Sep 25 2009

Follow The Money To 2010

There are indicators all over the place flashing red on the Democrats as they rush headlong into political implosion. By being hell bent on pushing through partisan, hyper-liberal policies that the broad center of America opposes, they will make themselves the nation’s lightening rod for all their frustration and anger built up over decades in the next few elections cycles.

The first indicator is, as allows in politics, the money game. Just recently the GOP was trumpeting an rise in donations:

The Republican National Committee, National Republican Senatorial Committee and the National Republican Congressional Committee brought in a total of $14 million in August. That was $1.6 million more than the rival Democratic National Committee, Democratic Senatorial Campaign Committee and the Democratic Congressional Campaign Committee.

But the once-vaunted GOP fund-raising machine is showing new signs of life. The RNC has outraised the DNC in two of the last three months and has brought in a total of $6 million more than the DNC this year.

Just out today, the Democrats are wondering why their unilateral, cowboy approach to tell everyone else what is good for them – combined with demonizing the opposition made up of seniors, businesses, families, etc – is causing a serious drop in donations:

Democratic political committees have seen a decline in their fundraising fortunes this year, a result of complacency among their rank-and-file donors and a de facto boycott by many of their wealthiest givers, who have been put off by the party’s harsh rhetoric about big business.

The vast majority of those declines were accounted for by the absence of large donors who, strategists say, have shut their checkbooks in part because Democrats have heightened their attacks on the conduct of major financial firms and set their sights on rewriting the laws that regulate their behavior.

Biting the hand that feeds them is not a winning political strategy. Seniors are rising up in opposition to the cuts in the Medicare services and budgets – once a very left leaning group. I would bet the Jewish community is starting to shift its support after the mess we saw in the UN this week. The unemployed have learned now that government cannot stimulate jobs, only tax cuts can do that without months of needless suffering. They too seem to be shifting their positions. Intensity is higher in the opposition, even as their numbers grow.

Yeah, President Obama makes President Clinton look down right wonderful.

Another sign – independents are turning on Obama and the Dems:

For the first time, independent voters — who delivered Mr. Obama the White House and Democrats control of Congress — disapprove of the job he is doing, by 46% compared with the 41% who approve. In July, 49% of independents approved of the president, against 38% who disapproved.

Horribly written, probably to blunt the bad news for Dems. What this poll of ‘adults’ shows is that President Obama was +11% in July with independents, but came out of August -5%. A 16% swing in one month, which is just unheard of unless the bottom is about to fall out.

Another indicator – even the left leaning pollsters at 538 admit 2010 could spell the end of Democrat control of Congress:

Would 53% of the popular vote be enough for the Republicans to win a House majority? A quick look, based on my analysis with John Kastellec and Jamie Chandler of seats and votes in Congress, suggests yes.

It’s still early–and there’s a lot of scatter in those scatterplots–but if the generic polls remain this close, the Republican Party looks to be in good shape in the 2010.

Personally, I don’t think the generic polls will stay that close. I think we are at a tipping point where all hell breaks loose.  I think the Dems will sink even further behind, and for good reason.

The faux liberal stimulus package is doing nothing, as I predicted it would in March, and as the Obama administration later admitted would be the case. Now everyone talks about this mythical stimulus bill next year.

So, will Dems will be gaining support as unemployment hits 10+% through Halloween and Thanksgiving, as the under-employed number goes from the current 17% to 20+%? Won’t that be a nice holiday season through Christmas? I don’t think so.

The current economic pain and suffering, along with the fact the DC liberal elites are on a mad rampage of delusional and silly policies (cheap, extended, premier health care that will have no impact??) will be seen as more and more out of touch. Not just with mainstream American voters, but with reality itself.

Yeah, I think this is just the beginning of a massive slide in support. No one wanted to see the first African American President fail. But that wishful thinking cannot stand up for long to the tens of millions of Americans living through economic hell and being fed false promises and demagoguery. Envy is a poor substitute for a good job.

As much as we wanted to see Obama succeed at least somewhat, he seems to be a rolling disaster of left wing naiveté and arrogance.

19 responses so far

19 Responses to “Follow The Money To 2010”

  1. WWS says:

    meanwhile, Nancy Pelosi yesterday said that there will be no trigger in the health care bill – as far as she is concerned, the bill is going to be hard left or there will be no bill at all.

    Which completely backs out of the deal she made with the “Blue Dogs” to get this thing out of committee.

    http://thehill.com/homenews/house/60181-pelosi-shoots-down-public-option-trigger

  2. [...] in deficits over the next decade, even more than the outrageous $9 trillion previously projected. Follow The Money To 2010 – strata-sphere.com 09/25/2009 There are indicators all over the place flashing red on the [...]

  3. ph2ll says:

    I agree that many including Republicans wished our young black President well and hoped he could heal our national divide on race. Yet this man has turned out to be nothing more than a hard leftest and everyone is beginning to notice. Notice how he speaks of profits with disdain. America was built on profits. Capitalism is why we have flourished for so long and now our government is on a rampage to control all sectors of the economy while increasing debt to a unimaginable scale. This is simply unsustainable.

    What if China and Japan don’t buy our evermore inflationized debt? Some can see a vision of Armageddon in our future. See here:

    http://www.cnbc.com/id/33004753

    This young reckless President and Congress are taking this country over the cliff and with it a generation that will never vote for these fools again.

  4. AJ,

    Democratic Congressional fund raising is now seeing the results of a “Capital Strike” by small business and big financial capital.

    There was a capital and small business expansion strike in the first six months of Clinton’s first term, which ended quickly because Clinton convinced them he was an economic moderate. Remember James Carville’s rants about the bond market when he was trying to get Government Option Healthcare in 1992-93?

    Clinton’s arrival in 1992 resulted in something like 3% of all small businesses shutting up shop before the inauguration.

    There was a similar “Capital strike” with Pres. John F. Kennedy by small-businesses in 1960-61 as well (I think that was the first time it was noticed) until his tax cuts convinced them they could trust him with the economy.

    Pres. Obama is doing precisely the opposite of Kennedy & Carter and is repeating the mistakes of Franklin Roosevelt. He is convincing capital and small businesses that they are right to fear the future, and to conserve their capital and energy because he will rob them of any return on their capital and personal labor investment.

    It is quite clear Obama’s crew and Congressional Democrats are completely oblivious to the above, and the National and World economy is going to catch it in the neck from lack of American small business economic activity and big capital risk/tax avoidance.

    It only takes simple number-crunching to see that Federal deficit spending is crowding out the private capital investment necessary for economic growth.

    Even setting aside things like a capital strike, the money just isn’t there for much of a recovery from this recession. Something north of 45% of all federal spending in fiscal year 2009 will be financed by borrowing and 35-40% in fiscal year 2010 in the best case. This does not take into account money creation by the Federal Reserve to keep the financial system from collapsing.

    And there is a truly frightful chance of rampant inflation, aka for a return of Carter administration type stagflation.

    The American economic “bounce” that everyone in D.C. and the NY City financial markets had “programmed in” for the second half of 2009 is not happening because the people who are expected to do it — small business — have taken their toys home to the house to wait out the Obama Admistration.

    Obama could not be doing a better job of hammering small business confidence. The small business lobby reported in March 2009 that something like 14% of American small businesses contributing to their organization have either folded since Obama’s election or were planning to in the near future.

    And Obama still hasn’t settled on anything to settle the financial market’s uncertainty from the unwinding of the home mortgage credit bubble.

    Obama would rather campaign that govern; AKA in terms of being a governing President, and dealing with the financial markets, he is dithering and grandstanding to his political base rather than making a decision.

    This gets us back to FDR.

    The reason for the second 1937 recession in the Great Depression was a complete collapse of confidence by American business. American businessmen took their toys and stayed at the house trying to out-wait Roosevelt and his policies.

    Like with Obama, the relations between American big business and FDR were poisonous from day one with the “Business Plot” (http://en.wikipedia.org/wiki/Business_Plot) ‘uncovered’ by Brig General Smedly Butler.

    Which in turn lead to the Special Committee on Investigation of the Munitions Industry — the seven-member special committee, for which the Senate’s Democratic majority chose a Republican 42-year-old North Dakota Senator Gerald P. Nye AKA the “Nye Committee” (http://en.wikipedia.org/wiki/Nye_Committee) to run — witch hunts of American industrialists involved in WW1 armaments production.

    The committee’s extensive use of subpoena and sworn public testimony (more than 200 witnesses) of American businessmen, to include supposed “Business Plot” notables like J. P. Morgan Jr. and Pierre du Pont, put the fear of vengeful government in American business’ hearts and mobilized a populist movement towards American isolationism and neutrality.

    FDR at first took advantage of that movement to peal away Republican mid-Western populists, like Nye, away from the Republican Party via public statements like:

    “This grave menace to the peace of the world is due in no small measure to the uncontrolled activities of the manufacturers and merchants of engines of destruction.”

    The Nye Committee got shut down when it found that Roosevelt’s relatives had worked with an Aviation industry corporate agent to sell aircraft to the Nazis and Nye publically suggested that Pres. Wilson had withheld essential information from Congress as it considered a declaration of war in 1917.

    As war clouds rose in Asia, and Europe, FDR publically gave lip service to isolationism while working privately to undermine and subvert the Neutrality acts that populist movement spawned (See also: “He Kept us out of War” as FDR’s 1940 re-election campaign slogan.) and used “stimulus” money from the WPA and elsewhere to build up the US Navy.

    The end result could be seen in polls conducted by Fortune magazine of American businessmen in Oct 1940 –“77% of businessmen had reservations about doing rearmament work because of their “belief that the present administration in Washington is strongly anti-business and [their] consequent discouragement over the practicability of cooperation with this administration on rearmament.”"

    [see: http://www.amazon.com/gp/reader/1583228268/qid=1233262184/ref=sib_books_pg?ie=UTF8&keywords=Special%20Committee%20on%20Investigation%20of%20the%20Munitions%20Industry&p=S02U&checkSum=2AOcWscHJFWUiRIV2gDmsUEGQCVpiEoh3AB8fzZbA8M%253D#reader-page

    It took Pearl Harbor and the appointment of high profile businessmen to various munitions boards and industrial mobilization positions to bring American business on-board with the Administration’s wartime mobilization. (Much of this is in the US Army’s Green Books and particularly the book on the mobilization of the Aviation industry.)

    The scary thing about Obama is that he has made the same sorts of mistakes with American small business entrepreneurs, as FDR did with the big business capitalists…and he is such a hard core leftie that even if there was a Pearl Harbor, no one would trust him to mobilize the economy for anything.

    More on the Nye Committee below:

    http://www.politico.com/news/stories/0907/5614.html

    Please note that President Obama’s choice to avoid a positive decision to act on governing is a decision to farm out Federal governance to the Democratic Congress.

    Since the Democratic Congressional leadership are in safe gerrymandered districts. We are seeing them hike taxes on “The Rich” so they can sell tax deductions for their campaign re-election funds.

    For example, Cap & Trade can’t be passed in Congress, but the Democratic Congressional committee chairmen and Obama’s staff are working out what amounts to a regulatory “tax farming scheme” where the well connected can go to Congress and get an EPA enforcement dispensations (“Carbon Credits”) in exchange for donations to deserving Democrats.

    It will require an immense amount of work and willful foolishness to bring about a depression, but the Obama Administration has shown itself capable of such greatness.

    This augurs for an economic disaster worse than Jimmy Carter’s.

  5. AJ,

    Louis Woodhill wrote an article in July 2009 that mentions that past decreases in capital investment will result in a further increase in the unemployment rate, to about 14%, before the really recent increase in investment will level things off at a 14% unemployment rate.

    See:

    http://www.realclearmarkets.com/articles/2009/07/06/get_ready_for_14_percent_unemployment_97295.html

    July 6, 2009

    Get Ready for 14 Percent Unemployment

    By Louis Woodhill

    Basically that article said that,

    a) Just as a certain mininum amount of ongoing capital investment is required to maintain existing capital stocks,

    b) A certain minimum amount of hiring new workers is necessary to maintaining a static labor force in terms of the total number employed. (I.e., there is a constant labor force turnover, with new hires replacing retiring and laid off workers.) thus,

    c) Any increased workforce capital investment causes increasing employment to happen after about a six month lag time.

    Which means there are two components to a rise in unemployment –

    1) A failure to hire new workers to replace normal turnover, and

    2) An increased termination rate.

    An outright decline in economic activity might have ceased but, because new hires to replace turnover always lag increased capital investment by about six months, unemployment can continue rising due to past capital disinvestment, even if current investment is increasing.

    In addition, since US population is expanding, a static labor force means an gradually increasing unemployment rate as well as absolute numbers of unemployed.

    This is why I mention the small business/financial capital strike Obama’s regulatory and tax policy uncertainty is causing.

    “Real” economic recovery, i.e., an increase in new hiring producing a decrease in the unemployment rate, will not begin until the summer of 2010 (if then) because those capital strike people were busy conserving — AKA not spending — thier capital.

    All you have to do is look at the capital investment numbers.

    Those were declining until March 2009, and have only recently (2nd quarter 2009) leveled off.

    That meant that unemployment would continue to increase for a while, and then level off. (The unemployment numbers you posted here bear that prediction out.)

    Only after unemployment has leveled off for a while *might* employment rates start to increase, and right now I’m not seeing any actual increase in the necessary capital investment beyond replacement levels.

    This is September 2009. Wait for the fourth quarter 2009 figures on capital investment to come out next spring. Those have to show a significant increase for employment to start picking up in the summer of 2010.

    Concern over this was why Democratic House Majority leader Stennie Hoyer was seriously talking about a “second stimulus plan” this summer.

    His doom is that any second stimulus plan that the Democrats do that doesn’t consist entirely of massive Ronald Reagan/George W. Bush style tax cuts or tax rebates will not work fast enough in the economy to make a difference in the 2010 election.

    Doing that is against Democratic Party religion in any case because of the influence of Government employee unions in Democratic Federal House and Senate primary campaigns a’la California.

    A second stimulus that adds more government spending might have an impact in 2012, but it is getting late even for that because of the 2-3 year slack built into the government contracting process between;
    a) passing a bill,
    b) obligating the money,
    c) issuing a contract and
    d) actually spending the money over two years covered by the Congressional authorization.

    Note that new big infrastructure programs add a step between “c)” and “d)” that includes environmental impact processes that tag on 1-to-7 years depending on the environmental regulatory issues and the litigation involved.

    Obama’s sub-contracting out the stimulus bill to House and Senate Democrats meant that they timed most of the “Stimulus spending” such that the gap between steps “b)” to “c)” above – where campaign contribution influence buying pays the most — was happening a few months prior to Democratic Party 2010 primaries.

    The Obama Administration and Congressional Democratic Leadership counted on the economy bouncing back in 2009 like it did for Clinton after Bush 41 in 1991 so they can do Socialized Healthcare, “Cap & Trade” energy taxes and absorb the economic shock of the expiration of the Bush Tax Rate cuts in 2010.

    The problem is that the economic bounce back is not happening. It got worse, faster, in terms of unemployment.

    Now Obama no longer has the policy means or credibility to do what needs to be done because the Congressional Democrats spent the money he needed to affect the economy and tarred Obama with their image in the process.

  6. WWS says:

    Everything you write is true, Trent – and you didn’t get to the catch-22 that would make any second stimulus bill absolutely catastrophic for the country. (and for any party that tried to push one)

    If you’ve been reading the financial news, you know that the Dollar is bouncing around it’s yearly lows while Gold is at it’s all time high. China and the G-20 are starting to seriously examine the penalties to them of using the Dollar as the international reserve currency.

    A second big surge of massive US government spending with no revenue to back it up is just the thing to collapse international confidence in the dollar’s long term viability, and thus lead to a collapse in its value. A collapsed dollar will not long remain as the world’s reserve currency. On the other hand, raising taxes to bolster revenue is the same fix Herbert Hoover tried in 1930 and 1931, and we already know how that works out.

    To put it succinctly – if the rest of the world gets fed up enough with our financial mismanagement to drop the dollar as a reserve currency (which China was just proposing to do yesterday) then this country falls into an Argentina style inflationary depression overnight. The economic effects of this would be devastating; in fact, it could easily be *worse* than the Great Depression.

    This administration doesn’t dare push a second stimulus.

    This administration doesn’t dare to NOT push a second stimulus.

    This administration is screwed.

    And so, unfortunately, are we.

  7. WWS,

    Yes, we are screwed. Just how screwed awaits events.

    See below from CNBC on US durable goods orders in August:

    http://www.cnbc.com/id/33020130

    The Commerce Department said durable goods orders tumbled 2.4 percent, the largest decline since January, after rising 4.8 percent in July. That was well below market expectations for a 0.5 percent rise in August.

    In another report the department said sales of newly built single-family homes rose 0.7 percent in August for a fifth straight month to a 429,000 unit annual pace, the highest since September last year. However, the increase was below market expectations for a 440,000 unit rate.

    US stocks fell on the data, which, coming on the heels of a report on Thursday that showed a surprise drop in existing home sales in August, serving as a reminder that recovery from the worst recession since the 1930s would be uneven.

    Government bond prices rose on the news.

    “The durables report is a bump in the road for the U.S. recovery story. We still expect a relatively positive trend for the economy, although we shouldn’t get too excited,” said Sebastien Galy, senior currency strategist at BNP Paribas in New York.

    Durable goods orders are a leading indicator of manufacturing activity, which in turn provides a good measure for overall business health.

    This lack of American durable goods orders *may* be significant and point to more bad economic news in time for Thanksgiving and Chirstmas.

    We just don’t know at this point.

    There is so much slack in international cargo container box shipping that a huge supply of intermediate goods can be in the world supply chain, feeding what production is left, before new orders of goods are placed.

    You don’t order more durable goods if you have them sitting in ISO cargo containers in your plant or at a rail/truck terminal near your plant.

    My Brother works in a container shipping firm and he told me back in December 2008 that he was sending cargo ships back to China with only 42% of capacity filled.

    In other words, 58% empty.

    Since most of the cargo sent back to China from the USA is scrap of various sorts used as feed stock to make consumer goods, we saw the return feed back. Or more accurately, it’s lack, until he last couple of months.

    See:

    http://www.latimes.com/business/la-fi-tradecrash2-2009mar02,0,807159.story?track=rss

    The bottom line is that so many shippers are over leveraged in expansion plans that won’t ever make money that many won’t survive:

    Although the shipping industry has always gone through cycles, shipping companies now believe that things have changed drastically, and for the worse. “There was never a shortage of cargo in the past,” says Kranich. But that’s no longer the case today. Because of declines in consumption in the West and production in the East, the global container fleet’s enormous cargo capacity can no longer be filled. The resulting sharp decline in prices means that almost all shipping companies are generating substantial losses.

    and

    There is little evidence of a recovery in the port of Charleston, South Carolina. There is only a single ship, the MSC Prague, docked at the wharfs in one the biggest ports in the United States. Only last year, brand-new, giant cranes were installed at the Charleston terminal. Many of them are now idle, partly because orders are sharply down among German machine-building companies.

    Forty-five percent of US imports of German goods pass through Charleston. Containers owned by German shippers like Hapag-Lloyd and Hamburg-Süd are stacked high in the harbor. BMWs, fresh off the assembly lines, stand in endless rows at the wharf. They include SUVs produced at the company’s nearby plant, bound for Europe, as well as 3 series and 5 series cars intended for the US market.

    See:

    http://www.businessweek.com/print/globalbiz/content/aug2009/gb20090811_320246.htm

  8. AJ,

    I think America just got an August 2009 lay off notice for additional holiday season unemployment.

    More economic bad news from the same CNBC article I clipped above, see:

    http://www.cnbc.com/id/33020130

    Non-defense aircraft and new parts orders plunged 42.2 percent in August, likely reflecting a drop in civilian aircraft orders received by Boeing.

    New orders for transportation equipment dropped 9.3 percent.

    New durable goods orders excluding transportation were flat in August, after rising for three straight months, the department said.

    Analysts polled by Reuters had expected new orders, excluding transportation, to rise 1.0 percent, M/b>after a 1.1 percent increase in July.

    Non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending, unexpectedly fell 0.4 percent in August.

    Analysts polled by Reuters had expected core capital goods to increase 1.3 percent. The prior month was revised to show a 1.3 percent drop, previously reported as a 0.3 percent fall.

    Underinvestment in capital goods now leads to more unemployment later.

    IMO, there are a whole bunch of Americans about to get Thanksgiving and Christmas unemployment slips.

  9. Grrr… my 11:12am post should have had this passage read as follows:

    >Pres. Obama is doing precisely the opposite of Kennedy &
    >_CLINTON_ and is repeating the mistakes of Franklin
    >Roosevelt. He is convincing capital and small businesses that
    >they are right to fear the future, and to conserve their capital
    >and energy because he will rob them of any return on their
    >capital and personal labor investment.

  10. Toes192 says:

    Ghost Ships…
    .
    Google [cargo ships Indonesia sitting] for more
    .
    The biggest and most secretive gathering of ships in maritime history lies at anchor east of Singapore. Never before photographed, it is bigger than the U.S. and British navies combined but has no crew, no cargo and no destination
    .
    http://www.dailymail.co.uk/home/moslive/article-1212013/Revealed-The-ghost-fleet-recession-anchored-just-east-Singapore.html

  11. ivehadit says:

    This group on the White House knows exactly what they are doing. They are not stupid or naieve, imho. Why else would they flaunt overnight dates to New York and lobster, lobster, lobster, and vast vacations overseas…and $1500 tennis shoes and 36 cars to pick us Tuscan Kale and on and on. Someone who cared about what was happening to Americans would NOT BE DOING THIS.

  12. Terrye says:

    I think they are getting desperate with some of the polls too. The latest NYT poll had Obama at 56% on approval rating, even though he was below a majority on approval of handling of specific issues.

    One thing that was interesting, was that the numbers of Democrats were almost 2 to 1 that of Republicans, a margin of more than 15%, that is almost double the margin they had in their last poll. They only had 22% Republicans in that poll. In a few months they will have to start leaving Republicans out altogether.

  13. WWS says:

    Trent, agree with you completely. You watch some of the same numbers I do. And there are some very serious problems rising in other areas that will also raise unemployment some more – mostly the fact that the “fixes” put in place last winter and fall were mostly short term, stop gap measures that made the long term situation worse, not better.

    Example 1: Chrysler. Most people are under the impression that the company was “saved” by it’s forced merger with Fiat and all the government money pumped into it. Not so – it was simply kept on life support. Sometime in November, Fiat and the new Chrysler Board are expected to announce that most Chrysler plants in the US will be shut down over the next year and possibly within 2 years the Chrysler name will only exist as re-branded Fiat’s shipped in from Italy.

    You say Fiat invested too much to pull a stunt like that? Actually, Fiat invested *Absolutely ZERO dollars* (lira, euros, magic beans, whatever) into this project. They just made the best promises to the administration about keeping everything going, which is why they were handed this for free. But all of those promises were conditional, depending on “business conditions.”
    The head of Fiat has already announced that “Business Conditions” (here’s a shocker) are “much, much worse than he thought when they agreed to take Chrysler over.”

    bye bye, Chrysler. And bye bye to the $50 billion or so we pumped into you that only served to buy us 11 months of nothing but false hopes of unicorns and rainbows.

  14. WWS says:

    (continued from last post)

    Example 2 – Housing. You read the msm, and you will here things like “housing is recovering slowly.” No, it isn’t. Sales,
    both older homes and new, are in the worst shape they have been in for decades, and the August numbers just in were “disapointing.” And this in spite of the fact that we are giving an $8000 tax credit to all first time homebuyers (expected to be used on 40% of all sales this year) and are keeping real interest rates at zero, an incredibly stimulative move. Taken together, these are the most intensive and massive stimulus that has been pumped into the housing market *ever*. And what’s the result of that stimulus? The housing market is struggling just to hang onto absolutely abysmal sales numbers. Will this just naturally pick up, as the white house economists assume? 50 years of data say that a real rebound in housing starts *after* the unemployment numbers start to turn around, not before. Not too hard to figure out why – unemployed people don’t buy many houses, and neither do people who are nervous about losing their jobs.

    And what happens when this federal stimulus gives out? The $8000 tax credit (iirc) expires at the end of November, and people I know in the industry are saying that buyers who want to make it under the wire had better start processing the paperwork on a potential purchase in the next couple of weeks if they want to be sure of making it in time. The Realtors Ass’n is pushing Congress to extend this for another year – but it’s an expensive perk, and with all the budget pressure and everything else going on, I’m not sure they can get Congress to bail them out again this fall. That’s a wait and see who has Pelosi’s ear kind of a game.

    The bigger danger, the one that Congress can’t change even if they want to, is what happens to housing once interest rates start going back up. And everyone *Knows* that they have to start going back up fairly soon – no country, not even America, can hold it’s real interest rates at zero without collapsing the value of their currency and cauing a massive spike in commodity prices. We’re starting to see some of that already with gold. Current interest rates are a godsend to the housing industry, but they *cannot* last much longer, not without causing misery for the rest of the economy. (otherwise why wouldn’t we just keep interest rates at zero all the time?) Raising interest rates will effectively suck all of the life out an industry that is barely surviving on life support.

    As soon as interest rates start to come up, whatever bit of strength the housing market may have will collapse, and housing starts will collapse to new lows. Given the unprecedented level of vacancies (a 5 year supply at current rates) it’s at least theoretically possible for us to go at least an entire year without a single new house being built at all in this country. Just imagine what that would do to the construction industry.

    Sometime within then next calendar year, this scenario will start to play out. Given our deficits, it has to.

  15. WWS,

    Too quote a friend of mine:

    “There are two kinds of Americans, those who remember Jimmy Carter and those who will find out.”

  16. Ivehadit,

    Please repeat this after me:

    “Nutball Regime Becomes More So Under Pressure‏.”

    Iran’s current Mullah regime is a perfect example of this.

    Iranian president’s wild rhetoric was and is addressed to a domestic audience, i.e., that it concerned domestic dominance games, and that the actors do not conceive of the outside world as real, let alone able to influence events inside Iran.

    Similarly Pres. Obama’s inner circle cannot see the the rest of America, or the outside world beyond America, as anything other than the Democratic power machine that is Hyde Park/Chicago politics.

    Neither America nor the outside world are Hyde Park, but no one will tell the King that he is without a real robe and naked.

    I had expected that by 2012 the Democrats would be pandering to the life-style police as a means of appealing to their base. As in, again, Nutso regimes become more so under pressure actions like:

    1) “Mommy, a Democrat stole my corn-dog!”

    2) “We’re supposed to use what instead of toilet-paper?”

    The speed at which they have already gotten there with regard to environmentalists & soft toilet paper is down right scary.

    I guess Pres. Obama taking over the American car industry and making American built big cars illegal was not enough for the Environmental Wowzers.

  17. AJ,

    Now is the time for Red State and Purple State Democratic Congressmen & 2010 election Democratic Senators to panic.

    http://abcnews.go.com/print?id=8594380

    U.S. Unemployment Not to Peak Until 2011: Krugman
    By Marja Novak
    Reuters
    LJUBLJANA

    Unemployment in the United States will peak only in early 2011 because of a slow and painful recovery from the global economic crisis, Nobel Prize-winning economist Paul Krugman said on Wednesday.

    He said the global economy seems to be stabilizing at a level that is “unacceptably poor” and added it is possible that the recession will be a double-dip one.

    “(U.S.) unemployment will peak in early 2011 … certainly staying very high and possibly rising all next year,” Krugman told a business meeting in Slovenia, adding his forecast was based on data from previous U.S. economic crises.

    The U.S. unemployment rate jumped to a 26-year high of 9.7 percent in August, according to U.S. Labor Department data.

    Krugman, who received a Nobel Prize for economics in 2008, said the acute phase of the global crisis had passed but the recovery is likely to feel like a “continuing recession.”

    He said recoveries have been weak from past crises in the United States and other regions as job sectors continued to get worse long after the crises have bottomed out, adding the global job market will continue to get worse “well into 2011.”

    “We might have a double dip, that’s a real possibility now for the world as a whole,” said Krugman, saying the effects of stimulus programs will start to fade early next year and recovery will be slow due to the global nature of the crisis.

    >snip<

    Democrats in the House are now set up for a 1994 class political hiding in the 2010 elections.

  18. ivehadit says:

    Hi Trent,
    It’s amazing isn’t it? They never learn. I remember studying GroupThink in college back in the ’70′s.

    Actually I personally believe there are darker motives being acted out. These radicals are as far left as one can get, imho, and David Horowitz’s h.o. as well. He’s been there, done that and knows their M.O.

    I really like Robin of Berkeley’s comments as a psychologist (or psychiatrist?) over at AmericanThinker.com. Delusion is part of this group’s blind side.

    Love your input here, Trent, btw. :)

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