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November 03, 2011


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Well, that was embarrassing.


As we look at the markets and the American psychology today we see a scary place where everything seems to be in turmoil. Granted this President came in naive and implemented programs and policies that have stirred the nation into debate and anxiety. His popularity is still high but the acceptance of his major initiatives has waned as a stubborn unemployment situation has grown worse, perhaps even desperate. On the other side Republican Governors are hacking away at costs including public unions not to the liking of many. The pain we are seeing in Europe is characteristic of debt. It comes in two waves--the first in rising interest rates squeezing governments into emergency action. This is followed by the austerity programs that wean people from public jobs, services and entitlements. We look at America and we see annual foreclosures on homes in the 1 Million level. We see 16-20 million people unemployed. We see 29% of American homeowners under water. We see people in our streets trying to make some kind of statement of their frustration. Yesterday, I watched President Clinton try to express his views on what the Wall Street people were saying and even he stumbled to try to collectively group their message. When asked what he meant in his new book when he said he has had a tough time getting the President to listen to his advice he immediately back tracked and said Obama has taken all his advice except set up a bank fund to finance small businesses. President Clinton clearly knows where America will have to turn to get the country working again. His plan however, as outlined was much the same as Obama's and highly focused on infrastructure. The only difference is he actually wants to spend money on infrastructure and to find ways to pay for it using private money, not just government money. In the first stimulus bill Obama spent nearly $1T and only 3 % of it went to infrastructure. Of course Clinton's version of infrastructure is focused on liberal objectives: the internet speed, electric grid upgrades, energy efficient government buildings, modernization of public schools, etc. Without reviewing the book for you Clinton has outlined specific ideas to get America moving again. But, his prime focus is tax code revision to get American businesses to being capital back home for investment, tax code revision to get higher revenue from rich people by closing loopholes rather than raising rates,manufacturing and small business credit. As always Clinton was refreshing to listen to. Clinton reminded us of how much of a challenge Japan was to the US in the 80's and how they caved in. His point was that the US will compete with China in the same way.

On the foreign relations scene we have major hurdles. Iran has finally come to the line in the sand and splashed it in Obama's face. With Russia and China calling for no military action against Iran and the disclosure that Russia has helped Iran build the detonating device while Pakistan and Korea are helping with the nuclear technology all of a sudden we are in a major squeeze. At the same time we have a continued problem in Syria as Assad continues to publically kill and abduct demonstrators. We have a leaked report of a faster withdrawal from Afghanistan. We have Iran active in both Iraq and Afghanistan. We have Putin announcing he will once again run for President in Russia making it more and more obvious that the old USSR KGB is now the political mafia in charge of Russia and realigning with China and Iran. In three years the world has somewhat regressed into a very dangerous place. A financially weak NATO makes for a less reliant partner in world peace actions. Any news on our new war in Africa since the decision to send in special forces?

As I write this the markets are reeling under Italian bad (or good?) news. But, I look at the EU situation as a warning bell for the US not to follow in their path. The USSR and Japan have both demonstrated the folly of central government run economic systems. The pain we will see in Europe and in our own country as we withdraw from this debt led economy will be immense but we have the advantages. We have the best location on earth. We have the strongest agricultural production. We are the wealthiest country. We have a huge fraction of our own natural energy resources. We have the best universities. We have the best military. We are the largest manufacturer. We have friendly neighbors with Mexico and Canada who are both resource rich. In my estimation this mess will endure but our opportunity is great if we get our politicians working together.

To that end the super committee is rumored to be coming together. Obama, yesterday, reopened the off shore drilling location on a slow basis. Base secure he is now moving right? Police are starting to control the Wall Street crowd activities in many cities. A message was delivered in Ohio yesterday to both sides: To Republicans-- too hard a line on public servants. To Democrats-- no mandated healthcare. Both sides should listen and come together to compromise. And Europe is delivering the Debt and entitlement message one more time.

Harrycat---I can't prove he is or is not. He says he isn't and they say he is. If he does not withdraw then the voters will decide if they want to vote for him based on their view of whether it is true or it matters. As I commented before the behavior of Bill Clinton demonstrates that many voters don't care. I think that is clear enough. The longer this issue drags on the less the voters will get to hear on the real issues so I expect that the media will continue it as long as possible to keep the focus off Obama.

Bill M.: Did you just claim that it is up to the voters to decide if Cain has been a sexual predator? Surely you meant something else.

Harrycat---you may be from the middle but your comments are far left. Lying to Congress is criminal. Not all of Bill Clinton's acts were consensual. There were many women in the Clinton history. However, the only one I can say for sure was proven was Monica. In Cain's case he may or may not have done exactly what the women claim. In the end the voter's will decide. Clinton is the leader of the Dems. Obama turns to him every time he gets in trouble with his base. The point is that there are ample instances of both credible and noncredibel accusations against politicians in both parties. Some men cheat and some men use their positions to try to cheat. This is hardly the reason women are behind men in the C suites. We can both agree that opportunity should be equal for men and women, minorities and disabled. As you point out it is getting better. In the end American business pays a huge premium for talent and competance. I can attest to that as the CEO of a major Executive Search Firm. For the most part it doesn't matter the gender or skin color of the candidate. However, what holds people back is getting the experience and exposure they need to qualify as one of these candidates. Getting into the c Suite of a Fortune 1000 company requires a long history of performance without many mistakes along the way. As for politics it is largly an uphill battle for a woman or minority candidate to jump to the c suite. (White House or Congress)But, a well educated and informed poltician can get there as Obama showed. However, at the state and national level the media is in control of much of their destiny and if they do not meet the mold that the media likes they discredit them as they did Palin. If the media approves of you then like Obama, Clinton, John and Teddy Kennedy, Daley, Jackson,etc it doesn't matter what you do they support you. Just as the media tries to discredit the Tea party but supports the Wall Street people. Reality is the way it is. Women and minorities did not really enter the arena until the 70's and if you look at the state and local government they are making big progress. In the c suite world there are more women becoming CEO's. But, where the playing field is level in small business where women and minorities are free to make big progress. It is unfortunate that more educational attention is not focused in high school on the opportunity for people to take care of themselves and advance their security through the small business start up process. Eventually people who do not understand America and long for the days of the gold watch and 50 years at the same firm, like the Democratic unions, Congress and Obama, will begin to understand how this country works and change the system to match our new economy. In some ways the system will change itself as many of the 16-20 Million unemployed will --out of frustration-- enter into the world of entrparnuers. But, I fear first we will have to go through the age of entitlement where the young people try to find jobs in secure zones that pay less but are benefit rich--mainly the government and public unions. That is reality.

Where is the hypocrisy? I am not a Dem. Clinton is not my guy. The first time I voted for Dubya. I am one of the "middle", but it is no wonder that you can't recognize me. There are very few of us left.

However, as a small note, whatever it was that Clinton did, it was consensual (the sexual part) and non-criminal. If Cain did what the accusers say he did that is criminal and he should be prosecuted. That type of behavior must not be tolerated.

Another small point: I thought Obama led the Dems, not Clinton. What are you trying to say?

Given the long history of men preying on vulnerable women, especially in the workplace, I am, at the moment, siding with the four unrelated women. Unless a conspiracy can be found I am with them. Any men who can't recognize the truth of predation of women in the workplace are part of the problem.

For generations women have been undervalued. Look at the relative pay scales for equal work for example. How many women are in Congress? Finally this is starting to change. I say this for my children and grandchildren - things are starting to change. Its about time.

Harrycat---I can't defend Cain or villify him. If he is a serial predator then that equates him with President Clinton who was proven to not only prey on staffers but lied to Congress as well. Why then did Congressional Democrats not purge themselves of his services? And, why today does he continue to lead the Democratic party? In the end Cain is one of 10-12 Republican candidates and in the end will have to compete with them all to win the nomination. The sad part of all this is will be that IF Cain is innocent and this is nothing but a serial attempt to make money or disgrace the man then he suffers from simply trying to serve. You should consider the hypocrisy of your question.

Cain is either a serial predator, or four unrelated women have lied (motive ?). Will Reps stay with their man and disrespect women so blatantly?

Unlikely Event---

It is unlikely that the economy will get better that quickly, Bill. Obama knows that and his strategy is to run against Republican obstruction and even if he cannot make that stick he will run against Congressional obstruction to explain why several Democrats are voting against him. Colorado set the tone--no tax increases until we see a better economy. Legislators heard it. Lieberman joined the Republicans this week in defeating the Dems version of infrastructure stimulus with a tax on the rich. The bill showed the sentiment for the election: Both sides want infrastructure spending but Republicans want it paid for with spending cuts and Democrats want it paid for with tax hikes. Period. Nothing the President can do will help fast enough. In fact it could be that he is actually on a path to slow the economy further. Consider these:

1. Payroll tax reductions expire next month. This will have an immediate negative impact on small businesses and consumers.

2. He has asked EPA to review the process being used in Pennsylvania to extract Natural Gas from shale to determine if it is impacting water quality. This could shut down one of the few industries in the country that is hiring.

3. He is in Europe today and being pressured to provide US assistance to bail out Greece. Should he cave more pressure on the US taxpayer and a one way street to Italy,Spain, etc.

4. The real #'s. In October the US deficit was $208B. All these cuts we are hearing about are in numbers for the future budgets not today's. Imagine what the debt will be as we go to the polls in 13 months. Now you can understand why this President and this Congress has not produced a budget since he took office. They simply do not want Americans to see the real cash flow of the country.

5. Foreclosures are going to be in the 800,000 range next year. More pressure on the housing market.

6. In December he is scheduled to approve or disapprove the NG pipeline extension that carries Canadian oil currently to Illinois and if approved will carry it to Oklahoma and Texas. If he disapproves it thousands of new jobs will not be created.

7. The new EPA regulation allowing 20% ethanol in gasoline is coming on line. Corn which is used to produce much of the Ethanol in the US is used in more than 3000 products in the US and Ethanol increases the price of corn which in turn increases prices in all these other products. Corn is currently selling at nearly $10/bu. Look back 3 years at the price.

8. The new Healthcare law is slowing pushing more and more costs onto US businesses and unless you are one of the 1800 big companies like McD's you are not exempt. Those costs will go to the consumer.

9. The Occupy Wall Street crowd are their own worst enemy and the President's as well. Their impact on inner city businesses is going to have a negative impact on the economy unless you sell T shirts.

10. Anything the Congress or the President does between now and the 2012 election is unlikely to get done fast enough to help. Even if they were to restart the offshore oil industry they would have to wait for more drilling rigs to be created to start. They are now parked in South America.

11. The Congress will likely be faced soon with another request for unemployment extensions. More money for both state and federal governments to come up with. More reason for some people to stay out of work.

12. He is faced with Democratic governors in the states who are joining Republicans in cutting budgets by reducing staff in public unions. No matter how many IRS agents he hires it will not make up for these cuts.

While I believe this economy will continue to get a little better there will be no rush to 8% unemployment. I think the President knows he can only win with a huge turnout of his base and he can only get that with actions that pleases them. Thus, his rush to get Iraq troops home and the new acceration of Troops out of Afghanistan leaked by his staff yesterday. The only question that remains is will the Republicans focus on the Senate and can they come up with a candidate that won't lose to him. Colorado probably has shown the attitude of the independents as the tax for schools measure lost 2-1. It got my attention.

"NO SOLUTIONS FROM THE 'RIGHT' PLEASE." When some progress begins showing itself economically; a quick Bi-partisan, 'Leftwing' generated plan, will be wisked thru the Senate. This will form the basis for the Election . Nothing will be more obvious. This type of strategy has gotten him into the 'Harvard Law Review' but I still have faith in the Electorate's Review.

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