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Understanding the state of our economy for dummies.

October 2, 2008 Leave a comment

The current economic state has been very confusing for many of us.  Despite coming from an economic background, I must admit that things have been confusing for me as well.  I’ve done my best to make sense of things, and, as simple as I can make it – this is how it is:

1.  Capitalism.  This is where we want to be.  Both traditional American Conservative and Liberal ideologies operate within the framework of capitalism.  Conservatives want to deregulate, Liberals want to increase government oversight.  But at the end of the day, it’s still capitalism.

2.  Good Socialism.  This is where the bailout bill is supposed to take us, if passed.  Supposedly, the bill will replace the bad Socialism the Dems running Freddie/Fannie are employing with good Socialism.

3.  Bad Socialism.  Since the 2006 elections, Democrats have been steadily nationalizing major industries, and then managing them poorly.

4.  Diluted Marxism.  Obama, DNC, Obama’s indoctrinated voters.

5.  Communism.  Obama’s friends, family, etc.

You’ve probably noticed the huge split in both parties on what to do about the financial crisis.  The reason for this is simple, each politician is essentially given two choices:

1.  Vote against my principles and potentially cause a new depression.

2.  Potentially allow a new depression to happen and vote against my principles.

Obama wants the bailout plan because it increases Socialism in the U.S.  McCain wants it because he understands that good Socialism is better than bad Socialism.  Ultimately, there is no good option in this.  In the long run, I think that the bailout plan will hurt us.  Smaller, less intrusive options may end up being more productive without allowing the further encroachment of socialism – even good socialism.

An Open Letter to RealClearPolitics.com

September 24, 2008 6 comments

Previously, some of my readers prompted me to investigate the Diageo/Hotline poll.  After doing so, one of my readers suggested I pursue the matter further, so I decided to write the following letter:

To the employees and ownership of RealClearPolitics.com,

The RealClearPolitics National Average is arguably the most trusted polling compilation in the country.  It is both a valuable resource of information and highly influential over public opinion of the nature and condition of the presidential race.  It is for this reason that I believe it worthy of intervention should its integrity be impugned.  Being such, I have developed concern since it has come to my attention that one of the polls included in the average is conducted by a company whose stated interests conflict directly with the desire to conduct polling in a scientific manner, continually presents improbable data, has questionable ties including lobbying, and gives all impressions of partiality.

The poll in question is referred to as the Diageo/Hotline Daily Tracker Poll – named after two groups that sponsor it, Diageo and Hotline of the National Journal.  The company which conducts the actual polling is known as Financial Dynamics – an international financial consulting firm.

The poll has consistently generated extraneous outliers which invariably benefit the Democratic ticket and compromise aggregate data. The large majority of the disparate data occurs in general election daily polls and on economic questions.  For example, roughly a week ago both Rasmussen, one of the most credible polls in the country, and Diageo/Hotline polled the question, “Who would better handle the economy?” Rasmussen had McCain at 49% and Obama at 45%, while Diageo/Hotline had McCain at 36% and Obama at 47%.

Demonstrating that Obama is superior on the economy seems to be a recurring theme for Diageo/Hotline.

Currently, Diageo/Hotline has a question in which voters are asked to compare two short statements regarding the source of our economic trouble – one from McCain, one from Obama. Diageo/Hotline altered Obama’s statement to include a reference to Bush not present in the original speech. According to Diageo/Hotline, 46% of voters agree with Obama’s altered statement and only 31% with McCain’s.

Since the beginning of this month, all of the organizations you are using (at the moment I type this) to acheive your polling average have shown McCain with a lead in one of their polls at least once – except Diageo/Hotline. These organizations include:

Rasmussen
Gallup
NY Times
CBS News
CNN
Opinion Research
Battleground Research
ABC News
Washington Post
Ipsos

In fact, Diageo/Hotline hasn’t shown McCain in the lead once since the general election began on June 3rd. Considering the small sample size (300 daily) and high volatility of Diageo/Hotline’s general numbers, the closeness of the race, and certain events that gave McCain an edge, this is highly improbable.

It is difficult not to conclude that Diageo/Hotline is promulgating erroneous data. As former pollster Paul Zannucci said after reviewing their numbers, “[T]hey are definitely producing skewed results, but are they doing it intentionally?”

In 2005, Financial Dynamics acquired a PR firm/Lobbying group currently known as Dittus Communications. Dittus’s purpose in Financial Dynamics is unchanged since before its inclusion: It PR’s and lobbies for both corporate and political interests. From the company’s website:

In the summer of 1993, Gloria Dittus founded The Dittus Group, pursuing a vision of serving clients by melding her grassroots experience and her years in corporate communications and public relations. She envisioned a communications shop that was different from the rest – one that delivered policy victories as well as market conquests.

Today, FD Dittus serves national and international clients, with its primary focus on public affairs. We work daily with the journalists who cover the issues, the policy-makers who oversee industry and the thought leaders who influence the outcomes. FD Dittus is best known for delivering legislative and regulatory victories for clients on some of the most controversial issues facing the business community, ranging from obesity, terrorism insurance and media ownership to seatbelt safety, homeland security and trade relations with China.

The company is still being operated (under Financial Dynamics) by its founder Gloria Dittus. Both she and her company are deeply entrenched with numerous political interests and important policy makers in Washington. Many of the political interests which employ Dittus are aligned with the goal of a Democratic victory in November. Indeed, if her political donations and event schedule are any indication, she too, appears aligned with this goal. On May 19th, 2008, she hosted a party for “Madame Speaker”, a book celebrating Nancy Pelosi – in her home.

Of course, the management of Financial Dynamics would have to be complicit in releasing information to aid Democratic political interests.  I have researched the contributions given by the management team (excluding Gloria Dittus) of Financial Dynamics and found the following:

Money given to Democrats by management:

$18,900 given by Ed Reilly (CEO)

$16,700 given by Declan Kelly (Chairman, U.S. and Ireland)

$5,600 given by Paul Keary (Director of development)

$4,600 given by Gordon McCourn (Vice Chairman, Senior Director)

$4,600 given by John Quinn (CFO)

$2,500 given by Neil Dhillon (Senior Vice President)

$2,300 given by Sarabjit Walia (CEO)

$1,500 given by Christine Mohrmann (Industrials)

$750 given by Raoul Bhavnani (Consulting Services)

$500 given by Jeannine Dowling (Senior Vice President)

Money given to Republicans by management:

NONE.

Indeed, in 26 years of operation, out of over 1,000 current and past hired employees, only one employee has given to the other side of the aisle.  Mr. Wild gave $250 to John McCain in 1999, a year in which Democrats were rooting for McCain to knock out Bush in the primaries.  It leads one to wonder what sort of questions come up in the company’s job interviews.

The regions the company operates in are diverse, and its employees are primarily involved in finance – a profession that disproportionately attracts Republicans. The odds of such a political makeup with a decent sized company as Financial Dynamics arriving by chance are significantly less than 1%.

In conclusion, it is highly unethical for Financial Dynamics to conduct polling meant to inform public opinion on political entities while simultaneously being employed to influence public opinion by political entities. It is highly questionable for such an unusually partisan corporation to claim to conduct an unbiased poll. Ethical problems aside, it is statistically improbable that the numbers given by the poll are accurate.  For these reasons, I ask that you disabuse the public and the integrity of RealClearPolitics.com of this questionable data.

Your loyal reader,

Fred Shelm

9/24/08

Biden: Money Mishandler

August 26, 2008 Leave a comment

Our economy is the largest, most complex and fundamentally fragmented in the world. Do you want someone, who, despite having a huge steady salary for years, has managed to mismanage funds so badly that his debt may actually outweigh his total net worth running our economy? Because if Obama becomes president, and then something bad happens to him, that’s what we might get. (Though Obama himself would be pretty bad too.)

His name is Joseph Biden and according to OpenSecrets.org, his average estimated net worth is about $-12,491. Biden has been in the Senate for 35 years. His salary is $183,500 a year. How in the world does he mismanage it so badly?

More importantly, do we really want someone that incompetent with simple numbers within such proximity of the wheel that turns our economy?

Categories: America, Biden, Economy

Obama and the new Depression

June 7, 2008 6 comments

Right now we’re in a slowdown. Not quite a recession, but we are nevertheless economically vulnerable. In order to help us evade a depression and shift back towards a period of growth, our next president needs to do three things:

1. Lower taxes or at least not raise them.

2. Cut spending, that’s why we’re in this mess.

3. Expand our trading markets.

McCain wants to do all three. Hillary wants two out of three, also not bad. Obama says he will do the opposite of all three. He wants to raise taxes, raise spending, and diminish or eliminate many trade agreements. We’ve seen this type of economic policy before in a Republican president: Herbert Hoover, the man who led us into the original Great Depression. Most Republicans and most Democrats learned from Hoover’s mistakes and have avoided repeating them. Bill Clinton, for example, did all three. That’s why our economy was strong in the 1990’s. If Obama becomes president, we may be staring at a new depression.

For reference, here’s Obama’s stated positions on the above economic issues.

Taxes:

Obama has stated that he wants to raise the capital gains tax, which will affect one third of Americans.

Source: New York Times

MR. GIBSON: All right.

You have however said you would favor an increase in the capital gains tax. As a matter of fact, you said on CNBC, and I quote, “I certainly would not go above what existed under Bill Clinton, which was 28 percent.”

It’s now 15 percent. That’s almost a doubling if you went to 28 percent. But actually Bill Clinton in 1997 signed legislation that dropped the capital gains tax to 20 percent.

SENATOR OBAMA: Right.

Spending:

To his discredit, Bush raised spending. At the current government spending level, we are already spending too much. Obama has not vowed to eliminate any of Bush’s domestic programs, but instead intends to add more expensive programs to the already too long list. One would think that the candidate of “change” would want to avoid following the policies of Bush, rather than doubling down on them.

Source: www.barackobama.com/

Obama’s Plan to Cover Uninsured Americans: Obama will make available a new national health plan to all Americans, including the self-employed and small businesses, to buy affordable health coverage that is similar to the plan available to members of Congress. The Obama plan will have the following features:

1. Guaranteed eligibility. No American will be turned away from any insurance plan because of illness or pre-existing conditions.
2. Comprehensive benefits. The benefit package will be similar to that offered through Federal Employees Health Benefits Program (FEHBP), the plan members of Congress have. The plan will cover all essential medical services, including preventive, maternity and mental health care.
3. Affordable premiums, co-pays and deductibles.
4. Subsidies. Individuals and families who do not qualify for Medicaid or SCHIP but still need financial assistance will receive an income-related federal subsidy to buy into the new public plan or purchase a private health care plan.

All of this, especially the subsidies, will require large amounts of money from the government. All of these proposals, including insurance for the self-employed, are already available through non-government or limited government means. Obama’s plan will ultimately just make them more expensive.

Trade:

Source: www.barackobama.com/

He [Obama] will use trade agreements to spread good labor and environmental standards around the world and stand firm against agreements like the Central American Free Trade Agreement that fail to live up to those important benchmarks.

In other words, Obama will oppose any free trade agreements that he doesn’t feel disperse his labor policies. He wants to force other countries to adopt his standards instead of FREE trade agreements which allow nations to trade, well, freely. When you use pressure (in this case economic) to force another country to adopt your ways, that’s called imperialism. Not only that, but closing markets simply because the leaders think differently than Obama, will hurt the economy – not just ours, but the third world countries cut off from us because Obama doesn’t like them.

As in the Great Depression, if the U.S. should be steered into an economic ditch, the whole world will suffer. The world is already suffering needlessly because of our excessive spending. Food prices are too high. Gas is too high. Obama’s stated policies will make that all much worse.

Categories: Economy, Obama