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AT THE LATEST ANGEL'S CORNER – READERS WRITE ABOUT SOUTHERN HISTORY, OBAMA'S CREDIBILITY IN THE WORLD, A THEORETICAL CHANGE IN FEDERAL RULES, THE STATE OF FOREIGN MILITARIES, THE DANGER OF USING PRECEDENT TO FORM THE POLICIES OF THE FUTURE.

AUGUST 5,  2011

SHORT TAKES ON THE DRIFTING WRECKAGE – AT 11:05 P.M. ET:

DOWNGRADE – By now you probably know that Standard & Poor's has downgraded the credit rating of the U.S. Government, the first time that's ever been done.  Two other credit bureaus, however, have not done the same.  The Standard & Poor's action is clearly a rebuke to the United States, and neither party can take any comfort in it.  Economic analysts say that the actual effect of the downgrade is unclear at this time.  We might get some early indication when Asia markets open again on Sunday night.

WHO WOULD NOTICE? – The US Postal Service said on Friday night that it may have to default on payments it owes the United States Government.  Actually, I understand that the Postal Service said this by letter several weeks ago, but the letter got lost in the mail.  (No, no, no.)   The service warned a while back that there may be drastic cuts in mail service in the years ahead, to stem the losses that are incurred chronically.  An end to Saturday deliveries is in sight.  Many post offices will have to be closed, and even some weekday deliveries will be cut back.  There are millions of Americans who don't have computers, or access to e-mail, and this could be a real hardship.

ONE HAS NEEDS, DEARIES – The New York Times reports that seriously priced luxury goods are selling like the proverbial hotcakes, including $750 women's shoes, and Mercedes Benzes.  There is a sneering quality to the article, and I object!  It seems to me that you want to look your best when going to the unemployment office.  Look like a winner who likes to work!  Pull up in that Mercdes, driven by a chauffeur.  (You can get a friend.)  They'll know you're going to look for a new job vigorously, just to support that lifestyle.  Oh, and that $9,000 coat from Neiman Marcus is a steal.

RUBIO PACS FOR ACTION – Republican Senator Marco Rubio has established a Political Action Committee, calling it Reclaim America Pac.  Rubio, who just became a senator this year, has rejected all suggestions that he run for president next year.  But he is being widely mentioned as a candidate for vice president, a steppingtone to the presidency whether his ticket wins or loses.  The PAC, like chicken soup, can't hurt.  Rubio is probably the best speaker in the Republican Party right now.

August 5, 2011    Permalink 

FINALLY, SOME GOOD NEWS – AT 9:09 A.M. ET:  The U.S. economy added 117,000 jobs in July, which, while not spectacular, wasn't bad at all.  From WaPo:

WASHINGTON — Hiring picked up slightly in July and the unemployment rate dipped to 9.1 percent, an optimistic sign after the worst day on Wall Street in nearly three years.

Employers added 117,000 jobs last month, the Labor Department said Friday. That’s better than the past two months, which were also revised higher.

The mild improvement may ease investors’ concerns after the Dow Jones industrial average plummeted more than 500 points over concerns that the U.S. may be entering another recession.

Still, the economy needs twice as many net jobs per month to rapidly reduce unemployment. The rate has topped 9 percent in every month except two since the recession officially ended in June 2009.

And...

The unemployment rate fell partly because some unemployed workers stopped looking for work. That means they are no longer counted as unemployed.

COMMENT:  At least there are a few smiles here.  This rate of growth in employment does not, as the story points out, solve our problems, but it gives a bit of a boost.  We'll just have to see whether it can be sustained, and, more important, built upon, in the coming months.

We await the opening of American markets to see what impact the jobs report will have.

August 5, 2011       Permalink

NO OTHER WAY – AT 7:54 A.M. ET:   When he ran in 2008, President Obama's campaign was overflowing with hope, optimism, inspiration, spirituality, and all that good stuff.  Why, The One was coming, and we could already feel ourselves cleansed.

Not so in 2012.  If Obama ran on his record, his campaign would last 30 minutes.  Instead, it appears that, like any failed president, this one will divert attention from himself, portraying his opponent as the Devil, and scaring the daylights out of the voters.  From The Los Angeles Times:

Reporting from Washington— The stock market plunge highlights a challenge President Obama faces in his quest for a second term: With a recovery that is anemic at best, he probably will be forced to run on something other than his economic record.

Already, the outlines of a hard-nosed reelection campaign are emerging. Using surrogates to distance the president from the effort, his team is pushing back hard against criticism of his handling of the economy. At the same time, aides are developing lines of attack against potential GOP opponents.

"It's not going to be 2008 'Yes, we can' anymore. I think it's going to be slash-and-burn," said Democratic pollster Paul Maslin. "We have an embattled incumbent who doesn't have much hope of improving his standing except by point of comparison with his Republican opponent. It's going to be a very different kind of election that's going to be brutal, to be honest."...

...Obama's political advisors reject the suggestion that the president will run a scorched-earth campaign. Instead, one of those advisors said, they will present a "very aggressive contrast" with the GOP nominee.

Ben LaBolt, an Obama campaign spokesman, put the contrast the campaign hopes to portray this way: "A president that prevented another depression, stood up to special interests to pass Wall Street reform, and is fighting to create the jobs of the future," versus a Republican nominee who supports policies that "would eliminate hundreds of thousands of jobs and erode critical programs like Social Security."

COMMENT:  The problem for us is that these tactics often work.  Scare the voters into voting for the Devil they know.  People in America are frightened about their future, and, frankly, the Republican Party doesn't often come across as inventive or welcoming.

The tactics can fail if the Republicans come up with a candidate who 1) fights back; 2) has impressive experience; and 3) is an optimist with a warmth that shines through.  Of course, those were the characteristics of Ronald Reagan, who ran a vigorous campaign in 1980, who'd been a two-term governor of California, and who always told the American people that it's morning in America, no matter how dark the night.

The classic definition of a star in Hollywood is someone who has that indefinable something extra.  In politics, it's someone who wins the trust and hearts of the people in ways we don't always completely understand.  It's a human connection, as there was with FDR and Reagan, and, yes, to his 2008 supporters, with Obama.

Is there such a GOP candidate?  I don't know.  People mention Rick Perry, but he hasn't been tested beyond Texas.  Will he explode and expand?  Or will he be strictly local?  We're going to find out. 

Al Smith, the great governor of New York who, in 1928, became the first Catholic to be nominated by a major party for president, was called "the happy warrior."  That's a fine definition of what's needed.  Now show us the person.  No pessimists need apply.

August 5, 2011       Permalink

BLOODY SYRIA – AT 7:42 A.M. ET:  Syria is becoming an obscenity.  Secretary Clinton said yesterday that the Assad regime has killed more than 2,000 of its own citizens in recent months.  And yet the world reacts with only minor suggestions of upset.

Compare please to the international uproar that greeted a scandal in an American prison in Iraq during the Iraq War.  No one was killed.  No one was even seriously injured.  Some prisoners were humiliated and ill-treated, and the problem was exposed by our own Army and corrected.  Yet the world reaction suggested that mass genocide was taking place.  It is the double standard of the international left, as exemplified by "human rights" groups which, like the old red front groups, use grand words and market in hypocrisy.

Questions are being raised about America's own response to the Syrian massacres, given the speed with which we sent Hosni Mubarak to the showers.  From ABC News: 

The Obama administration has been reluctant to call on Syrian President Bashar al-Assad to step down despite the regime’s increasingly bloody crackdown on protestors seeking his ouster.

U.S. officials tell ABC News that there was a debate between the White House and the State Department this week over whether to take that step. The White House wanted President Obama go beyond his May 19 statement that Assad must reform or get out of the way, while the State Department cautioned that it was worth saving that arrow in the quiver.

Pressed repeatedly this afternoon by reporters asking why the U.S. has yet to call on President Assad to step down, Secretary of State Hillary Clinton eventually said “I come from the school that actions speak louder than words.”

And we've gotten neither.

To that end she said the U.S. is trying to develop international consensus for a global response to the violence in Syria.

“We are working around the clock to try to gather up as much international support for strong actions against the Syrian regime as possible,” Clinton said.

This crisis has gone on for months.  Must be a slow clock. 

The fact is that this administration's reputation for weakness, anticipated cuts in our defense, and a generally ambivalent attitude toward foreign policy, are combining to make us the pitiful helpless giant that we used to fear we'd become decades ago. 

There's an old saying in diplomacy:  "If you say you're going to take Vienna, take Vienna."  If we claim to be interested in advancing human rights in the Mideast, it's time to combine with other nations and insist that Assad leave power, while at the same time finishing the job against Gadaffi in Libya. 

We are losing influence.  We feel it around us.  The price will be paid.

August 5, 2011       Permalink

THE WORLD WAITS – AT 7:31 A.M. ET:  The heavy dip in stock prices yesterday was worldwide, fueled in part by America's economic problems, but also by Europe's financial crisis.  While Greece has been temporarily bailed out, Spain and Italy are on the brink.

Italy is the world's eighth largest economy, and not easily bailoutable.  For decades the West Europeans have been living on a credit card, maintaining vast welfare states, made possible in part because the United States was defending them.  Now a number of European states are running out of money, and Uncle Sam cannot help.   But don't despair.  The Europeans will still proclaim their superiority over us, no matter what kind of financial suicide they commit.  They will proclaim said superiority while secretly watching American sitcoms.

Stocks in Asia have already tumbled for an eighth straight day, and Europe is also down.  We await the result in the United States, whose performance will have a psychological impact on the rest of the world when the demolition derby begins again on Monday.

BRUSSELS (AP) -- Stocks around the world tumbled Friday ahead of crucial U.S. jobs figures, continuing a losing streak reminiscent of the aftermath of the collapse of U.S. investment bank Lehman Brothers in 2008.

Growing panic about the debts of big eurozone countries like Italy and Spain, paired with fears the U.S. may be heading back into recession. Jobs figures later could well go a long way to determining whether the U.S. economy is indeed on the point of shrinking again.

The biggest one-day points decline on Wall Street since the 2008 financial crisis Thursday carried into Asian and European markets Friday, taking down oil prices as well, as investors were preparing for a slowdown in demand.

Have a nice weekend.

August 5, 2011     Permalink

AUGUST 4,  2011

SHORT TAKES ON THE DRIFTING WRECKAGE – AT 10:01 P.M. ET:

WATER ON MARS – A NASA orbiter has found possible evidence of water on Mars, water that apparently flows seasonally.  There is no report yet on whether Mars would be willing to sell us some of its water, given our credit rating.  Also, the EPA wants to tax Martian water to pay for removal of any Martian pollution.

LONG-TERM JOBLESS – In another sign that some Democrats are distancing themselves from Obama economic policies, a group of Congressional Democrats from the Joint Economic Committee is warning that the percentage of long-term unemployed, those out of work for six months are more, is at a near-record level.  According to this report, some 42% of the country's 14.4 million unemployed are long-term cases.

GOP ALSO HURT BY DEBT CRISIS – We can view it with a bit of skepticism since it was sponsored by The New York Times and CBS News, but a new poll shows Americans disapproving of how both Congressional parties handled the debt crisis, with more disapproving of Republicans than Democrats.  Some 66% of respondents turned thumbs down on the Dems, 72% on the GOP.  Only 14% approves of Congressional performance overall, a new low.  We've stressed before at Urgent Agenda that the president's fading numbers don't necessarily guarantee GOP gains next year, as the Republican Party remains highly unpopular as well.

THE STAND-UP GUY – Leon Panetta, who just went from CIA director to secretary of defense, is the kind of old-time Democrat that I like.  He takes national defense seriously, and seems unfazed by the 60s crowd.  Today, with all the fashionable talk about cost-cutting, Panetta warned that there is danger for our national defense if cuts go beyond those currently contemplated.  "If it happened - and, God willing, that would not be the case - but if it did happen, it would result in a further round of very dangerous cuts across the board, defense cuts that I believe would do real damage to our security, our troops and their families, and our military's ability to protect the nation," Panetta said.  I like the guy.  He's real, not trendy, and he's a grown-up.

August 4, 2011       Permalink

THE MESS – AT 7:31 P.M. ET:  The Dow dropped almost 512 points today, meaning a certain number of my neighbors here in White Plains won't be hanging out at Neiman-Marcus this weekend.  Maybe Macy's.

And yet, there are some who just know how to party, no matter what.  From Andrew Malcolm at the L.A. Times's Top of the Ticket blog:

Uh, what in the world is going on here?

That humongous hard-fought debt ceiling deal that was supposed to settle things down in D.C. financially and politically seems to be doing precisely the opposite there and now around the world. And all within 48 hours.

Europe isn't buying the deal.

The Dow Jones Industrial Average plunged almost 513 points today, erasing all of its gains this year, as fears grew of yet another recession before most people believed the first one was over. This White House returned to SOP immediately anyway. And George W. Bush is nowhere in sight to blame for this one.

And...

Obama was so pleased with the bipartisan deal to control his spending and cut the nation's $14.3 trillion national debt that he signed it in private. Within hours he was talking about spending much more on bridges, roads, clean energy and unemployment extensions.

Despite his sagging poll numbers, Obama then resumed fundraising for his reelection. He flew to Chicago for a $35,800 per plate dinner that raised millions. He gave a 22-minute oration that still blamed what's-his-face the Texas guy from nearly three years ago, did not contain the word retrenchment and was widely applauded by Windy City fans...

...The stock market plunge, however, was not expected to affect the White House's next pair of parties, a staff gathering this afternoon and another this evening with more friends and family to celebrate the aging Obama's well-documented birth a half-century ago today.

COMMENT:  As one late-night comedian put it, Obama's approval ratings are so low, Kenya is insisting he was born in the United States. 

Watch out for tomorrow.  The term "black Friday" may be hauled out.  We hope not, but be aware.

August 4, 2011       Permalink

SNIPPET OF THE DAY – AT 7:03 P.M. ET: 

Actual headline from Fox: 

IDAHO MAN REPORTEDLY BANNED FROM WEARING BUNNY SUIT IN PUBLIC

It's about time someone dealt with the bunny suit problem.  Some may think that our multi-trillion-dollar national debt is a big issue, but to me the appearance of a man in a bunny suit is a clear sign of national decline (See Gibbon:  "The Decline and Fall of the Roman Empire," Chapter 27, "Caesar Bans Bunny Suits").  Let us now praise the law-enforcement heroes who refuse to budge in the face of the pink hordes.

UTTERLY DISGRACEFUL – AT 10:19 A.M. ET:   One of the last sacred cows in American life is "education."  After all, it's for the children...isn't it?  Well, not quite.  When we start looking at many educational institutions with two eyes, the blood begins to boil at the waste, the self-indulgence, the political correctness, and, too often, the profund anti-intellectualism.  Get this one, from Fox:

The head of a North Carolina college says some students will have their graduations delayed after budget shortfalls cut sections in classes needed to be taken to earn a degree.

In response to $26 million in cuts, the University of North Carolina at Greensboro trimmed staff and lost nearly 1,000 class sections.

"It's us not being able to offer enough classes of any sort to enable students to build a full schedule and build a schedule to enable them to make good progress," UNC-Greensboro chancellor Linda Brady told MyFox8.
Brady expects other schools across the UNC system -- which suffered a collective $414 million loss in state funding -- to force students to stay onboard for an extra semester, MyFox8 reports.

To offset some delays, UNC-Greensboro created a course-substitution program for students to gain credits, and added a 6.5 percent tuition hike.

COMMENT:  I won't claim to be familiar with all the details, but the word "extortion" comes to mind.  You know, restore our funds or we'll hold your kids hostage for another semester. 

They cut a thousand sections?  How many sections does a college need?  How many departments does it need?  I'm sure some courses can be found among those remaining to allow students to graduate on time.  This doesn't sound like a college.  It sounds like a department store, which is what too many colleges have become.

And I'd love to know, not only what courses and "services" have been cut, but what remains.  Is there, for example, an office of vice president for diversity?  For green jobs?  For multicultural outreach? 

We learned several weeks ago, that one campus of the University of California system had shown only a modest increase in faculty members, but a vast increase in administrators. 

The University of Chicago, my alma mater, at one time featured the Hutchins College, an undergraduate program in which there was no specialization.  The college consisted of only 14 courses, and everyone took all 14.  It was one of the finest educations imaginable. 

I hope there's a follow-up to the North Carolina story, explaining how a college that can cut a thousand sections is actually run, and why there is not enough of a core left to allow students to graduate on time.  I believe that colleges are going to come under increasing scrutiny in the coming years, as parents, students, and contributors demand more for their money, and some very substantial streamlining.

August 4, 2011      Permalink 

FLORIDA COOLS ON OBAMA – AT 9:26 A.M. ET:  Florida, like Ohio, is a key swing state that political pundits look to for indications of trends.  Right now the trends in the sunshine state are not in Mr. Obama's favor:

TALLAHASSEE, Fla. (AP) — President Barack Obama is losing support among Florida voters, especially among independents, a poll released Thursday shows.

Fifty percent of voters surveyed randomly by landline telephone between July 27-Aug. 2 by Quinnipiac (Conn.) University said Obama would not deserve a second term in the election were held today. However, former Massachusetts Gov. Mitt Romney was the only announced Republican candidate with enough support in the poll to give the president a strong challenge. Both men were favored by 44 percent of those questioned.

In a matchup against Texas Gov. Rick Perry, who is expected to get into the race for the GOP presidential nomination, Obama was favored 44 percent to 39 percent.

However, Obama held double-digit leads over all other Republican presidential hopefuls.

Romney, an unsuccessful candidate for the Republican nomination in 2008, led Perry 23 percent to 13 percent in a sampling of 510 Republican voters with none of the other announced candidates reaching double digits.

"Gov. Perry's stock is rising even before he announces whether he'll run," said Peter Brown, assistant director for Quinnipiac's polling institute...

...It was with independents where Obama took his biggest hit. Sixty-one percent of independents said they now disapprove of the president's performance compared to 33 percent who approved. In May, 47 percent of the independents approved of Obama's job performance compared to 45 percent who did not. 

COMMENT:  The methodology of this poll – voters selected randomly by landline telephone – suggests that the condition of the president is probably worse than the poll indicates.  Generally, Mr. Obama fares poorest among polls of likely voters, the most accurate polls of all.

If Republicans can nail down Florida, it's a major step toward the presidency.  One of Florida's senators is Marco Rubio, who also is the man most mentioned as a vice presidential choice on the GOP side.  Not a bad idea.  Romney-Rubio, Perry-Rubio, or Rubio-...? 

August 4, 2011       Permalink

THURSDAY JOBS REPORT OUT – AT 9:20 A.M. ET:  From Bloomberg:

Initial claims for unemployment insurance payments in the U.S. fell last week to a level that shows limited improvement in the labor market.

Applications for jobless benefits decreased 1,000 in the week ended July 30 to 400,000, the fewest in almost four months, the Labor Department said today in Washington. Economists forecast 405,000 claims, according to the median estimate in a Bloomberg News survey. The four-week average also declined to the lowest level since April.

A further reduction in the pace of dismissals may be needed before companies gain the confidence to step up hiring, which has slowed in the past three months. Employers added 85,000 workers in July, economists project a Labor Department report to show tomorrow, failing to reduce a jobless rate that’s holding above 9 percent.

“Claims are moving in the right direction, which is a sign things probably aren’t getting worse in the labor market,” said Drew Matus, a senior U.S. economist at UBS Securities LLC in Stamford, Connecticut, who correctly forecast the level of claims. “There’s still job creation going on but it’s just not at a rate that’s going to make people feel more comfortable about the economic outlook.”

COMMENT:  This report doesn't reflect the psychological impact of the debt deal reached this week.  And 400,000 unemployment claims is still startling high.  If cuts in defense spending are anticipated, that could mean more layoffs in the coming months.

The figures here really don't point anywhere.  Other economic reports this week were decidedly negative.

August 4, 2011       Permalink 

BAD JOKE – AT 8:37 A.M. ET:   We wrote about this ridiculous possibility last week, and now it's a reality.  Nothing is that surprising in the ridiculous orbit of Iran.  From Britain's Guardian:

A senior Iranian revolutionary guards commander targeted by international sanctions has taken over the presidency of OPEC after he became Iran's oil minister on Wednesday.

Rostam Ghasemi, head of the Khatam al-Anbia military and industrial base, was one of four ministersnominated by president Mahmoud Ahmadinejad to join his cabinet last week and approved by Iran's conservative-dominated parliament.

Ghasemi is currently subject to US, EU and Australian sanctions and his assets have been blacklisted by US Treasury and western powers. He took 216 votes from the 246 deputies present in the 290-seat parliament.

Iranian state media interpreted the vote as a reaction by Iran's parliament to international sanctions against the country, especially those which have targeted the revolutionary guards and the country's nuclear programme.

"The clever and decisive vote of Iranian MPs for engineer Ghasemi to become the oil minister is a meaningful and crucial response to the attacks against the guards from the west's media empire," said Ramedan Sharif, the head of the revolutionary guards public relations' unit, in quotes carried by Iran's semi-official Fars news agency.

COMMENT:  This dandy becomes president of OPEC, the world's powerful oil cartel, because OPEC has a rotating presidency, and it's Iran's turn.  So the Iranian oil minister automatically heads OPEC.

This is a crazy situation.  Let's see if the other OPEC nations, many of which are reasonably rational, will change the rules and prevent this farce from happening.  The world's economy is precarious enough.  With an Iranian heading OPEC, how much faith will people have in the future of international oil markets?

August 4, 2011      Permalink