Tag Archive for: economy

Are hedge fund managers moving to Florida a good idea?

/in , , , /by

Cheryl Carpenter Kilmek in BizPac Review reports:

“The word is out among hedge fund owners that Palm Beach County is the place to be. Kelly Smallridge, President and CEO of the Business Development Board of Palm Beach County, says in the past two weeks she has been getting phone calls every day from New York hedge fund owners tired of high taxes and cold weather looking for a change.

Following a recent New York Post article that said, “The city’s hedge-fund executives are flying south — and it’s not for vacation,” Fla. Gov. Rick Scott sent a letter to hedge fund owners asking them to consider Florida, which prompted a tremendous response.”

But is this really good for Florida?

Florida has had its share of hedge fund managers gone bad. Can you say Ponzi scheme? For example, Scott W. Rothstein, is the disbarred lawyer and the former managing shareholder, chairman, and chief executive officer of the now-defunct Fort Lauderdale law firm Rothstein-Rosenfeldt-Adler. He was accused of funding his philanthropy, political contributions, law firm salaries, and an extravagant lifestyle with a massive $1.2 billion Ponzi scheme.

HedgeCo.net lists the following recent cases of hedge fund manager fraud:

Hedge Fund Manager Convicted by Jury In Black Diamond Ponzi Scheme

February 12, 2013 :

New York (HedgeCo.Net) – A Federal jury has convicted a certified public accountant Jonathan D. Davey, 48, of Newark, Ohio, of four criminal charges relating to an investment fraud conspiracy, the FBI reports. The federal indictment, returned in February 2012, […]

Charges Allege $311 Million Global Hedge Fund Fraud Scheme

February 8, 2013 :

New York (HedgeCo.Net) – An indictment was filed and an information unsealed today charging two business associates in the hedge fund management industry with defrauding institutional investors and causing collective losses of more than $311 million, announced United States Attorney […]

Witness in Rajaratnam Hedge Fund Insider Trading Case Gets One Year Behind Bars

February 1, 2013 :

New York (HedgeCo.Net) – Roomy Khan, a government co-operator in the biggest hedge fund insider trading conspiracy in US history, has been sentenced to one year in prison. Khan has pleaded guilty to passing inside information to Galleon Group fund […]

BCM Hedge Fund Analyst Sentenced in Manhattan

February 1, 2013 :

New York (HedgeCo.Net) – Jason Pflaum, a former research analyst with the hedge fund Barai Capital Management (BCM), was sentenced to time served, followed by two years of supervised release, for his participation in an insider trading scheme in which […]

Insider Trading: California Hedge Fund Founder Gets 2 Years Behind Bars

January 25, 2013 : Permalink

New York (HedgeCo.Net) – San Francisco hedge fund founder Doug Whitman was sentenced yesterday to two years behind bars after a conviction on securities fraud and conspiracy charges. Whitman Capital, the hedge fund he had presided over had about $100 million in assets. […]

Hedge Fund Fraud: Wireless Analyst Sentenced to 4+ Years

January 16, 2013 :

New York (HedgeCo.Net) – The securities research analyst who had publicly refused in 2010 to wear a wire in a hedge fund insider trading trading probe was sentenced yesterday to over four years in prison, Bloomberg’s HedgeWorld reports. John Kinnucan […]

California Hedge Fund Manager Jailed For Fraud

January 15, 2013 :

New York (HedgeCo.Net) – Albert Ke-Jung Hu, a silicon valley hedge fund manager, has been jailed for 12 years on charges of defrauding investors out of at least $6.5 million. “Instead of investing the money as promised, Hu “converted that money […]

Madoff: Doomed Hedge Fund Magnate Speaks Out

December 28, 2012 :

New York (HedgeCo.Net) – The master of manipulation, Bernie Madoff, second only to Charles Ponzi himself, sent out a Christmas memo claiming that “Insider trading… has been present in the market forever, but rarely been prosecuted.” “Markets have always focused on […]

2 Prominent Hedge Fund Managers Found Guilty

December 18, 2012 :

New York (HedgeCo.Net) – A New York jury has found Anthony Chiasson and Todd Newman, both former hedge fund managers, guilty of insider trading charges. The NYT reports: “The government built its case around the testimony of two key witnesses: Spyridon Adondakis, […]

Three Unregistered Brokers Charged For Improper Sales Of Hedge Fund Interests

December 10, 2012 :

New York (HedgeCo.Net) – The SEC has charged three brokers who raised funds for an Oregon-based hedge fund manager for failing to register as broker-dealers before engaging in securities transactions. “Broker-dealer registration is crucial to protecting investors from Ponzi schemes […]

SAC Hedge Fund Insider Trading Professor Resigns

November 30, 2012 : 

New York (HedgeCo.Net) – The Neurologist linked to the Alzheimer drug tests/hedge fund insider trading case, has resigned from his position at the University of Michigan. Professor Sid Gilman is accused of leaking data to SAC hedge fund trader Mathew Martoma. Gilman was paid […]

SEC Preparing Civil Suit Against Cohen’s Hedge Fund SAC Capital

November 29, 2012 :

New York (HedgeCo.Net) – A week after hedge fund trader Mathew Martoma was charged with insider trading, the SEC is going after the hedge fund in question, Steven A. Cohen’s hedge fund SAC Capital, according to people familiar with the situation. “In […]

Rubio Tweets “There is only one savior, and it is not me. #Jesus”

/in , , , , /by

Senator Marco Rubio took offense at the Times cover title “The Republican Savior”. In response he tweeted “There is only one savior, and it is not me. #Jesus”.

rubio time magazine cover

The TIME magazine column “Immigrant Son” by Michael Grunwald notes, “But while Rubio is a child of immigrants, he’s also a child of the conservative movement, an ambitious ideologue and former political operative who speaks partisan Republican with the fluency of a native. (Romney, by contrast, spoke it as a second language.) Like Paul Ryan, a potential 2016 rival, he’s part of a new generation of lean and hungry conservatives who grew up in the anti-government Reagan era and entered politics after the scorched-earth Gingrich revolution. Bipartisan compromise is not usually his thing.” To read the entire TIME magazine story click here.

There are questions being raised about the future of America and the role partisan politics plays in creating a country divided. At a recent TEA Party Sarasota meeting one member stated, “the political parties were merely two squads on the same team”. Big government, more regulation and higher taxes have been embraced by both Republicans and Democrats. This has led to crushing debt, unfettered spending and more government control.

Can any one politician actually make a different when the party system works against any change or reform?

We will see if Rubio will remain independent in his actions or will become part of his party’s leadership. Will political power trump his moral compass as he becomes the “new voice” of the Republican party?

Early civilizations were well aware of the danger of pride and power and knew that this could destroy kings and empires if not held in check. And thus a philosophy was developed by the very wise Greco-Roman philosophers (lovers of truth) in order to help their rulers and themselves to be vigilant about their behavior, lest they destroy themselves by pride. And thus when any great general (be it an emperor-to-be, a war general, or any victor of a great battle) was honored by a great manifestation such as a triumphal entry into his city-state, a slave (a lowly of lowlies) would ride in the chariot with him and whisper in his ear that he should remember that “he is not a god, but a mortal human being”.

A lesson that all politicians must learn?

Gov. Scott declares war on Citizens Property Insurance

/in , , , , /by

On November 30, 2012 Governor Rick Scott addressed Florida’s 6th Annual Insurance Summit in Lake Buena Vista. During his remarks he targets Citizens Property Insurance as a threat to Florida’s economic future. Below are his remarks addressing Citizens Property Insurance:

In order to decrease costs for Florida homeowners we must increase competition in the marketplace by addressing major concerns with Citizens Property Insurance.

Citizens was created to be the insurer of last resort. Today Citizens is now the largest insurer in the state.

Citizens poses three major concerns to our insurance market for Florida families who dream of owning a home:

First, the existence of Citizens Insurance increases the chance that Floridians will be hit with hurricane taxes;

Second, Citizens is grossly underfunded; and

Third, Citizens inhibits new companies from coming to Florida resulting in less competition.

First, all of Citizens policyholders are subject to a special hurricane tax. Florida families could be hit with a hurricane tax at a time when they can least afford it, right after a devastating storm. And 79% of Citizens’ policyholders have no idea that they are subject to a hurricane tax.

Think about this. The average Citizens insurance policyholder pays a premium of approximately $2,300. If a storm hits that depletes Citizens’ surplus, either one big storm or several smaller storms, Florida’s families will be assessed hurricane taxes to pay for Citizens losses. This means that the average family with a Citizens policy faces a hurricane tax of over $1000.

A family may be forced to pay this tax even though their home wasn’t hit by a storm. A family in Tampa could be insured with Citizens and face a hurricane tax to pay for losses to Citizens’ policyholders in Miami.

If Citizens can’t pay its claims, the families with Citizens policies are first up for hurricane taxes. Then, once Citizens taxes its own policyholders, they will then tax every Floridian with an insurance policy in order to get additional funds.

So, Citizens Property Insurance poses a threat to each and every Floridian with an insurance policy. If Citizens can’t pay its claims, we are all on the hook for its losses. And Floridians can be taxed multiple times. Your homeowner’s policy could be taxed; your auto policy could be taxed. Even the policy on your family pet could be taxed.

That means that the average Florida family who owns a home and two cars could be taxed three times to pay for a Citizens’ deficit.

Most families have no idea that they are liable for the potential losses of the state’s largest property insurer.

My second major concern is that Citizens is woefully underfunded. Today, Citizens has a little over $6 billion in surplus. But one storm the size of Hurricane Andrew could result in nearly $14 billion in losses to Citizens. That’s an unfunded liability of nearly $8 billion dollars. The only way to pay for those losses is by taxing Florida families.

Finally, Citizens hurts Florida families by crowding out competition in the insurance marketplace, which limits the ability to reduce costs for homeowners.

I’ve traveled the state and spoken to numerous leaders of insurance companies to ask them: “What’s preventing you from expanding your business in Florida?” Nearly every time I’ve been told that the domination of Citizens Insurance prevents new companies from coming to Florida while also preventing existing companies from expanding in Florida.

How can any private insurance company compete with a government-sponsored entity that doesn’t pay taxes and doesn’t need to charge fair market prices? It can’t.

Shrinking Citizens is the first step toward increasing competition in the marketplace and driving down prices for homeowners.

Shrinking Citizens will also protect Florida families from hurricane taxes.

And, shrinking Citizens will attract new capital to Florida and help to permanently reduce the cost of property insurance.

To make the dream of homeownership a reality for more Floridians, we must reduce the size of Citizens, which has grown from an insurer of last resort to an insurance giant in just a matter of years.

We began making some progress toward this goal by giving over 400,000 Citizens policyholders the opportunity to return to the private insurance market this year.

Of course, we must also ensure Citizens is not wasteful. I recently directed the Chief Inspector General to investigate travel expenses and firings at Citizens. This report will tell us what additional steps must be taken to enforce oversight and compliance within Citizens. A taxpayer organized entity must be held to the highest standards of integrity and good stewardship of the public trust.

VIDEO: Democrat Candidate Patrick Murphy Calls TEA Party “Extremist”

/in , , /by

Democrat Congressional Candidate Patrick Murphy runs away from a reporter asking him to clarify his statement that the “Tea Party are Extremists” made during a debate with his opponent, incumbent Rep. Allen West (R). Murphy is Rep. West’s opponent for Florida’s new Congressional District 18 seat.

On Thursday October 4, 2012 during a debate with Rep. West, Murphy made the statement, “I used to be a Republican but because the TEA Party people are extremists, I decided to become a Democrat!”

J. Mark Campbell, investigative reporter for The United West, repeatedly asked Murphy to explain his statement about the TEA Party after the debate. Campbell approached Murphy and then, it was OFF TO THE RACES…as he literally, RAN-A-WAY!

Following the debate Rep. West stood outside in the parking lot answering press questions for 30 minutes. Murphy was no where to be found.

Rubio Votes Against Continuing Resolution

/in , /by

After his vote against H.J.Res.117, a short-term Continuing Resolution to fund the federal government for six months, U.S. Senator Marco Rubio issued the following statement:

“Today, the federal government once again left one of its most basic duties unfulfilled – the passage of an annual budget. After four consecutive years of trillion dollar deficits and a $16 trillion national debt, the American people deserve for their elected officials to come together with an action plan to reduce spending and encourage real growth. Instead, Congress passed a continuing resolution that merely extends federal spending at its current levels and punts away the responsibility of governing to another time.

“As I’ve done before, I voted against this short-term continuing resolution because I believe that times are too dire to continue this inaction. We are treading water while the water is boiling. Congress has a responsibility to move America out of this mess by charting a fiscally responsible path for the future, starting with a responsible and balanced budget.

“Instead of working with Republicans to address this issue a long time ago, President Obama merely proposed partisan budget plans that left his promise of deficit reduction behind and were so flawed not a single senator in either party voted for them. In order to move America forward, we need Washington to live within its means and stop borrowing money to support a bloated federal government. We can’t say that President Obama’s leadership has failed this time, because the truth is he hasn’t led at all.”

Florida to Lose 79,459 Jobs Due to Defense Cuts

/in , , /by

The Jacksonville Business Journal reports that Florida stands to lose 79,459 jobs and $4.1 billion in labor income by the end of fiscal 2013 if $1.2 trillion in federal defense cuts take place in January as planned.  A report conducted by George Mason University by economist Stephen Fuller says Florida would suffer the sixth most job losses of all the states. The report measures the impact of both defense and nondefense employment reductions at federal agencies and their contractors, as well as at businesses that count them as customers. A little more than half of Florida’s lost jobs in the next fiscal year — 41,905 — would result from Department of Defense cuts, and the rest would stem from reductions at civilian agencies. During that period, Florida would also see gross state product losses of $8 billion. To read more click here. The George Mason University report concludes – The magnitude of economic impacts resulting from the Budget Control Act of 2011 over the combined FY 2012-FY 2013 period have been shown to be large and their impact on the U.S. economy to be significant:

• Combined DOD and non-DOD agency spending reductions totaling $115.7 billion in FY 2013 would reduce the 2013 U.S. GDP by $215.0 billion.

• These spending reductions would result in the loss of 746,222 direct jobs including cutbacks in the federal workforce totaling 277,263 and decreases in the federal contractor workforce totaling 468,959 jobs, thus affecting all sectors of the national economy.

• The loss of these 746,222 direct jobs and 432,978 jobs of suppliers and vendors (indirect jobs) dependent on the prime contractors would reduce total labor income in the U.S. by $109.4 billion.

• The loss of this labor income and the resultant impacts of reduced consumer spending in the economy would generate an additional loss of 958,508 jobs dependent on the spending and re-spending of payroll dollars associated with the direct and indirect jobs lost as a result of BCA.

• This loss of $215.0 billion in GDP and 2.14 million jobs in 2013 would erase two-thirds of the GDP gains projected for the year and raise the national unemployment rate by 1.5 percentage points by the end of 2013.

• These economic impacts would affect every state with their respective vulnerabilities to projected DOD and non-DOD spending reductions being determined by their agency mix and relative magnitudes of federal payroll and procurement. Based on current patterns of federal spending by state, ten states account for more than half of total federal payroll and procurement outlays. This significant concentration of federal spending represents a major threat to these states’ economies in 2013. While other states may appear less vulnerable to federal spending reductions, these may also suffer significant impacts dues to their smaller sizes or more specialized economic structures.

Florida is has twenty-one military installations, and is home to U.S. Central Command at MacDill AFB in Tampa.

The Case Against Energy Subsidies in Florida

/in , , /by

State Rep. Scott Plankton

State Representative Scott Plankton and Agricultural Commissioner Adam Putnam have been pushing for government subsidies to grow Florida’s economy. According to James M. Taylor, J.D., from Florida Political Press, reports, “Digital Domain Media Group Inc. closed its taxpayer-subsidized film studio Tuesday and filed for bankruptcy protection, just a few short months after State Rep. Scott Plakon (R-Longwood) told skeptical Tea Party leaders that the Florida film industry provides a sterling example of why government officials should hand over taxpayer dollars to politically connected renewable energy companies.”

According to Taylor, “Between 2009 and 2012, Florida’s Republican-dominated legislature and various local governments handed over $135 million in taxpayer subsidies to Digital Domain. Those subsidies included prime real estate and a lavish headquarters building in addition to direct cash payments.

“$135 Million Wasted,” notes Taylor.

“In an April conversation with Tea Party leaders unhappy about legislation giving renewable energy companies $100 million in taxpayer subsidies, Plakon said state subsidies for film companies such as Digital Domain demonstrate why it is good for government to generously subsidize politically connected companies and industries,” writes Taylor.

Another effort to use government money to subsidize energy in Florida is the Energy Economic Zone (EEZ). There are two EEZ pilot projects currently underway, one in Sarasota County and another in the City of Miami, Florida.

Why an Energy Economic Zone, why now and for what purpose?

Dennis Cauchon, writer for USA Today, in his column “Household electricity bills skyrocket” points out, “Electricity is consuming a greater share of Americans’ after-tax income than at any time since 1996 — about $1.50 of every $100 in income at a time when income growth has stagnated, a USA TODAY analysis of Bureau of Economic Analysis data found. Greater electricity use at home and higher prices per kilowatt hour are both driving the higher costs, in roughly equal measure. . .”

It makes sense for households, businesses and government to find ways to save on their electric bills. But is the creation of a government subsidized EEZ the way to do that?

One of the driving forces behind the creation of an EEZ in Sarasota County is the building of a methane power plant at the county landfill. According to Gary Bennett from Sarasota County, “County staff will be recommending that a private developer be allowed to design/build/operate a landfill gas to energy facility at the Central County Landfill in Nokomis. Staff believes the project is feasible. The estimated cost would be roughly $5-6 million dollars for a 3.2 megawatt facility based on cost estimates we have seen. Permitting is extensive. Includes both state and local. [The] Developer would pay the cost. Power would be fed to the power grid so no back up needed. This project once approved takes roughly 18 months to permit and complete.”

County staff was asked if a feasibility study was conducted.

According to Gary Bennett, “We did look at costs if the County would build a facility but it was looked at in a very simplistic manner. It was not feasible for the County when the price of renewable energy that would be paid the County dropped from about 7 cents a kilowatt hour to around 5 cents a kilowatt hour. Since this would be a developer driven project with all the financial risk on the developer, they will determine whether the project is feasible. The County would be looking for the developer to pay the County revenue for the landfill gas supplied to their facility.” Floridians currently pay 11.44 cents per kilowatt hour.

The two developers involved in the pilot EEZ are Hugh Culverhouse and Henry Rodriguez.

There is a key problem. EPA studies show a landfill must have trash rates over 1 million cubic feet/year minimum to produce enough methane for a plant. Sarasota County falls well below this level of trash rate per year. What will determine whether a generation unit can be successful are the percent of methane (usually 35-50 %) and the cubic feet per minute for each well. As the methane is collected it is sent thru scrubbers to clean and purify the gas prior to burning it to produce steam for a turbine or used in modified vehicles like buses or trash trucks as fuel. If not enough is available at a high enough concentration or pressure it is unlikely that Sarasota County landfill is a good candidate. Additionally, being a public/private utility it could be tax exempt and thus its inclusion in the EEZ is not needed.

The EEZ pilot projects are the first step in a process to create energy subsidies in all 67 of Florida’s counties and many cities for an questionable return on the taxpayers investment. After all saving energy is in everyone’s best interest. Do Floridians really need government stepping in to help?

Will the EEZ become Florida’s version of Solyndra?

Rep. West Receives Guardian of Small Business Award

/in , , , /by

Congressman Allen West (R-FL) received the National Federation of Independent Business Guardian of Small Business Award Thursday.

The award is presented to members of Congress who NFIB considers “champions” of small business owners. West received a perfect score of ‘100’ for his votes on 13 key NFIB supported pieces of legislation concerning issues from healthcare, energy and Federal Government regulations.

Rep. West received a perfect score from the National Federation of Independent Businesses as did sixteen other members of the Florida delegation. Republican Senate Candidate Connie Mack received a 100 percent, with Rep. Debbie Wasserman-Schultz garnering a zero. Senator Bill Nelson received a score of 36 and Senator Marco Rubio a score of 100.

Here is the list of the Florida delegation by district and their NFIB scores:

1      Miller, J. 100
2      Southerland 100
3      Brown, C. 0
4      Crenshaw 100
5      Nugent 100
6      Stearns 100
7      Mica 100
8      Webster 100
9      Bilirakis 100
10    Young, C.W. “Bill” 100
11    Castor 8
12    Ross, D. 100
13    Buchanan 100
14    Mack 100
15    Posey 100
16    Rooney 100
17    Wilson, F. 0
18    Ros-Lehtinen 9
19    Deutch 0
20    Wasserman Schultz 0
21    Diaz-Balart 92
22    West, A. 100
23    Hastings, A. 8
24    Adams 100
25    Rivera 100

For a complete look at how each Member of the 112th Congress voted, click here

“Our small businesses are at the heart of keeping this economy going and I am proud to receive this award,” West said. “As I travel Dixie Highway in Palm Beach County and visit small businesses in South Florida, I see firsthand the importance of expanding opportunities and reducing burdensome regulations on our independent employers. Our small businesses represent the best of the American spirit and I will continue to be their voice on Capitol Hill.”

NFIB President and CEO Dan Danner praised West for his commitment to American business owners.

“In the 112th Congress, Representative West proved he is willing to stand up and do big things for small business,” Danner said. “Guardian-award winners are genuine small business champions, consistently voting to promote and protect the right of small business owners to own, operate and grow their businesses.”

Congressman Allen West is a member of the House Committee on Small Business and is a member of the Subcommittee on Contracting and Workforce and the Subcommittee on Investigations, Oversight and Regulations.

The Guardian of Small Business Award is presented to lawmakers who vote with small businesses 70 percent or more of the time and demonstrate a commitment to protecting free enterprise.

National Federation of Independent Business is the nation’s leading small business association. Founded in 1943 as a nonprofit, nonpartisan organization, NFIB gives small and independent business owners a voice in shaping the public policy issues that affect their business. NFIB has 350,000 members and its mission is to promote and protect the right of our members to own, operate and grow their businesses.

Hasner Campaign: Both Parties Created This Jobs Crisis

/in , /by

This week the Adam Hasner for US House Campaign launches the “It’s About Math” informational series. Between now and Election Day, Adam will be focusing on the real numbers and real issues of great importance to the residents of Florida’s District 22.

“So many people I speak with, regardless of political party, are sick and tired of the name calling and scare tactics,” Adam Hasner said. “What they really want to know is whether or not you have a plan to get America’s fiscal house in order and get our economy moving again. Every day I am talking about just that. I’m hopeful this debate can be about the real differences I have with my opponent on getting spending under control, creating jobs and improving the lives of people in our community. Solving our nation’s problems isn’t about Republicans or Democrats or any political philosophy. It’s about math.”

A key number from the August jobs report released last week was 368,000. That is the number of Americans who stopped looking for work and are no longer counted in the US labor force by the United States Labor Department. (Wall Street Journal, Five Key Takeaways from Jobs Report, 9/7/12).

“This number itself is telling, but it also says more about the individual stories of the college student who can’t find a job, a dad who got laid off, a mom who’s working less hours than she wants to or needs to, a senior who’s had to go back to work to make ends meet because they lost their retirement savings,” said Hasner.

“Behind this number are the stories of the people who are losing hope and beginning to believe that our country’s best days are behind us. It’s distressing that people are giving up. We can do better and they deserve better.

“While the official unemployment rate hovers above 8% for the 43rd consecutive month – perpetuating the slowest economic recovery in decades – Lois Frankel continues to distract attention from spending and the economy and remains silent about what should we do to create jobs.

“That’s most likely because she knows her record on job creation as Mayor was abysmal. Lois Frankel entered office in West Palm Beach with the city’s unemployment rate at 5.4%. But by the time she left office 8 years later, the unemployment rate in her city had climbed to 10.6%. The numbers prove that she didn’t have solutions for West Palm Beach and she’s failed to offer any ideas on how to get our nation’s economy back on track.

“Mayor Frankel continues to support the same misguided Washington policies that for the last 43 months have been failing small businesses, families and hard-working Americans.

“Both parties got us into this mess, but now isn’t the time to point fingers and place blame. It’s time for a new approach:

  • We must reform the current tax code to make it flatter, fairer, and simpler and eliminate loopholes and exemptions.
  • We must eliminate hurdles to form new businesses and right-size regulations that are currently stifling economic growth with red tape and compliance costs and do it with a balanced approach that protects our natural resources and protects consumers.
  • We must unleash the power of Made in America energy with new technologies for safe development of domestic oil and natural gas. Affordable energy is a key factor in creating jobs and attracting companies to bring manufacturing jobs back home.
  • We must also focus on education and worker training initiatives to get the long term unemployed back to work.
  • “What small businesses need is certainty, knowing what to expect so they can make critical decisions to hire new employees, invest in new equipment, and expand their operations.

“It’s time for common-sense policies that will empower private sector job creation to help Main Street get back on its feet and get America’s economy back on the move.

Media Matters vs. Investors Business Daily

/in , /by

As President Obama prepares to take the stage tonight and accept his party’s nomination for re-election there is an ongoing discussion about the state of the economy. The great question is: Are we as a nation better off today than four years ago?

Media Matters and Investors Business Daily (IBD) have both tried to answer this question. Each came to a different conclusion.

Media Matters states, “In their attempts to grapple with the question of whether Americans are better off, cable news outlets have regularly failed to provide important context about the dire state of the economy in late 2008, when millions of jobs were lost.” Investors Business Daily reports, “Obama’s argument is simple: The economy was headed for a second Great Depression when he took office — hemorrhaging GDP and jobs. His stimulus, the auto bailouts and so on, prevented that, and the economy has since been slowly digging out of the massive ditch into which President Bush drove it. Thus, Obama says, he deserves an ‘incomplete’ grade.”

Media Matters focuses on statements from five economists reflecting upon September 2008 and the financial crisis. Diana Henriques, who covered finance for The New York Times, states, “September 2008 was one of the scariest months I have ever experienced as a business reporter. We had seen Bear Stearns nearly fail, we had seen Fannie Mae and Freddie Mac taken under receivership.”

IBD takes a comparative approach, looking at key indicators then and now. IBD uses the following examples to answer the question:

• Median incomes: These have fallen 7.3% since Obama took office, which translates into an average of $4,000. Since the so-called recovery started, median incomes continued to fall, dropping $2,544, or 4.8%.

• Long-term unemployed: More than three years into Obama’s recovery, 811,000 more still fall into this category than when the recession ended.

• Poverty: The poverty rate climbed to 15.1% in 2010, up from 14.3% in 2009, and economists think it may have hit 15.7% last year, highest since the 1960s.

• Food stamps: There are 11.8 million more people on food stamps since Obama’s recovery started.

• Disability: More than 1 million workers have been added to Social Security’s disability program in the last three years.

• Gas prices: A gallon of gas cost $1.89 when Obama was sworn in. By June 2009, the price was $2.70. Today, it’s $3.84.

• Misery Index: When Obama took office, the combination of unemployment and inflation stood at 7.83. Today it’s 9.71.

• Union membership: Even unions are worse off under Obama, with membership dropping half a million between 2009 and 2011.

• Debt: Everyone is far worse off if you just look at the national debt. It has climbed more than $5 trillion under Obama, crossing $16 trillion for the first time on Tuesday and driving the U.S. credit rating down.

Media Matters states, “Other veteran financial scribes point to the overall economic picture today as compared to 2008, while also noting that the positive direction of the economy is important, too. Their comments are supported by a number of key indicators: The economy has grown for twelve consecutive quarters; private sector employment has grown for 29 consecutive months, adding millions of jobs; and the Dow Jones Industrial Average has nearly doubled from its low point in March 2009.”

Media Matters quotes Kevin Hall, McClatchy’s national economics correspondent, as saying, “If you go back and look at the charts — you can pull up the GDP chart, we are growing 2 to 2.2 percent — you would say it is clearly yes, compared to a 3.7 percent contraction in the third quarter of 2008, followed by an 8.9 percent contraction in the fourth quarter of 2008.”

The real indicator of if we are doing better will not be determined by economists or statistics. It will be determined at kitchen tables across America. What each family, individual and business owner feels and experiences will determine the truth about are we better off. This will translate into motivation to vote for or against a particular candidate.

Bottom line: Are YOU better off today than 4 years ago?

RELATED COLUMN: The Five ‘Reasons’ to Re-elect Obama By Larry Elder

Watchdog Wire Interviews Blaise Ingoglia, Sheila Krumholz and Marjorie Dannenfelser

/in , , /by

Watchdog Wire interviews three citizens who are doing extraordinary things. Each heads their respective organization and tells the truth about the issue that is top of mind with them and their organization. Each organization is non-profit and issue oriented.

LISTEN TO THE EXCLUSIVE WATCHDOG WIRE INTERVIEWS WITH INGOGLIA, KRUMHOLZ AND DANNENFELSER.
[iframe]

[/iframe]

Our guests appear on the Podcast at the time noted below:

11:00 to 11:20 Blaise Ingoglia, www.GovernmentGoneWild.org. Blase speaks to government spending that is out of control and discusses his latest video “One Nation, Under Water”.

11:20 – 11:40 Sheila Krumholz, www.OpenSecrets.org. Sheila describes the influence of money on elections and how both political parties have focused on fundraising as the way to get elected, perhaps to the detriment of the election process.

11:40 to Noon Marjorie Dannenfelser, www.SBA-List.org. Marjorie describes the differences between the Democrat and Republican political platforms on the issue of the sanctity of life. She explains the history of the Susan B. Anthony List and its impact on statewide and Congressional elections.

Each guest provides special insights into why this election is so very important to them and their organization.

UPDATE:

This is a video released by SBA-List.org addressing what Marjorie discussed during her interview with Watchdog Wire – Florida:

Higher Gas Prices Add to Economic Slump

/in , , /by

Courtesy of the Heritage Foundation:

Unemployment is at 8.3 percent. The economy is sputtering at 1.5 percent growth. Food prices are rising due to drought conditions across the country. And gas prices are up again, pinching Americans’ summer budgets. It is past time for the President and Congress to pursue smart policies that would put us on a path to relief.

According to AAA’s Fuel Gauge Report, the current national average for regular is $3.66 per gallon. That’s up 28 cents per gallon from a month ago, and July had its biggest price jump since AAA started tracking prices in 2000. To see the average for Florida click here.

There are many factors affecting prices that we cannot control—worldwide tensions, especially in the Middle East, can drive up oil prices. Global demand, especially from China and India’s rapidly growing economies, continues upward.

But after three years of adding regulatory hurdles and blocking exploratory access and development, President Obama’s policies are helping keep prices higher than necessary.

If the President truly wanted to lower gas prices, he would work to increase supply. But when given the opportunity, he has done the opposite. He turned down the Keystone XL pipeline, which would bring up to 830,000 barrels of oil per day from Canada. His Administration has made it even harder for companies to explore and extract domestic energy resources by canceling, delaying, or withdrawing a number of lease sales for exploration and development. Meanwhile, huge swaths of federal lands have been put off limits for energy exploration.

Domestic refinery outages have had a recent impact on gas prices. Two of the factors holding back domestic energy production are regulatory red tape and litigation—and these, we can do something about. As Heritage’s Nicolas Loris notes:

Environmental activists delay new energy projects by filing endless administrative appeals and lawsuits. Creating a manageable time frame for permitting and for groups or individuals to contest energy plans would keep potentially cost-effective ventures from being tied up for years in litigation while allowing the public and interested parties to voice opposition or support for these projects.

We don’t have to stand still. Congress could alleviate the energy crunch in 10 different ways by taking action on things we can control, like restrictions on oil shale development and offshore drilling.

One of the most common objections is that increasing domestic oil production takes too long and would not impact the market for at least a decade. The longer people make this argument, however, the longer it will take. The sooner we make investments in domestic energy, the sooner those benefits will be realized. And with some serious reforms, some of this oil can reach the market in much less than a decade.

Gas prices aren’t under the control of any one President. But Americans shouldn’t settle for policies that restrict oil exploration, refining, and production and artificially drive prices higher.

MORE FROM THE HERITAGE FOUNDATION:

High Gas Prices: Obama’s Half-Truths vs. Reality

President Obama’s 10 Worst Energy Policies

Watch Out Florida Here Comes Our “Bubble Government”

/in , /by

Recently in a radio interview Robert Wiedemer co-author of America’s Bubble Economy and Aftershock and Edward J. Pinto, resident scholar at the American Enterprise Institute discussed the idea of the United States having a “bubble government”. Wiedemer stated that America has suffered through “a number of financial bubbles” and the “aftershock following each”. To date each of these bubbles, the most recent being the housing bubble, have burst and fallen onto two other looming bubbles. These two bubbles are the “dollar bubble” and the “debt bubble”.

These two bubbles are primed to burst and the pin is called inflation.

The Wall Street Journal headline for April 5, 2012 was “Markets Fear End of Stimulus” written by Jonathan Cheng and Charles Forelle. What is the great concern? According to Cheng and Forelle, “European Central Bank President Mario Draghi indicated he would be hesitant to undertake more monetary easing, citing concerns about inflation.” Monetary easing (a.k.a. government stimulus or quantitative easing) is governments printing money. Today American is awash in money due to our government printing it with no end in sight – the dollar bubble is upon us.

Congress has failed in their Constitutional duty to pass a budget in nearly four years. The U.S. government runs on continuing resolutions and Congress has raised the debt ceiling to an astounding $15+ trillion dollars. In 2011 Congress spent nearly 55% more than it collect in revenues. The debt ceiling will be breached yet again before the November 6, 2012 elections. This all has caused our government to borrow at an unprecedented rate of 40 cents of every dollar – the debt bubble.

What does that all have to do with Florida?

Florida is especially vulnerable to the aftershock of either a dollar or debt bubble burst. Florida’s barely recovering housing market and our large population of fixed income retirees are in the cross hairs should inflation increase even fractionally.

According to Edward J. Pinto, “One in four [Federal Housing Administration] FHA loans outstanding in Georgia and New Jersey are now thirty-days-plus delinquent, with eight additional states having delinquency rates above 20 percent. The national rate is 17.79 percent.” Florida has a delinquency rate of 23.07%. Pinto points out, “FHA is estimated to have a current net worth of -$16.923 billion, approximately $18 billion less than the ‘economic net worth’ set forth in FHA’s 2011 Actuarial Study.”

Pinto states, “The Government Mortgage Complex (GMC), consisting of FHA, Fannie Mae, Freddie Mac, the Veterans Administration and Federal Department of Agriculture, is bankrupt. The Government Mortgage Complex guarantees about $6 trillion in in home mortgages, yet has zero capital backing it. Fannie and Freddie do owe the government nearly $200 billion and counting.”

When inflation kicks in, as it is in Europe, the bond markets will tank, as they have in Spain, and Florida will be facing a double dip recession because many retirees have invested in bonds.

President Obama, the Federal Reserve and Congress will do everything they can to not let this collapse happen before the November 2012 elections. However, they may not be able to stop it, as the markets are already reacting to failed attempts at austerity in the EU and the rising cost of debt.

These two bubbles are coming home to roost in America.

When they burst the burden will fall most heavily upon the American taxpayer a rapidly diminishing species. There is not the political will to address either bubble until they burst and a national crisis occurs. As the argument goes “never let a good crisis go to waste” but this time the austerity solutions will be Draconian.

A possible scenario is a replay of the October surprise of 2008 – a meltdown of the financial markets. Are we being set up for another TARP or Stimulus III? Time will tell.

Obama Turning Americans into “Economic Slaves”

/in , , /by

Florida Congressman Allen West (R-22) stated at a Port Saint Lucie campaign speech President that President Obama wants to turn Americans into “economic slaves.”

At the event Congressman West spoke about the importance of lowering taxes, minimizing regulations on business and bringing jobs back to Florida. Congressman West criticized President Obama on his failure to create private sector jobs.

“Self-esteem comes from doing esteemable things. Sitting at home and getting a check from the government is not going to help your self-esteem. What it will do is make you an economic slave to people living in a far, far, distant place,” West remarked.

Congressman West stated, “He does not want you to have the self-esteem of getting up and earning and having that title of ‘American’. He’d rather you be his slave and be economically dependent upon him.”

Congressman West said during a Conservative Black Forum said that President Obama “doesn’t have a vision for the black community” in America. Congressman West’s website notes:

“In the beginning, in chapter one, it talks about over the past 30 years, billions of dollars have been poured into black communities across the country in hopes of curing well-documented socio-economic problems including failing schools and adequate housing, rampant crime and drug abuse, black on black killings, unemployment and more,” West said. “Despite the courageous efforts of many local institutions, agencies, school leaders, grassroots organizations and community residents, the problems remain.”

“In many instances, these problems have grown worse,” he continued. “I believe it will take new ideas and new voices to find solutions, and that is exactly why we’re here. We’re here today to talk about economic freedom as opposed to economic dependency. We’re here today to talk about four basic conservative principles and how they can apply to economic revitalization for the black community: That’s limited government, being fiscally responsible, individual industrialism that leads to self-sufficiency and the free market that grows business, and lastly and most importantly, it’s about equality of opportunity which comes from a good education.”

West points to the black community’s 14 percent unemployment rate as an indicator that the current economic policies aimed at helping minorities aren’t working, adding that “if you understand actual unemployment, it’s probably closer to 18 or 20 percent.”

On top of that, West pulled out statistics showing how blacks aren’t proportionally represented population-wise in the percentage of new start-up businesses around the country.

“60 percent of new startups are in the white community, 23 percent of new startups [are] in the Hispanic community, 5 percent [of] new startups [are] in the Asian community and, with 13 percent of the population, you’re only seeing nine percent of new startups coming out of the black community,” West said.

Over the more than two-hour-long discussion about issues facing these communities and possible solutions, President Barack Obama hardly came up. After the event, West told The Daily Caller that’s because Obama “doesn’t have a vision for the black community and economic development.”

“He doesn’t have a vision for America,” West told TheDC. “So, I think that’s why we see all of these horrible economic indicators turning in the way that they are. His vision is just to get re-elected and that’s not what I’m here talking about.”

West issued a warning concerning the Supreme Court’s recent decision to uphold the Affordable Care Act. “Now we find ourselves in a situation where the tax code of the United States of America is being used as a weapon against the American people. It is being used for behavior modification. That is exactly what came from the Supreme Court decision last week,” said West.

Congressman West is campaigning for a second term in the U.S. House in Florida’s newly-drawn district 18. He faces County Sheriff Bob Crowder in the GOP primary on August 14 for a chance at the party’s nomination.

Raising the National Debt – Doing Evil in the Name of Good

/in /by

debt

Many people see government debt, over regulation and control of individuals, families and our natural resources as necessary to the good of the collective. May I humbly suggest that this is a violation of natural law as envisioned by our Founding Fathers in the Constitution?

Debt is in and of itself not immoral if the person encumbers himself for a his purpose – expanding a business, building a home or sending a child to college. It becomes an immoral act when debt is incurred without the consent of the indebted. The National Debt is taxation of the individual and future generations without representation.

This summer President Obama will ask Congress to raise the debt ceiling.

This effort will become political theatre of the first order with the media. Both sides will be touting the good and the bad of raising the debt ceiling. I predict that the debt ceiling will be raised, which is the consummate example of doing evil in the name of good. Progressives will argue that the poor will be harmed if the debt ceiling is not raised. Their plea is that only government can sustain the poor for the poor will never be capable of sustaining themselves due to a corrupted society.

Their argument is false on its face.

It is false because it is government that defines poor, not the poor defining themselves. There have been since time immemorial those who have more and those who have less. However, it has only been recently that those with less have been defined as a “class of poor”. Charles Murray in his book “Coming Apart: The State of White America, 1960-2010” notes, “Michael Harrington’s The Other America created a stir when it was published in 1962 partly because Harrington said America’s poor constituted a class separate from the working class – a daring proposition. At the time, the poor were not seen as a class, either by other Americans or in their own eyes. The poor were working-class people who didn’t make much money.”

The public debate is all about jobs. Jobs mean a working class. The working class consists of all those working or earning a living or having a job not supported by government subsidy. The private sector working class has shrunk under both Democrat and Republican administrations. There is a growing concern that today more people vote for a living than work for a living. The private sector creates prosperity, which in turn creates jobs, which in turn allows the working class to advance and be less poor. Prosperity comes from productive work, not government welfare.

Government at every level consumes wealth and uses it for its own ends. Our republican form of government was created to protect individual property. Property was defined in broad terms by James Madison, author of the Constitution. Madison wrote, “[Property] embraces everything to which a man may attach a value and have a right: and which leaves to everyone else the like advantage. In the former sense, a man’s land, or merchandize, or money is called his property. In the latter sense, a man has property in his opinions, and the free communication of them.”

Madison believed, “As a man is said to have a right to his property, he may be equally said to have a property to his right.”

Take away a man’s property and he is no longer a man but a slave. Government at every level has created reasons to limit man in both its property right and his right to property. For decades the federal, state and local governments have instituted laws and regulations designed to smother property rights. Government at every level is becoming what Thomas Jefferson called the “feudal-ruler form of government”. In the feudal-ruler scheme according to Brian Sussman, author of “Eco-Tyranny: How the Left’s Green Agenda will Dismantle America”, “The rights of the government become superior to the rights of citizens.”

Only when men and women own property are they truly free. We must be superior to our government or tyranny will reign supreme – forever.