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Tuesday, September 28, 2010


Popping Stinky Bubbles

When William F. Buckley started his conservative publication The National Review, he famously wrote that its mission would be "to stand atwhart history yelling 'stop.'" Today, Dems deride Republican conservatives as "the party of no." My response would be that given the breakneck speed of progressives' agenda, and its far reaching and precedent shattering impact, "No" is today more appropriate than "Stop."

In the 1950's, the progressive agenda included Medicare and Medicaid, Head Start, revisionism in education, the "War on Poverty," (largely a welfare expansion program), and Civil Rights. The divide was not strictly speaking between parties. In fact, Republicans like Everett Dirksen led the fight for Civil Rights, and routinely supported some of the other agenda. However, the GOP had serious doubts about Medicare's financial underpinnings and were concerned about the War on Poverty's impact on incentives to work. In retrospect, those concerns were well taken.

However, there was an understanding that the social safety net, initiated during the FDR years, would continue to grow for a time, and the only debates were about which initiatives and at what cost. Buckley's "stop" command was just that - let's consider carefully before we add to the entitlement commitments. It implied an eventual resumption, not a permanent halt and certainly not a reversal.

The situation is very different now. There is a palpable feeling in the country that the commitments made to entitlements already in place before the Dems re-took Congress in 2006 were already beyond the resources of the country to support. This blog showed in a series of posts some years ago that the demographics had already doomed the financial viability of both social security and medicare. There would have to be significant cutbacks in promised benefits and increases in contributions to make those programs work for the baby boom and succeeding generations.

The public knows intuitively that the Obama Health Reform bill amounts to nothing less than pouring gasoline on a fiscal fire. This is the essence of the Tea Party movement - that the current progressive agenda is about a lot more than incremental reform. It's about a country that is moving off its moorings - financial, constitutional, even cultural. It is not enough to draw a line in the sand this time. Health reform needs to be defunded, repealed, replaced. It's enough of politicians telling us that one thing is happening when the truth is that quite another is going on. Don't tell us you are going to cut taxes for the middle class when at best, you are going to continue the current rates while raising the rates for higher earners. Don't tell us we can keep the insurance we have when the new law makes it unlikely in the extreme that our plan will be grandfathered. Don't swear to defend the constitution and then undermine it relentlessly.

And do all this while lying to us with a straight face.

How about Andy Cuomo yesterday accusing his opponent of racism and extremism - while sucking up to Charlie Rangel who should be under indictment! No scenario seems too nauseating for this crowd.

Tea Partiers have learned, as was famously advised, to ignore what they say, just watch what they do. Progressives will not be deterred from the opportunity to implement their socialist vision until they are put out of power. We know that. We know that Obama's base is actually disappointed that he didn't achieve more! A public option, cap and trade, much higher taxes on corporations and the wealthy, higher estate taxes, etc. Conservatives know what's at stake a mere five weeks from today, and we are all showing up to vote. Many independents are joining us. Defeated establishment Republicans are quietly leaving the field. Lazio in New York already gave up the Conservative line. Hopefully, Murkowski will follow in Alaska (no matter, that race looks to be over anyway).

Dems can hardly believe the polls. They are hoping that it can't be nearly that bad for them, that their turnout efforts will change the math. This week they began an effort to e-mail the young first time voters from 2008 to remind them to vote this year. Can anyone imagine a more useless exercise? If there is one way NOT to communicate with the college age generation, it's e-mail. They don't check it and when they do, what would you think the average college student is going to do with a message from the Democratic Campaign Committee, click on it or delete it? Do you know anyone that age? If so, you know the answer too.

In fact, I think the polls may actually understate the coming turnout dynamic. So even where races are tightening (I knew John Kasich could not really be 17 points ahead), there is no cause for panic. And the Chavez defeat in Venezuela can only be a good omen for lovers of capitalism, here.

It can be a little embarrassing sitting on the train, reading the WSJ, laughing out loud in an otherwise quiet car of dozing passengers. Here are excerpts from an article headlined "Manure Raises New Stink" from the March 25 (don't ask) edition:
By Lauren Etter

Winchester, Ind. - Like many of his neighbors, farmer Tony Goltstein has to deal with the aftermath of the dairy bubble.
But besides his mounting financial troubles, Mr. Goltstein also must contend with bubbles the size of small houses that have sprouted from the sludge pool at this Union Go Dairy farm. Some are 20 feet tall, inflated with the gas released by 21 million gallons of decomposing cow manure.
But he has a plan. It requires a gas mask, a small boat and a Swiss Army knife.
The saga of Mr. Goltstein's bubbles, which are big enough to be seen in satellite photos, began about seven years ago and traces the recent boom and bust of U.S. dairy farmers.
Mr. Goltstein, 43 years old, had moved his wife and their three children from the Netherlands to Winchester, population 4,600, about 90 miles east of Indianapolis. They planned to build a dairy farm of 1,650 cows on 180 acres.
He had installed a black plastic liner to keep the manure from seeping into the ground during the flush days of the dairy business when prices and demand were growing.
The plastic liner has since detached from the floor of the stinky, open-air pool and Mr. Goltstein says he can't afford to repair the liner properly. But he says he's game to pop the bubbles before the manure pool overflows and causes an even bigger stink.
His neighbors aren't happy with the plan.
"If that thing back there blows, God help us all for miles," said Allen Hutchinson, whose corn and soybean farm is next door. He and other neighbors worry that puncturing the bubbles could cause an explosion of manure and toxic gases...

The first small bubbles began poking up in the fall of 2006. "I thought, 'this doesn't look right,'" (Goltstein) said.
In July 2008, about the time milk prices plummeted amid weak global demand, one of the bubbles ripped open and revealed solid matter inside. A state environmental inspector visited and the state fined Mr. Goltstein $2,125 for failing to properly maintain the lagoon.
The Goltsteins filed for Chapter 11 bankruptcy protection last month; their bank began foreclosure proceedings. Mr. Goltstein said repairing or replacing the lagoon liner could cost him more than $200,000 - money, he said, he doesn't have...

This month, Mr. Goltstein asked state regulators to let him pop the bubbles. He said he and his 19 year old son would slice them open with a knife from a paddleboat.
Bruce Palin, assistant commissioner for the office of land quality at the state environmental agency, said officials were considering the idea. But he added, "not knowing how much volume of gas there is and how much pressure is on it, we're concerned with just cutting a hole."
Last year, a hog farmer in Hayfield, Minn. was launched 40 feet into the air in an explosion caused by methane gas from a manure pit on his farm. He sustained burns and singed hair.
Mr. Goltstein's attorney, Glenn D. Bowman, acknowledged that the potential existed for an explosion: "We're aware of that sort of physics issue," he said.
If and when the bubbles are deflated, state officials said, they will be there to keep watch.
"If they don't do it right,.." Mr. Hutchison said, shaking his head as his voice trailed off...


On Sept. 20, we sold 100 shares of Newmont Gold (NEM) at 63.18 that were purchased in January, 2007 for 45.37. This was simply a matter of following our formula and does not mean I have changed my attitude toward gold. We are still accumulating GLD. On Sept. 22nd we bought 200 shares of Alcoa (AA), a zero buy, at 11.20. We also threw in the towel on Blockbuster, assuming the reports that bankruptcy would be filed and stockholders left with nothing were correct. They were. We sold 2100 for five and a half cents and 3800 for 5.9 cents. At least we got about $330 in net proceeds, versus the zero that stubborn holders will get in bankruptcy. In the meantime, we will wait for the inevitable shareholder lawsuit mailing. We spent $36,000 plus to buy all these shares, and in addition to the $330 we got last week, we received a $3,200 return of capital and $2500 in dividends along the way. So we lost about $30,000 and should have realized this was a bad situation when the company was loaded with debt by Viacom, and things only got worse when Carl Icahn got involved. Lesson learned.

Yesterday, we sold 800 shares of Hauppauge Digital from the IRA at 2.70. We bought 200 in June of 2008 for 2.06 and 600 in July of 2008 for 1.26. Combining taxable and IRA capital gains and losses, we are out about $18,000 year-to date in realized transactions, but more are coming with the Tomkins and ADCT takeovers still to execute. Not all that bad considering how many dogs have been ejected from our kennel.

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