'Dinner for One' featuring Sarkozy and Merkel [VIDEO]

'Dinner for One' featuring Sarkozy and Merkel [VIDEO]
(Satirist Udo Eling teamed up with state broadcaster ARD to rework the original, putting the French president's head on butler James' body, and the German Chancellor's head onto the body of Miss Sophie.) First performed by British comedians Freddie Frinton and May Warden--the most watched TV program in history, shown every New Year's Eve in Germany and other countries--now renamed "The 90th Euro Rescue Summit" or "Euros for No One."

True to the original, Mr Sarkozy, the butler, drinks for all his mistress' guests and gets increasingly inebriated, prompting Mrs Merkel to say: "Nicolas, think of your credit rating!" - a reference to the downgrades looming over France from international ratings agencies. (The Telegraph)

DINNER FOR ONE Original 1963 HQ

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Five 2012 Economic Predictions

1. Eurozone: It's going to get worse, a lot worse, before it gets better;
2. Mideast troubles (together with the continuing crisis in the Eurozone) will keep markets "fearful."
3. BRICs: The Party's Over;
4. USA: don't expect a rebound in the economy in 2012, but as PIMCO says, the USA has one of the least "dirty" shirts and will be able to withstand the shocks coming from the Eurozone; the election of Romney in November will set the stage for a real turnaround beginning in 2013;
5. 2012 Safe havens: UK, USA, Canada, Australia. Cash (and the equivalent) is King.

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Predictions 2012: Technology

Predictions regarding technology for 2012 (in no particular order):

1.  RIM (BlackBerry): continuing decline in market share as new (BlackBerry 10) models have now been delayed to late 2012--in the meantime Apple and Android will continue to iterate, dominate, and leave RIM in the dust. Meanwhile Microsoft/Nokia launch their own offensive with new Windows Phone models.  If I were in Waterloo, I would be shopping what's left of RIM to potential bidders--Amazon?

2.  Facebook has reached a plateau in U.S. growth, will launch their IPO (finally) and will face the challenges of being a mature company in a constantly changing landscape.  Google+ and Twitter will continue to grow and provide alternatives for those unwilling to succumb to social media  according to Zuckerberg.

3. Yahoo--too bad for its stockholders that Microsoft's offer wasn't accepted in 2008 ($44.6 billion/ $31 a share)--now it's too late--another company destroyed by corporate egos (are you listening RIM?).  Maybe Yahoo (which has a pretty nice email platform) can find a buyer (Amazon? Facebook?) who can take what's left after shedding its asian "assets."

4.  Microsoft--can it reinvent itself?  So far, Microsoft, at best, has had mixed results in its attempts to keep up with  Google and Apple.  Microsoft should own home the TV market with the Xbox--watch Apple and Google take it away in 2012.

5. Amazon, Apple, Google--these are the ones to watch in 2012 as they continue to iterate and launch new products--e.g., watch all three go head-to-head in tablets in 2012.

6.  Finally, keep an eye on a new disruptor--Republic Wireless--the business concept makes a lot of sense and will give AT&T, Verizon et al a lot of potential low-end competition. 

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Predictions: 2012 Presidential Race

The week before New Year's Day is the time to take stock, review the past year, and look forward to the new year.  I thought I'd write a few posts looking forward in various fields--politics, technology, etc. Today--the 2012 Presidential Race.

Actually I've already written a few posts on this (here, here, and here), so it's not very hard to look forward to 2012.  Essentially the race will be determined in the Republican primaries and caucuses. Either the Republicans will nominate Mitt Romney and thereby stand a good chance of winning the White House, or they will nominate one of the "others" and thereby ensure the re-election of Barack Obama. With Romney, the Republicans have a chance of winning independent voters (and even some Democrats) who are disappointed and/or frustrated and/or out-of-work and/or turned off (for whatever reason) from the government served up by President Obama and the Democrats these past 3 years. If nominated, Romney's election would not be guaranteed--he would have to run a "smart" campaign (please, no more out-of-context quotes from President Obama, etc.). I would strongly suggest he consider Gov. Bobby Jindal (Louisiana) as his VP running mate. The country faces serious problems that are not going away. The new normal is here to stay. Government on all levels--national, state, local--has been slow to adjust, and in some cases has made things worse.

Entitlements are out-of-control and Obama has done nothing to reform (and thereby save) needed programs such as social security. He appointed a commission (Simpson-Bowels) which gave a sound, non-partisan blueprint to make our way out of the present "mess" and Obama has "fumbled" it by failing to take action on any of its recommendations. Where's the leadership? I thought Obama was the guy of "vision" and "hope" and "change." No guts, no glory.

President Obama proposed needed health care reforms and then allowed the lobbyists and their pawns (Democrats in Congress) to write the legislation--now exemptions/waivers are being granted left and right from provisions of "Obamacare" which in themselves are damning admissions of failure. No one ever had to tell FDR, LBJ, or Ronald Reagan that the "devil is in the details." Health care costs are still out of control--Obama should have demanded (at a minimum) a "public option." He (and the Democrats) blew it.

Tax reform? Under Obama? Forget it--it's just band-aids. I know, he will blame the Republicans for gridlock in Washington--but remember, the Democrats controlled the White House and both houses of Congress during Obama's first 2 years in office. 2011 has been gridlock because Obama has been unable to pivot like Bill Clinton did when faced with similar circumstances. Obama is afraid of real change; he is afraid to take decisive action when it might open himself up to criticism from members of his own party--Bill Clinton was the great "triangulator" which is why he got things done (and won re-election) even when Republicans controlled the House of Representatives and U.S. Senate!

It's pretty easy to see Obama's core base--public (governmental) unions, wealthy wall streeters (Jon Corzine et al) and other lobbying/funding sources for Democrat campaigns, and traditional Democrat "minorities" and "interest groups." He inherited a mess from George W. Bush--foreign (Iraq/Afghanistan) and domestic (economy). He (and the Democrats) deserved to win (meaning the Republicans deserved to lose) the election in 2008 (and I supported him then). But 2012 is different. Obama is weak on leadership. He doesn't understand how private sector jobs are created--government must, but can only, create a positive business environment: comprehensive tax reform; entitlement reforms; sound fiscal policy; "smart" (meaning common-sense, effective, yet limited) regulations; and infrastructure investment (which should have been the primary fiscal stimulus in this "recession"). Instead, we got things like Solyndra and Obama's proposed "jobs bill" that threatens businesses in the U.S. with lawsuits if they hire anybody who doesn't happen to already be unemployed. Any business person could have told Obama (and did) that those provisions would discourage, not encourage, hiring. Unfortunately, Obama (and the Democrats) just don't get it. James Carville pleaded with him "fire somebody!" Obama doesn't fire anybody--government employment is lifetime employment even if you're inept, incompetent, or just doing a lousy job. Think of "Fast and Furious" (where the U.S. government--Justice Department's ATF--armed a foreign criminal enterprise and thereby engaged in "state-sponsored terrorism") for just one of many examples. Anybody fired? How about firing the Attorney General who is either clueless or inept to allow such an operation to be conducted? Unfortunately for Obama (and the Democrats), the American public conducts its business differently--just ask Jimmy Carter or George H.W. Bush.

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Merry Christmas to All from under the Palm

Merry Christmas to All 

from under the Palm

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Resources for the 2012 U.S. Election

Published today, "Election 2012" a new page for Views under the Palm - johnmpoole.com of Resources for the 2012 U.S. Election with links to the following:

Interactive Electoral College Map
Latest Polling
Primary Debate Schedule
2012 Primary Schedule
VIDEOS
2012 Republican National Convention
2012 Democratic National Convention
and
Dates and Links for the three 2012 Presidential debates between President Obama and the eventual GOP Presidential nominee, and the date for the Vice Presidential debate..
and links to other resources including:
Bloomberg
CNBC
Drudge Report
Financial Times
New York Times
Politico
Reuters
Roll Call
Wall Street Journal
Washington Post
Wikipedia
2012presidentialelectionnews.com
and
Live Streaming media (free):
BloombergTV
BloombergRadio
aljazeera live

Check it out and let us know what you think!


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The higher education bubble is about to burst

"just like the sub-prime mortgage crisis, there could be a new financial bubble ready to burst"

The idea of putting young people into thousands of dollars of debt just to get a higher education degree benefited the higher education complex--colleges and universities (and their employees), governments, and participating financial institutions--but certainly put young people at a financial disadvantage unlike any previous generations faced.  Yes, state governments could and did reduce support for public universities, and yet, ALL colleges and universities could and did continue to escalate salaries, benefits, and other costs much faster than the rate of inflation by merely passing the cost on to the "captive market" of students seeking an education and degree. "Just sign here," became the mantra of every student financial aid/loan officer and there was no pain--until after graduation.  Now those loans are coming due, and the pain is evident (as well as the "rip-off" of worthless degrees or at least worth a lot less than impliedly promised)--probably the worst examples are at the "for-profit" schools, but all are guilty to some degree (no pun intended). OWS can talk about the greed on Wall Street--but Wall Street has NOTHING on the higher education complex when it comes to GREED.

Peter Thiel (Peter Thiel: We're in a Bubble and It's Not the Internet. It's Higher Education) says the bubble that has taken the place of housing is the higher education bubble. “A true bubble is when something is overvalued and intensely believed,” he says. “Education may be the only thing people still believe in in the United States. To question education is really dangerous. It is the absolute taboo. It’s like telling the world there’s no Santa Claus.”

Thiel has it only partly right--it's not "education" per se, that is overvalued, it's the "degree." Getting "the credentials" is putting young people thousands of dollars into debt before they can even begin a career--is this the way to treat young people just starting out in life? No, and there are better ways--just look at the way other nations do it. I would suggest "grants" funded by the federal government on an 80/20 basis--government pays 80% and students pay 20% (provided one meets certain guidelines--grade average, degree programs in needed fields, etc.) and that the institutions receiving the funds be accountable for costs, etc.  Everyone acknowledges that the nation needs an "educated workforce." Then we need to "pay for it."  Send the "best and brightest" to the schools of their choice (within certain limitations) and encourage all to get an education of some sort--including vocational skills programs.

But there are other things at work that are going to "disrupt" and "change the paradigm" of higher education as we have known it in the United States. Bill Gates, Steve Jobs, and Larry Ellison are all college dropouts who did very well, thank you, in life. They all saw value in education (after all, lifelong learning is true education), but saw no need to "hang around" for the "degree."  Some of the best institutions of higher education are now "getting it" and it appears M.I.T. is leading the way--(technology, including online learning, is going to be a BIG disruptor)-- 

M.I.T. Expands Free Online Courses, Offering Certificates - NYTimes.com: "The M.I.T.x classes, he said, will have online discussions and forums where students can ask questions and, often, have them answered by others in the class. While access to the software will be free, there will most likely be an “affordable” charge, not yet determined, for a credential . . . . “The most important thing is that it’ll be a certificate that will clearly state that a body sanctioned by M.I.T. says you have gained mastery.” . . .  “It seems like a very big deal because the traditional higher education reaction to online programs was, yeah, but it’s not a credential,” said Richard DeMillo, director of the Center for 21st Century Universities at the Georgia Institute of Technology. “So I think M.I.T. offering a credential will make quite a splash. If I were still in industry and someone came in with an M.I.T.x credential, I’d take it.” M.I.T. said its new learning platform should eventually host a virtual community of learners around the world . . . M.I.T. officials said they expected that other universities would also use it to offer their own free online courses. Mr. Reif said that M.I.T. was investing millions of dollars in the project, . . ."

The higher education complex has got a few things to "learn"--bubbles don't last forever and the globalization of higher ed online learning is going to change everything they thought they knew about higher education. The old saying of "lead, follow, or get out of the way" is apropos, as is "change, adapt, or find something else to do."

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Why the UK is a better bet than France

“...one prefers to be French than British at the moment on the economic level” – François Baroin, French economy minister

“ ... they should start by downgrading Britain which has more deficits, as much debt, more inflation, less growth than us and where credit is slumping” – Christian Noyer, governor, Bank of France

With reports that France's AAA credit rating will be cut by Standard & Poor's before Christmas, the eurocrisis is not going away or even taking time off for the holidays. French protestations aside, if you have a choice, you don't want to be "trapped" in the Eurozone--better the safe havens of the UK, Sweden, Switzerland, Norway--
UK will fare better in this Anglo-French spat - FT.com: ". . . . The real difference between France and the UK is simply that the UK is not trapped. Britain is a sovereign country. France is economically a sub-sovereign zone. That is the simple reason why the eurozone needs a eurobond and a lender of last resort function in the system. With those functions in place, policy errors are less catastrophic.Mr Baroin is therefore quite wrong. You do not want to be French, German or Italian if you have a choice. A rating downgrade for France and the rest of the eurozone is thus logical and deserved."

Or as the Nobel laureate Paul Krugman has explained (substitute France for Italy below):
". . . The answer lies in the concept of original sin. . . the economics kind — the long-standing notion that developing countries were especially vulnerable to financial crises because they borrowed in foreign currency. (Yes, the linked paper actually raises some distinctions between currency mismatch and original sin; never mind for now). The key point is that by joining the euro, Italy took a bite of the apple — it converted its advanced-country status, as a nation issuing debt in its own currency, into original sin, with debts in someone else’s currency (Europe’s in principle, Germany’s in practice). That is the root of its new vulnerability."

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Can somebody put Newt Gingrich back on his chain?

Newt Gingrich is still off his chain--

Gingrich: Send U.S. Marshals to arrest uncooperative judges - Election 2012 - The Washington Post: "Gingrich: Send U.S. Marshals to arrest uncooperative judges
By Matt DeLong
Former House speaker Newt Gingrich showed no sign Sunday of letting up on his assault on “activist” federal judges. During an appearance on CBS’s “Face the Nation,” Gingrich suggested the president could send federal law enforcement authorities to arrest judges who make controversial rulings in order to compel them to justify their decisions before congressional hearings. . . ."

Can somebody, anybody, put Newt Gingrich back on his chain?

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Sarkozy's euroenvy is isolating France

France, increasingly isolated, is learning the hard way that euroenvy doesn't pay--

French attack on British economy is 'unacceptable', says Nick Clegg - Telegraph: "French attack on British economy is 'unacceptable', says Nick Clegg--The French government has been formally warned by Nick Clegg, the Deputy Prime Minister, that their recent criticism of Britain's economy was "simply unacceptable"." On Friday night, François Fillon, the French prime minister, interrupted an official visit to Brazil to call Mr Clegg to "clarify" his recent comments that Britain's credit rating should be reviewed. The Deputy PM told Mr Fillon that his recent remarks and those by other senior French figures had been "simply unacceptable and that steps should be taken to calm down the rhetoric". The conversation came as a major credit rating agency warned the French that it could downgrade the country's rating in the medium term. Fitch Ratings affirmed France's AAA rating but lowered its outlook for the French economy to negative, which usually means a downgrade is possible in 12–18 months. David Cameron and Angela Merkel, the German chancellor, enjoyed a "positive" discussion ahead of an official German visit to London next week. The conversation has added to speculation that Nicolas Sarkozy is becoming isolated in Europe. . . "

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Response to Petition on the Abolishment of the Transportation Security Administration

What follows is the official response to the "We the People" Petition to abolish the TSA-- 
"Response to Petition on the Abolishment of the Transportation Security Administration

By John Pistole, the Administrator of the Transportation Security Administration

Thank you for participating in the We the People platform, we respect the right of the petitioners to be heard and value the feedback we receive from travelers who share their experiences – good or bad – with us. The men and women of the Transportation Security Administration (TSA) have a challenging, but critical mission, and they take their jobs very seriously. TSA understands that the terrorist threat remains real and continues to evolve, as evidenced by the attempted terrorist attack on Christmas Day 2009 and the disrupted air cargo bomb plot last year.

Why TSA Exists.

TSA was created two months after the September 11 terrorist attacks, when Congress passed theAviation and Transportation Security Act (ATSA) [.pdf] to keep the millions of Americans who travel each day safe and secure across numerous modes of transportation.

Over the past 10 years, TSA has strengthened security by creating successful programs and deploying technologies that were not in place prior to September 11, while also taking steps whenever possible to enhance the passenger experience. Here are just a few of the many steps TSA has taken to strengthen our multi-layered approach to security:

Establishing an Intelligence-Driven Approach.

TSA uses intelligence in real-time to strengthen security and share key information with state, local, and international partners, to ensure they can respond to evolving threats.

Vetting of Passengers and Transportation Workers.

Today, 100 percent of passengers flying to, from, and within the United States are prescreened against terrorist watch lists under TSA's Secure Flight program. In addition, employees with access to airports and ports, and those who transport higher risk materials, are vetted to ensure a secure environment.

Screening for Explosives.

TSA screens 100 percent of carry-on and checked baggage for dangerous items including explosives. TSA has also deployed explosives-detection canine teams. The teams are used to detect explosives and deter terrorism in aviation, mass transit, and cargo environments.

Deploying Advanced Technology to Detect Evolving Threats.

As part of its multi-layered approach to security, TSA uses Advanced Imaging Technology andAutomated Target Recognition software to detect metallic and nonmetallic threats, including weapons and explosives concealed under layers of clothing on passengers. Using Advanced Technology X-ray, Bottled Liquid Scanners and Explosives Trace Detection (ETD) Technology, TSA can more efficiently and effectively screen checked and carry-on bags for potential threats.

Covert Testing.

Covert testing provides TSA with valuable information that can be used to modify security measures, improve training and inform the development of future technology. The statistic cited in the petition was from testing performed nearly eight years ago and doesn't reflect the current security environment. Since then, TSA has implemented new security measures and deployed enhanced technology to address evolving threats to aviation.

Strengthening In-Flight Security.

Hardened cockpit doors and the Federal Air Marshal Service serve as additional layers of security against an act of terrorism.

Establishing a Professionalized Workforce.

Transportation Security Officers (TSO) working at 450 airports today are hired through a rigorous vetting process and go through extensive training that did not exist prior to September 11. Today's TSOs have an average of three and a half years of experience on the job and have a turnover rate of approximately 6 percent. This compares to an average of 3 months of experience and a turnover rate of 125 percent for screeners prior to the creation of TSA.

TSA's Next 10 Years.

TSA is working to enhance its risk-based, intelligence-driven security initiatives to strengthen security while continuing to improve the passenger experience whenever possible. Current efforts include: changing the way TSA screens passengers ages 12 and under, evaluating the expanded use of behavior detection techniques, and piloting expedited screening for known travelers. Efficiencies gained by implementing more risk-based security methods allow us to make the best possible use of the resources to secure air travel.

Additionally, new software has been deployed to further strengthen privacy protections by eliminating passenger-specific images on Advanced Imaging Technology (AIT) machines. The new software has been installed on all millimeter wave AIT units currently in airports, with plans to test and deploy similar software for backscatter units in 2012.

Our Nation is safer and better prepared today because of these and other efforts of the Department of Homeland Security, TSA, and our federal, state, local and international partners. TSA is constantly identifying ways to continue to strengthen security and improve the passenger experience and appreciates the feedback of the public.

We invite you to stop by TSA's blog to continue this discussion.

Check out this response on We the People.

Stay Connected

Stay connected to the White House by signing up for periodic email updates from President Obama and other senior administration officials."

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Romney leads in Iowa - Interview [VIDEO]

Latest Poll Iowa: Romney 23%, Gingrich 20%, Paul 18% (Rasmussen Poll)


The Caucus | Interview With Mitt Romney [VIDEO]
The former Massachusetts governor sits down with The New York Times to discuss Newt Gingrich’s challenges and the status of his own campaign.

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All You Need to Know about the Eurosummit

A disastrous failure at the summit - FT.com: "fiscal austerity: long-term structural recessions in vulnerable countries. To put it bluntly, the single currency will come to stand for wage falls, debt deflation and prolonged economic slumps. Can this stand, however big the costs of a break-up? The eurozone has no credible plan to fix the flaws of the eurozone, apart from greater fiscal austerity: there is to be no fiscal, financial or political union; and there is to be no balanced mechanism for economic adjustment on both sides of the creditor-debtor divide. The decision is, instead, to try still harder with a stability and growth pact whose failures have been both predictable and persistent."--Martin Wolf in the Financial Times

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The Germans and French just did something Very Stupid

The City must now look to its own defence – Telegraph Blogs: "Surely everyone can now see . . . . the EU intends to maim our (UK) banking, insurance and investment industries. David Cameron's sticking point at the talks on Friday was so modest, so minimalist, that no one had foreseen the possibility of a breakdown. . . He wasn't asking for special treatment . . . (in the sense that, say, the French insist on special treatment for their film industry). All he was asking was that future decisions on financial services shouldn't be imposed without the consent of all 27 members. . . he simply wanted a confirmation that the status quo couldn't be altered in ways deleterious to Britain. In rejecting his request, the federalist leaders may have sent the prime minister, and the United Kingdom, in a direction that neither he nor they intended. . . there can surely no longer be any doubt about their motives. If the Frankfurt Group Euro-federalists were not planning measures which the Square Mile would resist, it would have cost them nothing to agree to David Cameron's amendment. . . . What can we do about it? Since the EU plainly intends to be unhelpful, if not downright vindictive, we shall need to find unilateral ways to protect our interests. . . . The financial services sector is one of the few in which Britain leads the world. Its impact is felt well beyond London. . . . The industry also employs 100,000 people in Birmingham and 150,000 people in Scotland. It generates nearly 12 per cent of the government's total tax take, and 3 per cent of our export revenue. It is as important to us as heavy industry is to Germany or agriculture to France. They, of course, would not countenance accepting EU rules that damaged those sectors. . . "

The Germans and French just did something stupid--Very Stupid. London is a world financial center. Over-regulation by the EU could very well lead to permanent damage to the UK's banking, insurance and investment industries. Merkel and Sarkozy, in their myopic, selfish, and vindictive attitudes, don't realize that once London's status is lost, the financial business will NOT migrate to Paris or Berlin (or Frankfurt etc.)--it will leave the EU forever--most probably for more market-friendly Asia.

The Eurozone has a lot of problems, the heart of which is a defectively-designed currency with no "lender of last resort." Germany (with support from France) is trying to suck everyone into the Euro's own problems so it doesn't have to accept responsibility and allow the ECB to monetize the debts of Italy, Ireland, et al. By alienating Cameron (and the UK), Germany and France have needlessly lost an ally. The Eurocrisis is not over. The Eurosummit solved nothing long-term.  The problems of the Eurozone will never be solved until the Germans and French quit acting like Germans and Frenchmen, and start acting (and thinking) like Europeans.

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The Race for President

I watched the GOP debate Saturday night and have been giving this some thought. Each Republican debate is becoming more like some kind of reality TV episode. I notice Jon Huntsman doesn't even bother showing up anymore. It looks like the "wingnuts" now predominate the Grand Old Party. Come November, 2012, they may have a rude awakening. Most Americans don't go in for the "crazy talk" and don't believe their lies about Obama etc. Despite the economy, Obama might easily win re-election--it always comes down to a choice between two candidates. Americans continue to personally like President Obama and his family. Contrast the spectacle being played out in the Republican race against this snapshot of the President:

Barack Obama: The Obama Presidency. Minute by Minute | POLITICO44 - POLITICO.com: Sunday church (12/11/11 1:46 PM)--"The Obamas attended services at the nearby St. John's Episcopal Church. The first family made a short walk to the church shortly after 11 a.m. The Rev. Dr. Luis Leon delivered a sermon on John the Baptist. The Obamas took communion shortly after noon and walked back through Lafayette Park to the White House."

Doesn't exactly fit the picture of a radical islamist socialist, does it? Bottom line: Americans want somebody they can trust in the Presidency--someone who's sane, steady, and sober-minded.

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Oops!--RIM dumps BBX name

RIM dumps BBX name in latest debacle: "Research In Motion has unceremoniously dumped the "BBX" brand name it had chosen two months ago for its new BlackBerry operating system after a U.S. court embarrassed the beleaguered smartphone maker by slapping a temporary ban on its use. In yet another public relations debacle for a company that has suffered through a series of them recently, the court said RIM could not use the BBX name until it could sort out copyright infringement allegations."

Is there ANY competent management left at RIM? If so, who? Honestly, this kind of mistake would be beneath a Silicon Valley start-up, much less an experienced technology company.

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Europe’s disastrous summit--I'm with Felix

I'm with Felix--

Europe’s disastrous summit | Felix Salmon: "Remember how Wolfgang Münchau said that the Euro zone had to get it right at this summit or it would collapse? Well, the Euro zone has most emphatically not got it right. Take any of the list of prescriptions of the minimum necessary right now — from Münchau, from Larry Summers, from Mohamed El-Erian — and the one thing that jumps out at you, especially in light of the most recent news, is that if you look at anybody’s list, there’s an enormous number of items which has zero chance of actually happening. . . . It all adds up to one of the most disastrous summits imaginable. . . the dream of European unity is dissolving in real time, as the eyes of the world look on in disbelief. Europe’s leaders have set a course which leads directly to a gruesome global recession, before we’ve even recovered from the last one. Europe can’t afford that; America can’t afford that; the world can’t afford that. But the hopes of arriving anywhere else have never been dimmer."

Second opinion? Here you are--
" . . . this looks like a disastrous meeting. More austerity, more posing of the crisis, wrongly, as being all about fiscal deficits; no mechanism for ECB funding. Somehow southern Europe is supposed to deflate its way to prosperity, while everyone runs a trade surplus, presumably against that potentially habitable planet we’ve discovered 600 light-years away." Paul Krugman, New York Times

The U.S. is already getting inflows as a "safe haven" from the chaos about to descend upon Europe.

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Ron Paul ad on Newt Gingrich (video)

Ron Paul ad on Newt Gingrich (video)

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Remaking the euro zone in Germany’s likeness

Angela Merkel Nears a Remaking of Euro Zone - NYTimes.com: "Mrs. Merkel’s leadership has come at a high cost for indebted countries, especially those on the periphery, with cuts in public spending biting just as joblessness has surged. Youth unemployment in Spain is nearly 50 percent, a fact Mrs. Merkel raises with domestic audiences when cautiously selling more intervention. The treaty changes she and President Nicolas Sarkozy of France proposed in Paris on Monday would have been inconceivable at the beginning of the crisis, since it requires states to cede a significant degree of economic sovereignty. It is a process that many observers, in particular the populist British press, say is well underway. German dominance of the euro zone, they say — with Mrs. Merkel as the unofficial but unchallenged leader of Europe — has in fact already arrived. Silvio Berlusconi’s resignation as Italy’s prime minister was interpreted as an omen for Europe’s German-directed future. And confidential draft proposals of Ireland’s December budget were found to have circulated among lawmakers in Berlin last month before opposition lawmakers in Dublin saw them."

The problem is that southern Europe is not Germany, and therefore the "German solution," i.e., "austerity," is not going to work but only create more hardship. When the peoples of Greece, Italy, Spain, and Portugal, figure this out, all hell is going to break out. Ireland? First the Irish people are sold out by their leaders for the banks, and now they are being sold out to Germany. Unnecessary suffering is not noble.

Intelligent People talking about the Economy replay (link)

If you missed the live streaming "Intelligent People talking about the Economy", you can catch the replay here.

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Gingrich - more "baggage" surfaces

Gingrich Scolds Pelosi for Suggesting She’d Air Ethics Charges - Bloomberg:  Gingrich, who was reprimanded by the House in 1997 after an ethics investigation, said members of Congress should bring charges against Pelosi, herself a former speaker, if she follows through on airing aspects of the probe. (What's Gingrich scared Pelosi will reveal?--I think the public has a right to know.)

Pelosi, a California Democrat, told the website Talking Points Memo Dec. 2 that she relished the possibility that Gingrich, who is rising in the polls, might become the Republican nominee. “One of these days we’ll have a conversation about Newt Gingrich,” she said. “I know a lot about him. I served on the investigative committee that investigated him, four of us locked in a room in an undisclosed location for a year. A thousand pages of his stuff.” She declined to say more, adding, “When the time’s right.” ‘Public Record.’
Her spokesman, Nadeam Elshami, said yesterday Pelosi “was clearly referring to the extensive amount of information that is in the public record, including the comprehensive committee report with which the public may not be fully aware.” Pelosi sat on the panel, equally divided between Democrats and Republicans, that concluded Gingrich used tax-exempt contributions for political purposes and then misled congressional investigators about it. . . . in violation of federal laws barring the use of tax-exempt funds for partisan purposes.

As I've said before: the new Newt Gingrich is the same old Gingrich. Poor old Gingrich--he's got more baggage than the Lost&Found at O'Hare International!

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S&P Creditwatch Negative: Germany, France

S&P ratings warning to top euro nations - FT.com: "Standard and Poor’s has warned Germany and the five other triple A members of the eurozone that they risk having their top-notch ratings downgraded as a result of deepening economic and political turmoil in the single currency bloc.

The US ratings agency is poised to announce later on Monday that it is putting Germany, France, the Netherlands, Austria, Finland, and Luxembourg on “creditwatch negative”, meaning there is a one-in-two chance of a downgrade within 90 days."

Caveat emptor!

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Re: ICANN - somebody in Washington is listening

As a follow-up to my post of August 18th (Good riddance Rod Beckstrom!) - some good news this morning from Politico--

POLITICO Morning Tech - POLITICO.com: "SENATE HEARING COULD SLOW DOWN ICANN’S PLANS FOR DOMAIN NAME EXPANSION – Dan Jaffe, executive vice president of the Association of National Advertisers, said the Senate Commerce Committee hearing this Thursday on ICANN’s top level domain name expansion is a good sign. “The fact they are holding a hearing is significant,” he said. “They are sufficiently concerned that they feel they need to take a second and third look. ... People are faced with a Hobson’s choice — sit on the sidelines, but it will cost them millions of dollars in increased monitoring. Or they have to buy top-level domains they don't want in order to protect their companies. If that is true for the largest companies in the world, what does that mean for the middle-sized or smaller companies?”"
Maybe somebody in Washington is listening.

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The Problem with the new Newt Gingrich

According to the new Newt Gingrich, he is going to be the Republican nominee for President--he's got a lock, no need to have any primaries, everybody can stay home and call off the campaigns. While some may dismiss this as hubris, I'll take it at face value.

Of course, I'm sure if the Obama folks were as confident as Newt that he was going to be the Republican nominee, they would already be celebrating and drinking green beer in Chicago.

But let's assume for the moment that Newt is right, he is going to be the Republican nominee, what does that mean? It means that all of the BAGGAGE of the old and new Newt Gingrich will weigh down not only the Republican race for President, but the Republican candidates for Senate, House of Representatives, etc. Independent voters and thoughtful Republicans will be running to the polls to vote Democrat. This is truly a Democrat Party's dream come true (and I am sure they are all now "pulling for Newt" to be the Republican nominee).

It's not just that Newt's a "stupid man's idea of what a smart man sounds like" (Paul Krugman). No, that 's just a liberal talking, here are examples (out of many) from two smart conservatives:

George Will: Newt's candidacy "embodies almost everything disagreeable about modern Washington."

Bruce Bartlett (Bruce Bartlett held senior policy roles in the Reagan and George H.W. Bush administrations and served on the staffs of Representatives Jack Kemp and Ron Paul): Gingrich--"unfit for office."

And these are Republicans talking about Newt--wait till Axelrod and Company get going--they will have a field day!  Of course, it won't be the first time that the GOP decided to commit political suicide on a national scale. No, the problem for the GOP with the new Newt Gingrich is that he is the same old Gingrich.

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Intelligent People talking about the Economy

The New York Times Opinion Pages - Live: "The Economic Situation in America"
Tues., Dec. 6, 7:30–9 p.m. ET (US) Time Zone Converter
Paul Krugman, Joe Nocera and Carmen M. Reinhart join moderator Thomas L. Friedman to talk about the economy and what they foresee for the years ahead — live in New York and streamed live on nytimes.com/opinion.
TheTimesCenter
242 West 41st Street
New York"

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Finding your passion (video)

John Hagel on stress, pressure, success and finding your passion

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Why a Stimulating Job Can Improve Your IQ (video)

Why a Stimulating Job Can Improve Your IQ - Many people think of IQ as a genetic trait like eye color, something you're born with and stuck with for life. But . . . evidence is mounting that IQ can change over an individual's lifetime. WSJ.com

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Germany: Going Down with the Ship

What's happening in Europe is becoming of epic proportions--and I'm sure will be studied by economists for years to come--

Germany told to act to save Europe - FT.com: ". . . the Organisation for Economic Co-operation and Development called on European leaders to provide “credible and large enough firepower” to halt the sell-off in the eurozone sovereign debt market, or risk a severe recession. The OECD’s comments came as the organisation slashed its half-yearly forecasts for growth in the world’s richest countries, warning that economic activity in Europe would grind to a near-halt. Yet their calls were met by a stubborn insistence in Berlin that only EU treaty change to forge a “stability union” in the eurozone would revive confidence in the markets.  Wolfgang Schäuble, German finance minister, rejected calls for the European Central Bank to act as a “lender of last resort” in the eurozone . . . "

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The Rich get Richer (and Bigger) thanks to the Fed

I first wrote about this in August--http://www.johnmpoole.com/2011/08/federal-reserve-has-some-explaining-to.html . Now Bloomberg is reporting even more--

Secret Fed Loans Gave Banks Undisclosed $13B - Bloomberg: "The Fed didn’t tell anyone which banks were in trouble so deep they required a combined $1.2 trillion on Dec. 5, 2008, their single neediest day. Bankers didn’t mention that they took tens of billions of dollars in emergency loans at the same time they were assuring investors their firms were healthy. And no one calculated until now that banks reaped an estimated $13 billion of income by taking advantage of the Fed’s below-market rates, Bloomberg Markets magazine reports in its January issue. . . . .details suggest taxpayers paid a price beyond dollars as the secret funding helped preserve a broken status quo and enabled the biggest banks to grow even bigger."

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Saving a dinosaur, part 2: Overhauling the Post Office for the 21st Century

Saving a Dinosaur, part 1 was here--now for part 2 (courtesy a New York Times editorial):

Overhauling the Post Office for the 21st Century - NYTimes.com: "A reasonable request from management to end Saturday mail deliveries would net savings of $3 billion a year for the service, which reported a loss of $5.1 billion in the fiscal year just ended. This gets approval in the House’s bill, but not the Senate’s. On the other hand, the Senate measure offers creative ways to finance buyouts of 100,000 workers and ease health care costs, while a draconian House provision threatens to transfer power to a control board if the service runs deficits for more than two years.

"Congress needs to produce a bill that allows the Saturday shutdown as well as the closure of up to 3,700 local post offices where service would be continued through automated outlets at neighborhood businesses. First-class use is plummeting, and annual revenues have dropped from $75 billion to $65 billion in the last four years. Postmaster General Patrick Donahoe is pleading for authority to make $20 billion in cuts by 2015 to let the service fairly compete against private mail and delivery companies."

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Saving a dinosaur: the US Postal Service (video)

The United States Postal Service is bleeding money - $10 billion just last year. It’s also bleeding business – mail volume is down 20% since 2006 and not coming back. Just as trains replaced the pony express, the Internet has become the modern Postal Service’s greatest competition. That’s not going to change.

A better USPS, however, is possible. . . . the Issa-Ross Postal Reform Act. . . . Americans deserve an efficient USPS that delivers for decades. But misguided action - or none at all - could saddle taxpayers with a multi-billion dollar bailout for the Postal Service. The clock is ticking…

http://www.savingthepostalservice.com

What is the Postal Crisis already costing American taxpayers? At the end of Fiscal Year 2011 - October 1, 2011 at midnight - the Postal Service had exposed taxpayers to a potential loss of $15.8 billion. The FY '11 exposure is comprised of the $15 billion borrowing limit reached by the Postal Service during the fiscal year and $800 million in Federal Employee Retirement System (FERS) payments that the Postal Service chose to not pay. $15.8 billion is the starting point for the running tally of postal losses to which American taxpayers are exposed.

Over FY '12, the Postal Service is set to expose American taxpayers to an additional $14.09 billion in losses: $5.5 billion in deferred FY '11 retiree health care payments, $5.6 billion in FY '12 retiree health care payments, and $2.99 billion in FY '12 FERS payments that they may be unable to pay. Spreading these potential losses evenly over FY '12 means that every second taxpayer exposure to Postal Service losses increases by $445.57.
   http://postal.oversight.house.gov/

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Yankeegroup: Facebook Falls Low on Consumers' List of Favorable Brands

Facebook Falls Low on Consumers' List of Favorable Brands - Mobile Now: snapshot from Yankeegroup--percentage of consumers having favorable impressions of brands:

Google US: 77% Europe: 75%

Sony US: 69% Europe: 69%

Disney US: 68% Europe: 52%

Apple US: 66% Europe: 58%

Amazon US: 63% Europe: 59%

Facebook US: 51% Europe: 50%

for more information, go to Yankeegroup.

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Pick Your Poison: ECB as lender of last resort

Pick Your Poison: Is it going to be ECB as lender of last resort or a case of coulda, shoulda, woulda?--

Dutch back ECB as 'last resort' Financial Times By Matt Steinglass in Amsterdam Jan Kees de Jager, the Dutch finance minister, endorsed a more active role for the European Central Bank “as a last resort” to contain the eurozone debt crisis ahead of a meeting in Berlin with his counterparts from ...

ECB cannot be lender of last resort: Gonzalez-Paramo Reuters OXFORD, England (Reuters) - The ECB cannot be the lender of last resort for troubled euro zone states, one of its top policymakers said on Thursday, underscoring the bank's continued resistance to fierce pressure for it to take a more active role in ...

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Eurocontagion: caveat emptor!

The Apocalypse Trade - NYTimes.com: ". . . German bonds are now being priced as a risky asset — what the FT calls the “apocalypse trade“. The interest rate on bunds, at 2.21% as I write this, is still very low by historical standards. But it’s above the rate on UK bonds (2.17%) and way above the rate on US bonds (1.88%). The way to see this is that the market is in effect pricing in a real possibility of eurozone collapse. . . ." Paul Krugman in the New York Times

How safe are the euros in your pocket or bank account?

Debt crisis: as it happened November 24, 2011 - Telegraph: "The FTSE 100 loses £107 billion during nine straight days of losses, as a meeting between French, German and Italian leaders offers little progress on resolving eurozone debt crisis."


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Pimco's El-Erian Calls U.S. Economy `Terrifying' (video)

Pimco's El-Erian Calls U.S. Economy `Terrifying' and Europe? 'There are no easy solutions.'

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Eurozone: the confidence fairy’s not coming

Brief Eurozone status update: “Even with unlimited political will, this would be a recipe for prolonged recession and stagnation in Europe. With political capital limited in practice — watch Spain’s new government quickly become just as unpopular as the old one! — it’s a recipe for catastrophe. No wonder eurocrats placed their faith in the confidence fairy. But she’s not coming. It would take a radical reversal of course to save this thing. And so far I see no willingness to face up to that necessity.” -- Paul Krugman in the New York Times

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Why the U.S. desperately needs tax reform

Buffett-Ducking Billionaires Avoid Reporting Cash Gains to IRS - Business - MiamiHerald.com: "The rate at which the 400 U.S. taxpayers with the highest adjusted gross income actually paid federal income taxes --their so-called effective tax rate -- fell to about 18 percent in 2008 from almost 30 percent in 1995, IRS data show. That’s the tip of the iceberg, since much of their wealth never converts into income on a tax return, McCaffery said."

Our current tax system is unfair and highly regressive. As Mort Zuckerman has said, "Our current tax system is an abomination." Unfortunately there is no leadership from the White House nor Congress on this issue. What we need is comprehensive tax and entitlement reform.  Herman Cain, for all his faults, is the sole candidate running who has been willing to propose something (albeit imperfect) along the lines of comprehensive tax reform. In addition, the current system works hardships on the real "job creators"--self-employed persons making up to $100,000 a year who must pay income tax plus a regressive 15.3% "self-employment" tax rate on ALL of their income.

My proposal--it's simple:
a) Set the tax rate--this is the rate of tax on net income (wages, interest, dividends, capital gains, etc.) an individual or corporation ("taxpayer") earns annually above one million dollars (in other words, the rate of tax Warren Buffett would pay on all his income over the first one million annually)--my suggestion is 30% (note that the current highest marginal rate is 35%).

b) 50% of the first $100,000 in income of every taxpayer would be exempt from taxation (lowering the effective rate to 15% on the first $100,000 earned annually by every American taxpayer--individual or corporation).

c) 25% of income over $100,000 up to $1,000,000 would be exempt from taxation (resulting in an effective tax rate of 22.5% on all income over $100,000 up to $1,000,000).

d) Eliminate ALL payroll taxes (including "self-employment" taxes). Everyone would be covered by Social Security (including public employees currently exempt)--this would eliminate (eventually) the need for all public employee pensions (which are bankrupting the states, local governments, and agencies such as the Post Office). Institute "means testing" and the other reforms to entitlements recommended by Simpson Bowles. Allow everyone to have a "tax-exempt" retirement account (merging the 401k and IRAs) into retirement accounts which would be insured by the federal government and could only be held at a federally regulated institution (such as a FDIC bank or federally regulated broker).

e) Eliminate ALL loopholes and personal deductions except allow: 1) charitable donations (capped at 20% of taxable income); 2) interest payment deductions (capped at 20% of income--this gives relief to homeowners and debtors); and 3) deductions for expenses incurred as a result of business or employment.  Losses could be "carried-forward" for up to five years. Set personal and dependent exemptions of $4000 per each individual/dependent with a cap of $20,000 per household. Federal taxes would be "territorial"--only on income earned in the U.S.--but schemes to unfairly shift income overseas would be disallowed and subject to penalty.

Historically (post-war average) taxes have raised about 18.5% of GDP (federal revenues divided by gross domestic product). With our aging population and need to re-invest in infrastructure, education, etc., federal revenues probably need to be closer to 20% of GDP going forward. I do not have the access to data to "crunch" the numbers above and determine what per cent of GDP this proposal would generate. However, the "result" from that analysis could be adjusted by merely increasing or decreasing the tax rate in a) above. One problem has been that the current tax system (unfair as it is) only produced revenues of 14.9% of GDP in both 2009 and 2010 which increased our ongoing federal deficit.

Should federal spending be cut and federal entitlements reformed? Yes. But federal revenues at only 14.9% of GDP are too low, and the evidence suggests that the high income corporations and individuals are not (generally speaking), paying their "fair share" (again Warren Buffett is right.)  General Electric not paying taxes is not right.  Warren Buffett paying a smaller percentage of his income in taxes than his secretary is not right. In addition, as a long-range goal, our annual federal deficit should not exceed 3% of GDP.

Something has got to give, and we really don't have the time to continue to delay.

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When Government is the Problem, Entrepreneurs will find another way

Greg Siskind on Immigration Law and Policy: Entrepreneurs Sailing ... By Greg Siskind If this doesn't get the attention of those who think our business immigration system is functioning well, I don't know what will. A new venture in Silicon Valley is planning to set up a high tech incubator facility on a ship that will sit in international ... Greg Siskind on Immigration Law...

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