Week in Review Part IV: Random Musings

There is still mass confusion over the Republican primary schedule, thanks to Florida’s decision to move their date up to Jan. 31. South Carolina is now Jan. 21. Nevada’s caucuses Jan. 14 and Iowa announced this week that its caucuses would be Jan. 3. So that leaves New Hampshire.

The problem is the state has certain laws mandating that New Hampshire be the first primary, but that it also be held seven days ahead of the next one or caucuses. New Hampshire could thus hold the primary on Jan. 7, but this doesn’t allow enough time after Iowa. So New Hampshire could move to December, like Dec. 3 and 10 are being thought of.

The easy step would be for Nevada to move to Jan. 17 and allow New Hampshire to hold its primary Jan. 10, but Nevada, like Florida before it, is playing the role of a-hole. On the other hand, New Hampshire should just hold it Jan. 10, retain some goodwill, and be done with it.

--In a new AP-GfK poll, Mitt Romney was the choice of 30% of Republicans, with Herman Cain next at 26% and Rick Perry at just 13%. Among all adults surveyed, half said President Obama should not be re-elected, while 46% said he should be. In hypothetical head-to-head matchups, Obama edges Romney, 48-45, while the president takes Cain 49-43, and Perry 51-42. [Obama has an overall job approval rating in the poll of 46%.]

Significantly, among all adults, Romney’s favorability rating has risen ten points since August to 49%.

The above polling data was taken in the days before this week’s Nevada GOP debate.
John Podhoretz / New York Post

“At the moment about half an hour into last night’s Republican candidate kerfuffle when it looked (seriously) like Mitt Romney and Rick Perry might haul off and start busting each other in the bazoo, it became clear that the Emmy for Best New Television Drama should go to the weekly series called ‘The Republican Presidential Debates.’….

“Those who are still in mourning for the series ‘Lost’ have finally found their new obsession: The story of eight mysterious strangers trapped in an alternate reality trying to figure out how to escape an endless series of convention centers and cable channels by finally getting transported to the snows of Iowa and New Hampshire for judgment by the most mysterious force of all: The Republican primary voter….

“As for Herman Cain, the first 20 minutes of the debate was taken up with the glaring difficulties with his 9-9-9 tax plan, which he himself could not defend. Later he seemed unaware of or unclear about something he had said earlier in the day about prisoner swaps.

“Cain’s moment is fast coming to an end. Perry got himself a second wind – a faint one.

“And Mitt Romney is still the name above the title. The next debate isn’t until November. I’m speaking without irony as a television watcher when I say I’m very, very sad about that.”

Economist Arthur B. Laffer / Wall Street Journal…on Herman Cain’s 9-9-9.

“The whole purpose of a flat tax, a la 9-9-9, is to lower marginal tax rates and simplify the tax code. With lower marginal tax rates (and boy will marginal tax rates be lower with the 9-9-9 plan), both the demand for and the supply of labor and capital will increase. Output will soar, as will jobs. Tax revenues will also increase enormously – not because tax rates have increased, but because marginal tax rates have decreased.

“By making the tax code a lot simpler, we’d allow individuals and businesses to spend a lot less on maintaining tax records; filing taxes; hiring lawyers, accountants and tax-deferral experts; and lobbying Congress….

“Still, a number of my fellow economists don’t like the retail sales component of the 9-9-9 plan. They argue that, once in place, the retail rate could be raised to the moon. They are correct, but what they miss is that any tax could be instituted in the future at a higher rate. If I could figure a way to stop future Congresses from ever raising taxes I’d do it every day of the week and twice on Sunday. Until then, let’s not make the perfect the enemy of the good.”

[On Friday, Cain began tweaking his plan to exempt those below the poverty level from the 9% income tax, or 9-0-9. I was so frustrated watching Cain during the Nevada debate because he didn’t come close to spelling out the positives. It’s clear from the polls the people want the system blown up. He has a winning issue, Cain just needs a good adviser to show him how to sell it.]

--Speaking of the Nevada debate, where Rick Santorum lambasted Mitt Romney for his health-care record as Massachusetts governor, the Wall Street Journal opined:

“(Mr. Romney) did previously promote his plan as a model until Democrats took his advice. ‘How much of our health-care plan applies to other states? A lot,’ he wrote in these pages in 2006. Mr. Romney repeated those sentiments in the hardcover version of his book ‘No Apology,’ though he cut them from the paperback.

“But the larger and more important point is that Mr. Romney continues to defend his Massachusetts plan as a success for precisely the same reasons that President Obama says it should be imposed on all states. In reality, the Massachusetts plan is not a success and its problems are the best refutation of the duo’s arguments.

“Here’s Mr. Romney Tuesday night: ‘What we do is rely on private insurers, and people – 93% of our people who are already insured, nothing changed. For the people who didn’t have insurance, they get private insurance, not government insurance.’

“Here’s Mr. Obama in his health-care speech to Congress in 2009: ‘If you are among the hundreds of millions of Americans who already have health insurance through your job, Medicare, Medicaid, or the VA, nothing in this plan will require you or your employer to change the coverage or the doctor you have.’ And the uninsured, Mr. Obama continued, would simply receive ‘affordable choices’ from ‘private insurers.’

“The trouble with the Obama-Romney definition of ‘affordable’ is that in practice it means subsidies, and once the government provides ‘free’ health care, the private sector and entitlement state are fungible. Government inevitably dictates choices that used to be left to markets, as Mr. Santorum and Newt Gingrich pointed out. And, sure enough, due to the subsidy gusher that Mr. Romney opened, Massachusetts is now moving to impose price controls on private insurance and tightly regulate the type of care patients can receive….

“Mr. Romney has every right to cling to theories that were flawed in conception and have proven false in practice, though the rest of the GOP field has the responsibility to challenge his canned answers. The mental contortions that his health-care record requires need to be dissected – the way Mr. Obama will do if Mr. Romney is the nominee – to give GOP voters a chance to weigh the political liabilities that his candidacy might pose in 2012….

“Mr. Obama’s unbridled expansion of government means that the election will present the electorate with the largest philosophical choice since 1980: To continue the trend toward a larger and growing government and the ever-higher taxes to pay for it, or to modernize the 20th century’s broken government institutions. Republicans do not want to wake up in 2012 to discover that they have nominated someone who is unprepared, and maybe unwilling, to lead the reform of government that America needs.”

--Bye-bye Michele Bachmann as her New Hampshire staff quit on Friday, citing frustration with her lack of commitment to campaigning there.

--In a CNN/Opinion Research poll just 42% of Democrats said they were either “extremely” or “very” enthusiastic about the 2012 vote. In the spring and summer, the same CNN surveys had 56% and 55% of Democrats, respectively, in the “extremely” or “very” enthusiastic categories. Not a good sign for the donkeys.

Contrast that with Republicans, who in the same two categories registered 64% in the spring, and then an equal 64% this month. So the enthusiasm gap between Republicans and Democrats went from 8 points in the spring to 22 points today.

--Mort Zuckerman, publisher of U.S. News and World Report, told the Wall Street Journal’s James Freeman of his experience dealing with President Ronald Reagan after one of U.S. News’ correspondents, Nicholas Daniloff, was seized without warning by the KGB.

“I worked in the White House for the next four weeks virtually every day and through that I met Reagan,” says Mr. Zuckerman. Reagan secured Mr. Daniloff’s release in a swap that included a Soviet spy held in the U.S.

“Reagan surprised me,” says Mr. Zuckerman. “He got the point of every argument…He was very decisive. And everybody loved working for him. They followed his lead because they really respected his decisiveness and his instincts.

“I was not a Republican and I was not an admirer of his before I knew him, and you know, Harry Truman had a wonderful definition for the presidency. He said the president has to be someone who can persuade the American people to do what they don’t want to do and to like it. And that’s what you have to do. Somebody like Reagan had that authority. He was liked so much and he had a kind of moral authority. That’s what this president (Obama) has lost.

“Democracy does not work without the right leadership, and you can’t play politics. The country has got to come to the conclusion at some point that what you’re doing is not just because of an ideology or politics but for the interests of the country.”
--Robert Samuelson / Washington Post

“A specter haunts America: downward mobility. Every generation, we believe, should live better than its predecessor. By and large, Americans still embrace that promise. A Pew survey earlier this year found that 48% of respondents felt that their children’s living standards would exceed their own. Although that’s down from 61% in 2002, it’s on a par with the mid-1990s. But these expectations could be dashed. For young Americans, the future could be dimmer….

“In the Pew poll, 54% of respondents with a high-school diploma or less felt their children would do better; only 35% of graduate school alums agreed. ‘A kind of depression has set in,’ writes Washington Post columnist Richard Cohen. ‘We’ve lost our mojo, our groove.’

“It can be argued that all this glumness repeats a historical error: projecting the present onto the future. Just because the economy is rotten today doesn’t mean that it will always be. After World War II, the Nobel Prize-winning economist Robert Fogel has recalled, there was widespread ‘alarm about massive unemployment.’ Eleven million veterans and 9 million defense industry workers had to be re-employed. People feared a new Depression. It didn’t happen, because pent-up demand for homes, cars and appliances fueled a hiring boom.

“Unfortunately, this caveat is only half relevant now. Our future would certainly be brighter if the economy resumed strong growth, but that wouldn’t automatically ensure higher living standards. A society generates those through productivity – increases in efficiency, technology or business organization that lower costs or enable firms to pay higher wages. Without higher productivity, broad living standards won’t rise. But even with it, the young may not enjoy gains.

“The explanation is that productivity improvements have already been committed to demographic trends we can’t alter (aging) or problems we haven’t addressed (runaway health costs, deteriorating infrastructure). Future productivity and income gains will be diverted to these uses: higher taxes to pay for an older population; health spending; and taxes and fees to repair roads, schools and water systems.

“It’s already happening. ‘A decade of health care cost growth has wiped out real income gains for an average U.S. family,’ report two Rand Corp. researchers in the journal Health Affairs….

“Meanwhile, spendable incomes – what people consider their living standards – stagnate. The squeeze will continue. In 1990, there were 32 million Americans 65 and over; by 2040, that’s reckoned at 80 million. Rising costs for Social Security and Medicare have created a new political dynamic: If benefits for the elderly aren’t cut, burdens on the young will go up. Decaying infrastructure poses similar choices. Either pay for repairs or tolerate substandard roads and dilapidated schools.

“Our children’s futures have been heavily mortgaged….If today’s weak recovery persists, the outlook darkens….

“America is a competitive society. It’s not guaranteed that children achieve their parents’ relative economic status: The children of parents in the richest 20% won’t automatically stay in the richest 20%. Some children advance; some fall. But if overall incomes are rising, even those who don’t advance relatively often have higher absolute incomes than their parents. Studies by the Pew Economic Mobility Project confirm this. Two-thirds of Americans have higher incomes than their parents…

“Generational gains tempered individual setbacks. We may now lose this comforting cushion. Our leaders might try to avoid that by boosting economic growth, controlling health spending and trimming benefits for the elderly. But we aren’t sure how to do the first and lack the political will to do the second and third. The future is never entirely predictable, but downward mobility is not just a scary sound bite. It’s a real possibility.”

--Michael Goodwin / New York Post…on the Occupy Wall Street movement:

“Each day, about 3.7 million people go to work in New York City. For the last month, fewer than 500 people have been sleeping in a park near Wall Street so they can curse the economy that produces all those jobs for all those people.

“Guess which group is getting expressions of sympathy and even solidarity from the president to the mayor?

“The demonstrators include open anti-Semites, homeless people and anarchists, along with students, trust-fund babies and the terminally bored. They are supported by municipal unions and other leftist groups, whose agendas run the gamut from higher taxes to higher taxes….

“When times are tough, the tough don’t quit work so they can complain. And the people who really want a job aren’t playing drums in a park, getting stoned and taunting cops.

“Too many protesters, with their gauzy demands for an end to capitalism and more free stuff, feel entitled to be supported by others. If they ruled the world, we’d all be living in mud huts and begging for handouts.

“And yet, as befits a culture that lacks the courage to fight for its own values, this tiniest faction is taking Gotham hostage. They are wreaking havoc on local businesses and residents while breaking numerous laws, including the open use of drugs. Civic appeasement has emboldened them.”

--I thought my friend Liz S. had a great point in talking about the OWS crowd.

“This is the generation that received medals for participating because everyone is a winner!

“Well guess what? They’re finding out not everyone is a winner.

“It’s this non-stop sense of entitlement that drives some of us crazy.”

--The Washington Post reports that the tale Sen. Marco Rubio tells of his family’s history is embellished, as a review of documents “show that Rubio’s parents came to the United States and were admitted for permanent residence more than 2 ½ years before (Fidel) Castro’s forces overthrew the Cuban government and took power on New Year’s Day 1959.”

Rubio has continually said he was the “son of exiles,” Cuban Americans forced off the island after “a thug” took power.

In response to the new information, Rubio said his accounts have been based on family lore. “I’m going off the oral history of my family,” he told the Post. “All of these documents and passports are not things that I carried around with me.”

Bottom line, there are numerous times that Rubio dramatically stretched the truth in his accounts of his family’s life that went unchallenged, until now.

--In catching up on some reading, I finally got around to a piece in the September issue of Smithsonian by Lynnell Hancock on Finland’s superior, No. 1 in the world educational system. Among the many surprising bits I picked up:

“There are no mandated standardized tests in Finland, apart from one exam at the end of students’ senior year in high school. There are no rankings, no comparisons or competition between students, schools or regions. Finland’s schools are publicly funded. The people in the government agencies running them, from national officials to local authorities, are educators, not business people, military leaders or career politicians. Every school has the same national goals and draws from the same pool of university-trained educators. The result is that a Finnish child has a good shot at getting the same quality education no matter whether he or she lives in a rural village or a university town. The differences between weakest and strongest students are the smallest in the world….

“Ninety-three percent of Finns graduate from academic or vocational high schools, 17.5 percentage points higher than the United States, and 66 percent go on to higher education, the highest rate in the European Union. Yet Finland spends about 30 percent less per student than the United States….

“It’s almost unheard of for a child to show up hungry or homeless. Finland provides three years of maternity leave and subsidized day care to parents, and preschool for all 5-year-olds, where the emphasis is on play and socializing. In addition, the state subsidizes parents, paying them around 150 euros per month for every child until he or she turns 17….

“Finnish educators have a hard time understanding the United States’ fascination with standardized tests. ‘Americans like all these bars and graphs and colored charts,’ (school principal Kari) Louhivuori teased… ‘It’s nonsense. We know much more about the children than these tests can tell us.’”

--In a study of 360,000 cellphone users in Denmark, investigators found no increased risk of brain tumors with long-term use. However, the study focused on cellphone subscriptions, not actual use…so it does not settle the debate about cellphone safety. As reported by Tara Parker-Pope of the New York Times, “A small to moderate increase in risk of cancer among heavy users of cellphones for 10 to 15 years or longer still ‘cannot be ruled out,’ the investigators wrote.”

--Divers found the carcasses of about 2,000 sharks, slaughtered for their fins, in a Pacific Ocean marine sanctuary 300 miles off the coast of Colombia. The discovery was made when divers saw 10 fishing trawlers – flying the Costa Rican flag – entering the zone illegally. When the divers dove, they began finding a large number of sharks without their fins, none of them alive. Yes, it was about shark fin soup and appetites in Asia. Man plummets further on the All-Species List.

--But this just in… “A great white shark has killed an American diver in the second fatal shark attack off Western Australia in 12 days.

“Police Sgt. Gerry Cassidy says the man was below water Saturday when a witness on the dive boat ‘saw a large amount of bubbles.’ The body soon surfaced with fatal injuries.”
The sharks have had enough. It’s payback time.
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Pray for the men and women of our armed forces…and all the fallen.
God bless America.
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Gold closed at $1642
Oil, $87.62

Returns for the week 10/17-10/24

Dow Jones +1.4% [11808]
S&P 500 +1.1% [1238]
S&P MidCap +0.6%
Russell 2000 -0.01
Nasdaq -1.1% [2637]

Returns for the period 1/1/11-10/24/11

Dow Jones +2.0%
S&P 500 -1.5%
S&P MidCap -5.1%
Russell 2000 -9.1%
Nasdaq -0.6%

Bulls 35.8
Bears 41.0 [Source: Chartcraft /Investors Intelligence]

Have a great week. I appreciate your support.