The GOP Race for 2016

The current GOP elite, in a stunning display of self-fulfilling prophecy, fielded the  B team this election cycle.  They have an energized base, the ability to attract greater corporate contributions than at any time in the recent past, and a weakened President, yet somewhere in the ivory tower, the decision was made to lose in 2012 to win in 2016.   The GOP did not expect to win the House in 2010 and even after that landslide victory, did not believe they could defeat Obama in 2012.  Not wanting to risk the "A" Team, they supported the man who couldn't beat McCain in 2008. 

As any sports team will testify, when the players take the field, you play to win.  You don't start the game hoping for a tie and yet this is exactly what the GOP has done.  Hoping to win Congress and stall Obama's initiatives, they put their B team on the field to play for a tie.

 
There is no doubt that the bench for the Republican Party is stronger than their current slate of potential candidates and many of those on the bench also believed that Obama was unbeatable, or they might have run.   The GOP is playing this election cycle to lose the Presidency but gain control of Congress.  They know that their bench is stronger than their current field of candidates and they don't want to risk one of the current crop winning the Presidency and blocking a run by one of the better potential candidates in 2016. 


The race is down to 3 actual candidates:  Romney Gingrich and Santorum.  Mr. Lead-With-My-Chin Santorum is argumentative, petulant and smug.  Most Republican voters simply can't stand to listen to him in the debates.  He has gotten better in defining his positions and makes some good points but the filibustering in his responses leaves most voters cold and the petulance is unbearable to watch. You can easily imagine him as the kid on the playground always threatening to "tell teacher" for real or imagined slights.   He's a non-starter.   Romney has perfected the "deer caught in the headlights" look and response once the debates started to focus on his record.  For someone who has supposedly been running for President for 8 years he appears to be woefully unprepared.   Putting Romney up against Obama is like pitting your local CPA against Dale Carnegie.  Romney is a geek.  He couldn't string together a sales pitch if his life depended on it. 

Romney would make a much better President than Gingrich, but he has no chance of being able to get the GOP there.  Although he may be brilliant with numbers, words seem to give him trouble. Thinking on his feet and using words to defend his position is not his strong suit.  He looks weak and ineffectual when confronted with hard questions. To date, Romney has not been able to cogently define the differences between Conservative and Liberal philosophies and Republican voters reject him because he appears to be someone mouthing a philosophy that he doesn't believe.  There is also the matter of his refusal to admit that RomneyCare was a mistake.  He is a tough pill for most GOP primary voters to swallow. He looks weak and ineffectual when confronted with hard questions.  He's the perfect foil for Democrats this election season.


Gingrich provides rich fodder for Democrats with his many foibles but he is able to concisely define the differences between the Obama socialist strategy and the free market conservative philosophy of success.   He is also biting and brilliant in his remarks and is extraordinary in his ability to think on his feet and control the conversation.  The Republican elite cannot fathom supporting a President Gingrich in a second term run for the White House.  They idea is "beyond the pale" for most of the GOP leadership.  The same leadership that gave us the "play to a tie" election strategy will fight a Gingrich nomination with everything they have in their arsenal.  


With the Party's stunningly stupid strategy of playing to lose, Gingrich may be the perfect candidate because he won't go down without a fight and he will define exactly what he's fighting for.  Obama has a staff of writers and a teleprompter to make him seem spontaneous but he often makes gaffes when forced to speak off the cuff.  Gingrich is unpredictable and as such, gives conservatives a great deal of anxiety, but also the Democratic Party and President Obama.  The choice for the Republican voter is to risk looking ineffectual and mildly confused or to go down fighting with a take no prisoner's attitude.  Either approach may well end in defeat, but the message sent to voters will be vastly different.  


From the outset, the GOP strategy was deeply flawed but as the GOP is learning, it is also one that the party may not recover from after another 4 years of Obama.   President Obama has already marginalized Congress to a greater degree than any President since FDR.  If Congress goes Republican, which is possible, he already has in place enough Czars and regulators who will implement the Socialist agenda without Congress.   This will be a disaster for the country and one that will negatively impact our children and grandchildren.


Liberals will not relinquish control of the government without a fight.  Obama was nurtured in the corrupt Chicago political machine.  In Chicago, the political machine knows how to control outcomes.  What was a problem in Chicago, is now a problem on a national level and one straight from the Chavez playbook.  Ask any Chicagoan about the fairness of their city's politics and not one will tell you it is not corrupt.


The real choice for Republicans this primary season is to "leave nothing on the field" at the end of the game, or to meekly go down in defeat hoping for Obama to beat himself in 2012.
 

Spread the Wealth the Washington Way

The funneling of taxpayer money by politicians to their friends and campaign contributors has experienced a breathtaking increase in recent years due to an annual federal outlay that has exploded to over $3 trillion dollars.  The opportunity to exploit political connections for increased profit by the wealthy has reached levels not seen before.  Although the rhetoric of the current Administration is that of a Robin Hood styled "spread the wealth", the reality is that this is far from the truth.  The overwhelming majority of the stimulus package which was touted as providing jobs to the middle class went instead to wealthy campaign contributors under the guise of "public good".
 
One good example is Warren Buffet, the supposed "Oracle of Omaha", who has long exploited political connections to enhance Berkshire Hathaways financial returns.  Although Mr. Buffet has publically called for higher taxes on the rich, he has actually been using current tax loopholes to shelter his own income from these same taxes. And where did these profits come from?  In large part from the taxpayers.  
 
Upon close examination of the monies doled out as a result of TARP, it's clear that Mr. Buffet needed the TARP funds more than most. Berkshire held stock in Wells Fargo, Bank of America, American Express,Goldman Sachs, which received TARP money as well as $130 billion of in FDIC backing for their debt. Berkshire also held a substantial position in General Electric.  Without this bailout, it is possible that Berkshire would have been in financial straits.  AS Rolfe Winkler of Reuters said, " Were it not for government bailouts, for which Buttet lobbied hard many of his company's stock holdings would have been wiped out."1
 
Berkshire Hathaway had 30% of of their stock portfolio invested in these companies.  Without the government bailout, Berkshire would have realized substantial losses.  As it turns out, however, Berkshire made over $500 million on  a year in dividends on Goldman Sachs alone.
 
This was not coincidence.  Mr. Buffet was very active behind the political scene to guarantee that his stake was protected and that the companies he had invested in were protected.  
 
In a brazen act of sheer chutzpah Mr. Buffet had the audacity to publically complain about the bailouts in his annual letter to Berkshire investors, claiming that Berkshire was damaged by these bailouts!
 
The ones most harmed by this insider (yet legal) "insider trading" of political connections for profit is the taxpayer.  The Obama Administration has, not only played along, they have exponetially increased the amount and frequency of taxpayer funded grants to assure that their wealthy patrons are assured of profits due to government largesse, while publically campaigning on a "spread the wealth/class warfare" platform.  
 
Apparently this administration doesn't believe in spreading the wealth very far.

The Federal Reserve Becomes Political

Last Friday the Federal Reserve sent a 26 page paper to Capitol Hill, without invitation, offering a "framework" for "thinking about certain issues and tradeoffs" in the housing market.

 

Although the paper is vague on how this "framework" would be implemented, the NY Fed President William Dudley left no doubt as to the lobbying effort this paper represents for more political power in the housing market.  He specifically called for bridge loans for jobless borrowers, more government-assisted re-financings, a new program for principal reductions for underwater borrowers, and floated the possibility of getting Fannie and Freddie into the rental housing business.  Apparently the Fed believes that they need to share in the spoils of the Obama Administration's breathtaking federal power grab through regulatory government agencies. 

 

The Federal Reserve was established to be an independent agency in charge of monetary policy and bank regulation -in other words, an agency with a clearly defined and limited government role.    Extending that mandate to include the regulation of customers of a bank is an over-reach of epic proportions, but we have come to expect no less from this President.

 

This document provides all the political cover necessary for politicians willing to spend taxpayer money  to support housing prices in an election year .  This is what passes for neutral and independent in the Obama Government.

 

According to The Wall Street Journal there have been 16 government sponsored programs in the last 5 years.  None of which have succeeded in improving either the economy or the housing market.  But we are to believe that a Federal Reserve policy will? 

 

This Administration's belief that government intervention into private markets is so far off base as to be laughable if it wasn't so sad that so many people are out of work due the wrong-headed government policies sponsored by the Obama White House.   First, the Federal Government has prevented the banks from foreclosing on properties and allowing the market to "clear" the houses on the books. 

 

Secondly, the Justice Dept. went after Bank of America on the weird assumption that some Black and Hispanic mortgage holders were unfairly charged higher mortgage rates than the average cost of mortgage fees.  This is  ignores the fact that some Black borrowers paid less and some White borrowers paid more as well.  An average is, well, an average.  It means that some paid higher and some paid lower to come up with an average a fine point entirely missed by the Justice Dept.  White borrowers who paid more are on their own, only the politically expedient borrowers (the ones who can be counted on to vote Democratic) are of concern.  This bias also does not take credit history into this calculation.  Justice is served if Black and Hispanic borrowers always pay less than White borrowers?

 

The Federal Reserve will no doubt argue that the economy can't recover until the housing market recovers.  This confuses basic principles otherwise known as economics.  The housing market will recover when the overall economy recovers.  In other words, the housing market does not drive economics it's the other way around.  We're sure that the Fed also understands this.  They're counting on the fact that you don't.