The Fictitious State of Trump’s Fantastical Union

I may not have watched Der Trumpenführer's "State of the Union" address since I knew in advance that it would bear little resemblance to objective reality, but many others did.  In the New York Times, the reactions ranged from that of "conservative" Ross Douthat who perpetually has his head up his ass, in my view, especially when it comes to being an apologist for religion and all of the toxicity it ushers into the world, to making the statement  about last night when he said "you could read tonight’s remarks (a better idea than listening to their somewhat soporific delivery) in part as an attempt to hit the reset button, to pitch himself as a centrist dealmaker rather than a predictable ideologue . . . we saw a glimpse of a potentially successful presidency. . . "  The only problem is that given Trump's utter lack of any moral compass, we will never see a "successful presidency" and even Douthat concedes that Trump lacks any plan to act on the few meritorious items he mentioned.  

Far Better analysis of the disingenuous performance can be found from Nicholas Kristof - who fact checked Trump's claims - who counters Trump claims with facts and figures that show the speech had little to do with reality and, instead was a propaganda piece believable only to his most unhinged base and or the otherwise delusional.  Another good take down comes from Frank Bruni.  Here are excerpts:

The word that came to mind most often as I watched Donald Trump deliver his first State of the Union address was “pretend.”

He pretends to be a statesman, and we’re supposed to pretend that hundreds of vulgar and recklessly divisive moments before this — thousands, if we’re adding tweets — don’t negate that claim.

We’re supposed to pretend that he gives a fig about decorum, though it disappears almost as soon as the teleprompter does. Above all, we’re supposed to pretend that what he says today has any bearing on what he’ll say tomorrow, when what he said yesterday contradicted it.

Our president  [Trump] lives in a world of sand and wind and make-believe, where the merest gust can alter the shape of everything, and Tuesday night’s remarks — especially his appeal for “common ground” and his vision of “all of us together” as “one American family” — should be seen in that shifting, swirling, fantastical context.

But Trump is a ridiculous breed apart, his moods more erratic, his poses more ephemeral, his pledges emptier.

Last February, in a speech to a joint session of Congress, he used his opening minutes to exalt civil rights, decry anti-Semitism and proclaim that “we are a country that stands united in condemning hate and evil in all of its very ugly forms.”

Later came the violence in Charlottesville, Va., and his insistence that there were “some very fine people” among the white nationalists and neo-Nazis there.

Early this month he invited television cameras into the White House so that we could behold his placid demeanor as Democrats made their pitch for Dreamers and he recommended a “bill of love.” Within 48 hours, he was ranting about “shithole countries” whose human effluvium befouls our shores.

On Tuesday night, Trump dwelled boastfully on certain economic indicators — unemployment figures, the stock market — to portray America as a newly industrious land, dizzy with sudden riches. But we Americans aren’t that dizzy: We still expect more from our country and president than a Dow above 25,000, and that’s why Trump’s approval rating is below 40 percent.

He took starkly partisan positions on regulations, gun rights, foreign aid, “religious liberty” and more, then dared to pretend that he was extending an “open hand” to Democrats.

There were howlers aplenty in his address. “Americans love their country, and they deserve a government that shows them the same love and loyalty in return,” he said. How does minimizing Russian interference in the 2016 election — and thwarting the investigation into what happened — accomplish that?

There were fictions galore. “For the last year,” he asserted, “we have sought to restore the bonds of trust between our citizens and their government.” No. He, his brood, Steven Mnuchin, Louise Linton and Tom Price (remember him?) swanned around on the government’s dime, their self-promotion and self-celebration extraordinary even by Washington’s standards.

The distance between Trump when he’s controlled and Trump when he’s unbound makes a speech like Tuesday night’s an especially hollow charade. And the orchestrated news in it can’t erase the messier developments beforehand, including the escalation of his assault on the F.B.I. and reports of his lawyers’ panic about his offer to be interviewed by the special counsel Robert Mueller. Jonathan Swan wrote in Axios that one of Trump’s intimates “believes the president would be incapable of avoiding perjuring himself. ‘Trump doesn’t deal in reality,’ the source said. ‘He creates his own reality.’ ”

His speech was such a creation, and to treat it any other way is to launder his entire political history and see a leader who has never been there.

When Wrong Wins Out

Just because a political party wins elections doesn't mean that it has right on its side or that the citizenry hasn't made a horrible mistake.  Let's not forget that the German people first legitimately elected Adolph Hitler to office before he proved to be a demented monster.  More recently, George W. Bush got elected president twice.  Talk about bad decisions. All too often, the larger public makes bad decisions.  The same holds true for the results of the elections on Tuesday.  When people are motivated by racism and hate - which is the GOP base's real motivation - the results are almost sure to be wrong.  A piece in the New York Times looks at when wrong wins out in the electoral field.  Here are excerpts:

The race is not to the swift, nor the battle to the strong, neither yet bread to the wise, nor yet midterms to men of understanding. Or as I put it on the eve of another Republican Party sweep, politics determines who has the power, not who has the truth. Still, it’s not often that a party that is so wrong about so much does as well as Republicans did on Tuesday.

I’ll talk in a bit about some of the reasons that may have happened. But it’s important, first, to point out that the midterm results are no reason to think better of the Republican position on major issues. I suspect that some pundits will shade their analysis to reflect the new balance of power — for example, by once again pretending that Representative Paul Ryan’s budget proposals are good-faith attempts to put America’s fiscal house in order, rather than exercises in deception and double-talk. 

So now is a good time to remember just how wrong the new rulers of Congress have been about, well, everything.

First, there’s economic policy. According to conservative dogma, which denounces any regulation of the sacred pursuit of profit, the financial crisis of 2008 — brought on by runaway financial institutions — shouldn’t have been possible. But Republicans chose not to rethink their views even slightly. They invented an imaginary history in which the government was somehow responsible for the irresponsibility of private lenders, while fighting any and all policies that might limit the damage.

So here we are, with years of experience to examine, and the lessons of that experience couldn’t be clearer. Predictions that deficit spending would lead to soaring interest rates, that easy money would lead to runaway inflation and debase the dollar, have been wrong again and again. Governments that did what Mr. Boehner urged, slashing spending in the face of depressed economies, have presided over Depression-level economic slumps. And the attempts of Republican governors to prove that cutting taxes on the wealthy is a magic growth elixir have failed with flying colors.

In short, the story of conservative economics these past six years and more has been one of intellectual debacle — made worse by the striking inability of many on the right to admit error under any circumstances.

Then there’s health reform, where Republicans were very clear about what was supposed to happen: minimal enrollments, more people losing insurance than gaining it, soaring costs. Reality, so far, has begged to differ . . .

And we shouldn’t forget the most important wrongness of all, on climate change. As late as 2008, some Republicans were willing to admit that the problem is real, and even advocate serious policies to limit emissions . . . 

But if Republicans have been so completely wrong about everything, why did voters give them such a big victory?

Part of the answer is that leading Republicans managed to mask their true positions. Perhaps most notably, Senator Mitch McConnell, the incoming majority leader, managed to convey the completely false impression that Kentucky could retain its impressive gains in health coverage even if Obamacare were repealed.

But the biggest secret of the Republican triumph surely lies in the discovery that obstructionism bordering on sabotage is a winning political strategy. . . . This was, it turned out, bad for America but good for Republicans. Most voters don’t know much about policy details, nor do they understand the legislative process. So all they saw was that the man in the White House wasn’t delivering prosperity — and they punished his party.

Will things change now that the G.O.P. can’t so easily evade responsibility? I guess we’ll find out.

Economis Issues Are Driving Women from the GOP

The Republican Party has been rightly brutalized for trying to reopen aspects of the so called culture wars that many thought to have been resolved 35 to 40 years ago - the availability of contraception being but the most notable. And this Neanderthal Christianist approach has rightly alienated many women voters. But an article in Forbes argues that the GOP's stone cold heart and "let's take care of the rich" approach to economic issues is also fueling the wide gender gap in preferences for a presidential candidate. Here are some article highlights that ought to send a message to those in the GOP who seek to destroy the social safety net:

The blogosphere was abuzz last week after polling numbers from USA Today/Gallup came out showing Obama with a 18-point lead over Romney with women in swing states. Many leapt to the conclusion that the more than a month-long fracas over birth control – when and how it should be covered, as well as whether it is bad in the first place – has turned women off of the Republican platform.

But in a forum on women’s economic concerns on Friday, President Obama stated what has become a new campaign refrain of late: “Women are not some monolithic bloc. Women are not an interest group.” And as he put it even more simply a few weeks back: “I’m not somebody who believes women will be single-issue voters.” Indeed, he’s right. Women care deeply about accessing contraception (sorry, Nikki Haley), but that’s not the only issue they vote on – and it’s not necessarily the main driver of the widening gender gap between Republicans and Democrats.

It’s likely that the squabbling over contraception and reproductive rights has “really galvanized women,” Celinda Lake, president of polling firm Lake Research Partners, told me. Unmarried women and younger women weren’t even paying attention, yet their interest has jumped 20 points, she said. But now that the politicians on both sides have their attention, they don’t like what they see when it comes to economic issues. It’s “a question of priorities,” Lake said. “These women feel that it’s tough economic times out there, my family’s in trouble, this country’s in as big trouble as it’s been in generations, young people having a very hard time, Rome is burning, and you’re focused on my birth control?”

Interestingly enough, economics, not so-called “social issues” like reproductive rights, has historically played a large role in the gender gap. . . . Women overall tend to support what the authors call “compassion issues” like welfare, education, and healthcare, and are therefore more supportive of increased social spending in bad times. The gender gap increases when domestic spending becomes more liberal because “[a] policy change that might be seen as too liberal for the average man might seem like the correct amount of spending to the average woman,” the authors sate. Women are voting to increase economic support for those who most need it while men lose their appetite for spending in tough times.

When it comes to Obama’s policies, “Women tend to think he’s much more in touch with their families and the middle class,” she said. “They do think the government should be a partner… not just in the safety net but in getting the economy going.” Why would women be more supportive of spending on social programs? The authors of the study answer, “Men tend to be less economically vulnerable than women, and they are less pessimistic than women about the economy.” Women know what it is to struggle to make ends meet, even in good times.

This is not to ignore the economic side of contraception, either. Women support co-pay free birth control because it has such a huge impact on their bottom lines – and their ability to work at all. But to say that women are fleeing the Republican Party based solely on this issue is to ignore the role the economy at large will have in the upcoming election. Women aren’t single-issue voters, and if the GOP wants to woo some of them back, it’ll have to take a hard look at a lot of its policy priorities.

Defense Spending Cuts Could Savage Virginia's Economy

Sometimes you need to be careful what you ask for. Virginians - foolishly, in my view - too often vote for Republicans both at the state and national level when it's not ultimately in their best interest. Too often the Kool-Aid drinker set in Virginia deceptively whips the general voting public into a frenzy over social issues and rallies support for Christianist and Tea Party GOP candidates - local Congressmen Scott Rigell pictured at left and Randy Forbes are perfects example - with no thought to where some of the anti-government extremism might lead. As the Virginian Pilot is reporting, if the Congressional super committee does not reach a budget cutting agreement, the GOP demanded automatic cuts will go into effect and Virginia will get bitten in the ass big time financially. Not surprisingly, Hampton Roads would feel great pain as would Northern Virginia. Did the AFA endorsed Rigell or Forbes not to mention Pat Robertson's BFF Bob "Taliban Bob" McDonnell think these consequences through, or are they merely stupid demagogues? Here are some story highlights:

If Congress were to cut $1 trillion from the defense budget over the next 10 years, the consequences for Virginia, particularly Hampton Roads, could be bleak, according to a report by Republican staffers on the House Armed Services Committee.

The Navy could see major cutbacks in shipbuilding, thousands fewer sailors, two dozen fewer ships and the loss of two carrier strike groups, the report predicts. Virginia and two other defense-heavy states, California and Texas, could lose 1 of every 4 civilian defense jobs, thousands of defense contracts could dry up and there could be another round of the Base Realignment and Closure Commission, or BRAC.

Nonpartisan defense experts stress the report is a worst-case scenario that may not come to pass. But it does demonstrate the possible effects of deep cuts, they said, particularly because the GOP staff members specifically avoided making cuts to a large part of the budget - military pay, benefits and retirement programs.

A special House-Senate "supercommittee" has until Nov. 23 to trim the budget deficit either by spending cuts, revenue increases or some combination, under the terms of a budget law passed this summer. If the 12-member panel fails, the law triggers automatic spending cuts of $1.2 trillion.

Adm. Mike Mullen, the retiring chairman of the Joint Chiefs of Staff, has said if the automatic cuts - called sequestration - are made, the Pentagon could lose about $1.1 trillion over 10 years, according to Congressional Quarterly.

U.S. Rep. Randy Forbes, who heads the House defense panel's Readiness Subcommittee, said Wednesday the GOP staff analysis is a first pass at identifying cuts that could be in play. More detailed reports will follow, he said.

There has not been enough focus on how cutting billions in defense might affect national security and the United States' military presence worldwide, the Chesapeake Republican said. "The only question that is being asked is, 'How much do we cut?' " he said. "That is an incredibly dangerous way to do national defense."

Should Hampton Roads and Virginia as a whole take a financial body blow, I hope the Democrats will find the spine to remind the voters who brought the calamity upon them. I'm not against trimming defense spending, but someone needs to use some serious thought on how to do it - and about the need to end the tax breaks for the very wealthy.

Wealthy New York Donors Are Backing New York Gay Marriage Push

The New York Times has coverage of a strange phenomenon: wealthy GOP donors supporting the push for same sex marriage in New York State. Is it yet another sign of the schizophrenic nature of today's GOP - i.e., the crazies versus the rational, longer view pragmatists - or something else? Whatever the cause of the phenomenon, it's a shift from wealthy donors pandering to the nastiest aspects of the far right elements in the party. Personally, I suspect that some in the GOP - e.g., those who haven't already bailed from the party - are frightened of the ever increasing insanity of the party base and undue sway of the the Tea Party and Christofascist elements. In addition, some may simply see that long term, history is on the side of full LGBT civil equality and want to position themselves and the party so that they don't forfeit the younger generations of voters. Here are some story highlights:

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As gay rights advocates intensify their campaign to legalize same-sex marriage in New York, the bulk of their money is coming from an unexpected source: a group of conservative financiers and wealthy donors to the Republican Party, most of whom are known for bankrolling right-leaning candidates and causes.
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Their behind-the-scenes financial support — about $1 million in donations, delivered in recent weeks to a new coalition of gay rights organizations — could alter the political calculus of Albany lawmakers, especially the Republican state senators in whose hands the fate of gay marriage rests.
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The donors represent some of New York’s wealthiest and most politically active figures and include Paul E. Singer, a hedge fund manager and top-tier Republican donor, as well as two other financiers, Steven A. Cohen and Clifford S. Asness.
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The support is likely to jolt the traditional financial and political backers of gay rights causes, who now find themselves in the unfamiliar position of being outraised and outspent in New York.
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The donations are financing an intensive campaign of television advertisements and grass-roots activism coordinated by New Yorkers United for Marriage, a group of same-sex marriage advocates. The campaign is aimed chiefly at persuading several members of the Senate Republican majority to join most Senate Democrats in backing same-sex marriage
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The newly recruited donors argue that permitting same-sex marriage is consistent with conservative principles of personal liberty and small government. . . . “This is an issue of basic freedom,” Mr. Asness said.
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Some of those involved have made what might be termed the pro-business argument for same-sex marriage, arguing that the legalization of same-sex marriage would help keep New York economically competitive. One of the donors, Daniel S. Loeb, who has donated hundreds of thousands of dollars to Republican candidates for federal office in the last two years, said he hoped to make clear to Republicans that same-sex marriage had a broad coalition of support.
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The involvement of Mr. Singer is the most striking, given his devotion to conservative candidates and philanthropy: He is chairman of the Manhattan Institute, a right-leaning research group, and one of the most generous Republican donors in the country. But he also has a personal stake in the issue: he has a gay son who married his partner in Massachusetts, where same-sex marriage is legal.
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Aides to Mr. Bloomberg said he viewed the marriage issue in a larger context: Freedom, he argues, is New York’s “competitive advantage” and its brand, and he has become committed to vigorously defending it, as he did amid criticism of a proposed Islamic center near ground zero.
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Would that Virginia had leaders focused on freedom and competitive advantage as opposed to groveling to the foulest elements of the Christofascist at The Family Foundation, CBN Broadcasting, and Liberty University among others.

JFCOM's Possible Closure - The Risk of Putting All One's Eggs in One Basket

For far too many years the city leaders in the Hampton Roads area have placed all of their economic eggs in one basket. Virginia Beach has chosen to focus on tourism, yet still offers no really top of the line hotels and resorts with the result that big spending tourists go to other destinations. Worse yet, the resort area is run like a police state where only certain "family friendly" businesses are welcome. Top of the line clubs - especially the horrors, gay clubs - are nonexistent and parking has become so difficult/expensive that many locals (gay and straight) simply avoid the resort area entirely. Why go where one is not wanted. The rest of the cities have focused far too much on courting the military and military contractors and the result is that with the proposed closure of the military's Joint Forces Command ("JFCOM"), some of this short sightedness may be coming home to roost. Sadly, most of the leadership of region's cities do little to embrace diversity - although Hampton may have started to crack that mold through its meeting with HRBOR - and a similar closed mindedness is evident at the Hampton Roads Chamber of Commerce whose leadership is made up of the good old boy types who strike me as believing that blacks, women and gays all need to know their place. A Virginian Pilot article looked at this issue and the likelihood that JFCOM's high tech jobs could be headed to Florida. Here are some highlights:
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Hampton Roads leaders trying to save the Joint Forces Command from extinction are looking nervously to the south. Florida, already in the running to snag one of the Navy's Norfolk-based aircraft carriers, may also turn out to be a beneficiary of Defense Secretary Robert Gates' plan to close the Norfolk-based military command known as JFCOM.
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[P]erhaps the most vulnerable piece of JFCOM is the command's modeling and simulation functions. Those high-tech operations, used for training, experimentation and development of new warfighting concepts, have been the catalyst for a booming cluster of related businesses near JFCOM's operations center in northern Suffolk.
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The nightmare scenario for local leaders is that those programs will be dismantled and consolidated in Orlando, Fla., which has an older, more deeply rooted and much larger concentration of modeling and simulation operations.
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James Koch, an economics professor and former president of ODU, said . . . . Even without JFCOM, the Hampton Roads economy will remain heavily dependent on military spending - dangerously so, in Koch's view. Federal spending on military installations now tops $10 billion a year in Hampton Roads, more than in any other metro area in the country. The direct and indirect effects of military spending account for nearly half of the region's economy, ODU economists estimate, up from one-third a decade ago.
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The trend holds lessons for local leaders, Koch said."I am a great supporter of the Department of Defense, but we cannot depend upon the DOD increasing its expenditures every year, or even keeping them at the same level. "The lesson is that we need to really work on diversifying our economy."
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Diversifying the economy in an area where social and cultural backwardness are still too prevalent and where arriving travelers at Norfolk International Airport are greeted with a huge display of Pat Robertson and Regent University will not be easy. The burden rests, however, not just on local leaders but also on the governmental leadership in Richmond which currently is sending a strong message that diversity and tolerance are in short supply - especially in the governor's and attorney general's offices.

Local Scientists Waking Up to Oill Spill Threat While McDonnell Seeks Offshore Drilling

You have to wonder what's in the water that Gov. Bob McDonnell is drinking. Either that or assume that he must have drunk some of Ken Kookinelli's Kool-Aid. With the increasingly recognized possibility that the Gulf of Mexico oil spill may end up effecting Virginia, McDonnell continues to be obsessed with bringing offshore drilling to Virginia - putting at risk Virginia's seafood and tourism industry. Like it or not, the long term future demands that alternate energy sources - like offshore wind farms - be developed as opposed to trying to delay the inevitable. But then, the GOP isn't exactly known for new ideas and somehow expects different results from the same old approaches - a clear sign of insanity. (BTW, Rachel Maddow did a great job on McDonnell last night). Fouled beaches this summer could be financially catastrophic for the Outer Banks and Virginia Beach which depend on summer beach goers to keep their economy afloat. Here are some highlights from the Virginian Pilot that ought to be scaring the daylights out of rational Virginians:
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Scientists are increasingly worried that spilled oil from the Gulf of Mexico may get sucked into the Gulf Stream and make its way up the Atlantic coast to Virginia and North Carolina, perhaps within two or three weeks. The same scientists say it is unlikely that any oil would reach shore and spoil beaches in either state, though offshore fishing and sea turtle migration off both coasts would likely suffer.
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If the massive spill that resulted from an oil rig explosion off Louisiana “keeps going and they don’t stop it, we might start to see small tar balls on the edges of the Gulf Stream” off Virginia and North Carolina, said Larry Atkinson, an oceanographer at Old Dominion University in Norfolk. He said it would take unusual and sustained northerly winds to blow oil from the Gulf Stream onto beaches in Virginia and North Carolina, “but stranger things have happened.”
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Atkinson is a member of the Mid-Atlantic Regional Ocean Observation System, a group of scientists and marine businessmen who are closely monitoring the Gulf spill and providing information to the Coast Guard and other potential responders to migrating oil.
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Cape Hatteras on North Carolina’s Outer Banks is especially vulnerable to such an event, scientists say, given how it juts into the ocean so far and is only 10 to 15 miles from the Gulf Stream. In Virginia, this same offshore belt of moving water, rich in fish and marine mammals, is about 20 to 30 miles from beaches.
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“We are concerned, definitely concerned,” said Harvey Seim, a marine science professor at the University of North Carolina in Chapel Hill. He and other scientists have been briefing emergency management coordinators along the Atlantic coast for several days, including those on the Outer Banks.
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Environmental groups responded that potential impacts in the Mid-Atlantic from the Gulf spill are evidence that plans to drill for oil and natural gas at least 50 miles off the Virginia coast are too dangerous and should be scrapped. “The mere fact that we’re sitting here discussing possible effects in Virginia from a spill in the Gulf is astounding,” said Mike Tidwell, executive director of the Chesapeake Climate Action Network. “I mean, can you imagine the damage if such a spill, or even a smaller one, occurred off Virginia and not thousands of miles away?”
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While some political leaders have backed a time-out from drilling in order to better understand what went wrong in the Gulf, McDonnell so far has remained behind a planned sale of oil and gas leases off Virginia in late 2011 or early 2012.

The Taliban’s Rising Tide in Pakistan;Rampant GOP Delusion at Home

One has to question whether or not there is any aspect of the USA as a nation that the Chimperator and his regime/policies have not utterly f*cked up. The housing industry is in a meltdown, Fannie Mae and Freddie Mac are teetering on possible insolvency, the fiscal budget has been blown to Hell and the national debt has mushroomed, Iraq is a sink hole in terms of money and military personnel, and Afghanistan - what should have been the focus after 9-11 is falling apart, a new International Red Cross report finds the USA guilty of torture and there are questions as to whether the Chimperator could face war crimes charges, the constitutional protections of U. S. citizens have been undermined, and Americans are subject to domestic spying as if the country were China or the former USSR. Yet the Chimperator thinks history will be kind to him, no less. A new New York Times column had this to say about Afghanistan and Pakistan:
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The swelling forces of Taliban and Al Qaeda fighters in Pakistan’s border region pose a grave threat to American and NATO troops in Afghanistan. They also pose a grave threat to the Pakistani people. Pakistan’s Taliban militias, like their Afghan counterparts, are trying to impose their harsh medieval version of Islamic law.

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Sending United States troops into Pakistan’s border regions to try to clean out Taliban and Al Qaeda forces is also not the answer — and would provoke even fiercer anti-American furies across Pakistan. The poorly paid, ill-trained and uncertainly loyal Frontier Corps in Pakistan is not up to the job.

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Washington has made a lot of policy mistakes in Pakistan — most notably supporting Pervez Musharraf for far too long. It has forfeited most of its credibility with the Pakistani people and reinforced their belief that the fight against extremism is “Washington’s war” and not also their own. Both countries have a common and increasingly urgent interest in rolling back the power of Al Qaeda and the Taliban and working together to promote democracy and development in Pakistan. President Bush needs to persuade Pakistan’s leaders of that — and he needs to do it now, before Al Qaeda and the Taliban get any stronger.

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The Chimperator, however is not the only member of the GOP who has not kept his eye on the ball or failed to remain even remotely in touch with reality. John McCain's top economic advisor, Phil Graham, said yesterday that the United States was only in a “mental recession” and that it had become a “nation of whiners.” I guess we are just imagining all of the foreclosures and it is just a delusion that Fannie Mae and Freddie Mac are on the ropes. It would seem that McCain and company cannot be trusted to correct the problems that thety don't even see as existing. One commentator on MSNBC dubbed the Graham/McCain approach as the "Marie Antoinnete economic policy." It is hard to disagree with that assessment and I have to wonder what mind altering drugs Graham has been taking. Here are story highlights from the New York Times:

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BELLEVILLE, Mich. — Senator John McCain has spent the week trying to tell people that he feels their economic pain. So it was more than a little unhelpful when one of his top economic advisers was quoted Thursday as saying that the United States was only in a “mental recession” and that it had become a “nation of whiners.”

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But it was too late to keep from complicating things for Mr. McCain, who has been trying to strike a more empathetic tone after sometimes struggling to maintain a balance between displays of optimism about the nation’s future and demonstrating an understanding of Americans’ economic hardships.

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Senator Barack Obama, . . . seized on Mr. Gramm’s remarks, made in an interview with The Washington Times. “You know, America already has one Dr. Phil,” Mr. Obama said at a campaign stop in Fairfax, Va. “When it comes to the economy, we don’t need another.” Mr. McCain himself repudiated Mr. Gramm’s comments.

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And when he was asked whether Mr. Gramm — McCain campaign co-chairman, UBS Investment Bank vice chairman and former economics professor — might serve as treasury secretary in a McCain administration, the candidate replied with a flash of his sometimes tart humor. “I think Senator Gramm would be in serious consideration for ambassador to Belarus,” he said, “although I’m not sure the citizens of Minsk would welcome that.”

US Loan Default Problems Widen

As if the mortgage and housing market concerns were not bad enough, now the credit markets are showing other areas of weakness (http://www.ft.com/cms/s/0/7c453090-7ff7-11dc-b075-0000779fd2ac.html):

Poor quarterly results from banks across the US over the past two weeks suggest credit problems once confined to high-risk mortgage borrowers are spreading across the consumer landscape, posing new risks to the economy and weighing heavily on the markets. US banks have raised reserves for loan losses by at least $6bn over the second quarter and by even larger amounts from last year, indicating financial executives believe consumers will be increasingly unable to make payments on a variety of loans. Banks are adding to reserves not just for defaults on mortgages, but also on home equity loans, car loans and credit cards.

Dick Bove, analyst at Punk Ziegel, said bank earnings indicated “there are problems with consumer debt that extend beyond the well-known issues in the real estate markets. Auto loans are clearly a new area of concern”. At Wachovia, the fourth largest US bank by assets, credit loss provisions more than doubled from the second quarter to $408m. Troubled loans that could turn into losses also more than doubled. Ken Thompson, chief executive, said the housing market could remain weak through next year. Wachovia’s poor earnings fuelled a stock market rout on Friday.

Problems can be seen at banks across the US. At KeyCorp, in Cleveland, non-performing assets rose $241m from last year and loan-loss provisions doubled. In Dallas, Comerica’s loan loss provisions tripled from last year to $45m. Net credit losses jumped from $663m last year to $892 at Wells Fargo, in San Francisco, due to home equity and car loan losses. Loans more than 90 days past due and still accruing increased to $5.53bn from $3.66bn last year.

Yet despite all of this, the Chimperator continues to claim that the economy is fine. Perhaps for him and his wealthy friends (many of whom have made millions from no-bid sweetheart deals), but not for many regular people. The man is either an idiot or delusion (or maybe both).

It's The Economy, Stupid

I very much agree with the premise of this article (http://nationaljournal.com/crook.htm) - while Iraq, health care and taxes are the main campaign issues today, if things pan out as I fear they might, the economy and a recession may be the bigger issues in 2008. If that happens, I suspect the GOP's difficult prospects will become far worse. I have mixed emotions - I do not want economic hardship for anyone, yet a crushing defeat for the GOP may (A) get the country on a new course economically and socially and (B) flush "values voter" issues down the toilet for years to come. Both are very much needed. Here are some highlights:

I am not an economic forecaster, but anyone can dream. And if I had to guess, I would say that the chances are better than even that next year's presidential contest will be fought against the backdrop of a recession. The stock market, so far, appears to disagree. You might prefer to trust the collective wisdom of a million investors betting real money. Usually I would advocate that. But you might also ask yourself, as I am, what on earth is Wall Street thinking?

Roubini said last year that the problems in the housing market would get worse before they got better. He and only a handful of others predicted that house prices would soon fall (on a national aggregate basis) year-on-year for the first time since the Great Depression. Until recently, most economists were expecting no worse than a slowing rate of increase, and a good number recommended housing as an investment. House prices are now falling across the country as Roubini said they would, and the backlog of unsold houses (suggesting lower prices to come) is growing.

Roubini made a second prediction. He said that stresses in the housing market would feed into the broader financial system. One of the forces powering the housing boom, he pointed out, was the explosive growth in subprime mortgages. That growth, in turn, had been driven by financial innovation -- especially by the repackaging of those mortgages into securities that could be sold to investors across the wider financial market. As defaults began to rise on those poor-quality mortgages, Roubini predicted, the pain would not be confined to the victims of foreclosure or to the reckless new lenders that had granted the loans in the first place but would also extend to their backers at one or more removes in the capital market. And again, so it proved.

Were soothing words from the Fed and a tweak to interest rates all that was needed to put things right? Treasury Secretary Henry Paulson Jr. does not seem to think so. The slump in the home-building industry, in other words, is still gathering momentum. Sales of homes in Southern California, until recently one of the hottest markets in the country, fell 30 percent between August and September, and are now down 50 percent from a year ago. Only when sellers are ready, or are forced, to face their losses and let the market clear will a floor for prices be established. Wherever that floor might be, we are not there yet.

Another economist with a disturbingly good track record of calling market slumps is Yale's Robert Shiller. Long in a small minority, he foresaw the big stock market fall of 2001-02. Since then he has been sounding the alarm about house prices. According to his recent calculations, prices would need to fall by approximately 50 percent to re-establish a historically normal ratio of prices to rents. Even a far smaller decline would still be enough to push mortgage foreclosures to highs, to worsen the plight of homebuilders, to tear bigger holes in the earnings of banks and investment firms, and, most important, to severely dent consumer spending.

Everything depends on what consumers do next. Roubini thinks that they will retrench, and he is still predicting a "hard landing." It is the only aspect of his earlier forecasts that has not yet come true, and I would not bet against it. Distressed debtors and foreclosures are already on the rise and the economy is still strong. What would a downturn do to those housing market numbers, and how would they then feed back on the broader economy?

Treasury Secretary says U.S. housing crisis is ‘significant’ economic risk

I am not sure where these folks have been for the last six months to a year. I have been discussing the housing crisis for some time. An article yesterday indicated sales of homes in Southern California were down almost 50% from a year ago. The ripple effect from that is huge in terms of lost business and related revenues. Combine that with the sub-prime mortgage melt down and it makes for one toxic economic stew. Locally, word has it that some smaller title insurance agencies have folded due to the business slow down. Here are some highlights from an MSNBC report (http://www.msnbc.msn.com/id/21322471/):

WASHINGTON - Treasury Secretary Henry Paulson called Tuesday for an aggressive response to deal with an unfolding housing crisis that he said presents a significant risk to the economy. In the administration’s most detailed reaction to the steepest housing slump in 16 years, Paulson said that government and the financial industry should provide immediate help for homeowners trying to refinance current mortgages before they reset at much higher rates. He also called for an overhaul of laws and regulations governing mortgage lending to halt abusive practices that contributed to the current crisis.

. . . the housing decline is still unfolding and I view it as the most significant current risk to our economy,” Paulson said in a speech delivered at Georgetown University’s law school. “The longer housing prices remain stagnant or fall, the greater the penalty to our future economic growth.” In his most somber assessment of the crisis to date, Paulson said that the housing correction is “not ending as quickly” as it had appeared it would and that “it now looks like it will continue to adversely impact our economy, our capital markets and many homeowners for some time yet.” Paulson spoke a day after officials from the nation’s three biggest banks announced the creation of a fund with up to $100 billion in resources to buy troubled assets such as mortgage-backed securities.

People I know in the mortgage industry are saying that we are only seeing the tip of the ice berg. Paulson should have spent a little time before now focusing on regulation. Much of the mess could have been avoided. Fasten your seat belts.

5 Myths About Sick Old Europe

Living in the Ghent area of Norfolk, Virginia - definitely a blue island in a still largely red state - one hears all too often the egocentric blustering of those who blindly believe that the USA is the most wonderful of nations and more excellent than anywhere else. Having traveled oversees extensively a number of years ago for my job, I came to realize that (1) there are other perspectives on all kinds of issues and (2) while the USA does have things to be proud about (in the past it was its democracy and civil liberties which have been sadly eroded under the Chimperator and Emperor Palpatine Cheney), not everything is bad or dire in other nations. This article in the Washington Post - which I have set out in full - dispels many of the false bluster against Europe:

In the global economy, today's winners can become tomorrow's losers in a twinkling, and vice versa. Not so long ago, American pundits and economic analysts were snidely touting U.S. economic superiority to the "sick old man" of Europe. What a difference a few months can make. Today, with the stock market jittery over Iraq, the mortgage crisis, huge budget and trade deficits, and declining growth in productivity, investors are wringing their hands about the U.S. economy. Meanwhile, analysts point to the roaring economies of China and India as the only bright spots on the global horizon.

But what about Europe? You may be surprised to learn how our estranged transatlantic partner has been faring during these roller-coaster times -- and how successfully it has been knocking down the Europessimist myths about it.

1. The sclerotic European economy is incapable of leading the world.
Who're you calling sclerotic? The European Union's $16 trillion economy has been quietly surging for some time and has emerged as the largest trading bloc in the world, producing nearly a third of the global economy. That's more than the U.S. economy (27 percent) or Japan's (9 percent). Despite all the hype, China is still an economic dwarf, accounting for less than 6 percent of the world's economy. India is smaller still.

The European economy was never as bad as the Europessimists made it out to be. From 2000 to 2005, when the much-heralded U.S. economic recovery was being fueled by easy credit and a speculative housing market, the 15 core nations of the European Union had per capita economic growth rates equal to that of the United States. In late 2006, they surpassed us. Europe added jobs at a faster rate, had a much lower budget deficit than the United States and is now posting higher productivity gains and a $3 billion trade surplus.

2. Nobody wants to invest in European companies and economies because lack of competitiveness makes them a poor bet.

Wrong again. Between 2000 and 2005, foreign direct investment in the E.U. 15 was almost half the global total, and investment returns in Europe outperformed those in the United States. "Old Europe is an investment magnet because it is the most lucrative market in the world in which to operate," says Dan O'Brien of the Economist. In fact, corporate America is a huge investor in Europe; U.S. companies' affiliates in the E.U. 15 showed profits of $85 billion in 2005, far more than in any other region of the world and 26 times more than the $3.3 billion they made in China.

And forget that old canard about economic competitiveness. According to the World Economic Forum's measure of national competitiveness, European countries took the top four spots, seven of the top 10 spots and 12 of the top 20 spots in 2006-07. The United States ranked sixth. India ranked 43rd and mainland China 54th.

3. Europe is the land of double-digit unemployment.

Not anymore. Half of the E.U. 15 nations have experienced effective full employment during this decade, and unemployment rates have been the same as or lower than the rate in the United States. Unemployment for the entire European Union, including the still-emerging nations of Central and Eastern Europe, stands at a historic low of 6.7 percent. Even France, at 8 percent, is at its lowest rate in 25 years.

That's still higher than U.S. unemployment, which is 4.6 percent, but let's not forget that many of the jobs created here pay low wages and include no benefits. In Europe, the jobless still have access to health care, generous replacement wages, job-retraining programs, housing subsidies and other benefits. In the United States, by contrast, the unemployed can end up destitute and marginalized.

4. The European "welfare state" hamstrings businesses and hurts the economy.

Beware of stereotypes based on ideological assumptions. As Europe's economy has surged, it has maintained fairness and equality. Unlike in the United States, with its rampant inequality and lack of universal access to affordable health care and higher education, Europeans have harnessed their economic engine to create wealth that is broadly distributed.

Europeans still enjoy universal cradle-to-grave social benefits in many areas. They get quality health care, paid parental leave, affordable childcare, paid sick leave, free or nearly free higher education, generous retirement pensions and quality mass transit. They have an average of five weeks of paid vacation (compared with two for Americans) and a shorter work week. In some European countries, workers put in one full day less per week than Americans do, yet enjoy the same standard of living.

Europe is more of a "workfare state" than a welfare state. As one British political analyst said to me recently: "Europe doesn't so much have a welfare society as a comprehensive system of institutions geared toward keeping everyone healthy and working." Properly understood, Europe's economy and social system are two halves of a well-designed "social capitalism" -- an ingenious framework in which the economy finances the social system to support families and employees in an age of globalized capitalism that threatens to turn us all into internationally disposable workers. Europeans' social system contributes to their prosperity, rather than detracting from it, and even the continent's conservative political leaders agree that it is the best way.

5. Europe is likely to be held hostage to its dependence on Russia and the Middle East for most of its energy needs.

Crystal-ball gazing on this front is risky. Europe may rely on energy from Russia and the Middle East for some time, but it is also leading the world in reducing its energy dependence and in taking action to counteract global climate change. In March, the heads of all 27 E.U. nations agreed to make renewable energy sources 20 percent of the union's energy mix by 2020 and to cut carbon emissions by 20 percent.

In pursuit of these goals, the continent's landscape is slowly being transformed by high-tech windmills, massive solar arrays, tidal power stations, hydrogen fuel cells and energy-saving "green" buildings. Europe has gone high- and low-tech: It's developing not only mass public transit and fuel-efficient vehicles but also thousands of kilometers of bicycle and pedestrian paths to be used by people of all ages. Europe's ecological "footprint," the amount of the Earth's capacity that a population consumes, is about half that of the United States.

So much for the sick old man.

http://www.washingtonpost.com/wp-dyn/content/article/2007/10/05/AR2007100501041.html?hpid=opinionsbox1

I hope no one thinks that I am anti-American (other than in terms of its mistreatment of gays and a poor choice in a president). I just wish more Americans would make sure they knew more of the real facts before they go off acting on false assumptions and facts. This needs to start in the White House.