Seeing red elephants

The Intrade Prediction Market has the possibility of Republicans taking the House at an all time high.

The clause that progressives lean on

The commerce clause!

Economy slowing down more than expected

From the WSJ:

The U.S. economy grew more sluggish than initially estimated in the second quarter, and corporate profits nearly dried up, further evidence that the recovery is losing steam.

Gross domestic product, the value of all goods and services produced, rose at an annualized seasonally adjusted rate of 1.6% from April to June, the Commerce Department said Friday.

In the government's first report of the economy's benchmark indicator a month ago, the growth rate was estimated to have slowed to 2.4% after a 3.7% expansion in the first quarter.

Still, the revised estimate for the second quarter was above expectations for a 1.3% gain among economists polled by Dow Jones Newswires.

Friday's report also showed that companies barely managed to post profit gains, following several very profitable quarters. After-tax earnings edged up 0.1%, well off the previous quarter's gain of 11.4%. First-quarter profits were revised down from the initial estimate of a 12.1% increase.

Year over year, profits remained 37.7% higher, with companies cutting costs by trimming payrolls.

So, it is now clear that GDP is in a downward trend after a brief sugar high in the 4th quarter of 2009 from the so-called stimulus package. Here are the GDP numbers:

1st quarter of 2009: -4.90%

2nd quarter of 2009: -.70%

3rd quarter of 2009: 1.6%

4th quarter of 2009: 5%

1st quarter of 2010: 3.7%

2nd quarter of 2010: 1.6% (revised downward from 2.4%)

Bad economic policy ideas continue to abound: The very same people that trumpeted from the highest tree tops that the stimulus was and has worked are now running around telling us that it simply wasn't big enough. Now we have liberals in Congress making noise about a second package. The first one didn't work so they want to try it again! We even see liberal economist Paul Krugman calling to use Fannie and Freddie, agencies that are in conservatorship and that currently carry $5.5 trillion in public liabilities, in more useless transfer schemes. My lord, when will the madness end?

Affordable housing

The news on Tuesday that sales of existing homes fell a record 27% in July spooked the Dow to decline by a mere 133 points. I guess all of those short term tax credits and fancy programs initiated by the Obama administration to prop up prices has been essentially a big waste of tax dollars. Oh well. Another lesson in hubris, I suppose. The funny thing is that as prices go down, the more affordable housing becomes for more people which is what our government has been telling us they want and why they have spent a treasure in tax dollars to create. It turns out that if you just leave the market alone, it will sort out affordability on its own. Amazing.

About those Bush eight years...

Here's a video reminder of who contributed to the housing bust.

We are better off...

Matt Ridley, author of "The Rational Optimist," makes the case that human beings are far better off now than in the past and make significant advances when free exchanges of ideas and trade flourish.

Carter created more jobs than G.W. Bush?

So this is the new spin that I found on some Progressive blogs: More jobs were created under Presidents that were Democrats than Republicans. (This is similar to the claim I heard during the 2008 Presidential election that stated that the stock market does better under Democratic presidents--a misleading argument that gets debunked nicely by Don Luskin.) And a Wall Street Journal blog entry is used with hefty legitimacy to prove their point. The problem with this argument is that 1) The Executive branch does not control the public purse, Congress does. For example, a Democrat president with a Republican majority in Congress can not take all the credit or blame for the performance of the economy. 2) In the case where an incoming president inherits a recession from the previous administration, the crude statistics will encumber the unlucky incoming president with low and even negative job creation. President George W. Bush inherited the pop of the dot-com bubble from Bill Clinton and then had to deal with the September 11 terrorist attacks which also hit the economy hard. His first 3 years or so in office were economic disasters not of his doing. Since liberals love telling that Obama inherited a bad economy from G.W. Bush wouldn’t it be consistent to blame some of the low job creation numbers of George W. Bush to Bill Clinton?

This whole propaganda campaign by liberals to attempt to forestall losses in the November elections is based on poor analysis and a crude reading of statistics. I’m not surprised.

The skinny on Social Security

Dan Mitchell hits one out of the park and makes Mark Walsh look like a partisan hack in this clip. Yes, Sweden, the country that liberals love to hold up as the paragon of civilization, has Personal Retirement Accounts and they have not fallen into the ocean, folks. Sooner or later, we are going to have to do something about Social Security.

The evolution of America

This year is the year of the census. Here is a neat look at the history of what the census questions looked like since the late 18th century.

Batteries in hybrid cars fail early!

From The Los Angeles Times:

When Honda Motor Co. rolled out its latest-generation Civic hybrid, it was sold as the automaker's green car of the future.

But five years into production, Honda has discovered that its high-tech batteries can die years early, a potentially expensive flaw that the automaker has been addressing with a software update that many owners claim has made the car less environmentally friendly.

Jason Marchesano of Overland Park, Kan. said the battery in his 2007 Civic hybrid started losing its ability to hold a charge last year. Rather than replace the battery, which was under warranty, Honda loaded a software program into the car's computer that he said made the car sluggish and slashed the vehicle's gas mileage.

When he complained again several weeks ago, Honda installed a second software update, cutting efficiency further. Today he gets just 33 miles per gallon, compared with 45 when the car was new.

"I've been sitting here scratching my head and asking, why did I get a hybrid?" said Marchesano, a computer consultant whose hybrid's gas mileage these days is scarcely better than the conventional Civic, which is rated about 30 mpg and costs several thousand dollars less.

Marchesano and other hybrid owners fear that Honda has decided to sacrifice their vehicles' performance in order to avoid the huge cost of replacing thousands of faulty batteries, which are still under eight- or 10-year warranties and cost as much as $3,000 each to replace.

Oh just wait until the Toyota Prius starts to show early battery wear. There will be congressional hearings on C-Span for weeks.

One of our cars is a Toyota Echo that we bought used for 8K. It gets about 35-36 MPG. Now compare that to a hybrid Toyota Prius that can cost 25-27K out-the-door. Do the math. Even with federal and state rebates/credits which would bring the price of the Toyota hybrid down to about 20K, gas would have to be at 4 bucks a gallon for more than EIGHT years before any real "savings" in gasoline costs were realized. The odds that gas prices are going to be at $4 for 8-10 years are long at best. And in 8-10 years, if you have to deal with waning battery power all of the savings on gas will essentially go up in a large puff of CO2. It is amazing that there are so many people that have been taken in by the advertising and the "green" culture that surrounds these very expensive vehicles.

Must read articles on fascism

Our friend Jeff Perren over at Shaving Leviathan has written eloquently on fascism, General Motors, the Chevy Volt, and federal press subsidies. Please take some time out and read these fine articles.

Can you tell which stimulus program is fake or real?

Unbelievable.

The odds that Democrats will lose the House

Intrade shows Democrats losing control of the House as being very likely.

Obamaville

So, this is the "summer of recovery?"

1) Thousands showed up for Section 8 public housing applications in the hot Atlanta sun yesterday. We should get used to crowds like this as long as the White House believes that a super-regulated command economy will solve all our woes.

2) Some in New York City were protesting for MORE jobless benefits. I say what these people need are jobs. Where are the jobs Mr. President?

Congress continues to write checks on our behalf

The House (mostly Democrats) just passed a $26 billion "emergency" bill to attempt to save their butts from political ruin in November:

Summoned back from summer break, the House on Tuesday pushed through an emergency $26 billion jobs bill to protect 300,000 teachers, police and others from election-year layoffs. President Barack Obama was to sign the measure by day's end.

Lawmakers streamed back to Washington for a one-day session as Democrats declared a need to act before children return to classrooms minus teachers laid off because of budgetary crises in states that have been hard-hit by the recession.

Republicans saw it differently, calling the bill a giveaway to teachers' unions and an example of wasteful Washington spending that voters will punish the Democrats for in this fall's elections. The legislation was approved mainly along party lines by a vote of 247-161.

The aid for the states is to be paid for mostly by closing a tax loophole used by multinational corporations and by reducing food stamp benefits for the poor.

House Speaker Nancy Pelosi said the bill was being immediately sent to the White House so Obama could sign it into law. Obama, joined by teachers at a Rose Garden ceremony earlier in the day, said, "We can't stand by and do nothing while pink slips are given to the men and women who educate our children or keep our communities safe."

Uh-huh. So, what happens next? What if the economy doesn't improve over the next year? Then what? More "emergency" bills signed for the benefit of the public service unions while those of us without union cards get stuck with the bill? Jeez.

BTW, this is yet another example of the failure of the "stimulus" package. It has done little to get our economy rolling again. I swear that we are all better off when congress is away on vacation where they can do little damage to the public finances.

Cartoon of the day

HT: Carpe Diem