Fiorina's Hat In The Ring

(Courtesy CNN)

Carly Fiorina will run in the GOP Senate primary in California, with the winner set to challenge Democratic incumbent Barbara Boxer in 2010:

(CNN) -- Former Hewlett-Packard CEO Carly Fiorina finally made it official Wednesday: She's running for Senate in California.

The first woman to lead a Fortune 500 company made the announcement at an event in conservative Orange County, pledging that her focus will be on economic recovery and fiscal accountability"

"The decisions made in Washington impact every family and every business, of any size, in America. Throughout my career, I've brought people together and solved problems, and that is what I plan to do in government: Set aside ego and partisanship and work to develop solutions to our problems," she told supporters.

"I will not settle for a jobless recovery, and we must start the important work of getting our financial house back in order," Fiorina added. "Washington must show discipline to cut spending and create policies that encourage and empower businesses and put people back to work."

Fiorina, considered to be a moderate Republican with little history on social issues, will face off against conservative California Assemblyman Chuck DeVore for the GOP nomination.

This already looks like another potential moderate/conservative decision for Republicans.  Fiorina was one of John McCain's primary surrogates in the 2008 Presidential race, until she spoke out of turn on a few issues.  One of her more 'unconservative' statements came when she suggested that private health insurance should be required to cover the costs of birth control.

There's also a certain element of national/local conflict in play.  While Fiorina is said to be the preferred candidate of party bigwigs at the national level, Assemblyman Chuck DeVore already holds the endorsement of over half of the California GOP's elected officials; in addition, he just picked up endorsements from US Senator Jim DeMint, the Senate Conservative Fund, and Erick Ericson of corporate blog RedState.com.

I must say that I think Fiorina faces an uphill battle. 

She can't really talk about "not settling for a jobless recovery" and "empowering business" when her tenure as CEO of Hewlett-Packard saw the company lay off 28,000 workers (while arguing for more H-1B visas), pursue and complete a painful merger with Compaq, and lose more than half its stock value (from $52 to $21) before she was ousted by the Board of Directors in 2005.  She left with a severance package in excess of $20 million.  She came under fire back in 2008 when she said that neither McCain nor Obama "could run a major company." Well, neither can she, and that doesn't give her a strong position from which to talk about job creation or healthy businesses.  If that's going to be her primary selling point, I don't think she's going to win any election that includes Silicon Valley.

Given the recent endorsement of DeVore by several strongly conservative national players, I think that Fiorina will also have to go through an ideological 'purity test.'  That's going to be rather interesting to see, because I think that such a primary campaign will ultimately hurt the winner in the general election.  Thier ultimate opponent--Barbara Boxer--holds well-known positions on such issues, and has increased her share of the vote in each of her re-election campaigns.

It's going to be interesting out in Lotusland...

Off-Year Elections - Lessons Learned?

Well, the pundits are in full flower today.  Some look at the gubernatorial results in New Jersey and Virginia and name them a stinging rebuke of the Democrats, while others point to the Congressional race in NY-23 and suggest that a smackdown has been delivered to conservative Republicans.

I'm going to disagree with both suggestions, and here's why: ALL POLITICS IS LOCAL.  Former Speaker of the House Tip O'Neill said it, and we see it proven again and again.  Here's the lessons of which I saw confirmation in yesterday's results, in no particular order:

1) As a rule, off-year elections belong to the local bases of each party.  Campaign managers on both sides talked about "campaign fatigue" and its effect on their get-out-the-vote efforts this time around.  The wave of young and/or first-time voters we saw in 2008 did not materialize in these elections; they were largely decided by the never-miss-an-election faithful.  (Early analysis of Virginia turnout indicates that GOP turnout was on a par with last year's, but that Democratic turnout crumbled.)

2) "Coattails" don't last beyond one election.  Obama's/Biden's campaigning didn't help Deeds or Corzine, and Palin's endorsement didn't carry Hoffman to victory.  Exit polls (apply salt as desired) in both NJ and VA indicated that Obama's campaigning only affected about 40% of the electorate, with those folks evenly split between voting "in support of" and "in opposition to" the President.  40% doesn't make a referendum...

3) Voters simply behave differently in state-level elections.  It might surprise you to learn that "deep blue" New Jersey, since 1980, has elected Republican Governors more often than it has Democrats. (Christie's win makes it 5-4 GOP)  The same level of contention/turnover is found in Virginia, where McDonnell's victory gives the Governor's Mansion to the GOP for the 4th time in 9 chances since 1980.  (Compare that to a state like Kentucky, which has only elected two Republican Governors since World War II!)  Here's where the disconnect becomes clear...New Jersey elected Christine Whitman to the Governor's Mansion, then turned around one year later and went for Kerry by 15 points!

4) Candidates who talk convincingly about local issues win.  Here's where Hoffman dropped the ball in NY-23, as far as I'm concerned.  When you not only fail to answer questions about local issues, but have your handlers dismiss those concerns as "parochial," you're digging yourself a hole.  Owens basically stayed on message (particularly where support for FT Drum was concerned) throughout the Scozzafava/Hoffman circus, peeled off a bloc of Scozzafava's supporters after her withdrawl, and now a big chunk of NY-23 has a Democratic Congressman for the first time in a century.

5) None of the above can save you from lousy performance as an incumbent.  Frankly, I'm amazed that Corzine made the race all that close, given his job approval rating of 40%.

6) Candidates have to campaign across the entire state, and do so aggressively.  Here's where I think Deeds failed in Virginia; he didn't cover large swaths of the state, and wound up losing all but about 10 counties.

I think it utterly ridiculous to suggest that candidates are "not liberal enough" (as seen over on DailyKos) or "not conservative enough" (as seen over on RedState).  The simple fact of the matter is that there is no single definition of "liberal" or "conservative" that applies across 50 states, thousands of Congressional districts or hundreds of thousands of cities.  Both parties would do well to learn that particular lesson, or 2010 is going to be Grade-A Ugly...for both sides.

At What Point Do We Consider These Acts of War?

We already mentioned this week about the hidden nuclear facilities in Iran,  holding no real civilian use,  as if that is really a surprise to any of us.   Now today we are receiving word that yet again, they are just plain shady and can't be trusted.   We are at war with terrorists, and it's becoming more and more apparent that Iran is the little man behind the curtain, helping fund them and supplying their efforts:

The Huffington Post explains:

Israeli commandos seized a ship Wednesday that defense officials said was carrying hundreds of tons of weapons bound for Lebanon's Iranian-backed Hezbollah guerrillas – the largest arms shipment Israel has ever commandeered.

The Israeli military said an Iranian document was found on board, showing that the arms shipment originated from Iran, although the paper was not shown to reporters.

"It's a cargo certificate that shows that it was from a port in Iran," military spokeswoman Lt. Col. Avital Leibovich said. "All the cargo certificates are stamped at the ports of origin, and this one was stamped at an Iranian port."

The Israelis boarded the ship before dawn in the waters near Cyprus. Israel has long accused Iran of arming its enemies.

As it stands now the Israeli has not shown the proof of the shipment of 60 tons of missles being sent from an Iranian port to reporters, or released their proof for the public to see, but if this stands as legitimate proof that Iran is indeed sending missiles destined to Hezbollah and being postmarked to Israel... 

...Do we take the reins off of Israel and let them defend themselves for once and for all?  

Factor in the probability that Iran is not-so-secretly produce nuclear weaponry and that in all likelihood those too would have a planned trip to Israel in the future...   do we dare stand in Israel's way any longer, or just let them fight the war that is being waged upon them?

Potential Voter Fraud In NJ?

Courtesy WSJ:

Apparently, John Fund thinks so. In a Wall Street Journal article yesterday, Fund points out that an unprecedented 180,000 absentee ballots have been requested in New Jersey where incumbent Democratic Governor John Corzine faces a serious challenge from Republican Chris Christie. On some 3,000 forms the signature doesn't match the one on file with county clerks, claims Fund.

But critics say that Fund is inciting alarm without evidence. Brad Friedman says;

The Wall Street Journal's cowardly liar and "voter fraud" fraudster John Fund appears to be running out of fresh "voter fraud" lies to feed to Fox "News" viewers. According to Media Matters today, in advance of tomorrow's gubernatorial election in New Jersey, expected to be a very close race, Fund appeared on Fox's Glenn Beck show and related an anecdote of supposed fraud now going on in the Hispanic community in Camden.

"People are going door to door in parts of Camden with Hispanics that don't have very much knowledge of English, and they're saying, 'We have a new way for you to vote, la nueva forma de votar; just fill out these papers.'"

Trouble is, the incident that Fund claims is going on right now actually happened in Philadelphia 16 years ago, as even Fund himself admitted in his own WSJ column published just hours before his appearance on Fox today...

Other blogs and news services have also questioned the validity of Fund's claims, including the left leaning Media Matters.

Of course, voter fraud is always a possibility in any election.

Iran Nuclear Facility Has, "No Possible Civilian Use"

Courtesy JERUSALEM POST:

The recently-revealed Iranian nuclear facility in the Shi'a holy city of Qom has "no possible civilian use," Military Intelligence chief Maj.-Gen. Amos Yadlin said Tuesday morning, directly contradicting statements made by Iranian President Mahmoud Ahmadinejad in September.

As the Iranian nuclear controversy and subsequent concerns grow, Israel and the West face hard decisions in how to deal with the potential threat of a nuclear armed Iran.

Karzai Reelected by Default - Are You Kidding Me?

Courtesy CNN:

So, Karzai's lone challenger drops out--because he doesn't think a fair runoff election will be possible--and everyone's rushing to congratulate Karzai?  Geez-o-pete...

Afghan electoral officials Monday declared incumbent President Hamid Karzai the winner of another term in office, after canceling this weekend's second round of voting.

U.S. President Barack Obama called Monday for a "new chapter" of improved governance in Afghanistan now that Karzai's re-election as president is complete.

All the players are calling on Karzai to form a government that can be supported by a majority of the people, but that's going to be a pretty tall order, since those same people didn't give him a majority of their votes.

Apparently, this is all well and good under Afghan law.  That boggles the mind, but so be it.  I think we really need to keep leaning on Karzai to bring some other elements into his government; it's going to be very difficult to build support for him otherwise.

Reasons for Regulation - Nth in a Series

McClatchy Newspapers has been working on an investigation of Goldman Sachs, and the first installment is a doozy:

In 2006 and 2007, Goldman Sachs Group peddled more than $40 billion in securities backed by at least 200,000 risky home mortgages, but never told the buyers it was secretly betting that a sharp drop in U.S. housing prices would send the value of those securities plummeting.

Goldman's sales and its clandestine wagers, completed at the brink of the housing market meltdown, enabled the nation's premier investment bank to pass most of its potential losses to others before a flood of mortgage defaults staggered the U.S. and global economies.

Only later did investors discover that what Goldman had promoted as triple-A rated investments were closer to junk.

If you're selling something that you won't buy yourself, well...doesn't that say it all?

John Coffee, a Columbia University law professor who served on an advisory committee to the New York Stock Exchange, said that investment banks have wide latitude to manage their assets, and so the legality of Goldman's maneuvers depends on what its executives knew at the time.

Right, we all know where that line of questioning will go..."I don't recall," anyone? 

They played the offshore game, too:

It also was the lead firm in marketing about $83 billion in complex securities, many of them backed by subprime mortgages, via the Caymans and other offshore sites, according to an analysis of unpublished industry data by Gary Kopff, a securitization expert.

In at least one of these offshore deals, Goldman exaggerated the quality of more than $75 million of risky securities, describing the underlying mortgages as "prime" or "midprime," although in the U.S. they were marketed with lower grades.

If this report is correct, Goldman Sachs' endeavors have all the earmarks of fraud.

The need for regulation should be obvious.  The notion that banks should even be allowed to play at marketing securities while simultaneously betting on their failure should be abhorrent to anyone claiming to support a "free market" or "level playing field."  The destructive effects of banking deregulation should be equally apparent, especially when we're talking about financial markets whose "paper value" exceeds the entire world's combined GDP.

I'm going to swipe a title (but no content) from a diarist over at the Great Orange Satan - It Isn't Reform Unless It Gives Goldman An Aneurysm.

Seriously, I'd like to hear a coherent argument that this sort of business behavior DOESN'T prove the need for increased regulation of the financial industry...

Scozzafava Suspends Campaign In NY's 23rd District!

POLITICO

Conservative Party candidate Doug Hoffman is a likely shoe-in.

Scozzafava's statement:

Dear Friends and Supporters:

Throughout the course of my campaign for Congress, I have made the people of the 23rd District and the issues that affect them the focal point of my campaign. As a life long resident of this District, I care deeply and passionately about its people and our way of life. Whether as a candidate for Congress, a State Assemblywoman or a small town Mayor, I have always sought to act with the best interest of our District and its residents in mind—and today I again seek to act for the good of our community.

The opportunity to run as the Republican and Independence Party candidate to represent the 23rd District has been and remains one of the greatest honors of my life. During the past several months, as I’ve traveled the district, meeting and talking with voters about the issues that matter most to them, I’ve been overwhelmed by the amount of support I’ve received as I sought to serve as their voice in Washington. However, as Winston Churchill once said, Democracy can be a fickle employer, and the road to public office is not always a smooth one.

In recent days, polls have indicated that my chances of winning this election are not as strong as we would like them to be. The reality that I’ve come to accept is that in today’s political arena, you must be able to back up your message with money—and as I’ve been outspent on both sides, I’ve been unable to effectively address many of the charges that have been made about my record. But as I’ve said from the start of this campaign, this election is not about me, it’s about the people of this District. And, as always, today I will do what I believe serves their interests best.

It is increasingly clear that pressure is mounting on many of my supporters to shift their support. Consequently, I hereby release those individuals who have endorsed and supported my campaign to transfer their support as they see fit to do so. I am and have always been a proud Republican. It is my hope that with my actions today, my Party will emerge stronger and our District and our nation can take an important step towards restoring the enduring strength and economic prosperity that has defined us for generations.

On Election Day my name will appear on the ballot, but victory is unlikely. To those who support me – and to those who choose not to – I offer my sincerest thanks.

Dede

Update on Sunday, November 1, 2009 at 16:53 by GrayRider

HuffPo

Scozzafava is now endorsing democrat Bill Owens in this race. Did someone say, "hell hath no fury....."

CBS Claims White House Fudging Numbers On Stimulus Jobs

Courtesy of News Busters

First Campbell Brown calls BS on the White House on the FOX controversy, now CBS challenges the Obama administration on jobs created by the stimulus package. Whoa...dude!! What's up with that? Are we suddenly living in a parallel universe?

Happy Halloween Open Thread

Let's keep it happy...
Best stories, favorite costumes, greatest knock knock jokes...
How much beer will you be consuming while handing out trick or treat candy...
That kind of stuff.   The floor is yours.   And of course, have a Happy Halloween:

The Pelosi Plan Unveiled

"I'm strong enough to pick up my own bill."

All 1990 pages of it.  

Ladies and gentlemen... we have a new record!

See it for yourself courtesy of the BL Rag.

(Warning: Largest PDF file I've ever uploaded)

 Comment away.  This is an Open Thread.

Here We Go Again...

OK, were you among those who thought that maybe--just maybe--the big banks had learned their lesson when the "securitized" mortgage market collapsed last year?  Nah, it seems that they've been busy building the next iteration of their profit-from-flying-paper scheme.  Last month, the New York Times reported:

The bankers plan to buy “life settlements,” life insurance policies that ill and elderly people sell for cash — $400,000 for a $1 million policy, say, depending on the life expectancy of the insured person. Then they plan to “securitize” these policies, in Wall Street jargon, by packaging hundreds or thousands together into bonds. They will then resell those bonds to investors, like big pension funds, who will receive the payouts when people with the insurance die.

The earlier the policyholder dies, the bigger the return — though if people live longer than expected, investors could get poor returns or even lose money.

Either way, Wall Street would profit by pocketing sizable fees for creating the bonds, reselling them and subsequently trading them. But some who have studied life settlements warn that insurers might have to raise premiums in the short term if they end up having to pay out more death claims than they had anticipated.

You have GOT to be kidding me.   Oh, but they're excited about it:

“We’re hoping to get a herd stampeding after the first offering,” said one investment banker not authorized to speak to the news media.

There's an incipient market framework in development, too!

Some financial firms are moving to outpace their rivals. Credit Suisse, for example, is in effect building a financial assembly line to buy large numbers of life insurance policies, package and resell them — just as Wall Street firms did with subprime securities.

The bank bought a company that originates life settlements, and it has set up a group dedicated to structuring deals and one to sell the products.

Goldman Sachs has developed a tradable index of life settlements, enabling investors to bet on whether people will live longer than expected or die sooner than planned. The index is similar to tradable stock market indices that allow investors to bet on the overall direction of the market without buying stocks.

Oh, and here's the crowning glory of this little idea:

But if a policy is purchased and packaged into a security, investors will keep paying the premiums that might have been abandoned; as a result, more policies will stay in force, ensuring more payouts over time and less money for the insurance companies.

“When they set their premiums they were basing them on assumptions that were wrong,” said Neil A. Doherty, a professor at Wharton who has studied life settlements.

Indeed, Mr. Doherty says that in reaction to widespread securitization, insurers most likely would have to raise the premiums on new life policies.

When are these clowns going to learn their lessons?

The Governator Seems A Wee Bit Ticked...

Governors veto legislation all the time.  That, in and of itself, is completely unsurprising.  One might expect more vetoes than usual in California these days, given the state's woeful financial condition.  Governor Schwarzenegger has, however, apparently acquired something of a foul taste in his mouth as of late.

Consider this veto notification.  The bill itself, AB 1176, was completely without controversy; in fact, it passed both houses with nary a dissenting vote.  Its only purpose was to allow the city/county of San Francisco to change how it handles infrastructure financing districts.  Well, take a close look at the veto notification letter:

More specifically, read down the left margin after "I am returning....without my signature."

(Original PDF can be read straight from the Governor's web site.)

There's some history here; Assemblyman Tom Ammiano, the Democratic author of the bill, had heckled Schwarzenegger loudly at a fundraising event (even yelling "you lie", according to MSNBC) before taking the floor to criticize him at length.  Given that these veto notifications are sent directly to the sponsoring legislator(s), this might be more than a coincidence...*chuckle*

Escape From New York

Courtesy of The New York Post and The BL Rag

Reminiscent of the title of the 1981 futuristic action flick starring Kurt Russell, where NYC is closed off and turned into a maximum security prison, residents are fleeing New York State in record numbers. Unlike the convicts in the movie, this real life scenario consists of citizens escaping the bondage of some of the highest tax rates in the nation. 1.1 million of them to date.

A few weeks ago, I wrote a report on millionaires leaving NY because of high taxes, but it now seems that average New Yorkers are feeling the bite of the tax man and are busting out. The results... lower tax revenues for the state.

The average Manhattan taxpayer who left the state earned $93,264 a year. The average newcomer to Manhattan earned only $72,726.

That's a difference of $20,538, the highest for any county in the state. Staten Island was second, with a $20,066 difference.

When the Obama Administration recently announced that they would cut the pay of executives of corporations that took 'bail out' money, New York Governor David Paterson was incensed. Most, if not all of those executives are New York residents and when their compensation is dramatically cut, their tax bills will be significantly reduced.

It all adds up to staggering loss in taxable income. During 2006-2007, the "migration flow" out of New York to other states amounted to a loss of $4.3 billion.

Although New York's loss, Florida and New Jersey have profited by the biggest out of state migration in the country, with most escapees settling in the Sunshine State and the Garden State.

Ohio Betting On Casino Gambling

With budget deficits and declining tax revenues, many states are seeking financial relief wherever they can find it. Of course, considering spending cuts doesn’t seem to enter into the equation for most, but I digress. Some are looking at gambling, in one form or another. Ohio is looking to expand gambling in this election cycle, yet again.

Now, there’s several different forms in which state sanctioned gambling can take. Let’s look at two.

State Lotteries.

Lotteries aren’t new to this country. In fact, lotteries have been used in financing both private and public ventures from our early history. In early America. they played a major role in financing roads, libraries, churches, colleges, canals and bridges among other things. The American Revolution even used a lottery to help underwrite the war effort. Many states now have a state lottery, and some folks are talking about a national lottery.

But studies have shown that state lotteries can actually have a negative affect on a state’s economy, and most often at the expense of the poor, whom are more apt to make lottery purchases.

Lottery spending also takes money out of the private sector that would have been spent on consumer goods and services. That of course, then costs jobs and reduces tax revenues from businesses and consequently from workers in the form of income tax.

Casinos.

Another form of state sanctioned gambling, is casino gambling. Opponents say that casinos breed crime...prostitution, violent crime, and costs jobs. Not to mention the problems associated with gambling addiction.

Proponents say that casinos actually create jobs, directly and indirectly. Naturally, the casino itself employees people. Then there are the utilized vendors and their employees. There’s the hotels and motels, the restaurants and gas stations, the grocery stores and convenience stores, the increased need for housing of said employees, and workers to build and maintain the housing, and so on and so on. And as far as the addictions are concerned, some say that those with compulsive behavior will exhibit that behavior in one form or another whether gambling is available or not. If they're not able to blow their money on gambling, they'll blow it on big screen televisions and other items at Wal-Mart or somewhere.

Here in Ohio, we have had a lottery for years. Although it’s generated billions of dollars for the state I’m not sure the state has been truly benefited. Initially, the sales pitch for the lottery was that the profits would fund our schools. Yet our schools are in financial trouble still, even though they receive lottery money as well as the lion’s share of our property taxes.

After past failures, next week we'll be asked once again to look at the casino initiative. Although it’s been soundly defeated in past elections, I’m wagering that Ohio’s 10.1% unemployment rate will ensure a very different outcome this time. If not, wanna go for double or nothin’?