{"id":4866,"date":"2012-03-14T22:40:28","date_gmt":"2012-03-15T02:40:28","guid":{"rendered":"http:\/\/www.thedailygouge.com\/?p=4866"},"modified":"2012-03-14T22:40:28","modified_gmt":"2012-03-15T02:40:28","slug":"the-daily-gouge-thursday-march-15th-2012","status":"publish","type":"post","link":"https:\/\/www.thedailygouge.com\/?p=4866","title":{"rendered":"The Daily Gouge, Thursday, March 15th, 2012"},"content":{"rendered":"

It’s Thursday, March 15th, 2012….and here’s The Gouge!<\/strong><\/p>\n

First up, James Pethokoukis, courtesy of Conn Carroll and writing in The American<\/em>, summarizes….<\/strong><\/p>\n

The entire Obama presidency, in one anecdote<\/span><\/h1>\n

 <\/p>\n

One of my favorite moments from the new book\u00a0The Escape Artists: How Obama\u2019s Team Fumbled the Recovery<\/em>:<\/p>\n

Energy was a particular obsession of the president-elect\u2019s, and therefore a particular source of frustration. Week after week, [White House economic adviser Christina] Romer would march in with an estimate of the jobs all the investments in clean energy would produce; week after week, Obama would send her back to check the numbers. \u201cI d<\/span>on\u2019t get it<\/span>,\u201d he\u2019d say. \u201cWe make these large-scale investments in infrastructure. What do you mean, there are no jobs<\/span>?\u201d<\/strong><\/span> But the numbers rarely budged.<\/em><\/p><\/blockquote>\n

Now let\u2019s fast forward to this\u00a0past September:<\/p>\n

A $38.6 billion loan guarantee program that the Obama administration promised would create or save 65,000 jobs has created just a few thousand jobs two years after it began, government records show.\u00a0The program \u2014 designed to jump-start the nation\u2019s clean technology industry by giving energy companies access to low-cost, government-backed loans \u2014 has directly created 3,545 new, permanent jobs after giving out almost half the allocated amount, according to Energy Department tallies.<\/em><\/p><\/blockquote>\n

So where are the new jobs coming from, at least the good-paying ones? From the industry Obama wants to replace as much as possible with \u201cclean\u201d energy: oil and gas<\/em><\/span>.<\/span><\/strong><\/span> A new report from the World Economic Forum estimates the sectors \u201cadded approximately 150,000 jobs in 2011, 9% of all jobs created in the United States that year.\u201d<\/p>\n

Those numbers are even more impressive once you realize that some 40% of all new jobs are being added in low-pay sectors such as retailing and leisure.\u00a0So nearly 20% of new \u201cgood jobs\u201d are in oil and gas.<\/p>\n

So much for those who so desperately wish, as does Steve Boss’ liberal friend, to crown The Obamao the world’s smartest man.\u00a0 B. Hussein reminds us of the scene from Hitchcock’s Torn Curtain<\/em> where Ludwig Donath says to Paul Newman<\/em>, “You told me nothing….you KNOW nothing!”<\/strong><\/p>\n

Then again, he’s a community organizer from Chicago….how much can he really know?!?<\/strong><\/p>\n

For more on the arrogance of a man who knows nothing and has done nothing, check out the video clip #3 on our home page at www.thedailygouge.com.
\n<\/strong><\/p>\n

In a related item, the WSJ<\/em>‘s Dan Henninger details the reincarnation of Harry Houdini:<\/strong><\/p>\n

The Magician<\/span><\/h1>\n

In a re-election year, the U.S. president is making the world and all its troubles . . . vanish.<\/span><\/h3>\n

 <\/p>\n

Don’t get too distracted by the Republicans’ road-tour version of the 2012 presidential election as it hits theaters in the likes of Mississippi, Alabama, Hawaii and Illinois. The best show in town still plays daily at 1600 Pennsylvania Avenue. If maestro Barack Obama wins re-election this fall, we will have watched one of the greatest magic acts in American history.<\/span><\/strong><\/span><\/p>\n

The new Obama magic show debuted in the State of the Union speech. Standing before Congress, Mr. Obama brought forth “An Economy Built to Last.”<\/span> Not the real one we have now (Or anywhere close to reality!)<\/span>, but the one he’s going to conjure after he’s re-elected.<\/strong><\/span><\/p>\n

The way this works is the president breaks economic history into two parts. In his right hand are the awful policy mistakes someone else made before January 2009.<\/span> In his left hand is the economy he’ll bring to life after November. In between is nothing<\/em><\/span>.<\/span> You think you’re looking at the Obama years from 2009 to 2012\u20148% unemployment, low growth, low investment\u2014when whoa, it’s gone<\/em><\/span>! Never happened<\/span>.<\/span><\/em><\/strong><\/span><\/p>\n

The best was yet to come.<\/span> The president of the United States is making the world itself and all its troubles . . . vanish.<\/strong><\/span><\/p>\n

Iraq, Afghanistan, Iran, Syria, Pakistan, North Korea\u2014one by one, Mr. Obama and his lovely assistants have methodically taken them all off the table. If he can make the world’s problems seem to go away until he gets re-elected, it will constitute his presidency’s greatest illusion.<\/span><\/strong><\/span><\/p>\n

Iraq went away in October, when Mr. Obama announced that all U.S. troops would be out of there by year’s end. Not most of them; all of them. This would be the first major war theater in modern times that the U.S. departed without leaving behind any presence. The argument in defense of this total troop wipeout is that Iraqi Prime Minister Nouri al-Maliki demanded the U.S. waive prosecution immunity for any of our forces still there. The counter-argument is that the U.S. lost all leverage with Iraq’s government because of Mr. Obama’s passivity toward the place and its problems. Iraq fell to next to nothing.<\/span> Remarkable.<\/strong><\/span><\/p>\n

In December 2009, Mr. Obama announced that the U.S. would surge 30,000 troops to Afghanistan. In the real world this is known as a commitment. The strategy was succeeding in strategically important Helmand and Kandahar provinces in the South. Then this past June, Mr. Obama announced he would pull these troops out of Afghanistan by this summer, likely in time for his August renomination speech in Charlotte. The U.S.’s Afghan commitment has been polling poorly.<\/span><\/strong><\/span><\/p>\n

This of course doesn’t mean the Afghan Taliban will disappear. The magic stops at the water’s edge. The Taliban’s plans to re-overthrow the Afghan government in Kabul will go forward. But Afghanistan as an issue is sliding off the table.<\/p>\n

One year ago, Syria’s Bashar al-Assad began to methodically kill anyone publicly opposed to his rule. Like the criminal warlord Keyser S\u00f6ze in “The Usual Suspects,” Assad is killing them, their wives, their children, their relatives, demolishing their homes and razing their towns. The world wants to help.<\/p>\n

Evoking the Libyan intervention, the Obama administration says we can’t help, because we don’t have a U.N. Security Council resolution.<\/span> Russia and China won’t let that happen. Our hands are tied.<\/span> Syria is off the table.<\/strong><\/span><\/p>\n

Amid informed fears that Iran’s nuclear program is moving close to weapons-producing capability and a pre-emptive strike by Israel, President Obama gave a hawkish speech on Iran to the American Israel Public Affairs Committee, told a reporter “I don’t bluff,” and met with Israeli Prime Minister Benjamin Netanyahu. Watching from the pundit gallery, writer Vali Nasr concluded on Bloomberg News: “Last week, President Barack Obama skillfully shifted the debate on Iran, pushing back against ‘idle talk of war’ and making the case for diplomacy.” The centrifuges are still spinning, but Iran is off the table.<\/span><\/strong><\/span><\/p>\n

Earlier this month, North Korea, the ever-volatile nuclear power, said it would suspend its uranium-enrichment program and missile tests in return for the Obama administration’s decision to deliver 240,000 metric tons of food aid. China’s government praised the food package as a prelude to resuming the stalled six-party talks.<\/p>\n

Specialists noted that this was the first time the U.S. has ever linked humanitarian assistance to inducing North Korean participation in talks. No matter.<\/span> This should take North Korea off the table until November.<\/strong><\/span><\/p>\n

It’s an amazing feat<\/em><\/span>. At home and overseas, Barack Obama has just erased three years of rough spots from the hard disc of politics.<\/span><\/strong> It will be more remarkable still if the Republicans, amid a war-weary public, go along with the illusion.<\/strong><\/span> The world, alas, may not. For America’s onlooking competitors and adversaries in Tehran, Beijing, Moscow, Pyongyang and Waziristan, a U.S. president’s magic act is for them a very real opportunity<\/em><\/span>.<\/strong><\/span><\/p>\n

But let’s be honest; none of Tick-Tock’s sleight-of-hand….not ONE trick….could have been successful without the complete complicity of a MSM willing to sell its soul to ensure their divinity a second term.<\/strong><\/p>\n

Next up, courtesy of Speed Mach, when even the New York Times<\/em>‘ Joe Nocera’s asking the question, you KNOW the Dims ain’t gonna like the correct answer:
\n<\/strong><\/p>\n

Is MF Global Getting a Free Pass?<\/span><\/h1>\n

 <\/p>\n

\"\"<\/a><\/p>\n

It\u2019s sure starting to look as if Jon Corzine is going to get away with it.<\/p>\n

By now, it has been well established that Corzine\u2019s former firm, MF Global, committed the sin of sins for a broker-dealer. In late October, during the final, desperate days before it entered bankruptcy proceedings, its executives took money from segregated customer accounts \u2014 money that belonged not to MF Global but to the farmers and commodities traders that were its clients \u2014 and used it to prop up its rapidly collapsing business. Nor was this petty cash: of the $6.9 billion in customer assets that MF Global held, a stunning $1.6 billion is missing. There is virtually no chance that the full amount will ever be recovered.<\/strong><\/span><\/p>\n

Let\u2019s not mince words here. <\/span>These executives committed a crime<\/span><\/em>.<\/span> Virtually every knowing violation of the Commodities Exchange Act is a crime, but taking money from segregated customer accounts is at the top of the list.<\/span><\/strong> And for good reason.<\/strong><\/span> Customer money is supposed to be sacrosanct. If a broker-dealer goes bankrupt, the segregated accounts are supposed to remain safe, a little like the way bank deposits remain protected if a bank goes under. Indeed, customers need to be able to trust the fact that their money is segregated and protected at all times. Otherwise, the markets can\u2019t function.<\/p>\n

\n

Yet, a few weeks ago, Azam Ahmed and Ben Protess, who have done a remarkable job covering the MF Global bankruptcy for The Times, wrote an article suggesting that prosecutors were having trouble putting together a criminal case against anyone at MF Global. So far, wrote Ahmed and Protess, they\u2019d been \u201cunable to find a smoking gun.\u201d<\/span> In fact, they continued, \u201ca number of federal prosecutors have expressed doubts\u201d that MF Global \u201cintentionally misused customer money.\u201d<\/span> Apparently, the current theory is that it was all just a big accident, the chaos of those final days causing the firm\u2019s executives to tap into customer funds without realizing it.<\/span><\/strong><\/p>\n

Excuse me while I roll my eyes. Of course there isn\u2019t a smoking gun.<\/span> As a general rule, financial professionals tend not to write e-mails that say, \u201cHey, we\u2019re desperate. Let\u2019s break into the customer accounts<\/em><\/span>!\u201d<\/span> And, of course, they are always going to say it was unintentional.<\/span> They are saying it already, starting with Corzine, who told Congress last year that \u201cthere was no intention to violate segregation rules.\u201d<\/span><\/strong><\/p>\n

As for the chaos, you bet it was chaotic at the end. How could it not have been? Last month, James W. Giddens, the bankruptcy trustee for the broker-dealer arm of MF Global, issued a report that vividly described the scene: \u201cThe rush to meet funding needs … led to billions of dollars in securities sales, draws on credit facilities and a web of intercompany loans. … The company\u2019s computer systems and employees had trouble keeping up. … A number of transactions were recorded erroneously or not at all. …\u201d And so on.<\/p>\n

Well, fine. But is it really plausible that you can take $1.6 billion \u2014 nearly 25 percent of the customer assets under management \u2014 and not know you\u2019ve used customer money?<\/span> It is not<\/em><\/span>.<\/strong><\/span> One theory, which is implicitly suggested in the trustee\u2019s report, is that the executives \u201cborrowed\u201d the money thinking they would be able to replace the funds quickly, which they then couldn\u2019t because the counterparties wouldn\u2019t give back the collateral. That\u2019s still a crime<\/em><\/span>.<\/span><\/strong><\/span><\/p>\n

I understand that bringing complex financial cases in front of a jury is not easy. But what prosecutors don\u2019t seem to understand is that the country needs them to bring these cases. When they took a pass on Angelo Mozilo, the former chairman and chief executive of Countrywide, and Richard Fuld, who was chief executive of Lehman Brothers when it went bankrupt, they sent a signal that the highly paid executives who gave us the financial crisis would not be held to account.<\/strong><\/span><\/p>\n

A failure to prosecute anyone at MF Global would be, if anything, even worse.<\/span> It would mean that executives at a broker-dealer can indeed steal customer money and get away with it \u2014 so long as it was \u201cunintentional.\u201d<\/span><\/strong><\/span> And it would only deepen the cynicism so many people feel about government. I\u2019ve heard it suggested, for instance, that the Justice Department won\u2019t prosecute Corzine because it would hurt President Obama. (Corzine, the former governor of New Jersey, had been a big fund-raiser for the president.) I don\u2019t happen to subscribe to that theory, but I certainly understand why others might.<\/p>\n

To be sure, it is early yet. Federal investigators are still digging into the facts surrounding MF Global\u2019s failure, no doubt searching for that elusive smoking gun. But if, in the end, they decide they can\u2019t make a case, I hope they understand what they are telling the rest of us<\/em><\/span>.<\/strong><\/span> Giving the big guys a pass isn\u2019t good for the financial markets. And it isn\u2019t good for democracy either.<\/p>\n<\/div>\n

\"\"<\/a><\/p>\n

As Jimmy Malone said in The Untouchables<\/em>, “Welcome to Chicago; this town stinks like a whorehouse at low tide.”\u00a0 Things haven’t changed.<\/strong><\/p>\n

In a related item from “Economics in One Lesson”, circa 1946, Henry Hazlitt confirms Liberals know as little now as they knew then:<\/strong><\/p>\n

There is a strange idea abroad, held by all monetary cranks, that credit is something a banker gives to a man. Credit, on the contrary, is something a man already has.<\/strong><\/span> He has it, perhaps, because he already has marketable assets of a greater cash value than the loan for which he is asking. Or he has it because his character and past record have earned it. He brings it into the bank with him. That is why the banker makes him the loan. The banker is not giving something for nothing. He feels assured of repayment. He is merely exchanging a more liquid form of asset or credit for a less liquid form. . . .<\/p>\n

Now it is to A, let us say, who has credit, that the banker would make his loan. But the government goes into the lending business in a charitable frame of mind because, as we saw, it is worried about B. B cannot get a mortgage or other loans from private lenders because he does not have credit with them. He has no savings; he has no impressive record as a good farmer; he is perhaps at the moment on relief. Why not, say the advocates of government credit, make him a useful and productive member of society by lending him enough for a farm and a mule or tractor and setting him up in business?<\/p>\n

Perhaps in an individual case it may work out all right. But it is obvious that in general the people selected by these government standards will be poorer risks than the people selected by private standards.<\/span><\/strong><\/span> More money will be lost by loans to them. . . . [T]he recipients of government credit will get their farms and tractors at the expense of what otherwise would have been the recipients of private credit.<\/span><\/strong><\/span><\/p>\n

And in the Environmental Moment, courtesy today of Jeff Foutch, another example of why, as The Obamao promised, the cost of energy would necessarily rise under his Administration:<\/span><\/span><\/strong><\/p>\n

Government-subsidized green light bulb carries costly price tag<\/span><\/h1>\n

 <\/p>\n

\"\"<\/a><\/p>\n

The U.S. government last year announced a $10 million award, dubbed the \u201cL Prize,\u201d for any manufacturer that could create a \u201cgreen\u201d but affordable light bulb.<\/p>\n

\n
\n

Energy Secretary Steven Chu said the prize would spur industry to offer the costly bulbs, known as LEDs, at prices \u201caffordable for American families<\/em><\/span>.\u201d There was also a \u201cBuy America\u201d component.<\/span> Portions of the bulb would have to be made in the United States.<\/strong><\/span><\/p>\n<\/article>\n<\/div>\n

\n
Now the winning bulb is on the market. The price is $50<\/em><\/span>.<\/span> Retailers said the bulb, made by Philips, is likely to be too pricey to have broad appeal.<\/span> Similar LED bulbs are less than half the cost<\/em><\/span>.<\/strong><\/span><\/div>\n<\/div>\n
\n
\n

\u201cI don\u2019t want to say it\u2019s exorbitant, but if a customer is only looking at the price, they could come to that conclusion<\/em><\/span>,\u201d said Brad Paulsen, merchant for the light-bulb category at Home Depot, the largest U.S. seller of light bulbs. \u201cThis is a Cadillac product, and that\u2019s why you have a premium on it.\u201d (Seriously….who on earth needs a “Cadillac” lightbulb?!?)<\/span><\/span><\/strong><\/span><\/p>\n

How the expensive bulb won a $10 million government prize meant to foster energy-efficient affordability is one of the curiosities that arise as the country undergoes a massive, mandated turnover from traditional incandescent lamps to more energy-<\/strong><\/span>efficient ones.<\/strong><\/span><\/p>\n

Energy legislation signed by President George W. Bush in 2007 introduced a ban on inefficient incandescent light bulbs, covering traditional 100-watt bulbs this year. Sales of traditional 75-watt incandescents will be prohibited next year, and 60-watt incandescents will go after that. (Yet another reason to say, “Hey, George….”<\/span><\/strong><\/p>\n