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Monday, January 30, 2012


Groundhog Day is Coming...Again

OK, let's get the Republican Presidential sweepstakes out of the way first. Romney has the ship righted again for the moment and should win fairly comfortably in Florida tomorrow. The prediction here was that that would end it - we'll see. Newt is pretty invested in this thing personally so he might not be quite willing to give up the ghost yet, although he should. Going nuclear on the likely nominee has not been viewed positively by most Republican voters, and definitely not by party regulars. Of course, it's not as if the Obama campaign wouldn't have brought every Mitt negative up in the general election anyway. Democratic operatives have assumed from the beginning that Mitt would be the candidate and I am sure there is nothing about him that they don't already know. If you remember anything from the 2008 campaign against Hillary, you should recall that the Chicago Obama crowd (Axlerod et al) are archetypal pit bulls. As the WSJ editorial writer (Paul Gigot) said last week, if you can't beat Newt, you sure won't beat Barack. So let it play out.

As for Paul and Santorum, who knows why they are still persisting? The money has to run out soon.

One thing I don't agree with WSJ columnists Dan Henninger and Kim Stassel about is that Mitt should have been proving his conservative bona fides in these primaries to unify the party. That would have been exactly the wrong strategy. Mitt has always had his eye on the general election and has studiously played toward the middle with an eye to competing for the independents who decide these things. Let's face it, whoever the Republican nominee is will capture almost all of the conservative vote. This is why Obama keeps shifting between throwing left wing environmentalists a bone while providing red meat for Dem moderates. He knows he's getting the left wingers anyway.

Still, Romney has not quite sealed the deal, and if it goes on much longer, it adds to the temptation for those who would draft Governor Daniels, who did his cause no harm with his very effective State of the Union response. Romney did not handle the tax return issue particularly well. Why didn't he simply say that his income is mainly investment income, turn to Newt, and ask him if he was seriously suggesting that tax rates on investment income should be increased? In a Republican primary? That would have ended the controversy.

Of course, Mitt does have the inconvenient benefit of paying capital gains tax rates on his "carried income" while a hedger at Bain. Regular Musings readers know I think that is simply the wrong tax treatment, and I would consider that ordinary income and change the tax code accordingly.

Meanwhile, the Obama train wreck continues unabated. Don't take too seriously the better economic numbers the last 45 days that have given the President a temporary, if meager, pop in the polls. The better productivity and employment were due to inventory restocking, not because of any real economic improvement. With Europe teetering and Japan suffering under a debt load even worse than our own, you can bet the better numbers will be short lived. Meanwhile, he derails the Keystone project, pumps for more subsidation of hopeless green energy projects (a la Solyndra) and makes recess appointments while the Senate is technically in session, a pretty clear constitutional goof that makes the actions of those appointees subject to court reversal. It also adds to the general perception that this administration, like the one before it, considers itself beyond the rule of law.

By the way, Congressional Republicans learned that trick of keeping the Senate in session from Dems, who pulled the same thing on GWB to keep him from abusing the recess appointment capability. Unlike Obama, Bush determined that the line of credible behavior was drawn at the constitution.

Congress also did an about face on the internet piracy bills - PIPA and SOPA - and pulled them in the face of user outcry. Internet users seem to have this belief in their divine right to access everything on the web for free, once they have paid their way onto the web. I am not sure how this got going, but I don't subscribe to it. If the movie industry is going to go the way of the music industry, I am not sure how writers and composers are going to get paid. Nevertheless, the users got their way - again.

I have always admired the WSJ and Forbes and those others who charged for their on-line content. If it's worth anything, it should drive some revenue.

And following that line of discussion, at least one musings reader complained that the op ed I referred to in my last post, The War on Political Free Speech by Bradley Smith from the Jan 23 WSJ, was indeed restricted to paying customers on the Internet site. So I wouldn't reprint it, but I am allowed to copy a few short excerpts.

"From the start, reaction to Citizens United v Federal Election Commission has bordered on the hysterical. Rep Alan Grayson (D.,FL) called it the 'worst decision since Dred Scott' - the 1857 decision holding that slaves could never become citizens. In his State of the Union message, within days of the ruling, President Obama lectured Supreme Court justices in attendance that they had 'reversed a century of law' to allow 'foreign companies to spend without limit in our elections.' Neither statement was true...

"Citizens United overturned only the 1947 independent spending restriction (of Taft Hartley), not the earlier prohibition on corporate contributions to campaigns. Not until 1990 did the Supreme Court uphold a prohibition on corporate expenditures independent of campaigns. Citizens United therefore, overturned not 'a century of law' but a precedent 20 years old. Moreover, the court specifically noted that it was not ruling on the viability of the prohibition on foreign political spending - and earlier this month it summarily upheld a lower court ruling finding that the prohibition on foreign political expenditures was constitutional...

"...(Sen) Bernie Sanders (I., VT) proposed a constitutional amendment last month that would not only prohibit corporations from speaking on political elections, but would prohibit any group of citizens organized 'to promote business interests' from speaking about elections...Because most newspapers are incorporated, UCLA law Prof. Eugene Volokh believes that the Sanders Amendment AND A COMPANION BILL IN THE HOUSE WOULD EVEN AUTHORIZE THE GOVERNMENT TO PROHIBIT NEWSPAPER EDITORIALS ABOUT ELECTIONS...(emphasis added) A national coalition, Move to Amend, seeks a constitutional amendment providing that 'artificial entities such as corporations...shall have no rights.' The coalition seems oblivious to the fact that this would apply... to non-profits such as the NAACP and the Sierra Club...The goal of this misinformation is clear. Reformers, who sit mainly on the political left, and their Democratic Party allies hope to silence voices that they perceive to be hostile to their political interests."

I saw jazz singer Jane Monheit and her fine backup trio at Birdland a few weeks ago, and I have to say it is an experience I want to repeat. She is an Oakdale, Long Island product and has simultaneously a sexy and cerebral approach to America's only true art form. She also has a devoted, almost fanatical following.

Then a couple of nights ago, I went with a fellow lobbyist visiting from D.C. to Bar on Fifth, and saw an excellent quintet. But even more exciting was the fact that the great Benny Golson and his wife were sitting right next to us! If you've never heard of Mr. Golson, by all means Google him.

The big game is Sunday and all things being equal, I would make New England a 1-2 point choice. But not when their best receiver is either out or playing very hurt. So the game is at worst pick em for the Giants now, and they might actually be a 1 point choice at kick off if Gronkowski can't go.

On 1/25, we sold 500 shares of FSI International (FSII) at 4.36. 100 of those cost 2.73 on 10/4/10 and the other 400 cost 2.98 on 6/24/11.

We'll report today's sale transaction in the next post.

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