So you're sitting at home, reading sports news, you see all these schools desperate to join all these conference, but you don't see the Big Ten mentioned at all. Instantly, you panic. What the hell is going on? Why are we sitting back and doing nothing? Why aren't we going after these schools?
Well, do we really need to?
From a Big Ten and Michigan standpoint, not really: The Big Ten has the three most popular teams in college football, so they can afford to wait as far as conference realignment goes. It doesn't make sense for them to go after schools left and right, when they already have a good base. Everyone says to go after Notre Dame and Texas, but if you're going to expand, it's going to be an even number of schools. Additionally, it's going to lead to more of a split if you do bring in more schools in terms of TV revenue. I don't think it makes sense for Notre Dame or Texas to come to the Big Ten at the moment, nor does it make sense for us to take them on.
If you really do want to expand, it's all about strategy. The crown jewel of college sports, despite the fact that it's not as big a college football market as one thinks is New York. Everyone wants into New York. So what about New York? The Big Ten already has 3 of the top 10 most popular teams in New York. I really think they'll only benefit if they bring in a Notre Dame or a Rutgers if they want to expand. Rutgers might not be worth it because the increase in subscriptions might be offset by the fact that there is another mouth to feed. Notre Dame really is the only one that makes sense from a competitive and financial perspective. The problem is that they won't want to come to the Big Ten if they come in because of their current deal with NBC.
They're not Michigan, they're not Ohio State, and they're not Penn State.
I don't think I want the Big Ten to expand otherwise. Brian Bennett of ESPN spells it out. It doesn't make sense for the Big Ten to take on Missouri or Kansas for the sake of expansion. They don't bring anything to the table in terms of competition or financial benefits, but they're AAU schools which fit in if there is expansion.
Honestly, the Big Ten is in good shape. They got a good school in Nebraska that actually brings something to the table. They might miss out on Texas and Notre Dame, but neither schools would want to fit into the Big Ten when you look at the Big Ten Network. With all the expansion, everyone wants the Big Ten to get in on it too, but I believe staying true and keeping things the way they are might be the best thing to do.
Right now, the Big Ten has a great TV deal and a great network that does well to give exposure to all the schools. They already have some great brand names under their moniker. There is no need to try and bring more mouths under their roof at the moment. Even with all of this expansion, the Big Ten will continue to thrive in its current state.
A couple months ago, Netflix took flack for raising their prices for their subscription services. While they took heat, the company raised prices to deal with the growing cost of increasing the content available for their customers. It was a necessary move to grow the business.
Yesterday, Netflix announced that it was separating its DVD-by-mail services and its Internet movie-streaming service:
In his overnight email to the company's 23 million domestic subscribers, Mr. Hastings said the DVD business will be renamed Qwikster, hived off into a separate subsidiary that will have its own billing system, website and list of movies.
Now, I think that the DVD business is becoming somewhat archaic as we move towards a more digital world with cloud computing becoming more prevalent. With that said, there is still a demand for it, and I don't see that separating the businesses is a smart idea. It would be, if the customers were mutually exclusive in terms of online streamers versus DVD renters. This does not appear to be the case.
The outrage was immediate, as more than 16,000 users responded on Netflix's blog:
"You are making things significantly worse for us," one customer wrote, in a screed that echoed many of the others. "Now not only will we have to pay a LOT more for your services, but we will also have to access two separate websites."
Netflix is taking a long-term view, and as a result, they are taking a short-term drubbing. This is taking place both from their customers and their investors. Let's look at their customers first:
But what sealed the deal was Sunday night's so-called apology -- your mea culpa for the price hike. But you don't rescind the price hike?! Even worse, you announce proudly that you're creating an entirely new service to handle the DVD mail business, Qwikster?
So now, I have to go to one site to see if a movie is streaming, and if not, go to another site to put it in my by-mail queue to wait for a hard disc.
It's clear you don't care about keeping me happy, like you once did. I don't feel so proud being caught with that little red envelope anymore.
Clearly, these decisions were driven by what the company sees for the business. While it does make long-term sense, I think they're underestimating the good will they had generated for the brand by being the people's DVD and online streaming company. Now they're in hot water. The investors are getting out: After a tremendous rally, that even my dad took note of and lamented not getting in on, the company has taken a huge hit over the last month. Even though the market as a whole has taken a hit, it certainly has not taken as big a hit as Netflix. The company has lost more than half of its shareholder equity in the last two months.
For me, the number one thing about business is knowing how customers are going to react to your business decisions. It is this understanding that shows that a company will succeed. You look at Apple and you see how a company with a strong understanding of its consumer has succeeded. Netflix has demonstrated an increasingly poor understanding of its consumer's needs and stands to suffer as a result.
While I strongly agree that the streaming business is the future, I think neglecting or complicating the DVD business is a poor decision. One of the main influences of technology has been to consolidate business activity. This is doing the exact opposite. While it may help Netflix tackle the content gap in the streaming business by separating the two businesses, this could have been executed much better. Additionally, I would have to question the timing, given the bad publicity that the price hikes garnered.
Time will tell whether Netflix will remain a strong company, but at the moment, you cannot like the direction it is going as a consumer and/or an investor.
So I've been ripping Obama for trying to use Keynesian measures to help us get out of this recession. The problem for me is that government spending will lead to government reliance. You don't have to look far to see the potential problem that may develop. Greece continues to have trouble getting their citizens off the government's teat:
But others entertain strong doubts about the willingness and ability of the Greek political class to implement the structural measures that will improve the performance of the Greek economy. "The present government has done absolutely nothing during the last 12 months to speed up privatizations, reduce the public sector or open up closed professions," Athanasios Papandropoulos, a leading economic analyst, told me recently in an interview. "In these 12 months it has not fired even one civil servant. The only thing it is doing is trying to tax the private sector out of existence. Why should we believe that they will do something different now?"
Government reliance has changed the expectancy of the citizens. They don't believe the government is going to change:
Structural reforms have been repeatedly announced by Greek officials during the past. Yet nothing has happened. Greece's plans tend to resemble Soviet Five Year Plans: They look good on paper but have absolutely no bearing on reality. Anyone in the government who tries to point this out is forced to resign. Economist Stella Balfousia, the head of the Greek Parliament budget office, had to tender her resignation after her office published a report contradicting the government's official forecasts on debt and deficit.
While I don't think the US is going to be Greece, I do think we need to limit the influence of the public sector. There are many roles the public sector can play, but being the primary provider of jobs is not one of them. That should be left to the private sector. This is why I've had such a problem with the plans that Obama has put out there. I don't want to see US start to stutter; I want to see the US continue to grow.
I remember when I was in high school, I wrote a paper about how the United Auo Workers Union was ruining the American Auto Industry by demanding too much. At the time, the Big Three were losing billions of dollars and jobs were fleeing the rust belt, where the UAW has a stronghold, as a result.
The time around, the UAW has less ground to stand on in that they cannot strike against Chrysler or General Motors. This was part of the agreement when the US bailed out those two companies in light of the financial crisis. Ford did not take the money, so they do have to worry about a potential strike. Additionally, Ford appears to be the healthiest of the three companies.
In these recent negotiations, there are signs that the UAW and the Big Three are on better terms:
Not many decades ago, contract expirations used to be firm deadlines for the UAW. Agreements, or strike notification, usually came around the midnight deadline when the negotiators were groggy from several nights of very little sleep.
This year it helped that the union had agreed not to strike General Motors and Chrysler over wages.
This shows a pleasant change between the two parties. It's funny how a few lean years can do to a relationship. I think it's always important that the interests of a union and the companies it is negotiating with are aligned. So often, the interests are not aligned and this is not good for either party.
“They’re all new jobs, and quite a few of those jobs were located in Mexico,” UAW Vice President Joe Ashton said. “What we said going into negotiations is one of our major objectives is jobs, and we think we met that objective.”
“I am really proud of our whole team,” King said at the press conference. “We really came into negotiations to create jobs in America.”
Perhaps the most important result of this good news is that it is good for Michigan, a state that has been hit hard by the automakers' struggles:
Although the details will not be confirmed until today, early word suggests that workers will get a nice array of one-time rewards, in the form of a signing bonus and increased profit-sharing. That keeps the company's day-to-day costs fixed going forward, a boon in this still all-too-uncertain economy, while recognizing that workers deserve recognition for the role they continue to play in keeping the company and its products strong.
As a fan of the American Auto Industry, it was important for an amicable deal to get done. Hopefully, this deal will signal a new era of better relationships between the UAW and the automakers. Hopefully, it will lead to a more successful Michigan.
In a midterm election with a weak President and even weaker contending candidates, you would think a senate race would not be very important. However, here in beautiful Massachusetts, a race between heavyweight contenders is stacking up.
Yesterday, Democrat Elizabeth Warren declared her candidacy for the senate. While she has to win the primary against some solid candidates, she has been instantly dubbed the favorite to challenge Republican Scott Brown for his Senate position. If you remember, Scott Brown, improbably, defeated favorite Martha Coakley with a campaign that very much mirrored that of President Barack Obama. For Democrats, the seat has even sentimental value as it was the seat of the late Ted Kennedy. Democrats hope to reclaim the seat and Warren has been a favorite both in the Commonwealth and in Washington. They see her as the right candidate to take on Brown.
Basically, I want to survey how the campaign will go and why you should care.
The Campaign: Warren declared her candidacy yesterday:
She's already a favorite of Democrats because of her work in creating Consumer Financial Protection Bureau. She's a Harvard Law Professor and wants to fight for the middle class. They feel she can reach their constituency, unlike Martha Coakley.
Warren was tapped by President Barack Obama last year to set up a new consumer protection agency, but congressional Republicans opposed her leading the office. She returned to Massachusetts this summer.
Supporters say her image as a crusader against well-heeled Wall Street interests and her national profile will give her candidacy muscle, though she’s never run for political office.
At the same time, her ties to Barack Obama and her job at Harvard might not cast her in the most positive light amongst the "townies:"
Should the professor win the primary, expect Brown to label her an out-of-touch academic in the mold of another law school professor, President Obama.
Ties to Harvard have all of a sudden become a bad thing with all the academics that have gone into government and introduced failed policies. There's also the negative stigma of elitism that is directed from Cambridge, a city of high intellectual capital but also a center of liberal thought.
But, assuming she gets past the Democratic primary, any attempt to use her background as a consumer advocate to run a populist campaign against incumbent Republican Scott Brown will be burdened by her day job as a professor at Harvard Law School. Even before Warren officially declared, she was already being accused of “Harvard elitism.” Her fortunes in 2012 may well turn on whether she finds an effective response.
Why is Harvard bad?
Todd Feinburg, co-host of one of Boston’s popular morning call-in radio shows, told me that “all my callers know about her is she’s a Harvard elitist. They see the country being run by Harvard elitists who don’t know what they’re doing.”
But Massachusetts only has so many registed Republicans. In fact, they only represent 11 percent of the electorate. So who are the ones that elected Scott Brown and who are the ones that Warren will have to win over?
Rather, she’ll be after another group that may already be casting suspicion on her resume—the historically Democratic blue-collar voters whom Scott Brown won over with a barn coat and a pick-up truck in the 2010 special election to fill Ted Kennedy’s seat.
There's a term that they've come up with and I love it:
Specifically, the middle-class and lower-middle-class voters Brown appealed to are what veteran Boston political commentator Jon Keller calls “townies,” those multi-generational Massachusettsans who don’t live in the state’s campus nexuses, poor urban areas or affluent suburbs, but in the hardscrabble towns and cities on Boston’s periphery. Keller argues Brown peeled them off in unprecedented fashion not only because of his everyman persona but because of the way he baited their economic and cultural anxieties: Brown incited small-town fears about illegal immigrants underbidding contracts, and argued that President Obama’s Affordable Care Act would “screw unions out of their gold-plated plans.”
I'll note that there is a difference between the types of demographics in the Boston area. Having lived here my entire life, I've been exposed to them. Most of the educated people in the Boston area tend to side with the liberals while the further you get away from Boston, the more socially conservative people you get. Scott Brown campaigned on the every man campaign and it resonated with those people on the outer parts of the Commonwealth.
One of the problems with Coakley is that she was too associated with Boston. With Warren, the connection will be more linked towards her ties to Harvard:
Which brings us back to the Harvard question. If townie voters identify Warren with Harvard (and echt-liberal Cambridge, where she happens to live) to the same degree they linked Coakley with Boston, Sullivan and other local pundits predict that Brown will carry the election. Thinking along the same lines, Brown’s campaign has already begun calling her “Professor Warren.”
Even though Brown and Warren aren't that different:
Where he was raised in a broken home in tiny Wrentham and did whatever he had to to pay for his education, Warren grew up poor in Oklahoma, won a scholarship to college, and paid her own way through law school. She can also argue that her scholarly work on bankruptcy and contract law hasn’t secluded her in an ivory tower, but given her a pathway to understanding the problems of ordinary people.
With her financial backing and her party popularity, she should run a good campaign. It appears she's ready to put in the work. I'm still skeptical that she can actually reach out to the people, considering she doesn't have New England roots. If you look at all of Massachusetts's politicians in recent years, all of them were deeply rooted in Massachusetts. Can she reach the townies?
Senator Scott Brown remains the most popular major political figure in Massachusetts, but his approval rating has fallen from a year ago, a sign he may be more vulnerable than anticipated as he gears up for a reelection fight, according to a Boston Globe poll.
And the actual numbers:
Though Brown, who faces reelection next year, has fallen a bit from the lofty perch of public approval he had enjoyed, he remains quite popular for a Republican in a traditionally Democratic state. Nearly half of respondents, 49 percent, said they view him favorably, compared with 26 percent who view him unfavorably. A Globe poll conducted last September showed him with 58 percent approval and 21 percent disapproval.
That article also says this about Warren:
Warren, the choice of many Washington Democrats and some state party insiders to face off against Brown, remains unknown to large swaths of the voting public, according to the poll. While those who know of her tend to like her - 23 percent rate her favorably, 12 percent unfavorably - 60 percent said they don’t know who she is or have no opinion of her.
“If she’s going to be the candidate, she’s going to have to do a lot of work just to boost name recognition,’’ Smith said.
That work she's prepared to do is good because people don't know who she is. If I was Brown, I would capitalize on this by portraying her as someone from the Ivory Tower of Cambridge and someone who has spent time in Washington DC, but isn't knowledgeable of the people of the Commonwealth of Massachusetts. For Warren, the advantage of people not knowing who she is means she can portray herself as she wants. In these days, a lot of Democrats have a bad rap, and she should take solace in the fact that she's not one of those Democrats.
As far as the campaign, I think Brown is still a very popular candidate and so long as he puts up a good campaign, he will be reelected. The Democrats made a huge mistake by taking Massachusetts for granted when Brown was elected. Brown must be weary not to do the same thing.
Why You Should Care: Well, it appears that the Republicans have sured up their position in the Senate. When Brown was elected, he was the 41st seat, which was necessary to filibuster the Democrats. With the current President, the Democrats could have run amok with their spending policies. At the same time, the Republicans are still outnumbered by the Democrats in the senate. Looking at the potential elections for this class of Senators, it doesn't seem like there are many seats that the Republicans will lose, but Scott Brown in liberal Massachusetts may be the most likely, even with his popularity.
This election will go down the same year as the Presidential election and a lot can change with a potential new President. The Republicans will need all the help they can get. It's an important election and they're vulnerable both on the state and national level.
If you were watching the Tea Party Debate last night, then you missed a great football game. Yes, I spent the evening basking in the glow of my television as two Michigan quarterbacks threw for a Monday Night Football record amount of yards. I flipped over to the debate for may be ten seconds and heard Herman Cain speak, but I missed the majority of the action.
I don't know how many of you missed it, but I'm going to review the main talking points.
Social Security: Mitt Romney attacked Rick Perry for calling it a Ponzi Scheme:
In the debate, Romney chided Perry for referring to Social Security as a "Ponzi scheme" and vowed to protect the program. Romney called such language "over the top" and said that Perry wrote in his book "Fed Up!" that the entitlement program is unconstitutional.
Rick Perry responded by saying that Romney was using the term to scare seniors. While that may be true, Perry did say that in his book. What's more important to me is that Romney is taking the offensive. My big knock on him has been that he is not very assertive in the debates. He seemed to really leave his mark last night.
I expect him to show that he is serious about being president and taking control of the Republican primaries.
For too long, politicians have been afraid to speak honestly about Social Security. We must have the guts to talk about its financial condition if we are to fix Social Security and make it financially viable for generations to come.
So basically, he says we should talk about it, but doesn't give a solution. He didn't provide a solution last night either. He will continue to get pounded on this and other matters of entitlement reform until he comes up with a proper plan for making Social Security financially viable.
HPV: Perry also continues to be attacked for making young girls get HPV vaccinations. Michelle Bachmann has been the most offended by this:
"To have innocent little 12-year old girls be forced to have a government injection through an executive order is just flat out wrong," Bachmann says in her e-mail requesting donations, titled "I'm Offended.
Perry has been weak in defending himself. The thing Republicans seem most offended by is the fact it was passed through an executive order rather than through the legislature.
It's an effort to help these young women healthy. I don't see how you can't strongly defend yourself against that.
Regardless, it does bring into question Perry's values. He has admitted that he would have liked to have gotten it through the legislature, but there's also questions of chrony capitalism in this matter. Bachmann again:
She returned to that line of attack on NBC’s "Today" show. “It’s very clear that crony capitalism could have likely been the cause” of the HPV vaccination program. She ripped Perry for deciding to implement the program through a 2007 executive order.
Crony capitalism or not, I don't know how big an issue is. Yeah, it has brought into question Perry's character, but there are other flaws with Perry related to bigger issues.
Immigration: While I don't see this as being a huge issue, Perry also came weak on immigration:
Third, immigration. In Texas, Perry has extended in-state, taxpayer-subsidized tuition to the children of illegal immigrants. It's a sensible policy, as it brings them into the fold and gives them the opportunity to improve their lives and contribute to the wider economy. But his opponents slammed Perry hard for a policy they called "amnesty." Romney was straightforward in stating what is, for most conservatives, gospel: This is a nation of laws, and we follow the laws.
As a border state, Perry should have a stronger opinion or more connected policies regarding immigration, but he failed once again. Even Jon Huntsman ripped him on it:
Even Jon Huntsman, when he wasn’t making baffling jokes about Kurt Cobain, told Perry his claim that he couldn’t secure the border was “pretty much a treasonous comment.”
"What we did in the state of Texas was clearly a states right issue. And the legislature passed with only four dissenting votes in the House and the Senate to allow this to occur," he said. "We were clearly sending a message to young people, regardless of what the sound of their last name is, that we believe in you. That if you want to live in the state of Texas and you want to pursue citizenship, that we're going to allow you the opportunity to be contributing members in the state of Texas and not be a drag on our state."
I'm not quite sure how well that's going to fly, especially with Tea Party voters. Anything that suggests providing subsidies is a hot button issue. Giving these benefits to illegal immigrants is, as Bachmann put it, "not the American way."
Also notable was Rick Santorum's flub:
Former two-term Pennsylvania Senator Rick Santorum suggested that Perry's support for the Texas DREAM act was a ploy to attract Latino voters.
"What Governor Perry's done is he provided in-state tuition for -- for illegal immigrants. Maybe that was an attempt to attract the illegal vote -- I mean, the Latino voters," Santorum said, quickly correcting his flub.
I don't think attacking a race of people is a good idea, Mr. Santorum.
Jobs: Romney finally made a strong case for Perry's record:
It's easy to do well when you have everything going for you. In Massachusetts, which is one of the most liberal states, Romney didn't have a lot going for him. He had a democratic state senate. He had high taxes. There were jobs leaving the state. There were a lot of things going to the other way.
Romney is correct that Massachusetts was losing jobs month after month for nearly a year before he took office. Those losses stabilized in his first year, and the state then began to see job growth. According to BLS statistics, over the entirety of Romney's term in office, the ranks of Massachusetts' employed went from 3,224,600 to 3,270,400. That’s a 1.4 percent increase. However, that was far slower growth than the national average, 5.3 percent. In fact, as Perry and Huntsman correctly pointed out at the debate, Massachusetts ranked 47th in job growth over the length of Romney's term. The only states that did worse: Louisiana, Michigan and Ohio.
So what's the difference between the rate at which Massachusetts was losing jobs and the job growth that Romney had? Are we not talking turn around? Or are we just focusing on job growth?
Isn't this a legitimate question to see whether he did turn things around even if at a slow pace?
General Impressions: It sounds like Perry is losing his lead or he's suffering from being the front runner at the moment. As the front runner, he is taking the brunt of the crossfire from his opponents. He has a target on his back and the rest of the candidates, even Michelle Bachmann, are hitting it.
The most important thing to me was to see Mitt Romney actually take control and assert himself. He took command and showed that he is passionate about wanting to be president. He showed them that he means serious business. That's what stood out to me.
The rest of the candidates aren't legitimate contenders to me. Bachmann is this year's Sarah Palin. Ron Paul still isn't a viable mainstream candidate. Rick Santorum isn't really making any headway. I've been very disappointed with Jon Huntsman who has yet to be in bloom.
As the candidates continue to debate, we'll learn more about how things are going to turn up. It seems now that there are two horses with the rest nipping at their heels.
Everybody remembers where they were when they found out. They remember it like yesterday and it will be something they will never forget. Events like that will never escape your memory. It will forever be there, haunting.
i was in Mr. Means's (yes that was his real name and he was anything but mean) math class when it happened. We got called in for an assembly. The entire middle school was called in. i had no idea what was going on. Ms. Newman told us what had happened. It didn't hit me. I was 13 at the time and I didn't grasp the magnitude of the situation.
After we were dismissed from the assembly, I remember checkin CNN and reading what was going on. I was more naturally curious about what happened than shocked or anything else. I wasn't frightened at the time.
That night, all I did was watch the news. They told us that Osama Bin Laden and Al Qaeda were responsible for the attacks. They showed his face. Suddenly, I was filled with fear. It finally hit me. That night, I cried. I couldn't sleep. There was a feeling of helplessness, fear, and anger. This was my first real exposure to what terrorism is.
In many ways, it was the day I lost my innocence. I don't remember every moment of that day, but I will never forget how I felt.
10 years later, I'm still haunted by it. I look at the New York skyline and it seems empty. I had the chance to go to the World Trade Center, but we went to the Empire State Building instead. When I imagine what would have happened if we had gone there on the day of an attack, it makes chills go down my spine.
In memoriam, we all remember the events of that day, hoping that it never happened.
Since I called out Obama for not knowing how to create jobs, I guess I should tackle this issue.
My main beef with Obama is that he's using fiscal stimulus to try and create jobs. The way he's spending just isn't working. The economy continues to suffer even as he's spending billions of dollars "creating jobs:"
What’s clear, however, is that the Obama Administration badly needs a re-start after a(nother) disastrous August that saw the president’s numbers drop to record lows and the country descend deeper into economic pessimism.
Assuming that the jobs report shows in the neighborhood of 60,000 jobs created, it would provide fodder to Obama’s Republican critics who have long argued that not only are his policies not working but that the administration has little idea what else to do to make things better.
Despite this, it seems that President Obama wants to do more of the same:
President Barack Obama signaled Monday he'll propose a major infrastructure program and an extension of a payroll tax break in the jobs speech he planned to deliver Thursday before a joint session of Congress.
While the state of this country's infrastructure is a topic for another day, at what point will Obama realize that "creating" construction jobs is creating work not jobs. Once these projects are completed, there's nothing left to do unless you spend more money on improving infrastructure. It's just a spending spiral that he's creating. You can't do that.
But issuing a call for jobs isn't as simple as it may seem. While the new jobs numbers present the GOP with an obvious issue with which to hammer the president, Republicans in Congress and out on the campaign trail have spent much of the year focused on a different economic area: fiscal austerity and proposals to pare the big federal budget deficit.
However, it seems that it will become a more contested issue. Mitt Romney outlined his plan today:
Standing in front of a large banner that read “Day One, Job One,” Mr. Romney detailed the 10 actions he would take the first day of his presidency. Five of them are executive orders, and the other five are pieces of legislation that he would send to Congress and request action on within 30 days.
“The right course for America is to believe in growth,” Mr. Romney, a former Massachusetts governor, said at McCandless International Trucks. “Growing our economy is the way to get people to work and to balance our national budget.”
The way I see it, in terms of the difference to approaches, Romney is putting the money back into the households and to the businesses, while Obama is using that money to spend on creating jobs. Clearly it's more efficient Romney's way. I'm not convinced that how great an effect it will have.
We know, for starters, that 100% of net job growth in the U.S. comes from entrepreneurial start-ups, as a Kauffman Foundation report documented in 2010. If you took start-ups out of the picture and looked only at large or incumbent businesses, job growth over the last 35 years would actually be negative. In the words of Kauffman's Tim Kane, "When it comes to U.S. job growth, start-up companies aren't everything. They're the only thing."
While big companies may have to hire or fire people from time to time, they're, for the most part, mature companies. They're not going to continue to grow. The new technologies that are born and the new jobs are spurred by small businesses:
As I noted in an article last year with retired chief judge Paul Michel of the U.S. Court of Appeals for the Federal Circuit, which handles patent appeals, simply clearing the patent backlog could create up to 2.25 million jobs by 2014. And it wouldn't cost the taxpayer a dime, since the patent office is the only self-supporting agency of the federal government.
The problem with the current government is that they're not spending money right. I don't trust a government that is going to take tax payer money and misappropriate it in misguided band-aid programs.
While I'm not satisfied with the Republicans' plans thus far, I feel their plans will better alleviate the troubled economy because it will allow households and firms to choose where to spend that money. Deregulation has been mentioned by several candidates, but there hasn't been a specific plan laid out. Hopefully, as the election trail heats up, the candidates will be pushed to come up with specific ways to fix the economy and to create jobs.
One of the cornerstone's of Obama's campaign was to invest in clean technology jobs. One of the companies that the government extended a loan to has filed for bankruptcy:
Despite receiving a $535 million federal loan and about $1 billion in venture capital, high-profile solar-panel maker Solyndra Inc. plans to file for bankruptcy protection, undermined by a weak global economy and competition from China.
Lots of venture capital companies bought into the hype, investing in green technology to piggyback their own capital on federal favoritism. Solyndra's relationship with the White House came under special scrutiny because of Solyndra backer and Tulsa billionaire George Kaiser's history as an Obama fundraiser. In a letter to Energy Secretary Steven Chu in February, the House Energy and Commerce Committee raised concerns about the loan, noting that the company had suffered "financial setbacks," and asking for information about "whether Solyndra was the right candidate" for the loan guarantee.
These points all lead me to wonder about a big company in this space, Solyndra. This is a private company. I don’t have any financials to look at as a result. Neither do you. But you should, this company is heavily indebted to Uncle Sam.
So what in God's name are they doing?
I don't want to get too much into chrony capitalism, using public funds to feed special interests or to benefit campaign financiers. There are better solar companies that are thriving. Why did Obama put it into that black box?
Arlington officials boast the project will save $14,000 in annual electricity costs, but the solar panels have a life span of no more than 10 to 15 years. So the feds spent $300,000 to shave at most $150,000 off the net present value of Arlington's electric bills. Some 3,000 counties across the country received federal funds for the same kind of negative-return energy conservation "investments." This is the kind of "clean energy" program the administration wants to expand.
He has no idea what he's doing. It makes no economic sense to put money into a technology that doesn't pay off. This is throwing money away. The construction jobs are temporary. This is wasted money. Without even getting into where the money is going, a rich county, it doesn't make sense to put solar panels on a roof when it doesn't make economical sense. That's not investing in clean technology. That's wasting money.
Investing in clean technology would mean growing the technology so that there are jobs to help advance the technology within the industry. Obama has been so out of touch with what really works and that's the problem. He keeps talking about stimulus and improving infrastructure, but all he's doing is creating temporary low-skill jobs. On top of that, when he's investing into new technologies, he's putting money into failing companies like Solyndra.
I think it's safe to say that Obama has not delivered on his promise to create clean technology jobs, but to go even further, I'm not sure he even knows what creating jobs is. The struggling economy and his failed policies only reinforce this belief.
If you've been paying attention to the markets recently, you would know that Warren Buffett recently bought shares of the struggling Bank of America. While it makes sense in theory to follow the investments of a man who has been dubbed the Oracle of Omaha, it doesn't, however, seem like the best investment.
It does give a certain credibility to the stock and the company:
"This helps with the credibility gap that I think has existed in the minds of some shareholders. It reiterates the point that the balance sheet is healthy. They needed an endorsement in the market and they got it," said Jon Finger, managing partner of Finger Interests in Houston.
It does not hide the fact that the company is in some sort of trouble. People put money into these companies because of Buffett's track record and his name. However, you're not getting the same deal that Buffett is getting. Before we get into the actual deals, consider this; you're buying after Buffett buys, probably at a higher price than Buffett, and you're selling after Buffett sells, probably at a lower price than Buffet. This means you're getting lower returns to begin with.
Now Buffett is investing in beleaguered Bank of America. He invested $5 billion in a special preferred stock and will be getting a 6 percent dividend, while the regular stock you can buy pays less than 1 percent. Now I don’t know whether Bank of America is a good deal at current prices. Maybe it is. But the point is, if you buy now, you’re not getting the same terms as Buffett. You’re just pumping money into his dividend payment and hoping for the best.
And it's not the first time he's gotten this type of deal; he did it with Goldman:
But Buffett had more than $12,000 to invest. He had $5 billion. So he negotiated a much better deal. He bought preferred stock that came with a special dividend. Instead of 1 percent, he negotiated a 10 percent dividend. So now every year he receives a check for $500 million. Then, only after he gets paid, do common stockholders get their paltry 1 percent.
He did it with General Electric:
Buffett made a similar deal with General Electric. In 2008 he bought $3 billion in preferred shares with a 10 percent dividend. But you wouldn’t have done well to follow him. The stock was selling at around $21 a share in the fall of 2008. Now it’s running between $15 and $16, a loss of over 20 percent. But remember, unlike regular investors, Buffett’s been collecting that 10 percent dividend. He’s still ahead of the game.
Even when the stock was losing, Buffett was gaining. Does this sound like the kind of deal you want to get into?
A class of ownership in a corporation that has a higher claim on the assets and earnings than common stock. Preferred stock generally has a dividend that must be paid out before dividends to common stockholders and the shares usually do not have voting rights.
The precise details as to the structure of preferred stock is specific to each corporation. However, the best way to think of preferred stock is as a financial instrument that has characteristics of both debt (fixed dividends) and equity (potential appreciation). Also known as "preferred shares".
Buffett is essentially getting a much better deal than those of us who invest in common stock.
Following Buffett might have its advantages. Bank of America shares surged on news that Buffett had invested in the company. However, you need to realize that you're investment returns will be different from Warren's and your needs might not be the same as a result. He has built in advantages which will enable him to make a lot of money. These advantages are not available to the general public. It's important to see through to the details before making an investment following someone like Warren Buffett.
I'm not saying following Warren Buffet is a bad idea. I just think its important to know what you're getting into and how your returns might not be what you expect. The most important thing in investing is information: make sure you know what's going on.
With the pending debt crisis, the issue of taxes has become a much discussed issue. The biggest backlash in the debate seems to have been spurred by Warren Buffet, who says the ultra-rich should be paying more. A New York Post op-ed says that this is misguided:
Left unsaid is that much of that is taxed at 35 percent (via the corporate income tax) before he even gets his hands on it. So in effect, he’s paying taxes twice (that is, when his companies actually pay, anyway).
Counting both taxes, his effective rate would really be well north of 40 percent for a big chunk of his income.
In addition, Obama has propagated rhetoric against Corporate Jet Owners:
This, according to Republicans, has spurred a class warfare about who pays what taxes. The Daily Show pretty much explains it best:
This dialogue of shifting the burden of taxes from the rich to the poor has been a common thread from the Republican candidates. Fact of the matter is that the people who aren't paying taxes are amongst the poorest in our country. They live from pay check to pay check and can't afford to pay taxes without threatening their already low standard of living. Quite simply, it's a type of tactical rhetoric to enrage the contingency they're appealing to who tend to hate taxes and hate paying them. To these people, everyone should share the burden if there is a burden at all. Here's what Michelle Bachmann had to say:
"Part of the problem is today, only 53 percent pay any federal income tax at all; 47 percent pay nothing," said Bachmann. "We need to broaden the base so that everybody pays something, even if it's a dollar. Everyone should pay something, because we all benefit."
It's not just her saying this. Jon Huntsman is also in the we need more people paying taxes boat (8:11). I agree with Huntsman as saying we need people to have a stake in our spending. If you aren't paying taxes, what do you care how the government is spending those funds?
The problem though is that people are looking at it from a budgetary stand point. Taxing the poor shouldn't be seen as the way to increase tax revenues. It should be used more to make sure people have a shake in the government's spending. It should be to keep the government accountable.
Consider: Of those households that do not owe income taxes, about a third earn $10,000 a year and a slightly smaller share earn between $10,000 and $20,000. More than three-fourths earn $30,000 or less.
In addition, the notion that these households pay no taxes is flat-out wrong. They pay — leaving aside state and local sales, income and property taxes — federal gasoline and other excise taxes and, most significantly, payroll taxes on every dollar they earn. These taxes are regressive. Everyone pays the same share, regardless of income, so they hit the poor hardest, and they counterbalance the progressivity of the income tax code.
Let's not worry about taxes from a who pays stand point then. Let's worry about taxes from the stand point of the budget. Raising tax revenues is necessary in times where the budget is a concern. Deciding the budget isn't as simple as cutting spending and increasing taxes though. It is important to also consider the effect that these changes will have on the economy.
The economy is struggling.
We need policies that encourage economic growth. Let's start with Obama's plan to raise taxes and see if it would positively affect the economy. We'll look at the UK for evidence. The UK raised the top tax bracket to 50% for the wealthiest:
The new rate will affect the 300,000 highest earners in the UK, out of the 29 million people who pay income tax.
It will be levied on taxable incomes greater than £150,000 a year and aims to raise an extra £2.4bn by next year.
This is, in effect, similar to what Obama wants to do in taxing those making $250,000 or more. So did it work?
The most likely explanation is that higher income tax receipts partially represent the new 50p rate kicking in and rasing revenue. How else to explain the figures? Receipts are up way in advance of earnings or employment growth.
So it has worked in raising revenues. The big question then becomes has it helped the economy? It seems not:
"We always said that recovering from the deepest recession that we've had for many decades, with the largest budget deficit that we've seen for a very long time was going to be choppy and I think probably the waters have been choppier than anyone expected. We've seen big headwinds in the global economy, rising oil prices, rising commodity prices. All those things have an impact on the British economy."
Those same variables would seemingly have the same effect on the US economy. Raising revenues won't be worth it if you have events like this going on:
A solution that also addresses the economy would be the best case scenario. So what other options are there? Michelle Bachmann has proposed that we cut taxes:
Representative Michele Bachmann promised Saturday that as president she would turn things around within one economic quarter, in part by cutting corporate taxes and eliminating capital gains and inheritance taxes. Painting President Obama as doggedly antibusiness, Mrs. Bachmann asked, “Why in the world wouldn’t we do what we know works to create jobs in this country?”
Why would we want to cut taxes when we need to raise revenues? This doesn't seem intuitive does it? Well, a lot of companies have a lot of cash on their balance sheets, but they aren't using it:
Tax policy is driving much of this trend. For multinational corporations, cash earned abroad cannot easily be remitted to the United States. If it is paid back to the United States, it is subject to a dividend tax that can rise to as much as 35 percent. Companies are loath to pay this tax because while they can offset it with taxes paid abroad, the companies still end up paying a relatively high tax rate.
However, lower taxes won't solve the problem completely:
Five companies alone — Pfizer, Merck, Hewlett-Packard, Johnson & Johnson and I.B.M. — repatriated $88 billion, But the repatriation did not result in increased investment. Instead, companies largely repatriated the money and used their current United States holdings to pay out dividends or engage in share repurchases. This was contrary to what Congress had intended.
While the cash was not used for investment, this does not mean it did not have an overall positive effect on the American economy: shareholders went on to spend this cash. The study’s authors acknowledged this, stating that “presumably these shareholders either reinvested these funds or used them for consumption, thereby having indirect effects on firm investment, employment or spending.”
How can this be fixed?
A permanent tax reduction would not only cut taxes but actually raise revenue, allowing for Republicans to vote for it. And it should be a holiday without restrictions — trying to force companies to invest the money rather than pay dividends is a useless exercise that will create only more bureaucracy.
Even if the money were largely spent on buybacks and dividends and a large portion were kept abroad, it would still be reasonable to expect $300 billion to $600 billion to be repatriated. This money would flow into the economy, making the dividend tax cut a stimulus package that Democrats could support.
Lowering taxes isn't the complete solution, but there are ways to combat corporate loopholes and encourage the return of that money into the United States. Tax-friendly areas have been known to do well, as was chronicled in the WSJ documenting the success of the Swiss region Zug:
Developed nations from Japan to America are desperate for growth, but this tiny lake-filled Swiss canton is wrestling with a different problem: too much of it.
Zug's history of rock-bottom tax rates, for individuals and corporations alike, has brought it an A-list of multinational businesses. Luxury shops abound, government coffers are flush, and there are so many jobs that employers sometimes have a hard time finding people to fill them.
Zug provides an example where lower taxes has helped grow the economy and grow tax revenues. This is because as the economy has grown, there's been more wealth to kick back to the government. The government are getting lower percentages of incomes, but those incomes are growing because of the burgeoning economy.
We've actually seen this work in the United States before, when Reagan cut outrageous taxes leftover from the Carter administration. While this didn't rejuvenate the economy immediately, it helped the economy regain momentum through the 1990s, while the Clinton administration operated at a budget surplus.
Government officials need to take a hard look at this. The debt crisis is clearly an important issue. The solution, however, must make long-term sense. To me, this means that the government should encourage economic growth to raise in the future tax revenues. The shortfall from lowering taxes can be done by cutting spending.
The answer to our problems is addition by subtraction. The economy needs a boost. This is the way to do it.
Steve Jobs resigned from Apple on Wednesday. I have a great deal of admiration for the man. My family's first computer was an old Apple Macintosh. It was small, cute, and different.
I don't really remember it that much, but it was my first exposure to computers. During the time I grew up, Apple was always the underdog. Microsoft and its PC allies seemed to have a dominating presence in the personal computer market.
If you look at Apple now, as the greatest company in the world, you have to wonder how they got to where they were. The answer to everything is Steve Jobs. He's been a visionary, he's been an innovator, he's been The Man.
His resignation has been like a worldwide eulogy:
His departure leaves an empty feeling because he has brought us so much.
The history of Apple of a company is very much intertwined with the life of Steve Jobs at Apple. The New York Times had a chronology of Jobs's career at Apple.
Obviously, one of the key moments for Apple was when Steve Jobs returned to the company after a ten year hiatus:
When Steve returned, Apple just took over the world. Those iMacs were fantastic and cool. I owned a special edition Graphite G3 iMac. I actually still have it in my room, even though I haven't used it in forever. I remember the first thing I did was watch the free "A Bug's Life" DVD that came with the computer, probably related to Steve's ownership of Pixar at the time.
His story isn't just the story of a person, but the combination of time, place and person, spawning a career in industrial design of awesome proportions. Mr. Jobs founded two pivotal companies in American history. Both happened to be named Apple. One was the Apple of the Macintosh, the other was the Apple of the iPhone.
We'll return to that article in a second, but his return's significance to the company is incomparable. You can see it in the stock price: Over the last ten years, he has brought us a plethora of technological advancements with iPod and iTunes, the new mac computers and laptops and more recently the iPhone and iPad. These increased the influence of the company by diversifying its products in music as well as mobile devices. The iPod was the first of these new devices that really changed the game:
It throws up endless interesting juxtapositions: just now my iPod came up with Nick Cave, Judy Collins, Kasabian, Elvis Costello, Booker T, the Beatles, PJ Harvey, Arcade Fire and the Carpenters. It’s not perfect (why is it so determined to team Nick Lowe with Led Zeppelin?), but if you don’t like one of its choices you can just press fast-forward. Thanks to shuffle, you can create a radio station of a kind that died out when the broadcasters allowed niche playlisting to become a tyranny. And it doesn’t have any chit-chat or jingles or adverts. The music really is the thing.
Other companies came out with their own devices but the iPod was the iPod and iTunes was iTunes. He made it easy. You could get iTunes on any computer and it was a simple way of keeping track of your music. It linked to the iTunes Store as well as to your iPod when you downloaded new music. It just changed the music listening experience.
Jobs gave business an identity. He brought it to the 21st century:
“Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work,” Jobs said in a 2005 Stanford University commencement speech, which has been much quoted in recent days. “And the only way to do great work is to love what you do. If you haven’t found it yet, keep looking. Don’t settle.”
Here's the speech if you haven't seen it:
There are two other great Jobs speeches here.
He moved business forward. Technology is what drives innovation today. It is what makes our lives easier. Jobs has made a career of making products that people not only need, but are easy to use. I conceived the idea of the iPhone soon after the iPod, but I don't think I could have executed the product much better than Apple did.
That's been the story of Apple in recent year. I've questioned the need of some of their products, but the products they've brought forth have always been executed flawlessly. And people buy them like crazy. When I sit on the T and look around, everyone is on their iPads doing work or playing games. Apple has become a company that has a presence in every aspect of your life. That's a lot of what has made the company so great.
Going forward, it will be interesting to see how it goes. Jobs himself said that Apple will continue to innovate:
"I believe Apple's brightest and most innovative days are ahead of it," he said in his announcement this week, perhaps his one concession to ordinary sentimentality, for it seems impossible that Apple, or any company, could anticipate another run like Apple's in the 10 years since the iPod's introduction.
Going forward without Jobs is a scary prospect. It is something that is now a reality. Changes will be made:
Rather than acting as mere advisers to one of the world's great visionary leaders, the board may have to take more control, be less deferential to the new CEO Tim Cook than it was to Jobs, and meet more often.
Jobs is going to be the new chairman on a board that lacked a chairman before. This means that while he is no longer the CEO and won't be in charge of day to day operations, he will still have a strong say in the direction of the company. Despite his health worries, it's a good sign.
It's a good sign for everyone, the shareholders, the customers, but most importantly as a sign of Jobs's health. Steve Jobs has contributed so much to the world. He is an inspiring story for any American as a self-made man, as an innovator, an entrepreneur, as a cancer survivor and battler, and as an American. In the years to come, Jobs will be immortalized for his deeds. I have to say, it's been a pleasure to read about all the things he's done for Apple.
While this may be goodbye from running Apple, I hope it's not a goodbye forever.
The tech industry is at an interesting crossroads right now. While many of the largest companies have a plethora of cash at their disposal, rather than spending it on acquisitions, research and development, or stock buy backs, these companies are buying up patents to sure up their standing.
This patent purchases have been happening for some time but Google's recent purchase of Motorola has heightened the patent debate:
The costs of our broken patent system are often abstract, but this month Google put a price tag on the problem: $12.5 billion. That's what Google paid for Motorola's U.S. smartphone business and its 17,000 patents. This is $12.5 billion that one of America's most creative companies will not use to innovate, fund research or hire anyone beside patent lawyers.
Rather than using these patents to develop new products, these companies are using them to sure up their market position against their competitors and to start lawsuits. The war is taking place not in the sleek high tech buildings of Silicon Valley, but in the courtrooms.
The Google deal is the biggest in a line of purchases that has seen the biggest companies look to secure a competitive advantage:
Lacking its own trove of patents to vie with Apple, Microsoft and other companies, Google and its hardware partners were targeted by suits aimed at slowing the adoption of Android smartphones. Adding the 17,000 patents of Motorola Mobility, which has been inventing mobile-phone technology since the industry began, may help Google stanch the onslaught.
Google's Android technology has been under attack, so these purchases sure up their position against Apple and other competitors:
Apple stepped up the patent feud by suing Android manufacturers, claiming Google-powered devices copy the iPhone and iPad. Microsoft has sued Motorola Mobility and Barnes & Noble Inc., whose Nook reader runs Android software.
“We have a responsibility to our employees, customers, partners and shareholders to safeguard our intellectual property,” David Howard, Microsoft’s corporate vice president and deputy general counsel for litigation, said in an e-mail. “Motorola is infringing our patents and we are confident that the ITC will rule in our favor.”
Besides the lawsuits, the purchase of Motorola Mobility puts a price on patents:
"There is clearly an upward sloping trend in patent value and patent value being recognized," said James Malackowski, chief executive of Ocean Tomo, an intellectual property advisory firm which values patent portfolios as part of its services. "As with any trend, it's never perfectly smooth, you see volatility in outlier transactions."
I think this best describes the situation:
"There are three textbook ways to value intellectual property, just as you would real estate -- the income approach, the cost approach, and the market approach," he said.
"If you are looking at an apartment building, the market approach says how much do other apartment buildings sell for? For the cost approach, you would ask what it would cost to build a like unit. The income approach says look at the present value of the rents -- or for patents, the present value of the expected earnings associated with owning the technology."
The question is: should these companies be spending their cash on patents? The answer isn't so simple:
Many venture capitalists and software entrepreneurs have warned that software is fundamentally different from other areas of innovation and that patents should be granted much more rarely than they are today. Software almost always builds on previous work, so patents rarely reflect the kind of original work that patent law is supposed to protect.
Part of the problem is that the law no longer distinguishes between how ideas become products and services differently in different industries. A good contrast to software is how advances are made in the pharmaceutical industry, which is made up of largely independent areas of research.
While these companies do deserve protection for their intellectual property, it is not good for the companies nor the technology sector for these companies to just duel over these patents. The cash that these companies have on their books would be better used for new innovation through R&D and to create new jobs. The posturing of these companies suggests more about patent law than anything else. There needs to be changes:
The U.S. Court of Appeals for the Federal Circuit is the exclusive forum for patent appeals, created in 1982 to keep the law consistent. But with consistency has come decisions upholding patents so broadly it’s hard to tell exactly what they cover.
The solution would be to have stricter standards:
A more reasonable approach would be stricter approval standards. The U.S. Supreme Court seemed to agree last year when it affirmed the rejection of a proposed business-method patent. The decision comes too late for companies that have shelled out for infringement fights. But it bodes well for those that would rather use patents to promote innovation than squelch it.
You cannot change what has already happened, but you can make the future more clear. The purchases of these patents have been made because of uncertainty over these patent laws. They don't know where they are protected and where they are vulnerable.
These companies can't move forward without ensuring that their present is stable. It is time to reconsider how patent law applies to technology. The US government must make a stronger push to ease these companies' worries and get them back to focusing on innovating the future.
Ron Paul always seems to not be taken seriously. It's unfortunate. After all, he's the one who said governments should have less influence on people's lives. He campaigned hard on it in 2008. Now, it seems everyone else is capitalizing on his original message. He continues to be forgotten:
The media's ignoring of Ron Paul hasn't gone unnoticed in the mainstream media either:
By now, pretty much everyone agrees Ron Paul was ignored by the media following his second place finish in the Ames straw poll on Saturday. Whether or not the media blackout was justified due to his less-than-favorable campaign prospects is subject to debate.
So what are Paul's prospects? We can judge some of it by his ability to raise money right? Well, he's cash:
Rep. Ron Paul (R-Texas) raised $1.8 million in 24 hours on Saturday and Sunday, a major online "money bomb" timed to coincide with his 76th birthday. This is the fourth time Paul has raised more than $1 million in a day this campaign cycle, and a signal that he will have the money to compete as long as he wants for the Republican presidential nomination.
Paul is still behind Romney and Perry as far as raising money, but the man is raising more money than Michelle Bachmann at this point. He's not going away. And with all that money, he should not go away quietly.
On the ballot Romney remains in a strong position. He leads all candidates with 36% of the vote. However, Perry, making his first appearance in the NH Journal poll, debuts with a strong 18%. Ron Paul continues to impress despite relatively little media attention with 14%. And Bachmann earns 10%. All other candidates were in single digits.
So despite the lack of media attention, Paul continues to raise money and do well in the polls. You've got to still wonder why no one's considering him a serious contender. Is the media attention the only thing keeping him from being a serious contender.
Yet we see all these other candidates that seemingly have no chance getting media attention. Rick Santorum continues to get attention, despite finishing a distant fourth place. Even Jon Huntsman is getting more attention than Ron Paul. What's the deal with that:
Huntsman is challenging orthodoxies of thought that afflict the GOP alone, and taking positions that reflect the conventional wisdom in the media: evolution is a fact, so is climate change, and the debt ceiling had to be raised. In contrast, Johnson and Paul are challenging orthodoxies of thought that are bi-partisan in nature and implicate much of the political and media establishment.
Even more worrying is the fact that not only is Paul getting outshined in media coverage by his fellow candidates, but also by the potential Presidential candidates.
The Tea Party is using a radio blitz for Sarah Palin. Everyone under the sun are waiting for a Paul Ryan or Chris Christie to throw their hat into the race.
It's unbelievable.
In many ways, by not giving Ron Paul fair time or attention, he is becoming a forgotten man in this race. However, the extent to which people are going to ignore him is ridiculous. Palin, Ryan, and Christie aren't even in the race, and attention should not focus on them until they decide they want to serve our country. Huntsman and Santorum are not campaigning nearly as well as Paul, yet they are both getting the mainstream treatment. Whether you like Ron Paul or not, you should agree his voice should at least be heard. The media blackout on Ron Paul is anti-American.
One of the top challenges for any Republican candidate for President is to win the Tea Party vote.
The Tea Party is a grassroots movement that may or may not be misunderstood. When it first emerged, the protests seemed silly because there seemed to be racially motivated, particularly in the way they tried to convince the public that Barack Obama was born outside the United States:
"Given how much sway the Tea Party has among Republicans in Congress and those seeking the Republican presidential nomination, one might think the Tea Party is redefining mainstream American politics," Campbell and Putnam write. "But in fact the Tea Party is increasingly swimming against the tide of public opinion: among most Americans, even before the furor over the debt limit, its brand was becoming toxic."
In spite of this, it has continued to gain political influence amongst Republican presidential candidates.
Rather than discuss the movement, I would like to address in regards to their Tea Party politics.
Michelle Bachmann has been championing herself as a Tea Party Republican, particularly in highlighting her recent voting record in light of the debt crisis. However, she was burned in Friday's Wall Street Journal for some of her stances:
If Mrs. Bachmann is worried that Mr. Ryan's reforms would not address her concerns, then there are other approaches to choose from. But she has declined to offer or endorse any, expressing only vague support for a small increase in the retirement age and greater means testing—neither of which would make a real dent in Medicare's growth, since neither would reform the grossly inefficient payment system that causes costs to explode throughout the health sector. An asterisk is not enough.
The problem is that while the Tea Party has admirable political goals, its politicians may not have the spine to get things done. Providing concrete policies is an important factor:
A posture of bold fiscal conservatism is simply not compatible with timid evasions on Medicare reform. The combination may be politically convenient, but it is substantively incoherent. And it's not just Mrs. Bachmann who has done this—most of the GOP presidential candidates have as well. Virtually every speech they give is laced with promises to tame our deficit and debt, to scale back the size, scope, reach and cost of government. Yet they have little to say when it comes to fixing the fundamental structure of our health entitlements. They want to will the ends but not the means to those ends. And that just won't do.
You can't shy away from strength. By dodging concrete policies, you're building uncertainty for your campaign. One of the main criticisms of Obama was that he didn't provide concrete policies. I think a 2012 candidate will have to provide a much stronger stance on the issues.
The activists and enthusiasts were much more likely to express doubts about a Perry candidacy. Many were dissatisfied with his time as governor and doubted the authenticity of his conservative credentials.
These are the two "front-runners." I discount Mitt Romney only because I think his religion will be an issue and his spotty record is something that he won't defend. Romney is a smart guy, but he's not charismatic and he's not outspoken. I think he genuinely wants to be President and probably would do a good job if elected. However, he lacks those two traits which are prime on the campaign trail. Oh, and he's definitely not a Tea Party favorite.
Interestingly, the two candidates that would probably most appeal to the Tea Party are not even in the race.
And let me tell you what the truth is. What's the truth that no one is talking about-here is the truth that no one is talking about: you're going to have to raise the retirement age for social security. Oh I just said it and I'm still standing here! I did not vaporize into the carpeting and I said it! We have to reform Medicare because it costs too much and it is going to bankrupt us. Once again lightning did not come through the windows and strike me dead. And we have to fix Medicaid because it's not only bankrupting the federal government, it's bankrupting every state government. There you go. If we're not honest about these things, on the state level about pensions and benefits and on the federal level about social security, Medicare, and Medicaid, we are on the path to ruin.
Christie is mulling a run as is Paul Ryan, who brought us the Path to Prosperity:
No one person or party is responsible for the looming crisis. Yet the facts are clear: Since President Obama took office, our problems have gotten worse. Major spending increases have failed to deliver promised jobs. The safety net for the poor is coming apart at the seams. Government health and retirement programs are growing at unsustainable rates. The new health-care law is a fiscal train wreck. And a complex, inefficient tax code is holding back American families and businesses.
Both of these candidates fit the Tea Party agenda so far as cutting government spending and reducing taxes. More importantly, they have a strong record for entitlement reform. They have a strong stance against it and would provide the spine that the Republicans that the other candidates lack.
While the Bachmanns and the Perrys may have the charisma to appeal to the Tea Party supporters, they lack the record to bring about changes the Tea Party activiists can get behind. There's hope that one of these men will run for the presidency. However, until then, the Tea Party activists will have to settle for less.
