Facebook: All Greased Up In Snake Oil

On the first day that Facebook became an Initial Public Offering (IPO), the stock opened at $38/share; then, rose to $45; and it has been sliding downwards ever since. Today, it reached a low of $26.83.  If you were unfortunate enough to buy into the hype and bought it at $45, you're now down 40% on your investment.  Down 29% if you bought at $38.

In stock trading, investors and traders, alike, are also reminded not to try and grab a falling knife.  And, for sure,  Facebook is a falling knife.  The problem with a stock like this is that it had theoretically hit its high point last year.  Much of the shine is off the company because it appears that people are tiring of the format.  In an AP-CNBC poll, taken just before it became a publicly traded company, only 13% of the respondents trusted Facebook with their information.  56% didn't click on any of the advertising being presented; and, if fact, its advertising revenues have fallen.  46% said they thought that Facebook was a passing fancy and would ultimately lose to other competitors.

On top of all that, only 51% approved of or liked Facebook.  While, of that same group, 71% said they liked Google. Only 36% of those polled said they had a favorable view of Mark Zuckerberg, Facebook's founder.  Then, too, only 18% thought that the baby-faced and somewhat weird, Zuckerberg, was even qualified to run the company.

In the past, people have been P.O.'ed at Facebook because of privacy issues.  Even today, you have to wade through one clicked page after clicked page to block the whole world from seeing what you would prefer not be seen.  With Facebook, full frontal nudity is the norm and you have to work hard at putting your clothes back on and becoming a somewhat private person again.  All the hype was just a bunch of snake oil sales advertising and the sliding price of the stock is valid proof of that.

Click here to see the AP-CNBC polling data or go to http://www.cnbc.com/id/47391504/AP_CNBC_Facebook_IPO_Poll_Complete_Results_Analysis

Update:  Contrary to above, Facebook finished the day up $1.37 at $29.59 due to late-day buying; gaining almost a buck in the last 10 minutes of trading.  Did some actually catch the falling knife?

Update (a day later): Apparently, yesterday's late-day buying was just a short-covering rally.  As of today, Facebook has returned to its losing ways and has been down as much as $2 from yesterday's gains.

Hospital Drug Shortages: First Blame Republicans. Then, Democrats.

In 2003, George W. Bush signed into law, the Republican lead initiative called the Medicare Prescription Drug Improvement and Modernization Act".  Under the law, seniors enrolled in the new Medicare, Part D, could obtain their prescription drugs at substantially lower prices.  At least if they didn't reach the now-infamous "Doughnut Hole".   But, also, as part of that law, drugs sold directly to health care providers were restricted from price hikes.  And, that fact, today, has caused a major drug shortage problem in the United States.

Right now, many seriously ill patients are being told that they cannot start or continue life-saving drug therapies because the medication they need is either in short supply or completely unavailable.  Many of those drugs are actually cheap generics that have been around for many years.  The problem generally starts with a Food and Drug Administration (FDA) inspection and the eventual shut down of a drug manufacturing facility because of some violation.  This, in turn, forces a drug to become in short supply.  Normally, this shortage  would cause the price to rise significantly.   As a result, the higher price would typically motivate the original manufacturer to get on the stick and meet FDA compliance and restart manufacturing and distribution at that new higher price.  At the same time, other competing companies would want to take advantage of the higher prices by upping their production.  But, when the prices are "fixed" by federal law, there is no incentive for a manufacturer to spend millions to bring their plant into compliance with the FDA or for any other manufacturer to spend money to up their rate of production.

This is a perfect example of why price fixing doesn't work.  Shame on the Republicans and George Bush for causing this problem.  Some people may actually die because of it.  And, shame on the Democrats who had complete control of Congress and the Presidency for ignoring the problem and not correcting it.  Instead, all those Democrats were too focused on taking over health care in America.  Even today, it is well known why there are drug shortages and, yet, Congress still refuses to fix the law that's caused the problem.  It's things like this that give Congress its well-deserved 10% approval rating.

If Romney Wins, Will Democrats Try To Sink His Presidency With Tax Hikes

I don't know if you know it or not but, January 1, 2013 is being not-so-lovingly referred to as "Taxageddon".  That's because, on that date, Americans will be hit with the largest total tax increase in the history of the union.

Right up front, the Bush tax cuts are set to expire; meaning that people in the lowest tax brackets -- the people who benefited most from the Bush tax cuts -- could see their tax rate rise by 50%.  Most all other Americans will see tax increases of around 12%.  Additionally, taxes will go up for any income from interest and dividends, and for capital gains.  The child tax credit will fall back to $500 from the current $1000 per child level. The marriage penalty will be back.  At the same time, the $5 million estate/inheritance tax exemption will slide back to a million dollars; meaning that, once again, many small business will either change hands or go belly up in order to pay Uncle Sam.

The tax fury doesn't just stop there.  A number of tax increases that are associated with ObamaCare are to take effect on that very same "Taxageddon" date.   Individuals making $200,000 and marrieds making $250,000 will be hit with a 0.9% tax increase to fund the new health care law.  At the same time, if those $200,000/$250,000 tax bracketers should sell property and make a profit, they will be hit with a federal 3.8% surcharge on those profits; whereas today, they would pay no tax at all.   Also as of January 1, medical devices will be hit with a 2.3% excise tax for any device selling for more than $100. Even Granny's wheelchair won't escape this tax.

The reality of the above taxes is simple: If all of the above go into effect as scheduled, it would send our economy into a tailspin -- basically, into another recession.  Surely, the Democrats wouldn't want that to happen if Obama is elected.  So, my guess is that they will gladly join the Republicans to extend the Bush tax cuts for another year or two.

But, what if Romney beats Obama? What, then?  Would the Democrats go so far as to allow the Bush tax cuts to expire?  Would they actually do that to sink the economy and a Romney presidency with it?  Of course, if the Bush tax cuts did expire, the Democrats would make it seem like it was the Republicans who made it happen.  My guess is that the Democrats would fight to keep the cuts for the middle and lower classes; forcing the Republicans to squabble over tax cuts for the rich.  In the process of being at odds with each other, common ground won't be found and the Bush cuts will expire. In typical fashion, the Democrats will blame the Republicans because the Republicans, as usual, were only for tax cuts for the rich.  We'll just have to wait an see.

Obama's Stupidity On Profits

Ever since Barack Obama took office, he's been at war over corporate profits.  In 2009, he attacked corporations, Wall Street, and banks for putting profits ahead of jobs.   In 2011, he gave a speech before the Chamber of Commerce where he said businesses must share their profits with the workers.  In other words -- like he once told Joe the Plumber -- "spread the wealth around". Now, in the last two weeks, he has attacked Romney and Bain Capital for "maximizing profits".

Only a socialist would be so negative on companies making money. Really, can Obama be that dumb about business?

Look at it this way.  If the first McDonalds wasn't profitable, there wouldn't have been a second McDonalds.   But thanks to profitability, there now are over 33,500 McDonalds worldwide; employing nearly a half million workers.  The bottom line is that profits allow companies to expand and expansion means jobs. If companies simply gave all the profits away to the employees, there wouldn't be any money left for expansion. Just two weeks ago, Hewlett Packard announced that they were laying off 27,000 workers.  The company didn't make that announcement because profits are rising.

The President just doesn't get it.  Jobs follow profits.  Not the other way around.  Unlike the President, Romney definitely understands this. Today, in America, we have a jobs problem and, obviously, we have a President who is totally clueless as to how to fix that problem.

Let Us Remember All Our Heroes

War is hell.  With war, America has lost many good people who have put their lives on the line to fight for and on behalf of this country.  But let's not just remember the fallen who paid the ultimate sacrifice on this day of remembrance.  Let us also think about the thousands who have been wounded and injured in battle.  For many, their lives are no longer whole and they have to live their sacrifice every single day.

Pakistan: Friend Or Enemy?

There's an old proverb which states: "The enemy of my enemy is my friend."  But, conversely, one could also say: "The friend of my enemy is no friend of mine."  And, when it comes to our relationship with Pakistan, the latter is surely true.

They proved this when they decided to convict a Pakistani surgeon of treason for his help in allowing us to locate and kill Osama Bin Laden.   This conviction speaks volumes to the fact that Pakistan never wanted us to find him.  Pakistan is not our friend.  The Pakistanis are simply the friends of our enemies: Osama Bin Laden, Al Qaeda, and the Taliban; all of which have found refuge and cover in their country.  The enemy of Pakistan is India.  Just maybe we should hold true to the old "enemy of my enemy" proverb by befriending India.  We could easily do this by rewarding India with the billions in foreign aid that was originally destined for Pakistan.  Maybe, then, Pakistan would stop taking us for granted.

Fool's Gold?

Last May, it was disclosed that the massive George Soros hedge fund had sold most of its investments in gold.  Soros, himself, negatively referred to its high prices as the "ultimate asset bubble."  At the time, gold was selling in the low-to-mid $1500's an ounce and many just scoffed at Soros short sighted selling; believing that it could easily double in price over the next two to three years.  Gold, in fact, did continue its 12-year stratospheric rise by reaching the $1903 mark as of August 22nd of last year.  But, that was the top.  Since then, gold has fallen.  Last week it hit a 9-month low of $1541; 19% off last year's high.

In the last 3 months, the dollar volume in gold sales has been extremely heavy with the price sliding downward in the process; but not that dramatically.  It appears that there are enough buyers to match the heavy selling; and, as result, this has kept it from going into free fall.  At this point, gold seems to be at a breakpoint of sorts.   If selling dries up, then it will stabilize and either move sideways or back upwards in price.  But, if buying dries up and the selling continues, the Soros prophesied bubble will break and we could see a serious fall in the price.  Maybe even below $1000 an ounce.  

In my opinion, anyone buying gold right now is foolish.  No one should buy unless it breaks out of its current downward trend line. I for one, am betting that Soros is right about it being in a serious bubble and fully expect it to crash within the next 3 to 6 months.

Did Obama Welcome Those Catholic Lawsuits Over Contraception?

This week, 43 Catholic institutions filed Federal lawsuits against the President's mandate that they must cover the cost of contraception as part of their health insurance programs.  Don't think for one moment that Obama didn't expect this.  He did, and he welcomes it.

Obama knows that, other than liberal Catholics, most other liberals in America hate the Catholic Church.  It's a Church that has always been openly against abortion, homosexuality; and, now, against women's supposed right to contraception.  Therefore, these lawsuits are essentially energizers for his political base.  He's making the assumption that liberal Catholics aren't going to go against him on this  issue because they probably already use contraception.  At the same time, he's hopefully calculating that non-Catholic liberals will be stirred up and angered enough to come out in droves to vote for him in the Fall.

Even though these lawsuits will probably wind up with the Supreme Court striking down the President's contraception mandate, he could care less because, by the time the Supreme Court weighs in, he, in theory, would have already been reelected.

It Will Be Bank Runs That Will Ultimately Doom Europe

Most people think it was the stock market "Crash of 1929" that was responsible for the Great Depression.  But, although the "crash" created the negative environment that ultimately set up the conditions for it, the effects of that crash were  primarily localized to the United States.  What really caused a world-wide economic collapse in the 1930's was a U.S./European run on banks with huge numbers of depositors closing out their accounts; all starting with a run on a fairly small non-governmental bank: the Bank of the United States in New York City.  From there, it spread across America and, eventually, to Europe. These runs caused the banks to collapse because banks (even today) never have enough funds to cover even a moderate number of depositors closing out their accounts.  The bulk of a bank's money is loaned out to borrowers; their primary source of income;  at least back then.

In the last few weeks, Greek depositors have been yanking their money out of Greek banks and their banking system is being overly stressed.  The European Central Bank is attempting to shore it up by providing liquidity (infusing cash); as much as 100 billion Eurodollars this week alone.  But, "what if" the run becomes contagious and the depositors in Spain, Italy and even France start closing their accounts?  Then, the world has one big problem.  It literally could be 1930-1931 all over again.  This time starting in Europe and probably spreading to the U.S.  The real worry should be whether or not the world's Central Banks can abate or contain the runs enough to avoid a complete system collapse; with the world's bank depositors losing much of their wealth in the process.

Is Labor Losing Again In Wisconsin?

Last year and this year, organized labor has spent millions in trying to replace a conservatives in the Wisconsin state government as punishment for dissolving state employees collective bargaining practices.  First, they tried to replace a supreme court justice with a liberal; giving the state's high court a liberal bias.  But, the unions failed.  They then tried to recall enough state senators as to give the legislature a liberal advantage; and, again, they failed.  Then, they backed  Democrat Kathleen Falk in last month's gubernatorial primary and she lost to the less-labor-sympathizer, Democrat Mayor of Milwaukee Tom Barrett.

Now, because of the Falk loss, they are now being forced to support Tom Barrett in the June 5th recall election up against the anti-labor Republican Governor Scott Walker.   But here's the thing.  The polls are showing Scott Walker in a clear lead over Barrett; by 6 points or more.  And, if those polls hold, labor will just lose again.   Apparently, organized labor hasn't got the memo.  People are no longer interested in government workers getting high pay, cushy benefits and early retirement when they, themselves, have to do with a lot less in their working lives.  Voters also know that Walker's policies have turned a multibillion dollar state deficit into a multimillion dollar surplus. Unemployment has been lowered by a full percentage point.  And, real estate tax have been lowered. 

Gov. Brown's Greased Pig Deficit Problems

At State Fairs, it always good for a laugh to see the greased-pig events with the competitors flopping and flailing around while trying to get their hands on that slippery little hog. But, when a Governor does the same thing while trying to define his State's deficit problems, it's not so funny.

Back in January, Governor Jerry Brown projected California's budget deficit to be $9.2 billion.  Then, on May 14th, he said his "new" projection was $16 billion.  Five days following that declaration, a non-partisan, independent analyst of the State legislature said that number was off by a billion dollars; indicating that the actual deficit number is closer to $17 billion. 

It seems to me that if you don't even know how big a problem you have, you won't be able to fix it.  For that reason alone, Governor Brown is totally incapable of rectifying California's debt problems.  However, Brown's budgetary incompetence goes even further.  In typical liberal fashion, he wants to solve California's budgetary ills by raising taxes on the rich while, at the same time, talking about spending $100 billion for a high speed rail system and another $15 billion for a revamp of the State's water system.   On top of all that, he wants an immediate increase of $5 billion a year in education.  And, if he doesn't get his tax increases?  Well, he's told the voters that he will be forced to make "painful" cuts in education and public safety.

Obviously, Governor Brown doesn't seem to understand that spending is at the heart of California's deficit woes.  The state is drowning in debt and he keeps filling the pool with water. Even if he does get his millionaires tax, the spending will still exceed revenues.  It seems everyone knows this except  the governor and all the voters who elected him.  Obviously, Chicago columnist Mike Royko's labeling of Brown as "Governor Moonbeam" in 1976 is as true then as it is today.  Royko was also right when he said that California was “the world’s largest outdoor mental asylum.”

The Hypocrisy of Michael J. Fox

Caught up in his own disease, Michael J. Fox put his own life above the lives of the unborn with his backing of a Democrat candidate who supported abortion with the hopes that stem cells would cure Parkinsons and thereby save his own lowly life.  In the following commercial, he helped get Claire McCaskill (with kill being the operative part of her name) get elected; solely because of his disease:



Now, 6 years later, Fox has abandoned the failed outlook of stem cell research to cure Parkinsons and has decided to look to the internet for renewed hope. (click to see the interview with Diane Sawyer). 

Obviously, Fox found out the hard way that politicians can't cure a damn thing or really solve any problems.

Not A Greek Tragedy. Just Greek Stupidity!

There's been a lot of press lately about the debt problems facing Greece.  Many  writers have used a now well-worn play on words, "Greek Tragedy", to describe the debt crisis in that country. In reality, the situation is a tragedy of their own making; and, to put it bluntly, due to pure stupidity.

For years, the Greeks have dug themselves into an economic hole by supporting a larger and ever growing expanse of government control of their daily lives.  Along with that, common sense and good economics were literally thrown out the window when the decisions of "socialist" politicians gave away the house by instituting increasingly liberal work rules, retirement ages, and pensions.  Now, as a consequence, the entire country is so plagued by its own internal debt that a complete economic collapse is sitting on a hair-trigger.

In order to save the country and the Eurozone in the process, the European Union, the European Central Bank, and the International Monetary Fund have promised a cash infusion.  In return, a previous Greek government had agreed to austerity.   But, the Greeks, in a none-for-all-move, have continued their short-sightedness by rejecting the previously agreed upon austerity.  They've done this by voting in a bunch of hard left politicians that completely reject it and, actually, support exiting the European Union and reinstating the drachma as their currency.

But, this go-it-alone attitude is, in itself, even more ignorant and, quite frankly, a juvenile response.  The only reason that the Greek economy hasn't collapsed by now is because its inclusion in the European Union has kept it alive. The real Greek Tragedy will occur when they pull out of the Union and start reprinting their former currency.  The drachma, unsupported by fiscal health, will drop like a rock against other world currencies.  The result will be hyperinflation and high unemployment; and, they will be thrown into a deep depression. For years, the Greek word for happiness and rejoicing, "Oopa",  will just be missing from the vocabulary; replaced by the word "I̱lithióti̱ta" (meaning stupidity).

The Incredible Disappearance Of Anti-War Groups

When George Bush was in office, the media was constantly focused on the antics of anti-war campaigners like Cindy Sheehan and Code Pink.  But, since Obama took office, more than three years ago, those people have all but completely disappeared off the political landscape.  They were nowhere to be seen when President Obama authorized a troop surge in Afghanistan.  Nor, were they around when he authorized increased drone attacks in both Pakistan and Yemen.  This despite the fact that the drones were producing a lot of collateral, civilian deaths. Then there was the  U.S. military involvement in the support of the overthrowing of Libyan strongman, Gaddafi. Where were they then?

It just seems to me that the anti-war movement was more about politics and less about war.  Actually, more about being anti-Republican and anti-George W. Bush.  For that reason, the anti-war movement has diminished itself and is no longer worth listening to; either now or in the future.

Obama's Coming Out Is Having Negative Consequences

When the President announced he was in support of gay marriage, I'm sure that the his reelection team thought they had a winner by being able shore up the the liberal base and, at the same time, garner votes from independents.  After all, the polls seem to indicate that a majority of Americans are in support of same-sex marriage.  But, in reality, he may have actually done more harm than good by fracturing that  base.   The New York Times is reporting that several Black pastor's expressed concern over the President's "coming out" on the same-sex marriage issue.  Some even saying that they would not support his reelection.  Then, too, many Catholics -- already at odds with Obama over forced contraception insurance coverage -- are probably further offended by his new stand.  This is especially true for Catholic Latinos.  In fact, gay marriage is at odds with many other religions as well. This is most likely why -- in direct contradiction to the polls -- so many states have successfully banned same-sex marriage when the issue has actually been put to a vote. 

I personally think the same-sex marriage decision was a mistake.  Obama knows this, and this is why, in 2008, when running for the presidency, he said he supported civil unions and not same-sex marriage.
(Click here to see Obama in a Panel Discussion on the topic) This 2008 position was in direct contradiction to his prior support of same-sex marriage when he ran for the U.S. Senate.  It appears that the President's evolving positions are more like a revolving door; coming back to what he actually believed all the time.  But, the crassness of changing positions to simply get votes may also turn some voters off. Especially those who voted for him in 2008 when they were under the false impression that he was against same-sex marriage.

The 1% Exist Because the 99% Want Them To Exist

In 1941, the average annual American income was only $1,496.  It would cost you 25 cents to see a movie. And, one of the highest paid actors, Jimmy Stewart, earned about $72,000 that year. In that  same year, Joe DiMaggio was paid $37,500 to play for the Yankees.  By any measure, both Stewart and DiMaggio were considered to be the 1% of their time. Stewart made almost 50 times more than the average American. DiMaggio 25 times.

Today, the average American makes about $42,500.  That's 28 times what their counterpart made in 1941.  At the same time, the top-paid actor, Leonardo DiCaprio, makes more than $77 million a year; or, more than a 1000 times what Jimmy Stewart made in 1941 and 1,655 times the current American's income.  Then, too, the top ball player for the Yankees, Alex Rodriquez was paid $32 million to play in the 2011 season. That's 850 times what DiMaggio was paid and 752 times the average individual income in 2011.

So, in roughly 70 years, the average American's pay  increased 2,800% while the pay of our sports and movie idols, combined,  jumped by more than 90,000%. Of course, a liberal would point to this disparity in salary growth as proof that the rich are getting richer while the rest of us, the 99%, languish.  But, the reason that A-Rod and DiCaprio get paid so much is because "we", the 99%, made it so.  It was "we" that demanded to see DiCaprio on the silver screen and it was "we" that were so eagerly willing to pay high box office prices and buy the DVDs that drove DiCaprio's income higher and higher.  The same was true with A-Rod and our willingness to see him take the field.  And, this attitude didn't just stop with sports and entertainment.  On Wall Street, the salaries are high because "we" chase the companies that best perform in handling our investments.   And, in business, too, the competition for talented people has also driven CEO pay higher and higher. 

As long as "we" won't settle for anything but the best, "we" will continue to see the rich get richer.  We made them what they are.  More than 90% of today's millionaires are newly minted thanks to us.  Which just proves that if your talented or have great ideas, this country will compensate you with millions.

You Can Thank France and Greece For Lower Oil Prices

This morning, West Texas Intermediate (WTI) oil was trading at $93/barrel.  Just a few weeks ago it was trading at over $107 per barrel and gasoline prices we're clearly heading above $4/gallon; nationwide.  That's nearly a 14% drop in price. So, what happened?

Well, you can thank the economic mess in Europe for the lower oil prices.  As Europe moves into deeper recessions and as countries like France and Greece seem to be rejecting austerity to get debt under control, the value of the Euro dollar has fallen; actually causing the American dollar to rise in value on a relative basis. As a consequence, the stronger U.S. dollar has caused oil prices to fall..  It's just that simple. And, it basically proves that Obama's weak dollar policy through high spending and debt is at the core of out current high oil and gasoline prices.  All along, the falling Euro has somewhat kept oil prices in check. I guarantee you that if Europe had been in good economic health over the last 3 years, we would have easily seen gasoline prices above $5  a gallon in the last two years.

Those same, so-called speculators that supposedly drove prices higher as a response to Middle East events are now responding to other changing world events and, as a consequence, are selling off their oil holdings; thus driving oil and gasoline prices down.  Maybe Obama should demand an investigation because oil prices are obviously being manipulated lower. .

The Hypocrisy of Obama's Latest Attack On Romney and Bain Capitol

As of today,  Barack Obama's reelection campaign released this new ad attacking Mitt Romney's stewardship of Bain Capital:



But what this ad and the idiots that appear in it don't seem to understand is that Bain Capital was involved in the business of fixing broken companies.  Companies that were broken because they had too many people and/or too many unprofitable or marginally profitable products and services.  Those companies were broken long before Bain got involved. So, if those people lost their jobs it was because the original management of the company that hired them was at fault due to bad management.

Though, I guess, the height of hypocrisy comes from Obama, himself, on this one.  The fact is that what Bain Capital did is no different than what the President's people had to do with the "broken" General Motors.  Like Bain Capitol,  Obama took a controlling interest in General Motors by infusing $56 billion in cash.  But, unlike Bain's takeover of companies, Obama used taxpayer money -- not private capital -- to fund the takeover. Then, to make the company profitable again, people had to lose their jobs and some benefits.  The Saturn and Pontiac Divisions were shuttered and employees were just let go.  Losers like Saab, Opel, Vauxhall, and Humvee were sold off with their worker's ultimate fate in question. Hundreds of dealerships were shut down; and, as a result, lots of people lost their jobs.  Former suppliers to Pontiac and Saturn lost contracts and, in the process, some either laid people off or, perhaps, went out of business all together. 

I'm sure that if Romney wants to stoop to Obama's level, he could just as easily run a similar ad with former, disgruntled, General Motors workers or Dealers.

Update: Even Obama's former Car Czar who orchestrated the GM Bailout calls this Obama attack ad "unfair".  (Click here to see video from Morning Joe program).

What Are AP's Surveyed Economists Smoking?

Recently, the Associated Press (AP) surveyed 32 economists, and the consensus was that it will be hiring that will sustain economic growth.  In AP's published article entitled "AP survey: Economists confident that hiring gains will help sustain US recovery", the surveyed economists seem to have blinders on.  First of all, we just came off of another missed GDP growth number.  The First Quarter GDP only grew by 2.2% when 3% was expected.  Most all of those economists know that you need at least 2.5% in GDP growth to even start making a dent in the unemployment rate.  Secondly, they have to now that the last employment report was a farce with the amount of discouraged workers growing at a rate that was twice that of job growth.  That report makes two months in a row where the "jobs created" was substantially less than even expected workforce growth.


For the last three years economists have consistently gotten it wrong.  They expected 6% growth in 2010 and we only got 3%. They thought 2011's economy would grow by 3% and we got 1.7%.  This year they expect a 2.1% growth for the full year and we started the year off with another worse than expected number for the First Quarter.  Right now, I wouldn't take any economist's survey seriously,  Obviously, the Hookah pipes are in broad use within the economics community.

The Baby Boomers Are Lowering The Workforce Participation Rate?

Following a week ago last Friday's disastrous job creation number and, especially, the record low workforce participation rate, liberals have been scrambling to come up with an excuse for the number of Americans no longer working.  The answer they came up with is that the declining labor participation rate is all due to the rate at which baby boomers are retiring.  I even had one "anonymous drive-by" idiot throw that in my face with a comment left on that Friday's blog entry about the employment report. 

But, the "baby boomer" excuse is a complete exaggeration.

First off, the baby boomer generation only started  to hit retirement age as of last year; and, the process won't be complete until 2029. Yet, the workforce participation rate has fallen each year since 2008; starting with the height of the recession and continuing through Obama's more than three years in office.  Secondly, there is no automatic retirement age for most seniors.  Many stay in the workforce because they just can't live off of Social Security checks and some small pension they may be getting.  Lastly, according to the Bureau of Labor Statistics own data, the participation rate for the senior age group of 55 and older has remained constantly high with every other age group seeing substantial declines in the last four years.  (Click to see graph).

Those economists and media types who want to proliferate the "baby boomer lie" are totally in the tank for Obama and are a disgrace to the concept of fair and factual reporting. They have merely replaced the facts with  political ideology.

Obama's Unnatural Selection On Gay Marriage

President Obama claims his recent decision in support of gay marriage was the result of evolution.   Well, I contend it was a subset of evolution: Natural Selection.  Or, more appropriately, unnatural selection. It was "natural" for a president who is struggling to re-energize his shrinking liberal base to make a "choice" that would shore up one of his four biggest donor and support groups: The Gay, Lesbian, and Trans-Gender population. 

However, this "selection" may not be welcomed by a near majority of Americans.  In polling, the nation is almost split on gay marriage.  Though, most don't mind civil unions or civil partnerships for legal reasons, most believe that  marriage is a term that should be reserved for a "natural" union between a man and a woman. In fact, 31 states have already passed laws banning it, and just last Tuesday, a majority of North Carolina voters shot it down once again, with Maryland having a referendum to do the same in the fall elections.  So, many may be turned off by Obama's unnatural selection in support of gay marriage and his "selection" just might be one more reason not to vote for him in November.

As I have stated before in this blog, I firmly believe that, as long as states are allowing for gay/lesbian child adoption, the child would be best served by domestic partnership or civil union protection under the law.  But, more than that, a caring America should allow gays and lesbians to be in a legally establish relationship if they want to.  It is ridiculous to believe that,  somehow, by baring such relationships, gay/lesbians relationships would be punished out of existence. However, let's leave "marriage" as it has been for thousands of years.

Chevy Volt's Not So Electrifying Sales

Once again Chevy Volt's sales are disappointing.   Two months ago, there was a lot of left-wing joy in that fact that the Chevy Volt broke the 2,000 mark by setting a sales record of 2,289 cars.   Many in the industry saw this as a new trend that would help General Motors "exceed" its claim that they would sell between 15,000 and 20,000 Volts this year; with sales easily surpassing the high end of that range.  Sadly, sales slipped again last month and the Volt only managed to sell 1.654 vehicles.   What really hurt the Volt was the fact that the competing Toyota Prius Plug-In did so well; beating the Volt sales by 192 cars.

The problem with the Volt and other electric cars is the fact that the electric vehicle (EV) market is a niche market with only a small, limited amount of buyers.  For this reason, more models from more manufacturers only mean that this limited number of buyers will be spreading their buying over an increasing amount choices; and each model's sales will suffer in the process. Being the most expensive of all the electrics, this further limits the Volt's market to an even more limited, wealthier class of buyers.   As a result, the Volt's sales will be further marginalized.  Right now the buyers of EV's are finding the Prius the better buy with a known history of Hybrid/battery technology.  The average price of a Prius EV is only $26,000 as compared to the Chevy alternative at $40,000.   And, whether you buy a Volt or a Prius Plug-In, you still get the same $7500 tax rebate.  For all the above reasons, I think the Volt was a mistake and is ultimately doomed to die; and, not necessarily a slow death.

Oprah, You Break It You OWN It

To me, the worst thing that the supposed "smart lady" of entertainment ever did to her career was to back Barack Obama in 2009.  After doing so, her syndicated show's ratings plummeted.  Now, for over a year, she's struggled to keep her "OWN" fledgling cable channel alive.  But, over the weekend, it was disclosed that the young cable channel is now 1/3 of a billion dollars in the red with no improvement in sight.  Her national, daily audience is only 308,000; despite having cable and satellite access to more than 150 million homes. Those meager audience numbers are pretty disastrous for a person who, with her previous show, garnered 7-1/2 million viewers every day.  Even Oprah's own appearances on her "OWN" channel have not improved ratings.  And, obviously, her choice of Rosie O'Donnell was a major mistake.

Rumors are flying that "OWN" will be scrapped within a year.  This may just prove that people would prefer their "idols" be silent on politics.  With her backing of Obama, Oprah broke "OWN" before it ever went on the air.  Now, historically speaking, she will forever be seen as loser in this foray into cable entertainment.  A sorry reality for someone who once had such an illustrious career.

Why Friday's Employment Report Was Even More Disappointing

According to last Friday's employment report from Obama's Bureau of Labor Statistics (BLS),  the economy only added 119,000 new jobs to the workforce.  In the month prior, it added 120,000 new jobs.  So, in the last two month only 239,000 "new" jobs have been added.  But here's the thing, in a March report, the BLS reported that, as of February, the U.S. had approximately 3.5 million job openings.  Job openings that could all be theoretically filled today with the nation's  unemployed exceeding 12.5 million workers.

For months, Obama  has claimed that the reason so many are unemployed is because corporations are sitting on $2 trillion in cash when they could easily use that money to hire the unemployed.  The fact is that the unemployed have job opportunities but, for one reason or another, aren't seeking out those opportunities.  That's what makes Friday's employment report even more disappointing.

Big Labor Fails Again In Wisconsin

Yesterday, big labor went down in flames, again in Wisconsin.  Their candidate, Democrat Kathleen Falk, who they spent millions on and who was supposed to unseat the sitting Governor, Republican Scott Walker in a June 6th recall election, lost by a margin of 58% to 34% in a primary battle against former Milwaukee Mayor, Democrat Tom Barrett.  Falk wasn't even close and Barrett is seen by the unions as being no different than Walker.   This is the second loss for big labor in Wisconsin.  Back in August of last year they spent millions to recall 3 state senators in what turned out to be another complete waste of money.

Yesterday and last year, just proved that the the labor unions haven't the clout they thought they had.  And, money, alone, isn't always the answer. For the rest of the Republican governors who are fighting excessive union demands, pay, and benefits, this victory should give them cause to press on with their labor reforms.   It showed that the voters are fed up with high pay and benefits for government union workers when, they themselves, are suffering with high unemployment and pay that is almost half that of government workers..

Obama Should Watch Out For The Undecideds

This morning, the national, daily, Rasmussen presidential tracking poll has Mitt Romney beating Barack Obama by five points; 49% to 44%.  As part of that polling, 3% indicated that they were undecided.

Now, in politics there is something called the "Incumbent Rule".  It simply states that, by election time, 80% of those likely voters, who previously declared themselves undecided, will vote against the incumbent and for the challenger.  So, when you see polling data, like the Rasmussen data (above), it is more likely that Mitt Romney is leading Obama by 51% to 44%; actually, a seven point lead.

Always keep this in mind whenever you see head-to-head Obama/Romney polling data.  This is especially important with a poll that has Obama slightly ahead of Mitt Romney.

Another Global Warming Exaggeration Exposed

When Al Gore released his global warming alarmist movie, An Inconvenient Truth, we were told that the world's seas were sure to rise 20 feet by the year 2100 unless we took action to reduce our carbon footprint. Then, just a few years later, that number was revised downward to about 6 feet; this despite very little action taken. In fact, atmospheric carbon levels are at record highs, and only going higher. Now, according to the latest research into the Greenland ice packs, we might see a 12 to 19 inch rise in sea levels by 2100 (click here for the NPR story). At this rate, if we would just hold off doing anything for a few more years, my guess is that scientists will announce that sea levels are actually falling.

Obama Takes Away Our Strategic Advantage in Afghanistan

Last week, President Obama announced a new "strategic" agreement between the United States and Afghanistan covering the time frame from now until 2014 and 10 years beyond.  But, an overlooked part of that agreement may have actually taken away a "key" strategic advantage that we now enjoy and one which actually allowed us to kill Osama Bin Laden.  That advantage is the ability to launch "offensive" drones and air attacks from Afghanistan against Al Qaeda and Taliban strongholds that are located in neighboring Pakistan. 

Within the ten-page agreement, there is this specific clause: "The United States further pledges not to use Afghan territory or facilities as a launching point for attacks against other countries". Obviously, one of the "other countries" that is clearly implied in this statement is Pakistan. But, it also means that we can't launch any attack against another Afghan neighbor, Iran. And, that, to me, gives us a severe strategic disadvantage in the region.

A Socialist President? What Are The French Thinking?

Well, if you don't know by now, Nicolas Sarkozy lost the top job in French politics.  In his place will be an avowed socialist: François Hollande.  Now, if this newly minted socialist President gets his way, my guess is that it won't be long before France wishes they had Sarkozy back, because every economic plan that Hollande has for France is an economy killer.

For one, Hollande plans not to just raise the taxes on the rich, but, instead, he's clearly stated that he wants to "soak the rich".  If you make a million euros or more a year, he plans a 75% tax.  For those making 150,000 euros or more, the tax will be 45%.  Executive pay will be mandatorily limited to 20 times that of the pay of the average worker.  He will increase the Value Added Tax (VAT) on everything people buy to help pay for his new social programs.  He also plans to arbitrarily hire 60,000 additional teachers.  And, the retirement age with full pension benefits will be lowered from 62 to 60 years of age for those working at least 41 years.

Sarkozy lost because the French economy was floundering.  But, there is nothing in the Hollande plan for  that will make the French economy any better. Just more taxes and more spending.  Socialism doesn't work.  It hasn't worked in Venezuela and it won't work in France.  All that will happen is that the wealthy and some businesses will leave the country.  With earlier retirements, pension expenses will eat the country alive. With higher VAT's, consumer spending will be slowed and the economy along with it.  France is already in recession. Hollande will only exacerbate that harsh economic reality.

The Self-Destruction Of Julia

The Obama-Biden campaign website is now offering a slide show entitled: The Life Of Julia. In it, they want to show how Democratic social programs take care of Julia from cradle to grave. What the Obama campaign doesn't tell you is that all those programs supporting Julia, today, may not be there in the future. The fact is that they are costing too much and the debt in support of those programs is moving us closer and closer to a Greek-style bankruptcy. If the number of the "Julia's" continues to grow, we will be broke and the coddled "Life of Julia" will just self-destruct.

Krugman Decries Austerity, Again!

On Sunday, in the article: Austerity Is So Wrong!, New York Times economic columnist, Paul Krugman. once again argued that government spending, not austerity, will "easily and quickly" cause an economy to grow.  But, the best example of why Krugman is "so wrong" is to merely look at Germany as part of the EuroZone.  In 2008, when the recession hit most of the world, Germany suffered greatly because 1/3 of its economy was dependent on exports and the export market had weakened significantly.  Within months however, the economy snapped back quickly.  Today, Germany is the only shining spot in all the EuroZone.  Most of the rest of the countries are either in the throws of recession or teetering on bankruptcy.

Germany flourished when others were still struggling because of the economic recovery programs of Angela Merkel. While it is true that she spent $72 billion dollars in stimulus, it is also true that she cut government spending by nearly twice that amount -- $123 billion -- in austerity programs.  She also convinced labor unions to give up or reduce benefits in what can only be defined as even more austerity.

Germany is now in better shape because they didn't buy into the Keynesian belief that you can simply spend yourself out of a recession.  Something that the likes of Paul Krugman can't get through their heads.

The Browning of Green Technology

While Obama seems to want to double and triple-down on failed and expensive green technologies, the rest of the world is going in the opposite direction.  All across Europe, because of serious debt problems, slowing economies and revenues, and an effort to avoid bankruptcies, governments are considering austerity plans that don't include subsidized wind and solar energy expansion.  Instead, these governments are focusing in on absolutely essential activities.

The same is true in China.  But, China is much different than Europe, in that China's economy is in good health.  So, why not continue government-subsidized wind and solar?  Well, China is no dummy.  They can see that the world is jumping off the solar and wind bandwagon.  They know that one of Spain's biggest reasons for being on the brink of bankruptcy was its push to be the world leader in wind power. The Chinese government knows that the best thing it can do is provide cheap energy for its people and its growing businesses.  After all, it was cheap energy that made the United States such an economic powerhouse.  So, now, that country is investing in oil, nuclear, hydro-electric, and natural gas.

Without government-support, green technologies are doomed.  Green is non-competitive and too expensive  to stand on its lonesome when going up against the cheapness of coal, natural gas, and gasoline in producing energy. Increasingly, the climate science that was supposed to drive "green" is being found to be greatly flawed.

The news articles in support of the above opinion are as follows:

• Time.com: "Will Austerity Derail Europe's Clean-Energy Movement?"
• The Daily Caller.com: "China slows solar, wind expansion undermining White House green PR strategy"

Liking and Voting For Obama Are Too Different Things

Last Thursday's Gallup daily tracking poll gave Obama a 51% approval rating; the highest in weeks and probably due to all the Bin Laden "kill" hype during that week But, on that same day, in a head-to-head election match-up against Romney, the same Gallup polling only gave Obama a single point advantage: 46% to Romney's 45%. Between the job approval rate and Obama's reelection polling, there was a 6 percentage point differential. This just proves that some voters are confusing job approval with likeability. As a result, when it comes to actually reelecting Obama, those same voters appear to be siding with Romney. A fact that should make Obama very, very nervous.

California's Taking A Bullet Train To Its Head

On a near daily basis, people and businesses are leaving California to find new homes and new places  without high taxes and government spending, environmental nonsense, and absolutely out-of-control regulations. It's as if the ghost of Horace Greeley has come back to say: "Go East young man. Go East!"  And when they do leave, they take their tax base with them; leaving California with a declining source of revenue.  So, in response to the exodus, Governor Jerry Brown wants to raise taxes even higher in an attempt to close the gap on an already estimated $10 billion budget deficit for this year.  With the 3rd highest state income tax rates in the nation, Brown seems to be hell bent on being numero uno; guaranteeing that California has the worst business climate of all the states.

Now, you would think that, with all the debt and deficit problems and with people exiting due to over-regulation and taxing, the California legislature and Governor Brown would be working overtime to reduce spending.  But, no.  California continues to do what it's always done: spend and regulate.  In fact, Jerry Brown's latest foray into extravagance is a proposed, taxpayer-funded $100 billion bullet train from L.A. to San Francisco.

Big labor is all for California taking the "bullet" because this 10-year project means a lot of union jobs.   The environmentalists see it as a way of keeping cars off the roads and airplanes out of the air. However, the fact that this project will cost Californians $10 billion a year in money they don't have seems to go right over the politician's heads.  California is already running a $10 billion budget deficit and this project will double that. The fact that bullet trains have only proven themselves cost effective against other modes of transport over short distances -- 40 miles or less -- without serious government subsidies, also doesn't seem to have Jerry Brown and other Democrats losing any sleep. Nor does it seem to matter that a tax-payer subsidized bullet train will actually reduce state income tax and, in addition, cause airlines to cut back on flights causing a further loss of revenue.

California is already near bankruptcy and, if the bullet train project is actually approved, it could very well push the state over the edge into financial default.  What concerns me is that, when California does default, the state will likely seek a bailout from Washington, and, you can bet that big spending Obama and other Democrats will be glad to oblige; and, my guess is, without any real austerity mandates.  So, ultimately, California will be rewarded for its irresponsible handling of its state government, with the rest of the country having to pony-up the cash to bail them out.

How To Lower The Unemployment Rate By Only Adding 119,000 New Jobs

This morning, the nation's unemployment rate dropped from 8.2% to 8.1%.  In order for that to have happened, the economy should have added more than 450,000 new jobs.  But, instead, only 119,000 were added last month.  So, how was the unemployment rate able to improve?  Well, it was all because 522,000 workers just gave up looking for work last month and were no longer considered part of the workforce.  Because of this, the April could have actually "lost" 72,000 jobs and the unemployment rate would still have fallen to 8.1%.

Sadly, this morning's reported unemployment rate is a pure distortion from which Mr. Obama is unjustly benefiting.

Obama Courts The Youth Vote?

In 2008, Obama won, thanks in part, to a lot of 18 to 24 year olds who registered and voted for him. This was quite the feat since, customarily, youths have low voter registration and election day turnout rates. Many of those young people voted for him on the simple basis that they felt Obama understood them and would help them.   But, today things are different. America's youth is heavily unemployed and Obama's lack of sound economic policies have done nothing to improve that situation.

Black youths have been hit the hardest with the unemployment rate for men at 37% and women 24%.  Overall, for 18 to 24 year olds it is close to 19%; compared to the 8.2% among all age groups. Then, according to a recent Associated Press report, 1 out of every 2 college graduates is either unemployed or underemployed in jobs that fall well below their education skills; with many of the underemployed working in part-time jobs.

So, obviously Obama has a youth problem; and, he knows it.  That fact was born out by this week's desperate campaign attempt to win back the college voter by visiting 3 campuses and calling for Congress to extend the low 3.4% loan rate for federal college loans.  But, whether I'm in college now or have recently graduated, I would be less concerned about my student loan "rate" and a lot more concerned as to whether or not I'll even get a job to pay for it.

The Dying Middle Class Under Obama

In 2008, the campaigning Barack Obama blamed George Bush and Republican policies for the decline of the middle class.  However, since taking office, he has overseen a massive decline in the incomes of the average middle class family; a loss in incomes to the tune of $4300 a year (Click for story).  

For the middle class, it isn't just the take-home pay that is killing their lifestyle.  They are also getting squeezed at the gasoline pump; at the grocery stores; in their electricity costs, and in paying their local and state tax bills.  Altogether, my guess is that the average middle class family is more than $7,000 a year "less better off" than they were when Obama took office.  And, for the working poor, the impact is even more hurtful. 

Obama failed to correct the economy and stem the loss of jobs and home values.  His spending policies failed to stem unemployment and only drove prices up.  Yet, with all the economic problems facing America, the President, instead, focused in on a massive takeover of health care.  Only a fool would want to reelect this man.

Would Obama Have Even Gone To War In Afghanistan Over Bin Laden?

This week, the big political flap is over Barack Obama's campaign ad which implies that Mitt Romney would "not" have taken the shot to kill Osama Bin Laden if he had the chance.  But, I pose a different question.  Would Obama, if he were in George Bush's place, gone after Bin Laden and Al Qaeda by going to war with Afghanistan? Or, would the obvious anti-war Democrat and constitutional lawyer, consider the attack on the World Trade Center a civil problem?  A civil problem and a police problem because Osama Bin Laden and Al Qaeda had no true "alliances" to any one country.  In my mind, I think the latter is true.  As a consequence, I think they would still be flourishing in Afghanistan today.  At best, Bin Laden, thanks to Obama's timidity, might only have wound up on the FBI's Most Wanted list with a bounty on his head.

But, for me to think that would be "pure and unwarranted" speculation.  Just as it is "pure and unwarranted" speculation to think that Mitt Romney would "not" have taken the opportunity to kill Osama Bin Laden.  I think this is why so many, including Democrats, are being critical of the President over the assumption made in that campaign commercial.  Further, I think people are turned off when they see a sitting President try to take singular credit for something that took more than 10 years to  accomplish with hundreds, if not thousands, of people involved in giving Obama a chance to take that historic shot. That, to me, only diminishes this Presidency.

Biden: Bin Laden Is Dead, GM Is Alive

Ahead of the one-year anniversary of the Bin Laden raid, Vice President Joe Biden proudly declared: "Bin Laden is dead, GM is alive."

Now, I'll buy Obama/Biden taking credit for the Bin Laden killing.  But, as far as GM being alive, the qualifier should be "just barely".   While the company looks profitable on paper, let's not forget that this profitability came at a very high cost to the taxpayer's with a $56 billion bailout.  At the same time, prior stockholders and creditors were literally thrown under the bus with Obama handing ownership over to the unions and the U.S. Treasury. And, with the stock price floundering, it looks like it will be a very long time before the taxpayer will get any of its money back.

However, lurking just below the surface, GM has a major problem that could, again, put that company into serious financial trouble. That problem is underfunded pension funds.  As of the end of last year, it was estimated that GM's pension funds were short $31 billion dollars; growing from a $22 billion deficit at the end of 2010.  That was a net deficit increase of $9 billion in just one year and far greater than the $7.6 billion in GM's profits for that same year.  What's more disturbing is the fact that, based on stock price, the total value of the company barely exceeds its pension deficit at the end of 2011.

Unless GM can get some concessions on existing pension liabilities, that company will be right back facing bankruptcy in as little as two years.  That's because the pension fund payouts are rising much faster than GM's profits and its contributions to pension funding.   This pension problem is one of the reasons that GM's stock price is floundering.   A problem that will only get worse with time.