For some time, we have been hearing about the housing market, and how things were going in that department, critical to our overall health. Well, as it turns out, the National Realtors Association can’t count. They were off, way off, on where the numbers actually are, and their mistake was not a good one as this Chicago Tribune article highlights:

[snip] Far fewer homes have been sold over the past five years than previously estimated, the National Association of Realtors said Tuesday.

NAR said it plans to downwardly revise sales of previously-owned homes going back to 2007 during the release of its next existing home sales report on Dec. 21.

NAR’s existing home sales numbers, released monthly, are a closely followed gauge of the health of the housing market.

While NAR hasn’t revealed exactly how big the revision to home sales will be, the agency’s chief economist Lawrence Yun said the decrease will be “meaningful.“

“For the real estate business, this means the housing market’s downturn was deeper than what was initially thought,“ Yun said.

Yun said the database NAR uses to track existing home sales, the Multiple Listing Service (MLS), has led the real estate agency to over-count existing home sales for several reasons. [snip] (Click here to read the rest.)

Well, crap. That is some pretty sucky news, isn’t it? This had been one of the upward trends lauded of late, and turns out, that was a big bunch of hooey.

And I have to share one more story of Obama helping out his buddies with our money (H/t FlBreeze), as this editorial from Investor.com highlights:

[snip] Now we find the Navy partnering with the Agriculture Department to purchase hundreds of thousands of gallons of alternative biofuel in place of standard JP-5 fuel for Navy aircraft — the biggest federal purchase of biofuel ever.

It’s part of the White House’s “we can’t wait for Congress” strategy as the 2012 election year looms. But JP-5 typically costs less than $4 a gallon. If a family on a budget started filling up with $16-a-gallon gas, it might want to adopt the motto, “we can’t wait to go broke.”

[...]

As J.E. Dyer noted over the weekend on the Hot Air Green Room, “a member of Obama’s presidential transition team, T. J. Glauthier, is a ‘strategic advisor’ at Solazyme, the California company that is selling a portion of the biofuel to the Navy. Glauthier worked — shock, shock — on the energy-sector portion of the 2009 stimulus bill.”

Solazyme had already gotten a nearly $22 million chunk of change out of the taxpayers thanks to the 2009 stimulus. We heard the ludicrous excuse last week from Obama Navy Secretary Ray Mabus, as quoted in the National Journal, that “we are doing this for one simple reason: It makes us better fighters” because “our use of fossil fuels is a very real threat to our national security and to the U.S. Navy ability to protect America and project power overseas.”(Click here to read the rest.)

What the hell are these people drinking? Whatever it is, they need to put it down, and walk away. This is just ridiculous, and absurd. I swear, Obama is finding all kinds of ways to funnel our money to his buddies, and I am sick of it.

Again, I have to ask – where the hell is the MSM on this?? How many scandals can Obama possibly have before they start reporting them? Unbelievable.

First to Senate Majority Leader Harry Reid. Reid has declared that the problem with unemployment isn’t the lack of private sector jobs. Nope, it is the lack of government jobs, see. Never mind that the massive $787 Billion Stimulus bill added a whole slew of Federal government jobs (in the thousands). Oh no, as over 400,000 people have been added to the roles this past week, surely it is because the Obama Administration just isn’t hiring enough people! Ahem. Seriously, Reid is talking about firefighters, police officers, and others. Though he is still wrong on the numbers.

Good grief. What is WRONG with this man? Here is Reid’s “logic” on this topic:

Senate Majority Leader Harry Reid (D-Nev.) on Wednesday indicated Congress needs to worry about government jobs more than private-sector jobs, and that this is why Senate Democrats are pushing a bill aimed at shoring up teachers and first-responders.

“It’s very clear that private-sector jobs have been doing just fine; it’s the public-sector jobs where we’ve lost huge numbers, and that’s what this legislation is all about,” Reid said on the Senate floor.

Reid was responding to recent comments from Senate Minority Leader Mitch McConnell (R-Ky.), who accused Democrats of purposefully pursuing higher taxes as part of the teacher/first-responder bill, S. 1723, so that Republicans would oppose it. McConnell said the bill was meant to fail in order to give Democrats an issue to run on in the 2012 election, but Reid said the Republicans are simply trying to defeat President Obama any way they can.

The legislation Reid is defending is part of Obama’s jobs package. Vice President Biden was in Pennsylvania, an important election state, on Tuesday to push for the administration’s plan on increasing the number of teachers. (Click here to read the rest.)

Right. And since the Stimulus worked OH so well (not) the last time around, spending over $228,000 for EACH job SAVED or created, it does not appear they are doing a very good job of managing the funds they want us to pony up. Again.

I love this whole smoke and mirrors action around the “saved” jobs. The whole point of the Stimulus Bill was to STIMULATE the economy and CREATE jobs, not just “save” jobs, a sleight of hand accounting by any measure. What a joke.

Not that we can’t use police officers and firefighters. Of course we do, But this is a far more complex issue than Reid is making it appear. My guess is he’s trying to deflect for failing to pass the Jobs Bill.

Speaking of Biden and his little campaign for Obama’s jobs bill, what this article leaves out in its description was how completely unhinged Vice President Biden appeared on Wednesday, yelling about how women will be raped and people robbed if this flawed Jobs Bill that was never meant to be passed didn’t pass. Don’t take my word for it, here he is in his own words:

Click here to view the embedded video.

Gee, Joe – fearmonger much??

And then there was this “testy” exchange with a Human Events reporter who asked VP Biden if he wanted to back down a bit on his claim that women would be raped and people murdered if this Jobs Bill isn’t passed:

On Wednesday, Biden gave a speech saying budget cuts had drastically impacted police forces in many cities and “the result has been, and it’s not unique, murder rates are up, robberies are up, rapes are up.”

“I didn’t use … no, no, no,” Biden said to Mattera. “Let’s get it straight, guy. Don’t screw around with me. Let’s get it straight.”

Mattera followed up, asking the vice president, “You didn’t use a rape reference?”

“I said rape was up three times in Flint,” Biden replied. “Those are the numbers. Go look at the numbers. Murder is up; rape is up; burglary is up. That’s what I said.” (Click here to read the rest.)

This kind of browbeating, yelling, and threats from the Office of the Vice President to blackmail Congress into passing a flawed bill is disturbing on a number of levels. And one pesky fact Reid and Biden keep forgetting – the Senate is controlled by Democrats, and the bill failed there as well.

Both of these men, Reid and Biden, are appearing a bit desperate in their attempts to force this bill down our throats (shades of Obamacare). But these lengths to which they are going are far afield, and need to be ratcheted back. A lot. What we need is reasoned discussion on both sides of the aisle to come up with a workable program that will address the 9.1% unemployment and over 16% underemployment in this country, not this dear mongering, and blame game being played by Reid, Biden, and Obama. We need a real plan, not a political campaign slogan (at our expense, I might add – you cannot tell me this whole bus tour wasn’t a campaign event).

That’s what we need, and we need it now. What do you think?

I hasten to add, the stories of the six victims in Tucson, Judge John Roll, Christina Taylor Green, Giffords Aide Gabe Zimmerman, Phyllis Schneck, Dorwin Stoddard, and Dorothy Morris, need to be held in the fore, our prayers going out to their families. The continued updates regarding Rep. Giffords miraculous improvements, as well as the condition of the other 13 injured, is also important to keep in the fore.

But here are some of the things you may have missed. Amy Siskind of The New Agenda had a very interesting post about Obama, and the number of women in his cabinet/inner circle. Bottom line, it is low, as her post, “After Arizona, Will Obama Learn to Include Women?” indicates:

[snip] Yes, just as I was snapping to, Air Force One would be landing back in D.C. Senator Gillibrand and Congresswomen Wasserman Schultz and Pelosi would deplane and return to their 17% minority. President Obama would be head back to the White House — or should I say, the “fraternity house”: his inner-circle is composed almost exclusively of men.

Yes, to the president’s credit, he did appoint two women to the Supreme Court. That’s the end of the good news for women. Here’s the bad news:

* Obama’s cabinet picks are just 25% women.

* Obama’s czars are only 12% women.

* No women have leadership roles in running our country’s economy.

* Obama has only one woman in his inner-circle: Valerie Jarrett.

[...]

Paradoxically, Speaker Boehner in his opening days seems quite comfortable with women. One of his first symbolic gestures: to build a women’s restroom near the House floor. Next, Boehner shocked even me: he officially endorsed a woman for RNC chair (Maria Cino). And here’s a prediction: Boehner’s ability to cry in public will make it easier for women candidates to do the same in the future. Hey — I gotta admit — although I agree with Speaker Boehner on very few issues, I like the guy! He walks the walk for women on the right.

[...]

So I say this to our president: yes, let’s live up to the dreams of Christina Green, the nine-year-old who was tragically and senselessly killed in the Arizona shooting. The girl who was interested in politics and therefore came to see Congresswoman Giffords, Arizona’s only female representative in the U.S. House or Senate. Why don’t we have more women in leadership for girls like Christina to see and model after? And President Obama, what will YOU do to live up to her expectations? (Click HERE to read the rest.)

Yes, I can see why so many “feminists” wanted to support Obama over Hillary Clinton. He is SO good on the women’s equality issue – not.

But wait, there is more. Once again, LGBT groups are unhappy with Obama. Yes, yes, I know he signed the bill to repeal DADT, but he did blessed little to get that to come about, and did exactly what I thought he would do – have it in the Lame Duck session so he could blame the Republicans in case it didn’t pass.

Well, that is exactly what he did in terms of DOMA, but not before his Justice Department did this:

Supporting DOMA: Gay rights advocates are criticizing the Obama Justice Department after its attorneys filed a court motion Thursday in support of the Defense of Marriage Act despite the president’s view that the law should be repealed.

[...]

The Justice Department says it’s obligated to defend U.S. policy regardless of the president’s personal beliefs. The department made the same case after it had to, awkwardly, fight a judge’s ruling against “don’t ask, don’t tell” in the months before it was repealed by Congress.

But that’s no salve to the gay rights community, which has called on the administration to show more resolve against laws like DOMA. [snip]

And it is not true, either. Other Administrations have stood up to laws they thought were un-Constitutional, not continuing to defend them, as the Obama Administration has done repeatedly with DOMA. Indeed, it continues in that same vein in this filing:

[snip] “All families deserve the recognition and respect of their government. We know the president supports us. It’s time for him to help lead the American public toward full equality for all Americans,” Human Rights Campaign President Joe Solmonese said in a statement. The gay rights group said the Justice Department should at least “acknowledge that the law is unconstitutional.”

It does not. In its filing, Justice Department attorneys said the law was “not unconstitutional under this court’s binding precedent.” The Justice Department argued that the law “reflects Congress’s reasonable response to this still-evolving debate among the states regarding same-sex marriage.”

Why Solmonese, that Hillary Clinton backstabber, continues to act all insulted is beyond me, but I will spare you my diatribe on him this time around.

But here’s what I knew would happen with Obama:

[snip] “The Department of Justice has long followed the practice of defending federal statutes as long as reasonable arguments can be made in support of their constitutionality, even if the administration disagrees with a particular statute as a policy matter, as it does here,” the brief said.

“Indeed, the president supports repeal of DOMA and has taken the position that Congress should extend federal benefits to individuals in same-sex marriages. But a consensus behind that approach has not yet developed, and Congress could properly take notice of the divergent views regarding same-sex marriage across the states,” it said.

[...]

He told a gay-and-lesbian magazine last month that while a repeal of DOMA may not be possible, particularly with Republicans in control of the House, “that’s something that I think we have to strategize on over the next several months.” (Click HERE to read the rest.)

Yep, like I expected, Obama will blame the Republicans if it doesn’t get changed now. The Democrats were in control of the entire Congress for FOUR years, and now it is all the Republicans fault…(Civility? Oh, that is only for Conservatives, not Democrats.)

Here is a whopper of what came out this week. It was foretold by none other than Sarah Palin back in November when the government was looking to buy more bonds:

“All this pump priming will come at a serious price. And I mean that literally: everyone who ever goes out shopping for groceries knows that prices have risen significantly over the past year or so. Pump priming would push them even higher. And it’s not just groceries. Oil recently hit a six month high, at more than $87 a barrel. The weak dollar — a direct result of the Fed’s decision to dump more dollars onto the market — is pushing oil prices upward.”

I intentionally withheld the title of that article: “What Sarah Palin Gets Wrong About Inflation.” And that would be what, exactly? Haven’t all of those things, along with foreclosures setting another record high in 2010, and an increase in unemployment claims, come to pass? Yes.

In that same article, though, there was this (condescending) response:

[snip] Sudeep Reddy of The Wall Street Journal pointed out that Palin didn’t seem to be quite up on what’s been going on with inflation. In fact, he noted, grocery prices haven’t risen that much. “The consumer price index’s measure of food and beverages for the first nine months of this year showed average annual inflation of less than 0.6%, the slowest pace on record (since the Labor Department started keeping this measure in 1968).” [snip]

Hey, Reedy – guess which one of you is wrong here? I’ll give you a hint – it is not Palin. No need to take my word for it. Here is Stuart Varney discussing this issue:

These are just a few of the issues that have been going on this week (I know, Daley came onboard on Friday, but the massacre on Saturday pretty much knocked that way down, as it should have). Women still are underrepresented, Obama’s Justice Department is still targeting gay people, and we are increasingly in an economic world of hurt.

We cannot forget the victims of last week’s shooting, but nor can we allow ourselves to allow the political smoke and mirrors to distract us from what else is going on in our country.

What else happened this week that was low on the media totem pole? Consider this an Open Thread.

But then I remember that Biden didn’t have to follow this course and back an inexperienced academic in his bid for the Presidency — and I say, you’ve made your own bed now “lie” in it.

ABC’s Jake Tapper interviewed VP Biden who offered a fabulous example of the “bob and weave.” When Tapper asked Biden how many troops would come home from “America’s longest war” in Afghanistan when we reach President Obama’s July 2011 deadline, Biden first told Jonathan Alter:

“In July of 2011 you’re going to see a whole lot of people moving out. Bet on it.”

But now VP Biden is saying it’s not a deadline but a “transition…”

“The military signed on. Petraeus signed on. Everybody signed onto not a deadline, but a transition, a beginning of a transition,” Biden said.

Tapper pressed him – but what did he mean when he said “a whole lot of people” would be “moving out” of Afghanistan?

“What I was responding to was the idea that the president had been outmaneuvered. I was saying make it clear. And so it — it wasn’t so much numbers I meant. It could be as few as a couple thousand troops. It could be more. But there will be a transition,” Biden said.

A few thousand troops, eh? That oughta make everyone happy. But surely when President Obama fired General McChrystal and put General Petraeus in charge of ground operations, any firm timeline went out the window. Outmaneuvered, indeed. How tiresome for Biden et al to pretend that a “transition” is what they planned all along. Let’s go to the videotape!

In discussing the economy and the $787 billion stimulus package, Biden then complained:

“There’s a lot of people at the time argued it was too small,” he said. “A lot of people in our administration…even some Republican economists and some Nobel laureates like Paul Krugman, who continues to argue it was too small.”

He said they needed Republican votes to get it passed and finally found three. Biden also implied the real problem was Republican obstructionism:

But if it wasn’t for the legislative reality, Biden explained, “I think it would have been bigger. I think it would have been bigger. In fact, what we offered was slightly bigger than that. But the truth of the matter is that the recovery package, everybody’s talking about it [like] it’s over. The truth is now, we’re spending more now this summer than we — I’m calling this…the summer of recovery,” the Vice President said.

So let’s follow this logic – Obama/Pelosi proposed legislation they thought they could get through even though they wanted more. But it was those pesky Republicans who wouldn’t give more to them. Never mind the Democratic supermajority they had at the time and the Republicans, with a damaged brand and a minority voice were wandering like nomads in the wilderness.

Biden now says the stimulus should have been bigger to be successful. Yet they withheld half the dough last year, which they could have used to stanch the bleeding and stop the suffering of Americans in 2009. Perhaps they saved a good portion of the “stimulus” package for the “summer of recovery” – the summer of 2010 when Democrats need every vote they can get. Is it cynical of me to assume they held back those funds so they could pump money into the economy in advance of the midterms? Not likely.

Back in February 2009, President Obama sang a different tune. Via Reuters:

“It is the right size, it is the right scope. Broadly speaking it has the right priorities to create jobs that will jump-start our economy and transform it for the 21st century,” Obama said of the more than $800 billion bill at a rally in Elkhart, Indiana.

“I can say with complete confidence that endless delay or paralysis in Washington in the face of this crisis will only bring deepening disaster,” Obama said.

Furthermore, Tapper himself had the goods to call Biden out on the carepet for this falsehood. In January of 2009, Tapper had this to say:

“Obama’s team is pitching a plan that will cost between $675 billion and $775 billion, one that creates three million jobs, 80 percent of them in the private sector,” Tapper said. “But they will face skeptics.”

Looks like they got more than what they wanted, not less. Biden has also gone on the record months ago claiming we would be creating several hundred thousand jobs per month going forward – that also has not come to pass.

Tell me, is any government official going to get on TV and make an honest statement. And is any reporter going to have the guts to call them out on their lack of honesty when they don’t?

Let me understand this. Clyburn didn’t SAY Greene was a Republican plant, just that these tactics are the EXACT same ones those mean Republicans use. And, the machines on which we vote here in SC are flawed, deeply flawed machines (with which I actually agree – many of the machines we use in this country are far too susceptible to hacking, a point made by Hand Count Paper Ballots Now). Of course, I am sure Clyburn is not complaining about his own win with those same machines. Just saying. Logic does not seem to be Clyburn’s strong suit as he jumps through one hoop after another trying to blame the Republicans yet trying to claim he isn’t blaming the Republicans. Yeah, okay, Jim.

Greene’s opponent, Vic Rawl, is also claiming there was a software issue, with a “systemic” problem. He has filed a protest against the results.

And then there was Clyburn’s take on the $50 billion additional funding Obama wants for “firefighters and teachers.” They might as well throw in there “and puppies and kittens and baby ducks!” in their attempts to manipulate the masses. Clyburn must have missed his House leader on Sunday saying there was a beaucoup amount of stimulus money left, and they should use THAT instead of adding to the deficit even more. Here is Majority Leader Hoyer, and Minority Leader Boehner, discussing this very issue:

Clyburn seems to be a bit out of the loop on that one. Oops. Must be his focus on those voting machines with which he seems to have had no problems before, and those evil Republicans who are engaging in nefarious deeds though he has no evidence to support that, except his own belief. Then again, this is the same man who believed the Clintons were racist with zero evidence to support that claim, either, so…

And now to another member of the House of Representatives. That would be NC Rep. Etheridge, he of the assault on the young colleges students on the streets of Washington. Etheridge has now issued an apology for his actions:

Huh. Well, I am glad he apologized. He sure needed to do so. Interesting that he keeps injecting “partisan politics” into the apology, though. I appreciate that he has encountered difficult situations before, but that did not seem to be the issue here. Despite the attempts by the one reporter to keep trying to give him excuses (camera in his face, tired, frustrated, etc., etc.), he would not excuse his behavior. My favorite was the reporter asking if the kids were basically Republican plants…Wow. How about those “partisan politics”?

And how about those faux reporters trying to give this guy an out anyway possible (someone stole your lunch money! You didn’t get enough sleep! Someone called you a stupid head!)? Holy cow. Why didn’t they just give him a script of their own making, for pete’s sake? Though to his credit, Etheridge did not take any of their ready-made excuses for his actions. He is right – it is inexcusable, and he is LUCKY that those kids didn’t file charges against him, though I suppose they still could.

I don’t know what is in the water in the House of Representatives, but it is some good stuff. Wow.

This is an update, but feel free to consider it an Open Thread, friends!

We are at a remarkable moment. We have an open, 2,000-mile border to our south, and the entity with the power to enforce the law and impose safety and order will not do it. Wall Street collapsed, taking Main Street’s money with it, and the government can’t really figure out what to do about it because the government itself was deeply implicated in the crash, and both political parties are full of people whose political careers have been made possible by Wall Street contributions. Meanwhile we pass huge laws, bills so comprehensive, omnibus and transformative that no one knows what’s in them and no one—literally, no one—knows how exactly they will be executed or interpreted. Citizens search for new laws online, pore over them at night, and come away knowing no more than they did before they typed “dot-gov.”

It is not that no one’s in control. Washington is full of people who insist they’re in control and who go to great lengths to display their power. It’s that no one takes responsibility and authority. Washington daily delivers to the people two stark and utterly conflicting messages: “We control everything” and “You’re on your own.”

All this contributes to a deep and growing alienation between the people of America and the government of America in Washington.

None of this happened overnight. It is, most recently, the result of two wars that were supposed to be cakewalks, Katrina, the crash, and the phenomenon of a federal government that seemed less and less competent attempting to do more and more by passing bigger and bigger laws.

Add to this states on the verge of bankruptcy, the looming debt crisis of the federal government, and the likelihood of ever-rising taxes. Shake it all together, and you have the makings of the big alienation. Alienation is often followed by full-blown antagonism, and antagonism by breakage.

Ms. Noonan also states:

The right never trusted the government, but now the middle doesn’t.

If Jane Hamsher is to be believed, many on the left aren’t thrilled either.

Of course, the White House is going to go after Social Security again. It’s the pot of gold at the end of Wall Street’s rainbow, and they desperately want that injection of cash which could keep their giant ponzi scheme from exploding. . . for a little while.

Lucky for them, Obama has successfully dismantled the opposition that kept George Bush from privatizing Social Security at Wall Street’s behest only a few years ago. Did anybody fail to get that message when majority whip Dick Durbin yesterday told “bleeding heart liberals” that they need to be willing to accept cuts to Social Security and Medicare benefits for the economic well-being of the nation?

…Just as the choice groups sat on their hands for the Nelson amendment in the health care bill, just like the Sierra Club remains mute in the wake of an oil spill the size of Delaware, there will be nothing more than progressive window-dressing in opposition to cutting Social Security benefits this time around. Any of these groups utter so much as a whimper in response to Durbin’s very alarming statement yesterday? Nada. Zip. Zero.

The idea that the right is more “authoritarian” and top-down than the left is absurd.

Good point, Ms. Hamsher – I don’t much trust what’s coming out of either side.

Ms. Noonan then discusses the much criticized law that Arizona’s passed out of frustration to control its borders:

It is doing this because the federal government won’t, and because Arizonans have a crisis on their hands, areas on the border where criminal behavior flourishes, where there have been kidnappings, murders and gang violence. If the law is abusive, it will be determined quickly enough, in the courts…

But the larger point is that Arizona is moving forward because the government in Washington has completely abdicated its responsibility. For 10 years—at least—through two administrations, Washington deliberately did nothing to ease the crisis on the borders because politicians calculated that an air of mounting crisis would spur mounting support for what Washington thought was appropriate reform—i.e., reform that would help the Democratic and Republican parties.

[snip]

The American president has the power to control America’s borders if he wants to, but George W. Bush and Barack Obama did not and do not want to, and for the same reason, and we all know what it is. The fastest-growing demographic in America is the Hispanic vote, and if either party cracks down on illegal immigration, it risks losing that vote for generations.

But while the Democrats worry about the prospects of the Democrats and the Republicans about the well-being of the Republicans, who worries about America?

No one. Which the American people have noticed, and which adds to the dangerous alienation—actually it’s at the heart of the alienation—of the age.

Both Hamsher and Noonan make clear that we don’t have much by way of allies in the persons of our government officials. It is apparent to anyone half awake that Democrats and Republicans, for the most part, capture an issue in furtherance of their careers and little else. There is a line in the movie “Syriana” –

“We want to give the appearance of doing our due diligence. But we don’t want to do our due diligence.”

Noonan uses the issue of government’s failure to secure the border to the same effect in her piece as Hamsher uses “the giant flaming ball of oil being pushed straight for the coasts of Alabama and Mississippi” that “[m]ight be the worst environmental event in decades” in hers – as examples of government ineffectiveness due as the result of succumbing to interest groups rather than doing what is best for the American people.

For those of us at NoQuarter long shouting in frustration for better leadership than what was being foisted upon us all, it is ironic that Noonan may be the first major pundit to make the following observation:

I asked a campaigner for Hillary Clinton recently where her sturdy, pantsuited supporters had gone. They didn’t seem part of the Obama brigades. “Some of them are at the tea party,” she said.

Though I don’t care for her “sturdy, pantsuit” snark –she notes correctly that we feel we have no place in this new world order of the Democratic party. Perrylogan, one of the commenters to Hamsher’s piece, makes clear why:

The progressive movement died during the primaries, when Obama’s supporters started calling their fellow Democrats racists.

Amen.

In the universe of President Obama, the second “Great Uniter” in a row (George Bush II being the first), we are now more divided against ourselves than ever. It also looks as though many are feeling divided from the very people we have elected to protect our best interests.

Much of this is the result of the politics of demagoguery – served up to control the populace rather than to assist it, to divide us from each other, so we never take the time to notice we have far more in common than we realize.

All this jumble is to say that when two ladies from opposite sides of the aisle express this much anger and frustration, it is time for our politicians to wake up – lest we do figure out how to unite peacefully. Then those elitists Jane, Peggy and we all rage against might be ridden out of town on a rail.

“We’re going to have to make some tough choices” about the deficit and national debt, President Obama said to a crowded gymnasium full of supporters at Indian Hills Community College, after a lengthy riff on how the unsustainable debt would need to be tackled.

This, unlike most of what the president said during the town hall meeting, was met with silence.

“I noticed I didn’t get a lot of clapping about the whole ‘We’re gonna have the hard choices’ thing,” the president ribbed the crowd.

The President is ribbing the crowd? Now that’s what I call “The Audacity of Hope.” Half million dollar pizza parties. The most expensive inauguration in history. After this gentleman spent all of last year more than tripling spending (yes, I know, I know, it was all Bush’s fault) now he wants to tell the American people it is time to make some hard choices?

More frustrating than the endless campaigning and political posturing is the notion that the American people are so bloody stupid, they will not leap to the same conclusions I just did. Further, he tells us this stuff as if he just thought of it. Haven’t the tea partiers, for one, been screaming about these very problems for over a year?

Could it be President Obama is not aware why his audience sat on their hands for his remark about “hard choices?” I cannot prove that the people of Ottumwa, Iowa agree with my assessment but perhaps this might be a reason why he did not receive the adulation he is used to and so craves:

It is offensive to be lectured to about fiscal restraint by a man who has been spending taxpayer money like a drunken sailor for the better part of a year and a half, bailing out and covering for reckless companies with reckless management styles that continue to scam the American people, hiding the true cost of the legislation his Congress has been ramming down our throats and promising transparency while delivering the opposite.

The people of Iowa, and the rest of American for that matter, have been practicing plenty of fiscal retraint as they deal with high unemployment, watching their savings dwindle to dangerously low levels amidst an uncertain future with an administration that appears tone deaf as to their problems.

Any President that keeps trying to sell the bill of goods that cap and trade is going to help solve our economic problems instead of finally planting his feet behind the desk to figure out how to put more people back ot work in this country really needs to talk less to the American people – and listen more.

“This will bear on how we think about our federal budget in the future,” [Obama] said. “Everybody dislikes Washington right now, and everybody wants to lower their taxes. Everybody hates waste in government. But at the same time, you know, government does some important things like helping to make sure you’ve got clean drinking water and that your roads aren’t full of potholes.”

Please Mr. President, stop telling me what I hate. I don’t hate taxes. I am more than happy to pay my fair share and do so regularly. I hate when my taxpayerdollars go to bailout out the actions of corrupt actors who are not held to the same rules as I am. I do not hate government. I hate bloated government, local, state and federal, that enjoys no end of perks and bloated salaries and perks. I appreciate the good things that government does, which is why I pay taxes. What I don’t appreciate is the things my tax money is supposed to pay for – like education – gets “borrowed” away and never returned.

Clearly, the President has no idea what I hate which gives me a clear indication of why his policies have nothing to do with the urgent needs of the American people.
Close attention need by paid to the following:

…Earlier in the day, back in Washington, DC, he’d presided over the first meeting of his Debt Commission, which will issue recommendations after the November 2010 elections on ways to reduce the $12.8 trillion national debt.

“I’ve said that it’s important that we not restrict the review or the recommendations that this commission comes up with in any way,” the president said at the meeting. “Everything has to be on the table. …This means that all of you, our friends in the media, will ask me and others once a week or once a day about what we’re willing to rule out or rule in when it comes to the recommendations of the commission. That’s an old Washington game and it’s one that has made it all but impossible in the past for people to sit down and have an honest discussion about putting our country on a more secure fiscal footing. So I want to deliver this message today: We’re not playing that game. I’m not going to say what’s in. I’m not going to say what’s out. I want this commission to be free to do its work.”

Could it be he is not going to give you any details about what is “in it” until after the midterms because if he told you now, all his herd mentality Dems insistently following Pelosi and Reid off a cliff would be voted down this November? Is that why we are not getting a report from the Debt Commision until after that?

In Ottumwa, the president previewed for the crowd that whatever the commission comes up with, “we’re going to have a very tough debate about how to bring down our deficits.”

He continued, “as this debate unfolds, I just want everybody to pay attention to what folks are saying. A lot of times politicians will tell you, ‘I’m going to cut your taxes, I’m going to lower the deficit, I’m going to expand Medicare.’”

Don’t settle for that, the president told the crowd. “Ask every politician when they say they’re going to balance the budget and deal with the deficit: ‘What exactly are you going to cut? What spending are you willing to eliminate? Are you going to eliminate funding for sewers? Are you going to reduce the cost of Medicare? Because there’s no such thing as a free lunch.”

Who the hell out here has been getting a free lunch. The free lunch has gone to the folks at Goldman Sachs, Fannie and Freddie, and GM (who claim they paid back their bailouts — however they did it with other TARP money).

A free lunch? Why does President Obama insist upon being condescending? Beyond his pronouncements from on high about “bitter voters,” this reminds me of candidate Obama’s pronouncement about Democrats and abortion during the campaign. As reported by CBS News:

“The mistake pro-choice forces have sometimes made in the past, and this is a generalization . . . has been to not acknowledge the wrenching moral issues involved,” he said.

Really? Do we not? Telling us what we do and do not like or believe seems to be a pattern.

Reading the other fine print of his statement in Iowa, he wants us to ask other politicians what THEY are going to do – but we cannot ask the President what HE is going to do. “We’re not going to play that game?” All he is doing is playing games, while taxpayers can only look on in frustration and disbelief.

The president said “the way folks talk about it in Washington,” you might think the debt could be solved by reducing waste and abuse, eliminating foreign aid and earmarks. But those are relatively small parts of the budget, he said.

Which “folks” are these, exactly?

“We could eliminate all foreign aid and all earmarks and we’d still have a huge problem, because most of our budget goes to Social Security, Medicare, Medicaid and defense spending, about 70 percent of the budget. Everything else we do is only about 30 percent of the budget. So this is going to be a tough bunch of choices that we gotta make here.”

Okay – so here is the bitter pill to swallow – get ready folks. Here come the cuts! So that if you have been paying in to Medicare, as my mother has, for example, in her 50 years in the work force, you can expect less. Presidents like to point toward Social Security’s impending insolvency without mentioning part of the reason it is in trouble is because government keeps borrowing money from it that they do not put back.
Remember his economic advisor Austan Goosbee talked about privatizing Social Security? Do not be surprised if you hear rumbings next year, too – the same rumblings President Bush made several years ago. Now I ask you – would you want the private sector – otherwise known as Wall Street crooks – playing with your dough while you’re busy keeping the roof over your head and don’t have enough time to daily monitor their shenanigans?

“I just want everybody to be prepared” for this debate, which will take place over the next couple years. “Remember when I was running for office, I said I will not just tell you what you want to hear, I would tell you what you needed to hear. And you needed to hear that we’re going to have some hard choices about our deficit.”

Oh, that was my favorite comment of all. I have never heard a bigger pile of horse hooey! And that is saying something. He told everybody what they wanted to hear out on the campaign trail – unicorns and giant popsicles. But little else.

Is there anyone with the courage to stand up and insist that this President start telling the truth? The press has already proven themselves to be, almost uniformly, nothing more than notches on his bedpost, cowed from speaking up for fear of a lack of access, which would mean a loss of their $5 million dollar book deals.

Who is speaking for us?

Thank you. Rant over.

Usually the Obama administration downplays expectations for job growth, but apparently Vice President Joe Biden didn’t get the memo – or he did, but just blew it off.

Well, it wouldn’t be the first time our loquacious VP has done such a thing and come up with his own thoughts on a heated subject:

“Some time in the next couple of months we’re going to be creating between 250,000 jobs a month and 500,000 jobs a month,” Biden said at a fundraiser today in Pittsburgh.

Next month, Biden predicted, the nation’s employers will add between 100,000 to 200,000 jobs to their payrolls.

Um. Could you please tell me where he is getting these numbers? We know the Census created a bunch of temporary jobs but they will evaporate in a few months. On behalf of all my friends, neighbors and local business owners who are struggling or whose businesses have already shut down, I’d love to hear some good news here – but only if it backed up by fact…

The administration’s own forecast projects that the labor market will add about 100,000 jobs a month for the rest of the year, then around 200,000 jobs a month next year, and 250,000 jobs a month in 2012.

Biden noted today that in the past he “got in trouble” for making predictions about job creation, but clearly that did not stop him from delivering his bold new projections.

“We caught a lot of bad breaks on the way down,” Biden said. “We’re going to catch a few good breaks because of good planning on the way up.”

Another phrase I’m not quite sure what to do with… “good planning”? So it was good planning to enact a pork, er, Stimulus Bill when they first got into office and then withhold a large percentage of the money until just before the midterms so they can artificially pump up the economy to get votes? Is that the sort of good planning we are talking about? Strikes me not only as cynical but downright cruel to so many who have lost their jobs and homes.

Please – if you have any news to report — I mean, real news, backed up by real fact, not just spit-balling or spin, that indicates some honest to goodness substantial job hiring is going to happen in the next few months, please share it…

I’m sure Mr. Biden would be happy to know someone agrees with him.

Naturally the race baiters, race hustlers and sycophants to the current administration are frustrated. Their heads really ought to explode when they watch this video. Please enjoy some tea party folk being interviewed at these protests*…since the MSM et al are so busy tellin you there are no black Americans participating in these rallies…

I wonder what the exploding heads will say now.

Chat away.

**********
* H/T Hot Air for finding the video.

Democratic officeholders should be afraid.

Republican officeholders, too.

For many a year now, officeholders of both major parties have worked hard to earn the distrust of ordinary Americans. It appears that they finally have succeeded.

If only ordinary Americans hadn’t been so inattentive. If only ordinary Americans hadn’t been so trusting. If only ordinary Americans hadn’t been so damnably nice, the country would be in a better position to manage its finances today. [snip]

Better late than never, a lot of ordinary Americans are waking up to the sobering reality that there really is no one they can trust. Not Democrats. Not Republicans. Not government. Not corporations. And certainly not corporations in league with government.

The people who are angry today are more in tune with this nation’s founders than ordinary Americans have been in decades.

While there are those who make fun of a few tea partiers dressing up in costumes reminiscent of our founding fathers, those costumes are designed to make a point:

The United States has an intricate system of checks and balances, and a government structure based on a separation of powers, and a Bill of Rights that safeguards the rights of states and the rights of the people precisely because the greatest collection of political talent and philosophical insight ever assembled on this continent — and maybe anywhere on this planet — looked at the concept of government and said, “We need to make a really small cage for this thing, then be careful not to overfeed it.”

We seem to have lost the care-and- feeding instructions about a century ago. We let government out of its little cage and it has been consuming everything it can lay its paws on ever since. In the last 45 years, it has been on a real binge, and in the last year and a half, it has taken bigger bites than a lot of people thought possible.

Ordinary Americans who care about freedom are finally getting a clue and — horrors! — they’re hollering at members of Congress. That’s right: Nice, trusting, formerly inattentive Americans are getting in the faces of the political class and calling them names.

…If members of the political class are too tender to endure a little well-earned rudeness from the people whose hard-earned money they like to “spread around,” then they ought to get out of politics. Maybe their successors will find the voice of the people less irritating.

While O’Brien is correct in stating that this righteous anger needs to be expressed without violence, he also states that this administration and our media as taking to shutting down criticism with tactics of demonization (just like the administration before it):

Don’t doubt for a second that the left is hoping desperately for someone to step all the way out of line. They thought they had their man — and early news reports said they did — when Joseph Stack crashed his Piper Dakota into an IRS building in Texas.
As it turned out, Stack proved to be a Marx-quoting lefty — the wrong flavor of nut.

So the left has to settle for a little name-calling of its own: “ignorant,” “racist,” “homophobes,” “hooligans,” “extremists.” The list, as you know, goes on and on.

It’s bunk, but it’s the script.

Tea Party folks are just patriots worried, with good reason, about the future of the country they love. They’re vocal and they’re inspiringly unaffiliated.

They scare the hell out of both political parties, because they’ve embraced distrust.

The Democrats fear them because they see through the left’s empty promise of utopia in exchange for freedom. The Republicans fear them because they’re pushy and because they’re loyal to their principles rather than to a party.

They make everyone uncomfortable. That’s healthy.

While I’ve never been to a tea party protest, I got good and angry when the bailouts started at the end of 2008 and the pork laden non useful Stimulus package passed in 2009 and the bailouts of car companies that couldn’t run themselves properly happened, too. The 2700 page health care monstrosity, whose ugly details are now just coming to light, was the last straw.

I was taught to play by the rules only to discover my taxpayer dollars were used to bail out those using our investments as a giant ponzi scheme. And too many politicans who exempt themselves from the rules and policies we are expected to follow take pork for their districts as an inducement to continue to sell taxpayers down the river.

So crooks and liars are rewarded for their folly while the rest of us are told to pay the bill – and keep playing by the rules. That is but one reason for the groundswell of anger sweeping the country.

What are yours?

Trashing a vehicle is pretty easy to do.

Of course, if your goal was to to have fun and still be able to drive home at the end of the day, then breaking an axle can only be counted as a very costly mistake. The kind of mistake that makes you wish you could go back in time to when you were just dealing with a truck bogged down in the mud and still had hope for a positive outcome.

On the other hand, if the goal (as some tout) was to capture the public’s imagination and employ people while generating an endless cycle of destruction and construction of vehicles, I can’t help but think that this would be a highly profitable and entertaining method for achieving that goal.

Of course, our government had it’s own method of trashing vehicles (seen here) for the noble goals of cleaning the environment and stimulating the economy. And while I may find their methods painfully frustrating to watch, to each his/her own. It is results that count in our goal oriented world. So with a rev of the engine – lets look at some clunker numbers…

According to analysis by The Associated Press of data obtained through the Freedom of Information Act:

…the government reported spending a total of $562,500 in rebates for new cars and trucks that got worse or the same mileage as the trade-ins — in apparent violation of the program’s requirements.

…677,081 clunker trade-ins processed by the government through Oct. 16. More than 95,000 of the new vehicles purchased under the program — or about 1 in7 — got less than 20 mpg, according to the data.

…The data show the average fuel economy was 15.8 mpg for the old vehicles and 24.9 for the new ones.

…In at least 145 cases the government reported consumers traded old vehicles that got better than or the same mileage as the new vehicle they purchased. A driver in Negaunee, Mich., traded a 1987 Suburban that got 18 mpg for $3,500 toward a new Silverado pickup that got only 15 mpg. An Indianapolis driver traded a 1985 Mercedes 190 that got 27 mpg for $3,500 toward a new Volkswagen Rabbit that got only 24 mpg.

In at least 15 deals in nine states, owners of large pickups cashed in old trucks for between $3,500 and $4,500 toward new Hummer H3 SUVs that got only 16 mpg.

Okay. Maybe cash for clunkers was not the best at improving fuel economy or taking the dirtiest vehicles off the road. But it did stimulate sales. Even if it was, according to Edmunds, at a cost to taxpayers of $24k, not $4k per car.

The industry research juggernaut claims that of the 690,000 vehicles sold under the program, only 125,000 of those sales went to people who weren’t going to purchase a new car in 2009. The result, says Edmunds, is that the $3 billion spent for C4C ended up spurring only 125,000 sales at a cost of $24,000 per vehicle. Further, Edmunds claims that October’s sales would have ramped up even more than what current projections indicate.

And if your wondering why I continue to rant on about Cash for Clunkers? It is to counter the seemingly intelligent people in and out of our government who are still claiming C4C was a great success and using that “success” as justification for other consumer driven “stimulus” programs such as the cash for appliances, cash for new home buyers (extending an $8,000 tax credit for first-time home buyers). And now a cash for caulking program (aka – Home Star to make existing homes more energy efficient.) There will be more on Home Star in an upcoming post.

My point is that consumerism is dying and it should be laid to rest and buried. Unfortunately, our government is not only trying to resurrect consumerism, they are intent on dragging us into the coffin as a replacement and they are using these clunker programs (as discussed here, here and here) along with health care reform and any other legislation they can get passed as the shovels with which to bury us.

Our government and the Obama administration need to move beyond the old Nike slogan from the 80′s. To “just do it” does nothing but set us up with clunker goals. And clunker in = clunker out. We need and deserve better. Now more than ever, we need to focus not just on what we do, but how we do it. And if our government officials can’t understand that simple concept, then maybe they need step aside so more qualified professionals can do the job.

**UPDATE**

Ah, remember just a few weeks ago the White House was touting the success of “Cash for Clunkers” and attacking Edmunds for their faulty analysis with:

We found out that motor vehicle output added 1.7% to economic growth in the third quarter — the largest contribution to quarterly growth in over a decade.

Well, today the revised GDP numbers for the third quarter were released. AND …

… automotive consumption was less than half of what was initially estimated, contributing 0.81 of a percentage point to growth.

Not good. And from the AP, even worse –

Tuesday’s report showed that overall consumer spending grew at a pace of 2.9 percent last quarter. That was down from a 3.4 percent growth rate first estimated

And that is not just me saying it bad. Here’s Paul Krugman take:

Given the latest number, the date at which we can expect to see a return to full employment is … never.

And that’s if growth continues at this rate. The odds are good that growth will slow down next year: the stimulus has already had its peak effect on growth and will turn into a net drag in the second half, the inventory bounce — which was a major factor in 3rd quarter growth, such as it was — will fade out.

Basically, we may be in a technical recovery, but we’re not recovering.

For more GDP analysis at Memeorandum.

And now may I remind you of the incredible SNL “having sex” skit Larry Johnson posted here.

Isn’t that great?? Well, it would be if it was actually true. But it is not. For instance, did you know that Puerto Rico has 99 districts? Nope, me, either. Because they don’t. They have 1 (one). How about Arizona? Heck, they’ve got at least 38 (thirty-eight), right? Oh, wait, no they don’t – they have 8 (eight). The alleged “recovered jobs” bragged about by Biden and how our stimulus money is being spent don’t quite match up. I know, big surprise (almost as much as the following report being on ABCNews):

Wow that’s some “state of the art system” you got going on there, Joe. And I am SOOOOO sure that all of the problems are the result of people not knowing in which district they live. Oh, sure. Because it is so difficult to access that information. I mean, really, you might need to make a PHONE CALL or something. Or look it up on “the internets,” if it isn’t in the area in which you live. Because then, you could just take a little look-see at your voter registration card! Gosh, I am just stunned that they would not be getting these numbers right!

Speaking of jobs, check out these headlines:

This is exactly why so many of us are concerned about the Government running our health care system. Can you say fraud? If they cannot even get this right, how are they going to adequately address issues of life and death?? I don’t think even an abacus could help out there …

Ironic that yesterday, NY Times columnist Charles Blow, certainly an Obama cheerleader from way back, penned a column entitled Obama’s to Fix, in which he cautions the President to stop blaming George Bush for the “mess” he inherited. Clearly, our President, far from undoing such a mess, is daily making a bigger one of his own. Mr. Blow begins with this ominous phrase:

What a difference a year makes.

In October 2008, the candidate Barack Obama delivered a major economic speech in Toledo, Ohio. In it he said: “Right now, we face an immediate economic emergency, and that requires urgent action. We can’t wait to help workers and families and communities who are struggling right now — who don’t know if their job or their retirement will be there tomorrow; who don’t know if next week’s paycheck will cover this month’s bills. … We need to pass an economic rescue plan for the middle-class, and we need to do it not five years from now, not next year, we need to do it right now.

“So today I’m proposing a number of steps that we should take immediately to stabilize our financial system, provide relief to families and communities and help struggling homeowners. It’s a plan that begins with one word that’s on everybody’s mind, and it’s easy to spell: J-O-B-S.”

“Right now,” “immediate economic emergency,” “requires urgent action,” “can’t wait.” Wow! He gave the impression that job creation would be his top priority, that action would be swift and effective, that his solutions would not only stanch the hemorrhaging, but reverse the trend.

He has not made jobs his top priority. This health care debacle, bailing out Wall Street, getting into the car business and generally putting money into the pockets of everyone except those who need it have all taken priority over putting Americans back to work. And, no, putting an extra $13 a week into people’s paychecks is not going to do the trick when as Mr. Blow points out the new official labor statistics have us at 10.2 unemployment, which is an increase of “more than 50 percent from the time Obama gave that speech.”

“(By the way, the underemployment rate, which includes part-time workers who want to work full time and those who’ve given up searching, is a staggering 17.5 percent.)”

I am still at a loss to understand why there was such a great urgency to pass health care legislation that is not supposed to go into effect for more than three years. Someone on another blog made the observation that Obama and Pelosi et al are using the economic crisis and joblessness as a weapon to pass their agenda. As people are panicked at losing their jobs and their healthcare, they are more likely to look to government to bail them out – and more amenable. As Rahm Emanuel said, “never waste a good crisis.” What better time to ram this through. Mr. Blow continues:

Job creation has dropped from top priority to one of many, and President Obama has been remanded to pandering for patience and offering excuses. On the one hand, he argues the tortured rationale that there is good news in the awful numbers: Things are still getting worse but at a slower pace. On the other, he incessantly reminds us that he inherited the crisis. The implication: Don’t blame me, blame Bush.

But this president can’t keep deflecting to the last one. Pain is presently felt. The crisis that took form on Bush’s watch is being experienced on Obama’s. Fair or not, finger-pointing is not effective policy.

This is now Obama’s crisis, and it carries political consequences. During Tuesday’s gubernatorial races in New Jersey and Virginia, nearly 9 in 10 voters said that they were worried about the direction of the nation’s economy in the next year. And the majority of those who held that view voted for the Republican candidates. This could portend a flashback to 1994.

It isn’t President Obama’s fault that he inherited this mess, but it is his to fix, and he must make haste. To paraphrase his Toledo prelection: you need to do it not five years from now, not next year, you need to do it right now. J-O-B-S.

There were many options to put people back to work this year if that was really the priority. Clearly it was not. This President spent almost a billion dollars to get his job. I don’t want to hear complaints now. Obviously, he inherited a mess, which he has made worse with reckless spending. No one expects him to fix everything in the space of a year, but I thought his “good judgment” meant he knew how to prioritize. We need leadership and part of that involves sacrificing one’s ego to help those who need it most. That is far more important than pushing legislation just for the purpose of putting a check mark next to one’s name. You don’t not spend billions, even trillions, you don’t have at a time like this. Since this bunch so miscalculated on their $787 billion stimulus package, I am not inclined to trust them now by handing over 1/6 of the economy to their stewardship.

It is interesting that Mr. Blow, who played the race card on Mr. Obama’s behalf last year, is now joining the ever increasing number of his pundit supporters who are having problems with his endless campaigning, blaming and wrongheaded focus.

As to the health care debate, I called my Congressman’s office Friday morning to complain about the bill and his assistant debated the merits with me. At least she took the time to do so. It was a shame she was wrong on the facts. I told her to go back and read the thing. Now we have a 2,000 page beast that the Senate must contend with and we are told it will never pass in its current form. So why the rush? Why wouldn’t this Administration be in the same kind of rush to help get people back to work?

There are 237 millionaires in Congress. Perhaps that explains why they have difficulty relating to the urgent need to put millions of Americans back of work, instead manufacturing an urgent need to pass labrynthian legislation for the mere purpose of saying “Mission Accomplished.”

Hmm. Where have we heard that phrase before?

1. Warren Buffett makes his single largest acquisition ever with the $34 billion purchase of Burlington Northern

2. Ford posts surprisingly strong auto sales

3. Royal Bank of Scotland becomes the biggest banking bailout yet with another injection of capital

4. Johnson & Johnson announces plans to layoff 7% of its global workforce

Each of these developments is truly meaningful. Interestingly enough, numbers one and two are decidedly constructive while numbers three and four are clearly quite bearish about global prospects. Despite the magnitude of these stories, in my opinion, they pale in comparison to developments in the precious metals and bond markets today. What is happening? Let’s navigate.

The Treasury yield curve is steepening dramatically today with yields on longer term notes and bonds rising by 6 to 8 basis points, while shorter maturities are unchanged. A snapshot of the Treasury market is provided by WSJ Market Data.

Why is the curve steepening? What does that mean? What are the implications for other markets? All great questions. Let’s navigate further.

In my opinion, the Treasury yield curve is steepening as hints of a second economic stimulus package work their way through Washington. I definitely sense growing unease and anxiety over the state of the job market. The story about layoffs at Johnson & Johnson only adds fuel to the fire.

A second stimulus will only build upon the already out of control fiscal deficit which will need to be funded by increased government borrowing. As our borrowing needs increase, the demand for the funds will drive the price for the funds ever higher. The price is the interest rate on Treasury notes and bonds.

Why would the curve be steepening, though? Why aren’t rates on short maturity bills and notes also going up in sync with the longer term notes and bonds? The rates on shorter maturity Treasury bills and notes is most heavily influenced by Federal Reserve policy. It just so happens Fed governors are meeting today and tomorrow and assuredly they will leave their current policy unchanged. That policy is one of very easy money with a Federal Funds rate of 0-.25%.

The prospects of (1) another economic stimulus package; (2) a continued policy of very easy money supported by an accomodative Fed; and (3) a steepening curve with a rise in long term rates, all collectively point towards a greater likelihood of inflation. What segment of the market gives us a hint as to inflation? Gold.

What is gold doing today? Rallying in a big-time fashion. Gold is up 3% on the day as Bloomberg reports, Gold Climbs to Record as India’s Central Bank Buys IMF Bullion:

Gold jumped to a record after India’s central bank bought 200 metric tons of the metal from the International Monetary Fund, heightening speculation that there may be more official purchases.

Gold futures for December delivery rose to a record $1,087 an ounce on the New York Mercantile Exchange’s Comex unit and traded at $1,084.20 at 1:28 p.m., up $30.20, or 2.9 percent. A close at that price would be the biggest gain for a most-active contract since March 19.

“This will encourage other countries and other investors, especially Indians, who are big buyers anyway, to jump into the market,” said Leonard Kaplan, the president of Prospector Asset Management in Evanston, Illinois.

The Reserve Bank of India paid $6.7 billion for the bullion, which it bought from Oct. 19 to Oct. 30. It was “the biggest single central-bank purchase that we know about for at least 30 years in such a short period,” said Timothy Green, the author of “The Ages of Gold.” “The only comparable event was the U.S.’s steady purchases in the 1930s and 1940s.”

Now what was going on back in the 1930s that would have prompted steady purchases by the U.S. government?

Oh, no. I’m not going there. That thought is a little too ‘depressing.’

What do you think?

LD

A full 2.2% of the 3.5% rise was directly correlated to Uncle Sam’s support of the auto and residential construction sectors of the economy. Another .6% of the GDP was directly correlated to federal spending. Obviously, the Uncle Sam economy implies a large presence by that jolly old man. However, all that money Sam is pumping is nothing more than borrowing from future generations and pulling demand forward.

What would the economy have done on its own without the government support? Let’s listen to Christina Romer. Recall that Ms. Romer referenced last week that this quarter would provide the peak impact of benefits accruing from Uncle Sam’s economic stimulus. What does she say about this GDP report?

The Wall Street Journal references Ms. Romer in writing, Economy Snaps Long Slump:

Without stimulus programs such as “cash for clunkers” and a first-time homebuyer’s credit, “real GDP would have risen little, if at all, this past quarter,” Christina Romer, president of the White House Council of Economic Advisers, said in a statement.

Why does Ms. Romer provide that sobering view of the economy? Very simply, if the American consumer represents 70% of the economy, then we should largely focus on that consumer. What did we learn about the consumer over the last quarter?

The Financial Times’ John Auther informs us in writing, Short View: GDP Grows, but Pain Remains:

Household disposable incomes actually fell during the quarter, by 3.4 per cent, but consumer spending rose, also by 3.4 per cent. This is not a pattern that can be sustained for long, and it is inconsistent with the need for US families to pay down their debts.

What does that disparity between income and spending represent? An unsustainable economic path. What else does it mean? The U.S. economy just had “Christmas in July.”

Did you get anything in your stocking?

LD