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Friday, June 15, 2012

Cyber attack Warning

Defense Secretary Leon Panetta is following up previous warnings of cyberattacks that could cripple the country.  It seems as if he is the only person in America that is concerned. 

We have written about the possibility of an electro-magnetic pulse (EMP) attack against the US and how it would devastate our way of life and these cyberattacks are on the same level. We have become so dependent on computers that a strike at any one major sector of the economy could have major impacts on our lives as the effects would cascade through the country.  For example, an attack on the electric grid could cause outages that would make the 2004 one day outage (most of the eastern part of the country was knocked out by a mechanical failure), look like a blip on the screen. We could be shut down for weeks.

The danger we see with either of an EMP or a cyberattack is that we are not prepared for either. We have no backup plans. Within days, people would run out of fuel, water and food which would cause major panics throughout the country. If it went on for an extended period, say a month, there could be thousands, if not millions dying of starvation. It would be even worse if the event occurred in the winter when being able to heat homes would become even more imperative.

Yet our government has no plans and most people who have established some sort of "emergency stockpile" might not be able to protect it and themselves from those who would do anything to get a meal or fuel their car or heat their home. Isn't it the job of government to protect its people from "enemies foreign and domestic?"  If so, they fail again.

This is not an issue that will go away with the election of a new President and Congress, it  is going to be a permanent threat for the foreseeable future. Our leaders must understand the concerns that Secretary Panetta expresses and then take steps to institute plans to protect us. Otherwise, we only invite some rogue country or despot to take us down without firing a shot!

Conservative Tom


Defense Secretary Leon Panetta Says Cyberattacks Could Paralyze the Country Like Another Pearl Harbor
Defense Secretary Leon Panetta speaks with a congressional subcommittee on budget cuts Wednesday. (Photo: DOD/Glenn Fawcett)
In pleading with Congress Wednesday against automatic defense budget cuts, Defense Secretary Leon Panetta also warned of another crippling situation like Pearl Harbor. It won’t come in the form of bombers and torpedo planes though but as hackers and worms of the cyber variety with the ability to cripple U.S. infrastructure.
CNS News reports Panetta saying that those with the capability to launch a cyberattack would be able to “paralyze” the United States. Sen. Lindsey Graham (R-S.C.) asked Panetta to clarify:
“You said something that just kind of went over everybody’s head, I think, that there’s a Pearl Harbor in the making here. You’re talking about shutting down financial systems, releasing chemicals from chemical plants, releasing water from dams, shutting down power systems that can affect the very survival of the nation. What’s the likelihood in the next five years that one of these major events will occur?”
To this Panetta responded simply by saying that the “technological capability” to send our country into a mode like that of Pearl Harbor in a surprise attack is already available now. Panetta’s references to “the next Pearl Harbor” echo sentiments he shared last year with regard to cyberattacks, according to CNS news.
In June 2011, while being confirmed as Defense Secretary, Panetta said to the panel, “The next Pearl Harbor we confront could very well be a cyber attack that cripples our power systems, our grid, our security systems, our financial systems, our governmental systems.”
Continuing to probe on Wednesday, Graham asked about the risk level, which Panetta said was high, especially as the technology develops and the “will” to use it becomes more apparent.
“I’m very concerned that the potential in cyber to be able to cripple our power grid, to be able to cripple our government systems, to be able to cripple our financial system would virtually paralyze this country,” Panetta said. “And, as far as I’m concerned, that represents the potential for another Pearl Harbor as far as the kind of attack that we could be the target of using cyber.”
Those in the United States — both the government and private industry — are already the targets of thousands of attacks per day, according to Panetta. With that, he notes the importance of improving safety of systems in not only the defense sector but the private sector as well.
Earlier this year, the Cyber Intelligence Sharing Protection Act (CISPA) was introduced as proposed legislation that would put in place the infrastructure for private companies to share information with the federal government on the Internet to help prevent electronic attacks from cybercriminals, foreign governments and terrorists. The Cybersecurity Act of 2012, sponsored by Sens. Joseph Lieberman (I-Conn.) and Susan Collins (R-Maine) was mentioned as well. At this point, CISPA has been passed with bipartisan support in the House and still awaits a Senate vote. The Cybersecurity Act of 2012 has not yet been voted upon.
CISPA has been met with some backlash with those against the proposed legislation saying the language is overly broad and they fear violations of the anti-trust law by the government.
Chairman of the Joint Chiefs of Staff Gen. Martin Dempsey weighed in his support of CISPA during Wednesday’s hearing but also said the military is looking to develop “rules of engagement” to respond to cyberattacks and threats, according to CNS News.
Watch CNS’ footage of the dialogue here:
The Pentagon faces cuts of about $500 billion in projected spending over 10 years on top of the $492 billion that President Barack Obama and congressional Republicans already agreed to in last summer’s deficit-cutting budget.
Dempsey said the cuts would mean fewer troops, the possible cancellation of major weapons and the disruption of operations around the world.
The Associated Press contributed to this report.

Snyder's Folly

Today, Michigan will start down another dead end of public financing of infrastructure, it appears as if we will be paying for a new bridge to Canada. Today's announcement in Windsor and Detroit appears as if the bridge is a foregone conclusion.  We  strongly disagree.

With bridge and tunnel traffic running way below capacity, the addition of a new structure is foolhardy.  Additionally, when you add the fact that the current Ambassador Bridge  owner is willing to build the new span and pay for it privately, we begin to wonder if there is another reason.  We do not know what it is, but tying up billions on a new crossing which will not pay for itself is the financial mismanagement.

We expected more sanity from Snyder but maybe having a bridge named after you is more important than keeping the state on good financial footing.

Conservative Tom

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Rick Snyder Reinventing Michigan
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PLEASE NOTE:  If you have trouble viewing the stream, there is an option on the bottom right of the Livestream player to change the video quality setting to "low." Be sure to give the feed time to buffer.

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Tomorrow, Friday June 15, 2012, Gov. Rick Snyder and Lt. Governor Brian Calley will join Prime Minister of Canada Stephen Harper for an announcement of significant economic importance to Michigan and Canada.

The live events in Windsor and Detroit will STREAM LIVE at our website

Don't miss this major announcement!

Friday, June 15, 2012

12:45 PM: Live Broadcast from Windsor

2:45 PM: Live Broadcast from Cobo Hall in Detroit


Office: 517-335-7858

Wednesday, June 13, 2012

More Bad News For Obama

Retail sales dropped by .2 percent in both April and May. This is not good news. It reflects the idea that the economy is NOT booming and contrary to what the President said "the private sector is doing good."  You can put lipstick on a pig, but it still is a pig. All the dressing up by the White House will not make things any different. This economy is a disaster and no one in Washington or on Wall Street knows what to do.

Every day we see the market either go down on news and then rebound 24 hours later on  stories which were exactly the opposite of the previous days news. This is ridiculous. Either the market is being fixed or Wall Street is manic.  We believe it is both.

As we saw in the Facebook IPO, small investors were not given the information that large wire houses gave their "A" clients.  Small guy gets stripped of his money while the big boys win. That is wrong. Although the market is supposed to be a level playing field, this example shows it is not and anyone playing the game, has to understand that. Unfortunately, most do not. The market is fixed against the small investor, period.

As far as being manic, there is way too much volatility in the market. It suggests to us that day traders and computers are in charge.  Bad news in Greece one day drops the market and the next day it turns around because the news is that Greece has solved its problems. No country can solve its problems overnight which suggests other things are occurring. We would suggest that when the bad stuff comes out, computers and traders dump stock only to turn around the next day and buy at a lower price.  It is just one manipulated market that has no sense of reality.

Agree? Disagree? We love to hear your arguments.

Conservative Tom


A new snapshot of economic collapse: The Wall Street Journal’s MarketWatchreports “U.S. retail sales fell in May for the second month in a row - the first time that’s happened in two years - as consumers spent less to fill up their gas tanks.”
This led to a 0.2 percent seasonally-adjusted decline in retail sales for May, while April was also revised downward to a 0.2 percent loss, instead of the initially reported 0.1 percent gain.  It’s funny how everything seems to get revised downward these days.
If gas prices are taken out of the picture, May saw the same kind of weak 0.1 percent increase that was first reported for April… at least, it will until the inevitable “downward revision” hits next month.  Much of this was driven by “strong demand at auto dealers and Internet retailers,” according to MarketWatch.  The automobile increase is a bit puzzling, because unit sales actually slid significantly in May.  This would, taken at face value, suggest that auto dealers are selling fewer cars for higher prices.
Poring over the data, MarketWatch detects “a potentially worrisome sign,” which is the loss of sales at “virtually all of the establishments that tend to rely on discretionary income — extra money consumers have left over after paying for bills and necessities.”  This fits with recent reports of declining family net worth, and the dramatic loss of full-time jobs, to be replaced by part-time and temporary work.
These figures illuminate the complex relationship between energy prices, inflation, and consumer demand – a delicate system resolutely ignored by Obamanomics and its suicidal “green energy transformation” ideology.  Gas prices are falling because retail gasoline demand is down.  That’s a very bad sign during the big summer-vacation driving season.  Economic malaise and unemployment anxiety are shifting the consumer economy into a dangerously low gear, as it struggles to climb a terribly steep “recovery” hill.
This news is also a stunning repudiation of the wild rhetoric flung around by the Obama Administration over the last few months, when it was panicking over gas prices, and desperately insisting they were somehow immune to the laws of supply and demand.  That’s why developing American energy resources supposedly wouldn’t affect the price of gas at all, while skyrocketing gas prices were blamed on evil “speculators” by the President.
The corresponding drop in wholesale prices very clearly illustrates the way fuel costs influence the cost of virtually everything we buy.  It also provides a clear warning about the disaster awaiting us, if we give clumsy, politically blinkered central planners ever more control over a high-performance economy they will never understand.  They only know what they want out of the American economic machine, and they’re prepared to alternately kick it and pump it full of unstable “stimulus” and “bailout” fuel until it lives up to their expectations.

Tuesday, June 12, 2012

An Economic Lesson For The Ages

The following post is one of the best ones that we have seen  (other than ours, of course) which really tells the right story about the economy (here and abroad) and what we need to do.

We believe in the band-aid approach to economic troubles.  Better a short quick rough spot than a long, painful episode especially when we will end up in the same place.

The second to last paragraph should be reprinted and sent to every Congressman, Senator, the Fed and the President.  It should be the mantra of this and every following administration.

Let us know what you think.

Conservative Tom

Damn The Torpedoes
By:  Peter Schiff
Friday, June 8, 2012
Last week in an interview on CBS Network News, Economist Mark Zandi, the chief economist for Moody’s, unwittingly revealed a central error of the global economic establishment. Zandi has made a career out of finding the middle ground between republican and democrat economic talking points. As a result of this skill, he has been rewarded with large quantities of airtime from media outlets that want to appear non-partisan, despite the fact that his supposedly neutral analysis often leaves listeners frustrated.

When asked about the recent deterioration in the global economy, Zandi said that “the worst possible scenario” at present would occur if Greece were to leave the Eurozone. He claimed that the economic gyrations and liquidations of bad debt that would result from such an exit would be sufficient to create a vicious cycle that could drag the global economy back into recession. As a result, he urged policy makers to take whatever steps necessary to maintain the current integrity of the 17 nation Eurozone.

Given what most economists now know, few would actively argue that Greece’s entrance into the Eurozone back in 2001 was a good idea. In fact most concede it was a terrible idea based on bad forecasting and outright fraud. There is little disagreement over the fact that Greece grossly misrepresented its financial position in order to gain initial entry into the monetary union. It is also widely agreed upon that in the ensuing decade Greece exploited its monetary advantages to borrow irresponsibly.

Much has been written about how the fundamental misfit between Greece’s economy and currency gave birth to a deeply flawed system that was destined to run off the rails. Most also agree that the countries like Greece and Germany are too economically and culturally disparate to exist under the same monetary umbrella. But despite all this, Zandi wants to maintain the status quo. In his opinion, it is so imperative to prevent the deflationary consequences of an economic restructuring that it is preferable to prop up a failed system, perhaps indefinitely, rather than allow a newer, healthier system to replace it. In the process, the moral hazard created not only assures that Greece will become an even greater burden on Europe, but so too will other nations whose leaders will be emboldened in their profligacy by the anticipation of similar help.

From Zandi’s perspective (and he is certainly in the majority on this point) the goal of economic policy is to keep GDP growing. It follows then that he will oppose large-scale debt liquidations which drag down GDP in the short term. But sometimes debt needs to be liquidated. Bad ideas need to be abandoned. Once economies stop throwing good money after bad, capital is freed up to flow into more economically viable purposes. But economists and politicians never look at the long term. Their job seems to be to manage the economy for the next election.

The same “damn the torpedoes” mentality dominates economic thinking with respect to the U.S. economy as well. Years of artificially low interest rates, and government subsidies that direct capital towards certain sectors and away from others, has created an economy with too little savings and production, and too much borrowing and consumption. The ultra-low interest rates currently supplied by the Fed serve to perpetuate this unsustainable artificial economy. Higher rates would work quickly to redirect capital to the more productive sectors. But high rates could bring deflation and liquidation, which few economists are prepared to risk.

We have too many shopping malls selling stuff, but not enough factories making stuff. We have too many kids in college studying liberal arts, and not enough in the workforce acquiring skills that will actually increase their productivity. Banks are loaning too much money to individuals to buy houses, and not enough money to entrepreneurs to buy equipment. We have too many tax-takers riding in the wagon, and not enough taxpayers pulling it. The list is long, but the solutions are short.

We need to let interest rates rise to market levels, and allow the economy to restructure without government interference. We need to stop beating a dead horse and hitch our wagon to an animal that can really pull. The process will be painful for many, but like ripping off a band-aid, the pain will be over relatively quickly. However, since a painful restructuring means recession, politicians resist the cure with every fiber of their beings. So instead of a genuine recovery, one that will provide productive jobs and rising living standards, we get a phony recovery that produces neither.

Preserving a broken system merely to avoid the pain necessary to fix it only makes the situation worse.  Propping up sectors that should be contracting prevents resources from flowing to other sectors that should be expanding. Keeping workers employed in nonproductive jobs prevents them from gaining productive employment elsewhere. Encouraging activity or behavior the market would otherwise punish discourages alternatives that it would otherwise reward.

Unfortunately, leaders on both sides of the Atlantic put politics above economics, and economists like Mark Zandi provide the cover they need to get away with it.

This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License. Please feel free to repost with proper attribution and all links included.

Monday, June 11, 2012

USA Today Editorial On Wisconsin

This is a fairly balanced editorial on the Wisconsin recall of Scott Walker.  We post it here as an example that there can be fair and balanced discussions of an issue.

Conservative Tom

June 6, 2012
USA Today

Much will be read into Tuesday's election in Wisconsin, where Republican Gov. Scott Walker survived a recall vote. The outcome is being billed by many analysts as a harbinger of November, showing real GOP strength in a state Barack Obama won by 14 percentage points in 2008. It is also said to be a gauge of the nation's determination to get state budgets in order and to restrict the power of labor unions.
Maybe one or more of these things will prove to be true. Or maybe not. Predictions like these — particularly those focused on November — are often a fool's errand, driven by an insatiable desire to forecast the future.
The lessons from Wisconsin are narrower and simpler:
•Perhaps the most important one is that a governor can make unpopular — but necessary — decisions to rein in bloated government and still survive. After he was elected in 2010, Walker cut aid to localities, education and Medicaid, while requiring state workers to contribute more to their pensions and health benefits. On balance, his tough-medicine approach was not unreasonable. Where he might have overreached is in stripping most public employees of their collective bargaining rights in a bid to make future contracts less generous.
Walker's effort was both a political move to clip the wings of organized labor (which is more than 50% composed of government workers, who tend to vote for Democrats) and a fiscally prudent step to weaken the ability of powerful public sector unions to use the political process to help pick the people on the other side of the bargaining table.
Regardless of motivation, Walker deserves credit for confronting the legacy created by spineless or shortsighted public officials who created massive liabilities to satisfy an important constituency. His state took steps toward fiscal responsibility that many other states and the federal government are so far refusing to take.
•Walker's survival might also have come from a second lesson: that voters are not as enthusiastic about recalling public officials as are party activists. Only two governors in U.S. history have been recalled, North Dakota's Lynn Frazier in 1921 and California's Gray Davis in 2003. And while the number of recall efforts for local and legislative office holders has surged in the past two years, Wisconsin is a pretty good indication of the practice's limits when it comes to major offices.
Public reluctance to recall help explain the wildly divergent outcomes in Wisconsin on Tuesday and in Ohio last November, when voters overwhelmingly repealed a collective bargaining law very much like the one that got Walker into hot water. In one case, voters were happy to express their discontent over a particular law. But in another they balked when told they needed to recall the governor to achieve the same end.
Governors hold office for no more than four years. Barring malfeasance or gross incompetence, they should be granted time in office to focus on tough decisions without worrying about the next election.
•A third lesson from Wisconsin is that brazen partisanship rarely accomplishes anything other than fomenting bitterness and more partisanship. Walker got into trouble not just because he went to war with powerful unions, but also because he wasn't even-handed. He went after Democratic programs and constituencies while sparing those favored by Republicans. He made deep cuts to education, while cutting some taxes and increasing spending on roads. He eliminated collective bargaining rights for teachers, but not for police officers.
Democrats responded with their own partisan fusillade, turning the recall effort into a vindictive and personal attack against Walker. They lost in part because they couldn't come up with an affirmative message about the direction of the state.
Recall elections tend to have low voter turnout, or attract vast amounts of outside money. Both of these increase the influence of special interests. Rather than looking at the Wisconsin election as an excuse to handicap future races, why not look at it for what it was — a colossal waste of time, money and energy that accomplished little but stoke further polarization.

We Are #1

Congratulate yourself, your Federal Reserve is not the #1 holder of US debt!  It has been a long time since we have been numero uno in a category but now we are. What an accomplishment!  Wrong!  

We are being sold down the river and we are doing the paddling!  

It does not make any sense to us to have the government issue debt and then have the Federal Reserve buy it. Isn't that like you moving the $100 in your left pocket to the right pocket and saying you made $100? We should be selling our bad debt to countries that we want to mess up their finances, not ourselves. The sad part is that the Chinese and Japanese have been reducing their purchases of debt therefore requiring the Fed to buy it.  Good ole Uncle Sugar, he will take care of it all!

Add on top of that the amount of debt that we are accumulating. It is scary. As the following post indicates, debt owned by the Fed  has gone up by over $1.3 trillion in the past THREE years.  We just cannot keep up that trend!

When will the dam break? When will our economy not be able to sustain the debt service? The answer in our mind is simple, when interest rates go up to levels that are needed to get others to purchase our "junk."  When that happens, we will be faced the same draconian choices that the Greeks and Spaniards are facing today. 

The interest on the debt owned by the Federal Reserve, other countries and institutions has to be paid and unless something is done soon, we will not be able to service our monthly nut. What happens then?

A couple months ago we tongue-in-cheek made the argument that the US give up California to China, the Southwest to Mexico and Washington and Oregon to Japan in lieu of our debt.  The rest of us would be stuck with the Fed's part. We still think that might be an acceptable idea. What do you think?

Whether it is ideas like the above or something else, we must take action and it should be sooner rather than later.

Conservative Tom

Top Customer: Under Obama, Fed’s Holdings of U.S. Debt Have Jumped 452%

( -  Since President Barack Obama was inaugurated in January 2009, the Federal Reserve’s holdings of U.S. government debt have quintupled, according to the Fed’s official monthly balance sheet.
On Jan. 28, 2009, a week after Obama’s nomination, the Fed owned $302 billion in U.S. Treasury securities. On April 25, 2012, the latest date reported, the Fed owned five and a half time that much in U.S. Treasury securities--$1.668 trillion.
That is an increase from January 2009 of $1.366 trillion—or 452 percent.
Under Obama, the Federal Reserve has become the single largest owner of U.S. government debt. When Obama entered office, entities in the People’s Republic of China were the largest holders, followed by entities in Japan. At the end of January 2009, China owned $739.6 billion in U.S. government debt and Japan owned $634.8 billion.
By the end of March 2012, China’s holdings of U.S. debt had grown to$1.1699 trillion and Japan’s holdings had grown to $1.083 trillion.
Together, the Federal Reserve, China and Japan had increased their holdings of U.S. debt by $2.2445 trillion since Obama took office.
The total U.S. government debt grew from $10.6179 trillion to $15.6233 between Jan. 28, 2009 and April 25, 2012. Leaving out the intragovernmental debt—which the federal government owes itself—the publicly owned part of the U.S. government debt has climbed from $6.2955 trillion to $10.8607 trillion, an increase of $4.5652 trillion.
The $2.2445 trillion of that new publicly owned U.S. government debt that was purchased by the Fed, China and Japan equals 49 percent of all the new debt the U.S. government has sold to the public since Obama took office.

Obama's Coming Syrian Offensive

Here we go again, we already have seen military force used in Libya to remove Qaddafi and now are starting to hear rumblings, as in the following post, that the same strategies will be used against Assad. Is this a "wag the dog" event or is it for real? We believe the latter.

Our belief is that based on experience and the success in Libya, this Administration will use similar tactics and hope for a successful outcome. Will it be the same? Bravado would say so (and the President has plenty of that) but Assad is not likely to go quietly. If he does, where he might go is another question. Who would take him? He has plenty of money but he has other baggage that  might end up destabilizing his host country. Watch to see if his family (wife and kids) leaves the country, that will be an indicator of the severity of the situation.

As in Libya and Egypt, what might follow the end of the Assad era, could be drastically worse. Will the rebels who come to power be more or less tyrannical than Assad? That question is still to be answered, however, we hold out little hope for a moderate pro-American reformer to be able to consolidate power and make Syria a model for the rest of the region.  Our guess is that the situation will deteriorate significantly and the murders that have already occurred will be but a footnote to the greater calamity that is to come.

Our rationale for a human rights tragedy is that the minority (Alawites) that Assad represents will become targets if he is overthrown, reposed or killed. They have been in the inner circle since the senior Assad took control of Syria in 1971. There is a generous amount of animosity against this now powerful minority. If the protection of the state is removed, there could be an outright slaughter.  

Has the White House factored this into its thought process?  We sure do hope so. If not, the blood of those killed will be on our hands if the United States, France and England are instrumental in the forced removal of Assad.

Yes, we know that it sounds like we are in favor of keeping Assad in place even though he has killed many of his countrymen and in some ways that would be a correct assumption. On the other hand, he is a violent man who should be removed.  At least we knew what we had with Mubarak and Qaddafi and now with Assad, what follows could be significantly worse. The old saying goes "you might not like what you wish for."

Conservative Tom 

Obama speeds up limited air strike, no-fly zones preparations for Syria

DEBKAfile Exclusive Report June 11, 2012, 9:29 AM (GMT+02:00)
Tags:  Syria   Barack Obama   Bashar Assad   Air force   no-fly zone   Russia 

US President Barack Obama has ordered the US Navy and Air Force to accelerate preparations for a limited air offensive against the Assad regime and the imposition of no-fly zones over Syria, DEBKAfile reports. Their mission will be to knock out Assad’s central regime and military command centers so as to shake regime stability and restrict Syrian army and air force activity for subduing rebel action and wreaking violence on civilian populations.
DEBKAfile’s sources disclose that the US President decided on this step after hearing Russian officials stating repeatedly that “Moscow would support the departure of President Bashar al-Assad if Syrians agreed to it.”  This position was interpreted as opening up two paths of action:
1.  To go for Assad’s removal by stepping up arms supplies to the rebels and organizing their forces as a professional force able to take on the military units loyal to Assad. This process was already in evidence Friday, June 8, when for the first time a Syrian Free Army (which numbers some 600 men under arms) attacked a Syrian army battalion in Damascus. One of its targets was a bus carrying Russian specialists.
2.  To select a group of high army officers who, under the pressure of the limited air offensive, would be ready to ease Assad out of power or stage a military coup to force him and his family to accept exile.
The US operation would be modulated according to the way political and military events unfolded.
Washington is not sure how Moscow would react aside from sharp condemnations or whether Russia would accept a process of regime change in Damascus and its replacement by military rule.