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February 18, 2010


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We cannot have it both ways. When Scott Brown voted to end the filibuster on the jobs bill this week some of the Tea Party members called him a traitor and immediately gave up on him. Why? He came to Washington to get some bipartisan solutions moving forward to help the people of Massachusettes (and America). Sure, the $15B jobs bill is Harry Reid's and it is more spending. But it may help a little. Someone has to break the ice and make the first move to cross these lines and show that they are willing to work with the other side to get solutions for the 50-50% of Americans who don't identify with the far left or far right. Snowe and Collins joined him. So the Republicans made the first jesture of cooperation. And, the Tea Party people who are tired of a frozen partian government should have been cautiously optimistic. Now McConnell and Reid are talking about some bipartisan help to the people who have been out of work beyond their benefits lifeline. Whether you believe we should extend these benefits or not you should be encouraged that at least our represenatatives are engaging in a problem solving conversation in private on small issues. Perhaps tomorrow they will actually engage in "listening" to each other on a major issue with Trillions of dollars at stake: Healthcare. So, in effect the guy the Tea Party calls a traitor came to Washington to block the Democrats healthcare plan but what he may have done by showing his willingness to cooperate is get the two parties working together just because he has the potential to be the 41st vote.

We cannot function in this high debt, high unemployment, high cost of medicare and social security benefits world if we do not cooperate. Most of us would be delighted to have Obama as President if he could just get the two parties working to solve our economic problems. So indirectly perhaps this will happen because the people elected a man to the 41st voting position who actually wants to do more than just "block" the healthcare bill. A man who respects Democrats and will work with them. A man, ironically, like John McCain before he ran for President. It says something about America that McCain is fighting for his political life trying to prove that he is more conservative than he is. And, that Joe Lieberman had to run as an independent just to keep his seat because Democrats thought he was too cooperative with the other side. As soon as he won the seat they forgave him. It seems to be very dangerous to be "in the middle" these days.

So, tomorrow we will see if Obama will become the President of all Americans or if he will continue on his mission to redefine America as a European style country.

Economic Whammy. The key to America's economic recovery is the consumer. Just as we see America's managers gaining some confidence and beginning to interview we get a blow to the head as consumer confidence drops 11 points to below 50. We need 90+ for economic progress and 100+ for job development. Was it the snow? Was it Obama's return to the campaign trail? Was it the Feds raising rates?Is it layed off people trying to pay the taxes they owe from when they were working that reminds them of the days they could pay their bills? Was it more changes to the credit card laws that hit today? With their new chart showing it will take 30 years to pay off your balance with minimum payments? (That definitely gets your attention and dampens your appetite for dinner out tonight.) Was it the 40% increase in rates by Blue Cross? Who knows--but it is definitly not what any of us wanted to see. Here are my thoughts on what has to happen to get things going:

The consumer confidence level dropped below 50. A 20% drop this month. Growth in jobs does not occur unless the number is over 100. And economic growth occurs at 90. As I keep saying there is no real economic recovery out here. The housing market has stopped falling but not rising. The only purchasing going on is by the US government. States are reducing costs. The Feds are increasing taxes further driving down consumer confidence. Credit card companies are further restricting credit limits on cards. And, as you know banks and the SBA are not loaning money to small businesses. The $15B jobs bill may help a little with it's SS tax relief and $1000 reward but that is not going to get many companies hiring . congress needs to initate LOAN GUARANTEES for small businesses. We do not want charity we want repayable loans. The banks have the money but Congress has to give them protection so they will loan it out. $15B is $1700 per business. That is not going to get 8.8 million businesses to hire $50,000 a year people. I believe that unless the banks make credit available to small businesses the economy will turn down once again. Manager confidence which is rising will respond to these low consumer confidence figures as will the stock market and the hiring will again be put off. And, The Fed needs to announce immediately that no more interest rate hikes are in the cards until the ecoomy rebounds and hiring begins. Why is this administrtion so unwilling to listen to America's small business people? Has anyone ever listened to a conversation with Donald Trump? Sorry gang--just as it looked better we get a bump in the road. Let's hope it was just a speed bump.

So once again Harry Reid is saying something that he believes from his experience in life and controversy erupts. Harry is a liberal Democrat. Liberal Democrats see the world differently than most of us. We have to accept it. Not agree but believe in their passion for their views. And, it is our right to oppose it politically. We don't have to like it either. Why would anyone like policies that impact their financial well being or their vision of the future for their children? This difference in views is exactly the reason bipartisan leadership is necessary versus this back in forth see- saw approach we've seen since Carter. Carter: liberal. Regean: conservative. Bush I: Moderately conservative. Clinton: Liberal. Bush II: moderately conservative. Obama: Liberal. And, it is getting worse and far too inefficient. But it is Democracy in action.

Before Fox jumps on Senator Reid tonight for his remarks on how unemployed men are prone to domestic abuse I wrote this email to O'Reilly and Greta. Most of you recognize I stand with Bill Bowen in opposition to most of Senator Reid's policies. And certainly Obama's. But, there are reasons people feel the way they do and Harry Reid has his. So as one of his critics I am also one of his friends and I share this with you to think about.

I can offer this insight into the comments made by Senator Reid yesterday: Harry grew up in a mining town in southern Nevada (Searchlight) as the son of a remarkable woman and a gold miner. His father was often out of work as the gold mines played out and were closed during WWII. As a small boy Harry and his brother often observed their alcoholic father abuse their mother. Eventually, Harry and his brother reached teenage years and put a stop to it by physically challenging their father. Harry attributes unemployment and being poor to his father's behavior. Interestingly, Harry grew up in those poor conditions with a one rooom, one teacher school; a house made of railroad planks, and watched his parents suffer with no healthcare. We are all a product of our environment and these are the influences that drives the passion that we see in Harry as a Congressman. To his credit Harry left his family to attend High School living with various relatives while getting an education. He put himself through College and Law School with the help of people who later became politicians in Las Vegas and Governor of Nevada. Harry is one tough SOB, a devout Mormon and believe it or not antiabortion and pro gun control. His political hero is George Bush I who he admired for his ability to put together a world coalition for Desert Storm I. He supported GWB in his war on Iraq but later his fueds with GWB led him to turn bitter against his unwillingness to include Democrats in consideration of his decisions about the war. That bitterness is apparent in his behavior today in dealing with Republicans. Long before the "party of no" label was given to Republicans, Harry told me that Republican strategy would be to oppose any bipartisan initiative he offerred. Chicken and egg dilemma? I don't know for sure.

Erin Brockovich (portrayed in the Movie starring Julia Roberts) exemplifies much of Harry's legal career as he defended people wronged by US corporations and legal authorities. So he is not soft on US businesses when it comes to employees and customers.

I have known Harry most of my adult life as I grew up in Southern Nevada during those years. He went on to become my personal lawyer for a divorce and my corporate lawyer for many years. Harry and I are far apart on political issues but I can understand his compassion. And, he is a good man.

Just minutes after I posted my comment the President announced his "new" healthcare plan. Basically he took the plan the Senate passed and revised it to make it more acceptible to the House. In short:

It will cover 31 Million uninsured people (That number by the way is just "by chance" the number of illegal Mexicans who came to America in the last 30 years.

It cuts Medicare and Medicaide to help pay for it.

It allows the Feds to regulate Insurance carrier rates (now a state job)

It reduces the "cadillac tax"

It creates a high risk pool of preexisting condition people funded I believe by the Feds

It creates small business pools within states--not nationally.

The description I saw is ambiguous on the abortion restrictions--I believe it leaves the restrictions in.

It requires most people to carry insurance but it subsidizes those who cannot afford it.

It takes out the Nebraska purchase but leaves in the Louisiana buyout. I guess it was the prize for winning the Super Bowl.

The price tag is $1 Trillon. Yep $1,000,000,000,000.

This puts the Republicans on the defensive as they are being invited to make suggestions to "improve" this bill--virtually the same bill the public wants scrapped. So I will respond:

1. National pools of small business employees with three tiers of coverage. (Why would it be so difficult to put us all in the Federal government pool?)

2. National pools of individuals with 3 tiers of coverage.(Why would it be so difficult to put us all in the Federal government pool?)

3. A National pharmacy for purchasing power.

4. Limits on Legal awards against medical providers (or government subsidized liability insurance).

5. Enforce immigration laws. Deport every illegal who tries to use the emergency room. Close the borders.

6. Begin a study program on using the schools, day care centers or outsourcing quick care centers to give regular check ups to uninsured kids and people to promote preventive care and early diagnosis of illness. see what the cost/benefit tradeoffs are. I nominate Ken Hennig formerly of Baxter to head up the study.

That's enough to get us started.

Have you seen any actual willingness of this administration to compromise on anything? They are in full attack mode and the 2010 campaign is on. They are in full offensive mode: "The party of NO, the "stupid" Tea Party guys, "we did a superb job of saving Iraq", "we were wonderful at using TARP to stabalize the banks" , "Bush tried 300 terrorists in civilian courts" (before Congress authorized military tribunals), people who deny climate change are ignorant AND THE "RECOVERY ACT" saved millions of jobs saving us from the next great depression. Not much coming from the Clinton's. It should be an entertaining week.

Some thoughts:

Obama heads into the week of "cooperation" with Republicans with Democrats saying they are moving ahead with healthcare and some even calling for the reintroduction of the public option. I can only assume that these were either toothless threats from the left or, more likely, a move determined to make sure the republicans continue to be the party of "no". Somehow they even have the California Governor on ABC declaring his Republican party to be the party of "no". Today Obama announced he will propose that the Feds regulate rate increases of healthcare providers. If he isn't willing to make national pools to promote competition then why Fed regulation? More control for the Federal czars. It should be an interesting meeting.

Obama announces that Yucca Mountain nuclear dump site in Nevada is dead. This comes after the US government spent $38 BILLION dollars to locate it there. And, is nearing completion of the new bridge over the Colorado River to keep nuclear waste off Hoover dam on the way to Yucca Mountian. This cancellation is obviously is a political payoff of the Nebraska/Louisiana type to shore up Senator Reid's popularity in Nevada. Added to this was Obama's announcement that the US would build 7-10 nuclear reactors using UNION contractors. I applaude the nuclear reactors but the political moves of UNION contractors and the waste of $38 Billion dolaars to help Senator Reid are just political payoffs at the peoples' expense. I'm from Nevada. I was not pleased when it was selected as the nation's nuclear dumping ground. But, with estimates of $100B to startover it makes little sense to make this move. In the start over mode the nation will be in the "nuclear Guantanamo" replacement mode--who will readily accept it? But nuclear waste is piling up and it must be put somewhere. The destruction of 1000's of nuclear weapons, reator waste and medical waste all create a need for a safe place to store it.

On the positive front Afghanistan/Pakistan attacks/captures are improving things. Pakistan is obviously cooperating and having Pakistan interrogate the prisoners seems to be working well. Better than bringing them to the US and giving them their rights. (Miranda never lived in Pakistan.) The attacks on the poppy field territory in Afghanistan are succeeding although civilian casualties are a problem.

UN inspectors report Iran is on the verge of a nuclear weapon. I can't see how sanctions, at this point, can even slow it down. The US and/or Isreal are going to have to decide what their premptive strike options are and execute or begin their defensive deployment. Obama will struggle with this one.

General Powell resurfaced this weekend claiming to be a Republican but lambasting his "Republican friends" for their opposition to Obama and refuting Chaney's prediction that Obama will be a one term President. Let's see: Powell endorsed Obama over McCain, a fellow military man who dedicated his life to service of the country and spent 7 years being tortured by the North Vietnamese. Instead he supported a man with no experience in business or the military and the most leberal voting record in the US Senate. General Powell is a great American but in this case he used ppor judgement and is now trying to justify it.

The point was made this weekend that there is no place for moderate Republicans in the party. That may be true. But it is true of the Democratic party as well. It was Moderate Democrats who actually destroyed Obama's agenda--not conservative Republicans. And, moderate Republican's --except Snowe's move to get the healthcare bill out of committee--basically voted the party position along with moderate Democrats. So, I think the point to be made is that there is no place for moderates in either party. This is a point I made months ago--the American government has been hijacked by the two fringe elements: Liberal Democrats (about 17%) and Conservative Republicans (about 25%). Meanwhile the 55% of Americans in the middle who just want common sense leadership are left to sway in the wind and shake their heads in disgust and frustration. America is in big trouble. One thing we know in business is that indecision creates big problems. Decisive leadership gets things moving and u turns are sometimes necessary.

One last comment: Sarah Palin represents a mother and woman who we all should admire whether we agree with her policies or not. And whether we think she is the best choice for President or Vice President or not. She should be admired for her willingness to continue despite all the BS her family has to endure in order for her to voice her views.

I'm crawling into bed and pulling the covers over my head. I set the alarm, my little bit of cash is in the mattress and I'm waking up when this nightmare of a government is over. My cat is under the covers with me. Optimism is no longer in my vocabulary.

Here are a few comments on jobs and our leadership:

1. This recession is not over. There are very few signs of increased real activity out there. Using percentages to describe growth is very misleading. When the stock market fell 50% it requires an increase of 100% to get back to even. So, when economic indicators show housing starts up 2.8% after they have fallen 90% we are being misled. The only significant contracts for new housing that I know of are the contractors who are building housing on military bases for the troups coming back from overseas. The first time home owners $8,000 credit expires in April.

2. Real unemployment is 17%. That's 1 out of every 6 Americans. Jobs lost fell 35,000 last report. That is not job growth. As Bo points out it takes plus 150,000 to break even. So we are still behind 185,000 on the rate of job growth we need.

3. Obama and his people have done nothing to create jobs. They have perhaps saved some with 30% of the stimulus bill money spent for infrastructure and education. But, those jobs are now, in the second year of the bill, being lost as states/counties fail to regenerate the funds from the bill. However, the deficits in state and local budgets are now creating cuts in funding as well as increases in local and state taxes that will cost us jobs next year.
As the governor of Pennsylvania stated: we needed more infrastructure money and less social programs. So what will Congress do with the 50-60% of the pork bill that remains? They will not do what the people want and put it back in the treasury.

4. As I said last week the Feds are as unbelievable as the President. After just last week announcing they will raise rates but it is "months away" the Fed raised them yesterday after the market closed. You cannot count on or believe anything this administration says. They are the most untruthful, misleading administration ever.

5. Jobs Bill? Harry Reid is now begging Scott brown to help him pass his $15B bill for jobs. We have spent $2 trillion on economic stimulus, the banks, GM amd AIG's bailouts and we are now going to offer small business $15B? That one fact shows how little this administration understand the economy of the US. 76% of Americans work for small business---and they want to use pocket change to address that market segment. They gave GM $46B--one company? There are 8.6 Million small businesses.

6. Full campaign mode. It was said wednesday that President Obama does not govern--he campaigns. And, now the entire administration is in full campaign mode and on the attack against opponents in the Republican party and the independents known as the "Tea Party". This administration is now focused completely on stopping the reversal of the 2008 election. They have no time to govern. Eight months from now we will choose new representation. And for the next 8 months we will watch the stimulus funds that remain be used to fund every politically advantagous cause that fuels Democratic votes. Obama will be in full smoke and mirrors rhetoric. He will blame his failure to get his programs passed on the obstructionists in the Republican party. He had the votes but not the support of his own party to carry his agenda through. No healthcare. No jobs bill. No energy bill. No deficit reduction committee. No public NY trial for terrorists. No closing of Guantanamo. Loses in three major elections. Public approval in freefall. Bipartisan solutions extinct. Resignations by key Democrats sick of his policies or destroyed by their blackmail. Unfortunately, when politicians get in campaign mode America freezes to wait and see what will happen. And that is the last thing we need right now. We just had a National election and managers freeze in 2008. Now after a devastating 2009 we are at it again.

7. Tax increases every where. Congress is allowing the Bush tax credits to expire effectively increasing taxes in 50 different areas. This will further reduce consumer spending at exactly the time all the buckets of free Fed money dry up 2011. State and local governments are raising them as well. The spend and tax Democrats are back.

8. Without loan guarantees small businesses will not grow and hire. And no where is that strategy to be seen. Unbelievable.

9. Healthcare is now a war. As I stated last week the rumor was that healthcare premiums were going up 40%. And this week it happened. Healthcare providers, coming off record profits, defended the increases based on several factors:
a. States had denied their increases the year before (some states did restrict their increases to around 18% )
b. Lots of companies are reducing their benefits and therefore the providers are not making as much money. Interesting--could this be because Congress was going to tax "cadillac plans" so companies decided to get below that bar? We did. Thanks Congress--can you find anything you cannot screw up?)
c. Providers are hedging against losing the ability to target preexisting condidtions and long term illnesses in their rates. Also the portability of insurance between jobs.
d. Increased competition. If Congress ever does get it right it will produce national pools for small businesses, eliminate preexising conditions, allow portability and make the market a national market getting away from state restrictions that reduce competition and create a national purchasing house for pharmacueticals.
Every year that the government ignores the healthcare issue (lowering costs) the higher will be premiums. If the government is going to isolate and tax Blue Cross then they are going to grab for protection before it is legislated against them. This increase alone may make small business coverage of employees unaffordable. That would push many of the 107 Million employees into the pool of the uninsured or self insured. At $30,000 a year not many can do it. And of course under the Democrats proposal if we did cover them our plan would be well over the "Cadillac bar" and make the benefit taxable to our employees. Increasing their taxes $8,000 a year. People would be layed off nation wide.

10. Under the authority of the EPA Obama is pushing forward with his increase in regulation of American industry on CO2 emissions and increasing penalties. He does this despite admission by seveal top scientists that they cannot prove that there actually is global warming. What's the rush? Let's get some real science on the issue before we decide to punish American industry once again.

That's it for today, guys. As Bo ended his piece with "We are a nation of optimists" I would like to concur but add it takes more than optimism to solve our problems--it takes leadership and at the moment we are being led by false hopes and falsehoods. The good news is that Americans are not fooled long.

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