July 31, 2013

NewsBusted (073013)

Filed under: NewsBusted — Tom @ 6:52 pm

Here we go:

Topics:
– Detroit Bankruptcy
– President Obama
– George Zimmerman
– Obamacare
– Prince George
– New York Times
– Anthony Weiner
– MSNBC Melissa Harris-Perry
– Bette Midler

Best Line: “Bette Midler tweeted that Republicans did everything they could to make America lose World War II. And Midler also claims that the Pilgrims came over on the space shuttle.”

Ohio, 7th in spending growth last decade, has gone back to binging

Filed under: Economy,Ohio Economy,Ohio Politics,Taxes & Government — Tom @ 6:39 pm

After a 2-1/2 hiatus, the Buckeye State has relapsed.

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This column went up at Watchdog.org with minor edits a short time ago.

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Spending in Ohio is surging … again.

Direct spending in the Buckeye State grew, per capita, by 41.7 percent during the 10 fiscal years that ended in mid-2011, the Washington-based Tax Foundationa non-partisan tax research group, showed.

It marked the seventh-highest growth percentage in the nation.

Every one of Ohio’s neighboring states had lower spending growth. Only Pennsylvania’s 40.4 percent came close. The others: Indiana, 32.4 percent; Michigan, 21.5 percent; West Virginia, 14.2 percent; and Kentucky, 29.9 percent.

Ohio’s previous-decade spending binge was a bipartisan affair, first pushed by Republican Gov. Bob Taft and a GOP-dominated General Assembly. The strong economy before the turn of the century and the growth in state tax collections that accompanied it allowed Taft and lawmakers to become complacent, to believe they could put spending increases on virtual autopilot.
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‘If You Fund It, You Own It’

Filed under: Health Care,Life-Based News,Taxes & Government — Tom @ 5:33 pm

This advocacy ad (HT CNS News) is directed at Mitch McConnell, but there could and should be a version directed at John “the Facilitator” Boehner:

2Q13 GDP Growth (073113): An Annualized 1.7%, Up from Revised 1.1% in First Quarter; See Updates

Filed under: Economy,Taxes & Government — Tom @ 7:41 am

Note: I won’t be reacting to the GDP report until sometime after 9 a.m. because I will be on the ADP Jobs Report conference call.

Additional topside note: The GDP revision today, done once every five years, goes all the way to 1929. Obviously there’s a lot to review.

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Predictions:

  • Reuters“Gross domestic product probably grew at a 1.0 percent annual rate after expanding at a 1.8 percent pace in the first quarter because government austerity and weak global demand weighed on the economy, according to a Reuters poll of economists. But there is a risk that growth undershoots expectations, with forecasts as low as a 0.4 percent rate.”
  • McClatchy — “Most mainstream economic forecasters expect a growth rate from April to June well below 2 percent, with the most optimistic in the 1.5 percent range and the more pessimistic in the range of 0.5 percent. … It’s why President Barack Obama has given four speeches in the past week talking up the economy.”
  • Associated Press (covered here last night; “Economy tepid in second quarter but will expand rapidly, economists predict” — “Economists forecast that growth slowed in the April-June quarter to a seasonally adjusted annual rate of just 1 percent, according to a survey by FactSet.”
  • Business Insider — “expected to come in  at +1.0% compared with +1.8% in Q1. Lots of analysts are saying there’s a strong chance it’ll be on the bearish end of the 0.4% to 2.0% range noted by Econoday, in part as a result of sequestration.” Zheesh.

Comments:

  • There will be a comprehensive revision of the past several years of GDP data. Their overall direction will tell us whether the past few years has been almost as bad as we thought or even worse.
  • One figure almost no one looked at last month was the outsized contribution of a buildup in farm inventories, a puny element that somehow added 0.83 points of GDP out 1.8 in total. If that reverses itself in today’s report, there could be a significant “unexpected” surprise — unexpected to everyone except readers here.

HERE WE GO (full release): A better than expected 2nd quarter, offset by a much worse first quarter

Real gross domestic product — the output of goods and services produced by labor and property located in the United States — increased at an annual rate of 1.7 percent in the second quarter of 2013 (that is, from the first quarter to the second quarter), according to the “advance” estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 1.1 percent (revised).

The Bureau emphasized that the second-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency. The “second” estimate for the second quarter, based on more complete data, will be released on August 29, 2013.

The increase in real GDP in the second quarter primarily reflected positive contributions from personal consumption expenditures (PCE), exports, nonresidential fixed investment, private inventory investment, and residential investment that were partly offset by a negative contribution from federal government spending. Imports, which are a subtraction in the calculation of GDP, increased.

The 2Q beat vs. expectations (+0.7%) is the same as the 1Q writedown (-0.7%).

A really quick look at the more recent revised numbers shows a few interesting items:

  • 4Q12 growth was only an annualized 0.1%.
  • 1Q11 had a contraction of 1.3% (i.e., we were at the edge of a double-dip recession, though the preceding and subsequent quarters were +2.8% and +3.2%, respectively).
  • The second quarter of 2008 went to a positive 2.0%, further supporting the notion that the National Bureau of Economic Research blew the call when it said that the recession started in December 2007. It really started by the NBER’s own measurement guidelines in June 2008.
  • Last year’s GDP growth was written up to 2.8% from 2.2%, and is entirely due to 1Q12 being revised up from 2.0% to 3.7%, more than offsetting smaller writedowns in the other three quarters.
  • Zero Hedge notes that because of all of the revisions, the economy (as of 1Q13) just got $550 billion (3.4%) bigger ($16.535 trillion instead of $15.984 trillion). Immediate reax: I wonder how much of that is from 2Q08 and earlier?
  • Zero Hedge notes that after today’s comprehensive revision, the 1Q13 miss vs. expectations was the worst in 27 months.

As to the current quarter:

  • That farm inventories number, revised to contributing 0.88 points to the first quarter (meaning that all other factors only accounted for 0.22 points — yikes), came in positive (+0.13) this quarter. The guess here is that it won’t hold up in revisions and will go negative.
  • The “government spending cuts ate my GDP” excuse (only a -0.08-point impact) is gone.
  • The biggest negative influence, offsetting a few positives like fixed investment (from -.023 points last quarter to +0.93 points in the second quarter) was in imports and exports. While exports went from -0.10 points in the first quarter to +0.71 points in the second, imports went from a -0.10-point impact to -1.51 points (meaning that imports increased substantially). I would think/hope that this hugely negative number gets reduced in future revisions.

Overall, though it’s clearly not an acceptable result, the second quarter at least had some hints of building strength in areas that matter to genuine long-term economic improvement (i.e., fixed investment). But we really won’t know until we see what happens with imports, that pesky farm inventory change, and a pretty weak personal consumption element (only 1.22-point contribution) in future revisions.

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UPDATE: Seems a bit strong, but here it is from John Makin at AEI — “2Q growth numbers indicate a US recession is on the way”

UPDATE 2:Goldman: ‘We Expect A Downward Revision To The Fed’s 2013 Growth Forecast’”

UPDATE 3: Intriguing question for which the answer will have to wait — How much of the 3.4% writeup of GDP can be traced to the God-awful Bush 43 years? As noted in the comments, NONE of it can be traced to the Obama years.

ADP July National Employment Report: +200K Private Sector Jobs, June Revised Up 10K to 198K; See Conference Call Notes

Filed under: Economy — Tom @ 7:40 am

June’s ADP report came in at 188,000 private-sector jobs added. Predictions for July are:

The report will be here at 8:15 a.m. I will live-blog ADP’s 8:30 a.m. conference call. I would think that Mark Zandi is also going to talk a little bit about GDP on that call.

Here we go (direct link):

Private-sector employment increased by 200,000 from June to July, on a seasonally adjusted basis.

Highlights:
- Small businesses (1-49 employees) +82,000
- Medium businesses (50-499 employees) +60,000
- Large businesses (500 or more employees) +57,000

June was revised up by 10,000 to 198,000.

More, from the press release (may load slowly):

Mark Zandi, chief economist of Moody’s Analytics, said, “Job growth remains remarkably stable. Businesses are adding to payrolls in most industries and across all company sizes. The job market has admirably weathered the fiscal headwinds, tax increases and government spending cuts. This bodes well for the next year when those headwinds are set to fade.”

CONFERENCE CALL NOTES coming up, starting at 8:30 (my spur-of-moment thoughts in italics):

MARK ZANDI: Very consistent with job growth in past 36 months averaging 200K/month.

Broad-based across most industries, with weakness in mfg. due to cuts in defense outlays relating to sequestration and weakness in exports.

Solid gain in construction (over 20K). Also strong in companies of various sizes.

No significant evidence of health care reform impact, (evidence “evaporated” in the summer), or that bizzes are moving people from FT to PT. PT pickup is only evidence of volatility not of significant pickup.

Job growth is skewed to lower-wage jobs. Leisure and hospitality, retail, and professional services. 60% of job growth since early 2010 has been in the low wage category, bottom one-third of pay scale. Job growth very weak in middle-paying jobs (mfg and govt).

Not unusual to see this weighting early in a recovery. (EARLY???)

Sequestration is having an impact, most pronounced in defense outlays.

Still thinks Fed will start tapering in September, consistent with the script laid out in past few months.

Quite impressive in the context of the fiscal drag and other headwinds.

Q&A session —

Professional and biz services (+49K) (remember, that includes temps) is more consistent with what BLS has been reporting. It’s a melange of many disparate industries. Fair to say that in general it’s a sign of strength that this sector has strong job growth. Many areas with prof services are not that great in productivity, possibly explaining why GDP growth is weak vs. employment growth.

Doesn’t think employer mandate delay in Obamacare is affecting things yet. Hard to conclude that there’s any meaningful impact on job market of health care reform (but what about what employers haven’t done to grow their businesses?), despite business complaints. Doesn’t expect to see any Ocare impact for the rest of the year. Has been looking for it, and it’s not in the data.

Zero Hedge also believes that a number like this confirms that the Fed will start to taper.

Wednesday Off-Topic (Moderated) Open Thread (073113)

Filed under: Lucid Links — Tom @ 6:05 am

This open thread will stay at or near the top today. Rules are here. Possible comment fodder follows. Other topics are also fair game.

If you are on the front page, click “more” to see today’s items (updated sporadically; items time-stamped 6:05 a.m., if any, were posted earlier and held).
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Positivity: Rep. Jaime Herrera Beutler celebrates ‘miracle’ baby girl born with Potter’s sequence, likely first survivor of rare condition

Filed under: Health Care,Life-Based News,Positivity — Tom @ 6:00 am

From Washington State, and Baltimore (HT Hot Air):

MONDAY, JULY 29, 2013, 1:39 PM

Arriving prematurely at 28 weeks, baby Abigail Rose weighed 2 pounds, 12 ounces at birth. The condition is defined by an absence of amniotic fluid in the womb, which stunts the baby’s lung development.

Republican Rep. Jaime Herrera Beutler is celebrating the arrival of her “miracle” baby, who was born with a rare and usually fatal condition known as Potter’s sequence.

The staunchly anti-abortion congresswoman revealed the devastating diagnosis earlier in her pregnancy but resolved to bring the now-2-week-old Abigail Rose to term.

She is thought to be the first baby to survive the condition.

Doctors remain “cautiously optimistic” about the future but called the baby’s survival “unprecedented.”

“She is every bit a miracle,” the new mother, from Washington state, said in a release. …

Go here for the rest of the story.

As Poor GDP Report Awaits, AP’s Rugaber Starts Early With ‘Prosperity’s Just Around the Corner’ Meme

During the Obama administration’s 4-1/2 year track record of economic underachievement, establishment press business reporters have usually waited until the bad news actually comes out before working on convincing readers that future news will be better.

Not this time, at least at the Associated Press, aka the Administration’s Press. Christopher “Gone are the fears that the economy could fall into a recession” Rugaber didn’t bother to wait for tomorrow’s report on Gross Domestic Product to tell readers that the rest of the year will be fine. The fact that these rosy forecasts have rarely come to pass during the past 17 quarters didn’t seem to faze him a bit.

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July 30, 2013

New Haven Register: Fox, Coulter, the GOP, Nugent, Some of Its Readers — and Don’t Forget Toad’s Place — Embrace KKK’s Message

Those who falsely smear the other side in an attempt to make an argument tend to do so because they have run out of real ones. It would appear that the New Haven Register’s argument cupboard is completely barren of everything but poisonous rhetoric.

In an opinion piece which I can hardly believe is a house editorial, the Register characterizes Ann Coulter, Fox News, the Republican Party, anyone who thinks George Zimmerman really was innocent, Ted Nugent, and Toad’s Place, the venue where Nugent is playing next week, as among those who have “embraced” the “same basic message that the KKK has promoted for 148 years.” Tellingly, the paper turns on many of its readers, adding “a burgeoning array of fringe ‘conservative’ media and members of our own community commenting on stories on the New Haven Register’s website” to the KKK-sympathetic cadre. Brace yourself for what follows after the jump, and ask yourself why any person of genuine good will — left, right, or middle — would willingly support a publication such as this.

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Politico’s Elliott Entirely Ignores Abortion-Related Reasons Why EMILY’s List Head Won’t Run for U.S. Senate in Montana

At the Politico, Rebecca Elliott has reported that “EMILY’s List President Stephanie Schriock will not be running for Senate in Montana,” and that Schriock’s decision represents “another blow to Democrats’ hopes to retain the open seat in 2014″ currently held by the retiring Max Baucus.

Puh-leeze. Two minutes of research would have revealed why Schriock’s candidacy, already dicey in a largely pro-life state, had a high likelihood of turning into the mother of all train wrecks.

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AP: Gathering of 75 in Des Moines Shows ‘Iowa Residents Largely Support’ Medicaid Expansion

Who knew that merely getting just over six dozen people together to support having Iowa “expand Medicaid under President Barack Obama’s health care overhaul” would earn coverage from the Associated Press, and then be treated as some kind of groundswell of support?

Well, it did. The item involved, complete with a headline which makes it appears if some kind of poll might have gauged Iowans’ sentiments on the topic — the better to deceive those who only see the headline — follows the jump (posted in full because of its brevity; HT Instapundit):

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What’s ‘Phony’ Is The U.S. Economy

Filed under: Economy,Taxes & Government — Tom @ 2:00 pm

The Obama administration’s scandals are very real. 

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This column went up at PJ Media early Sunday afternoon Eastern Time and was teased here at BizzyBlog Sunday evening.

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During his one-hour, six-minute snoozer of a speech supposedly about the economy in Galesburg, Illinois on Wednesday, President Barack Obama denounced Washington’s “endless parade of distractions and political posturing and phony scandals.”

“Phony”?

The rest of the President’s speech was so utterly devoid of new ideas that even ordinarily reliable apparatchik Chuck Todd at MSNBC couldn’t handle it, aptly observing of Obama and his administration: “They have nothing new to say.”

Obama, whose flunkies presented his speech as yet another “pivot” back to jobs and the economy, didn’t even identify employment growth as his top priority. Instead, he said that it was reducing income and wealth inequality (“reversing these trends has to be Washington’s highest priority”). That’s pretty funny, because his administration’s policies, in coordination with Fed Chairman Ben Bernanke’s “quantitative easing,” now simply known as “stimulus,” have driven recent increases in those inequalities.

Let’s address those supposedly “phony” scandals.

Scandal” is defined as “a disgraceful or discreditable action.”

Disgraceful or discreditable actions define this administration’s everyday modus operandi. Its contemptuous conduct has generated far too many genuine scandals to address in a single column. While recognizing that certain older scandals, particularly Operation Fast & Furious and Benghazi, are more serious because innocent people died as a result, I will only address the three which broke this past spring.

Go to members of the press — but first get them individually behind closed doors with guaranteed anonymity, because they apparently can’t publicly admit that they disagree with anyone in the Obama administration without losing their precious “access,” let alone their credibility among their peers. Ask them one by one if they believe that Eric Holder, who signed the search warrant for Fox News reporter James Rosen’s private emails, lied under oath when he said the following at a congressional hearing:

As to potential prosecution of the press for the disclosure of material, that is not something that I’ve ever been involved in, heard of or would think would be a wise policy.

Then ask them if lying under oath to Congress about going after a journalist as a potential criminal is a form of disgraceful or discreditable behavior.

Ask members of Congress — the ones who, like Democratic Senator Ron Wyden, aren’t knee-jerk Obama koolaid drinkers — if Director of National Intelligence James Clapper engaged in disgraceful or discreditable behavior when he lied to Congress during a March hearing when he was questioned by Wyden about the extent of the National Security Administration’s collection of data on the activities of everyday Americans. Go one step, further, and ask how scandalous it is that even though Clapper has admitted to his egregious lie, he appears to have suffered no negative consequences for his deception.

As to the IRS scandal, it primarily involved but was by no means limited to the targeting of not-for-profit status applications from conservative and tea party groups for harassing scrutiny and inexcusable delays. At this point, it’s beyond meaningful dispute that the enterprise’s deliberate mission was to mute opposition efforts during the 2010 congressional and 2012 general elections. The targeting’s comprehensiveness during the year or so before 2012 balloting — along with the fact that its existence, though common knowledge in the White House in early 2012, was not disclosed until this year — for all practical purposes has delegitimized Obama’s 2012 electoral victory as a genuine expression of the will of an informed electorate.

We can go to Obama himself for proof that the IRS targeting, which we now know was orchestrated by IRS officials in Washington and not low-level rogue employees in Cincinnati, was scandalous. (The current completely predictable stonewalling, obfuscation, and obstruction are also scandalous, but I digress.)

In May, Obama, who claimed that he read about the IRS targeting in the papers like everyone else, said the following:

This is pretty straightforward. If in fact IRS personnel engaged in the kind of practices that have been reported, and were intentionally targeting conservative groups, then that’s outrageous. There’s no place for it.

“Scandalous” is a synonym for “outrageous.”

IRS personnel, Obama appointees, and White House officials have been shown to have “engaged in the kind of practices that have been reported,” and more. Sorry, Mr. President: Since it was outrageous then, it’s scandalous now. Therefore, since it wasn’t phony then, it can’t be phony now. Your attempt to describe it as phony now is itself scandalous.

What is undoubtedly phony (“false or deceiving; not truthful; concocted”) is our current economy.

Fed Chairman Ben Bernanke said something very important but really scary at a hearing of the House Financial Services Committee on July 17. How do I know it was important? Because the establishment press, with the exception of the wire service AFP, didn’t have a single story which referred to it.

During the question and answer session after his prepared testimony, Bernanke said the following:

I don’t think the Fed can get interest rates up very much, because the economy is weak, inflation rates are low. If we were to tighten policy, the economy would tank.

(The link is to “Q&A highlights” at Reuters, but that wire service’s related coverage also did not contain the quote.)

Keep in mind that “tightening” in the current context involves reducing, or “tapering,” the $85 billion per month in money Bernanke is electronically printing so he can buy government debt and mortgage-backed securities.

What kind of economy needs continuous artificial injections of $85 billion out of thin air every month to be kept from “tanking”?

  • One whose government continues to run unustainable deficits and which probably could not borrow enough money from other sources to finance them without those artificial injections.
  • One where any hint that Bernanke might start tapering is treated by the stock market as a reason to start scoping out the exits.
  • One where the stock market treats indications that the employment market or economic growth might finally start accelerating — in other words, what you and I would consider “good news” — as reasons to sell. Why? Because Big Ben might start tapering.
  • One which has had trillions and trillions of dollars in artificial stimulus from fiscal deficits and the Fed, and yet, as seen in the recent reductions of analysts’ second-quarter growth estimates from about 1.7 percent to below 1 percent, still can’t generate acceptable economic growth.

In other words, a phony one.

Evil Employers Forcing Employees Into ObamaCare Exchanges

Except that the evil employers are municipal governments, as an Investor’s Business Daily editorial noted yesterday:

Detroit Shows How ObamaCare Will Bankrupt the Country

Cost-Shifting: Looks like Detroit might get a federal bailout after all, by offloading its retiree health costs onto federal taxpayers via ObamaCare. It’s a window into why Obama-Care costs will quickly spiral out of control.

On Sunday, the New York Times noted that Detroit hopes to push its younger retirees who aren’t yet eligible for Medicare into the ObamaCare exchanges, where many will be eligible for subsidized insurance. Federal tax payers will pick up the tab, rather than those in Detroit. (IBD’s Jed Graham first wrote about this last month.)

One of the first to suggest this clever cost-shifting idea was Chicago Mayor Rahm Emanuel, who was in the Obama administration while it was putting ObamaCare together. In May, he revealed plans to save about $108 million a year by tossing 30,000 retirees into the ObamaCare exchanges.

If Detroit and Chicago get away with this, you can bet other cities will try, too. The U.S.’ 61 largest cities have more than $118 billion in unfunded retiree health care liabilities, the Pew Charitable Trusts estimates.

And the National League of Cities is practically drooling over the opportunity to shift as much as possible onto ObamaCare.

Imagine that. The public-sector unions will probably roll over on this. Union bosses tend to be all about representing current workers. When push comes to shove, they’ll throw retirees, who often do not have a vote on union contracts, under the bus and let the nation’s taxpayers pick up the tab (e.g., [although they're private sector -- well, sort of in GM's case]: GM and Chrysler bailouts).

Tuesday Off-Topic (Moderated) Open Thread (073013)

Filed under: Lucid Links — Tom @ 6:05 am

This open thread will stay at or near the top today. Rules are here. Possible comment fodder follows. Other topics are also fair game.

If you are on the front page, click “more” to see today’s items (updated sporadically; items time-stamped 6:05 a.m., if any, were posted earlier and held).
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Positivity: One of Air Force’s most decorated heroes passes away

Filed under: Positivity,US & Allied Military — Tom @ 6:00 am

From Shalimar, Florida (HT to an emailer):

One of the most decorated Airmen in Air Force history, whose career spanned three wars and four decades, has passed away.

Retired Col. George Everett “Bud” Day, an Air Force pilot, shot down during the Vietnam War and imprisoned in the infamous “Hanoi Hilton” along with Sen. John McCain, defiantly resisted the North Vietnamese for more than five years, and was awarded the Medal of Honor for his actions. He passed away July 27, in Shalimar, Fla., at age 88.

Day received close to 70 medals and awards, 50 of them combat-related, during a career that began in 1942 when, as a young 17-year-old, enlisted in the Marine Corps. Day would spend three years in the South Pacific during World War II before returning home to get a law degree.

In 1950, Day joined the Air National Guard and was called to active duty a year later, where he would go through pilot training and become a fighter pilot in the Air Force, where he would fly sorties during the Korean War.

But it was during the Vietnam War that Day would make his mark on history. In 1967, Maj. Day commanded Detachment 1, 416th Tactical Fighter Squadron, an F-110 unit, with the top secret mission to fly over Vietnam and Laos as forward air controllers. On Aug. 26, Day’s plane was hit by ground fire, and as he plummeted to Earth, ejected and smashed against the fuselage, breaking his arm in three places.

Day was initially captured and taken to an underground shelter, where he was threatened with a mock execution after refusing to answer the enemy’s questions. After five days, he escaped. In spite of his serious injuries and missing his boots, he traveled over 25 miles. During his arduous travel, he ate only local fruit and raw frogs, and he was further injured when a bomb went off nearby. After about 10 days, Day made it across the Ben Hai River into South Vietnam and a few days later was about two miles away from the Marine base at Con Thien. Tragically, Viet Cong insurgents discovered Day and shot him in the left thigh and left hand.

He was then moved to the “Hanoi Hilton,” where his wounds were left untreated, he suffered from malnutrition and constantly tortured. Day endured years of agonizing treatment. Many of his injuries did not heal properly, and his weight dropped to about 100 pounds. Still, Day remained defiant. In the spring of 1968, he was taken to the “Zoo,” a punishment camp for “hard resisters.” There, he was beaten so hard his vision became blurred. After Ho Chi Minh died in the fall of 1969, the POWs’ situation improved somewhat, but Day was still singled out for especially harsh treatment.

During one instance in 1971, guards burst in with rifles as some of the prisoners gathered for a forbidden religious service. Day defiantly stared the guards down and began to sing the “Star Spangled Banner” in protest. The other prisoners, including the prison’s top ranking officer, James Stockdale, joined him. …

Go here for the rest of the story.