Mixed Bag on Unemployment Data

The media is going to tout the Bureau of Labor Statistics reports out today, claiming that the unemployment rate dipped to 9.4%. Experts had expected the rate to increase to 9.6% from the 9.5% rate in July 2009.

However, things are not all what they seem to be.

The Bureau puts out more than just seasonally adjusted rates.

They also put out the unadjusted rates, and those rates tell a different tale.

They show that the unemployment rate remained at 9.7% in July (the same as June). Moreover, the number of unemployed plus discouraged workers remains well over 10% and shows no sign of slackening. Seasonally adjusted figures for unemployed plus discouraged shows a drop from over 10% to 9.8%, but that would sync with the seasonally adjusted unemployment rate as well.

This is a mixed bag, but naturally everyone will focus on the seasonally adjusted figure as proof that the recession is over or at least starting to subside.

The problem with this analysis is that businesses aren't ramping up production and retailers aren't increasing inventories because they don't want to be caught with excess inventory that would have to be sold at clearance prices. That further means that consumers wont find the big bargains they usually expect heading into the back-to-school season. Then, there's the shift in purchasing behavior to coincide with sales tax holidays in various states around the country. That shifts sales and businesses and consumers both take that into account.

UPDATE:
Moreover, job losses continue, just at a lower rate. With businesses having already cut to the bone, there isn't much left to cut in terms of employment. That would explain the slackening increase in unemployment, but the problem is that the economy isn't creating jobs. The number of unemployed around the nation continues rising, just not nearly as bad as it did just a few months ago. That's not good news.

UPDATE:
Innocent Bystanders is interpreting the data so you don't have to cull through all the raw information. The only way that the unemployment rate could drop is if the labor pool decreases even more. That's not a good thing at all. It continues to show a contracting economy.

Oh, and the Obama Administration's economic forecasts continue to be way off, even with this marginally good news (as seen in the associated chart). We would have been better off had the Administration done nothing (and we'd be a trillion dollars richer for it at that).

UPDATE:
Now, the Administration says that 10% is quite possible at some point during the rest of the year. I can't imagine why they'd come to that conclusion. Then again, they already know the rate is over 10% given the unadjusted figures, and the only reason that the rate appears to have dipped is that hundreds of thousands quit the job search because the economy is in the doldrums.

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Taliban Bigwig Baitullah Mehsud Killed In Airstrike?

It had been released earlier this week that one of Baitullah Mehsud's wives were killed in a UAV airstrike this week while at Mehsud's father in laws compound. Now, an aide to Mehsud says that Mehsud was indeed killed in an airstrike. The US has been trying to get at Mehsud for some time now, and the admission that his wife was killed suggested that we were on to his movements.

Pakistan's Taliban chief Baitullah Mehsud, who led a violent campaign of suicide attacks and assassinations against the Pakistani government, has been killed in a U.S. missile strike, a militant commander and aide to Mehsud said Friday.

Earlier, Foreign Minister Shah Mahmood Qureshi told reporters in Islamabad that intelligence showed Mehsud had been killed in Wednesday's missile strike on his father-in-law's house in Pakistan's lawless tribal area, but authorities would travel to the site to verify his death.

Pakistani and U.S. intelligence officials said the CIA was behind the strike. All spoke on condition of anonymity because of the sensitivity of the matter.

"I confirm that Baitullah Mehsud and his wife died in the American missile attack in South Waziristan," Taliban commander Kafayat Ullah told The Associated Press by telephone. He would not give any further details.

Mehsud had been a thorn in the side of not only the US, but Afghanistan and Pakistan, where Mehsud had been carrying on a war against the Pakistani government's efforts to pacify the frontier provinces and to limit the reach of the Islamists. Mehsud was a capable and determined leader, who had a loyal following, and whose thugs managed to capture wide areas extending beyond their tribal areas in the frontier provinces, putting the Pakistani government in jeopardy.

It was the realization of latter fact that meant that the Pakistani government, for all of its public opposition to the US covert airstrikes, never truly minded that the US was hunting al Qaeda and Taliban in the frontier provinces. The US was doing what the Pakistani military could or would not do.

Still, this could be a misdirection ploy by Mehsud's Taliban group, as Bill Roggio at the Long War Journal reports. US officials aren't nearly as sure that they got their man.

UPDATE:
Bill Roggio now reports with more certainty that Mehsud indeed was killed in the airstrike, and notes possible successors. One in particular is worrisome, Qari Hussain, for his use of child suicide bombers, but another of Baitullah's cousins is responsible for repeated attacks on NATO supply lines through Pakistan:

Possible successors to Baitullah include his cousins Hakeemullah Mehsud and Qari Hussain Mehsud; North Waziristan leader Hafiz Gul Bahadar; and Bajuar Taliban sub commander Waliur Rahman.

Hakeemullah directs Taliban operations in Arakzai, Kurram, and Khyber. He has been behind the attack against NATO convoys moving through Peshawar. More than 700 NATO vehicles and containers have been destroyed in these atacks over the past eight months.

Qari Hussain is a fear[ed] military commander in South Waziristan. He is renown for training children to become suicide bombers.

Hafiz Gul Bahadar is also a candidate to take over the Pakistani Taliban in the event of Baitullah's death. Bahadar is widely respected in Taliban circles and has close links to the Taliban in Afghanistan as well as a Qaeda.

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Senate Confirms Sotomayor 68-31

The outcome was never in doubt. Judge Sonia Sotomayor was confirmed by the full US Senate 68-31. She will be sworn in with more than enough time to start the October session of the Court.

Congratulations to Justice Sotomayor and my only hope is that she follows the law and the US Constitution and doesn't freelance policy into her decisions.

The GOP that voted for her confirmation may not be in the good graces with the conservative elements within the party, but they did do the right thing by confirming a candidate who was qualified for the position, even if you can disagree with her policy positions and judicial philosophy.

That was the quandary faced by the Senate Republicans, and while some pursued the political angle to denounce her policy choices and preferences, the job of the US Senate is to weigh the qualifications, not the policy choices.

I know that's now how this process has been handled, but that's how it should be done. The Democrats repeatedly did this to eminently qualified GOP nominees, including Chief Justice Roberts and Justice Alito.

What this does is lay the groundwork for the next confirmation when that eventually occurs.

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Down Goes Twitter. Down Goes Twitter

The popular service has reported outages earlier this morning, which means that people relying on the service had to make due with reaching for a telephone, or making a blog posting instead of their usual fast posts.

The cause? A denial of service attack, that remains underway. Expect service to be spotty as the company tries to defend against the attack.

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One Major Reason the Economy Will Not Recover Anytime Soon

Many Americans have their wealth tied to their real estate holdings. More Americans than ever bought homes and many of those who made their purchases during the real estate boom did so on easy credit with little regard for their capacity to repay. The ensuing real estate market correction and the credit market collapse should have brought the government policy of trying to expand homeownership into greater scrutiny since it was government programs and policy that sought to expand homeownership and demanded lenders extend mortgages to those who lacked the wherewithal to repay.

Now, we get word that nearly 50% of homeowners will be underwater on their real estate holdings by 2011.

The percentage of U.S. homeowners who owe more than their house is worth will nearly double to 48 percent in 2011 from 26 percent at the end of March, portending another blow to the housing market, Deutsche Bank said on Wednesday.

Home price declines will have their biggest impact on prime "conforming" loans that meet underwriting and size guidelines of Fannie Mae and Freddie Mac, the bank said in a report. Prime conforming loans make up two-thirds of mortgages, and are typically less risky because of stringent requirements.

"We project the next phase of the housing decline will have a far greater impact on prime borrowers," Deutsche analysts Karen Weaver and Ying Shen said in the report.

Of prime conforming loans, 41 percent will be "underwater" by the first quarter of 2011, up from 16 percent at the end of the first quarter 2009, it said. Forty-six percent of prime jumbo loans will be larger than their properties' value, up from 29 percent, it said.

That is a direct symptom of the easy credit years. It is also a symptom of the adjustable rate mortgage years, where buyers could get homes with no or little money down, and adjustable rate mortgages that looked great on paper for the first year or first few years, but which jumped up tremendously once the initial teaser rates ended.

Now, coupled with the real estate collapse, many of those who bought homes now face a situation where their homes aren't worth as much as the mortgages. That makes selling those homes ever more difficult creating short sale situations. That means that the home sales going forward are going to remain depressed for some time to come as sellers realize they aren't going to get the money they need to clear their mortgages and buyers find that they can't buy easily since the short sale transactions are more time consuming and difficult since the banks have to sign off on the deals.

There are no easy answers to this mess, but only time will allow the markets to rebound naturally. Government programs to improve homeownership will only result in exacerbating the situation and extending the difficulties.

This too will have a ripple effect across the economy, as homeowners will find that they can't obtain home equity lines of credit to carry out repairs or other improvements, since the property values can't sustain the additional credit hit to the property. It means that demand for capital items will remain below normal, and that means that industries reliant on home sales will suffer (think furniture companies, home improvement companies, home builders, etc.)

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Cold Cash Jefferson Convicted on 11 of 16 Counts

This couldn't happen to a nicer guy. Former Congressman William Jefferson, a Democrat from Louisiana, was found guilty of 11 of 16 bribery and fraud counts in federal court.

A federal court jury in Alexandria, Va., deliberated for five days before finding Mr. Jefferson, 62, a New Orleans Democrat who served in Congress for 18 years until being defeated in 2008, guilty of 11 of 16 counts of bribery-related crimes. The jurors thus rejected defense assertions that Mr. Jefferson’s business-promotion activities in Africa did not qualify as “official acts” under public corruption laws.

Mr. Jefferson faces a long prison term, unless his conviction is overturned on appeal.

In a six-week trial before Judge T.S. Ellis, prosecutors said that from 2000 to 2005, Mr. Jefferson sought hundreds of thousands of dollars in bribes from a dozen companies involved in oil, communications, sugar and other businesses, often for projects in Africa.

Congressional Democrats did all they could to prevent any action to censure or repudiate Jefferson. In fact, despite the FBI discovering $90,000 in cold cash stashed in Jefferson's freezer, Democrats rallied around this criminal.

Jefferson lost his bid for reelection in 2008.

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The Afghan IED Threat Persists

Here's a video showing what the US, Afghanistan, and the NATO ISAF forces face:



It's hard, thankless work, and yet the troops carry on with their mission to keep the roads clear all while the Taliban do their best to kill and maim anyone using those roads. Their IEDs do not discriminate between the military or kids playing along the routes.

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The Rebuilding of Ground Zero, Part 72

Mayor Mike Bloomberg came out and gave a blistering attack against the Port Authority for bungling the rebuilding efforts and standing in the way of Larry Silverstein rebuilding office space on the site. Moreover, he criticized the bistate agency because it was falling behind on deadlines to rebuild the 9/11 memorial, museum, 1WTC, and the transit hub.

Meanwhile, Silverstein announced that he's going to arbitration to compel the Port Authority to carry out its obligations.

Mr. Silverstein said in a statement that the authority’s inability to complete the transit hub, a vehicle security center and other projects at the World Trade Center site had undermined his company’s ability to build three office towers along Church Street, a claim that was immediately disputed by the Port Authority of New York and New Jersey.

Mr. Silverstein has insisted in recent months that the authority finance two of the towers because he is unable to obtain real estate loans and corporate tenants for the project. Reluctant to invest in speculative office space, the agency has asked Mr. Silverstein to risk his own money before it agrees to put up additional funds.

Mayor Michael R. Bloomberg, and separately, Gov. David A. Paterson, have tried to resolve the impasse with no success.

“Today’s action is designed to provide a complementary — and expedited — route to resolving this impasse,” the developer’s statement said. “One way or another, we must resolve, once and for all, the disputes that have arisen as a result of the Port Authority’s continued and admitted delays.”

The Port Authority is clearly at fault for the delays, and would lose at arbitration, which makes its position all the more curious.

The Port Authority, which managed to rebuild the PATH temporary station (twice), now appears to be dragging its feet and doesn't feel the slightest bit of urgency in completing work necessary to prepare the site for Silverstein to build the office towers as per their contractual obligations.

Then, there's the whole issue of financing. This is a project of national importance, and yet no one appears willing or able to contact the Obama Administration to inquire about obtaining the necessary financing to get the projects built.

Assembly Speaker Shelly Silver also finds the Port Authority at fault for dragging its feet and not doing enough to make sure that the site is rebuilt. While he calls on Silverstein to increase his financial commitment to the site, the real issue is obtaining financing, and no one seems willing to tackle that issue in any serious manner.

Instead, we're going to be left with a hole in the ground that will stand as a monument to the failure of the politicians to rebuild; one that dishonors all those who were murdered on 9/11 because of the lack of political will to see the reconstruction through to completion.

UPDATE:
The Port Authority released its updates on Ground Zero construction, and they claim they met 19 of 20 construction milestones. Curiously, one of the milestones includes jumping one of the two tower cranes on 1WTC 68 feet. But, if you look carefully, the steel forming the tower hasn't grown in size during the quarter. Some progress was made on the North core of 1WTC, but it's still lagging behind.

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On My Nightstand: Six Days of War: June 1967 and the Making of the Modern Middle East

For anyone who wants a serious treatment of the Six Day War and the Modern Middle East, Michael Oren's Six Days of War: June 1967 and the Making of the Modern Middle East is one of three books I would highly recommend. I've read it before, but I feel that the time is right for a rereading. The book traces the origins of the Six Day War and the fallout.

No examination of the region's conflicts is complete without understanding what occurred over the course of those six days in June, 1967 and how it transformed the region and Israel's position - for better and worse.

The other two are William Quandt's Peace Process and Thomas Friedman's From Beirut to Jerusalem. Friedman focuses on the cultural divide, and while it is dated, the underlying lessons remain valid (particularly how the Arab regimes deal with threats to their regimes as compared to Israel and the world reaction to same).

Quandt's book should be read as a companion to Oren as the focus is more on American foreign policy during that time, and I found it an invaluable resource when writing my Master's Thesis.

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Cash For Clunkers Effect On Environment Is Negligible

MSNBC has a report claiming that the cash for clunkers program will have a negligible effect on the global climate.

Climate experts aren't impressed.

Compared to overall carbon dioxide emissions in the United States, the pollution savings from cash for clunkers do not noticeably move the fuel gauge. Environmental experts say the program — conceived primarily to stimulate the economy and jump-start the auto industry — is not an effective way to attack climate change.
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"As a carbon dioxide policy, this is a terribly wasteful thing to do," said Henry Jacoby, a professor of management and co-director of the Joint Program on the Science and Policy of Global Change at MIT. "The amount of carbon you are saving per federal expenditure is very, very small."

Officials expect a quarter-million gas guzzlers will be junked under the original $1 billion set aside by Congress — money that is now all but exhausted.

Calculations by The Associated Press, using Department of Transportation figures, show that replacing those fuel hogs will reduce carbon dioxide emissions by just under 700,000 tons a year. While that may sound impressive, it's nothing compared to what the U.S. spewed last year: nearly 6.4 billion tons (and that was down from previous years).

That means on average, every hour, America emits 728,000 tons of carbon dioxide. The total savings per year from cash for clunkers translates to about 57 minutes of America's output of the chief greenhouse gas.

How much energy was expended by building all those replacement vehicles, instead of letting them go out to pasture on their own? That's an energy cost that isn't included.

Moreover, what was the energy cost of keeping GM and Chrysler afloat? On a strictly eco-leftist scale, that simply can't do because of all the emissions associated not only with the vehicles, but the entire production cycle.

Still, all this talk of emissions is little more than hot air considering that CO2 is a fraction of 1% of the atmosphere. It's not even the most influential greenhouse gas - that would be water vapor.

The improved gas mileage can be significant, but one has to figure what it costs someone to buy a new car and the lost opportunity for that purchase. It may take several years before an owner sees the benefit of the higher fuel economy in the new vehicle, dependent upon the price of gas and miles driven annually.

Also, what happens to the vehicles now that they're reduced to junk? They have to be recycled, and without cash for clunkers, practically every part of the vehicle was salvageable. Now, we're limited only to certain body parts, not the engine - the most valuable portion of any junked vehicle. Reusing those parts saved the environment. Now, what happens to older cars that aren't traded in under the program when cost-conscious owners want to repair the vehicle instead of getting rid of it? They will lose transportation options, and this program does nothing for them.

On whole, this program does nothing to improve the economy other than temporarily shifting when trade-in sales might occur, reducing overall sales for later in the year or delaying sales until the program became effective. It also does little to improve the economy, once you factor in the replacement costs in energy output to put a new car on the road in the place of perfectly serviceable vehicles.

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Obama Administration Withholding Cash For Clunkers Data

How's this new era of openness and veracity working out?

The Obama Administration is withholding data on the cash for clunkers program, even as the Senate is supposed to take up the $2 billion extender? How exactly does this work?

Oh wait. He Won. Therefore he gets to do as he pleases, and can withhold data that might show things aren't quite as rosy as he wishes them to be?

Let's put this in context. The White House has been busy claiming that the Ford Focus is the top selling replacement vehicle under the cash for clunkers program, and yet other data seems to suggest that the top vehicles sold aren't GM, Ford, or Chrysler, but rather Honda, Toyota, and Hyundai:

DOT officials already have received electronic details from car dealers of each trade-in transaction. The agency regularly analyzes the data internally, producing helpful talking points for LaHood, White House spokesman Robert Gibbs and other officials to use when urging more funding.

LaHood, the program's chief salesman, has pitched the rebates as good for America, good for car buyers, good for the environment, good for the economy. But it's difficult to determine whether the administration is overselling the claim without seeing what's being sold, what's being traded in and where the cars are being sold.

LaHood, for example, promotes the fact that the Ford Focus so far is at the top of the list of new cars purchased under the program. But the limited information released so far shows most buyers are not picking Ford, Chrysler or General Motors vehicles, and six of the top 10 vehicles purchased are Honda, Toyota and Hyundai.

LaHood has called the popular rebates to car buyers "the lifeline that will bring back the automobile industry in America." He and other advocates are citing program data to promote passage of another $2 billion for the incentives -- claiming dealers sold cars that are 61 percent more fuel efficient than trade-ins and Ford's Focus is the top seller.

LaHood also said this week that even if buyers aren't choosing cars made by U.S. automobile manufacturers, many of the Honda, Toyota and Hyundai cars sold were made in those companies' American plants.

But there's no way to verify his claims without access to DOT's data.

Senate GOP leader Mitch McConnell of Kentucky has argued against quick approval of $2 billion for the program because little is known about the first round of $3,500 and $4,500 rebates.

"We don't have the results of the first $1 billion," McConnell spokesman Don Stewart said. "You don't have them. We don't have them. DOT doesn't have all of it. We'd hate to make a mistake on something like that."

Once again, the lack of hard data makes it hard to corroborate any of the information coming out from the White House on the effects of this program.

After all, other reports claim that the top selling vehicle is the Ford Focus. That could still be the case, and the remaining slots filled with Hondas, Toyotas, and Hyundais. They're not mutually exclusive.

The thing is that the data on the operation of this program should be available for everyone to review before Congress gets to vote on the extension of the program and an additional $2 billion spent. Instead, we're being told that it must be passed or else the sky will fall.

That's no way to run a government. It's a fear-based political dynamic that does no one any favors except the Administration, which clearly doesn't understand basic economic principles.

UPDATE:
The DOT has released the top 10 selling vehicles. As I suspected, it was possible to have the Ford Focus having the most sales, while Toyota, Honda, and Hyundai making up the bulk of the rest of sales.

Rank Vehicle Includes Hybrid Combined City/Hwy mileage
1 Ford Focus No 27-28
2 Toyota Corolla No 25-30
3 Honda Civic Yes 24-42
4 Toyota Prius Yes 46
5 Toyota Camry Yes 23-34
6 Ford Escape Yes 20-32
7 Hyundai Elantra NO 26-28
8 Dodge Caliber No 22-27
9 Honda Fit No 29-31
10 Chevy Cobalt No 25-30

It's curious that Toyota had three models on the list; Ford and Honda each have two, and GM, Hyundai and Chrysler each had one model. Ford made the list with the Focus, and the Escape, which has a hybrid model. The real surprise is the Hyundai Elantra made the list, but the Honda Accord didn't. That may have to do with the perception that the Elantra was the better deal with the rebate included.

This list doesn't actually break down the total sales for each and the percentage of sales that were made under the cash for clunkers. That information would clarify some of the issues.

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Obama In His Own Words

The White House wants to play Jedi mind tricks and make people think that Matt Drudge and Andrew Breitbart took President Obama's comments out of context when Obama extolled the virtues of a single payer health care system (aka government health care).

“Hi. I’m Linda Douglass. I’m the communications director for the White House Office of Health Reform, and one of my jobs is to keep track of all the disinformation that’s out there about health-insurance reform. And there are a lot of very deceiving headlines out there right now, such as this one — take a look at this one. This one says, ‘Uncovered Video: Obama Explains How His Health Care Plan Will Eliminate PRIVATE Insurance.’

“Well, nothing can be farther from the truth. You know the people who always try to SCARE people whenever you try to bring them health-insurance reform are at it again. And they’re taking sentences and phrases out of context, and they’re cobbling them together to leave a VERY false impression. The truth is that the president has been talking to the American people a LOT about health-insurance reform and what is at stake for them.

“So what happens is that because he’s talking to the American people so much, there are people out there with a computer and a lot of free time, and they take a phrase here and there — they simply cherry-pick and put it together, and make it sound like he’s saying something that he didn’t really say.”

However, Obama very clearly wants a single payer system. Obama has done nothing to suggest that he's not moving towards single payer with his proposals and the current health care bills making their way through Congress.

Obama thinks that single payer health care is the way to go, and even if it takes several years to achieve the changeover, it will be worth it.

But don't take my word for it. Listen to Obama himself:



He wants single payer, universal health care, and is more than willing to shift the entire health care system to government health care within 10-15 years. However, the current proposals would actually result in nearly everyone with private health care being shifted into government health care within one year when their current policies are updated and adjusted with their periodic review.

Linda Douglass very clearly chooses to ignore the multiple references to single payer and Obama's desire to see government health care imposed. This isn't a scare tactic on the part of opponents to Obama's health care plans. It's revealing Obama's policies for what they are - and exposing Obama's lies, deceit, and the deception by him and his allies in pushing forward a plan that will not improve the quality of care in the United States and will not save anyone any money, and which the CBO has found will end up costing far more than the Administration is willing to concede.

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Sudanese Islamists Want to Show Who Wears Pants

The Islamists are busy in Sudan, and once again are showing their misogynistic views for all those who care to comment:

Sudanese police fired tear gas and beat women protesting outside a Sudanese court Tuesday during the trial of a female journalist accused of violating the Islamic dress code by wearing trousers in public.

Police moved in swiftly and dispersed about 50 protesters, mostly women, who were supporting Lubna Hussein, a former U.N. worker facing 40 lashes on the charge of "indecent dressing." Some of the women demonstrators wore trousers in solidarity with Hussein while others wore more traditional dress.

Trousers are considered indecent under the strict interpretation of Islamic law, adopted by Sudan's Islamic regime which came to power after a coup led by President Omar al-Bashir in 1989. But activists and lawyers say the implementation of the law is arbitrary

Hussein, along with 12 other women, were charged with indecent dressing for wearing pants.

The punishment for such a "crime" is 40 lashes. For her part, she has gone on the record saying that she'd take 40,000 lashes to protest this Islamist nonsense. She's done nothing wrong, and exerting her rights puts her and her supporters in mortal peril.

The judge has delayed ruling on the case until September 7, 2009, to address the possibility that Hussein is immune from prosecution as a UN worker. That does nothing to help the other women who were arrested along with Hussein, but for her part, Hussein has said that she wants the prosecution to go forward to highlight the misogynistic attitudes of the Sudanese regime.

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Former President Clinton Meets With North Korean Dictator: UPDATE: Ling and Lee Pardoned

Former President Bill Clinton is in North Korea, hoping to get the North Korean dictator Kim Il Jung to release two Americans, Euna Lee and Laura Ling, from prison. Both were tried and convicted on trumped up charges, and now the former President is giving Kim the attention he craves.

What is Clinton going to give North Korea in exchange for the release of the two Americans?

Clinton "courteously conveyed a verbal message" to Kim from President Obama, North Korea's state-run Korean Central News Agency (KCNA) reported. But White House spokesman Robert Gibbs denied that Clinton was carrying any message from the Obama administration.

Kim and Clinton had "an exhaustive conversation" that included "a wide-ranging exchange of views on the matters of common concern," KCNA reported.

Earlier in the day, Gibbs confirmed Clinton was on a "solely private mission to secure the release of two Americans," but gave little detail on his itinerary .

"We do not want to jeopardize the success of former President Clinton's mission," Gibbs said.

KCNA did not disclose the purpose of the visit in its three-line dispatch. However a source with detailed knowledge of Clinton's movements told CNN late Monday that he was going to seek the release of Laura Ling and Euna Lee, both reporters for California-based Current TV, a media venture launched by Clinton's Vice President Al Gore.

Yang Hyong Sop, the vice president of North Korea's Supreme People's Assembly, and Kim Kye Gwan, the vice foreign minister, met Clinton, KCNA reported.

Lee and Ling were arrested while reporting on the border between North Korea and China and sentenced in June to 12 years in prison on charges of entering the country illegally to conduct a smear campaign.

North Korea needs time and space to work out the kinks in its nuclear weapons and missile programs. They need energy and food from outside North Korea because without such humanitarian aid, mass starvation and death would be all too common.

North Korea's regime oversees a vast gulag archipelago where political prisoners go to die. It is an evil regime, and having Former President Clinton engage in such high level talks lends far too much prestige to this dictatorship.

While securing the release of Ling and Lee would be great, I fear that the price will be far too steep for the US, South Koreans, and the long tormented North Korean people who live under the ruthless dictatorship for all too long.

UPDATE:
Reports indicate that the North Korean regime has issued pardons for Ling and Lee. I wonder what the US is giving up in return. There's always something in the bargain. North Korea plays the game better than most and knows how to maximize its interests. What will the US be forced to pay down the road? Increased humanitarian aid that enables the regime to spend more on its military budget? Holding back on missile defense systems operable in the region? Cash?

I suspect that the price isn't going to be cheap. After all, that's why regimes such as North Korea act as they do. They know they can get away with it.

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New York Exposes Still More Medicaid Fraud

Last year, New York exposed more than a half a billion dollars in Medicaid fraud across the state. Doctors, pharmacies, and dentists all take advantage of the program through double billing and charging for services not rendered:

The Post reported yesterday that some scammers were continuing to collect payments long after patients had died.

Among the new findings:

* Sunnyside/GSSV Pharmacy, of Queens, filed 13 bogus claims for undispensed Medicaid-prescription refills and was banned from participating in Medicaid programs for five years and fined $26,000.

* Visionary Optics, of Jamaica, Queens, filed 16 false claims and was banned from the Medicaid program for five years and fined $32,000.

* Dentist Laurence Danziger of Stony Point, Rockland County, was banned from the Medicaid program for three years and fined $1 million following a 2005-2006 audit that found false and improper billings.

* Nearly all claims -- for about $1 million -- from the Pan American Medical Center in Midtown were rejected after a spot audit found that Medicaid was often double-billed for in- and outpatient services between Jan. 1, 2004, and Dec. 31, 2005.

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The Rebuilding of Ground Zero, Part 71

Over the past few days, Governor Paterson has announced that he's going to force Larry Silverstein to accept whatever half-baked deal that the Port Authority comes up with rather than make sure that Silverstein gets the financing he needs to build at Ground Zero. He's basically threatening that Silverstein will be pushed aside to allow the Port Authority to go ahead with its own agenda. That includes the Port Authority drawing up plans to finish the 9/11 memorial and the PATH transit hub, and nothing else.

If you want a reason why Ground Zero remains largely a hole in a ground, there's your answer.

The 9/11 WTC Memorial and Museum is being built - largely because public pressure to have a gaping maw present come time for the 10th anniversary would be political poison to everyone even remotely associated with Ground Zero. However, all the other projects are behind schedule and subject to delays, modifications, or cancellations.

In fact, the Freedom Tower (aka 1WTC), which now peeks out over the northwestern portion of Ground Zero is hopelessly stalled, and a new report indicates that it will not be completed before 2018, at least 4 years after the Port Authority claimed just a few months ago. Anyone looking at the Tower can see that it's stalled out, as the northern core remains barely visible from ground level.

Moreover, that report indicates that the 9/11 memorial and museum wont be completed until 2013, two years after the 10th anniversary, and well after the dates provided by the Port Authority:

A 2018 opening for the iconic, 1,776-foot building would come more than four years after the opening date the Port Authority trumpeted just 10 months ago, the government report found.

The July 14 "confidential draft...risk analysis" by the Lower Manhattan Construction Command Center (LMCCC) found that every blockbuster project at Ground Zero has fallen years behind time lines the PA unveiled in October.

The report says the grandiose transportation hub may not be ready until 2018, while the Sept. 11 Memorial, the site's emotional centerpiece, could be two years behind its 2011 deadline.

The report contradicts the "aggressive yet realistic schedules" PA boss Chris Ward gave Gov. Paterson.

Every one of those delays adds to the costs of rebuilding, and which makes an already expensive rebuilding project, even more expensive.

First and foremost, the Port Authority continues dragging its feet on the preparation of the site for Silverstein's office towers that were part of a previously negotiated settlement over how to rebuild at the site. The Port Authority continues to have to pay daily fines for failing to have the site ready.

The credit market collapse last fall has meant that financing remains a key stumbling block, and Silverstein's attempts to get the Port Authority to provide the financing has fallen on deaf ears. So too apparently has it fallen on the deaf ears of the New York Congressional delegation, from Senator Charles Schumer and Kristen Gillinbrand, to the members of the House.

At a time when the Obama Administration wants to get shovel ready projects going that would provide jobs and economic incentives, the rebuilding at Ground Zero is clearly the highest profile project, and one that would get support from a wide cross section of New Yorkers and all Americans in general.

Instead, we get treated to an ongoing battle, where Silverstein gets painted by the politicians as the bad guy, when the Port Authority and the other state agencies involved in rebuilding in and around Ground Zero can't get their own acts together to rebuild in a timely fashion.

If you want proof that this situation, look no further than Fiterman Hall and the former Deutsche Bank buildings. Both were heavily damaged during the 9/11 attacks, and both should have been demolished long ago. Yet, they're only now beginning to get around to it.

Silverstein long ago rebuilt 7WTC, showing that there is still someone who can get the job of rebuilding done.

Silverstein needs the financing to move ahead, and he needs the Port Authority to quit dragging its heels on site preparation. Everything is getting delayed because the former Deutsche Bank building hasn't been deconstructed, and is crucial to the infrastructure at the site since it is the site for the vehicle security center for vehicles entering the site.

Silverstein has threatened to take the matter to arbitration, and I suspect that he'd win on his claims, since there is more than adequate proof that the Port Authority is purposefully dragging its feet in the site reconstruction and efforts to prepare the site for Silverstein's office towers.

Curiously, for the first time in a while, Assembly Speaker Shelly Silver has noted that Gov. Paterson's nonsensical statements are a guarantee that there will be years more delays.

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Discerning the Effects of Cash For Clunkers On Auto Sales

There are reports that Chrysler is running into inventory problems and that they're suspending their matching rebate program because of the success of the cash for clunkers program.

That's not entirely true. In fact, I suspect it isn't anywhere near the reality of the situation with Chrysler at all.

Inventory control has been a problem with Chrysler for years, and their efforts this year resulted in multi-month closures of their production facilities so as to reduce the overall inventory of their vehicles on lots to be in line with historical levels - typically 60 days, but in Chrysler's case, they'd be lucky to be within 90.

So, if there are issues with inventories and a lack of vehicles, look first to the policy of factory closures before looking at cash for clunkers. Chrysler has to clear those lots, primarily because the new model years are going to be forthcoming shortly.

Then, there's the issue of the matching rebate offer. Is the new Chrysler really in a position to match those rebates. That's $4,500 a pop that they lose in profit per car sale. How exactly is that good business? Getting it in bulk sales? If they have 10% of the market, then they've sold perhaps 25,000 cars under the program.

According to the latest data, 10 million cars are expected to be sold in the US in 2009. Chrysler would be selling 1 million of that figure. Issuing $4,500 per vehicle with the rebates would mean $112.5 million in lost revenue ($4,500 times the 25,000 cars ostensibly sold under the rebate program - and if anyone can come up with hard numbers for Chrysler sales, I'll update this figure).

Oh, and the Chrysler rebate match rescission isn't exactly an elimination of the program. They're simply going to match the rebate and not give an automatic $4,500 for any car done under the CFC program. So, if the car is supposed to get a $3,500 rebate, the match will be $3,500, not the $4,500 as previously provided.

Then, there's a question as to what Chrysler vehicles are supposed to be in short supply. Which ones are they?

They're the Chrysler Town and Country and the Jeep Wrangler.

Neither of those cars actually is truly miserly on the fuel economy. The Wrangler gets 16 mpg.

The Town and Country? 18 mpg.

What kind of cars need to be submitted under CFC to qualify for the rebate?

Neither of these two cars qualify. Neither gets 22 mpg or better.

In other words, the cars that are in short supply have nothing to do with the CFC program. It has everything to do with the fact that Chrysler shut down its production facilities to try and reduce overall inventory. Now, they're going to have to ramp up production on gas guzzlers, which is where the demand is coming from.

Now, we can't quite figure out what is going on with GM or Ford, as their data isn't out yet, but Chrysler's precarious position isn't improving with their rebate offers, and it's costing the company dearly not having the vehicles that people want on their lots.

UPDATE:
Then there's the issue of whether we need another $2 billion or more for extending the cash for clunkers program beyond that which is already underway.

It is true that Internet car shopping activity, showroom traffic, and sales are all up, which is why the auto industry wants to keep the program going.

I love a good sales surge as much as anyone. But it’s not that simple. First, it’s not clear that cash for clunkers actually increased sales. Edmunds.com noted recently that over 100,000 buyers put their purchases on hold waiting for the program to launch. Once consumers could start cashing in on July 24, showrooms were flooded and government servers were overwhelmed as the backlog of buyers finalized their purchases.

Secondly, on July 27, Edmunds.com published an analysis showing that in any given month 60,000 to 70,000 “clunker-like” deals happen with no government program in place. The 200,000-plus deals the government was originally prepared to fund through the program’s Nov. 1 end date were about the “natural” clunker trade-in rate.

Clearly, cash for clunkers was underfunded from the start. Consumers quickly figured that out and rushed to take advantage before funding ran out.

This sales frenzy was inevitable. We have crammed three to four months of normal activity into just a few days.

What everyone fails to realize is that once this backlog is met, interest in the program will fade.

There is also an ironic unintended consequence. Car companies have cut the number of vehicles coming off their assembly lines in response to the recession, which is leading to spot shortages. This is particularly the case for fuel-efficient models the program was suppose to encourage consumers to buy. As prices for these autos rise, buyers will inevitably use their cash-for-clunker dollars to buy less-efficient models and thus crush one of the touted environmental benefits of the program.

It will be interesting to see just how the new sales break down, and whether the program actually resulted in new sales above and beyond what should be expected for the current quarter and the next quarter (when the new model year comes into showrooms and dealers need to clear inventories).

In other words, based on the Edmunds.com data, it appears that customers looking to trade in their clunkers either delayed their purchases to take advantage of the $1 billion program, or have accelerated their sales. In both cases, that means that they haven't actually increased the overall sales, just shifted around when those sales occurred.

UPDATE:
Ford released its earnings for the quarter, and it reported 2.3% increase in sales. Good for Ford. While the media is quick to credit cash for clunkers for the increase, what about the fact that it was the only domestic automaker not to receive a government bailout, and that it has one of the most popular cars in the country, the Ford Focus, which was cash for clunkers eligible.

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Obama Officials Signal Tax Hikes For Middle Class Loom

You can't say that you weren't warned. I've been saying exactly that ever since President Obama unveiled his massive spending priorities. There was absolutely no way he could ever intend to pay for any of it without raising taxes across the board. That includes allowing the Bush era tax hikes to expire.

Now, Treasury Secretary Tim Geithner (a tax cheat who couldn't pay his own tax obligations on time), and National Economic Council Director Larry Summers are both saying that tax hikes for the middle class are on the horizon. Neither could rule out tax hikes on the middle class.

Treasury Secretary Timothy Geithner and National Economic Council Director Larry Summers both sidestepped questions on Obama's intentions about taxes. Geithner said the White House was not ready to rule out a tax hike to lower the federal deficit; Summers said Obama's proposed health care overhaul needs funding from somewhere.

"There is a lot that can happen over time," Summers said, adding that the administration believes "it is never a good idea to absolutely rule things out, no matter what."

During his presidential campaign, Obama repeatedly vowed "you will not see any of your taxes increase one single dime." But the simple reality remains that his ambitious overhaul of how Americans receive health care -- promised without increasing the federal deficit -- must be paid for.

"If we want an economy that's going to grow in the future, people have to understand we have to bring those deficits down. And it's going to be difficult, hard for us to do. And the path to that is through health care reform," Geithner said. "We're not at the point yet where we're going to make a judgment about what it's going to take."

That includes raising taxes above and beyond the tax rates from 2000.

That means that if you benefited from lower taxes for the past eight years, get ready to be a whole lot poorer because the government will be digging ever deeper into your pocketbook to pay for a whole bunch of programs of dubious worth.

Moreover, the current recession isn't over, and they're looking to raise taxes into the teeth of a recession. If there's ever a way to cause a double-dipping recession, this is it. Signaling the tax hikes now will flatten whatever recovery is pending because people will save money in anticipation of the looming tax hikes and will not grow their businesses or spend their money nearly as much because they do not want to be caught short as a result of the tax hikes.

It also means that Obama lied about his promise to keep taxes as low as they are for 95% of taxpayers. Never mind that he blew that promise the moment he raised tobacco taxes to fund S-CHIP earlier this year. He's now looking to completely sink that promise to push for a health care overhaul that lacks a CBO stamp of approval since it will never do what was alleged - to cut costs of health care overall.

In other words, Obama's claims that he will cut the deficit by revising health care is an absolute lie. Obama will be raising taxes, the deficit will continue growing, and we'll be left with an even bigger mess than had Obama done nothing.

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Glenn Beck Goes Off the Rails Again

Glenn Beck is busy ranting that the cash for clunkers program website invites the government to hack into your personal computer. He cites a page on the cars.gov website that has the following disclaimer:

This application provides access to the DoT CARS system. When logged on to the CARS system, your computer is considered a Federal computer system and is the property of the United States Government. It is for authorized use only. Users (authorized or unauthorized) have no explicit or implicit expectation of privacy.

Any or all uses of this system and all files on this system may be intercepted, monitored, recorded, copied, audited, inspected, and disclosed to authorized CARS, DoT, and law enforcement personnel, as well as authorized officials of other agencies, both domestic and foreign. By using this system, the user consents to such interception, monitoring, recording, copying, auditing, inspection, and disclosure at the discretion CARS or the DoT personnel.

Unauthorized or improper use of this system may result in administrative disciplinary action and civil and criminal penalties.

Unauthorized attempts to defeat or circumvent security features, to use the system for other than intended purposes, to deny service to authorized users, to access, obtain, alter, damage, or destroy information, or otherwise to interfere with the system or its operation are prohibited. Evidence of such acts may be disclosed to law enforcement authorities and result in criminal prosecution under the Computer Fraud and Abuse Act of 1986 (Public Law 99-474) and the National Information Infrastructure Protection Act of 1996 (Public Law 104-294), (18 U.S.C. 1030), or other applicable criminal laws.

The language on that page can be broken down as follows:
Paragraph 1: You're accessing a government computer system, so when you're connected to the gov't system, you have to abide by government rules.
Paragraph 2: We reserve the right to check all information against law enforcement to prevent fraud (to a fault perhaps).
Paragraph 3: Penalites (well, what'd you expect if you violate 1 or 2)
Paragraph 4: If you try to circumvent existing security protocols or access the system illegally, you're subject to civil and criminal penalties.

Of all that's there, paragraph 2 is the one that would seemingly raise an eyebrow. It's overlawyered to a fault, but it's prevalent at nearly all government websites. In other words, it's the standard boilerplate used at government websites across the board. It isn't anything new, and it's not anything anyone has to worry about, unless they attempt to hack into the .gov website or computer systems.

For example, Los Alamos Natl Lab:

Any or all uses of this system and all files on this system may be intercepted, monitored, recorded, copied, audited, inspected, and disclosed to authorized site, Department of Energy, and law enforcement personnel, as well as authorized officials of other agencies, both domestic and foreign. By using this system, the user consents to such interception, monitoring, recording, copying, auditing, inspection, and disclosure at the discretion of authorized site or Department of Energy personnel.

Swap Cars.gov for that, and we're talking the same disclaimer.

Beck is an idiot who clearly hasn't done his research, and is more than willing to spew nonsensical conspiracies about the Obama Administration.

There's plenty of things to criticize about the cars for clunkers program, and I've detailed my concerns, but this isn't one of them.

UPDATE:
Sites that are peddling Beck's nonsense and claiming as Beck does that this somehow gives the government right to hack into your computer are just as off base. That includes Newsbusters' Jeff Poor and Jeff Wray.

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Nutter of the Day

Many of you know that I work in Lower Manhattan near Ground Zero. I take PATH every day, and when I say that there are more than a few nutters who patrol the permiter of Ground Zero with their conspiracy theories and nuttiness, I'm not kidding.

 

That's just one example of what can greet you when you come out of PATH in the morning. In this case, it was a woman in her 30s who was carrying this sign high above the crowd. It's insulting to the memories of the nearly 3,000 people who were murdered on 9/11 to think that beam weapons destroyed the towers.

It's not like there isn't video showing the planes hitting or the collapses of the Twin Towers beginning from at and above the level of the planes striking the towers.

Beam weapons? That's little more than blaming the government for the attacks.

Lest we forget, more than 30% think that the government conspired to cause the attacks.

If you look over the shoulder of the woman holding the sign, to the left you see the rising 1WTC (f/k/a Freedom Tower), and to the right is 7WTC. Tens of thousands of people converge on this location every day to commute between New York and New Jersey. It's fertile ground on which these conspiracy nuts can spread their message.

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An Evening With AC/DC

Last night Legalbgl and I treated ourselves to seeing one of the true rock and roll icons; AC/DC at Giants Stadium. They didn't disappoint. It was an awesome show from start to finish. Neither of us cared much for the opening acts, but that's not who we were there to see.

But first let me back up a bit. Legalbgl bought these tickets a few months ago, and we plunked down quite a bit to get floor seats. We thought we had excellent seats towards the back of the floor, but when we arrived at the stadium, we were directed to see a manager. He took our tickets from us, and joked that we were about to get tickets up in the nosebleed. After a moment, he asked us if we wanted to sit in section six, row three, seats 9 and 10. We were flabbergasted. We were literally going from the back of the floor to the front row.

The seats were on the extreme stage right, but had excellent views of the entire stage. It was awesome and totally made the price of admission worth it right there.

So, when the band broke into Rock 'n Roll train to open the show, we were psyched. It set the tone for the whole evening as the band rocked.

Now, mind you that these guys are getting up in years and Angus Young, the lead guitarist is no spring chicken. He was busy prancing and strumming as if he was someone half his age. They rocked it out.

 

That's a photo taken from my cellphone. It gives you some idea of just how close we were to the stage and the size of their sound system.

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