Obama DOJ: It's okay to be racist as long as it helps you achieve your goals.

Check out this passage from the recently released DOJ document titled "Guidance on the voluntary use of race to achieve diversity in postsecondary education." (h/t Daily Caller):

Institutions are not required to implement race-neutral approaches if, in their judgment, the approaches would be unworkable. In some cases, race-neutral approaches will be unworkable because they will be ineffective to achieve the diversity the institution seeks.

So you can call a non-racist approach unworkable if it doesn't bring you enough students of certain favored races?  Talk about a slippery slope.  Whatever happened to equal protection under the laws?  I guess the original ideas of the Founding Fathers, Abraham Lincoln and Martin Luther King have now been subjugated by this administration so that all men are created equal but clearly some are more equal than others.

How Conservative is Newt's Actual Voting Record?

The folks at Club for Growth has white papers on all the GOP candidates summarizing their public records and does a pretty objective job.  Looking at Newt's I really was struck by how conservative Newt's actual voting record was (which of course was mischaracterized by Jennifer Rubin, who I think must have been offered a post in a Romney administration.  How else do you explain her going full spittle in support of Romney and anti-Newt?), with most of the worrisome aspects of his record coming from speeches AFTER he left public office.  This is pretty much the exact opposite of Romney, who has a very questionable record from his limited time in elected office, with most of his conservatism coming from campaign speeches.  Anyway, let's look at Newt's actual record:

• Voted YES on the Reagan tax cut of 1981
• Voted YES on the Reagan tax reform bill of 1986
• Voted NO on the George H.W. Bush "Read My Lips" tax hike in 1990.
• Voted NO on the Clinton tax hike in 1993.
• Voted YES on the capital gains tax cut in 1997.
• Voted NO on the Chrysler bailout in 1979
• Voted YES on the Gramm-Rudman balanced budget bill in 1985
• Voted YES on a balanced budget amendment (as part of the "Contract for America" effort that he led) in 1995
• Led the effort and voted YES to cut $16.4 billion from the budget in 1995.
• Voted YES on welfare reform in 1996

I also decided to look myself at how much federal spending increased while Gingrich was Speaker of the House (1995-1999).  By my calculations, Federal spending rose an average of 3.1% a year while he was speaker.  When you compare it to the Presidential terms from Reagan on, this is the lowest rate of spending growth over the last 30 years.  Under Reagan, spending grew an average of 7.6% a year.  Under George H.W. Bush, 6.7%.  Under Clinton, 3.3% (it would have been much more if he got his single payor health care plan through, also he was restrained by Newt later).  Under W., it was 6.6% and under Obama, a whopping 8.6% a year.  Also, under Newt, Federal spending as a % of GDP fell from 21% to 18.5%, a whopping decline in 4 short years.

Is his record perfect?  Nope.  Not even close.  But the point is that on the big issues, he voted Conservative and helped champion balanced budgets and tax reform.  Focusing on that actual voting record really makes me more comfortable with him.  Especially when his main opponent is someone whose main accomplishment is a massive government healthcare program.

The 8.6% Unemployment Rate is Complete Fiction

Today, the Bureau of Labor Statistics released the employment report for November, which showed that our unemployment rate hit 8.6%, the "lowest" since March of 2009. As I've mentioned before, the unemployment rate that is printed today is not comparable to the unemployment rates of even a couple of years ago thanks to the "labor participation rate" falling off since November 2008:

As you can see, the labor force participation rate is about 2% lower than it was thanks to people no longer being counted as being part of the labor force. This artificially lowers the unemployment rate, as well as U-6 which counts the underemployed (currently at 15.6%). I guess this is one way Obama can solve the unemployment problem, if he kicks all the unemployed out of the labor force, unemployment would technically be 0% statistically (that tells you how much you can trust statistics to tell you how well we are doing).

So how does the unemployment rate look if you keep it steady at 66%? Take a look at this graph where the red line is the published unemployment number and the blue line takes into account those kicked out of the labor force number:

Not very pretty is it? It also tells a very different story which is that unemployment peaked in October 2009 at 10.1% and has been falling ever since. According to this calculation, our peak unemployment was actually in July of 2011 at 11.9%!

Anyway, here is an official statistic which pretty much corroborates my story,the employment to population ratio. Basically, it's the percent of people over the age of 16 who are currently working. That number also only bottomed in July:

So if you feel that the economy still seems really bad, despite official statistics looking good, there's a reason. You're right!

A Partial Transcript of Romney's Interview with Bret Baier with Snarky Commentary (from myself)

I finally got a hold of the transcript for Romney's very unsuccessful Bret Baier interview (for some reason Fox hasn't posted it on their website, perhaps the Romney folks put pressure on them?).  Anyway, courtesy of Lexis Nexis, I was able to get it.  Below are some key highlights with snarky commentary from your humble narrator:

BAIER: Like the "Union Leader," your critics charge that you make decisions based on political expediency and not core conviction. You have been on the both sides of some issues, and there's videotape of you going back years, speaking about different issues, climate change, abortion, immigration, gay rights.How can voters trust what they hear from you today is what you will believe if you win the White House?

ROMNEY: Well, Bret, your list is just not accurate. So, one, we're going to have to be better informed about my views on issues. My view is, you can look at what I've written in my book.

Now which version of the book No Apology would that be?  The hardcover version mentions Romneycare as being a model for healthcare reform for the whole nation and the paperback version omits that reference.  You've taken flip flopping to a new level when you change positions in different editions of the same book.  So how exactly does reading Romney's book clarify anything?  I prefer YouTube where you can see Romney flipflopping for yourself.  And based on Youtube, Bret's list is pretty accurate.

BAIER: But I'm sure you've seen these ads, using videotape of you in previous years, speaking on various issues.

ROMNEY: Uh-huh.

BAIER: And it seems like it's in direct contrast to positions you take now.

ROMNEY: Well, I'm glad that the Democratic ads are breaking through and you got --

BAIER: Jon Huntsman has a couple ads that do the exact same thing.

Did Romney just accuse Bret Baier of Fox News of being a tool of the Democrats?  Really?  Is that what you resort to when someone asks a legitimate question?

BAIER: In recent days, you've charged that Speaker Gingrich was proposing amnesty essentially with what he said in that last debate.You were attacking him on immigration, but you took what seemed like a very similar position back in 2006-2007, telling Bloomberg that some illegal immigrants need to be allowed to stay, come out of the shadows, and, quote, "we need to begin a process of registering those people, some being returned, some beginning the process of applying for citizenship and establishing legal status. We're not going to go through a process of tracking them all down and moving them out."

ROMNEY: Right.

BAIER: Is that different than where you are now?

ROMNEY: You know, my view is that those people that are here illegally today should have the opportunity to register and to have their status identified and those individuals should get in line with everyone else that's in line legally. They should not be placed ahead of the line. They should, instead, go at the back of the line, and they should not be allowed to stay in this country and be given permanent residency or citizenship merely because they've come here illegally.

Huh?  Exactly how would that work?  And why would an illegal voluntarily register unless it put them on a path to legality?  And doesn't the fact that they are already here mean they are already at the head of the line? 

BAIER: But isn't that what Gingrich is saying? Isn't he saying short of citizenship --

ROMNEY: I can't tell you what Speaker Gingrich is saying.

BAIER: But yet you call him --

ROMNEY: Bret, no. If he's going to do what I believe he said he was going to do for those people who would be allowed to stay permanently and become citizens, that would be providing for them a form of amnesty. But my view is, and I can tell you what -- I'll let him describe his view. My view is pretty straightforward.For those people who've come here illegally, they should have the opportunity to get in line with everybody else who wants to come in to this country, but, they go to the back of the line and they should be given no special pathway to citizenship or permanent residency merely because they've come here illegally.

That's a neat trick, he admits to criticizing Gingrich and then says "I can't tell you what Speaker Gingrich is saying."  What the?  Is he flip flopping on criticisms now too?  I also love how he views his nonsensical and murky answer on immigration as straightforward.  Yeah maybe for a Bain management consultant who obfuscates and creates overly complicated PowerPoint presentations for a living (he must have had entire groups within Bain making his 59 point plan), but not for normal people.

BAIER: The question is what you do with the 11 million plus people who are already here and how you handle them. And back in 2006-2007, you made a point in saying, we're not going to round them all up and send them out.

ROMNEY: That's right.

BAIER: So, what do you do with them?

ROMNEY: You know, there's great interest on the part of some to talk about what we do with the 11 million. My interest is saying, let's make sure that we secure the border, and we don't do anything that talks about bringing in a new wave of those or attracting a new wave of people into the country illegally.The right course for us is to secure the border and say nothing about amnesty or tuition breaks to illegal aliens or anything else that draws people into the country illegally. The right course, secure the border, and then, we can determine what's the right way to deal with the 11 million and to make it as clear as I possibly can.

Wait wasn't he just talking about a plan of what to do with the 11 million?  I'm confused.  And tell me again how this is any different than Newt's position again?  This is about as clear as a teenagers skin.

BAIER: About your book, you talk about Massachusetts healthcare. We've heard you many times, in the debates and interviews, talk about how it is different in your mind than the president's healthcare law, Obamacare. The question is, do you still support the idea of a mandate? Do you believe that that was the right thing for Massachusetts? do you think a mandate, mandating people to buy insurance is the right tool?

ROMNEY: Bret, I don't know how many hundred times I've said this, too. This is an unusual interview.

(LAUGHTER)

This is an unusual interview because he is asking the questions at the heart of the reason that 75% of Republicans can't stand you?  Would you rather have fluff questions?  Maybe if your answers were believable people would stop asking.

ROMNEY: All right. Let's do it again. Absolutely. What we did in Massachusetts was right for Massachusetts. I've said that time and time again, that people of the state continue to support it by about 3-1, but it's also designed for Massachusetts, not for the nation, and at the time our bill was passed, and that was brought forward as an issue, there were people who said, is this something you'd like to have the entire nation do?I said no. This is not a federal plan, it's a state plan. And under the constitution, states should be able to craft their own plans, and our plan --

If it has such high levels of support, why were you a one term Governor again?  Maybe that's unfair as I'm sure your unbridled desire to be President of this country drove you to decide not to run again 3 years before the Presidential election.

BAIER: So, governor, you did say on camera and other places that, at times, you thought it would be a model for the nation.

ROMNEY: You're wrong, Bret.

BAIER: No, no. There's tape --

Who are you going to believe?  Me or your own lying eyes!  He is almost like the Republican version of Obama.  Who thinks if he says something that makes it true, whether it really is or not.

BAIER: You think that you are well positioned to go up against President Barack Obama on the issue of healthcare?

ROMNEY: Of course. The best equipped, the best equipped. I understand healthcare. I spent a good portion of my career working in healthcare. I came up with a plan, unlike his, that doesn't cost a trillion dollars. Unlike his, we didn't raise taxes. Unlike his, I didn't cut Medicare by half a trillion dollars.

That would have been a neat trick, making a healthcare plan for Massachusetts with a total of 6.5 million people cost a trillion dollars.  Based on a Cato Report from 2008, it looks like it cost about $2 billion in 2008.  If you adjust for the difference in population size between the US and Massachusetts you get a plan that costs $93 billion a year.  On a 10 year basis, that get's you to $930 billion, just a smidge (a technical term) under a trillion.  And while yes, he didn't cut medicare, Romneycare does accept Federal subsidies for its implementation.  So all of us are paying for it right now, as we speak.

BAIER: A.B. Stoddard from "The Hill" asked, if you were president this week, what would you do immediately in response to the Pakistani's decision to shut off NATO supply lines to Afghanistan and force CIA to vacate a key base used for drone operations?

ROMNEY: Well, this ought to involve the personal attention of the president of the United States, either in person or on the phone. There ought to be a building relationship with leadership in Pakistan to understand our mutual interests. And I'm afraid that we're growing further and further apart, in part because of a president who simply doesn't know how to lead.And we need to have a president who can be on the phone, who can have a personal relationship, not only with Mr. Zardari, generals in Pakistan, with members of the ISI, to assure that they understand exactly where we're coming from, and we understand their interests. We recognize that the Pakistan people and the leaders of Pakistan, of course, it's a very multi- fractioned group there, that they will act out of their self-interest.They don't sit up nights wondering what's best for the United States. They think what's best for them and for their lives and their careers. We need to understand that. And then, we need to make sure that we have places of common ground where we can work together. I think you're seeing a pulling apart of our nations, and that would have great consequences, long term and short-term.

I'm sorry, didn't the Pakistani troops fire first?  This is a case of friendly fire on both sides, a horrible by-product of any war which I think both sides understand.  The Pakistanis are just using this as an excuse to go after us.  So why would you go groveling to them?  Isn't that something Obama would do?  Such a wishy washy answer.

BAIER: Charles Krauthammer asked, you pledged that as president you would stop Iran from acquiring a nuclear weapon, the last resort, of course, a military attack. What you're saying is that you're prepared to carry it out if necessary. He asks, would it be a single strike or sustained bombing campaign like in Serbia, would it be aimed at only the weapons or the pillars of the regime if you got to that point?

ROMNEY: Well, before I could make a decision of that nature, I'd have to have a very thorough top-secret briefing by our military to understand exactly what our options are, what the responses would be from the Iranian military. The intelligence community would have to weigh in. There's a lot more information I need to have to know what type of military strike would be appropriate and effective.

Elements of Herman Cain in that answer.  I think the right answer from someone who is our Commander in Chief should be "we would continue bombing until our mission is accomplished" (remember when Presidents spoke in terms of actually winning?).  His relatively wishy washy answer makes me think he is as much a pretend hawk as he is a pretend conservative.

BAIER: Lightning round here. What was the last book you read or reading?

ROMNEY: I'm reading sort of a fun one right now, so I'll skip that, but I just read "Decision Points" by President Bush.

Heaven forbid he humanizes himself, I guess it is the Romneybot all the way.  It would be funny if it were The Picture of Dorian Gray, as he is the Dorian Gray of the GOP.

BAIER: Do you think your faith will hurt you in this primary election, and what do you think the biggest misconception about your faith is?

ROMNEY: I think it may have some impact among a narrow group of individuals, but by and large, I don't think it will make the decision. Biggest misconception is the name of our church. It's the Church of Jesus Christ of Latter-Day Saints.

Really, the name is the biggest misconception?  Not the fact that many people call it a strange cult?  Or that people think Mormons still have multiple sister-wives?  How lame.

With Romney, the more I listen to him, the less I like him.  He is an evasive, insincere human being who is interested in only one thing, self-aggrandizement.  And tell me again how any of these questions were "uncalled for"?

Is Romney's Temper Worse than Newt's?

It's funny how Newt is constantly asked about his personal life and his business dealings and seems to always give very relaxed answers. Last night, in one of his only interviews that I can remember, he is asked about his prior positions and he flips out, calling questions "uncalled for" (see the video below). Thinking back to that previous debate interaction Mitt had with Perry where he flipped out, it makes you think that maybe Mitt has a bigger issue with his temper than Newt does at this point.

Radical Islamist Parties Have Won in Egypt

It's not official but it appears that the Muslim Brotherhood has won the most votes in the first round in Egypt's parliamentary elections.  They seem to have a clear majority in Cairo, Suez, Port Said and Luxor.  Even worse is that the #2 party isn't exactly a liberal secular party but al-Nour which is considered to be more radical than the Muslim Brotherhood (an organization that helped spawn Hamas and Al-Qaeda).  So tell me again why Mubarak had to go?  Brilliant job Obama!  I don't know what's worse, our abandoning our allies in Egypt to radical Islamist groups or our abandoning our allies in Iraq, putting them at the mercy of Iran and it's minions. 

Markets Seem to Be Rallying On a Sign Things Might Be Getting Worse

Overnight there was a dramatic intervention by an alphabet soup of central banks.  The Fed, ECB, BOE, BOJ, SNB and Bank of Canada all lowered their swap rates making it cheaper for local (non-US) banks to borrow dollars.  Even the Bank of China got involved, dramatically lowering their reserve ratio by 0.5%, the first lowering in 3 years (yup the banner year that was 2008).  This sort of massive coordination is never easy and is a sign of severe stress in the system. A writer at Forbes mentions the possibility that this could have been done to avert the imminent failure of a large European bank, which would have caused a Lehman like cascade through the system.   Considering this is the second massive central bank intervention involving US dollars in the span of less than 3 months, this is probably at best a kick the can down the road sort of scenario.  And lately the can just hasn't gone very far at all.

The big problem is that we are simply not facing a liquidity crisis.  We are facing a sovereign debt crisis which could eventually lead to a solvency crisis.  Pumping more dollars into the system won't help unless somehow people use those dollars to buy Italian, Greek, Spanish and French debt.  And they won't.  As the folks at GaveKal mentioned, sovereign debt investors are usually the types who will give a well funded government $100 with the assurance that they will be getting $102 in a year.  These are not swing for the fences, high risk, I've-got-a-feeling-on-this-one types.  Essentially, the natural market for EU sovereign debt has disappeared.  So how are these governments going to fund their operations over the next year given their 100%+ debt/gdp ratios?  How can they roll over hundreds of billions of dollars worth of debt?  What happens when they default and force banks to mark bonds to market, wiping out bank capital and causing a solvency crisis (remember MF Global was taken under by Italian sovereign debt)?  None of these issues have been solved by this intervention to lower the rates charged to borrow dollars.  In fact, if this intervention shows anything it is how close to the brink we really are.  Stay nimble and stay liquid.

Romney Center Seat Interview with Brett Baier

See Romney get testy and even give a nonsensical answer on immigration. He even pulled a Cain on the question on Iran and said he would have to defer to experts. I guess we know now why he doesn't give many interviews.

Thoughts on Recent Polls

It seems to be a particularly good day for Newt today pollwise.  An Insider Advantage poll conducted Monday shows a 15 point lead for the former Speaker in Iowa.  Newt gets 28%, Ron Paul is #2 with a little over 13% and Romney is in 3rd place with only 11.5%!  This is also Romney's lowest poll number in Iowa since this race began.  In the last Insider Advantage poll, conducted November 8th, Romney was at his usual 19%, so in 3 weeks he has lost about 40% of his support.  I guess being dubbed "electable" by Ann Coulter just isn't enough for some people.  What's also interesting from this latest poll is that Latino voters are breaking for Perry and Newt and Independents are very clearly staying away from Romney.

Insider Advantage also conducted a poll Monday in South Carolina, where Newt leads Romney by 23 points, 38% to 15%.  Note that 38% is a highest level attained by any candidate this election cycle in a South Carolina based poll and Newt's lead is tied for the largest of any candidate since Perry led by 23 points in a PPP poll back in August.  Considering this poll was conducted after the lobbying allegations, the immigration comments and all the other stuff the media/Romneybots have dredged up, this lead is probably much more secure than Perry's.  Also, as in Iowa, Newt does well amongst the Latinos in the sample and Romney does horribly among the independents.

And finally we have the Rasmussen Reports poll in New Hampshire, the first one conducted after Newt's surprise endorsement by the only state-wide paper, the Manchester Union Leader.  In this poll, Romney is down to a 10 point lead, one of the smallest leads he has had in this race.  Given he was Governor next door and has been clearly focusing on New Hampshire for so long, it's amazing that 2/3 of New Hampshire voters are still saying "not Romney".  In this poll you are even seeing 11% of NH voters going with Huntsman.

I do realize that polls can change on a dime but I think Newt should be feeling pretty good at this point given the amount of effort people have been putting in to try to shoot his candidacy down.  First, there were his consulting contracts, which in the end nobody cares about but the pundits (I never really thought GOP voters would begrudge someone making a living in the private sector, Democrats might, but not Republicans).  Most recently, there was the whole immigration kerfuffle.  Prior statements from down-the-line conservatives in the race which lined up or matched Newts seems to have deflated that in a hurry.  You've also had an ongoing barrage of pundits, from Ann Coulter to Jennifer Rubin getting completely unhinged by the prospects of a Newt nomination and trying to convince us that Romney is somehow inevitable despite not a single vote being cast yet.  So after all that going on in what seems to be a non-stop fashion, Newt is still surging.

Today's news of Herman Cain reconsidering his candidacy signals that Newt's numbers are likely to get even better as Cain voters look for a new home.  I would say that philosophical distance from Cain to Newt is much shorter than from Cain to Romney, so most of the core Cain supporters are likely to either break for Newt or go to another conservative candidate (I also wouldn't discount the possibility that Cain may officially endorse Gingrich).  And judging by the latest poll numbers, there are still a large number of them out there.  In the polls mentioned above, 10% of Iowa voters and 13% of South Carolina voters still consider Cain their top choice as of Monday. 

With 5 weeks to go until Iowa, Newt is certainly in the drivers seat.  Unless he drives himself into a ditch, of course.

Christie to Obama: What the Hell Are We Paying You For?

Another classic from my Governor. He also broaches the subject that maybe Obama should go back to being a Senator:

An Indepth Look at the Governing Philosophy of Newt Gingrich

Politico linked to a great, in-depth interview today with Newt Gingrich back in 1989.  I say great, not because I like what was said but it seems like a clear picture of his governing philosophy, which is quite useful when deciding how to vote.  Now if only the other candidates would have gone to these depths.  I've taken out the key passages below:

Certainly some conservatives have said that government should do nothing. But my view is that since 1968 the country has pretty decisively decided it does not want a left-wing president.  The result has been a center-right governing coalition, which includes Jimmy Carter, who was an aberration.
  

The country wants that coalition to govern, not juxtapose. So they're going to ask "What are your answers for so many working mothers?  So many single heads-of-households?"  A party which says "We have no answer" or "Our answer is a cultural revolution which will take generations, so in the meantime you'll just have to suffer" is going to be in a minority status.  

What you're going to see is an argument between a governing conservatism, which is pro-active and willing to solve problems with conservative values, and a more theoretical conservatism. 

...

There's going to be a lot of arguing, but I don't think it will splinter.  In Teddy White's "The Making of The President" from 1960, you will find a description of Theodore Roosevelt and an active conservatism.  That is the model I've had in my mind for 28 years.  For example, we now have a great concept in tenant management and ownership of low-income housing.  That empowers citizens, and says "You're not just a client, you're a citizen.  You have real responsibility and real authority."  If you're truly going to be a citizen, you have to have both opportunity and responsibility. 

 

On these issues we have a common bonding around a couple of premises. The first is that the concept, liberal welfare state has failed.  Read "City for Sale" by Jack Newfield and Wayne Barrnett, or "Honest Graft" by Brooks Jackson.  You can see that there is a systemically corrupt, liberal welfare state.  The process of giving some people enormous power and calling them bureaucrats, while depriving other people of power and making them clients, rather than citizens, is in the long run corrupting.  That is best expressed by Mario Varga Llosa in his introduction to "The Other Path" by Hernando DeSoto.

There is almost a new synthesis evolving with the classic moderate wing of the party, where, as a former Rockefeller state chairman, I've spent most of my life, and the conservative/activist right wing.  You have work being done by the Heritage Foundation as well as by such moderates as Tom Petri.  Petri has extraordinarily broad support for his living wage concept, which represents an empowerment/citizen choice replacement for the bureaucratic/corrupt, liberal welfare state.

...

Clearly, I am comfortable taking on Democrats.  I would suggest to moderates that the best example of this is Theodore Roosevelt.  If you're the minority party, you better be able to generate attention.  

You have to convince people that it is worth being part of your group.  By definition, that means a willingness to fight with the Democratic Party.  If the Democratic Party is okay, then why do we need Republicans?  If the Democrats do some things that are not okay, then isn't it our job to point that out?  I just do that more enthusiastically and energetically than has been the tradition in the last 40 years.  Now, the other 95 percent of the time, I've been bipartisan.  Norman Mineta, Jim Oberstar or Frank Anunzio can tell you that.  I've worked with them on House committees.  I also helped found the Military Reform Caucus, although the Washington Post doesn't put that on page one.  If you get involved in a controversy, then that becomes the mesmerizing event that people remember you by.  In general, where confrontation is needed, I'm willing to do that.  But where honest bipartisanship is possible, I'm going to be real practical.

...

Ripon Forum: Several years ago you described yourself as a "Jeffersonian populist." Could you please explain that?

Gingrich: It's one of the points I make to conservatives who often describe themselves as "Jeffersonian conservatives."  It usually means they want passive, lean, inactive government.  That I would never favor, nor did Jefferson.  He bought half a continent, sent the Navy to Tripoli, and sent a scientific expedition half-way across the U.S. when that was a longer trip than going to Mars today. 

The Founding Fathers were practical men who wanted a system that remained free and worked at a practical level for human beings.  Their vision of America was a successful, working America, and that's why a century, later William James called "pragmatism" the one uniquely American contribution to philosophy.

What I'm suggesting is that it's possible to be a conservative in the broad sense - i.e; the world is dangerous and some men are evil, so government must repress those instincts and protect US from those dangers - and hold that private markets and the rule of law are essential to economic prosperity.  One can hold those broad values and still believe in the cooperative efforts of Americans - whether it is building the Transcontinental Railroad, populating the West through the Homestead Act, setting up the Agricultural Agent system, or any of the innovations which made this such an extraordinary place.

My challenge to all Republicans is to invent the systems and the approaches that allow human beings to help themselves, to think through the replacement for the misgovenance of New York City that will allow its citizens to help themselves.  Then you'll have a remarkable explosion of energy and opportunity.  Centralized government giveaways through politicians and unionized bureaucrats just guarantees the focus on the acquisition of power and invites the systemic corruption which now dominates all big cities and is at the core of our domestic problems.

...

The Republican Party has to be the party of individual rights and individual opportunity.  It should be for affirmative action but against minority quotas.  There's a big difference.  If a young person of any ethnic background is inadequately educated in math, we should find a way to have compensatory math so that person can try for the best math or engineering scholarship in America.  The problem with quotas is that they say, "For reasons that have nothing to do with you as a person, we're going to punish you.  We're going to punish you if you come from one ethnic background in order to reward you if you come from another ethnic background."  Quotas are contradictory to the desire for an integrated America because they put a premium on figuring out who you are ethnically.

So there you have it.  None of this is frankly that surprising, giving his record but it is still helpful to know the philosophy behind the man.  He is a big government conservative.  He thinks government doesn't work not because of the idea of government itself but because the wrong methods have been used.  That is distinctly not libertarian though it is probably closer to traditional Whig/Republican thought which wanted a more activist government than the states rights focused Democrats.  If his solutions are in place we probably will have a better and smaller government than under Democrats, but we will still be far from having a government at a manageable size.  Is that enough?  It might be this time around because Obama has been such a disaster for this country in terms of both foreign and domestic policy and any improvement is welcome.  But will I have moments when I want to pull out my hair in frustration at having a big government Republican in office?  You bet.  I just think I will end up with more hair than under Obama or Mitt Romney for that matter.

Is Obama Going to Bail Out Europe?

I just saw these headlines on Zerohedge, which came from their Bloomberg terminal:

OBAMA SAYS U.S. `READY TO DO OUR PART' TO RESOLVE EURO CRISIS. - BBG

OBAMA SAYS SOLVING EURO CRISIS OF `HUGE IMPORTANCE' TO U.S. - BBG

It's hard to actually write a cogent critique of this as this is just such a horrible idea, it practically renders me speechless.  What exactly is our part?  Are we part of the Euro?  Wasn't the Euro created in part to be a competitor to the supremacy of the US Dollar?  So isn't it partly in our interest, in order to keep the US Dollar the world's reserve currency, to see the Euro fail horribly?  And one more question.  The money will come from where exactly?  Aren't we ourselves faced with a debt/GDP ratio of 100% with an annual deficit equal to 11% of GDP?  Where exactly are we going to find the hundreds of billions, if not trillions, of dollars necessary to stem this crisis?  There was a rumor this weekend that the IMF was readying a bailout of just Italy which could have totaled $800 billion, so if you add Spain, Portugal and Greece to the mix (and potentially France) the numbers get very serious very fast (of course the rumor was swiftly denied, I guess it was too early to mention that discussion point).  Even if Obama is simply referring to the bailout of Europe via the IMF, our "quota" is almost 18% of the funding so for Italy alone this could cost the American taxpayer $144 billion.  And chances are it would be much higher as Italy's quota is over 3% and all the countries smaller than Venezuela contribute 28% (how exactly do you ask third world countries to bailout out a lazy first world country?) so my guess is some IMF participants simply won't participate.   Try getting that through Congress.  Senate Democrats can't even pass a budget.

The Federal Reserve option just isn't much better.  So we are going to print money to buy European bonds now?  Our monetary base is $2.6 trillion right now so printing of the magnitude that would be required could have severe a severe inflationary impact, hurting American consumers as commodity prices will undoubtedly skyrocket.  As an extra kick in the face, the Euro will actually get even stronger as we will be printing massively at the same time the ECB isn't.  Just brilliant.

For once, it might be a good thing that Team Obama is in campaign mode 24/7.  As soon as they see their poll numbers dropping (and they will, like a rock), they will probably chicken out of any actual bailout and do nothing but the usual handwaving.  Unless they want to get to the point where even Ron Paul can beat them in the general election.

Are Newt's Immigration Comments Really Out of the Conservative Mainstream?

The press and some of the pundits in the tank for Romney or other GOP candidates have been making hay over Newt's very sensible comments on immigration:

You know, about five blocks down the street, you'll see a statue of Einstein. Einstein came here as an immigrant. So let's be clear how much the United States has drawn upon the world to be richer, better and more inclusive.

I did vote for the Simpson-Mazzoli Act. Ronald Reagan, in his diary, says he signed it -- and we were supposed to have 300,000 people get amnesty. There were 3 million. But he signed it because we were going to get two things in return. We were going to get control of the border and we were going to get a guest worker program with employer enforcement.

We got neither. So I think you've got to deal with this as a comprehensive approach that starts with controlling the border, as the governor said. I believe ultimately you have to find some system -- once you've put every piece in place, which includes the guest worker program, you need something like a World War II Selective Service Board that, frankly, reviews the people who are here.

If you're here -- if you've come here recently, you have no ties to this country, you ought to go home. period. If you've been here 25 years and you got three kids and two grandkids, you've been paying taxes and obeying the law, you belong to a local church, I don't think we're going to separate you from your family, uproot you forcefully and kick you out.

The Creeble Foundation is a very good red card program that says you get to be legal, but you don't get a pass to citizenship. And so there's a way to ultimately end up with a country where there's no more illegality, but you haven't automatically given amnesty to anyone.

...

Well, I mean, two things, first of all, in the DREAM Act, the one part that I like is the one which allows people who came here with their parents to join the U.S. military, which they could have done if they were back home, and if they serve on it with the U.S. military to acquire citizenship, which is something any foreigner can do.

And I don't see any reason to punish somebody who came here at three years of age, but who wants to serve the United States of America. I specifically did not say we'd make the 11 million people legal.

I do suggest if you go back to your district, and you find people who have been here 25 years and have two generations of family and have been paying taxes and are in a local church, as somebody who believes strongly in family, you'll have a hard time explaining why that particular subset is being broken up and forced to leave, given the fact that they've been law-abiding citizens for 25 years.

...

I don't see how the -- the party that says it's the party of the family is going to adopt an immigration policy which destroys families that have been here a quarter century. And I'm prepared to take the heat for saying, let's be humane in enforcing the law without giving them citizenship but by finding a way to create legality so that they are not separated from their families.

That doesn't sound so outrageous does it? In fact, Bachmann, who is viewed as conservative down the line by many, said much the same thing at a debate just over 2 months ago:

HARRIS: A quick 30-second rebuttal on the specific question.

The fence is built, the border is under control. What do you do with 11.5 million people who are here without documents and with U.S.- born children?

BACHMANN: Well, that's right. And again, it is sequential, and it depends upon where they live, how long they have been here, if they have a criminal record. All of those things have to be taken into place.

But one thing that we do know, our immigration law worked beautifully back in the 1950s, up until the early 1960s, when people had to demonstrate that they had money in their pocket, they had no contagious diseases, they weren't a felon. They had to agree to learn to speak the English language, they had to learn American history and the Constitution.

Doesn't seem like they actually disagree now does it (despite the fact Bachmann kept trying to say that Newt's plan would be amnesty for 11 million people)? And that is why Newt's comments probably won't hurt him much in the long run. Who exactly in the field has a tougher stance on illegal immigration? Obviously, Perry doesn't. Cain has trouble articulating any argument anymore after being put through the ringer. Bachmann, largely agrees with Newt. And what about Santorum? Check out this segment of the debate at the Reagan library:

GINGRICH: We should insist that first-generation immigrants who come here learn American history in order to become citizens. We should also insist that American children learn American history.

And then find a way to deal with folks who are already here, some of whom, frankly, have been here 25 years, are married with kids, live in our local neighborhood, go to our church. It's got to be done in a much more humane way than thinking that to automatically deport millions of people.

HARRIS: Senator, your solution?

SANTORUM: Well, my solution is very similar to Newt Gingrich's.

Look, I'm the son of an Italian immigrant. I think immigration is one of the great things that has made this country the dynamic country that it continues to be, people who are drawn because of the ideals of this country. And so we should not have a debate talking about how we don't want people to come to this country, but we want them to come here like my grandfather and my father came here.

They made sacrifices. They came in the 1920s. There were no promises. There were no government benefits.

They came because they wanted to be free and they wanted to be good law-abiding citizens. So we have to have a program in place that sets that parameter that says, you're going to come to this country, come here according to the rules. It's a very good first step that the first thing you do here is a legal act, not an illegal act.

So right after Newt mentioned the exact same plan that got him into "trouble" last week, Santorum's first words are that his solution would be similar. The anti-immigrant issue voters seem to be left with voting for Mitt Romney, who everyone knows will probably never even talk about getting tough on immigration after getting the nomination. In the end, this stance might cost Newt some votes but probably won't drive votes to any other candidate as they all substantially agree with him. As they should, if they did favor deporting every illegal who is here, no matter how long they have been here or what ties they have to the community, the GOP would be faced with the reality of having to win 70% of the caucasian vote to win national elections.

Great Newt Interview

Check out this great (and lengthy) interview of Newt back in 2001.  Here is an excerpt, if you have time, read the whole thing (h/t Conservatives with Newt):

INTERVIEWER: Philosophically speaking, what was the wellspring of your ideas? Were you influenced by people like Friedman or Hayek?

NEWT GINGRICH: No, I think I was influenced more by Adam Smith and by the founding fathers -- Jefferson, Adams, Madison, Hamilton, Washington -- and to some extent by the Whig historians of the 19th century. I was very much influenced by Goldwater's "Conscience of a Conservative" and by Reagan's speeches starting with "A Time for Choosing" in October of 1964. I actually came to Hayek backwards through Reagan, rather than the other way. In my mind, at least, what you had was a clear overdevelopment of the state in the 20th century as a vehicle for humans to organize their lives, so you needed a party of freedom that was committed, almost in the British 19th-century liberal tradition, to argue for personal choice for markets, for private property rights, and for taking Bismarck's insurance state and transferring it into a personal insurance system, as we're trying to do now on social security.

What I saw was a deviation from the long 18th- and 19th-century rise of freedom in the Whig tradition with four different patterns: the regulatory state in response to industrialization, where Theodore Roosevelt is probably the leading American developer of it; Fabian socialism with its British class warfare style, which never fit America, but the underlying anti-wealth, anti-achievement patterns did, [such as the] distrust of private property and private activity; third was Bismarck's insurance state, which gradually spread across the industrial world and which is essentially right if you can organize it so that people are insuring themselves rather than as a paternalistic bureaucracy trying to take care of you; and then finally, with Ludendorff's war economy in Germany in 1917, you really get what shapes John Kenneth Galbraith and a whole generation of younger economists, including Keynes, and that is the power of the state for a very short time to mobilize power and wealth remarkably. What they didn't realize was that while you can do that for about the length of the second world war, which in the American experience is not quite four years, if you do it much longer than that, it creates its own internal distortions. [This] is exactly what Hayek writes about it and what Smith understood: that a combination of politics, bureaucracy, [and] the distortion of power in the long run is radically less effective than the market as a place to allocate resources. So you had, from 1917, compounded by Leninism and then by Maoism, this affection of the left for the state as an organizing system, which when I was a young person in the late '50s was really close to its peak. There was a sense [that] this is the intelligent, sophisticated future, and those of you who favor free markets and private property represent this obsolete past. What all of us who believed in freedom felt was that in the long run centralized commanding control systems decay and collapse, and that's a historic pattern. You have to concede at least that Reagan was far more right than most of his left-wing critics in his understanding of the Soviet empire and the fact that in the end it just couldn't keep functioning.

INTERVIEWER: Do you make a connection between free markets and personal freedom, personal liberty?

NEWT GINGRICH: Absolutely. In fact, so did all the founding fathers. That goes back to the English Civil War, which is really the wellspring from which the American model of freedom emerges. It is the English Civil War and the effort of people to protect themselves from judges who are instruments of the state, not instruments of justice, to protect themselves from troops in their houses, to protect themselves from the king's right to kill you. And it's out of that English Civil War that you begin to have the rise of what we now call freedom, [the] first truly mass democratic societies in history, even more than the Roman republic. I think it's inextricable if you read Locke, if you read Jefferson, if you read the founding fathers, it is inextricable that if you don't have the right to private property, if you don't have the right to trial by jury, if you don't have the right to vote and fire the people to whom you loan power, you don't have freedom. The idea of a socialist free society in the long run, as Hayek points out, is an impossibility.

Third Quarter GDP Revisited

As I mentioned last month when the advance estimate for GDP came in at 2.5%, don't get too excited by the number. Well, lo and behold in today's Q3 GDP revision, the estimate went down from 2.5% to only 2% in the quarter. And in a year-over-year growth analysis (always my preference as it automatically adjusts for seasonality) the economy continues to deteriorate, only growing 1.5% over the third quarter last year:

Even more disturbing, real disposable personal income was flat compared to a year ago. This is a number that only turned negative in Q1 2009 and before that you had to go back to the 1974 recession to see it turn negative. Also, on a sequential basis, it's down two quarters in a row. No wonder people are so gloomy, their personal finances are officially in a recession. Anyway, here is real disposable personal income over the last 10 years:

Given this situation, it's really nice to see a President demanding tax increases, sabotaging shovel ready projects and focusing almost exclusively on campaigning.

Another Reason to Vote for Newt: He Drives MSNBC Nuts

You really have to hand it to Newt, he really knows how to drive "progressives" batsh*t crazy (though honestly, often they don't have to be driven to insanity, as they are already pretty close, especially at MSNBC. It's more of a leisurely stroll.)

Thanksgiving Family Forum

Here is the complete video from the Thanksgiving Family Forum which included all of the major GOP candidates except for Romney and Huntsman (okay, he is a bit borderline). This wasn't the usual policy debate as they actually spent a lot of time talking about religion, morality and their personal journeys. It was actually quite fascinating even if you aren't personally religious. Take a look. It's a very long video and the candidates don't show up until the 37 minute mark (which is when I started viewing) but it's worth it.

I think Newt did a very good job talking about his personal redemption and a lot of social conservatives who may have been wavering on him will probably feel more comfortable now. Bachmann, Perry and Santorum are clearly the most socially conservative candidates out there which everyone has already known. While their, especially Santorum's, performances were good, they probably didn't broaden their appeal much as they might have been a bit over the top (especially Bachmann and Santorum). Cain just can't get a break. In an answer about abortion legislation in which he thought he was saying he would sign anything that restricted abortion that crossed his desk, it actually came across that he would be very passive on the issue.

Newt is Tied, Statistically, with Romney in NH

According to the latest poll from Magellan Strategies in New Hampshire, Romney is leading Newt by only 2% in that key state in a survey of 746 likely voters done earlier this week.  I certainly didn't see this poll coming as Romney has had what seemed to be an insurmountable lead all year.  The smallest lead he has had previously was from one poll (run by the Democratic leaning Public Policy Polling [PPP]) of only 341 registered voters in which he had a 7% lead over Bachmann back in June/Jully.  Other than that, the next smallest lead he has had was 15% with most of the polls showing him leading by 20-30%.  Neither the Cain nor Perry boomlet got those candidates anywhere near Romney. In the October Magellan Strategies poll, Romney was leading Cain by 21% in that state.  Seems like the Newt boomlet may turn out to be more than a boomlet.    If Newt does beat Romney in NH (a big if as NH has an open primary, allowing non-Republicans to vote, a group likely to break for Romney) then Romney will be done, especially if Newt wins in Iowa (where he is leading) and South Carolina (in the latest poll there conducted over a week ago, Cain is #1, Newt is #2, so a new poll should show Newt in the lead there as well).

Go Newt go!

Broker "Goes Galt"

Here is a fantastic letter to clients written by Ann Barnhardt who just shut down her brokerage in disgust over the aftermath of the MF Global collapse (all emphasis is hers):

Dear Clients, Industry Colleagues and Friends of Barnhardt Capital Management,

It is with regret and unflinching moral certainty that I announce that Barnhardt Capital Management has ceased operations. After six years of operating as an independent introducing brokerage, and eight years of employment as a broker before that, I found myself, this morning, for the first time since I was 20 years old, watching the futures and options markets open not as a participant, but as a mere spectator.

The reason for my decision to pull the plug was excruciatingly simple: I could no longer tell my clients that their monies and positions were safe in the futures and options markets – because they are not. And this goes not just for my clients, but for every futures and options account in the United States. The entire system has been utterly destroyed by the MF Global collapse. Given this sad reality, I could not in good conscience take one more step as a commodity broker, soliciting trades that I knew were unsafe or holding funds that I knew to be in jeopardy.

The futures markets are very highly-leveraged and thus require an exceptionally firm base upon which to function. That base was the sacrosanct segregation of customer funds from clearing firm capital, with additional emergency financial backing provided by the exchanges themselves. Up until a few weeks ago, that base existed, and had worked flawlessly. Firms came and went, with some imploding in spectacular fashion. Whenever a firm failure happened, the customer funds were intact and the exchanges would step in to backstop everything and keep customers 100% liquid – even as their clearing firm collapsed and was quickly replaced by another firm within the system.

Everything changed just a few short weeks ago. A firm, led by a crony of the Obama regime, stole all of the non-margined cash held by customers of his firm. Let's not sugar-coat this or make this crime seem "complex" and "abstract" by drowning ourselves in six-dollar words and uber-technical jargon. Jon Corzine STOLE the customer cash at MF Global. Knowing Jon Corzine, and knowing the abject lawlessness and contempt for humanity of the Marxist Obama regime and its cronies, this is not really a surprise. What was a surprise was the reaction of the exchanges and regulators. Their reaction has been to take a bad situation and make it orders of magnitude worse. Specifically, they froze customers out of their accounts WHILE THE MARKETS CONTINUED TO TRADE, refusing to even allow them to liquidate. This is unfathomable. The risk exposure precedent that has been set is completely intolerable and has destroyed the entire industry paradigm. No informed person can continue to engage these markets, and no moral person can continue to broker or facilitate customer engagement in what is now a massive game of Russian Roulette.

I have learned over the last week that MF Global is almost certainly the mere tip of the iceberg. There is massive industry-wide exposure to European sovereign junk debt. While other firms may not be as heavily leveraged as Corzine had MFG leveraged, and it is now thought that MFG's leverage may have been in excess of 100:1, they are still suicidally leveraged and will likely stand massive, unmeetable collateral calls in the coming days and weeks as Europe inevitably collapses. I now suspect that the reason the Chicago Mercantile Exchange did not immediately step in to backstop the MFG implosion was because they knew and know that if they backstopped MFG, they would then be expected to backstop all of the other firms in the system when the failures began to cascade – and there simply isn't that much money in the entire system. In short, the problem is a SYSTEMIC problem, not merely isolated to one firm.

Perhaps the most ominous dynamic that I have yet heard of in regards to this mess is that of the risk of potential CLAWBACK actions. For those who do not know, "clawback" is the process by which a bankruptcy trustee is legally permitted to re-seize assets that left a bankrupt entity in the time period immediately preceding the entity's collapse. So, using the MF Global customers as an example, any funds that were withdrawn from MFG accounts in the run-up to the collapse, either because of suspicions the customer may have had about MFG from, say, watching the company's bond yields rise sharply, or from purely organic day-to-day withdrawls, the bankruptcy trustee COULD initiate action to "clawback" those funds. As a hedge broker, this makes my blood run cold. Generally, as the markets move in favor of a hedge position and equity builds in a client's account, that excess equity is sent back to the customer who then uses that equity to offset cash market transactions OR to pay down a revolving line of credit. Even the possibility that a customer could be penalized and additionally raped AGAIN via a clawback action after already having their customer funds stolen is simply villainous. While there has been no open indication of clawback actions being initiated by the MF Global trustee, I have been told that it is a possibility.

And so, to the very unpleasant crux of the matter. The futures and options markets are no longer viable. It is my recommendation that ALL customers withdraw from all of the markets as soon as possible so that they have the best chance of protecting themselves and their equity. The system is no longer functioning with integrity and is suicidally risk-laden. The rule of law is non-existent, instead replaced with godless, criminal political cronyism.

Remember, derivatives contracts are NOT NECESSARY in the commodities markets. The cash commodity itself is the underlying reality and is not dependent on the futures or options markets. Many people seem to have gotten that backwards over the past decades. From Abel the animal husbandman up until the year 1964, there were no cattle futures contracts at all, and no options contracts until 1984, and yet the cash cattle markets got along just fine.

Finally, I will not, under any circumstance, consider reforming and re-opening Barnhardt Capital Management, or any other iteration of a brokerage business, until Barack Obama has been removed from office AND the government of the United States has been sufficiently reformed and repopulated so as to engender my total and complete confidence in the government, its adherence to and enforcement of the rule of law, and in its competent and just regulatory oversight of any commodities markets that may reform. So long as the government remains criminal, it would serve no purpose whatsoever to attempt to rebuild the futures industry or my firm, because in a lawless environment, the same thievery and fraud would simply happen again, and the criminals would go unpunished, sheltered by the criminal oligarchy.

To my clients, who literally TO THE MAN agreed with my assessment of the situation, and were relieved to be exiting the markets, and many whom I now suspect stayed in the markets as long as they did only out of personal loyalty to me, I can only say thank you for the honor and pleasure of serving you over these last years, with some of my clients having been with me for over twelve years. I will continue to blog at Barnhardt.biz, which will be subtly re-skinned soon, and will continue my cattle marketing consultation business. I will still be here in the office, answering my phones, with the same phone numbers. Alas, my retirement came a few years earlier than I had anticipated, but there was no possible way to continue given the inevitability of the collapse of the global financial markets, the overthrow of our government, and the resulting collapse in the rule of law.

As for me, I can only echo the words of David:

"This is the Lord's doing; and it is wonderful in our eyes."

With Best Regards-
Ann Barnhardt

A Member of the European Parliament Loses It On the EU Leadership

I am now a big fan of Nigel Farage: