CNBC’s Fast Money quotes an investment strategist who says that when Federal Reserve Chairman Ben Bernanke gives his first press conference on April 27, his remarks “could induce a 10 to 15 percent correction” in the market. Here, “correction” means “drop.”
The reason the market might drop one-tenth of its value in a matter of hours is due to some analysts’ fear that Bernanke will not continue printing money (i.e. quantitative easing) to inflate the value of assets. When values return to more realistic levels, investors are likely to stop banking on government-distorted policies to bail them out.
The purpose of the Fed is to tinker with the money supply and interest rates to stabilize the economy. So far, the only stability it’s guaranteeing is as fake as a free lunch.
Bloomberg reports that the rumored $33 billion in cuts being negotiated by House Speaker John Boehner (R-OH) and Senate Majority Leader Harry Reid (D-NV) is looking like the key number both sides are working towards. For perspective, that’s $28 billion less than the House of Representatives passed a few weeks ago, and $67 billion less than Republicans promised during last year’s mid-term elections.
When the $61 billion cut was passed, Tea Party-backed legislators accepted the reduction under the assumption that half a loaf is better than nothing at all. Now, the loaf is down to a third, and activists are having none of it.
Whatever sum gets approved, it’s a sure bet the Tea Party and the members of Congress friendly to it won’t forget the importance of starting the cut threshold even higher next time. At this rate, don’t be surprised if the 2012 battle cry is, “$500 Billion in Cuts or Fight!”
Remember the line that President Obama used so often to soothe the anxieties of Americans worried about healthcare reform? “If you like your health insurance, you can keep it”? Well, things have gotten a litte more complicated since those earlier, more innocent days. Just ask Joel Ario, the HHS bureaucrat charged with overseeing Obamacare’s health insurance exchanges. According to The Hill’s Healthwatch Blog:
“If it plays out the exchanges work pretty well, then the employer can say ‘This is a great thing. I can now dump my people into the exchange and it would be good for them, good for me,’ ” Ario continued.
A kindly reminder from those of us not serving in the Obama healthcare politburo. If, like the majority of Americans, your employer provides your healthcare, you don’t get to choose whether or not you keep your current healthcare. And the government is putting its hand on the scales.
Indiana Republicans are expected to pass major school choice legislation in the next few days, allowing a family of four with incomes as high as $60,000 the opportunity to spend their tax dollars on the kind of education they want.
Here’s a perfect summary of the argument for public school vouchers from one Hoosier supporter:
“We fund education for a reason — to give individual children the skills they need to compete in life,” said Luke Messer, former executive director of the Indiana Republican Party who now heads School Choice Indiana. “If the money follows the child, parents ought to have the right to put their child in whatever opportunity they think would best serve their family.”
Vouchers put power into the hands of those most affected by choices about schools: families of students. Let’s hope Indiana Republicans go to the mat for this one.
It’s been a while since former Rep. Charles Djou (R-HI) lost his reelection bid last November. CFIF profiled Djou prior to his upset victory in a special election last May. Now, it looks like Djou might run for a U.S. Senate seat, but only if former Governor Linda Lingle (R-HI) decides against it.
Of the two, Djou is the more conservative; especially when it comes to fiscal matters. That said, either candidate would certainly be an improvement over retiring Senator Daniel Akaka (D-HI).
For everyone astonished or disgusted at the ease by which the political left either defends Obama vis-a-vis Libya or stifles the hysteria it unleashed against George W. Bush, there’s now a must-see video for you. From “Obama is awesome” to Fox News slurs to citing “Saturday Night Live” or “The Colbert Report” as authority, the rationalizations offered by the female avatar defending Obama will sound familiar and elicit laughter. Watch as the Obama defender’s male counterpart explains that Bush’s Iraq coalition was actually broader than Obama’s “multilateral” effort, that Bush actually obtained Congressional approval while Obama did not and that Saddam Hussein’s record of slaughter dwarfs Colonel Gadhafi’s:
Republicans in Congress are currently split on whether to accept incremental budget cuts in the name of political pragmatism or to hold a hard line — and face the possibility of a government shutdown or a freeze in the debt ceiling — in the name of principle. Freshman Florida Senator Marco Rubio takes to the editorial pages of the Wednesday edition of the Wall Street Journal with a message that leaves no doubt where he stands:
“Raising America’s debt limit is a sign of leadership failure.” So said then-Sen. Obama in 2006, when he voted against raising the debt ceiling by less than $800 billion to a new limit of $8.965 trillion. As America’s debt now approaches its current $14.29 trillion limit, we are witnessing leadership failure of epic proportions.
I will vote to defeat an increase in the debt limit unless it is the last one we ever authorize and is accompanied by a plan for fundamental tax reform, an overhaul of our regulatory structure, a cut to discretionary spending, a balanced-budget amendment, and reforms to save Social Security, Medicare and Medicaid.
For months now, we’ve heard “sober” politicians tell us that it’s time to have “an adult conversation” about the size and cost of government in which “everything is on the table”. It looks like Marco Rubio is calling their bluff.
Though current oil volatility will mask its effect, decades old federal regulations mandate that gas stations sell a “summer blend” gasoline from June 1 to September 15 (some localities extend the period). The blend is intended to cut down on air pollution in local areas, but it also adds an average of 10 cents per gallon to the cost of gasoline. Just what we needed.
Pratt & Whitney serves as the main producer of the F-35 engine, but forces in Congress perpetuated the wasteful General Electric and Rolls-Royce second engine. Although both the House and Senate have voted to end the second engine and allocate those precious defense dollars on more critical needs, the project kept going because the previous Congress never passed a 2011 budget. That left the Defense Department to operate on continuing resolutions based on the fiscal 2010 appropriations.
It’s an embarrassing illustration of wasteful Beltway politics, and a reminder of what we who favor fiscal sanity must continually overcome. Fortunately, the Defense Department just provided an assist in that effort.
A troubling trend seems to be emerging in the defense industry—outsourcing national security to foreign companies.
We recently learned that two defense companies are competing for a proposed American attack aircraft contract: Hawker Beechcraft of Wichita, Kansas, and a Brazilian company named Embraer. One particularly disturbing fact is that Embraer receives subsidies from the Brazilian government, which has publicly opposed the War on Terror and American efforts against Iran and Venezuela, but now seeks to profit from that same U.S. commitment to military strength. Another troubling item is an unconventional clause in the potential Embraer contract known as the “Golden Share” clause. Under that provision, the Brazilian government would be empowered to shut down the operation at any time during the production or maintenance of the aircraft. Alarmingly, the United States would have no means for recourse on the matter. That’s not very “golden” for American interests.
Additionally, awarding the contract to Hawker Beechcraft would sustain an estimated 1,400 domestic jobs, whereas Brazil’s Embraer would offer only 50 final assembly positions. Moreover, the Hawker Beechcraft AT-6 is based upon an aircraft already in wide use by the U.S. Air Force, the U.S. Navy, the North American Treaty Organization (NATO) and other American allies. Consequently, that familiarity and logistical infrastructure advantage would allow for substantial cost savings over the new aircraft’s life cycle. This is particularly important at a time when the Defense Department seeks cost control measures.
Americans just witnessed a similar episode between Boeing and foreign company EADS, and outsourcing defense to foreign companies is simply bad policy. America cannot afford to jeopardize domestic jobs or our national security.
CFIF Senior Fellow Troy Senik takes President Barack Obama to task in a column for The Daily Caller today, arguing that the commander-in-chief has the power to bring down gas prices, but won’t. Instead, Obama would rather enrich a semi-socialist state like Brazil while America’s economy sputters.
In fact, gas prices are up 67 percent since President Obama took office a little more than two years ago. Lest you think this analysis one-sided, during the same period in President Bush’s tenure gas prices increased by only seven percent.
Yet that doesn’t seem to bother President Obama much. Earlier this month, he said that we can’t drill our way out of our energy problems. That is like suggesting you can’t medicate yourself out of an illness.
From Charles Krauthammer on the Right to Peggy Noonan in the middle, denunciation of President Barack Obama’s handling of the war in Libya is expected. But tough talk from a reliable liberal like Eugene Robinson? Now, that’s progressive.
When every opposition group voted down his austerity budget earlier this week, Portugal’s prime minister resigned. Now, the European Union is preparing to bail out a third member nation in just over a year. (The other two are Greece and Ireland.)
While the Portuguese mess probably won’t have an immediate fiscal impact on the United States, the EU’s crisis of federalism could soon be felt over here.
States like Illinois and California are teetering on the edge of insolvency after spending like a bunch of reckless European countries. Because of the EU’s shared currency and the effects a default would have on the rest of the federation, the EU feels pressed into covering the costs of some members’ excess.
The same thinking seems likely to migrate across the Atlantic. Members of Congress are mulling options like bankruptcy for failing state governments, though that risks undermining state sovereignty. Also, bailouts run the risk of prolonging hard decisions, as well as deepening the dependency of states on the feds.
There are no easy answers, but there are some necessary decisions. Time will tell if those in Sacramento and Springfield can come to better resolutions that the parliament in Lisbon.
In fact, it’s not even close. Using aggregated data compiled from 148 nations during the years 2007 through 2010, survey subjects were asked, “Ideally, if you had the opportunity, would you like to move permanently to another country, or would you prefer to continue living in this country? To which country would you like to move?” The United States was the runaway leader, with more than three times as many respondents as the next closest countries (Canada and the United Kingdom). The U.S. led with 24%, Canada and the U.K. were far behind at 7% each, with France at 6% and Spain at 4%. In fact, America was named as the top potential destination by as many people as the U.K., France, Spain, Germany and Italy combined. So much for that supposedly superior European model.
Additionally, the survey found a nationwide economic impact. Shallow water expenditures were made in 219 congressional districts — including 102 congressional districts with expenditures of $1 million or more, 32 congressional districts with expenditures of $10 million or more and 7 congressional districts with expenditures of $75 million or more.
Refusing to issue new permits for deep and shallow water drilling only increases the costs of gasoline and natural gas to consumers and destroys jobs across America. Along with financial boondoggles like ObamaCare, the president’s willful refusal to increase domestic energy supplies is likely to be a huge liability in his reelection bid.
In this week’s Freedom Minute, CFIF’s Renee Giachino discusses the national debt crisis, Congress’ addiction to excessive spending and the Democrat’s budget plan. Giachino warns that without serious and immediate action to right the nation’s fiscal ship, America is destined to a future of higher taxes, greater inflation and a lower standard of living.
In an interview with CFIF, Professor Kori Schake, research fellow at the Hoover Institution and an associate professor of international security studies at the United States Military Academy, discusses the Libya campaign and the Obama Administration’s sudden change of direction.