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Tales From The Dark Side

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Regular readers of this blog know that I frequently discuss my skepticism about the true state of America’s economy.  It gets painful listening to the “usual cheerleaders” constantly tell us about the robust state of our economy.  The most recent Federal Reserve Beige Book serves as the Bible for these true believers.  One need only check in on a few of the websites listed on my blogroll (at the right side of this page) to find plenty of opinions which run contrary to the current dogma that America is on its way to a full economic recovery.

One of my favorite websites from this blogroll is Edward Harrison’s Credit Writedowns.  When I visited that site this evening, I was amazed at the number of contrarian commentaries posted there.  One piece, “The economy is nowhere near as robust as stocks would have you believe” dealt with one of my favorite subjects:  the Federal Reserve’s inflation of the stock market indices by way of quantitative easing.  Here is an interesting passage from Harrison’s essay:

My view is that the stock market has gotten way ahead of itself.  Easy money has caused people to pile into risk assets as risk seeks return in a zero-rate environment.  The real economy is nowhere near as robust as the increase in shares would have you believe. Moreover, even the falling earnings growth is telling you this.

Bottom line: The US economy is getting a sugar high from easy money, economic stimulus, and the typical cyclical aides to GDP that have promoted some modest releveraging.  But the underlying issues of excess household indebtedness, particularly as related to housing and increasingly student debt, will keep this recovery from being robust until more of the debts are written down or paid off.  That means the cyclical boost that comes from hiring to meet anticipated demand, construction spending, and increased capital spending isn’t going to happen at a good clip.  Meanwhile, people are really struggling.

The hope is we can keep this going for long enough so that the cyclical hiring trends to pick up before overindebted consumers get fatigued again.  Underneath things are very fragile. Any setback in the economy will be met with populist outrage – that you can bet on.

Another posting at Credit Writedowns was based on this remark by financier George Soros:  ”People don’t realize that the system has actually collapsed.”

Bloomberg News has been running a multi-installment series of articles by financial analyst Gary Shilling, which are focused on the question of whether the United States will avoid a recession in 2012.  In the third installment of the series, Shilling said this:

In the first two installments, I laid out the reasons why the U.S. economy, despite current strong consumer spending and the recent euphoria of investors over stocks, will weaken into a recession as the year progresses, led by renewed consumer retrenchment.

If my forecast pans out, the Federal Reserve and Congress may be compelled to take further action to bolster the economy.

*   *   *

Meanwhile, a number of economic indicators are pointing in the direction of a faltering economy.  The Economic Cycle Research Institute index remains in recession territory.  The ratio of coincident to lagging economic indicators, often a better leading indicator than the leading indicator index itself, is declining.  Electricity generation, though influenced by the warm winter, is falling rapidly.

One of the most popular blogs among those of us who refuse to drink the Kool-Aid being served by the “rose-colored glasses crowd” is Michael Panzner’s Financial Armageddon.  In a recent posting, Mr. Panzner underscored the fact that those of us who refuse to believe the “happy talk” are no longer in the minority:

In “Americans Agree: There Is No Recovery,” I highlighted a recent Washington PostABC News poll, noting that

no matter how you break it down — whether by party/ideology, household income, age, or any other category — the majority of Americans agree on one thing: there is no recovery.

But the fact that things haven’t returned to normal isn’t just a matter of (public) opinion. As the Globe and Mail’s Market Blog reveals in “These Are Bad Days for Garbage,” the volume of waste being created nowadays essentially means that, despite persistent talk (from Wall Street, among others) of a renaissance in consumer spending, people are continuing to consume less and recycle more than they used to.

Many people (especially commentators employed by the mainstream media) prefer to avoid “dwelling on negativity”, so they ignore unpleasant economic forecasts.  Others appear trapped in a new-age belief system, centered around such notions as the idea that you can actually cause the economy to go bad by simply perceiving it as bad.  Nevertheless, the rest of us have learned (sometimes the hard way) that effective use of one’s peripheral vision can be of great value in avoiding a “sucker punch”.  Keep your eyes open!


 

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Losing The Propaganda War

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The propaganda war waged by corporatist news media against the Occupy Wall Street movement is rapidly deteriorating.  When the occupation of Zuccotti Park began on September 17, the initial response from mainstream news outlets was to simply ignore it – with no mention of the event whatsoever.  When that didn’t work, the next tactic involved using the “giggle factor” to characterize the protesters as “hippies” or twenty-something “hippie wanna-bes”, attempting to mimic the protests in which their parents participated during the late-1960s.  When that mischaracterization failed to get any traction, the presstitutes’ condemnation of the occupation events – which had expanded from nationwide to worldwide – became more desperate:  the participants were called everything from “socialists” to “anti-Semites”.

Despite the incessant flow of propaganda from those untrustworthy sources, a good deal of commentary – understanding, sympathetic or even supportive of Occupy Wall Street began to appear in some unlikely places.  For example, Roger Lowenstein wrote a piece for Bloomberg BusinessWeek entitled, “Occupy Wall Street: It’s Not a Hippie Thing”:

As critics have noted, the protesters are not in complete agreement with each other, but the overall message is reasonably coherent.  They want more and better jobs, more equal distribution of income, less profit (or no profit) for banks, lower compensation for bankers, and more strictures on banks with regard to negotiating consumer services such as mortgages and debit cards.  They also want to reduce the influence that corporations – financial firms in particular – wield in politics, and they want a more populist set of government priorities: bailouts for student debtors and mortgage holders, not just for banks.

In stark contrast with the disparaging sarcasm spewed by the tools at CNBC and Fox News concerning this subject, The Economist demonstrated why it enjoys such widespread respect:

So the big banks’ apologies for their role in messing up the world economy have been grudging and late, and Joe Taxpayer has yet to hear a heartfelt “thank you” for bailing them out.  Summoned before Congress, Wall Street bosses have made lawyerised statements that make them sound arrogant, greedy and unrepentant.  A grand gesture or two – such as slashing bonuses or giving away a tonne of money – might have gone some way towards restoring public faith in the industry.  But we will never know because it didn’t happen.

On the contrary, Wall Street appears to have set its many brilliant minds the task of infuriating the public still further, by repossessing homes of serving soldiers, introducing fees for using debit cards and so on.  Goldman Sachs showed a typical tin ear by withdrawing its sponsorship of a fund-raiser for a credit union (financial co-operative) on November 3rd because it planned to honour Occupy Wall Street.

The Washington Post conducted a poll with the Pew Research Center which compared and contrasted popular support for Occupy Wall Street with that of the Tea Party movement.  The poll revealed that ten percent of Americans support both movements.  On the other hand, Tea Party support is heavily drawn from Republican voters (71%) while only 24% of Republicans – as opposed to 64% of Democrats – support Occupy Wall Street.  As for self-described “Moderates”, only 24% support the Tea Party compared with Occupy Wall Street’s 45% support from Moderates.  Rest assured that these numbers will not deter unscrupulous critics from describing Occupy Wall Street as a “fringe movement”.

The best smackdown of the shabby reportage on Occupy Wall Street came from Dahlia Lithwick of Slate:

Mark your calendars:  The corporate media died when it announced it was too sophisticated to understand simple declarative sentences.  While the mainstream media expresses puzzlement and fear at these incomprehensible “protesters” with their oddly well-worded “signs,” the rest of us see our own concerns reflected back at us and understand perfectly.  Turning off mindless programming might be the best thing that ever happens to this polity.  Hey, occupiers:  You’re the new news. And even better, by refusing to explain yourselves, you’re actually changing what’s reported as news.  Because it takes a tremendous mental effort to refuse to see that the rich are getting richer in America while the rest of us are struggling.  Maybe the days of explaining the patently obvious to the transparently compromised are finally behind us.

By refusing to take a ragtag, complicated, and leaderless movement seriously, the mainstream media has succeeded only in ensuring its own irrelevance.  The rest of America has little trouble understanding that these are ragtag, complicated, and leaderless times.  This may not make for great television, but any movement that acknowledges that fact deserves enormous credit.

Too many mainstream news outlets appear to be suffering from the same disease as our government and our financial institutions.  Jeremy Grantham’s Third Quarter 2011 newsletter will be coming out in a few days and I’m hoping that he will prescribe a cure.  My wilder dream is that those vested with the authority and responsibility to follow his advice would simply do so.


 

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Elizabeth Warren Should Run Against Obama

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Now that President Obama has thrown Elizabeth Warren under the bus by nominating Richard Cordray to head the Consumer Financial Protection Bureau (CFPB), she is free to challenge Obama in the 2012 election.  It’s not a very likely scenario, although it’s one I’d love to see:  Warren as the populist, Independent candidate – challenging Obama, the Wall Street tool – who is already losing to a phantom, unspecified Republican.

A good number of people were disappointed when Obama failed to nominate Warren to chair the CFPB, which was her brainchild.  It was bad enough that Treasury Secretary “Turbo” Tim Geithner didn’t like her – but once the President realized he was getting some serious pushback about Warren from Senate Republicans – that was all it took.  Some Warren supporters have become enamored with the idea that she could challenge Scott Brown for his seat representing Massachusetts in the Senate.  However, many astute commentators consider that as a really stupid idea.  Here is the reaction from Yves Smith of Naked Capitalism:

We argued yesterday that the Senate was not a good vehicle for advancing Elizabeth Warren’s aims of helping middle class families, since she would have no more, and arguably less power than she has now, and would be expected to defend Democrat/Obama policies, many of which are affirmatively destructive to middle class interests (just less so than what the Republicans would put in place).

A poll conducted in late June by Scott Brown and the Republican National Committee raises an even more basic question:  whether she even has a shot at winning.

*   *   *

The poll shows a 25 point gap, which is a massive hurdle, and also indicates that Brown is seen by many voters as not being a Republican stalwart (as in he is perceived to vote for the state’s, not the party’s, interest).  A 25 point gap is a near insurmountable hurdle and shows that Warren’s reputation does not carry as far as the Democratic party hackocracy would like her fans to believe.  But there’s no reason not to get this pesky woman to take up what is likely to be a poisoned chalice.  If she wins, she’s unlikely to get on any important committees, given the Democratic party pay to play system, and will be boxed in by the practical requirements of having to make nice to the party and support Obama positions a meaningful portion of the time. And if she runs and loses, it would be taken as proof that her middle class agenda really doesn’t resonate with voters, which will give the corporocrats free rein (if you can’t sell a liberal agenda in a borderline Communist state like Massachusetts, it won’t play in Peoria either).

Obviously, a 2012 challenge to the Obama Presidency by Warren would be an uphill battle.  Nevertheless, it’s turning out to be an uphill battle for the incumbent, as well.  David Weidner of MarketWatch recently discussed how Obama’s failure to adequately address the economic crisis has placed the President under the same pressure faced by many Americans today:

He’s about to lose his job.

*   *   *

Blame as much of the problem on his predecessor as you like, the fact is Obama hasn’t come up with a solution.  In fact, he’s made things worse by filling his top economic posts with banking-friendly interests, status-quo advisers and milquetoast regulators.

And if there’s one reason Obama loses in 2012, it’ll be because he failed to surround himself with people willing to take drastic action to get the economy moving again.

In effect, Obama’s team has rewarded the banking industry under the guise of “saving the economy” while abandoning citizens and consumers desperate for jobs, credit and spending power.

There was the New York Fed banker cozy with Wall Street: Timothy Geithner.

There was the former Clinton administration official who was the architect of policies that led to the financial crisis: Larry Summers.

There was a career bureaucrat named to lead the Securities and Exchange Commission:  Mary Schapiro.

To see just how unremarkable this group is, consider that the most progressive regulator in the Obama administration, Federal Deposit Insurance Corp. Chairman Sheila Bair, was a Republican appointed by Bush.

*   *   *

The lack of action by Obama’s administration of mediocrities is the reason the recovery sputters.  In essence, the turnaround depends too much on a private sector that, having escaped failure, is too content to sit out what’s supposed to be a recovery.

*   *   *

What began as a two-step approach:  1) saving the banks, and then 2) saving homeowners, was cut short after the first step.

Instead of extracting more lending commitments from the banks, forcing more haircuts on investors and more demands on business, Obama has let his team of mediocrities allow the debate to be turned on government.  The government caused the financial crisis.  The government ruined the housing market.

It wasn’t true at the start, but it’s becoming true now.

Despite his status as the incumbent and his $1 billion campaign war chest, President Obama could find himself voted out of office in 2012.  When you consider the fact that the Republican Party candidates who are currently generating the most excitement are women (Bachmann and the undeclared Palin) just imagine how many voters might gravitate to a populist female candidate with substantially more brains than Obama.

The disillusionment factor afflicting Obama is not something which can be easily overlooked.  The man I have referred to as the “Disappointer-In-Chief” since his third month in office has lost more than the enthusiasm of his “base” supporters – he has lost the false “progressive” image he had been able to portray.  Matt Stoller of the Roosevelt Institute explained how the real Obama had always been visible to those willing to look beyond the campaign slogans:

Many people are “disappointed” with Obama.  But, while it is certainly true that Obama has broken many many promises, he projected his goals in his book The Audacity of Hope.  In Audacity, he discussed how in 2002 he was going to give politics one more shot with a Senate campaign, and if that didn’t work, he was going into corporate law and getting wealthy like the rest of his peer group.  He wrote about how passionate activists were too simple-minded, that the system basically worked, and that compromise was a virtue in and of itself in a world of uncertainty. His book was a book about a fundamentally conservative political creature obsessed with process, not someone grounded in the problems of ordinary people.  He told us what his leadership style is, what his agenda was, and he’s executing it now.

I expressed skepticism towards Obama from 2005, onward.  Paul Krugman, Debra Cooper, and Tom Ferguson among others pegged Obama correctly from day one.  Obama broadcast who he was, through his conservative policy focus (which is how Krugman pegged him), his bank backers (which is how Ferguson pegged him), his political support of Lieberman (which is how I pegged him), and his cavalier treatment of women’s issues (which is how Debra Cooper pegged him).  He is doing so again, with his choice to effectively remove Elizabeth Warren from the administration.

I just wish Elizabeth Warren would fight back and challenge Obama for The White House.  If only   .   .   .


 

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Troublesome Creatures

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A recent piece by Glynnis MacNicol of The Business Insider website led me to the conclusion that Shepard Smith deserves an award.  You might recognize Shep Smith as The Normal Guy at Fox News.  In case you haven’t heard about it yet, a controversy has erupted over a 20-minute crank telephone call made to Wisconsin Governor Scott Walker by a man who identified himself as David Koch, one of two billionaire brothers, famous for bankrolling Republican politicians.  The caller was actually blogger Ian Murphy, who goes by the name, Buffalo Beast.  In a televised discussion with Juan Williams concerning the controversy surrounding Wisconsin Governor Walker, Shep Smith focused on the ugly truth that the Koch brothers are out to “bust labor”.  Here are Smith’s remarks as they appeared at The Wire blog:

It’s all political isn’t it?  Isn’t it just 100% politics? … Have you looked at the list of the top 10 donors to political campaigns?  Seven of those 10 donate to Republicans.  The other three that remain of those top 10, they all donate to Democrats and they are all unions.  Bust the unions, it’s over … . And this started when?  It started with the Koch brothers.  The Koch brothers were organizing…

*   *   *

I’m not taking a side on this, I’m telling you what’s going on … The facts!  But people don’t want to hear the facts … let them get angry, facts are troublesome creatures from time to time.  The Koch brothers, and others, were organized to bust labor, it’s what big business wants to do … this isn’t a new concept.  So they gave a bunch of money to the governor’s campaign.  The governor’s campaign is over.  Now, away we go!  We’re going to try to bust this union up, and that’s what they’re doing … this is political and everyone in the middle is a pawn.

Those “troublesome creatures” called facts have been finding their way into the news to a refreshing degree lately.  Emotional rhetoric has replaced news reporting to such an extreme level that most people seem to have accepted the premise that facts are relative to one’s perception of reality.  The lyrics to “Crosseyed and Painless” by the Talking Heads (written more than 30 years ago) seem to have been a prescient commentary about this situation:

Facts all come with points of view
Facts don’t do what I want them to
Facts just twist the truth around
Facts are living turned inside out

Budgetary disputes are now resolved on an emotional battlefield where facts usually take a back seat to ideology.  Despite this trend, there are occasional commentaries focused on fact-based themes.  One recent example came from David Leonhardt of The New York Times, entitled “Why Budget Cuts Don’t Bring Prosperity”.  The article began with the observation that because so many in Congress believe that budget cuts are the path to national prosperity, the only remaining question concerns how deeply spending should be cut this year.  Mr. Leonhardt provided those misled “leaders” with the facts:

The fundamental problem after a financial crisis is that businesses and households stop spending money, and they remain skittish for years afterward.  Consider that new-vehicle sales, which peaked at 17 million in 2005, recovered to only 12 million last year.  Single-family home sales, which peaked at 7.5 million in 2005, continued falling last year, to 4.6 million.  No wonder so many businesses are uncertain about the future.

Without the government spending of the last two years — including tax cuts — the economy would be in vastly worse shape.  Likewise, if the federal government begins laying off tens of thousands of workers now, the economy will clearly suffer.

That’s the historical lesson of postcrisis austerity movements.  The history is a rich one, too, because people understandably react to a bubble’s excesses by calling for the reverse.  When Franklin Roosevelt was running for president in 1932, he repeatedly called for a balanced budget.

But no matter how morally satisfying austerity may be, it’s the wrong answer.

Leonhardt’s  objective analysis drew this response from Yves Smith of Naked Capitalism:

Did a memo go out?   Leonhardt almost always hews to neoclassical orthodoxy.  This is a big change for him.

Those “troublesome creatures” called facts became the subject of an opinion piece about the budget, written by Bill Schneider for Politico.  While dissecting the emotional motivation responsible for “a dangerous political arms race where the stakes keep escalating”, Schneider set about isolating the fact-based signal from the emotional noise clouding the budget debate:

Many of the programs targeted for big cuts by the House Republicans have a suspiciously ideological tinge:  Planned Parenthood, the Environmental Protection Agency, funds to implement the new health care reform law, National Public Radio, the Corporation for Public Broadcasting, President Bill Clinton’s AmeriCorps program, money for a White House climate change czar.  The Washington Post calls the House budget “an assault on bedrock Democratic priorities.’’

The public is certainly worried about the deficit.  But do people believe the deficit is a crisis demanding immediate and radical action?  That’s not so clear.

In a Pew Research Center poll taken this month, the public was split over whether the federal government’s priority should be reducing the deficit (49 percent) or spending to help the economic recovery (46 percent).  What economic issue worries people the most? Jobs tops the list (44 percent). Fewer than half that say the deficit (19 percent).

Yes, there is an economic crisis in the country.  The crisis is jobs.  So Republicans have to argue that spending cuts will create jobs — an argument that mystifies many economists.

Let’s hope that those “troublesome creatures” keep turning up at debates, “town hall” meetings and in commentaries.  If they cause widespread allergic reactions, let nature run its course.


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Wealth Redistribution

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One of the sleaziest, most disingenuous arguments exploited by politicians is the “wealth redistribution” theme.  Whenever an influential corporate sponsor of some creepy politician is confronted with proposed legislation, which might change the status quo by reducing unconscionable profiteering, we are told that the new bill is a “socialist” attempt at “wealth redistribution”.  Unfortunately, there are too many sheeple who don’t realize that “wealth redistribution” already happened.

The recent uprisings in the Middle East have demonstrated how difficult it can be to maintain a plutocracy in the modern world.  As the American voting public becomes more familiar with the economic circumstances which led to the Egyptian turmoil, attention gradually gets refocused on how our domestic situation compares with Mubarak’s dystopia.  Blogger “George Washington” (a former law school professor) of Washington’s Blog recently wrote a piece concerning how the “Gini coefficient” demonstrates that America’s upward wealth redistribution has reduced this nation to banana republic status:

Egyptian, Tunisian and Yemeni protesters all say that inequality is one of the main reasons they’re protesting.

However, the U.S. actually has much greater inequality than in any of those countries.

Specifically, the “Gini Coefficient” – the figure economists use to measure inequality – is higher in the U.S.

*   *   *

Gini Coefficients are like golf – the lower the score, the better (i.e. the more equality).

According to the CIA World Fact Book, the U.S. is ranked as the 42nd most unequal country in the world, with a Gini Coefficient of 45.

In contrast:

  • Tunisia is ranked the 62nd most unequal country, with a Gini Coefficient of 40.
  • Yemen is ranked 76th most unequal, with a Gini Coefficient of 37.7.
  • And Egypt is ranked as the 90th most unequal country, with a Gini Coefficient of around 34.4.

And inequality in the U.S. has soared in the last couple of years, since the Gini Coefficient was last calculated, so it is undoubtedly currently much higher.

So why are Egyptians rioting, while the Americans are complacent?

Well, Americans – until recently – have been some of the wealthiest people in the world, with most having plenty of comforts (and/or entertainment) and more than enough to eat.

But another reason is that – as Dan Ariely of Duke University and Michael I. Norton of Harvard Business School demonstrate – Americans consistently underestimate the amount of inequality in our nation.

Ariely and Norton’s paper, based on their 2005 poll of 5,522 citizens about their preferences for wealth division, has been the subject of much commentary.  Last fall, Bruce Watson wrote an article for Daily Finance discussing Ariely and Norton’s report.  As Watson explained, the following empirical data compiled by Professor Edward Wolff, (and incorporated into the Ariely-Norton paper) portrayed the “real world” wealth distribution in America:

Currently, 85% of America’s wealth, which is defined as total assets minus total liabilities, is held by the country’s richest 20%.  Meanwhile the upper middle class holds 11%, the middle class has 4%, and the lower class and poor share an anemic 0.3%.

Here’s how Watson summarized the results of the Ariely-Norton research:

In the poll, the vast majority of Americans across the political, gender and wealth spectrum displayed a markedly skewed understanding of how America’s money is divided.  On average, respondents thought that the rich hold only 58% of the nation’s wealth, 32% less than their actual holdings.  They thought that the middle class controls 13% of the country’s wealth, more than three times their actual holdings.  As for the bottom 40% of the population, the assumption was that the lower class and poor own a measly 9% of the country’s wealth.  In reality, these two groups control about one thirtieth of that amount.

Who Should Get the Money?

Although the perception that America’s wealth distribution is unfair cut across partisan lines, Republicans and Democrats disagreed about the ideal distribution.  People who voted for George Bush believed that the richest 20% of the population deserved roughly 35% of the nation’s wealth.  Kerry voters radically disagreed:  they felt that the rich deserved only about 30%. When it came to the country’s poorest citizens, Bush voters felt that they deserved about 9% of the country’s assets; Kerry voters preferred to give them 12%.

Respondents making over $100,000 per year, the group most heavily skewed toward a top-heavy distribution of wealth, advocated a system in which the top 20% received about 40% of the country’s assets and the bottom 20% got roughly 7%.  Yet even this comparatively Dickensian wealth distribution still gave America’s rich less than half of their current holdings, while giving the poorest more than twenty times their current holdings.

In October of 2008, before the full extent of the Wall Street megabank bailouts had been completely understood by most Americans (and before those multi-million-dollar bonuses had been awarded to the malefactors who caused the financial crisis) the Gallup Organization conducted a poll on the subject of wealth redistribution.  This is what they observed:

A majority of Americans (58%) say money and wealth should be more evenly distributed among a larger percentage of the people, although slightly less than half (46%) go so far as to say that the government should redistribute wealth by “heavy taxes on the rich.”

*   *   *

Still, in each of the four times Gallup has asked this question in recent years, between 45% and 51% of Americans have gone so far as to agree with the fairly harsh-sounding policy of “redistribut[ing] wealth by heavy taxes on the rich.”

Because the polls discussed above reveal that the current wealth distribution is unacceptable to most Americans, the “wealth redistribution” argument — as it is often used by politicians – should be a non-starter.  Perhaps a program of  “enhanced tax incentives for generosity” might enjoy more widespread acceptance than Gallup’s “heavy taxes on the rich” – to the point where an overwhelming majority of Americans would support it.

Unfortunately, unless that “overwhelming majority of Americans” has an army of lobbyists to advance such an initiative, the cash registers politicians portraying the effort as “socialism” will be the only voices that matter.


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2010 Jackass Of The Year Award

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Once again, the moment has arrived for TheCenterLane.com to present its Jackass of The Year Award.  Our 2010 recipient is Alaska’s Senatorial candidate, Joe Miller.

Joe Miller’s campaign to defeat Senator Lisa Murkowski in Alaska’s 2010 Republican Primary got a big boost when Governor Sarah Palin decided to leave office to become a full-time celebrity.  Palin’s decision was immediately criticized by Senator Murkowski.  Palin responded to the criticism by endorsing Murkowski’s opponent in the Republican Primary:  Joe Miller.  Miller then won the support of the Tea Party Express, who – according to The Washington Post – spent more than $150,000 on pro-Miller television and radio ads during the week before the primary.  In addition to the mobilization of the Tea Party activists, Miller benefited from an initiative on the Alaska Republican Primary ballot requiring parental consent before a girl aged 17 or younger could receive an abortion.  Alaska’s most conservative voters were out in force on Primary Day.  The Washington Post article highlighted some of Miller’s positions that helped him curry favor with Alaska’s “hard right” voters:

He has called for phasing out Medicare and Social Security, as well as eliminating the Education Department because it is not mandated in the Constitution.

Never mind the fact that neither the FBI nor the Department of Homeland Security has been mandated by the Constitution.  The “lack of a Constitutional mandate” litmus test is only applied to those bureaucracies considered repugnant to Joe Miller.

Because the deadline for filing as an “Independent” candidate on Alaska’s November (general election) ballot had already expired by the August 24 primary, it was necessary for Lisa Murkowski to run as a “write-in” candidate in order to retain her Senate seat.

During the course of the ensuing campaign, Miller’s foolishness provided the news media with plenty of entertainment.  Despite Miller’s rhetoric, which called for limited government and fiscal restraint, Anne Applebaum of Slate recalled that Miller’s background became an issue in the campaign, since it was so inconsistent with that of a Tea Party hero:

During the course of the campaign, it also emerged that he had once collected farm subsidies; that his wife had once collected unemployment benefits; and that his family had received state health benefits.

Upon hearing that Murkowski would not abandon her quest to retain her Senate seat after her Republican Primary defeat, Mr. Miller immediately made a foolish statement, which he attempted to blame on an unidentified staffer.  Jim Carlton of the Washington Wire blog provided this quote of the now-infamous message sent out from Joe Miller’s Twitter account:

“What’s the difference between selling out your party’s values and the world’s oldest profession?” said the message under Mr. Miller’s Twitter address early Friday.

Mr. Miller said the tweet was sent by a staffer who was temporarily manning his account.  He added that the remark was aimed not at the senator herself, but at suggestions that Alaska’s Libertarian Party might allow Ms. Murkowski to run under its banner in November if she ends up losing to him in a final count of absentee ballots.

He blamed the tweet on “poor judgment” by the unidentified staffer, who he “relieved of his duties.”  He said he quickly removed the message from his Twitter feed.

If  Miller had not already done enough to alienate female voters — his Halloween-themed campaign ad, likening Lisa Murkowski to a witch, immediately drew the ire of the New Agenda website, which embedded a YouTube feed of the ad in this posting.

The most infamous event of Miller’s campaign occurred on October 17, when Tony Hopfinger, editor of the Alaska Dispatch website was handcuffed by Miller’s private security guards, when he attempted to interview the candidate at the conclusion of a “town hall” meeting at the Central Middle School in Anchorage.  The incident caused Miller to become the butt of many jokes on national television.

Hopfinger was attempting to question Miller about an incident that had become the subject of an e-mail that had originated a few days earlier from Mike Rostad, a Republican activist in Kodiak, Alaska, based on a discussion between Rostad and Miller’s father, Rex Miller.  The Anchorage Daily News provided this report:

Joe Miller was a part-time Fairbanks North Star Borough attorney in 2008 when he led an attempt to oust state Republican Party chief Randy Ruedrich.  Rostad wrote in the email that Rex Miller told him there was a poll being conducted during that effort against Ruedrich.  Rostad wrote that Rex Miller told him what happened:

“One noon hour, on his own time at the borough, Joe participated in an online poll voting against Randy.  He used four office computers in the office to do it, thinking this was his chance to boost numbers to get rid of Randy.  He emptied the cache files on the computers so the users wouldn’t know what he had done.  When the users asked what had happened to their caches, (Miller) admitted to what he did.  He was reprimanded and docked in pay for several days, but was not suspended or fired.

Miller’s improper computer use as a part-time attorney for the Fairbanks North Star Borough has been an ongoing controversy, which was the subject of this December 31 article from the Anchorage Daily News.

The handcuffing of Tony Hopfinger was not the only misstep by Joe Miller’s campaign on October 17.  Shira Toplitz of Politico reported on October 29 that the Murkowski campaign was running an ad, critical of two October 17 blunders:

The same night as the incident with the journalist, Miller told an audience that if “East Germany could, we could” secure the borders of the country — a controversial statement that Murkowski also uses in the new spot.

“Joe Miller’s answer to illegal immigration:  Use East Germany as an example,” continues the narrator.  “Exactly what kind of America does Joe Miller live in?  . . .”

Miller had nobody else to blame for his stupid remark exalting East Germany as a model for border security.

Once it became obvious that Lisa Murkowski made history as the first write-in candidate to win a Senate election since Strom Thurmond in 1954, Joe Miller took his battle to the courts.  He initially filed an action in Federal Court, although U.S. District Judge Ralph Beistline stayed proceedings pending resolution of the dispute in the State court, where the action should have been brought.  Once the case was filed in the State Court, Judge William Carey dismissed the suit and it was appealed directly to the Alaska Supreme Court.  U.S. News reported that when the ballots were still being counted, the Miller camp was determined to turn the election into a spelling bee:

Shortly after the second day of write-in ballot counting began on Thursday, a Miller observer challenged a vote for Murkowski that appeared to have her name spelled and printed correctly, though the “L” in “Lisa” was in cursive handwriting.  Later, at least 10 ballots in which Murkowski’s name appeared readable were challenged, including one in which the vote read:  “Lisa Murkowski Republican.”

Miller’s campaign said observers are simply challenging votes that don’t meet the strict letter of the law — including those with minor misspellings of Murkowski’s name or those with legibility or penmanship issues.

In addition to the “spelling bee” demand, Miller also attempted to pursue a claim of misconduct by election officials amounting to election fraud.  The Christian Science Monitor provided this report on Judge Carey’s dismissal of that count:

“Nowhere does Miller provide facts showing a genuine issue of fraud or election official misfeasance,” Carey wrote.  “Instead, the majority of the problematic statements included in the affidavits are inadmissible hearsay, speculation, and occasional complaints of sarcasm expressed by [elections] workers.  Nothing rises to the level showing genuine material facts of fraud.”

The stupidity of Miller’s “spelling bee” requirement became more apparent once the Alaska Supreme Court was asked to reverse the dismissal of that claim.  During oral arguments, Justice Dana Fabe directed a Why are you here? question to Miller’s attorneys.  Here’s how that moment was described by KTUU News:

With unofficial results showing Miller behind Murkowski by 10,328 votes, or 2,169 when ballots challenged by Miller observers are excluded, Justice Dana Fabe asked Miller’s legal team what — if any — impact the court’s decision would have on the outcome of the election.

“Even if you win on this argument and every one of the challenged ballots is set aside, it makes no difference in this count, and it makes no difference in the outcome of this election unless you win on one of your other counts — isn’t that correct?” Fabe said.

In other words:  even if the contested ballots were not counted in accordance with the guidelines advanced by Miller’s legal team – Miller still would have lost by over two thousand votes!

So seriously:  What was the point of filing suit?  Was Miller hoping to get some sort of deal from the Republican Party for conceding defeat?  His lawsuit was as idiotic as his entire campaign had been.  As late as December 27, Miller was vowing to continue his battle in the Federal Court to contest the election result.  Nevertheless, as Miller should have learned at Yale Law School, the pursuit of such a specious claim in a Federal Court, would likely result in rather expensive sanctions against Miller and his attorneys under Rule 11 of the Federal Rules of Civil Procedure, once his case was inevitably dismissed.  If that concern had not been enough to motivate Miller to abandon his Federal suit, it should have been enough to convince Miller’s attorneys that the game was finally over.  Miller ultimately conceded his defeat in the election on December 30, although he never made a concession call to Lisa Murkowski.  He explained that he had not made the call because he did not have Murkowski’s phone number.

Joe Miller may not have won the election to the United States Senate —  but he did win the 2010 Jackass of The Year Award from TheCenterLane.com.  Congratulations, Jackass!



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Painting Themselves Into A Corner

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April 27, 2009

During the April 21 – 24 timeframe, ABC News and The Washington Post conducted a poll to ascertain President Obama’s approval rating.  The poll revealed that 69 percent of Americans favor the job performance of our new President.  Fifty percent of those polled believe that the country is on the right track (compared with 19 percent just before Obama’s inauguration).  This seemed like a particularly strong showing since, just one week before this poll began, we saw the anti-taxation “tea parties” that had been promoted by Fox News.

A recent article by Ben Smith and Jonathan Martin for Politico revealed that in some states, the “tea parties” have helped energize the Republican base:

“There is a sense of rebellion brewing,” said Katon Dawson, the outgoing South Carolina Republican Party chairman, who cited unexpectedly high attendance at anti-tax “tea parties” last week.

As the article by Smith and Martin pointed out, this “rebellion” is taking place at exactly the time when many Republican Party leaders are tacking to the center and looking for someone like Utah Governor Jon Huntsman as a possible Presidential candidate for 2012.  Nevertheless, as the article noted, rank-and-file Republicans outside of Washington have no desire to adopt more moderate views:

Within the party, conservative groups have grown stronger absent the emergence of any organized moderate faction.

Many of those comprising the Republican base appear to be motivated by antipathy toward the increasing acceptance of gay marriage, rather than by a reaction to all of the bailouts that have been taking place.  In fact, I was surprised to observe, during the extensive “tea party” coverage, that none of the protesters were upset about the bank bailouts or Treasury Secretary “Turbo” Tim Geithner’s use of the Federal Reserve to manage the bank bailouts in furtherance of his attempts to avoid legislative oversight.  I guess Fox News had not primed the protesters for that sort of outrage.

The Politico article by Smith and Martin reveals that “cultural issues” remain as the primary concern of the Republican base.  Meanwhile, Newt Gingrich is trying to position himself as the next Republican standard bearer.  Those touting the “sanctity of marriage” (including the Catholic Church) don’t seem particularly concerned that Newt has been married three times.  Newt’s vision for the future is the same vision he was seeing almost twenty years ago:  lower taxes.  If others within the Republican Party have a broader vision and feel the need to expand their appeal to the voters, they can expect plenty of opposition from the party’s base — and therein lies the problem.  Newsweek‘s Howard Fineman has written extensively about how the political primary system works to the benefit of political candidates with the most extreme views.  This is because the only people who vote in political primaries are those with strongly held views and most of them come from the extremes.  This is why wing-nuts such as Minnesota Congresswoman Michelle Bachmann get nominated.  In the absence of any strong moderate or centrist uprising within the Republican ranks, the GOP could be destined to find itself marginalized.  It’s beginning to appear as though the only way for promising, new, centrist Republicans to get elected is to run as independents in the general elections.  Once elected, they can reclaim the “high ground” within the party.  In the mean time, Republican leaders are either unconcerned by or oblivious to the fact that they are painting themselves into a corner by continuing to pander to their base.