Red State

When people on the left start favorably linking to this Wall Street Journal article, you know the bailout has problems.

[I]n the other American auto industry you rarely read about, car makers are gaining market share and adjusting amid the sales slump, without seeking a cent from the government.

These are the 12 "foreign," or so-called transplant, producers making cars across America's South and Midwest. Toyota, BMW, Kia and others now make 54% of the cars Americans buy. The internationals also employ some 113,000 Americans, compared with 239,000 at U.S.-owned carmakers, and several times that number indirectly.

The root of this other industry's success is no secret. In fact, Detroit has already adopted some of its efficiency and employment strategies, though not yet enough. To put it concisely, the transplants operate under conditions imposed by the free market. Detroit lives on Fantasy Island.

And therein lies the problem. The Democrats have set up a false dichotomy -- helping American automakers and not foreign automakers.

Funny, in Democrats' minds massive immigration of people is a good think. Hell, they'll even embrace you if you're illegal. But no foreigners allowed, even highly productive ones, when the foreigners are companies employing American workers.

The world has advanced too far for Democrat protectionist policies of command and control.

Yes, that Peter Funt, and he's starting to wonder when it ends:

This is not easy to write, because I consider the election of Barack Obama to be one of the most inspiring political and social developments of my lifetime. I truly mean no disrespect when I say: Stop asking for money.

The answer is, of course, that it won't. Ever.

This is the race that never ends, yes it goes on and on my friends
Some people started running it, not knowing what it was
And they'll continue running it forever just because...

Moe Lane

PS: "Mean no disrespect?" The guy's going to be President, not King; and he's the one with a hand out, asking for a bailout for the DNC. Show some backbone, man.

Promoted from the diaries by Erick

I went to the rally the vote event for Saxby Chambliss this afternoon. And, again Sarah Palin showed, as she has in every venue before this one, what charisma and star power are. It may have not been a record but the thousands of people - young women, at least 3 or 4 beauty queens with their tiaras and sashes, little kids, young couples with babaies, and the staple of the GA RNC, old people - came out to see her and her only.

At an event to re-elect (in a runoff) Senator Chambliss, it was billed as "Chambliss - Palin" on the signage leading to the Gwinnett Civic Center. The candidate INTRODUCED the the Alaska Governor who spoke for the majority of the event. After a very good speech, her fourth of the day, Senator Chambliss and Governor Palin made their way through the rope line. It was easy to spot Saxby making his quickly through his supporters. To see Sarah you followed the photo flashes,the pointing of hundreds of cameras and video, the kids being passed up, and crush of most of the crowd around her. It was easier to see her from 10 aisles up than 10 feet away.

Considering my choices, I took the easier of two possibilities. I shook hands with Senator Chambliss' and made my way to the door. Sarah Palin's appearance may not have any appreciable affect on turnout. I do not think it will, but I have already voted for the Senator. I would believe that Senator Chambliss would rather be the foil for peaple hoping to see the next POTUS at the beginning of her ascent than being the headliner for Congressman John L. Lewis and Ludacris - ala Jim Martin - the night before his re-election.

Anyway, another inspiring Palin sighting means more hysteria from the Looney Left and Democrats who still have memories of another "amiable dunce" and more MIS-anlysis from the drive-bys and DC-Philly-NYC Milk Toast Conservatives. Enjoy.

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I think we're all getting a quite vivid sense that President-elect Obama's way of handling tough situations is to set his jaw, furrow his brow, stare purposefully forward, say reassuring things, but on no account to make any clear statements of intent, or to actually do anything.

At least one of the consequences of this extremely risk-averse approach to leadership, is that financial markets are completely in the dark about what they can expect from the new government.

And when financial markets don't know what to expect, they always err on the side of excessive caution. Hence the great difficulty they've been having in finding a bottom to bounce off from.

The stock and bond markets appear to be discounting an economic future that is little short of catastrophic. Since total catastrophe is one of the least likely outcomes, it stands to reason that markets are currently underpriced.

But that's not to say they can't very easily become a lot more underpriced!

Obama could sweep away a lot of this uncertainty and unreasoning fear with no more than a ten-minute news conference.

He could stand up, with the towering Paul Volcker, the sour-pussed Larry Summers and the sardonic-looking Tim Geithner standing behind him, and say the following:

"Ladies and gentlemen, I've consulted at length with my economic team. We're acutely aware that our economy is facing great uncertainty. We understand that our system is a capitalistic one. We intend to do whatever it takes to get business and capital working again, for the sake of every consumer and working person in America.

We also recognize our critical responsibility to the rest of the world. As the pre-eminent economic power, it's up to us to lead global markets back to health and prosperity.

I'm announcing the following key decisions, which we will stand by until our markets are back to normal, employment is growing, and our economy is healthy again:

All tax increases on capital, dividends, and business income are OFF THE TABLE.

All protectionist legislation, including increased tariffs and import duties, are OFF THE TABLE.

All new regulations, mandated costs and taxes on businesses, including export businesses, are OFF THE TABLE.

That is all. Thank you."

If Obama were to give this speech, you'd see explosive market rallies, and everyone would heave a big sigh of relief.

So how about it, Mr. President-elect?

-Francis Cianfrocca

John Goodman, head of the National Center for Policy Analysis, breaks down Obama HHS Secretary Tom Daschle's philosophy on health care reform, as expressed in his book Critical: What We Can Do About the Health Care Crisis, thusly:

The main ideas: Medicaid expansion, Federal Employee Health Benefits Program (FEHBP) for everyone who wants to enroll, Medicare for the nonelderly as a FEHBP option, a play-or-pay mandate for individuals, income-based, refundable tax credit subsidies (both at work and away from work), a play-or-pay mandate for employers, electronic medical records, a national health board ("to establish a single standard of care for every other provider and payer"…covering every disease from cancer to diabetes and even depression), preventive care, dental health, mental health, long-term care, home care, community health centers and combating obesity.

Not on the list: Health Savings Accounts, although Daschle was once an advocate, and even cosponsored HSA legislation.

Not on the list: Single-payer health insurance, but only because it is not politically practical.

Not on the list: Any way to pay for any of this. (The issue is not, can we afford reform? The issue is, can we afford not to?) I'm not kidding.

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The first are bone-crushingly naive, of course: but the second have had a really rotten return on their investment, these last few years.

But let's check in with the New York Post, first:

High-ranking members of Congress were flown to a lush Caribbean resort this month for a three-day conference planned and paid for by several of the country's most powerful corporations - a violation of federal ethics rules, critics say.

Six members of the Congressional Black Caucus attended the 13th annual Caribbean Multi-National Business Conference in sun-drenched St. Maarten, including embattled Harlem Rep. Charles Rangel and New Jersey Rep. Donald Payne.

(Via A Blog For All, via Instapundit.)

Let's give you the list, shall we?

Charles Rangel (D, NY-15) Donald Payne (D, NJ-10) Sheila Jackson-Lee (D, TX-18) Carolyn Cheeks Kilpatrick (D, MI-13) Bennie Thompson (D, MS-2) Donna Christensen (D, VI) (nonvoting member)

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Congratulations to RedState friend Kevin McCarthy, a Republican Congressman from California. Eric Cantor has just named him the Chief Deputy Whip for the House Republicans.

It is a fine choice.

Sarah Palin is on a barnstorming tour of the state of Georgia today, campaigning for fellow Republican Saxby Chambliss. The incumbant senator faces a runoff election tomorrow against challenger Jim Martin, a Democrat. With votes still being recounted in the Minnesota senate contest between Al Franken and Norm Coleman, the outcome of Tuesday's Georgia runoff could determine the size of the Democrats' majority in the senate.

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Rep. Louie Gohmert (R-TX), a member of the Republican Study Committee, has had enough of Congressional bailouts.

Right now there is $350 billion left of he $700 billion Congressional bailout funds. He has an alternative to more bailouts: a two month tax holiday.

Gohmert’s tax holiday plan is elegant in its simplicity: every American taxpayer would pay no federal income or FICA taxes for the first two months of 2009. For the typical American family -- earning about $50,000 a year -- that would mean they would keep about $2000 that would otherwise be paid to the government.

Gohmert’s plan doesn’t pay for Wall Street bonuses or let banks use bailout money to buy other banks or pay dividends. It doesn’t rely on bureaucrats to pay money out to the right people at the right time or try to stimulate the economy with token payments to people who don’t pay taxes.

Gohmert would like to hold the holiday in January or February of next year. It would cost approximately $332 billion, still cheaper than using the rest of the bailout money for a bailout.

Freeing individuals from two months of federal taxation would be a substantial benefit to families and the economy. “Those who can’t catch up on their mortgage get one-third of their money back each month and then they’ll be able to catch up on their mortgages. They’ll be able to refinance their mortgages, they’ll be able to buy stock that they can’t currently buy,” Gohmert said.

He added, “Somebody earning $72,000 would get a couple of thousand dollars back a month if we allow them to get back both income tax and FICA.”

You can sign our petition to support Congressman Gohmert. As events unfold and the legislation is drafted, we will email petition signers with the names and phone numbers of Congressmen to call to support the Gohmert plan.

You can post this petition too by embedding this code in your site:

<script src="https://widgets.kimbia.com/widgets/form.js?channel=redstate.kimbia.com/taxholiday"> </script>

The direct link to the petition is here.

The 30-year T bond is priced to yield 3.34% this morning. The 10-year note is at 2.83%. These are extraordinary numbers, and they're still falling fast. Three-and-six month bills are already at or near zero. This is powerful and continuing evidence that markets are uncertain and fleeing from risk.

The midcurve and long-end are multi-trillion dollar asset classes that have increased in value by something like a third, in just the last few weeks. If you thought supertankers couldn’t turn on a dime, you haven’t been watching the bond market.

One is also tempted to say this is evidence that markets are expecting extreme economic weakness ahead.

But there are so many dislocations in the bond market and trading is so illiquid, that it would be a stretch to say this is signaling anything but total uncertainty. By “dislocation,” I mean that there is an abundance of relationships among assets that make no economic sense. (The continuing negative 30-year swap spread is just one example.)

A textbook world would arbitrage the dislocations away almost immediately. Yet they persist and in some cases are growing.

But what is the real price of money in a time of deflation? A zero-yield six-month Treasury bill, combined with October’s 1% decline in CPI, implies a real interest rate of something like 5 or 6%: that's exceptionally high, and a very good reason not to engage in economic activity.

Then there is the pricing of TIPS. These are Treasury securities that adjust their principal amount every year according to the Consumer Price Index. So in theory, they represent the real cost of risk-free money at any given point on the yield curve. And the difference between TIPS yields and Treasury yields predicts future inflation.

As far as I can tell, the current TIPS spread appears to be predicting that we’ll have deflation of more than one percent each year for at least the next five years. Make of that what you will.

As I said, extreme uncertainty. And uncertainty breeds risk-aversion, which breeds economic weakness.

Update: At 10am ET, the 30-year bond is up almost two and 26/32, to yield 3.30%. The 10-year note is yielding 2.81%. As I said, extraordinary.

-Francis Cianfrocca

Note: "former Governor" is a title of trust and respect, and Ryan has forfeited both. Please refresh your memory of the details of his criminal activities before you read on: it's necessary to understand Senator Dick Durbin's (D-IL)... well, "failure" is a nice, non-judgmental word, I suppose. John Kass likes "foolish":

Just before Thanksgiving, Sen. Dick Durbin (D-Ill.) moistened his finger and, as he has done so many times in his career, held the digit aloft to check the prevailing winds.

This time, when he figured the winds were just right, Durbin lofted his trial balloon that carried with it the hopes and dreams of the corrupt bipartisan Combine that runs this state.

Durbin said he was considering writing a letter asking Republican President Bush to commute the prison sentence of the corrupt and unrepentant former Republican Gov. George Ryan.

Because, hey, what does Senator Dick Durbin (D-IL) care about dead kids, anyway?

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From the diaries by Erick.

Some think it a canard that liberals aren't patriotic. In some ways, it is a canard, but only just. Some liberals really do imagine themselves patriotic. But in what ever way liberals imagine they feel for their country, it doesn't seem that patriotism is really what they feel. At least not in the way that patriotism is properly defined. There has been a spate of stories in the media since Obama's election that serve to illustrate why liberals seem incapable of being patriotic.

But, first, what is patriotism?

After the War of 1812 one of our most celebrated sea captains, Stephen Decatur (America's first post Revolutionary War military hero) once gave a toast at Norfolk to his fellow seamen that is the most perfect illustration of true patriotism. As he lifted his glass, Decatur said, "Our country! In her intercourse with foreign nations, may she always be in the right; but our country, right or wrong."

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It seems to me that focus has shifted away from China’s economic and financial doings during the acute financial crisis that began last September.

The story in China for most of this year and last year has been extremely high inflation (particularly in prices for staple foods), and vigorous measures by the country’s banking and monetary authorities to reduce the formation of credit.

Up till late 2007, they also had a wicked bubble in their domestic stock markets (Shanghai and Shenzen, where non-Chinese may not trade), which they popped quite successfully. Be glad you weren’t invested in those markets.

In recent months, they’ve been walking back most of those policies, as economic growth has slowed sharply. Last year’s growth was 12.6%, led largely by exports and capital investment. (Three years ago, China had a true economic boom, led by domestic demand-growth, which had mostly petered out by last year.)

But next year, growth will probably run anywhere from 7.5% to 9%, according to estimates from the World Bank and other sources that are not the Chinese government. The raging inflation of the past year is also mostly gone.

As a result, the government is taking aggressive steps to pump growth back up, notably by pulling back policies intended to reduce bank lending. But it’s not clear to me that they can do this in the most healthy and sustainable way (by stimulating domestic demand).

Instead, they’re reaching for the tried-and-true: export growth.

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President-elect Barack Obama plans to nominate Senator Hillary Rodham Clinton as his secretary of state on Monday.

Hillary's nomination will be made in the face of the Constitutional prohibition in the Emoluments Clause (Article I, Section 6, clause 2):

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A number of interesting observations have percolated throughout the Interweb in the aftermath of the 2008 election - arguments about the "youth vote", the "center-right versus center-left," pushing aside social conservative issues, etc. But one of the most thought-provoking topics receiving attention is the issue of the presence (or lack thereof) of the Right in the online "Web 2.0" universe. As a technology geek by trade, this topic is near and dear to my heart.

Much has been made of the aforementioned "youth vote" in the post-election analysis, and within that discussion are implications that the youth were energized by the online presence of the Obama campaign. Tools such as YouTube, Twitter, Friendfeed, numerous blog sites, SMS, etc. were used to not only educate, but to "activate." A huge portion of Obama's fundraising was done via the web - small donations that eventually added up to huge numbers (please, let's not get into the issue of overseas donations, etc. - that's really not the point). These tools were used to empower activism, through GOTV-type projects, state-by-state campaign events, as well as fundraising. I am not 100% convinced that there is an obvious correlation between the high percentage of the 18-29 crowd that voted for BHO and his online presence...since youth are already steeped in online culture, and youth seem to lean left to start with, it is difficult to assign a direct cause/effect relationship proving that Obama's leverage of technology led to his success with that demographic. But it certainly didn't hurt.

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