Rick Perry: The Way Out

Rick Perry's wife recently contended that Rick Perry has been brutalized for his faith by the media:

It's been a rough month. We have been brutalized and beaten up and chewed up in the press to where I need this today...We are being brutalized by our opponents, and our own party. So much of that is, I think they look at him, because of his faith. He is the only true conservative – well, there are some true conservatives. And they're there for good reasons. And they may feel like God called them too. But I truly feel like we are here for that purpose.

This seems a bit misguided because, in my opinion, doubts about Perry's campaign have been warranted by his poor turnouts at the debates and his lack of substantiative plans for America. There was also the "niggerhead" fiasco.

Oh, and now there's this:

"My son had to resign his job because of federal regulations that Washington has put on us," Mrs. Perry said while campaigning for her husband in South Carolina, after a voter shared the story of losing his job.

"He resigned his job two weeks ago because he can't go out and campaign with his father because of SEC regulations," she continued, referring to the Securities and Exchange Commission. "He has a wife... he's trying to start a business. So I can empathize."

"My son lost his job because of this administration," she said a few minutes later.

Uh, what? He voluntarily resigned:

According to several reports, Perry’s son, Griffin worked as an investment banker at Deutche Bank before voluntarily resigning his job two weeks ago to work on his father’s presidential campaign. SEC regulations stipulate that it’s illegal to be an investment advisor and work on a campaign.

I don't know how you can blame that on the current administration. Unless it was a product of recent campaign reform, it has nothing to do with the current administration. Obama has been blamed for so many things that have not been true, particularly by the Perry and Bachmann camps (the candidates especially). Anita Perry needs to get a clue.

Anita Perry is speaking out for her husband because he is struggling. He needs something to get him going. He's lost ground and is losing more ground. He has to have some element to pick him up. Anita Perry's speaking out might hurt the Texas Governor though:

Mrs. Perry insists that her husband is authentic and went so far as to suggest that his opponents aren't. She'll have a hard time convincing Herman Cain's fans of that. And while the idea of a religious "elect" or chosen people may be part of some Christian theologies, most voters aren't likely to subscribe to the belief that Mr. Perry has been handpicked by God. Voters tend to like picking the candidates themselves.

To his credit, he's not alienating all voters:

“We are going to participate whenever and wherever they are,” said Robert Black, a Perry campaign spokesman.

Some of the other Republican candidates are boycotting the Nevada caucus because they moved up their primary. While it is disappointing that Nevada moved up their primary, it's important that the people get to hear what the candidates say and have a say themselves in which one represents them. This is a good move by Perry, in a campaign that has been closer to lackluster than spectacular.

I criticized Perry earlier this week for his withholding of a jobs plan. Well, he came out with one:

"Right here in Pennsylvania, and across the state line in West Virginia and Ohio, we will tap the full potential of the Marcellus Shale and create another 250,000 jobs," he said in unveiling a major piece of his overall economic plan.

Does this sound familiar? Sounds like Texas, don't it:

Even in Texas, the industries classified by the US Labor Department as "oil and gas extraction" and "mining support" account for just about 2 of every 100 jobs. But jobs in basic industries like mining or manufacturing typically help sustain many other jobs throughout a local economy. And over the past decade, Texas has seen energy jobs rise as a share of its economy.

Compared with Texas, other states appear to have plenty of room to grow. In the other 49 states collectively, the "oil and gas" and "mining support" industries account for less than 0.3 percent of all jobs. Those totals don't include some other energy-related jobs, such as in coal mining or renewable sources.

We've heard this type of plan before from Bachmann and Gingrich. The problem is the plan might be unattainable. A lot of these aren't promises, they're wishes that would need congress's approval:

“It’d be very difficult for an administration to walk back these regulations by itself,” says Case Western University law professor Jonathan Adler, who’s no fan of the rules. The EPA, after all, is required to regulate carbon by the Supreme Court. Perry’s administration could try to overturn the agency’s “Endangerment Finding,” a scientific document arguing that carbon-dioxide poses a threat to human health and welfare. But given the solidity of climate science — and the fact that the EPA has been warning about global warming for the past 15 years — that’d be a hard sell in the courts. If Perry wanted to junk air-pollution rules, he’d need Congress.

I think overall, this plan falls short because much of it is out of the President's control. Just like the tax code and other initiative. The United States is not Texas and not every state has energy supporting industries. You can't rely on that. To go further, it's not going to make up for what Perry is produced so far. For the most part, I think candidates are judged by their substance. You do have to have the presidential look and composure. Perry has finally brought substance, but I don't think it makes up for everything else. His campaign is misfiring all over the place, and I don't know if he can correct that. He dug a hole for himself and there might not be a way out.

Cadillac's CUE

Cadillac is trying to one up its competitors by introducing it's new Cadillac User Experience. The CUE is driven by technology:

Oct. 12 (Bloomberg) -- General Motors Co.’s Cadillac plans to offer an in-car data, navigation and media system next year with a tablet computer-style touch screen and applications that the company hopes will distinguish the brand from luxury rivals.

Cadillac is taking a cue from the trends in mobile technology:

“This is a differentiator moving us above and beyond our competitors,” said Micky Bly, GM’s executive director of global electric systems and infotainment, in an interview in San Diego. “IPhone, iPads, Droids, all those things are out there now, and people are familiar with that style of device navigation.”

CUE offers a lot of great features:

Along with exterior styling, fuel-efficiency and engine advances, automakers are competing for buyers with sophisticated in-car electronics that provide more than route guidance, real- time traffic information and hands-free phone calls. CUE will offer a broad range of data and applications, including Pandora Media Inc.’s music service, and will be easiest to use, Detroit- based GM said.

So is it a game changer? That's what Motor Trend asked, and upon review, concluded:

So how is it? This pre-production example wasn’t 100 percent there yet by the developers’ own admission, but with the kinks worked out, CUE has the potential to be a real game changer. As it should; when Cadillac set about designing CUE two years ago, its goal was to do what the smart phone did to the cell phone, by incorporating iPad-like technology into an intuitive user interface.

It's a very intriguing technology that should make the driver experience better, and Motor Trend likes the potential of it:

Perhaps the coolest thing about Cadillac’s CUE is its potential. Taking yet another page out of Apple’s playbook, Cadillac isn’t giving its customers everything yet. Rather, it’s leaving room for improvement and upgrades, and leaving its customers wanting more. While we need to spend a bit more time with a production-ready CUE before passing a final verdict on it, we will say that the potential for a game changer is there. Will CUE be Facebook, or will it be MySpace? Only time will tell.

I don't know if this is something that will be a clear differentiation between Cadillac and its competitors, but it will certainly be something that will draw interest in new buyers. More than anything, Cadillac could benefit from the buzz and getting these people in the showroom. Ultimately, what's going to sell cars is making great cars. This technology certainly can help with that.

Finally Enjoying Boardwalk Empire

In one of my past posts, I published a paper about how the first two episodes of The Sopranos sets up the rest of the series by introducing the main themes that would be developed over the course of the series. I concluded:

The proem of The Sopranos provides us with the lens and the scope through which we will see the rest of the series. Through this, The Sopranos develops aspects of the mafia world that have never been addressed before. Never have we seen the extent by which the depiction of mafia in such an expansive fashion. In the proem we learn that the story is not just about Tony and how changes in his business are stressing him out, but rather about the world he lives in within the context of a mafia tradition. As a story about America experience and assimilation, we are able to see contemporary depictions of events that are able to exist without sacrificing the necessary focus of the narrative to center on the mafia itself.

As I've been watching Boardwalk Empire's second season, I began to think more about this. One of the main problems with the first season of Boardwalk Empire is that there are so many character that the writers want to address. However, as a viewer, it's hard to get to know these characters. There's also no narrative commentary within the series like there is in The Sopranos with Tony and Dr. Melfi. Goodfellas also benefits from having a narration, when new characters are introduced. There's no need to see the characteristics if they are told to you.

In contrast, The Godfather develops its characters by showing their tendencies. In the very first scene, we see the roles that the characters will play in the plot. Vito is cautious and very introspective. Sonny has a hot temper and is not faithful to his wife. Clemenza is a loyal servant as is Luca Brasi. Michael is quiet and independent. Fredo is weak. They're masterfully illustrated through small scenes such as when Sonny slams the camera of the media member or spits on the FBI detective's badge.

Boardwalk Empire is a television show, therefore it has the liberty to be more complex. However, the complexity of the series might interfere with the audience's ability to fully understand what is going on. As I've watched the second season, it is much clearer to me that the little scenes that develop the characters have been much more helpful in understanding and enjoying the second season. In many ways, the first season of Boardwalk Empire serves as an introduction and proem for the series.

I did not enjoy the first season because I felt like nothing happened and we did not see anything happen to the characters. There was a lot of posturing, but there was a overwhelming lack of action. In a series about corruption and violence, there was something missing. Now, in the second season, we are seeing more action. There is more plotting against one another, there is more violence, and there is more hardship.

What I've realized most and why I actually appreciate the first season is that all the posturing gave us little clues to what the characters would become. We saw chinks in Nucky's armor. We saw the ambition of Jimmy Dormady. We saw Eli's frustration with his brother. These are all things that are being played out now.

The second season is much better because of the first. I no longer can complain about the first season. I wish we had more information about the direction this series was going. Prior to this season, I had never been more frustrated with a series. I wanted to like this series for so long. Now, I can.

Explaining Herman Cain's Emergence

Since I made this post, introducing Herman Cain as a potential to Romney and Perry, Cain has skyrocketed up the GOP presidential polls:

The public is doing just that. In recent national polls, following impressive debate performances and straw poll wins that caught the political establishment by surprise, Cain has suddenly risen to the top of the pack, running almost even with former Massachusetts governor Mitt Romney.

But as I suggested before:

If he really wants to make a run for this, he will aim for the transparency necessary to be a viable candidate. Until then, Herman Cain will be a bump in the road for the front runners. You cannot ignore potential skeletons in your closet and run for president. You will have people make you reveal that information as you rise a legitimate candidate. You should do your best to be prepared.

In the most recent debate, the pizzaman's 9-9-9 plan came under fire, and the media has started taking a deeper look into it:

But note that we said the “9-9-9” would happen eventually — and then only temporarily. That’s because it is only the second step of a planned three-step process. The first step would cut individual and corporate tax rates to a top 25 percent rate (down from a current high of 35 percent). Then the final step would replace all of the taxes — even the 9s — with a national sales tax, known by proponents as a “Fair Tax.”

(As denizens of Washington, we find this three-step process to be highly dubious. It takes years, even decades, to fundamentally overhaul the tax code. Herman Cain is going to do this three times in his presidency? But we digress.)

Other than the clear difficulties that he would have in trying to overhaul the tax code, there are other issues involved with revenue, but particularly in the tax rate of the people who can afford it the least:

On top of that, Cain would introduce the new sales tax, which would affect lower and moderate-income people who spend most of their income on purchases, not savings and investments. Depending on how you do the math, people now paying zero or negative taxes might be faced with a 27 percent tax on income.

In other words, while on paper Cain is promising a tax cut, in reality tens of millions of lower-income Americans would face tax increases.

His proposal seems unsustainable, unreasonable, and unfair. He's essentially going to cut into pockets that have nothing in them. There's a lot of danger in fiddling with the numbers and it seems as though his numbers are vastly different than those of others who've looked at his plans. On the whole, it looks like a plan that would reduce taxes on many individuals, but the his plan would also negatively affect those that have the least and have been most affected by the financial crisis and the consequential recession.

Then, why he's been so high in the polls? This has been his one draw, his one big plan, and it just doesn't add up. How are people saying that they're going to vote for him?

I'm not going to just write off Cain. He's clearly polling well and there's reason to believe he's a legitimate contender to Romney with those numbers. I just look at the actual facts, what he actually brings to the table, and I just don't see what his supporters see. I just don't see him being able to accomplish effectively what he's promising to bring forth.

Buffett's Challenge

So Warren Buffett has gone public with his income and tax payment of this last year:

Billionaire investor Warren Buffett divulged to a Republican congressman yesterday that he made more than $62 million in 2010 and that just 17.4 percent of his taxable income was taxed.

In addition, he has implored other billionaires to come out with their tax returns:

"What would be useful would be to get more of the ultra rich to publish their returns," Buffett wrote. "If you could get other ultra rich Americans to publish their returns along with mine, that would be very useful to the tax dialogue and intelligent reform. I stand ready and willing -- indeed eager -- to participate in this exercise."

The thing is that other billionaires have little desire to pay higher taxes:

A new poll of the Forbes 400 list by Salon.com finds that only 8 of the Forbes 400members would pay higher taxes, as Warren Buffett suggested in a New York Times op-ed in August. The problem with the Salon.com poll? Most of the Forbes 400 members didn’t respond to it. Salon doesn’t spell it out precisely, but it looks as if only 12 of the 400 billionaires bothered to reply.

Can you really blame them? Nobody willingly wants to pay higher taxes. If they have to pay the taxes, they'll pay the taxes. They can afford to as well. It's all a matter of just closing the loopholes. It's not an Obama thing, even Reagan hated the loopholes:

In the coming weeks, we'll see if Buffett actually releases his tax returns. If he does release them, I would not be surprised if one or two other billionaires followed suit. However, if you want them to pay higher taxes, you just need to close the loopholes. There is an unwillingness to do so because it will deter private giving. The millionaire tax that was proposed doesn't really work either because it opens up a whole new way for government to tax private citizens. It is just a new way to invade a person's personal liberty.

I don't think there is any progress to be made on this issue until Buffett follows through on his own challenge.

Sprint Outlook In An iPhone World

Sprint stock is cheap. It's really cheap. Does that make it a good investment though?

Well, Sprint just got the iPhone. That's huge, but they may have taken a huge gamble in getting it. They overpaid for the iPhone and made the mistake of telling everyone that they made that mistake:

“Friday was tough on the stock, tough on everybody in terms of the way it came across,” Hance said in an interview. “It was a mistake not to disclose the impact of the iPhone -- a mistake we will fix. We will talk about the impact when we talk about the third-quarter earnings."

As a company that has already shown that it has had problems becoming profitable, Sprint took a huge leap to get the iPhone on its network. The cache of having the iPhone on its network might have clouded the judgment of the executive who made this deal. What's worse is that they could not explain the purpose of the deal well to analysts:

Last week the laughter came from analysts at Sprint's investor meeting, where Mr. Hesse and executives laid out an inscrutable and incomplete financial plan that Wall Street's brightest admitted they could not make heads or tails of. Then Sprint dropped the bomb. It may need to go to the capital markets to fund a wireless business that, by now, ought to be spinning off loads of cash. The stock promptly plummeted 26% in an afternoon.

That just screams poor leadership. As an investor, you look at the management of the company and you have to be weary. They've made several poor decisions that has resulted in the continued evaporation of shareholder equity. You shouldn't catch a falling knife.

But is there upside to Sprint? While AT&T and Verizon both have delays on the new iPhone, Sprint has it available:

But Sprint, while it’s sold out of the 16GB model, still has the more expensive versions in stock, and its website says they’ll be delivered on Oct. 14 or 15.

While it suggests that the movement to Sprint for the iPhone has been slower than anticipated, it also means that people will have to go to Sprint if they want the iPhone. Remember, a lot of customers are under contract and don't want to go through the hassle of changing service. Furthermore, Sprint has the benefit of having better service:

The No. 3 U.S. wireless carrier does have its fans – a Consumer Reports survey last year ranked it even with Verizon in terms of overall customer satisfaction. It could be that AT&T and Verizon found more buyers for the expensive versions amid their corporate customer base. Or maybe Sprint’s just off to a slow start.

Sprint, unlike its competitors, offers unlimited data, which might be a huge draw for people who are sick of paying overages. I really think Sprint really needs time with the iPhone. No one should have expected it to have an immediate impact. I think people looked for phones more than service. Now that the playing field is leveling out, we should see a hunt for the best service. Sprint should be able to capitalize on this market shift.

Furthermore, Sprint has announced its plan to implement its 4G LTE network:

At its Oct. 7 meeting, Sprint had indicated its plans to take on additional debt to fund the rollout of their new higher-speed 4G LTE network by mid-2012. It had also earlier announced unlimited data plans for iPhone users.

We believe that if the company is able to lure iPhone users with its uncapped data plans and at the same time increase speeds and reduce costs by using its LTE network, the long-term prospects of the company looks good. However liquidity concerns arising from excessive debt on its balance sheet will continue to be a major deterrent to its business, and should this strategy not pay off, Sprint could be in dire straits.

Liquidity is at a premium in the market, given the ongoing concerns with debt throughout the world. However, Sprint should have some momentum with the iPhone buzz. While analysts are portraying the company negatively at the moment, there is a lot of reason to believe that Sprint will recover. Its services will only get better with the implementation of LTE and it should be able to distance itself from Verizon in that regard. It offers a better package than Verizon and AT&T, and as the consumers begin to realize that, this iPhone gamble will start to pay off for Sprint.

While Sprint may struggle in the short term, there is still plenty of upside as the company navigate to a 4g LTE world.

The Lockout Continues: Does Anyone Miss The NBA?

I don't know how many of you are upset about the NBA lockout, but they decided yesterday to cancel the first two weeks of the season. It's because the players and owners aren't even close to terms:

That happened Monday when league executives and the NBPA failed to make progress — and perhaps took a step back — on reaching a new collective bargaining agreement. The sides are far apart on the split of basketball-related income (BRI) and the system in which that money would be distributed to players, plus issues such as contract length, luxury tax, player raises and the length of the next CBA.

But the bigger question remains whether anyone cares? I love sports, but there are clear problems with the game that has nothing to do with the way the money is distributed. This quibbling over dollars and cents means nothing to me unless the actual product is improved. As far as I know, I don't think anyone has done anything about it.

I will say this, I sympathize with the businesses that rely on the NBA to bring people to their establishments. That lost income is detrimental in an already lean time. It's not chump change:

The San Antonio area gets an estimated $95 million yearly boost from the Spurs' presence, said David Bojanic, a marketing professor at the University of Texas at San Antonio who teaches courses in destination marketing, sport management and event management. But it's difficult to say how the loss of part — or even all — of a season really would impact the community

There's going to be a trickle effect from this. There is less demand for goods and services, so there's going to be less demand for labor and businesses are going to have to make cuts.

That's not good, but is it all bad? It's one less people to go out, spend money on things like booze and other overpriced items. It's less money going to overpriced tickets when that money can go to things like food, new shoes for their kid, new clothes. Some businesses may suffer, but this money that's not being spent has to go somewhere right?

A Change In Tactics

The latest GOP debate on the economy took place in New Hampshire earlier tonight. It displayed a change from the direction of previous debates. Herman Cain played a much larger role. The Pizzaman has seen his poll ratings rise rapidly in the wake of his performance in the previous debate and his victory in the Florida straw poll. His larger role seems to have come at the expense of Texas Governor, Rick Perry, who has fallen from the graces. Perry underwhelmed again and seemed widely ignored by the other candidates. He also made no attempts to take control of the debate or issues, which may or may not have been a bad thing, given his previous mediocre performances.

The key thing about Perry is that he still hasn't fully released his economic plan:

Mr. Perry is set to deliver his first major policy speech of the campaign on Friday in Pittsburgh, on energy and jobs. When pressed for specifics, he said, “I’m not going to lay it out all for you tonight.” Asked about Mr. Romney’s lengthy economic plan, he said, “You know, Mitt’s had six years to be working on a plan. I’ve been in this for about eight weeks.” Asked if he might accept a budget compromise that could involve raising revenue, as President Ronald Reagan did, Mr. Perry suggested that he would not.

The problem with this is that he comes across as unprepared. This was a debate on economics and Perry is withholding his plan for campaign speeches? Please. You're on a national stage in an important primary state, you have to deliver the goods. I have no idea who is running Perry's campaign, but they have failed miserably.

In the meantime, Cain has received the most attention from the other candidates:

Later, when Jon M. Huntsman joked that Mr. Cain’s 9-9-9 tax plan — which calls for reducing the individual and corporate income taxes to 9 percent and introducing a 9 percent national sales tax — sounded more like the price of pizza, Mr. Cain shot back that it “didn’t come off a pizza box, no.”

Bachmann also poured it on:

Bachmann said Cain’s plan wasn’t a jobs plan, but a proposal that would give Congress “a pipeline in a sales tax.”

“When you take the 9-9-9 plan and you turn it upside down, I think the devil is in the details,” she said.

Cain is convinced that his simple tax code will spur economic growth, but there are just too many concerns with it. It's also the only thing he has brought to the table thus far in terms of getting this economy going. As I've said in the past, the flat tax won't work because it'll put an immense burden on the poor who can barely make ends meet as things stand now. A flat tax will reduce their purchasing power and they will have to make tougher decisions about their consumption. Broadening the tax base has a similar effect.

Simple can be good, but simple won't necessarily work.

Romney seems to understand that:

“I have had the experience in my life of taking on some tough problems,” Romney said. “And I must admit that simple answers are always very helpful but oftentimes inadequate. And in my view, to get this economy going again, we’re going to have to deal with more than just tax policy and just energy policy, even though both of those are part of my plan.”

His approach seems much more pragmatic and with a stronger expectation of what Washington is going to be like. Cain, Perry, and Bachmann have all portrayed themselves as somewhat of Washington outsiders, but their problem is that they don't know how Washington works. Romney has the experience of working with liberals in Massachusetts and had to work with them to accomplish some of his initiative, which is what it's going to be like in DC. This is not even getting into his private sector experience.

We've already had like 4-5 debates and doesn't appear like a new candidate is going to enter nor does it appear that further debating is going to change the landscape of the primaries. Right now, it's pretty clear who should be the nominee and it isn't even close. In the long term, you have to look at the person who makes the most sense; this time it's Mitt Romney.