Buck Naked Politics

The Economy: There's Really Nothing Anyone Can Say

by Damozel | Ludwig Wittgenstein said:  'Whereof one cannot speak, thereof one must be silent.' Assistant Treasury Secretary Chuck Swagel didn't have any reassurance to offer about the economy, 90 minutes after the country learned that the country has lost jobs for the sixth months in a row. In fact, as Dana Milbank remarks, words failed him.

Does this mean the economy is worse than the Bush administration expected?

"We shouldn't, in a sense, be surprised when the data are, are, soft," Swagel managed to say.

Does the economy need another stimulus package?

"I-it seems, you know, it seems like that's, that's enough, uh, enough."

How Uninformed is John McCain About the Economy?

by Damozel | Let's ask him!

Throughout the past eight years, and as recently as last December, McCain has acknowledged on a number of occasions that he knows very little about the economy:

– Seeking to explain his shift to the left on economic issues, McCain claimed: “I didn’t pay nearly the attention to those issues in the past. I was probably a ’supply-sider’ based on the fact that I really didn’t jump into the issue.” [Jan. 2000]

– “I’m going to be honest: I know a lot less about economics than I do about military and foreign policy issues. I still need to be educated.” [Nov. 2005]   

– “The issue of economics is not something I’ve understood as well as I should,” but “I’ve got Greenspan’s book.” [Dec. 2007]  (Think Progress)

Note that Think Progress has thoughtfully provided links to the original sources. 
 

McCain Wants Tax Cuts -- for Himself

by D. Cupples |  Friday, Media Matters reported:

"Last week, the Center for American Progress Action Fund released a new report by Michael Ettlinger estimating that under McCain's tax plan, he and his wife, Cindy, would save $373,429. That's nearly $400,000 -- per year, not over the course of their lifetimes. (Under Barack Obama's plan, the McCains would save less than $6,000.

"The Obamas would save nearly $50,000 under McCain's plan, and slightly more than $6,000 under Obama's plan own plan.)"

While those numbers are interesting, Media Matters' primary point was actually the media's coverage failures and inconsistencies.

Pearlstein at WaPo: This Recession is a Mean One, and It's Not Going Away

by Damozel | I'm sure you've noticed it too:  the feeling that we're speeding down the hill without brakes and there's no exit in sight.  Nope.  It's not a bad dream.  It's the proof you're awake.

You know that 'rebound' you've been hearing about?  According to Steven Pearlstein, it's just a mirage.

It ain't gonna happen. Not this summer. Not this fall. Not even next winter.

This thing's going down, fast and hard. Corporate bankruptcies, bond defaults, bank failures, hedge fund meltdowns and 6 percent unemployment. We're caught in one of those vicious, downward spirals that, once it gets going, is very hard to pull out of. (WaPo)

And that, it appears, is the good news. 

Thumbnail Primer on Term Life Insurance

posted by Chris | Hold back your excitement as you read this missive! 

Seriously.  Most people need life insurance for either protecting their families (or business partners) or for estate planning.  There are several types of life insurance policies including universal life & variable life ( aka, permanent insurance) and term insurance. 

Some policies include a savings component and some do not.  Today we will concentrate on term insurance.

Oil Prices Up, U.S. Dollar Down

Will the economic and energy-related news ever get good?  Via Memeorandum, CNN reports:

"Oil reached $140 a barrel for the first time ever Thursday following reports that Libya may cut production and an OPEC official said crude could hit $170 a barrel this summer.

"Meanwhile, the dollar's decline against the euro added further upward price pressure....

"Light, sweet crude for August delivery ended the trading day at a record settlement of $139.64 a barrel, up $5.09, on the New York Mercantile Exchange - the third-largest single-day jump on a dollar basis in trading history. The previous settlement mark of $138.54 was set June 6, when oil prices jumped a record of $10.75 a barrel."  (See the rest of the story here)

Hundreds Indicted for Mortgage Fraud

Via Memeorandum, a Justice Department press release states, in part:

"Today we are announcing the results of a nationwide law enforcement sweep aimed at investigating and prosecuting mortgage fraud. In three and a half months, this action, known as Operation Malicious Mortgage, has resulted in charges against more than 400 individual defendants. Yesterday alone, 60 people were arrested and face charges, and arrests are continuing today....

"In a separate action today, an indictment was unsealed in the Eastern District of New York charging two Bear Stearns portfolio managers with conspiracy and fraud charges related to two hedge funds that invested in, among other things, securities tied to mortgage debt.  (Read more here.)

Obama Does a 360 on NAFTA

by Damozel | My colleague addressed Obama's professed love for 'the free market' yesterday. (BN-Politics)  Indeed, economist Paul Krugman pointed out back in January that Obama was less  progressive than either Clinton or Edwards on certain issues affecting domestic policy.  With respect to today's article in Fortune --- certain to cause alarm and despondency among progressive supporters who were carried away by his Message of Hope --- color us unsurprised.  Forewarned by Krugman and others, we checked the fine print. 

His campaign was quick to point out that this isn't really a reversal as such. He's just worked back round to his original position.

Oil Prices Up, Stock Prices Down

From the Associated Press (via Truthout):

"Oil prices shot up more than $11 to a new record above $139 Friday after Morgan Stanley predicted prices would hit $150 by the Fourth of July. The unprecedented jump is all but certain to drive gas prices well past the $4 mark in the coming weeks.

"Oil's meteoric surge, which pushed prices more than 8 percent higher in a single day, added to a huge increase Thursday to cap oil's biggest two-day gain in the history of the New York Mercantile Exchange. The burst higher - which also came on rising Middle East tensions - also raised the prospect of accelerating inflation by adding to already strained transportation costs. That gloomy outlook sent stocks tumbling, taking the Dow Jones industrials down more than 300 points."

Unemployment Rate Rose in May

The Bureau of Labor Statistics reports:

"The unemployment rate rose from 5.0 to 5.5 percent in May, and nonfarm payroll employment continued to trend down (-49,000), the Bureau of Labor Statistics of the U.S. Department of Labor reported today.  In May, employment continued to fall in construction, manufacturing, retail trade, and temporary help services, while health care continued to add jobs.  Average hourly earnings rose by 5 cents, or 0.3 percent, over the month." (via Memeorandum)

The State of Female Retirement

posted by Chris |  Below are a few statistics about retired women:

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- 20%: the percentage of older women living alone in poverty.

- 6 : the average number of years that women live longer than men.

- 58%: women’s median retirement income as a percentage of men’s

- $800: average monthly Social Security benefit for women ($1,177 for men)

The McCain Non-Option (Krugman on McCain's Tax Policies)

Posted by Damozel | Krugman writes:

As the designated political heir of a deeply unpopular president — according to Gallup, President Bush has the highest disapproval rating recorded in 70 years of polling — John McCain should have little hope of winning in November. In fact, however, current polls show him roughly tied with either Democrat....  For the most part... it probably reflects the perception, eagerly propagated by Mr. McCain’s many admirers in the news media, that he’s very different from Mr. Bush — a responsible guy, a straight talker.  (NYT)

As Krugman explains, this perception does not reflect the reality. 

Obama on Fox: a Self-Styled Progressive Who Voted for Tort Reform & Dislikes Govt. Regulation of Business

by D. Cupples |   Economist Paul Krugman indicated months ago that Barack Obama is not really that progressive.  Yesterday, during a Fox interview with Chris Wallace, Obama made his lack of progressiveness as clear as a crystal Champagne flute. 

I don't know if Sen. Obama was being disengenuouis (trying to score Fox viewers' votes)  or if he really meant what he said about having voted for tort reform and opposing some forms of government regulation of industries.  Neither option reflects well on him.  Below are pieces of the show's transcript:

High Prices at the Gas Pumps? All You Need is Straight Talk (& a Gas Tax Holiday)

Posted by Damozel | Put McCain in charge of the economy, STAT!  It turns out that the solution to rising gas prices is a little straight talk and a psychological boost in the form of suspension of the gas tax:

I propose that the federal government suspend all taxes on gasoline now paid by the American people — from Memorial Day to Labor Day of this year. The effect will be an immediate economic stimulus…. [B]ecause the cost of gas affects the price of food, packaging, and just about everything else, these immediate steps will help to spread relief across the American economy.” (Crooks and Liars)

Co-Payments for Life-Preserving Drugs Going Sky-High

Posted by Damozel | Now that there's a recession on ---or, according to the Bush Administration, a 'slowdown' ---  insurance companies have abandoned the traditional fixed-price co-payments for insured patients and requiring them to pay percentage for certain expensive drugs that could end up costing them thousands every month. (NYT)  And the subscribers pay because they have no choice.  These are drugs that treat "diseases that may be fairly common, including multiple sclerosis, rheumatoid arthritis, hemophilia, hepatitis C and some cancers. There are no cheaper equivalents for these drugs, so patients are forced to pay the price or do without."(NYT)

That may seem harsh, but there's a reason:  the insurance companies are just trying to look out for their subscribers.  Truly!   

Market Musings

posted by Chris |  The first quarter of 2008 has mercifully come to a close with the S&P 500 posting a 10% loss. Much to our chagrin we have experienced back-to-back negative quarters with the 4^th quarter of 2007 losing approximately 5%. 

Indeed the bull market that we enjoyed didn’t end with the classic large cap stock run up and along with profound investor glee, but rather with multiple shocks coming from the catastrophe that is the credit markets.

Gas Prices Up Again

by D. Cupples |   I took this photo yesterday, but it's no April Fool's joke. 

These are our gas prices in North Florida.  Keep in mind that the higher gas prices go, the higher the cost of producing and shipping the goods that we buy on a daily basis -- our food, clothing, toys....

At the beginning of February, I took a picture at the same gas station: Regular Unleaded was $3.16 and Diesel was $3.49

In the same blog post, I mentioned that Exxon Mobil had listed $11.6 billion in quarterly profits -- the highest ever in U.S. corporate history -- and had record annual profits of $40.66 billion in 2007.

Senators Question Bear Stearns Bail Out

by D. Cupples |   Senators Max Baucus (D-MT) and Charles Grassley (R-IA) are wondering about the details of the proposed, $30 billion Bear Stearns bailout. The consequences of the government's not intervening would likely take a nasty toll on our already-troubled economy, but it's nice to know that someone wants to guard the taxpayers' money pot -- especially Sen. Grassley, who investigated the FDA with a pit bull's tenacity.  The Hill reports:

"In a joint letter, [Senate Finance] committee Chairman Max Baucus (D-Mont.) and ranking Republican Chuck Grassley (R-Iowa) asked the key players in the deal for information about the negotiations and the final agreement."

Social Security Report is Out

by D. Cupples |  The annual Social Security trustees' report was released yesterday.  Based on the intermediate set of assumptions, the trustees concluded the following:

"Annual cost will begin to exceed tax income in 2017 for the combined OASDI Trust Funds, which are projected to become exhausted and thus unable to pay scheduled benefits in full on a timely basis in 2041 under the long-range intermediate assumptions.

Obama Aides Upset that Hillary Discusses Mortgage Crisis

by D. Cupples |   Given the staggering number of Americans who face mortgage foreclosure,  it's only natural that presidential candidates would address the issue.  Apparently, the Obama campaign doesn't think Hillary Clinton should speak about such things.  The Washington Post reports:

"On Monday, [Hillary' Clinton laid out a plan in Philadelphia aimed at slowing mounting foreclosures, renewing her call for greater lender transparency and for $30 billion in assistance for individual homeowners and communities to help most Americans through the credit crunch."