12/8/11 Daily Grind: Europe's question mark

Europe's Question Mark

By Robert Romano

Europe has absolutely no idea how it is going to get itself out of its current predicament, as evidenced by a wide range of proposals now under consideration to bail out banks that bet poorly on the debts of Greece, Italy, and other troubled sovereigns.

Chief among the proposals would be ratification of the European Stability Mechanism (ESM), a new treaty that would host a €500 billion permanent bailout fund intended to perpetually refinance European debt should the need arise. 

This new fund would exist alongside the current €440 billion European Financial Stability Facility (EFSF), even though ESM was originally intended to replace the "temporary" EFSF.  The trouble with the original is that there's only about €250 billion left, not enough to even help Italy refinance €400 billion of debt coming due next year.

All together, Portugal, Italy, Ireland, Greece, and Spain (PIIGS) have over €3 trillion of consolidated debts, and it is thought that the only way to contain the crisis — restoring investor confidence in the debts — is for somebody to guarantee every bit of that.

So far, the European Central Bank (ECB) has bought about €200 billion of PIIGS debt on secondary markets, although it is said it has a natural limit of about €300 billion that it is fast approaching.  The bank is prohibited from making direct purchases by the Lisbon Treaty, making it an unsuitable candidate to carry forth the bailout on its own.

For its part, the International Monetary Fund has thus far provided €78.5 billion to prop up Portugal, Greece, and Ireland, and has about €290 billion left to lend.

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Senate may vote on Mari Del Carmen Aponte appointment to Ambassador to El Salvador

By Rick Manning

Americans for Limited Government led the charge against the confirmation of Barack Obama's appointee to the ambassadorship of El Salvador, Mari Del Carmen Aponte until August of 2010, when Obama gave her a recess appointment to serve until Congress went out of session in 2011.

Now, Aponte's name is back in the news as Senate Democrats moved her nomination through the Foreign Relations Committee on a party line vote.  The White House is pushing for her nomination to be brought up for a full vote of the Senate as her temporary appointment is scheduled to end in January, 2012.

Aponte's nomination has been in trouble since the outset due to "unanswered questions" related to her 1990s romantic relationship with Cuban spy, Roberto Tamayo, and because those questions go to the heart of whether the nominee can be trusted with U.S. national security sensitive information, Americans for Limited Government President Bill Wilson believes Aponte's nomination should be rejected.

"Because Aponte refused to submit to a polygraph test, the American people still have not received a full, public accounting of the extent of Aponte's relationship with Tamayo. Instead, all they have received are vague assurances from Senators who claim to have seen the FBI records regarding Aponte and Tamayo," Wilson said.

"Is Aponte a loyalty risk or not? It is up to the U.S. Senate's confirmation process to answer this fundamental question and if there is any doubt, reject her nomination," Wilson explained.

Sen. Robert Menendez (D-N.J.), had defended Aponte after he said he had seen some of the FBI's materials on Aponte and Tamayo. Wilson said that was "not good enough."

Get full story here.

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ALG Editor's Note: In the following featured commentary from the UK Telegraph, Nile Gardiner makes the case against Paul Krugman, who wants more "stimulus" spending in Europe:

Paul Krugman's big government prescription for Europe proves that U.S. liberals are stuck in a time warp

By Nile Gardiner

All over Europe governments have begun to implement austerity measures in an effort to rein in spending and reduce crippling budget deficits. It is hard to find a major European leader these days still advocating the kind of large-scale stimulus spending championed by the Obama Administration in the United States over the past three years. Ironically, the most vocal supporters of greater government spending in the EU can be found today in America.

In yet another hectoring New York Times piece last week on the European financial crisis (a follow-up to his November 10 article "Legends of the Fail"), imaginatively entitled "Killing the Euro", Nobel Prize-winning economist Paul Krugman attacked "deficit scolds and inflation obsessives", completely dismissing the idea that the EU debt disaster has anything to do with out-of-control spending:

"How did things go so wrong? The answer you hear all the time is that the euro crisis was caused by fiscal irresponsibility. Turn on your TV and you're very likely to find some pundit declaring that if America doesn't slash spending we'll end up like Greece. Greeeeeece!

"But the truth is nearly the opposite. Although Europe's leaders continue to insist that the problem is too much spending in debtor nations, the real problem is too little spending in Europe as a whole. And their efforts to fix matters by demanding ever harsher austerity have played a major role in making the situation worse.

"So the next time you hear someone claiming that if we don't slash spending we'll turn into Greece, your answer should be that if we do slash spending while the economy is still in a depression, we'll turn into Europe. In fact, we're well on our way."

Get full story here.

7/19/11 Daily Grind: 'Cut, Cap and Balance' or Bust

'Cut, Cap, and Balance' or Bust

By Bill Wilson

Today, the House of Representatives is voting on the "Cut, Cap, and Balance Act," legislation that would cut $111 billion out of the budget immediately, cap spending to a percent of the Gross Domestic Product, and send a Balanced Budget Amendment to the states in return for increasing the $14.294 trillion debt ceiling.

The "Cut" part of the plan itself uses the Ryan-proposed-and-passed budget of the House for its formula for immediate spending reductions, which has ten-year savings of $5.8 trillion from the current baseline.  It also uses the "Cap" from Ryan's plan, starting at about 22 percent, reducing to 19.9 percent by 2021.

Above all, because it includes an amendment to the Constitution — the only mechanism by which to limit Congress' powers to spend — it happens to be the strongest proposal on the table. 

The American people, with the "Balance" demand, are really not asking for that much.  Including it in a debt ceiling vote is politically speaking, rather innocuous.

It takes three-quarters of all states to adopt an amendment, usually by state legislatures, several of which are still controlled by Democrats, who are unlikely to support the amendment. 

Nonetheless, legislatures need the option to adopt the amendment should the financial situation in this country deteriorate beyond reckoning.  Considering the nation's economic state, putting such an amendment to the states is actually very wise.  It will give the American people an option that previously did not exist, which they may need at a later date.

Get full story here.

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The Week Ahead: The Cut, Cap and Balance Debate and Taxes

Video by Frank McCaffrey

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Sen. Vitter's Amendment Directed Against Obama Czars Could Spur Additional Legislation

By Kevin Mooney

Unelected extra-constitutional czars are least partly responsible for the moratorium that continues to undermine energy production in the Gulf Coast. That's why Sen. David Vitter (R-La.) has stepped up to block funding for administrative appointments that escape congressional scrutiny.

In June, Vitter offered up an amendment that would defund existing czar positions in the Obama Administration and require Senate approval before any new positions of this type could be filled. It fell just short in a 47-51 vote, but it attracted bipartisan support and will be used as model for future legislation.

"Obama's czars have a great deal of power and authority and should be subject to the scrutiny of public opinion by going through the Senate confirmation process," Vitter said. "As long as the czars continue calling shots that have a profound effect on our lives, like how the Climate Czar was instrumental in forcing the job-killing moratorium, I'll continue pushing my legislation to prohibit their funding."

The Vitter amendment would have eliminated funding for newly established administrative offices that are headed by a 'czar.' It also expand the definition of what is considered a 'czar' to include the head of any task force, council, policy office or similar office established by the president that has not been confirmed by the U.S. Senate. This would not include the National Security Advisor.

Right from the outset of the Obama Administration, Vitter has argued against the use of policy czars within the executive branch who can move and shape policy without answering to Congress.

Get full story here.

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ALG Editor's Note: In the following featured commentary from Jesse's Café Americain, we are reminded of the wisdom of President Andrew Jackson warning against the dangers of a central bank, a concept he spent his tenure in office defeating:

Andrew Jackson On the Paper Money System and Its Consequences

"The last duty of a central banker is to tell the public the truth."—Alan Blinder

"When a man has so far corrupted and prostituted the chastity of his mind as to subscribe his professional belief to things he does not believe, he has prepared himself for the commission of every other crime."—Thomas Paine

As the US Federal Reserve System approaches its 100th Anniversary in a few years, and as central banks and their political allies around the world promote the bailout and enrichment of the biggest banks and wealthiest individuals, to be paid for by the impoverishment and sacrifice of the people, it might be well to remember the lessons of history with regard to a fiat currency controlled by private corporations under the guise of an 'independent monetary authority.'

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5/19/11 Daily Grind: Goodwin Liu's Last Stand

Goodwin Liu's Last Stand

By Bill Wilson

Today, the Senate will be taking a cloture vote on Goodwin Liu for the Ninth Circuit Court of Appeals.  Senate Republicans would do well to make sure it fails.  Else, the transformation of the Constitution from "a charter of negative liberties" into one that would "bring about redistributive change" will not be far away.

That is Barack Obama's true vision of the Constitution.  Then an Illinois State Senator, in a 2001 WBEZ public radio interview, Obama lamented that the Warren Court had proven unable to "break us free from the essential constraints that were placed by the Founding Fathers in the Constitution" and had "never ventured into the issues of redistribution of the wealth and sort of more basic issues of political and economic justice in this society."

No other statement of Obama's his gives the American people a clearer window into how he views the role of federal courts, which would, necessarily, venture into those issues. 

And no other judicial nominee of Obama's better embodies that philosophy than Berkeley law professor Goodwin Liu.

His is a doctrine of "welfare rights" and redistributionism. It is a philosophy that would take federal courts from a venue that adjudicates government infractions of constitutional rights into one where individuals could sue the government for denying "entitlements" like health care or education.

Senate Minority Leader Mitch McConnell last year led the charge to beat back the Liu nomination, and Senate Democrats never risked put him up for a vote.  Now, Obama has renominated him.

Get full story here.

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Various States Join Wisconsin In Fighting Back Against Unions And Big Government

Video by Frank McCaffrey

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Free Trade Agreements Held Hostage

By Adam Bitely

Free trade agreements between the U.S. and Columbia, Panama, and South Korea are being held hostage by the Obama administration.  The White House is demanding that taxpayers pay for job retraining and other costs associated with people whose jobs are affected by trade with foreign nations.

While this assistance sounds nice, it is a bad practice. Nobody wants to see their neighbor unemployed, but at the same time, nobody should be coerced to pay for their neighbor's well being.

The nonsense that is causing these trade agreements to be held up is centered on funding levels for the Trade Adjustment Assistance Program (TAA), a program that is administered by the Department of Labor. The White House and other politicians that distrust free trade are arguing that funding levels for the TAA need to remain at 2009-10 levels.

Senator Orrin Hatch told the New York Times that, "It makes no sense to shut the door on increasing U.S. exports by over $10 billion in order to fund a costly program. With our economy struggling and our nation broke, it's time to stop the excuses and give our exporters fair access to international markets."

The programs are indeed costly. The TAA, established by the Trade Act of 1974, costs taxpayers more than $1 billion annually.

Get full story here.

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ALG Editor's Note: As Americans for Limited Government has previously reported, the "stimulus is coming to an end, which means that states who have been on the federal dole finally have to cut spending.  In the following featured oped from the Wall Street Journal, Meredith Whitney looks at just how dependent the states have already become on federal bailouts:

The Hidden State Financial Crisis

By Meredith Whitney

Next month will be pivotal for most states, as it marks the fiscal year end and is when balanced budgets are due. The states have racked up over $1.8 trillion in taxpayer-supported obligations in large part by underfunding their pension and other post-employment benefits. Yet over the past three years, there still has been a cumulative excess of $400 billion in state budget shortfalls. States have already been forced to raise taxes and cut programs to bridge those gaps.

Next month will also mark the end of the American Recovery and Reinvestment Act's $480 billion in federal stimulus, which has subsidized states through the economic downturn. States have grown more dependent on federal subsidies, relying on them for almost 30% of their budgets.

The condition of state finances threatens the economic recovery. States employ over 19 million Americans, or 15% of the U.S. work force, and state spending accounts for 12% of U.S. gross domestic product. The process of reining in state finances will be painful for us all.

Get the full story here from the Wall Street Journal.

5/12/11 Daily Grind: Are You on Obama's 'Enemies List?

Are You on Obama's 'Enemies List?'

By Howard Rich

Wherever possible President Barack Obama has sought to dilute or disguise the ideological war his administration has been waging against capitalism over the past twenty-seven months.

As a result, his massive bureaucratic bailout became an "economic stimulus." His takeover of the financial markets was labeled "Wall Street Reform." His socialized medicine plan became the "Patient Protection and Affordable Care" act (which of course would magically shrink, not expand deficits).  And his massive energy tax increase was cleverly billed as a "cap-and-trade" emissions marketplace.

Yet when Obama's union goons on the National Labor Relations Board (NLRB) challenged aircraft manufacturer Boeing's right to locate a new facility in the right-to-work state of South Carolina, all subtlety evaporated.

There, in a black-and-white complaint, is indisputable evidence that the Obama administration is waging war against the American free market on behalf of union thugs and entrenched government bureaucrats. It's a costly war, too — one that's being funded by trillions of tax dollars (and trillions more in deficit spending).

Obama's silence on the NLRB-Boeing issue has been deafening.  Rather than rebuking this unprecedented imposition on a company's right to move new business where it sees fit, Obama has hidden behind his goon squad like a fashionable gangster unwilling to get his hands dirty.

Earlier this week, he was abruptly — and deservedly — called out for these tactics by U.S. Sen. Rand Paul.

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New Unions Laws In Wisconsin Help State Municipal Bonds 

Video by Frank McCaffrey

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Where Does the Money Go, California?

By Rebekah Rast

On Sept. 13, 2010, six pilot schools began instructing students in grades Kindergarten through 12 at the Robert F. Kennedy Community Schools in Los Angeles.

The difference between this public school and most other public schools is the Robert F. Kennedy Community Schools cost $578 million to build.  With art-covered walls, a marble memorial depicting the school's name sake, a state-of-the-art swimming pool and public park, it's no wonder this school came with a huge price tag.

So then, with $1 out of every $4 of taxpayer money going to fund education, constructing the newest Taj Mahal for a public school, is no big deal for California. The state must have the money.

Apparently it doesn't according to hundreds of teachers now protesting at the state Capitol.  The California Teachers Association has named the weeklong protests a "State of Emergency." 

The California deficit now stands at $15.4 billion after Gov. Jerry Brown and Democratic lawmakers cut spending and transferred money between government accounts.  But various increases in taxes like the sales, personal income and vehicle tax are expected to expire June 30. The California Teachers Association and the California Federation of Teachers worry the loss of state revenue will affect their jobs and various education programs.

Get full story here.

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ALG Letter Urging Senate to Block Susan Carney for Second Circuit Court of Appeals

May 11^th, 2011                         

The Honorable Mitch McConnell

Senate Minority Leader

361-A Russell Senate Office Building

Washington, D.C. 20510

Dear Leader McConnell:

On Jan. 15, 2011, Barack Obama nominated for the 2nd Circuit Court of Appeals, Susan Carney, Deputy General Counsel for Yale University. She has been voted out of the Judiciary Committee, and currently is awaiting full Senate consideration.   Unfortunately, as with other Obama nominees, serious questions have been raised about Susan Carney's lack of integrity. The allegations arise from Carney's tenure at Yale University, and call into question both her judgment as an attorney and her temperament to serve as a federal judge.

In 2007, when it was revealed that a Dongguk University professor, Shin Jeong-ah, had not received a doctorate degree from Yale, Carney allegedly engaged in a cover-up to prevent information from surfacing showing that Yale had indeed confirmed to Dongguk that Shin was a Yale graduate, as revealed by court documents filed by Dongguk.

At the time, Carney said the confirmation fax verifying Shin's doctorate sent by Yale was "not authentic," even though it turned out that it was. She did not even apparently fully investigate Dongguk's claim until the U.S. Justice Department issued a subpoena in the matter, and failed to even attempt to verify the authenticity of the fax, according to the plaintiffs.

Read full letter here.

5/4/11 Daily Grind: The War on Walmart

The War on WalMart—D.C. labor bosses and community organizers dislike the big jobs provider

By Adam Bitely

No one needs to tell you how big an issue unemployment is in America, and especially in Washington, D.C.  As of March 2011, the District of Columbia posted an unemployment rate of 9.5 percent.

Knowing that the unemployment rate is that high might surprise you when you learn that D.C. politicians, labor unions, and community organizers are trying everything they can to block one of the largest job providers and retailers in the world from coming to Washington. These supposed "leaders" want to prevent Walmart from setting up shop, which would prevent the creation of hundreds, if not thousands, of jobs for D.C. residents.

The grocery industry is one of the few remaining industries where labor unions thrive. While most sectors are seeing a decline in unions, grocery stores have remained a powerhouse for the United Food and Commercial Workers Union (UFCW). A threat to this labor-organizing stronghold is Walmart, a company that is not unionized and has taken drastic measures to prevent their shops from falling under the labor union's heavy hand.

Because Walmart is able to price their products lower than their competitors, they are able to force their competitors to change business practices or close-up altogether, which has been a blow to the grocery store labor unions. The UFCW is not concerned about whether or not people have jobs in a city where unemployment is hovering around double digits, rather, they are concerned that they are able to corner the market on the grocery stores to keep their political power intact.

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Geithner Wants To Raise The Debt Ceiling, We Want To Limit Government

Video by Frank McCaffrey

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Reject Obama Political Hack's Judicial Nomination

By Rick Manning

Senate Majority Leader Harry Reid is going to the mats to promote an attorney who would be the plaintiff's bars dream, to Federal District Court for the District of Rhode Island.  Reid upped the ante by filing for cloture in the Senate forcing at least 41 Senators to block his nomination through the threat of a filibuster. 

Obama nominee, John J. "Jack" McConnell, received a low rating from the American Bar Association of "substantial majority qualified, minority unqualified" indicating that there are serious questions about McConnell's evaluation fitness to serve a lifetime appointment among those who know him best.

To date, McConnell's 25 years of experience as a personal injury plaintiff's lawyer is mainly distinguished by intemperate remarks, political campaign contributions to the very Senators who will vote on his nomination, and acting as the state treasurer for the Rhode Island Democratic Party.

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 Carbon and carbon dioxide: Clearing up the confusion

By Paul Driessen

We are constantly bombarded with information — much of it inaccurate, misleading, even deliberately so.

We are frequently told we must reduce carbon emissions, support "carbon disclosure" and invest in "carbon trusts" — to prevent catastrophic global warming, global climate change or global climate "disruption." News stories, advocacy and lobbying activities, and corporate "ethics" promotions frequently use "carbon" and "carbon dioxide" almost interchangeably; some occasionally talk about "dangerous carbon monoxide emissions."

Torn by misplaced hydrocarbon guilt, wanting to do right ecologically, and often scientifically challenged, people are naturally confused. Because so much is at stake — for our energy supplies and prices, jobs, economies, living standards, budget deficits and environment — clearing up that confusion is a high priority.

Get full story here.