analysts" refer to "investors," or, as we call them in New York, "investuhs."  These aren't investors.  These are players, gamblers.  I've quoted this before, but Felix Rohatyn, one of the true statesmen of Wall Street, once called the stock market a casino, and that's what it is.  The market is always "reacting" to some late piece of news, without contemplating how this news fits in with other news.  Today the market was presumably "reacting" to higher corporate profits and a marginally acceptable unemployment figure.  Tomorrow it will "react" to something else.  Eventually, these men might grow up.

IMPORTANT SOCIAL NEWS – There is now a major petition campaign underway to have the children's TV show, "Sesame Street," permit Bert and Ernie to have a gay marriage.  I am not kidding.  I am not making this up.  When my kids were young we gave them Bert and Ernie dolls.  Little did we know it would come to this.  (Bert and Ernie must now be in their 40s.  Maybe it's time to settle down.)  I suspect that "Sesame Street" will succumb, and that we'll see a wedding.  I wonder who the Best Puppet will be. 

THE COOKIE CRUMBLES – But the polar ice doesn't.  Remember that story, back in mid-decade, that polar bears were dying because polar ice was melting?  Well, now there's a federal investigation, conducted by the Interior Department, is underway to determine whether that story was true or not.  The two scientists who wrote the original report are being questioned.  It's important because the "polar bear" issue was one of those highly charged stories that fueled the climate-change scare.  It was used, natch, by Al Gore in "An Inconvenient Truth."  Like other scientific "truths," it's now being questioned.  Stand by.

August 11, 2011       Permalink

DOW OPENS HIGHER, THEN EASES – AT 9:59 A.M. ET:  The Dow rose as much as 150 points over yesterday's close in early trading today, but then eased back and is now about even.  At the same time, America got some further grim economic news.  From Bloomberg:

The U.S. trade deficit unexpectedly increased in June to the highest level since October 2008 as a slump in exports exceeded a decline in shipments from overseas.

The gap widened 4.4 percent to $53.1 billion from $50.8 billion in the prior month, Commerce Department figures showed today in Washington. The deficit exceeded all estimates in a Bloomberg News survey of economists in which the median was $48 billion. Exports declined the most since January 2009.

U.S. shipments of capital equipment and industrial supplies fell in June, which may reflect the start of a cooling in the global economy. Some companies like Caterpillar Inc. (CAT) remain optimistic that demand for American-made goods will be sustained, helped in part by a weaker dollar.

“Sluggish U.S. demand growth this year has restrained imports,” Mike Englund, chief economist at Action Economics LLC in Boulder, Colorado, said before the report. “The export trajectory remains respectable.”

COMMENT:  It's pretty clear that we are in an economic position that may last for years, dimming the hopes of the post-9/11 generation.  The issues are worldwide, and there are even weaknesses starting to show in Asia. 

One of the things we must stand guard against right now is the inevitable bad ideas that will come down the pike, especially from social ideologists, aided by their disciples in journalism.  Get out your nonsense meters – stronger terms can be used – and insert the AA batteries.

August 11, 2011       Permalink

RUMBLE IN IOWA TONIGHT – AT 9:07 A.M. ET:  There will be a major televised debate among GOP presidential contenders tonight in Iowa, sponsored by Fox News and the Washington Examiner.  Check your local Fox News listing.

Neither Rick Perry nor Sarah Palin will be in the debate, but all the other majors will be.  Watch to see if Tim Pawlenty, who has shown some traction in Iowa in recent days, can improve his standing.  Watch to see if Michele Bachmann can repeat her stellar performance at the first debate, many weeks ago, in New Hampshire.

After the debate, the real Iowa fun begins.  Sarah Palin rolls into the state, and Rick Perry arrives over the weekend.  The Ames straw poll is Saturday. 

Iowa won't determine the nominee, and the Iowa caucuses, which actually decide convention delegate strength, won't be held until winter, but Iowa can send some weak contenders packing, and identify who is coming to the head of the pack.  I recommend you watch tonight.

In related political news, a new Fox poll has bad news for Barack Obama, and some tentative good news for Mitt Romney:

More American voters disapprove than approve of the job President Obama is doing. Likewise, if making a choice today, more voters say they would back someone else for president in 2012 than say they would give Obama a second term. Who would that someone else be?

Former Massachusetts Gov. Mitt Romney remains Republican primary voters’ preferred candidate. He’s also the GOP contender more voters see as likely to do a good job in the White House.

Currently 42 percent of voters approve of Obama’s job performance and 48 percent disapprove. Last month, before the agreement on the nation’s debt limit was finalized, 45 percent approved and 46 percent disapproved (July 17-19, 2011).

The drag on the president’s rating these days is not only lower approval among Democrats, which currently stands at 77 percent, but also a record-low 31 percent approval among independents. Approval among Republicans is 6 percent -- matching a previous record-low in October 2010.

Meanwhile, for the first time, the poll shows a 51-percent majority of voters think Obama is not a strong and decisive leader.

COMMENT:  Meanwhile, the president is scheduled to go on another vacation.  If I had numbers like that, I'd get out of town, too.

August 11, 2011       Permalink

WHILE OUR EYES ARE ELSEWHERE – AT 8:51 A.M. ET:  We've warned that one effect of our economic crisis is that it causes us to avert our eyes from foreign threats.  The same thing happened during the Great Depression of the 1930s.  Those foreign threats will not go away now, any more than they did then.  From The Wall Street Journal:

BEIJING—China sent its first aircraft carrier to sea, a defining moment in its effort to become a top-tier naval power that seeks to challenge U.S. military supremacy in Asia and protect Chinese economic interests that now span the globe.

The carrier, based on an empty hull bought from Ukraine, sounded its horn three times as it plowed through fog around the northeastern port of Dalian early Wednesday to begin its first sea trials, according to a Twitter-like service by the state-run Xinhua news agency.

The vessel, nearly 1,000 feet long, is far from fully operational: It has a new engine, radar, guns and other equipment, but has limited combat potential without backup from other carriers and an array of support ships. For the moment, it will be used mainly for training personnel, especially fighter pilots who must learn to take off from and land on a moving deck.

And they will learn.  The Chinese are a hard-working intense people.  "Made in China," once unheard of, has now become a staple I.D. for American electronics. 

The vessel... sends a powerful message both to China's domestic audience, for whom a carrier has for decades been equated with national strength, and to the U.S. and its regional allies, many of whom are embroiled in territorial disputes with Beijing.

It is the most potent symbol yet of China's long-term desire to develop the power both to deny U.S. naval access to Asian waters and to protect its global economic interests, including shipping lanes in the Indian Ocean and oil sources in the Middle East.

COMMENT:  Please note that, as this is happening, the Democrats in this country want to slash the defense budget to dangerous levels.  Sadly, there are some on the fringe right who want to go along with that.

History doesn't repeat itself, but the psychology of history repeats itself.  We averted our eyes in the 1930s, and got a bullet right between them at Pearl Harbor.  Next time, unless we are vigilant, and led by wise leaders who will remind Americans of foreign danger, the bullet may be nuclear. 

August 11, 2011    Permalink

MONEY WORRIES – AT 8:37 A.M. ET:  The overnight financial numbers from Asian and European markets were in negative territory.  We await the opening bell on Wall Street to see if we'll get any relief from yesterday's bloodbath.

True, the stock market isn't the real economy, but it has a serious psychological effect on the country, and on American politics.

We also await the weekly unemployment report. 

Worries about the solvency of several major European countries, including France, Italy, and Spain, continue.  And the London riots, which many will interpret as reflecting economic and social stress, aren't helping the economic outlook.  Please remember that London hosts the 2012 summer Olympics.  A continuation of social unrest in the city, especially if it includes assaults on tourists, can have a devastating effect on Britain as it prepares for the games, and its place in the international TV spotlight.

Violence was substantially reduced in Britain last night, thanks to massively increased police presence.

UPDATE:  Claims for unemployment benefits decreased in the U.S.  From Bloomberg:

Claims for unemployment insurance payments in the U.S. unexpectedly fell last week to a four-month low, signaling the recent slowdown in payroll gains is due to a lack of hiring rather than more firings.

Applications for jobless benefits decreased 7,000 in the week ended Aug. 6 to 395,000, the fewest since early April, the Labor Department said today in Washington. Economists forecast 405,000 claims, according to the median estimate in a Bloomberg News survey. The number of people on unemployment benefit rolls and those getting extended payments also dropped.

COMMENT:  Good, but hardly encouraging.  Remember that this was the situation as of five days ago, and does not take account of the impact of the downgrading of U.S. credit.  Nor does it take account of the impact of this week's market drop.  I wouldn't see this as a significant trend.

August 11, 2011     Permalink