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Monday, March 26, 2012

Crude oil whiplash? Blame the banks


June 16, 2011: 6:37 AM ET Want to see the plump financial tail wag the scrawny economic dog? Look no further than the wild, wooly oil markets.
Crude futures for delivery next month tumbled $4 and change in New York Wednesday, marking their biggest decline in a month. The recession obsession being what it is, the selloff was taken as confirming poor prospects for U.S. growth and rising risks that Europe will melt down.

But why now?
But what Wednesday's plunge actually shows is how the bankers and their buddies are having their way with the economy yet again. Financial types – starting with the big banks that so graciously lean on our tax dollars, but also hedge funds and asset managers that sell index funds and the like – have spent the past half decade or so flooding into commodities. These markets are supposed to serve producers and consumers, but lately have served as much as anything as a profit center for deep-pocketed speculators.
That mismatch helps to explain why the price of crude oil, which is broadly driven by slow-moving global supply and demand trends, has been whipping around so viciously. Yes, demand is rising and supplies are on the tight side, but let's face it, the global economy looks more or less the same now as it did at this time last year.
Yet the price of London-traded Brent crude has risen by half in the meantime, to a recent $117. This is, needless to say, not a salutary development -- at least for those of us who buy our petroleum products by the gallon rather than the thousand-barrel contract.
Fundamentals? With the casino crowd in control, who needs 'em?
"What's going on in crude is just crazy," says Howard Simons, a strategist at Bianco Research in Chicago. "A 5% fall in the front-month futures contract in a day? How? Demand is certainly not going to fall that much between now and then, and supplycan't increase enough to justify it either."
The notion that the banks and other financial types have perverted commodity markets isn't a new one. A United Nations report released this month concludes that multiplying financial interests have pushed up prices and increased market volatility. The recent recovery differed from previous ones, the report says, in that the prices of oil and other goods rose in anticipation of, rather than in response to, rising demand.
This speculative shift exposes the global economy to false inflation shocks and overreacting central bankers (this means you, Jean-Claude Trichet).
The U.N. concludes that at the very least, regulators must enhance transparency in the markets for goods such as grains, metals and energy. They should also, needless to say, tighten regulation of big trading firms.
As it happens, the United States last year passed a law called the Dodd-Frank Act that aims to do these sorts of things, at least to some degree. But Americans like nothing better than stuff that is bad for us, so congressional Republicans are pushing back -- the banks have given us so much, after all! -- and regulators are putting off making the rules stand up.
Hey, why defuse the weapons of financial mass destruction when doing so would squeeze big political contributors' bottom lines?
"We have passed a 2,100-page law that can't even be enforced because no one can agree on how to do it," says Simons. "People are going to look at this and say, here's the gang that can't shoot straight."
The gang that may be able to shoot straight but chooses not to is the banks, which have spent the past year calling for big spikes and steep selloffs, often in the same breath. If you didn't know any better you might think this is the work of guys intent on goosing trading revenue at the expense of all else.
As always, the unshining example of this is Goldman Sachs (GS), whose commodities researchers have been freely revising their take on oil price trends much the way Sen. John Kerry used to change his vote on Iraq.
Goldman was telling clients to buy oil futures last fall as the Fed-fueled rally in riskier assets started. It then warned in April that the rally was overdone – before changing again in May with a call for a new spike.
This spin-like-a-top routine is particularly notable because Goldman is the E.F. Hutton of Wall Street oil desks. It can say practically anything and people will listen.
"It's just irresponsible to know you have that sort of influence and go throwing it around that way," says Dan Dicker, a longtime oil trader whose recent book, Oil's Endless Bid, shows how financial firms have changed the energy markets, and not for the better.
Dicker says the Pavlov's dog reaction to Goldman's many oil calls illustrates a concept that plays prominently in the U.N. report – the "intentional herding" that takes place when traders latch onto a new price trend. The herding tends to unmoor prices from fundamentals, giving producers and consumers false signals and distorting investment decisions. That means gains for traders who get in early enough -- at the expense of the rest of the economy. Your tax dollars at work.
This results in, among other things, gasoline at $3.80 a gallon at a time when "there is no good economic reason for the oil price to be as high as it is," Dicker says.
That arrangement is undeniably bad for you and me. But you could swear that what Congress cares about is what's good for the Goldman Sachs energy desk, and until we see oil at $180 a barrel or something who's going to argue?
"I don't see the political will to turn the tide on this," says Dicker. "The forces making money doing this are a lot stronger than the people trying to contain it."

Crude oil whiplash? Blame the banks


Crude futures for delivery next month tumbled $4 and change in New York Wednesday, marking their biggest decline in a month. The recession obsession being what it is, the selloff was taken as confirming poor prospects for U.S. growth and rising risks that Europe will melt down.

But why now?
But what Wednesday's plunge actually shows is how the bankers and their buddies are having their way with the economy yet again. Financial types – starting with the big banks that so graciously lean on our tax dollars, but also hedge funds and asset managers that sell index funds and the like – have spent the past half decade or so flooding into commodities. These markets are supposed to serve producers and consumers, but lately have served as much as anything as a profit center for deep-pocketed speculators.
That mismatch helps to explain why the price of crude oil, which is broadly driven by slow-moving global supply and demand trends, has been whipping around so viciously. Yes, demand is rising and supplies are on the tight side, but let's face it, the global economy looks more or less the same now as it did at this time last year.
Yet the price of London-traded Brent crude has risen by half in the meantime, to a recent $117. This is, needless to say, not a salutary development -- at least for those of us who buy our petroleum products by the gallon rather than the thousand-barrel contract.
Fundamentals? With the casino crowd in control, who needs 'em?
"What's going on in crude is just crazy," says Howard Simons, a strategist at Bianco Research in Chicago. "A 5% fall in the front-month futures contract in a day? How? Demand is certainly not going to fall that much between now and then, and supplycan't increase enough to justify it either."
The notion that the banks and other financial types have perverted commodity markets isn't a new one. A United Nations report released this month concludes that multiplying financial interests have pushed up prices and increased market volatility. The recent recovery differed from previous ones, the report says, in that the prices of oil and other goods rose in anticipation of, rather than in response to, rising demand.
This speculative shift exposes the global economy to false inflation shocks and overreacting central bankers (this means you, Jean-Claude Trichet).
The U.N. concludes that at the very least, regulators must enhance transparency in the markets for goods such as grains, metals and energy. They should also, needless to say, tighten regulation of big trading firms.
As it happens, the United States last year passed a law called the Dodd-Frank Act that aims to do these sorts of things, at least to some degree. But Americans like nothing better than stuff that is bad for us, so congressional Republicans are pushing back -- the banks have given us so much, after all! -- and regulators are putting off making the rules stand up.
Hey, why defuse the weapons of financial mass destruction when doing so would squeeze big political contributors' bottom lines?
"We have passed a 2,100-page law that can't even be enforced because no one can agree on how to do it," says Simons. "People are going to look at this and say, here's the gang that can't shoot straight."
The gang that may be able to shoot straight but chooses not to is the banks, which have spent the past year calling for big spikes and steep selloffs, often in the same breath. If you didn't know any better you might think this is the work of guys intent on goosing trading revenue at the expense of all else.
As always, the unshining example of this is Goldman Sachs (GS), whose commodities researchers have been freely revising their take on oil price trends much the way Sen. John Kerry used to change his vote on Iraq.
Goldman was telling clients to buy oil futures last fall as the Fed-fueled rally in riskier assets started. It then warned in April that the rally was overdone – before changing again in May with a call for a new spike.
This spin-like-a-top routine is particularly notable because Goldman is the E.F. Hutton of Wall Street oil desks. It can say practically anything and people will listen.
"It's just irresponsible to know you have that sort of influence and go throwing it around that way," says Dan Dicker, a longtime oil trader whose recent book, Oil's Endless Bid, shows how financial firms have changed the energy markets, and not for the better.
Dicker says the Pavlov's dog reaction to Goldman's many oil calls illustrates a concept that plays prominently in the U.N. report – the "intentional herding" that takes place when traders latch onto a new price trend. The herding tends to unmoor prices from fundamentals, giving producers and consumers false signals and distorting investment decisions. That means gains for traders who get in early enough -- at the expense of the rest of the economy. Your tax dollars at work.
This results in, among other things, gasoline at $3.80 a gallon at a time when "there is no good economic reason for the oil price to be as high as it is," Dicker says.
That arrangement is undeniably bad for you and me. But you could swear that what Congress cares about is what's good for the Goldman Sachs energy desk, and until we see oil at $180 a barrel or something who's going to argue?
"I don't see the political will to turn the tide on this," says Dicker. "The forces making money doing this are a lot stronger than the people trying to contain it."

Kansas City Chiefs lose Matt Cassel to leg injury


Chiefs quarterback Matt Cassel grabs his left leg after he was sacked in the first quarter Saturday. (Dilip Vishwanat / Getty Images / August 29, 2009)


Matt Hasselbeck threw for 216 yards and two touchdowns with newly signed Edgerrin James watching on the sideline, leading the Seattle Seahawks to a 14-10 win over the Kansas City Chiefs on Saturday night in Kansas City, Mo., in a game in which the Chiefs lost quarterback Matt Cassel to a leg injury.

James, the NFL's active rushing leader, signed with Seattle on Tuesday but spent the game in sweats, pen and notepad in hand.



Hasselbeck put on a good show for his new teammate, leading the Seahawks on scoring drives to end the first half and open the second.

Kansas City had a woeful night on offense -- its only touchdown came on defense -- and lost two starters in the game's first three minutes: Cassel and cornerback Brandon Flowers (shoulder). Receiver Devard Darling also had to be helped off in the second quarter, favoring his left leg.

New York Jets 27, at New York Giants 25: Mark Sanchez, in his first game since being named the Jets' starting quarterback, completed a spectacular 31-yard touchdown pass play to Chansi Stuckey and put 20 points on the board in 2 1/2 quarters as the Jets took the annual New York braggin' rights game in East Rutherford, N.J. Sanchez overcame a slow start and a little early pressure to complete 13 of 20 for 149 yards for the Jets, who gave Rex Ryan his first victory as a head coach.

New Orleans 45, at Oakland 7: Drew Brees completed 14 of 17 passes for 179 yards and drove the Saints to touchdowns on all three drives he played.

San Francisco 20, at Dallas 13: Dallas rode Felix Jones and Marion Barber for most of a 94-yard touchdown drive, the highlight series during the first-half battle between the first-team units in a preseason game against the San Francisco 49ers.

at Pittsburgh 17, Buffalo 0: Ben Roethlisberger played a nearly flawless first half in his first game since injuring his right foot, James Farrior had a 22-yard interception for a touchdown and the Bills starting offense struggled yet again. Roethlisberger led two scoring drives while going 15 of 19 for 168 yards and 103.5 passer rating before sitting out the second half.

at Cleveland 23, Tennessee 17: Brady Quinn threw a 20-yard touchdown pass to Braylon Edwards and outplayed Derek Anderson in perhaps their final auditions for Coach Eric Mangini to be the Browns' starting quarterback.

at Detroit 18, Indianapolis 17: Third-string quarterback Drew Stanton threw a 21-yard pass to rookie Dan Gronkowski and a two-point conversion to John Standeford with 4:13 left to win it for the Lions.

at Atlanta 27, San Diego 24:

The Chargers' Philip Rivers led touchdown drip Rivers led touchdown drives in two of his three possessions in his first game since signing a contract extension, before the Falcons' backups rallied.

Baltimore 17, at Carolina 13: Joe Flacco threw for 247 yards and a touchdown and the Ravens' defense shut down Carolina's first unit.

Elsewhere

Byron Leftwich has won Tampa Bay's prolonged quarterback derby by beating out Luke McCown. Leftwich will start the team's regular-season opener against the Dallas Cowboys.

Buccaneers Coach Raheem Morris announced the selection after practice Saturday, saying Leftwich had an edge over McCown heading into training camp.

New England Patriots Coach Bill Belichick said Tom Brady left Friday night's exhibition game so the coaches could look at the backup -- not because of injury.

The team had announced at the game that Brady had a sore right shoulder.

Dollar and euro face summer of uncertainty


June 15, 2011: 2:12 PM ET
dollar and euroClick chart for more currencies data.
NEW YORK (CNNMoney) -- The euro sank to its lowest level against the dollar this month, as Greek protestors gathered in Athens and some hurled petrol bombs at the Ministry of Finance.
The unrest, and news that European governments had failed to agree on a bailout, pushed the euro to as low as $1.419 against the dollar in early trading Wednesday. Europe's currency had been trading as high as $1.47 against the dollar earlier this month.
But don't get too excited about a sustained rebound for the dollar. While the greenback did show signs of life Wednesday, it remains at very weak levels compared to currencies not called the euro.
The dollar index, which measures the U.S. dollar against a basket of currencies, has fallen 5% so far this year to around 75. That's down from a high near 87 in June of 2009.

Dollar rebounds. Thanks, Greece!

Among the factors driving the dollar's malaise at the moment is this summer's blockbuster debate over the debt ceiling, and concerns over the strength of the nation's economic recovery.
Michael Woolfolk, a senior currency strategist at Bank of New York Mellon (BNY), said currency markets on both sides of the Atlantic will be "volatile" this summer as long as Greece's financial crisis and the U.S. debt limit remain unresolved.

Last call for flight to safety

The uncertainty over the dual debt crises is driving investors to seek out the Swiss franc, a super safe-haven currency, and commodity-linked currencies like the Australian dollar, Woolfolk said.
All that uncertainty, and the political machinations that accompany it, are going to make for a long summer, said Marc Chandler, global head of currency strategy for Brown Brothers Harriman.
"They are using brinkmanship tactics," Chandler said. "Which means you have to wait for the very last moment to get a deal, something the markets don't like."
So how long will all this drag on? Lawmakers in the U.S. have accelerated the pace of their meetings on the debt ceiling, while facing a deadline of Aug. 2.
The arrival of a Greek bailout is harder to predict, Chandler said, but a series of meetings between European officials scheduled for the remainder of June may yield results. To top of page

Premier League round-up


Chelsea and Tottenham both maintained their 100 per cent starts to the new season on an afternoon when Liverpool came from behind to beat Bolton.


Champions Manchester United also hit back in the evening game to defeat Arsenal 2-1 at Old Trafford.

The Gunners controlled much of the first half and took the lead through an excellent long-range strike from Andrey Arshavin five minutes before the interval.



United improved in the second period and Wayne Rooney equalised from the penalty spot in the 59th minute after being brought down by Manuel Almunia.

Abou Diaby then headed a Ryan Giggs free-kick into his own net five minutes later to put United ahead, while the game ended with Arsenal boss Arsene Wenger being sent off.

Chelsea were highly impressive as they chalked up a fourth successive league win via a 3-0 defeat of Burnley.

The Clarets will rue Martin Paterson's profligacy in front of goal with the scoreline blank, as once Nicolas Anelka broke the deadlock on the stroke of half-time there was no way back.

Michael Ballack stooped to double Chelsea's lead after the break before Ashley Cole's stunning angled drive capped another imperious display from Carlo Ancelotti's side.

Tottenham left it late at White Hart Lane as Aaron Lennon's last minute strike against Birmingham City secured a 2-1 victory.

Worryingly for Harry Redknapp, Ledley King and Luka Modric hobbled off injured before the latter's replacement, Peter Crouch, scored his first Spurs goal with a looping second-half header.

Lee Bowyer restored parity via the scruffiest of efforts as Christian Benitez appeared to push Alan Hutton in the build-up to the goal, much to the ire of Redknapp, and the delight of a travelling Blues faithful.

It was, though, Spurs who had the last laugh as Lennon's impressive drive won it at the death.

Rafa Benitez has experienced better weeks in his football career and he'll be thankful for Steven Gerrard after his captain scored a thumping winner as Liverpool won 3-2 at ten-man Bolton.

Following Monday night's defeat to Aston Villa, things got a whole lot worse for Liverpool just past the half-hour mark when Bolton striker Kevin Davies stabbed home after a scramble in the box.

Davies' opener had come against the run of play so it came as little surprise when the in-form Glen Johnson restored parity before half-time when he cut inside on the edge of Bolton's box, before firing a daisy cutter beyond Jussi Jaaskelainen.

It was, though, a frailty at the heart of Liverpool's defence that was exposed again after half-time as Davies' flick header from a set-piece fell invitingly for Tamir Cohen to ram home.

Sean Davis saw red for two bookable offences before Gerrard struck the bar and Fernando Torres levelled matters with a neat finish. The scene was set fonish. The scene was set for Gerrard to emerge as a hero and he did just that with seven minutes remaining, via a searing drive from range.

Hull City and Wolves both went for three points in a bright game at Molineux but had to settle for one apiece after a 1-1 draw.

Stephen Hunt continued an encouraging start to his Hull career as his powerful run and cross from the left was headed in by Geovanni past Wolves goalkeeper Wayne Hennessey.

Wolves struck back early in the second half when a free-kick from deep fell to Richard Stearman, who finished with aplomb for a centre-half.

Dave Kitson followed up his first ever Stoke goal in midweek, in the Carling Cup, with a debut league strike as his first-half effort was enough to give the Potters a 1-0 win at home to Sunderland following a scramble in the box.

Blackburn's game with West Ham at Ewood Park ended in a disappointing stalemate as neither club did enough to take the spoils.

The 7 Irrefutable Rules Of Small Business Growth - Wiley



Throughout much of the 1980s and 1990s, I was president of three different fast-growth businesses. In each case, these businesses went from pretty small to considerably bigger (but still pretty small in the grand scheme of things). The biggest one reached more than $12 million in revenue and 100 employees, and all three went through significant growth phases.
At a relatively early age, I did learn a few things about what it takes to grow a small business.
I also learned that I liked talking about small business growth more than I liked actually doing it. I come from a long line of teachers and orators, and eventually the pull of that familial persuader gene proved more than I could resist. I decided in early 1998 (along with my inexplicably understanding spouse) to pursue a full-time career as an independent consultant and speaker, specializing in the area of business growth for the privately held business. So far, so good.
Soon after, people began to hire me. In almost every case, they hired me based on my experience growing smaller businesses into bigger ones. That’s what gave me credibility in their eyes.Whether it was as a speaker or a consultant, it was my past success that got their attention. I have now spoken directly with literally tens of thousands of owners and managers of private enterprises. To this day, people still usually hire me based on my real-world experience.

But here’s an interesting thing. As I said before, I did learn a few things about growing businesses while I was doing it.However, I’ve learnedmuch,muchmore about the concept of business growth since becoming a consultant, speaker, and“expert” in the field.What I’ve learned, combined with my experience growing small companies, is really what I bring to the table.
For years, I’ve immersed myself in the study of business growth.Who does it?Why do they do it?Why does this owner make it work and not that one? What do the academicians say on the subject? Successful entrepreneurs? Other selfproclaimed experts? The media? It’s a fascinating subject and one in which your sources of information are never exhausted.
So what have I learned? For one thing, I’ve learned that back when I thought I knew everything I could on the subject of growth, I actually knew very little. I’ve also learned that the more I know about my chosen field, the less definitive I can be. In other words, the more I see and hear and experience what it takes to grow a privately held business, the less able I am to make sweeping pronouncements and general statements of truth.
For every small business study that points in a specific direction, there’s invariably another that points in exactly the opposite direction. I can get consensus from one group of business owners on one idea, only to be shot down as irrelevant by the next. Even some of my own nuggets of wisdom, slowly unearthed during my many years of digging in the trenches, have proven to be nothing more than fool’s gold. But I have found a few concepts that seem to resonate with people in the know—people who have witnessed sustained, profitable growth. Through years of dedicated effort (aka trial and error), I’ve managed to hone in on a few big ideas that seem to make sense—ideas with which people I respect appear to agree. How do I know they agree? It has more to do with what they don’t say than what they do. On the whole, company leaders who’ve had even a modest amount of success become starkraving “experts.” (Believe me, as a former company president, I know.) They are never shy about shooting down anyone or anything that espouses ideas that are contrary to their own experience.
(Believe me, as a speaker and consultant, I know.) These seven rules of small business growth that I include in this book are not rules because anyone in particular agrees with them. Instead, it’s because I can’t find any credible individuals inclined to disagree with them. To me, that is exactly what makes them so gosh-darn ir-re-fu-ta-ble. It’s not that they’re scientifically proven. It’s that no one wants to disprove them, because almost everyone already agrees with them. Does that make sense? You’ll find that I like to make use of analogies, so here goes the first of many. Everyone seems to agree that a rose is beautiful. The notion that a rose is beautiful is irrefutable, despite the fact that it would be impossible to prove. Sure, I guess we could conduct some type of poll about attitudes toward rose beauty by various demographic groups, culminating in a statistical proof of general rose beauty across the human race. No one does this, though, because it’s silly. A rose is beautiful, and everyone knows it.
The rules I present here are important, and everyone “in the know” knows it. They are irrefutable.

Britain’s Second-Quarter Economic Growth Probably Eased to 0.2%

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By Fergal O’Brien and Mark Evans

July 23 (Bloomberg) -- Britain’s second-quarter economic growth probably slowed as weak consumer spending continued to restrain the recovery, economists said.

Gross domestic product rose 0.2 percent compared with a 0.5 percent increase in the first quarter, according to the median of 32 forecasts in a Bloomberg News survey. The Office for National Statistics will publish the data at 9:30 a.m. on July 26 in London.

Output was hit in the second quarter by supply disruptions stemming from the earthquake in Japan, while plants shut down and workers booked vacations to take advantage of consecutive four-day weekends in April to mark Easter and the royal wedding. Bank of England policy makers left their benchmark interest rate at a record low this month and warned that the current economic weakness may persist “for longer than previously thought.”

“The economy is likely to have eked out marginal growth at best in the second quarter, and there is a very real danger that it could have contracted modestly,” said Howard Archer, an economist at IHS Global Insight in London, who forecasts 0.1 percent growth. “Activity clearly took a significant hit in April from the extra public holiday, but the softness of the economy runs deeper than this.”

Manufacturing growth slowed in June, while expansion among services companies remained “below trend,” Markit Economics Ltd. said in reports this month. Consumer confidence fell as Britons grew more pessimistic about the outlook for the economy, Nationwide Building Society said on July 21.

Demand is being hit by government spending cuts while high inflation is eroding household incomes at the fastest pace since the 1970s. The economy has effectively stagnated since September, with the first quarter’s growth leaving the level of GDP no higher than it was in the third quarter of last year.

Four of the economists surveyed forecast a contraction in the second quarter, with Hetal Mehta at Daiwa Capital Markets Europe Ltd. projecting a 0.3 percent drop in GDP. At the other end of the range is Azad Zangana at Schroders Plc, with a forecast for growth of 0.4 percent.

--Editors: Andrew Atkinson, Eddie Buckle

To contact the reporters on this story: Fergal O’Brien in London at fobrien@bloomberg.net; Mark Evans in London at mevans8@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net

Management Tips from an 80-Year-Old Badass


Florida Marlins skipper Jack McKeon may not Twitter, but so what? This octogenarian knows his baseball and runs a tight ship

By Joel Stein
Illustration by John Ueland; McKeon: Otto Greule Jr/Getty Images; Field: Nick Laham/Getty Images

Not wearing a hearing aid is one of the many tricks Jack McKeon has learned during his six decades in baseball. “I used to be a very strong disciplinarian,” says McKeon, sitting in the Oakland Coliseum one recent afternoon as his players take batting practice. “Then I decided to back off a little bit. I don’t use the hearing aids because I don’t want to see a lot of things, and I don’t want to hear a lot of things.”

It may be too late for that. McKeon took over the last-place Florida Marlins on June 20, the day after then-manager Edwin Rodríguez quit. While Rodríguez wanted the Marlins to offer him a long-term contract, McKeon didn’t exactly need one. The 80-year-old’s appointment is almost without precedent in pro sports. In 2003 the Marlins hired a 72-year-old to take over a club filled with young, inexperienced players. That year, McKeon’s Marlins beat the New York Yankees in the World Series. Still, hiring a bona fide octogenarian is even harder to believe. The odds of McKeon winning the World Series this year (1 in 75, according to Vegas.com) are longer than the odds of him dying this year (1 in 15.5, according to Social Security’s actuarial tables).

While there are at least a dozen chief executive officers even older than McKeon—Hong Kong-based Run Run Shaw is, somewhat inexplicably, both a media mogul and 103 years old—none of them is running an outfit of men largely in their early 20s. Yet this management challenge doesn’t faze McKeon. “I got nine grandchildren, I’m in tune with what’s going on,” he says. “Maybe I’m not about to put my personal stuff on Facebook and all that crap, like the video stuff, whatever the hell they call it,” he explains, moving his thumbs as if he’s using a video-game console.

He doesn’t follow his players on Twitter, either. Marlins right fielder Logan Morrison recently posted, “McKeon asked me what I had going on tonite. Told him I was going home 2 play w/ Twitter. He replied ‘oh, what kind of dog is it?’ ” When I ask McKeon if he wants me to show him what his players are tweeting, he says: “No. I don’t care what they say. What do they say?” Then I show him Morrison’s tweets about his recent visit to Twitter headquarters, and McKeon makes a grumpy face. “I just want them to concentrate on baseball 100 percent once they enter that clubhouse. If he goes down to the minor leagues, he ain’t going to have any Twitter friends.”

Although affable, McKeon is known as a tough manager. During his first game this season, he benched his best player, shortstop Hanley Ramirez, for tardiness. He also pulled pitcher Randy Choate in the middle of a count. (“I’ve never had that happen before,” says Choate. “It worked.”) When he told his players they couldn’t hang out in the clubhouse during games, they knew he was serious; in 2003, McKeon locked the clubhouse doors and required players to hand him bathroom passes when they couldn’t hold it in any longer. He may be the only 80-year-old man who is willing and able to go three hours without peeing.

It’s taken McKeon decades to hone this management approach. “When you first start managing, you want the players to like you—so you let a lot of things slide,” he says. “You feel like these are veteran players and you need them on your side to help you.” However, McKeon eventually came to realize that “it doesn’t work that way. So when I come in, I try to establish me.” He’s learned that the best way to get personnel to buy into his detail-oriented program is by loosening them up—and playing to his own strengths. These days, one of McKeon’s signature bits is to call his players by the wrong name. When I ask him if this is really a bit, or if he actually has trouble telling Gaby Sanchez apart from Anibal Sanchez, he pauses and thinks. “They think, ‘He’s old. He forgot my name.’ So, s–t, I just go along with it.”

New York to Open Gay-Marriage Era as Lottery Winners Celebrate



By Esmé E. Deprez

July 22 (Bloomberg) -- Two grooms and two brides now adorn mugs, rubber duckies and snow globes in the souvenir shop of the City Clerk’s office in Manhattan as New York state prepares to allow same-sex couples to marry.

The city received 823 lottery entries from couples for 764 spots available for marriage at clerks’ offices July 24, said Marc LaVorgna, a spokesman for Mayor Michael Bloomberg. To accommodate all of the couples who applied, the city increased the number of slots in Manhattan to 459 from 400, he said.

Jo-Ann Shain and Mary Jo Kennedy of Brooklyn, who have been together 29 years, entered the 48-hour lottery after it was announced on July 19.

“At first we thought maybe it will be crazy, that it’ll be a zoo,” Shain, a 58-year old freelance medical editor, said in a telephone interview. “Then it occurred to us that we’ve waited so long, have fought so hard, it would be crazy not to be there on such a historic day.”

Shain said the couple plans to be married by a friend, who is a judge, outside the Manhattan clerk’s office as their 22- year old daughter, Aliya, looks on.


With 19.4 million residents, New York is the sixth and most populous U.S. state to grant same-sex couples the right to wed, a move championed by Governor Andrew Cuomo and approved by the Legislature in Albany on June 24, the last day of its session. The victory for gay-rights advocates, which made headlines around the world, more than doubled the number of Americans free to marry either gender to 35 million.

Record Day

The couples to be wed July 24 will mark the city’s most in one day, Bloomberg said this week. The previous record was set on Valentine’s Day in 2003, when 621 couples tied the knot.

As of yesterday, 3,145 couples had preregistered for marriage licenses, said Mark Botnick, a spokesman for the mayor. Of that, about 2,200 are estimated to be same-sex couples, he said.

Clerks’ offices in all five boroughs, which are normally closed on Sunday, will open from 8:30 a.m. to 4:30 p.m. at an additional estimated cost of $70,000, Botnick said. About 60 judges have volunteered to perform ceremonies, he said. The offices will remain open for two extra hours next week to handle the expected flood.

Three-Step Process

The Albany clerk’s office will provide licenses beginning at 12:01 a.m. on Sunday to 10 couples, according to the Empire State Pride Agenda. Clerks in Binghamton, Brighton, Brookhaven, Buffalo, Greenburgh, Ithaca, Niagara, North Hempstead, Oneonta, Rochester, Syracuse and Woodstock will also hold Sunday office hours, the Manhattan-based gay advocacy organization said.

All couples -- gay or straight -- face a three-step process to get married. They must obtain from a clerk a $35 marriage license, for which they can apply online or on site. Judges will be on hand to grant judicial waivers eliminating the state’s 24- hour waiting period. Couples may then have a clerk perform a civil marriage for $25 or hold a religious ceremony at another location.

Same-sex marriages in New York will be recognized in Connecticut, Iowa, Massachusetts, New Hampshire, Vermont and Washington, D.C., where the practice is legal, as well as in Maryland and Rhode Island, according to the mayor’s office.

Debate began at a U.S. Senate Judiciary Committee meeting on July 20 on the proposed Respect for Marriage Act, which would let the federal government extend benefits such as Social Security and health-insurance coverage to same-sex married couples. It would end the 1996 Defense of Marriage Act, which bans recognition of those unions. The proposal wouldn’t require states to legalize same-sex marriages.

Rabbi to Preside

Rabbi Sharon Kleinbaum of the Congregation Beth Simchat Torah in Manhattan’s Greenwich Village will marry people outside the Manhattan clerk’s office starting at 8:30 a.m. July 24. About 80 couples have signed up, with the final count depending on how many win the lottery, said Gabriel Blau, a congregation spokesman.

When Kleinbaum went to lobby for the marriage law’s passage in Albany, people pushed her and spat at her and said, “You are not a Jew,” Blau said.

Bloomberg plans to perform a marriage for John Feinblatt, his chief policy adviser, and Jonathan Mintz, the city’s commissioner for consumer affairs, at Gracie Mansion on July 24. The couple is the sole exception to the lottery.

The mayor is the founder and majority owner of Bloomberg News parent company Bloomberg LP.

--With assistance from Sarah Frier in New York and Victoria Pelham in Washington. Editors: Mark Schoifet, Stephen Merelman

To contact the reporter on this story: Esmé E. Deprez in New York at edeprez@bloomberg.net

To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net


AT&T customers try to block merger with T-Mobile


Talk about a David and Goliath story. The New York-based law firm of Bursor & Fisher is working with some AT&T customers in the hopes of blocking AT&T's proposed $39 billion acquisition of T-Mobile.
AT&T to buy T-Mobile

The firm is working on behalf of a small group of AT&T customers to demand arbitration from the company, which is the second largest wireless phone company in the U.S. and one of the biggest political contributors in the country. In its arbitration filings, Bursor & Fisher alleges that the deal between AT&T and T-Mobile would violate the Clayton Antitrust Act and harm competition in the wireless market. The firm has already signed up 11 AT&T customers, and it's soliciting more on its Web site: FightTheMerger.com. It filed the first arbitration demand Thursday in a 236-page document.


The main argument in the arbitration request is that the merger will lead to higher prices and diminished service, which would harm consumers. The customers are asking that the merger be blocked or at the very least that certain requirements be put on the merger, such as AT&T divesting some wireless spectrum and stopping its practice of entering into exclusive contracts with handset makers.

The Department of Justice and the Federal Communications Commission are already reviewing the merger. It's expected to take the agencies a year to complete their evaluation of the merger. The Justice Department in particular will be looking at potential antitrust claims while the FCC's main obligation is to ensure that the merger will serve the public interest, since the wireless licenses that AT&T and T-Mobile hold are regulated by the FCC. The FCC said this week that it has stopped the clock on its review as it obtains additional information from AT&T.

Scott Bursor, a partner at Bursor & Fisher, said his firm expects to file hundreds of these cases. While arbitration is typically used to dispute individual complaints, such as an erroneous charge on a bill, Bursor said he thinks the process can also be used for antitrust disputes, since class-action lawsuits are not available to AT&T customers.

"The law gives private parties the opportunity to sue in antitrust cases," Bursor said. "So we are using this arbitration process to help consumers, who are barred from filing class-action suits."

In its contracts, AT&T prohibits customers from suing the company directly or as part of a class-action lawsuit. A U.S. Supreme court decision in April upheld this practice. Instead, consumers must use an arbitration process. But consumers are also prohibited from filing arbitration as a group or class and instead must file claims individually, which is why Bursor has said the company will file hundreds of these claims.

And because each arbitration request is assigned to a separate judge, each case will be evaluated independently, which in theory could increase the chances of a beneficial outcome for the customers filing the complaint.

AT&T said in a statement that the arbitration process is not intended to hear class-action cases, such as the ones Bursor plans to file.

"The claims made by the Bursor & Fisher Law Firm are completely without merit," the company's statement said. "An arbitrator has no authority to block the merger or affect the merger process in any way. Our arbitration provision allows customers to resolve their individual disputes with AT&T in a prompt and consumer-friendly manner."

Bursor's firm has worked with wireless customers in the past on class-action suits over early-termination fees. His firm also sued AT&T over mobile-handset exclusivity. Michael Aschenbrener of Aschenbrener Law in Chicago, who has also brought class-action suits against wireless companies in the past, said that using the arbitration process to air antitrust complaints is unusual. So it's difficult to say if it will be effective. But he said at the very least it might get these consumers' concerns heard.

"Arbitration is a new approach in this context but necessary in light of recent anticonsumer Supreme Court precedent," he said. "Whether these consumers will be successful remains to be seen, but this demonstrates that consumers want to be heard and will be heard--no matter how much the courts and big businesses try to silence them."

These AT&T consumers involved in the arbitration are not the only ones opposed to AT&T's plan to buy T-Mobile. Sprint Nextel has also expressed its opposition. And this week, Senator Herb Kohl, who heads up a subcommittee on antitrust matters, asked regulators to block the deal.

Some states are also taking a closer look at the merger. California's Public Utility Commission is examining it. New York Attorney General Eric Schneiderman announced in March that his office would "undertake a thorough review of AT&T's acquisition of T-Mobile" and analyze the merger for "potential anticompetitive effects on consumers and businesses."

Meanwhile, AT&T has also garnered support from a number of groups. There are already governors in 26 states that have signed on to support the merger. And 76 members of Congress have also expressed their support for the merger.

AT&T said earlier this week during its earnings call that it is confident it will get the approval for the merger. And the company said it expects the deal to close in the first quarter of next year.

DOJ takes swipe at EFF over encryption passphrases


The U.S. Department of Justice took a thinly veiled swipe at an online civil liberties group that's arguing a Colorado woman can't be forced to decrypt her laptop for police inspection.

In a legal brief filed yesterday in what is likely to be a precedent-setting case, the Justice Department claimed that the Electronic Frontier Foundation had previously agreed that being forced to type in your passphrase was legal and did not violate Americans' rights to self-incrimination.

Prosecutors are hoping to convince a federal judge to order Ramona Fricosu, accused of running a mortgage scam, to decrypt an encrypted laptop that police found in her bedroom during a raid of her home. Fricosu has been charged with bank fraud, wire fraud, and money laundering as part of an alleged attempt to use falsified court documents to illegally gain title to homes near Colorado Springs.
EFF staff attorney Hanni Fakhoury

EFF staff attorney Hanni Fakhoury
(Credit: EFF)

EFF's Know Your Rights guide, prosecutors said, warns the public that "a grand jury or judge may still order you to disclose your data in an unencrypted format under certain circumstances."

The upshot, they said, is that "EFF's 'Know Your Rights' publication correctly states that a judge may properly order the production of unencrypted data consistent with the Fifth Amendment." (The Fifth Amendment broadly protects Americans' right to remain silent--see CNET's Q&A with defense attorney Phil Dubois.)

EFF staff attorney Hanni Fakhoury, a former public defender in San Diego, wrote the guide. Fakhoury told CNET today that the Justice Department isn't exactly describing his work fairly:

    This (the guide) is simply stating the obvious: whether the Fifth Amendment privilege against self-incrimination applies is fact-dependent. EFF believes that under the facts presented in the Fricosu case, the privilege applies and prevents the government's attempt to force Ms. Fricosu to decrypt the laptop. Under a different set of facts, the outcome might be different; something that's true in most areas of the law.

    This is obviously a situation in which the government is trying to do something it has rarely tried to do before, so the courts are just starting to consider it. That is why EFF got involved in the first place, to assist the court by providing it with what we think the law should be. I'm flattered the government believes the guide I wrote is legal precedent, and I look forward to the day when that's actually the case.

The Justice Department also argues that Fricosu's Fifth Amendment rights are effectively nullified because the government obtained the laptop through a search warrant, not a grand jury subpoena.

"Evidence obtained through search warrants does not implicate the self-incrimination clause because search warrants do not compel individuals to make statements..." prosecutors said. "The applied-for order would use as the source of evidence only material seized with a warrant; it would not make use of any compelled statements."

Prosecutors have stressed that they don't actually require the passphrase itself, meaning Fricosu would be permitted to type it in and unlock the files without anyone looking over her shoulder. They say they're not demanding "the password to the drive, either orally or in written form," and that they know the laptop is hers because of a legally intercepted phone call she made to someone in prison.

Competing legal analogies: What's a PGP passphrase like?
The question of whether criminal defendants can be legally compelled to cough up their encryption passphrase remains an unsettled one, with law review articles for at least the last 15 years arguing the merits of either side of the issue. A U.S. Justice Department attorney wrote an article in 1996, for instance, titled "Compelled Production of Plaintext and Keys."

Much of the debate has been over which of two analogies comes closest to the truth. Prosecutors tend to view PGP passphrases as akin to someone possessing a key to a safe filled with incriminating documents. That person can, in general, be legally compelled to hand over the key. Other examples include the U.S. Supreme Court saying that defendants can be forced to provide fingerprints, blood samples, or voice recordings.

On the other side are civil libertarians citing other Supreme Court cases that conclude Americans can't be forced to give "compelled testimonial communications" and extending the legal shield of the Fifth Amendment to encryption passphrases. Courts already have ruled that such protection extends to the contents of a defendant's minds, so why shouldn't a passphrase be shielded as well?

While the U.S. Supreme Court has not confronted the topic, a handful of lower courts have.

In March 2010, a federal judge in Michigan ruled that Thomas Kirschner, facing charges of receiving child pornography, would not have to give up his password. That's "protecting his invocation of his Fifth Amendment privilege against compelled self-incrimination," the court ruled (PDF).

A year earlier, a Vermont federal judge concluded that Sebastien Boucher, who a border guard claims had child porn on his Alienware laptop, did not have a Fifth Amendment right to keep the files encrypted.

Update 3:15 p.m. PT: I've heard back from Phil Dubois, Fricosu's criminal defense attorney. Dubois' position remains, he said in an e-mail message:

    That to force my client (assuming that she has the ability) to decrypt the hard drive would be an unreasonable and therefore unconstitutional search and so a Fourth Amendment violation; and

    That to force her to decrypt the drive would not be the same as compelling her to surrender the key to a safe, the new technology making that analogy inapposite, but would instead be compelling her to use the content of her mind to perform an affirmative act to assist the government to prosecute her, which raises the Fifth Amendment problem.

Microsoft sued over Kinect for patent infringement


A Bay Village, Ohio, company has sued Microsoft for allegedly infringing on its patents with the rapidly selling Kinect motion-sensing video game controller.

Microsoft's Kinect for Xbox 360
(Credit: CNET)

Impulse Technology filed the suit in federal court in Delaware, accusing Microsoft and several game makers--including Electronic Arts, Ubisoft, and THQ--of violating patents related to, among other things, tracking and assessing movement skills in multidimensional space. The suit was filed on July 1, but was only recently written about by the Web site Law360.

Impulse claims that the Kinect violates seven patents, issued from 2001 to last year. In its suit, the company said it notified Microsoft in March about the patents. The suit does not mention if Microsoft replied to the notification. And Impulse's attorney did not return a call.

Microsoft declined to address the specific charges, but said it works hard to make sure its products don't violate patent holders' rights.

"While we can't comment about this specific case, Microsoft invests heavily in protecting our intellectual property rights and has hundreds of pending and issued patents covering Kinect," Kevin Kutz, director of public affairs at Microsoft, said in a statement.

Clearwire ditches plans to produce phones, satisfied Sony Ericsson drops logo lawsuit




We thought Clearwire might have had a chance at legal victory against Sony Ericsson, but the wireless carrier has apparently dropped out of the ring. Clearwire told a federal court it no longer plans to produce a smartphone
-- which basically nullified Sony Ericsson's worry that upcoming Clearwire handsets would oh-so-similar swirling orb logo. As a result, Sony Ericsson's reporting today that it's dropped the trademark infringement lawsuit, which sounds good for all involved, except it leaves Clearwire not producing much of anything now.

Sunday, March 25, 2012

No “Hollywood victory moments” in the budget fight

Boehner didn’t cave on the budget deal this weekend, as some feared he would. The prior fears were not by any means inexplicable. Republicans in Washington are speaking mildly rather than trenchantly, and taking slings and arrows from the chattering class. There’s no Terminator-type trash talk coming from them. All the movement and fury seems to be on the Democrats’ side.


And that makes sense, because it’s the Democrats who occupy indefensible ground. Essentially, their position is that if Republicans won’t agree to raising the debt ceiling and raising taxes, the president will use his discretion to default on US government debt after 2 August. They don’t put it that way, of course, but that’s the reality. If Obama defaults on government debt, it will be because he decided to, not because he had to. He could be impeached for making such a decision.

The money will be there to meet out debt obligations; it just won’t be there to do that and continue to pay for all the other activities of the government. Obama could, equally, decide to cut expenditures in wildly unpopular ways like shorting Medicare reimbursements or leaving the troops without their pay, but Democrats in Congress wouldn’t let him get away with that either, any more than Republicans would. The real option after 2 August is to cut expenditures on other operations of the government, including the programs and subsidies that the Obama administration considers its highest priorities.

All of which is why it’s the Democrats who are most alarmed about having to face the choices after 2 August. The GOP position is not a precarious one. It’s a strong and meaningful position, and that’s why Obama and the Democrats are mounting a sustained assault, using every trick in the book to get the GOP to give up the ground it has staked out. Advertently or not, the Republicans have acted according to the strategic maxim of Bismarck’s military genius, Von Moltke the Elder:

A clever military leader will succeed in many cases in choosing defensive positions of such an offensive nature from the strategic point of view that the enemy is compelled to attack us in them.
Why doesn’t the GOP position look more tough and inspiring? For one thing, because our imaginations have been so conditioned to Hollywood productions and the 120-minute movie package that we think victories have to be signaled by the devices of video storytelling, or they aren’t victories.

But in real life, it rarely happens that way. Think back to January and the endless, annoying Cirque du Wisconsin with the runaway Democrats hiding out across the state line in the EconoLodge or wherever it was. There was no Hollywood victory at the end of that sorry episode. Eventually the Democrats just straggled back. On balance, the Wisconsin Republicans have been winning the peace.

But they looked, throughout the pitched confrontation, like a herd of deer caught in the headlights: bemused, a little shell-shocked, a little quizzical. A lot of conservatives wrote them off because they were just a bunch of modern legislator schmoes, doing modern legislature stuff. But while the Democrats and unions are still fighting a vociferous rearguard action, and it ain’t over yet, the momentum has clearly turned to the Republicans’ side.

Consider James Pethokoukis’ reference to Reagan and Reykjavik in 1986 (cited by Ed). Mikhail Gorbachev offered to raise the Reagan ante on strategic arms cuts, the best counteroffer ever presented by a Soviet leader, but Reagan turned it down because Gorbachev’s condition was that Reagan abandon the Strategic Defense Initiative.

This certainly didn’t resonate as a victory at the time. We don’t remember it today, but the Western media proclaimed an atmosphere of civilizational doom after the Reykjavik summit. You couldn’t swing a dead cat without hitting an editorial containing the phrase “snatching defeat from the jaws of victory.” Even many of Reagan’s staunchest supporters wondered if the old man had finally gone round the bend. Reagan was defending territory he had staked out – territory so alarming to the Soviets that it drove them to act, maneuver, change their approach, move off of their position – and to the observers of the time, that looked like disaster.

What we do remember today, however, is that it was Reagan who got what he wanted in the end.

In politics, victory often comes on little cat feet. I won’t be surprised if the way a GOP budget victory looks to the public is a lot like how it looks in Wisconsin today. An interim solution rather than a grand bargain; a sense of tension maintained rather than the catharsis of a satisfying conclusion.

There will be work left to do, but a shift of momentum. An MSM counter-narrative will be retailed relentlessly, on the water-torture principle. Paroxysms of caterwauling will persist from the Democrats and their constituencies. From the GOP, no glory, no stirring speeches, no one-liners. No string crescendo, no pulsating beat. Nothing but a bunch of Republicans looking weary and dithery, like they just stumbled in from a windstorm – but haven’t forgotten what they went out into it for.

J.E. Dyer’s articles have appeared at The Green Room, Commentary’s “contentions,” Patheos, The Weekly Standard online, and her own blog, The Optimistic Conservative.

Video: Talking class warfare, Casey Anthony, and MN shutdown on Tom Sullivan Show

Earlier this week, I taped an appearance on the Tom Sullivan Show, which aired for the first time yesterday on Fox Business Channel. Tom put together a good panel, with Lauren Simonetti from Fox Business and economist Lindsey Piegza.
We went through two rather similar topics in the Minnesota shutdown, which comes at the end, and the ramped up class-warfare rhetoric coming out of the White House of late. We also debated whether cameras in courtrooms have become a problem in trials like the one involving Casey Anthony or whether the media is the problem:

I was happy to set the record straight on the Minnesota shutdown, but I missed the opportunity to rebut Lauren on the Canterbury issue. Yes, the lack of state inspections has hampered business at the race track, but that hardly impacts most Minnesotans. The bigger impact is certainly with people who regularly access state services. I wasn’t arguing that there is no impact, but that the impact has been barely noticeable for most Minnesotans. People here are annoyed by the inability of the government to resolve the issue, but the people getting most hurt are the state workers who support Dayton and suddenly don’t have any income. As more of the details emerge from this standoff, the worse it will look for Dayton, who deliberately waited until the session ended to veto the budget bills the GOP produced six weeks earlier — six weeks in which Dayton refused to negotiate on the bills separately so that state government could keep operating.

By the way, I mention that I’d been to a baseball game the day before, which is one reason I may look a little stiff (or more so than usual, anyway). I forgot the sunscreen and ended up with bad sunburns on my neck and legs, which made for an interesting morning with a necktie and long pants. Thankfully, the show asked for a makeup artist that blended down my neck and face, or I might have looked like a beet. Nevertheless, I had a lot of fun with Tom, Lauren, and Lindsey, and hopefully I’ll get another chance soon to contribute.

Quotes of the day


“Sunday evening’s much anticipated deficit-reduction meeting at the White House, involving President Barack Obama and congressional leaders, concluded after negotiations that lasted about 1 1/2 hours.


“When asked before the start of Sunday’s talks if a deal could be reached within 10 days, Obama told reporters, ‘We need to.’”

***
“‘You have to have a backup plan. If you are relying on Congress to avoid the possibility of an Armageddon, you can’t just bet on that,’ said Keith Hennessey, who headed the White House National Economic Council during President George W. Bush’s administration…

“As recently as June 21, Miller told a group of sovereign debt holders in London that there is no Plan B and assured them that the debt limit would be raised before August 2.

“Publicly, Treasury has maintained there is no contingency plan. ‘Our plan is for Congress to pass the debt limit,’ Geithner said late in May. ‘Our fall-back plan is for Congress to pass the debt limit, and our fall-back plan to the fall-back plan is for Congress to pass the debt limit.’”

***
“As the White House continues negotiations with congressional leaders over a budget deal this weekend, newly elected head of the International Monetary Fund Christine Lagarde says that she ‘can’t imagine for a second’ that the United States would default on its debt obligations, saying it would be ‘a real shock’ to the global economy if no agreement is reached…

“Lagarde, who previously served as France’s finance minister, said there could be ‘real nasty consequences,’ including rising interest rates, depressed stock markets, increased unemployment, and decreased investment if a deal is not reached by the Aug. 2 deadline facing the United States.

“‘It would certainly jeopardize the stability, but not just the stability of the U.S. economy, it would jeopardize the stability at large,’ Lagarde said.”

***
“Democrats need a lot more tax revenue to make their long-term budget plans works. This is why Obama has not offered a long-term budget plan. The need for massive tax increases would then be clear to all. In private, liberal economists all talk about a need for a value-added tax to raise the additional revenue.

“But a liberal think with close ties to the White House, the Center for American Progress, recently released a budget plan that goes out to 2035. It shows taxes as a share of the economy rising dramatically to nearly 24% of GDP vs. around 18-19 percent historically. And I am guessing they would go even higher if the table went beyond 2035. If Boehner and the Republicans don’t hold the line now on taxes, this is the American future.”

***
“The details of a smaller deficit reduction deal have yet to be worked out, but the collapse of the grand bargain leaves President Obama in a more favorable political position. If both parties agree to cut $2 trillion from the budget with minor tax increases, he’ll notch a bipartisan accomplishment. But he can also say he tried something more ambitious in putting cuts to Social Security and Medicare on the table without facing the political fallout of actually slashing those programs. He went big and congressional Republicans — not to mention the noticeably silent 2012 Republican presidential candidates — didn’t. It will be Republicans who will have to justify bowing to the extreme wing of their party and walking away from a deal that included some ten times more spending cuts than revenue increases. Some things just aren’t too big to fail.”

***
“Anyone harboring any doubt over who is repsonsible for the failure of a “grand bargain” must consider Pres. Obama’s record. He avoided the debt before the election. After the election, he submitted a budget so absurd it got zero votes in a Democrat-controlled Senate. (Indeed, Senate Democrats have yet to submit a budget of any kind.) He has not moved from the positions he staked out in April. His position is not balanced, no matter how much the White House and the establishment media try to spin it as such.

“Furthermore, there should be no expectation that Obama will budge on the budget. Obama’s non-budget speech was a tacit admission that he cannot run for re-election on his record, but must demonize his opponents with class warfare and MediScare. He would be willing to entertain a GOP surrender on his terms, because he likely calculates that the liberals put off by any deal will be outnumbered by demoralized conservatives and libertarians, while he gains casual, low-information independents. Otherwise, he has already announced his intentions. He will do the only thing for which he has shown any talent: campaign. Whether he can run a negative campaign running from his record, as opposed to standing as the blank slate of Hope and Change, remains to be seen.”

***
“‘No matter the size of the cuts,’ a House GOP aide says, ‘I have major doubts that any kind of revenue raises could pass the House.’ Multiple Republican staffers suggest that Boehner faces as many, if not more, defections than the GOP did on the continuing resolution to keep the government running in April. Fifty-nine Republicans voted no on that deal; less than half of them were freshmen. Early on, Boehner called the debt-limit vote the first ‘adult moment’ for the new GOP majority, but the Tea Party’s mantra has been that the vote represents their greatest point of leverage to force the kind of draconian cuts the conservative grassroots wants. The sentiment only deepened in the wake of the April budget deal. Some, like freshman Republican Jeff Landry, are ready to risk the dire consequences of default to make a point. ‘If I don’t get exactly what I want, I’m not voting for it,’ Landry told Politico.

“Faced with the prospect of losing up to 100 members, Boehner will have to assiduously court Democrats without exposing his right flank, particularly as Cantor, his No. 2, lurks over his shoulder. Democrats are laying down their own markers, vowing not to support a deal that includes cuts to benefits in entitlement programs like Medicare and Social Security, though several have expressed a willingness to discuss these cuts separately. ‘Because of the dogmatic, know-nothing wing that is willing to discard the interest of the country…at the altar of Norquist purism,’ Connolly says, Boehner and Obama will ultimately find themselves needing a passel of Democrats to save a deal — likely more than the 81 Democrats who supported the CR in April. Connolly estimated some 100 Democrats would be required to thread the needle. ‘Triangulation isn’t going to work,’ Connolly says. ‘You need the Democratic caucus to pass this. And so does John Boehner.’

***
Via Mediaite.


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Video: Hume: The Obama DOJ reminds me of nothing so much as the Nixon Justice Department


Last week, of course, was a big week in the investigation of Operation Fast and Furious, the international gunrunning scandal that Obama administration officials still refuse to clear up. Today, Fox News senior political analyst Brit Hume characterized the ongoing scandal perfectly:



“This Obama Justice Department reminds me of nothing so much as the Nixon Justice Department,” Hume said on Fox News Sunday. “You have the scent of high-level knowledge of serious wrongdoing and you have the smell of cover-up and I think the stench of cover-up on this gun-running operation is very strong indeed.”

Hume’s commentary comes after Kenneth Melson, the acting director of the Bureau of Alcohol, Tobacco, Firearms and Explosives, last Monday gave secret and exclusive testimony to congressional investigators Rep. Darrell Issa (R-Calif.) and Sen. Charles Grassley (R-Iowa) to the effect that ATF was not the only agency involved in the scandal, taxpayer money was used to finance the gunrunning and Department of Justice officials explicitly instructed ATF officials not to respond to congressional inquiries.

Pawlenty plays it safe — but smart — on homosexuality


GOP presidential hopeful and former Minnesota Gov. Tim Pawlenty said today he’s not sure whether homosexuality is genetic or behavioral. Political Ticker reports:

“As I understand the science, there’s no current conclusion that it’s genetic,” Pawlenty said Sunday on NBC’s “Meet the Press.”

Saying he preferred to “defer to the scientists” about the issue, the former Minnesota governor said it was unclear if being gay or lesbian was a lifestyle choice.

“There’s no scientific conclusion that it’s genetic. We don’t know that. So, we don’t know to what extent it’s behavioral,” Pawlenty said. “That’s something that has been debated by scientists for a long time.”

T-Paw didn’t pass on the chance to reiterate his support for traditional marriage, however. He phrased his views positively, emphasizing that he is a proponent of marriage between one man and one woman and saying simply, “I have not supported the issues of allowing gay couples to have the same benefits in public employment as traditional couples.”

Political Ticker and other news outlets framed Pawlenty’s remarks as a “punt,” but, from where I sit, he answered the question the only way he could have. So far, science has not conclusively established homosexuality as a genetic predisposition. Given that Pawlenty presumably disapproves of gay behavior, what did he have to gain by either absolving gay couples of responsibility for that behavior or blatantly accusing them of poor choices?

Conversely, he did have something to gain by making a statement in support of traditional marriage — an institution his base likewise values and wants to see protected. (Keep in mind just 28 percent of Republicans think same-sex marriage should be legal and just 25 percent of conservatives hold that view.) Perhaps Pawlenty played it safe, but, primarily, he played it smart.

Marine to Mila Kunis: Let’s me and you hook it up at the Marine Corps Ball; Mila Kunis to Marine: Okay

I’m trying to read this guy’s mind and figure out whether he cut the video as a goof, just messing around on a slow day at war, or whether this was actually part of a brilliantly clever scheme to make it happen. Step one: Film the clip, in full bad-ass uniform,
replete with a cutesy move with the shades. Step two: E-mail it out to friends and friends of friends and wait for it to go viral. Step three: Hope that some entertainment reporter stumbles across it and asks Mila Kunis about it — on camera, preferably.

If this guy really did game it out that way, he should be planning war strategy in Afghanistan. Jackpot:
After questioning her publicist if she knew about the invitation, the clearly flattered 27-year-old actress agreed.

“I’ll go, I’ll do it for you,” she said, turning to Timberlake. “Are you going to come?”

“They don’t want me! They want you,” Timberlake responded. “You need to do it for your country.”

Kunis nodded.

“I’ll do it,” she confirmed.

So get that limo reserved, Sgt. Moore!

Alternate headline: “Marine Corps recruiting up 800 percent.” The only problem? Obviously there’ll be other guys who follow his lead and the pressure will be on for other gorgeous young starlets not to say no. C’mon, Blake Lively: You do support the troops, don’t you?

Dude, this is so alpha, it should come with a content warning for beta males. Damn.

Bachmann: Who needs executive experience if it means more big government?

Politico notes, correctly, that this is a great line directed at Romney, an “eh” line directed at Pawlenty, and a dumb line directed at Perry or Palin. There’s no obvious way out of this box: After four years of blaming the failures of Hopenchange in part on The One having never run so much as a lemonade stand, how do Republicans turn around now and take a chance on Bachmann?

Bachmann said executive experience doesn’t matter if it comes with “more of the same big government as usual.”

“This election will be about quite simply, who can lead that restructuring effort,” Bachmann said, referring to turning around the economy and working to repeal the federal health care reform law.

“Executive experience in government is one thing, but not when it comes to a promise of more of the same big government as usual,” she continued.

“Right on!” says Rick Perry, hunkered down in his office and feverishly dialing political operatives in New Hampshire. Bachmann’s other emerging problem is that the more she woos the Huckabee faction in Iowa with ostentatious displays of social conservatism, as she did last week when she signed a marriage pledge so heavy-handed that even Gingrich is shying away from it, the more she risks being pigeonholed as a “Christian candidate” a la Huck three years ago. Case in point: “Nightline” is planning to run a report tonight in which a former patient at the counseling center owned by Bachmann and her husband will claim that he was advised to pray the gay away. Won’t hurt her a bit with social cons, but if it does come down to her and, say, Romney for the nomination, his pitch to undecideds will be that the GOP can’t afford sideshows that take them off-message when they’re trying to beat Obama on the economy. Which of course is actually 90 percent of the reason to consider nominating Pawlenty. Once the general election campaign begins, blandness is very much a virtue.

Exit question: Via Ace, here’s a choice passage from Palin’s latest Facebook note. Who’s this aimed at?
As we approach 2012, there are important lessons we can learn from all of this. First, we should never entrust the White House to a far-left ideologue who has no appreciation or even understanding of the free market and limited government principles that made this country economically strong. Second, the office of the presidency is too important for on-the-job training. It requires a strong chief executive who has been entrusted with real authority in the past and has achieved a proven track record of positive measurable accomplishments. Leaders are expected to give good speeches, but leadership is so much more than oratory. Real leadership requires deeds even more than words. It means taking on the problems no one else wants to tackle. It means providing vision and guidance, inspiring people to action, bringing everyone to the table, and with a servant’s heart dedicating oneself to striking agreements that keep faith with our Constitution and with the ordinary citizens who entrusted you with power. It means bucking the status quo, fighting the corrupt powers that be, serving the common good, and leaving the country better than you found it. Most of us don’t see a lot of that real leadership in D.C., and it’s profoundly disappointing.

Pawlenty’s been pushing precisely the same message on the trail in Iowa lately. Hey Ed Rollins — any idea who Palin’s talking about here?

Snowe: No Social Security or Medicare cuts in the debt-ceiling deal

Via Think Progress, which asks a good question. If Snowe’s serious about a balanced-budget amendment, why rule out a deal on entitlements right now when there’s a tiny (emphasis on “tiny”)
bit of political momentum to make big changes to the budget? If she thinks Medicare’s too tough a nut to crack when we’re facing armageddon in three weeks, wait until millions more boomers are on the rolls and she has to deal with cuts every. single. year.

Another good question for you: Where does this leave us vis-a-vis the Lightbringer’s (alleged) proposal to raise the Medicare eligibility age from 65 to 67? That’s not a cut, strictly speaking, but the outcry will be enormous all the same. Is Snowe open to entitlement reform so long as she doesn’t have to call it a cut or is this a pure “hands off Medicare!” pander to seniors ahead of her reelection campaign next year? If it’s the latter, then any deal involving entitlements would start with just 46 votes in the Senate (assuming Collins and Scott Brown stick with the caucus, which is unlikely). How do they pick up 14 Democrats to beat the filibuster, especially when the DNC’s core campaign message next year will be, er, “hands off Medicare”?

Don’t look for members of Maine’s congressional delegation to support cuts in Social Security or Medicare as part of the debt limit legislation, but all four say a debt reduction package that includes budget cuts and new revenues is likely.

“There are solvency problems with both programs,” Sen. Olympia Snowe said in an interview on Friday, “They have to be addressed but not as part of the debt reduction talks.”

She said any debt reduction plan worked out by President Barack Obama and congressional leaders will still need the support of members of both parties and both Medicare and Social Security have strong bipartisan support…

She said she has no idea what will come out of the budget talks but she believes to get enough votes to pass it will have to have cuts in spending and additional revenue.

She wants to raise revenue by closing loopholes, not raising rates, a plan Collins agrees with. Does Collins also agree that entitlements should be off the table right now? The story doesn’t quote her to that effect but the lede sure makes it sound like it. (And it would be in keeping with her skittishness about Ryan’s Path to Prosperity.) If she’s out too, then we start with 45 votes in the Senate. And if Brown, who also opposes Ryan’s plan and is up for reelection, joins them then we’re at 44. What could go wrong?

Oh, in case you’re wondering how this afternoon’s debt-ceiling meeting went, Chuck Todd tweets, “The two sides are farther apart in debt talks than they have been for a while. Some in talks believe this is going no where. #stalemate?” If that’s the narrative in tomorrow’s papers, Wall Street should have an interesting day. ABC goes behind the scenes:
Boehner said at one point that “it’s clear to all of us how big this spending problem is. Congress keeps voting for programs we can’t pay for. But look, entitlement cuts aren’t easy for us to vote for either. Our guys aren’t cheerleading about cutting entitlements.”

“Your guys already voted for them,” the president said, referring to the budget offered by House Budget Committee Chairman Paul Ryan, R-Wisc.

“Excuse us for trying to lead,” Boehner said…

During another exchange, Republicans were going through proposed tax increases as bad for jobs.

“C’mon, man!” Vice President Biden exclaimed, “let’s get real!”

Cantor’s proposal this afternoon totaled $1.7 trillion in deficit reduction over 10 years, including … $200 billion in Medicare and Medicaid. Where that leaves us vis-a-vis Snowe, Collins, and Brown, I have no idea. The task now is to somehow get to $2.4 trillion, which is the amount they’ll need to raise the debt ceiling by to get through all of next year and beyond the lame duck Congress. Boehner has insisted that total deficit reduction be at least equal to the increase in the debt ceiling, so they need to find $700 billion somewhere. Interestingly, as part of his own Medicare proposal, Obama reportedly wanted $800 billion to $1 trillion in new revenue; if the GOP can get to $700 billion to make this deal, why not try for $800 billion and then call his bluff on Medicare? Make him own that proposal. If nothing else, it’ll be a hedge against Democratic Mediscaring next year.

While you mull, via Bryan Preston, here’s The One flat out admitting today that new taxes are on the way in 2013. Have at it, RNC ad team.