October 11, 2008

IBD: Market Dive Due to Impending ‘First Socialist President,’ Taxes, Protectionism

IBDeditorialsPic1008There has been an unreality in the reports on the falling stock markets for at least the past 10 days. Each day’s plunge seems to have been exclusively due to the “global economic crisis” and/or the supposed “freeze on credit.”

Oddly enough, the admittedly small bank where I have my business accounts is having absolutely no problem funding mortgage, home-equity, and other loan applications from qualified borrowers — a fact I confirmed just before posting this entry. With all due respect to the global business press, if there’s truly a “freeze,” how can that be?

I’ve put forth an alternative explanation to the media meme a couple of times this week myself, but an editorial at IBDeditorials.com yesterday brought out a major element of what I have been saying much more forcefully and articulately. Remarkably, though the possibility seems pretty obvious to me, and I suspect many others, I have seen no one in the business press covering daily market events even mention the obvious and quite likely alternative that follows.

The editorial, “Investors’ Real Fear: A Socialist Tsunami,” teases with the plaintive question, “What is it about the specter of our first socialist president and the end of capitalism as we know it that they don’t understand?”

The editorial’s body begins thusly:

The freeze-up of the financial system — and government’s seeming inability to thaw it out — are a main concern, no doubt. But more people are also starting to look across the valley, as they say, at what’s in store once this crisis passes.

And right now it looks like the U.S., which built the mightiest, most prosperous economy the world has ever known, is about to turn its back on the free-enterprise system that made it all possible.

It isn’t only that the most anti-capitalist politician ever nominated by a major party is favored to take the White House. It’s that he’ll also have a filibuster-proof Congress led by politicians who are almost as liberal.

Throw in a media establishment dedicated to the implementation of a liberal agenda, and the smothering of dissent wherever it arises, and it’s no wonder panic has set in.

And there’s more (bolds is mine):

….. All the while, it ensures that nothing — absolutely nothing — will be done to secure a sufficient, terror-proof supply of our economic lifeblood — oil — a resource we’ll need much more of in the years ahead.

The businesses that create jobs and generate wealth are already discounting the future based on what they know about Obama’s plans to raise income, capital gains, dividend and payroll taxes, and his various other economy-crippling policies.

The editorial further notes that 100 economists, including five Nobel winners have signed a letter warning against Obama’s proposed high-tax, protectionist plans. Have read about that anywhere else?

The editorial’s shortcoming, sadly more than minor, is that it does not assign any blame to current actions already taken or under consideration by Congress, the Treasury Department, and the Bush Administration. These would include the passage of the so-called “bailout” bill a week ago, and the possibility that the government will take preferred equity positions in certain banks and insurance companies.

Stock values are fundamentally based on discounted cash flows relating to a company’s expected future earnings. Government interventions in companies’ operations have almost always led to reduced, if not disappearing, earnings, simply because profit is no longer the primary driving motive. The massive proposals currently under consideration are especially dangerous in that respect. If earnings expectations dive, so do stock prices. Those, more than an economy that grew by 2.8% in the second quarter, seems to be a more plausible explanation for the recent steep declines in the equity markets.

Yet the day-to-day business press seems to be in lockstep ignoring what IBD has plausibly raised. Why?

Cross-posted at NewsBusters.org.

Name That Party: Former SF Supervisor Guilty of Shakedowns; AP, Chron Fail to ID as Dem

Filed under: Economy,MSM Biz/Other Bias,Taxes & Government — Tom @ 10:01 am

DemOrGOPgraphic0708A former San Francisco Supervisor pleaded guilty Friday to three felonies Friday that go to the fundamental integrity of city operations.

Both the Associated Press’s Paul Elias and the San Francisco Chronicle’s Wyatt Buchanan did not see fit to name the party of Ed Jew, who is, naturally, a Democrat.

Interesting, Jew attributes his downfall to the examples of others, and, according to Buchanan, “is prepared to name others who he says have engaged in similar actions.” Though there’s clearly an element of personal responsibility avoidance at play here, it’s nonetheless worth noting that AP and Buchanan still had no interest in learning where Jew picked up what Elias described as “lessons taught by other politicians.”

Here are the first five paragraphs of the AP story:

A former San Francisco supervisor pleaded guilty to three felony charges Friday and admitted to trying to shake down city business owners with planning permit problems.

Ed Jew resigned from the Board of Supervisors in January after a federal grand jury indicted him on charges that he demanded $80,000 from owners of outlets of the Quickly chain of fast-food restaurants to help them solve their permit issues.

During an FBI sting in 2007, agents videotaped the owners delivering a $40,000 payment to Jew in marked $100 bills and promised to pay the rest later. Agents found $10,000 of that cash wrapped in foil and stored in a freezer during a raid of his Burlingame home.

After changing his story several times, Jew told the FBI that he gave $20,000 to a consultant and kept the other half. Jew said he intended to donate much of it to charity while keeping the rest to buy hot dogs and hamburgers for community events.

“Even though the money was to be used for projects in my district, taking it was illegal at the time, and I knew it,” Jew said in court Friday. He blamed his “inexperience and naivete and lessons taught by other politicians” for contributing to his downfall.

Buchanan further noted Jew’s intention to name names:

Jew’s attorney said his client believed his actions were legal because that’s how he learned to behave in politics. At his sentencing on Feb. 13, Jew is prepared to name others who he says have engaged in similar actions.

An inquisitive reader would want to know if there is a party-related pattern to the corruption. Given the Democratic Party’s overwhelming dominance of San Francisco politics, this would appear to be an odds-on likelihood. Yet not a peep was heard from either reporter about this.

Jew also stands accused of election fraud for allegedly lying about where he lived so that he could run in the district he was elected to represent. He has pleaded not guilty to the charges brought by the state relating to that matter.

Cross-posted at NewsBusters.org.

The Obamazebo, and Obama’s ‘Judgment to Lead’

Filed under: Business Moves,Taxes & Government — Tom @ 9:12 am

Note: This item originally appeared at Pajamas Media on Thursday.

Also — See the tease for the PJM post that appeared here at BizzyBlog on Thursday. It has a follow-up reminder of how the $100,000 Obamazebo has a $100 million counterpart, and the list of previous related posts below.

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“Judgment to Lead” is supposedly what Democratic presidential candidate Barack Obama brings to the table. The claim, as PJM’s Pam Meister described it last month, is that “He may not have the same experience as his opponent, but he has what it takes to make the right call.”

While others search vainly for examples in Obama’s political life supporting that claim, I will describe a situation — what was has come to be known as the “Obamazebo” — where he clearly made the wrong call, demonstrated poor judgment, and utterly failed to lead. Though the amount of money involved is minor, the story is nonetheless revealing, and ultimately provides a window into Obama’s unfitness to be president.

A brief Chicago Tribune item from January 16, 2000 (posted here for fair use and discussion purposes) described an Obama-backed urban renewal project:

A group of politicians, school administrators and community activists unveiled a plan Friday for a $1.1 million botanical garden in the city’s Englewood neighborhood.

The proposal calls for a walk beneath the “L” tracks on Princeton Avenue, from 59th Place to 62nd Place. Backers said they hope it will help spur redevelopment in the impoverished area, boost neighborhood pride and soften the impact of traffic and pollution from the nearby Dan Ryan Expressway.

State Sen. Barack Obama (D-Chicago) said he planned to seek state funding for the effort and estimated that ground could be broken in early 2001.

He said the park could serve as part of a new vision in the area and permit youngsters “to have open space and not always be stepping on concrete and broken glass.”

In addition to flowers and trees, the proposed park would include a gazebo, a parrot sanctuary and a walk of fame.

A July 11 Chicago Sun-Times investigative report on the project recalls that Obama promised that he would “work tirelessly in Springfield and in Chicago to raise public and private dollars to fund this worthy endeavor.”

But almost nine years later, there are no new flowers or trees. There is no parrot sanctuary (neighborhood residents who may parrot Obama’s talking points don’t count), and there is no walk of fame.

Those who view the videos accompanying the Sun-Times’s original and September 25 reports will see that there is still a lot of concrete and trash.

There is also $100,000 of state money Obama obtained for the project that is mostly unaccounted for.

Oh, we know who got it. But for the most part, we have no idea what they did with it, with one exception — a gazebo that graphic contributor “tnculp” dubbed the Obamazebo:

obamazebo.jpg

(Original photo is from AP and Chicago Sun-Times; a Google earth screen shot of the area, with the lonely Obamazebo visible, is here.)

Kenny B. Smith Jr., to whose Chicago Better Housing Associated Obama steered the grant, was an Obama campaign volunteer who also contributed $550 to Barack’s 2000 senate and congressional campaigns. While Smith claims to have submitted paperwork to the state supporting what his association and his wife’s construction company spent on the project (which, oddly enough, he said he didn’t have copies of), the Sun-Times could only confirm the existence of the Obamazebo plus a few thousand dollars’ worth of site clearance work by a subcontractor.

Illinois’s attorney general is investigating.

Team Obama’s reaction: A not-our-fault, move-along, change-the-subject press release (at the end of this Sun-Times blog post).

Paraphrasing what I noted in mid-July shortly after the first Sun-Times report, this episode is about a lot more than almost $100,000 virtually vanishing:

  • Obama doesn’t feel responsible for the results of money clearly misdirected to someone he chose.
  • The press release announcing the project in 2000 shows that Kenny Smith was present. Smith made grand claims about how he was “work(ing) with a variety of governmental agencies and not-for-profit groups to secure funding (for) this project including the Chicago Transit Authority, the United States Department of Agriculture, and the American Society of Landscape Architecture. We have made some progress ….”
  • Given the lack of results, it’s reasonable to believe that Smith had at most met with these entities once or twice, and was blowing smoke about his realistic chances of getting money.
  • So for a nominal $550 in campaign contributions and a few blow-offs by wishful-thinking funding sources, Smith got 100 grand, which “somehow” went bye-bye.

From all appearances, Obama simply got hustled at Illinois taxpayers’ expense. You have to wonder if he even looked into how the rest of the “fund-raising” was going before the grant was made.

The Obamazebo episode shows that the Democrats’ presidential candidate can’t even get a $100,000 grant right. And while I’m thinking of it, who in the world really believes that building a botanical garden spurs economic development? When has such a result ever occurred?

Now Obama wants to have the final say in matters relating to a $3-plus trillion federal budget and a $14 trillion economy in a town chock full of con artists and tricksters.

Yikes.

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Previous Related Posts:

  • July 14 — The $100,000 Barack Obama Botanical Garden Gazebo
  • Sept. 7 — Carried Forward: The $100,000 Barack Obama Botanical Garden Gazebo (Graphics Updated)
  • Sept. 26 — ‘Obamazebo’ Project Under Investigation; Sun-Times Follows Up, Drudge Takes Note

Positivity: New way to make stem cells is safer — U.S. research

Filed under: Positivity — Tom @ 6:57 am

From Massachusetts:

Thu Sep 25, 2008 2:40pm EDT

Researchers have developed a safer way to make powerful stem cells from ordinary skin cells, taking one more step toward so-called regenerative medicine.

They used a common cold virus to carry transformative genes into ordinary mouse cells, making them look and act like embryonic stem cells.

If the same can be done with human cells, it may offer a safe way to test cell therapy to treat diseases such as sickle cell anemia or Parkinson’s, Konrad Hochedlinger of Massachusetts General Hospital and Harvard Medical School in Boston reported in the journal Science on Thursday.

Stem cells are the body’s master cells, giving rise to all the tissues, organs and blood. Embryonic stem cells are considered the most powerful kinds of stem cells, as they have the potential to give rise to any type of tissue.

But they are difficult to make, requiring the use of an embryo or cloning technology. Many people also object to their use, and several countries, including the United States, limit funding for such experiments.

In the past year, several teams of scientists have reported finding a handful of genes that can transform ordinary skin cells into induced pluripotent stem cells, or iPS cells, which in turn look and act like embryonic stem cells.

To get these genes into the cells, they have had to use retroviruses, which integrate their own genetic material into the cells they infect. This can be dangerous and can cause tumors and perhaps other effects.

HARMLESS VIRUS

Hochedlinger’s team used a much more harmless virus, called an adenovirus, to carry into the cells the four transformative genes, called Oct4, Sox2, Klf4 and c-Myc.

They used mouse skin cells and also liver cells from fetal mice and got both types to look and act like iPS cells.

“The nice thing about adenoviruses in contrast with retroviruses is they deliver proteins inside the cells but they will never, ever integrate their DNA into the cells,” Hochedlinger said in a telephone interview.

As the cells divide, they dilute the virus until it disappears, he said. But the genetic changes remain.

To test the cells they made chimeras — a blend of two separate animals. They injected their newly made cells into mouse embryos and when the pups were born, they carried visible evidence that the cells had indeed transformed them.

“It results in this stripy pattern of brown fur that comes from the iPS cells and black fur which comes from the host embryo tissue,” Hochedlinger said.

And so far, these chimeric mice have not developed any tumors. …..

Go here for the rest of the story.