Tea Leaves Point to Major GOP Win

The tea leaves for victory are there, the CBS/Times has the Obama coalition collapsing and Gallup is still pointing to an extremely positive atmosphere for the GOP.

PRINCETON, NJ -- Gallup's latest figures on the composition of the 2010 electorate suggest that, consistent with an earlier Gallup report, those voting in this year's congressional elections across the country will be similar in gender, age, and education to 2006 voters. At the same time, they will be substantially more Republican in their party orientation, and more conservative than has been the case in the past several midterms.

Silver has the GOP at 231 house seats and a 87% chance of taking the house, Cook is calling Democrat defeat inevitable, and Sabato is playing safe by only calling for a GOP pick up of 55 in the house and 8 in the senate. With that said, go VOTE!

British Economy Holds Firm

How dare they pull back from Keynsian economics!

British Prime Minister David Cameron’s once-in-a-generation budget gamble is paying off for now as the economy’s unexpected strength eases investors’ qualms over the risk of a renewed recession.

Gross domestic product grew 0.8 percent in the third quarter, twice as fast as analysts forecast, the Office for National Statistics said yesterday. Less than two hours later, Standard & Poor’s said the prime minister’s spending cuts had safeguarded Britain’s top credit rating, which it said is no longer in danger of being downgraded.

Cameron’s government unveiled the biggest budget cuts since World War II last week, eliminating 490,000 jobs in a bid to wipe out a record budget deficit by 2015. His drive, conceived in May to head off a Greek-style fiscal crisis, pushed the yield on the U.K.’s two-year government bond to the lowest on record.

Here in the US investors are now banking on inflation as an investment opportunity. I wonder why?

Tariq Aziz Handed Death Penalty

Something of a holdover dinosaur from another world. Aziz was the "friendly" face of the Saddam regimes as well as the token christian in his upper echelon. Now his time has come:

BAGHDAD (AP) — Saddam Hussein's foreign minister Tariq Aziz was sentenced to death by hanging Tuesday for persecuting members of Shiite religious parties under the former regime.

Iraq's high criminal court spokesman Mohammed Abdul Sahib did not say when Aziz, 74, would be put to death. The death sentence was for a conviction on charges of taking part in a Saddam-led campaign that hunted and executed members of the Shiite Dawa Party, of which current Prime Minister Nouri al-Maliki is a member.

There was talk that Azizi would get a life sentence (he already is serving 15 years for another crime), apparently that is not gonna happen. The following clip is about the roots of the 15 year sentence:

Mapping the 2010 Midterm

A helpful tool for the coming week:

Winning in Afghanistan with the HIMARS

Good news, almost to the level of war ending good. yeah we all know the game, the US and partners goes in, drives them out, they come back, etc..... This time though it sounds like they really dealt a major blow.

ARGHANDAB, Afghanistan — American and Afghan forces have been routing the Taliban in much of Kandahar Province in recent weeks, forcing many hardened fighters, faced with the buildup of American forces, to flee strongholds they have held for years, NATO commanders, local Afghan officials and residents of the region said.

A series of civilian and military operations around the strategic southern province, made possible after a force of 12,000 American and NATO troops reached full strength here in the late summer, has persuaded Afghan and Western officials that the Taliban will have a hard time returning to areas they had controlled in the province that was their base.

Some of the gains seem to have come from a new mobile rocket that has pinpoint accuracy — like a small cruise missile — and has been used against the hideouts of insurgent commanders around Kandahar. That has forced many of them to retreat across the border into Pakistan. Disruption of their supply lines has made it harder for them to stage retaliatory strikes or suicide bombings, at least for the moment, officials and residents said.

The missile in question is quite effective and is launched by the The High Mobility Artillery Rocket System (HIMARS) has apparently been so effective hat the Taliban have been completely knocked off their game.

Of course you need to actually know where the Taliban are, and for that....

(Fred Kaplan, Slate)Along with the surge of troops and the shift toward much more aggressive attacks on insurgency strongholds (as reported here last week), Gen. David Petraeus, the U.S. commander in Afghanistan, has intensified intelligence-gathering operations to a still greater (though less-reported) extent.

The air over Afghanistan's heavy fighting spots is jammed with intelligence, surveillance, and reconnaissance devices—drones, towers, even blimps filled with various sensors. (One senior officer told me that the number of these blimps has soared from eight to 64 just in the last month.)

All this information is collected and interpreted by a growing number of imaging and intelligence analysts. Still more important, it's coordinated with information gathered on the ground by special-operations officers and—increasingly—by Afghan security forces, who are better able to gain the trust of local Afghans who dislike the Taliban.

According to a NATO officer, many of the Taliban's hideouts and strongholds are defended by a ring of improvised explosive devices. Therefore, the only way to take out some of these targets is with "smart bombs" dropped from the air or highly accurate artillery rockets fired from a distance. (Older-style artillery would be out of the question, as the first few rounds would unavoidably explode far from their targets and kill many civilians, since these targets tend to be in the middle of towns or cities.)

Good work.

GOP Poised For Major Gains

It looks like the House should fall for to the GOP. RCP has the GOP at a 163 safe seats, (almost the entire Republican Caucus) with pick ups of almost 37 leaning their way. That puts them within 7 seats of taking the house and there are still 40 toss ups left! By the way one of those toss ups is Charles Djou, who through a divided Democratic party became the Republican rep for Hawaii 1 in a special election. More importantly he is now leading slightly in a District that overwhelming supported Obama in 2008 by the tune of 70% to McCain's 28%. What an extraordinary turn of events made even more amazing by the fact that he is the only member of the GOP in toss up status. The other 39 are all Dems!.


Another tea leaf pointing to significant movement towards the right is the amazing display of electoral prowess by Tom Tancredo who is now within 4 of becoming the governor in Colorado. Denver was the sight of the Dem Convention and epitomized the convergence of success, urban lifestyles, liberal social values, and the progressive agenda. Now its on the cusp of having one of the most right wing governors in the country. As for the Senate, I suspect many of the ties will break for Democrats as the superior organization skills of unions and interest groups overpower the enthusiasm of the right. That is not to say major gains will be made, just not enough to take the Senate.


So what are the chances the GOP takes the house? Well according to Nate Silver pretty good:

FiveThirtyEight’s projection for the U.S. House shows little change from last week. Republicans are given a 73 percent chance of taking over the House, up incrementally from 72 percent last week. During an average simulation run, Republicans finished with 227 seats, up from 226 last week; this would suggest a net gain of 48 seats from the 179 they hold currently.

However, there is considerable uncertainty in the forecast because of the unusually large number of House seats now in play. A gain of as large as 70-80 seats is not completely out of the question if everything broke right for Republicans. Conversely, if Democrats managed to see a material rebound in their national standing over the final two weeks of the campaign, they could lose as few as 20-30 seats, as relatively few individual districts are certain pickups for Republicans.

Its not just that the GOP is poised to make gains, they are making them by shifting the entire political spectrum to the right. If the Republicans do as well as expected, they will be well positioned for 2012 and for the passage of significant reforms in 2013.

Reuters: GOP Likely to Take House

I would counsel cautious optimism:

WASHINGTON (Reuters) - American voters unhappy at high unemployment are set to oust President Barack Obama's Democrats from control of the U.S. House of Representatives in November 2 elections, a Reuters-Ipsos poll projected on Wednesday.

The national poll found that Americans plan to vote for Republicans over Democratic candidates by 48 percent to 44 percent, an edge that will likely give Republicans dozens of seats in the House and big gains in the Senate.

The poll numbers suggest Republicans would win around 227 seats in the House to 208 for the Democrats, Ipsos pollster Cliff Young said. In the Senate, the poll indicates Democrats would retain control but with a smaller, 52-to-48 seat margin.

Yes the polling has been pretty good and even a look at some of the internal district polls has shown incumbent Dems in serious trouble (but not all of them). As for the Senate, taking that "venerable" body has always been a longshot and remains to be. This does not trouble me and for the record I am still skeptical of the massive wave in November. I am banking on solid gains that might even mean a turnover in the house. Understand I am not a pessimist, but there are so many Democratic seats and the power of incumbents so great that to knock off over 39 would be an incredible achievement.

New York on the Hook for 200 Billion in Health Care Benefits

Just great!

The cities, counties and authorities of New York have promised more than $200 billion worth of health benefits to their retirees while setting aside almost nothing, putting the public work force on a collision course with the taxpayers who are expected to foot the bill.

The total cost appears in a report to be issued on Wednesday by the Empire Center for New York State Policy, a research organization that studies fiscal policy.It does not suggest that New York must somehow come up with $200 billion right away.

But the report casts serious doubt over whether medical benefits for New York’s retirees will be sustainable, given the sputtering economy and today’s climate of hostility toward new taxes and taxpayer bailouts.

The daunting size of the health care obligation raises the possibility that localities will be forced at some point to choose between paying their retirees’ medical costs and paying the investors who hold their bonds. Government officials aim to satisfy both groups, and have even made painful cuts in local services when necessary to keep up with both sets of payments.

Former Bank of America CEO Subject of Investigation Over Muni-Bond Scandal

Considering Bank of America's role in the investigation its not surprising that some of its past members might end up caught in the net:

Oct. 1 (Bloomberg) -- Phillip Murphy, the former Bank of America Corp. executive who ran the municipal derivatives business at the center of a criminal investigation, is the subject of a regulatory action filed by U.S. banking regulators.

The Office of the Comptroller of the Currency, which oversees national banks, filed a “notice of charges” against Murphy in August 2008 that was placed under seal, according to a Securities and Exchange Commission filing by his current employer, Winters & Co. Advisors LLC. The Sept. 24 SEC filing didn’t disclose the nature of the notice.

Bank of America, the largest U.S. bank, has been cooperating for more than three years with Justice Department prosecutors who say that bankers paid kickbacks to financial advisers to rig bids on investment contracts sold to local governments. The bank, based in Charlotte, North Carolina, is among more than a dozen the government says conspired on the deals, according to court documents obtained by Bloomberg.

The Office of the Comptroller of the Currency files notices of charges against people when they start a civil case, just as indictments are filed at the beginning of criminal complaints, said Ralph Sharpe, a former director of enforcement at the agency who is now a lawyer with Venable LLP in Washington. “That starts the process,” he said.

In regards to CDR Financial Products:

Murphy joined Bank of America in 1998 to head its municipal derivatives unit, which sold investment agreements and interest-rate swaps to local governments. He left in 2002, after Bank of America fired Campbell for making payments to firms on transactions in which they weren’t involved, according to court records.Develop Relationships

The recipients of such payments included CDR Financial Products Inc., the investment-contract broker whose founder and two senior executives were indicted in October; UBS AG; and Winters & Co., Murphy’s current employer, according to a June 2002 e-mail from Campbell to Murphy. The message was included in filings of a lawsuit Murphy brought against Bank of America in 2003 in a North Carolina state court.

In CDR’s case, Campbell said, the payments were made to “develop a better relationship.”

The payments in turn would allegedly "encourage" CDR to drive buisness into the arms of the bank. CDR of course has a pattern of hiring consultants to local politicians for their "expertise" which frequently means connections to powerful local politicians. One big happy family I suppose.

The House Dems who Voted For Obamacare and their GOP Challengers

I received an e-mail the other day to publish this list of House Dems who voted for Obamacare and the democrats they are aiming to defeat, remember it well in November:

Doubling Down on Madness: The Obama War on the Chamber of Commerce Continues

As outlined in a previous post, attacking the Chamber of Commerce is the height of tactical madness and it appears this admin has decided to double down on this foolishness by having Axelrod go out and make an incredibly incendiary comment in response to a call for evidence that the Chamber of Commerce is on a foreign payroll, and his response "That there is no evidence they haven't taken money".

Of course the man at the top is spearheading this:

The White House intensified its attacks Sunday on the powerful U.S. Chamber of Commerce for its alleged ties to foreign donors, part of an escalating Democratic effort to link Republican allies with corporate and overseas interests ahead of the November midterm elections.

The Chamber adamantly denies that foreign funds are used in its U.S. election efforts, accusing Democrats of orchestrating a speculative smear campaign during a desperate political year.

By the way, in regards to foreign money, this is the party of George Soros and in regards to 2010 and foreign money:

Via Hot Air:

Via Jon Henke:

“Foreign-connected PACs
“Election cycle: 2010
“Total: $12,204,154
“To Dems: $6,517,903
“To Repubs: $5,581,701″

Maybe these dems have a point about foreign Money as Michale Barone pointed out the other day:

Glenn Reynolds nails this one: the Obama Democrats’ campaign riff against foreign donations to Democrats is bogus—and according to the New York Times, no less. This looks like a matter of projection, since it’s well documented that the 2008 Obama campaign did not put in place address verification software that would have routinely prevented most foreign donations. In effect they were encouraging donations by foreign nationals. Here’s the Washington Post on this back in October 2008:

Sen. Barack Obama’s presidential campaign is allowing donors to use largely untraceable prepaid credit cards that could potentially be used to evade limits on how much an individual is legally allowed to give or to mask a contributor’s identity, campaign officials confirmed. Faced with a huge influx of donations over the Internet, the campaign has also chosen not to use basic security measures to prevent potentially illegal or anonymous contributions from flowing into its accounts, aides acknowledged.”

If Obama and the Dems wish to avert a major defeat in November they need to motivate their base in such a way as not to create more enemies in the process.

Obama's Colossal Blunder in Attacking The Chamber of Commerce

Here's an idea, Obama should attack the largest and best financed interest groups in the nation three weeks out of an election where Democrats are already outgunned and facing a wipeout. Even better, Obama should attack that group based on the inane accusations of a left wing think tank. Sounds like a brilliant tactical move!

In two campaign stops Thursday, Mr. Obama invoked what he portrayed as a specific new example, citing a blog posting from a liberal advocacy group as he teed off on a longtime adversary, the U.S. Chamber of Commerce, over its political spending.

“Just this week, we learned that one of the largest groups paying for these ads regularly takes in money from foreign corporations,” Mr. Obama said. “So groups that receive foreign money are spending huge sums to influence American elections.”

But a closer examination shows that there is little evidence that what the chamber does in collecting overseas dues is improper or even unusual, according to both liberal and conservative election-law lawyers and campaign finance documents.

In fact, the controversy over the Chamber of Commerce financing may say more about the Washington spin cycle — where an Internet blog posting can be quickly picked up by like-minded groups and become political fodder for the president himself — than it does about the vagaries of campaign finance.

In other words Obama and his advisers are so trapped in their own bubble that they are starting a fist fight over an issue that will gain zero traction with the public but sure as hell tick off buisness owners in this country.

89,000 Stimulus Payments to the Dead and Incarcerated

Wonderful:

WASHINGTON -- More than 89,000 stimulus payments of $250 each went to people who were either dead or in prison, a government investigator says in a new report.The payments, which were part of last year's massive economic recovery package, were meant to increase consumer spending to help stimulate the economy.

But about $18 million went to nearly 72,000 people who were dead, according to the report by the Social Security Administration's inspector general. The report estimates that a little more than half of those payments were returned.

An additional $4.3 million went to more than 17,000 prison inmates, the report said. Most of the inmates, it turns out, were eligible to get the payments because they were newly incarcerated and had been receiving Social Security before they were locked up.

In all, the $250 payments were sent to about 52 million people who receive either Social Security or Supplemental Security Income, at a cost of about $13 billion. Other federal retirees also received the payments, but they were not part of the inspector general's review.

I guess John Cohn will be happy.

Repealing Health Care

An interesting report from Reuters and a testimony to the rise of the GOP's fortunes:

ZOMBIE LAWS

"A more serious possibility is that ACA opponents could deliver on another pledge: to cut off funding for implementation," Aaron wrote.The legislation authorizes spending, but the actual cash must be appropriated in a second process. The ACA has more than 100 separate authorizations calling for spending of well over $105 billion between now and 2019.

"None of these funds will flow, however, unless Congress enacts specific appropriation bills," Aaron wrote.Members of Congress could stop staff from working on rules for implementation, Aaron said."The nation would then be left with zombie legislation, a program that lives on but works badly, consisting of poorly funded and understaffed state health exchanges that cannot bring needed improvements," he said.

"They could even bar the DHHS (Health and Human Services Department) from writing or issuing regulations or engaging in any other federal activity related to the creation of health insurance exchanges," Aaron added."That would set the stage for a high-stakes game of political 'chicken'," he said. Obama could veto any bills, but Congress could shut down the government by refusing to pass any appropriations.

Paul Howard of the Manhattan Institute, a right-leaning think tank, said Aaron was right."This looks like a tactic that is very likely to be tried," Howard said in a telephone interview."Legislatively, this is probably going to be the game."But Howard said he doubted Republicans would simply want to cripple legislation."They are going to propose alternatives," he said."There is the potential here for some conversation for what healthcare reform should really look like going forward."

House Republicans, in their recently unveiled "Pledge to America" governing agenda, promised to "repeal and replace" Obama's overhaul of the U.S. healthcare system.

House Republican Leader John Boehner, in line to become House speaker if his party wins control of the chamber from Obama's Democrats, recently declared that he and his team are committed to doing all they can to stop the president's plan from being implemented.

"And when I say everything, I mean everything," Boehner told reporters.A number of public opinion polls the past year have shown broad disapproval of Obama's healthcare overhaul, so much so many Democrats up for reelection distance themselves from it.

Serious reform is on hold until 2012 unless of course Obama decides to work with the GOP Congress. In that case the only reform I could envision is one where Obama agrees to the repeal of Obamacare but in return gets significant aspects of it later adopted, and the GOP in turn agrees to go along with part of Obama's agenda in return for his signing off on the overturning of health care legislation. Anyway the next big political battle will be the end of bailing out the states, especially California. In that case it will be serious case of chicken between the GOP and Obama.

Nationalization Rumblings in South Africa

If there was ever a recipe to destroy South Africa and the dream of peaceful forgiveness, this it:

Some have interpreted this as meaning that the divisive topic will now be put on the back burner for two years while the study is being carried out. But they did not reckon on Julius Malema, the Youth League’s irrepressible leader, who has made the nationalisation of the mines—which has little to do with youth matters—the clarion call of his movement. He is now threatening to “disrupt” the operations of any mining company that resists nationalisation and to withdraw the league’s backing from ANC leaders who refuse to adopt its stance on the mines when they come up for re-election in 2012.

Interestingly, the National Union of Mineworkers, the country’s biggest and most influential union, has hit back, claiming that such statements threatened the livelihoods of the 400,000 workers in the mining industry. It refused to be “blackmailed, indoctrinated and manipulated by juveniles”, it said, calling on the ANC “to provide much-needed leadership to rein in its youth wing” so as to prevent “serious damage” being done to the reputation of South Africa’s mining industry. The Youth League has in its turn accused the union of being in cahoots with mine bosses and investors and caring little for the workers’ interests.

Under the 1955 Freedom Charter, drawn up by the ANC and its supporters at the height of apartheid and still regarded by many as the party’s Bible, “the mineral wealth beneath the soil” was to be “transferred to the ownership of the people as a whole”. Nearly half a century later, a law was passed bringing this into effect. Under it, the state became the “custodian” of all the country’s mineral and petroleum resources, with the power to provide licences to public or private companies wishing to exploit those resources, but for no longer than 30 years. The state retains legal ownership.

But the Youth League wants to go further and nationalise the means of production as well as the resources in order, it says, to distribute the profits among the people as a whole. But some suspect the league’s sudden passion for nationalisation is more to do with wanting to bail out their black-economic-empowerment buddies in the mining sector, many of whom fell on hard times during the commodity slump in 2008-09. It is even whispered that some youth leaders have accepted money in return for pushing the nationalisation agenda, which the league has hotly denied. But, whatever Mr Malema and his friends say, state ownership of the mines is unlikely to happen any time soon.

The youth league leader sounds like he has found a wedge issue with which he can burnish his radical credentials and march to power, in the name of the people of course. One hope this falls flat, or South Africa could end up like this.

Municipalities Add to Debt Burden of States

Debt, on top of debt leading to bailouts from the fed who can ignore its debt due to the ability of printing money.

Harrisburg, the capital of Pennsylvania, dodged financial disaster last month by getting money from the state to make a payment to its bondholders. It did so even though the state warned that the money had to be used for city workers’ pensions.

Now Harrisburg is calling on the state again. On Friday, the city said it could not meet its next payroll without money from the state’s distressed cities program.Across the country, a growing number of towns, cities and other local governments are seeking refuge in similar havens that many states provide as alternatives to federal bankruptcy court. Pennsylvania will have 20 cities and smaller communities in its distressed-cities program if Harrisburg receives approval. Michigan has 37 in its program; New Jersey has seven; Illinois, Rhode Island and California each have at least one. This is on top of troubled housing, power and hospital authorities.

The increasingly common pleas for state assistance — after two relatively quiet decades — reflect the yawning local budget deficits that have appeared in the last two years.As tax revenue has fallen, the cost of providing labor-intensive government services, like teaching and policing, has proved hard to reduce.

The programs, which vary by state, generally allow troubled communities to tap emergency credit lines while restructuring their finances with some form of state oversight.

Of course taking the money often allows the local political party, in many cases a near political machine, to ignore fiscal reality and continue with ruinous decisions that have less to do with essential services and more to do with service to the incumbent party.

Greece Looking At Bond Market Again

Considering how close to the brink they came, just the fact that they are looking at the bond market sounds like a positive turn of events:

Greek Finance Minister George Papaconstantinou will reveal today how he plans to offset lagging revenue growth in his 2011 budget to trim the European Union’s second-biggest budget gap and allow the country to resume borrowing in bond markets.

Papaconstantinou presents a proposal that seeks to achieve the deficit targets he pledged to the EU in return for 110 billion euros ($150 billion) of emergency loans needed to avert default, while not extending the two-year recession. In the first eight months, revenue rose 3.4 percent, trailing the 13.7 percent pace Greece pledged to secure the EU-led rescue. The plan will be released after a Cabinet meeting at 12:30 in Athens.

“It’s a very challenging budget,” said Nicholas Magginas, an economist at National Bank of Greece SA, the country’s largest lender. “It is increasingly likely that a less optimistic projection for revenue will be adopted. There will also be pressure to even that out with more spending cuts, which is the certain thing.”

Prime Minister George Papandreou, elected a year ago today, is trying to show investors that Greece can stay the course of a deficit-cutting drive that has slashed wages and pensions and led to street protests. Greece is seeking to return to bond markets next year after investor concerns that the country would default on 300 billion euros of debt led to a surge in borrowing costs and prompted the EU-led rescue.

Good luck with that.