The Sanchez Report

So Much For Global Warming

From the BBC:

This headline may come as a bit of a surprise, so too might that fact that the warmest year recorded globally was not in 2008 or 2007, but in 1998.

But it is true. For the last 11 years we have not observed any increase in global temperatures.

And our climate models did not forecast it, even though man-made carbon dioxide, the gas thought to be responsible for warming our planet, has continued to rise.

So what on Earth is going on?

Climate change sceptics, who passionately and consistently argue that man's influence on our climate is overstated, say they saw it coming.

They argue that there are natural cycles, over which we have no control, that dictate how warm the planet is. But what is the evidence for this?

Read entire article here

California: Plenty Of Blame To Go Around

In case you've been wondering who is to blame for the mess in California, I found this article that pretty much sums it up. One caveat, the article does not go far enough to place blame on those who have controlled the Assembly and Senate for much of the past forty years, namely the Democrats. After all, they're the ones who are responsible for spending and have grown the annual budget from roughly $70 billion twelve years ago to nearly $150 billion today. The entire article can be found on Forbes.com:

The findings:

1. Arnold Schwarzenegger

The Terminator came to power with the support of much of the middle class and business community. But since taking office, he's resembled not the single-minded character for which he's famous but rather someone with multiple personalities.

2. The Public Sector

Who needs an economy when you have fat pensions and almost unlimited political power? That's the mentality of California's 356,000 workers and their unions, who make up the best-organized, best-funded and most powerful interest group in the state.State government continued to expand in size even when anyone with a room-temperature IQ knew California was headed for a massive financial meltdown. Scattered layoffs and the short-term salary givebacks now being considered won't cure the core problem: an overgenerous retirement system. The unfunded liabilities for these employees' generous pensions are now estimated at over $200 billion.

3. The Environment

In California today, everyone who makes a buck in the private sector--from developers and manufacturers to energy producers and farmers--cringes in fear of draconian regulations in the name of protecting the environment. The activists don't much care, since they get their money from trust-funders and their nonprofits. The losers are California's middle and working classes, the people who drive trucks, who work in factories and warehouses or who have white-collar jobs tied to these industries.

4. The Business Community

This insanity has been enabled by a lack of strong opposition to it. One potential source--California's business leadership--has become progressively more feeble over the past generation. Some members of the business elite, like those who work in Hollywood and Silicon Valley, tend to be too self-referential and complacent to care about the bigger issues. Others have either given up or are afraid to oppose the dominant forces of the environmental activists and the public sector.

Theoretically, according to business consultant Larry Kosmont, business should be able to make a strong case, particularly with the growing Latino caucus in the legislature. "You have all these job losses in Latino districts represented by Latino legislators who don't realize what they are doing to their own people," he says. "They have forgotten there's an economy to think about."

5. Californians

The last hope lies with those of us still enamored with California. We have allowed ourselves to be ruled by a motley alliance of self-righteous zealots, fools and cowards; now we must do something. Some think the solution is reining in citizens' power by using the jury pool to staff a state convention, as proposed by the Bay Area Council, or finding ways to undermine the initiative system, which would remove critical checks on legislative power.

Obama Feeling The Heat: "You're Going To Destroy My Presidency"

President Obama is starting to feel the heat. I suspect the President has never experienced push back in any way shape or form. He has been accustomed to getting his way throughout his brief public career. His adoring fans and media have hung onto his every word, but this love affair has been disrupted. Not only are his poll numbers falling, but he doesn't even have the support of his own party in Congress. Just six months into his presidency and he is already concerned about his legacy. In a recent meeting with a Democrat Congressman, he was candid in expressing his concern about the lack of support of his healthcare plan by stating " You're going to destroy my presidency."

From Congress Daily:

A telling episode recounted by Senate Finance ranking member Charles Grassleyreveals the Obama administration might be more worried than they are letting on that a Republican senator's comparison of the healthcare overhaul to Waterloo might be dangerously close to the truth.

Grassley said he spoke with a Democratic House member last week who shared Obama's bleak reaction during a private meeting to reports that some factions of House Democrats were lining up to stall or even take down the overhaul unless leaders made major changes.

"Let's just lay everything on the table," Grassley said. "A Democrat congressman last week told me after a conversation with the president that the president had trouble in the House of Representatives, and it wasn't going to pass if there weren't some changes made ... and the president says, 'You're going to destroy my presidency.' "

The White House did not respond to requests for comment.

Read article here

CBO Director: The Federal Budget Is On An Unsustainable Path

The Director of the Congressional Budget Office confirmed what most of us already knew. Namely that the federal budget is on an unsustainable path. I'm sure the White House isn't happy with having another credible source weigh in on their reckless spending.

From the CBO Director's Blog:

Under current law, the federal budget is on an unsustainable path, because federal debt will continue to grow much faster than the economy over the long run. Although great uncertainty surrounds long-term fiscal projections, rising costs for health care and the aging of the population will cause federal spending to increase rapidly under any plausible scenario for current law. Unless revenues increase just as rapidly, the rise in spending will produce growing budget deficits. Large budget deficits would reduce national saving, leading to more borrowing from abroad and less domestic investment, which in turn would depress economic growth in the United States. Over time, accumulating debt would cause substantial harm to the economy. The following chart shows our projection of federal debt relative to GDP under the two scenarios we modeled.

   

 

Read entire post here

Obamanomics Is Moving Us In The Wrong Direction

The great Larry Kudlow once again articulates why the Obama economic plan is leading us down the road to economic demoralization.

From Townhall.com:

There’s no question that current government policies for taxes, spending, and regulation are causing the U.S. to lose competitiveness in the global race for capital, prosperity, and growth.

Of course, China has been moving in the direction of free-market capitalism for years. To some extent, this shows the positive benefits of America’s free-trade policies and its open-mindedness in helping nurture not only China growth, but also middle-class prosperity worldwide.

But what’s particularly galling about Obamanomics is that we may well be losing our competitive edge with Europe. While Europe is ever so slightly moving toward Reagan and Thatcher, the U.S. is shifting toward an overtaxed and overregulated model that smacks of François Mitterrand. That’s something no one should want to tolerate.

Heavy government controls at home, along with an income-leveling social policy couched in economic-recovery terms, is no way to run a railroad. At the simple stroke of a computer key, world investment flows to its most hospitable destination. That includes a reliable currency. But in President Bush’s last year and President Obama’s first, the U.S. has become a less-hospitable destination for global capital. That should worry everybody.

Read entire post here

Art Cashin Calls Stimlulus Package A "Hoax"

The Wall Street legend, Art Cashin, who serves as Director of Floor Operations for UBS Financial Services Inc. was interviewed today on CNBC and provided his view of the market. During the on air interview, he once again stated his belief that another stimulus package would be a waste of time and money, because the first package was "part illusion, part hoax." He further stated that the problems in the economy have not gone away and " the fire extinguisher is empty." He believes that the current stock rally will be short-lived but did not predict whether the pull back will be minor or a severe drop.

These comments are part of a growing chorus of the business community who are becoming more vocal in their opposition to the policies being offered up by the Obama Administration. The White House should take note and abandon its wreck less course. Somehow I doubt that they will listen. That's the problem with placing our economy in the hands of a group of academics and politicians who have never spent a day in the private sector. Ladies and gentlemen, our financial future is at stake and this is a battle of Theory vs. Reality. I'm pulling for Reality!

The Case Against Obama's Healthcare Takeover

From Kudlow's Money & Politics:

It looks like President Obama’s big-bang health-care reform is going down to defeat. This is good. But my question is why do we need it at all? According to a recent ABC News/USA Today/Kaiser Family Foundation survey, 89 percent of Americans are satisfied with their health care. That could mean up to 250 million people are happy. So why is it that we need Obama’s big-bang health-care overhaul in the first place?

There’s more. According the U.S. Census Bureau, we don’t have 47 million folks who are truly uninsured. When you take college kids plus those earning $75,000 or more who chose not to sign up, that removes roughly 20 million people. Then take out about 10 million more who are not U.S. citizens, and 11 million who are eligible for SCHIP and Medicaid but have not signed up for some reason.

So that really leaves only 10 million to 15 million people who are truly long-term uninsured.

Yes, they need help. And yes, I would like to give it to them. But not with mandatory coverage, or new government-backed insurance plans, or massive tax increases. And certainly not with the Canadian-European-style nationalization that has always been the true goal of the Obama administration and congressional Democrats.

Instead, we can give the truly uninsured vouchers or debit cards that will allow for choice and coverage, and even health savings accounts for retirement wealth. According to expert Betsy McCaughey, instead of several trillion dollars and socialized medicine, this voucher approach would cost only about $25 billion a year.

Read entire post here

Supreme Court Overturns Sotomayor In White Firefighters Case

From the Associated Press:

The Supreme Court has ruled that white firefighters in New Haven, Conn., were unfairly denied promotions because of their race, reversing a decision that high court nominee Sonia Sotomayor endorsed as an appeals court judge.

New Haven was wrong to scrap a promotion exam because no African-Americans and only two Hispanic firefighters were likely to be made lieutenants or captains based on the results, the court said Monday in a 5-4 decision. The city said that it had acted to avoid a lawsuit from minorities.

The ruling could alter employment practices nationwide, potentially limiting the circumstances in which employers can be held liable for decisions when there is no evidence of intentional discrimination against minorities.

"Fear of litigation alone cannot justify an employer's reliance on race to the detriment of individuals who passed the examinations and qualified for promotions," Justice Anthony Kennedy said in his opinion for the court. He was joined by Chief Justice John Roberts and Justices Samuel Alito, Antonin Scalia and Clarence Thomas.

In dissent, Justice Ruth Bader Ginsburg said the white firefighters "understandably attract this court's sympathy. But they had no vested right to promotion. Nor have other persons received promotions in preference to them."

Justices Stephen Breyer, David Souter and John Paul Stevens signed onto Ginsburg's dissent, which she read aloud in court Monday.

Kennedy's opinion made only passing reference to the work of Sotomayor and the other two judges on the 2nd U.S. Circuit Court of Appeals who upheld a lower court ruling in favor of New Haven.

But the appellate judges have been criticized for producing a cursory opinion that failed to deal with "indisputably complex and far from well-settled" questions, in the words of another appeals court judge, Sotomayor mentor Jose Cabranes.

"This perfunctory disposition rests uneasily with the weighty issues presented by this appeal," Cabranes said, in a dissent from the full 2nd Circuit's decision not to hear the case.

The Real Cost of Obama Healthcare = $4 Trillion Over Ten Years

The media has widely reported that the cost of President Obama's takeover of healthcare tops $1 trillion over ten years. However, Dr. Stephen T. Parente of the University of Minnesota and the HSI Network testified before Congress this week and pegs the true number at $ 4 Trillion Dollars over a ten year period. This number was derived using a model developed by the Department of Health and Human Services. Consider this, our entire budget for FY 2010 is $3.6 Trillion. Ladies and Gentlemen, there is no way we can afford this left wing socialized takeover of the finest healthcare system the world has ever known.

From The Lid blog:

• Our early assessment of the Senate Finance committee proposal shows a 74% reduction in the uninsured with a 10 year cost  2.7 trillionusing public option plan modeled after the Massachusetts Connector. We also modeled an FEHBP version of the public plan and got a cost of over 1.3 trillion, but with a 30% reduction in the uninsured.

• CBO scored the Kennedy Bill last week at approximately a 30% reduction [of uninsured people]for 1 trillion over ten years. Using the ARCOLA model, we found nearly everyone would be covered if all elements of the Kennedy bill were enacted at a ten year cost of 4 trillion. At this time, we are the only group yet to score the full Kennedy proposal. (If you would like to see the full analysis of this bill including how they got to their budget numbers) 

The full analysis concludes:

The plan lowers the uninsured significantly, to less than 1% of the population, but not without a cost of over four trillion dollars over 10 years. There are no provisions in the legislation to offset this course. Even if the most generous estimate of the employer sponsored tax exclusion ($300 billion per year, including collecting FICA contributions from employers) where used and combined with fraud estimates and block granting all of Medicaid (acute and long term care2), this would be a challenging proposal to finance with budget neutrality. Finally, the public plans will be quite successful in recruiting large numbers of Americans. They will also likely crowd out at 79 million individual
contracts with existing private insurers.

Separately, Parente analyzed the house version of the plan:

• The plan lowers the uninsured significantly, to less than 3% of the population, but not
  without a cost of nearly $3.5 trillion dollars over 10 years. There are no provisions in the legislation to offset this course. Even if the most generous estimate of the employer sponsored tax exclusion ($300 billion per year, including collecting FICA contributions from employers) were used and combined with fraud estimates and block granting all of Medicaid (acute and long term care2), this would be a challenging proposal to finance with budget neutrality. Finally, the public plans will be quite successful in recruiting large numbers of Americans. They will also likely crowd out 64 million individual contracts with existing private insurers.

Doctors' Stand Up To Obama And His Healthcare Reform

Something new happened to President Obama during his recent speech at the American Medical Association convention, he was booed. For the first time since becoming President, he faced outright criticism and it came not from the press, but from medical doctors who weren't afraid to express their disapproval of his takeover of the healthcare system.

From Breitbart.com:

Barack Obama isn't used to hearing boos.

For all the young president's popularity, the response he got Monday from doctors at an American Medical Association meeting was a sign his road is only going to get rockier as he tries to sell his plan to overhaul the nation's health care system.

The boos erupted when Obama told the doctors in Chicago he wouldn't try to help them win their top legislative priority—limits on jury damages in medical malpractice cases.

But what could they expect? If Obama announced support for malpractice limits, that would set trial lawyers and unions—major supporters of Democratic candidates—on the attack. Not to mention consumer groups.