Fed holds rates on inflation concerns
THE US FEDERAL RESERVE GAVE A DOWNBEAT ASSESSMENT OF THE WORLD’S LARGEST ECONOMY ON WEDNESDAY AS IT POINTED TO SLOWER THAN EXPECTED GROWTH AND HIGHER INFLATION.
In the most significant change to its policy statement, it stripped out all reference to “subdued” measures of underlying inflation and said that the economy is growing “somewhat more slowly than the Committee had expected”.
The toxic combination of disappointing growth but higher inflation combined to leave no hint that the central bank will consider further asset purchases to stimulate the economy.
It’s beginning to look a lot like 1979. Welcome back Carter. Is it time to get out our sweaters?
Sarah Palin predicted the effect of QE2
…..Back in November, GOVERNOR PALIN TOOK ON QE2 AND PRESIDENT OBAMA'S DEFENSE OF IT. Her predictions have turned out to be correct. WHEN MAKING HER CASE AGAINST QE2, SHE ARGUED THAT IT COULD CAUSE INFLATION, BUT WOULD NOT MUCH HELP U.S. NET EXPORTS AND BUSINESS INVESTMENT, the two factors needed to grow the U.S. economy.
Indeed, worsening net exports (exports minus imports) have been keeping the United States stuck in its current economic stagnation. When imports go up relative to exports, Americans get more debt and lose jobs, whereas when exports go up, relative to imports, Americans get more income and gain jobs. THE DECLINE IN NET EXPORTS MAY BE SLOWING OR PREVENTING THE U.S. ECONOMIC RECOVERY.
BERNANKE HOPED THAT QE2 WOULD WEAKEN THE DOLLAR WHICH WOULD TURN U.S. NET EXPORTS AROUND. BUT PALIN PREDICTED THAT ANY POSITIVE EFFECTS WOULD BE TEMPORARY. In November she wrote:
Will driving the dollar down in this way do anything to boost U.S. exports? The short answer is not really. A weaker dollar will temporarily boost exports by making our goods cheaper to sell; but inevitably other countries will respond in kind, triggering the kind of currency wars economists are warning us about.
Indeed, SO FAR PALIN HAS BEEN CORRECT. QE2'S EFFECT UPON NET EXPORTS APPEARS TO HAVE BEEN TEMPORARY. Although U.S. net exports worsened more slowly in November and December, they resumed their economy-sapping slide in February, as shown in the graph below….
So let me see if I have this correct. The media’s candidate for the stupidest politician ever was correct and Ben Bernanke and President Obama (the smartest politician ever) were wrong. Makes you wonder.
Obama versus Osama: guess who the Egyptians prefer?
First the good news: U.S. PRESIDENT BARACK OBAMA IS MORE THAN TWICE AS POPULAR IN EGYPT AS IRANIAN PRESIDENT MAHMOUD AHMADENIJAD.
Now, the bad news: the American president's standing has never been worse in Egypt, plummeting since 2008, when he received a 25 percent favorability rating, to 12 percent in 2011.
EVEN OSAMA BIN LADEN, THE LATE AL QAEDA LEADER, WAS MORE POPULAR THIS YEAR, WITH A 21 PERCENT FAVORABILITY RANKING. The Iranian leader fared worse, dropping from 21 percent favorability rating in 2008 to a miserable 5 percent.
The findings are drawn from a public poll of Egyptian views in the aftermath of the public uprising that brought about the resignation of Egypt's fallen leader Hosni Mubarak. The poll was commissioned by the International Peace Institute, a New York-based think tank with close ties to the United Nations and Arab governments.
In another poll it was found that Great White Sharks preferred Osama 97% to 3% over Obama.
Obama in Perilous Political State
According to a new Bloomberg National Poll, “AMERICANS ARE GROWING MORE DISSATISFIED WITH PRESIDENT BARACK OBAMA’S HANDLING OF THE ECONOMY and say it will be hard to vote to re-elect him without seeing significant progress over the next year and a half.”
Among the data points from the poll (which has DEMOCRATS OUTNUMBERING REPUBLICANS BY 32 PERCENT V. 27 PERCENT):
• ONLY 30 PERCENT of respondents said they ARE CERTAIN TO VOTE FOR THE PRESIDENT and 36 percent said they definitely won’t.
• Among LIKELY INDEPENDENT VOTERS, ONLY 23 PERCENT SAID THEY WILL BACK HIS RE-ELECTION, while 36 percent said they are sure they will seek out another candidate.
• By a 44 PERCENT TO 34 PERCENT MARGIN, AMERICANS SAY THEY ARE WORSE OFF than they were when Obama took office.
• More than half of respondents (55 percent) say their children are destined to a lower standard of living.
• Fewer than a quarter of people (23 percent) see signs of improvement in the economy while two-thirds (66 percent) say they believe the country is on the wrong track
• Sixty-one percent either strongly agree or mostly agree that in 2012, Obama will have had his chance and if the economy isn’t substantially better by election day, it will be very hard to vote for him.
• By a margin of 61 PERCENT TO 32 PERCENT, AMERICANS DISAPPROVE OF THE JOB OBAMA IS DOING TO TACKLE THE BUDGET DEFICIT.
• Fifty-seven percent of respondents disapproved of his efforts to create jobs.
• Fifty-seven percent disapproved of his handling of the economy.
This is a devastating poll if you are a democrat.
Obama’s America in Black & White
Platitudes about the civic utopia that would spring forth from the election of Barack Obama have vanished. Thomas Friedman’s claim that “the American Civil War ended, as a black man . . . became president of the United States,” has now been replaced by PBS host TAVIS SMILEY’S PREDICTION THAT THE 2012 PRESIDENTIAL ELECTION IS “GOING TO BE THE UGLIEST, THE NASTIEST, THE MOST DIVISIVE, AND THE MOST RACIST IN THE HISTORY OF THIS REPUBLIC.” E. J. Dionne’s trope that “it is time to hope again. Time to hope that the era of racial backlash and wedge politics is over,” has given way to the statement by CBS’s BOB SCHIEFFER THAT RECENT CRITICISM OF OBAMA REPRESENTS “AN UGLY STRAIN OF RACISM THAT’S RUNNING THROUGH THIS WHOLE THING.” Paul KRUGMAN, who wrote in 2008 that “Racial polarization used to be a dominating force in our politics, but we’re now a different, and better, country,” HAS TAKEN TO EQUATING THE ANTI-OBAMA TEA PARTY WITH THE KU KLUX KLAN.
Those who are equating Obama’s coming demise to racism remind me of the old joke about the man with halitosis who spent $50,000 to get rid of it to find people just didn’t like him. It isn’t racism that is causing Obama’s problems it’s his far left liberalism.
Spend Our Way Out of Debt
I am stunned that Democrats would be asking for a new stimulus. First, THIS NEW REQUEST IS AN ADMISSION THAT THE PREVIOUS STIMULUS HASN’T WORKED — if it had they wouldn’t be asking for more stimulus would they? But then, why ask for more of something that failed in the past?....
…..As my colleague ANTHONY DAVIES, ALSO AN ECONOMICS PROFESSOR AT DUQUESNE UNIVERSITY, HAS SAID, EVEN UNDER THE BEST CIRCUMSTANCES, STIMULUS DOESN’T CREATE PERMANENT JOBS; RATHER IT PLANTS THE SEEDS TO CRIPPLE THE ECONOMY. Yesterday, he explained:
As an economist, IF I WERE WORKING FOR A FOREIGN GOVERNMENT AND WERE TO DESIGN A PACKAGE OF POLICIES TO DESTROY A COUNTRY’S ECONOMY, I WOULD DESIGN A PLAN VERY SIMILAR TO WHAT WE’VE UNDERTAKEN IN THE U.S. OVER THE PAST 18 MONTHS.
If we pursue another economic stimulus of similar size to the previous one, we may as well condemn the economy to another 10-20 years of recession.
Not only will it not work, but it will significantly add to an already grave debt problem. STIMULUS IS WHAT KEEPS ENTREPRENEURS FROM CREATING NEW JOBS AND PRODUCTS. It makes them nervous, because we have to raise taxes in the future to pay for stimulus spending, and this makes for a very uncertain business environment.
What is really unfortunate is the TEA Party folks saw this as soon as Obama did it. They went out and demonstrated against the spending, but the Democrats and the media attributed it to racism and are yet to admit the truth.
South Carolina Not Pay for Primary
South Carolina Governor Nikki Haley (R) told lawmakers there will be no room in the budget to fund the GOP’s first-in-the-South presidential primary in February.
The Republican Party states the primary will go on, even if the GOP has to pay the $1.5 million needed to fund it.
GOV. NIKKI HALEY, KNOWN FOR HER CONSERVATIVE VIEWS AND ASSOCIATION WITH THE TEA PARTY MOVEMENT, STATED TAXPAYER FUNDS SHOULD NOT BE USED FOR MINOR FUNCTIONS, INCLUDING PRIMARIES:
“Political parties have sufficient fundraising ability to offset the costs of partisan presidential preference primaries, and in a budget year like this one, it is my ask that we do not dedicate taxpayer dollars to something I believe does not rise to the level of a core function of government,” she wrote in a letter in March.
Hooray for Nikki Haley. A governor with some common sense. The two parties plan on spending hundreds of millions on this election cycle. Let the party pay for the primaries and perhaps we won’t have bear quite so many commercials.
Interview with Ann Coulter
Ann Coulter’s new book is called Demonic: How the Liberal Mob Is Endangering America. I’ve read it, it’s outstanding, and I’d highly recommend that you read it, too. TO GIVE YOU A TASTE OF WHAT IT’S LIKE, HERE’S RWN’S SEVENTH INTERVIEW WITH ANN COULTER. ENJOY!
Coulter is quick witted and funny in this interview. And she does it without a teleprompter.
An Odd Comment about the Constitution
In a Time article on the Constitution, RICHARD STENGEL WRITES: “IF THE CONSTITUTION WAS INTENDED TO LIMIT THE FEDERAL GOVERNMENT, IT SURE DOESN’T SAY SO.”
Yes, it does. THE TENTH AMENDMENT SAYS: “THE POWERS NOT DELEGATED TO THE UNITED STATES BY THE CONSTITUTION, NOR PROHIBITED BY IT TO THE STATES, ARE RESERVED TO THE STATES RESPECTIVELY, OR TO THE PEOPLE.”
Even before the adoption of the Bill of Rights, JAMES MADISON EXPLAINED THE ORIGINAL UNDERSTANDING OF THE DOCUMENT IN FEDERALIST 45: “THE POWERS DELEGATED BY THE PROPOSED CONSTITUTION TO THE FEDERAL GOVERNMENT ARE FEW AND DEFINED. Those which are to remain in the State governments are numerous and indefinite.”
What is truly scary about this is that there are many on the left that would echo Stengel’s comment, that is, the power of the Federal Government is vast and indefinite.
Obamacare and the McKinsey study
Two weeks ago, the consulting firm McKinsey & Co. released a widely reported survey that said ALMOST A THIRD OF PRIVATE-SECTOR EMPLOYERS REPORTED THEY WILL DROP THEIR EMPLOYEE HEALTH INSURANCE COVERAGE WHEN OBAMACARE'S GOVERNMENT-MANAGED INSURANCE EXCHANGES COME ONLINE IN 2014.….
….Obama and his allies reacted with fury to the McKinsey results. Obama's deputy chief of staff for policy, Nancy-Ann DeParle, CALLED THE RESULTS AN "OUTLIER" and questioned whether the survey's respondents understood the plan. Sen. Max Baucus, D-Mont., sent McKinsey A THREATENING LETTER DEMANDING THAT THE FIRM REVEAL ITS SURVEY METHODOLOGY. And the New York Times' Paul Krugman -- ever willing to invent scurrilous charges out of whole cloth -- accused McKinsey of having "A SKEWED SAMPLE" OR "NO REAL DATA AT ALL."
Now McKinsey is having its day and answering Obama and Obamacare apologists by POSTING ALL 29 PAGES OF THE SURVEY QUESTIONS, AS WELL AS 206 PAGES OF CROSS-TABULATIONS. It turns out that some of the unreported responses in the survey are EVEN MORE DAMAGING TO OBAMACARE THAN THE ORIGINAL MCKINSEY REPORT INDICATED….
Be careful what you wish for.
Perhaps they should have read the bill before they passed it. The article points out if we do see the numbers from the survey, the cost of Obamacare will skyrocket by over $1 trillion in the first 10 years.