Conservative Happy Hour with Bill Whittle

Okay, I'm heading out to the Bill Whittle event, in Newport Beach.



I'm sure he'll have a bang up presentation, given all that's been in the news just this last week. And for questions and answers, I'll be interested to see if he has an emendation to his optimistic take on American exceptionalism, seen here, in part, at his outstanding video presentation: "Bill Whittle's Firewall: 'What We Believe, Part 7: American Exceptionalism."

And tune back in here later tonight for a report and more regular blogging!

The U.S. Still Has a Promising Future?

Well, I certainly hope so.



But check Michael O'Hanlon, at Los Angeles Times, "Despite Problems, the U.S. Still Has a Promising Future":

Amid all the talk of gloom and doom in the United States, with the stock market's near-crash and the renewed threat of a double-dip recession, it is worth pausing to remember that the United States remains the greatest country on Earth. It is also the country with the most promising future. I make these assertions not as a matter of national pride, but as an analytical conclusion.

And he makes an excellent argument. The problem --- and I know it's a problem, because I'm just like O'Hanlon on this --- is that his analysis is almost completely structural. That is, O'Hanlon's looking at all this recent turmoil from a comparative power analysis interpretation, which almost systematically excludes internal political determinants. We can extrapolate from past patterns of America's remarkable exceptionalism and global preponderance and expect things to flow along fairly well simply because for all our troubles, no single other nation matches America's bounty or prospects. But the debt downgrade, as Danial Henniger points out today, is the ultimate signal that American hegemony is shrugging. To use Mark Steyn's analogy, we're like a prize fighter who's been hammered, and the opponent's sitting at the opposite stool, counting the seconds until the bell rings to come over for another round of pummeling. That's to say, for example, when Britain fell from preeminent status after WWI, and most definitely at the conclusion of WWII, the mantle of global political and eocnomic leadership passed to a benign power across the Atlantic, the United States. The U.S. had not only resisted the hegemonic role during the 1920s, but after WWII we did just about everything in our power to restore the defeated European nations and Japan to economic vitality and competitiveness. As America declines now --- and I'm using decline now for the first time really in agreement --- there's is no commensurate situation of the leading power passing the baton to a friendly rising power, as we experienced in 1945. China and Russia cooperate where possible but will seek advantage from America's weakening position, as power politics dictates, and that's while at the same time China is paradoxically hemmed in further from America's debt problems (mutual vulnerability forms a trace element of U.S. power internationally). And of course toss into the mix President Obama's hellbent agenda of making the United States the unexceptional nation, and well, let's just hope he's out in one term, November 6th, 2012. And the key factor for the electorate is the massive Democrat debt overhang. We're heading into a double-dip recession, some say. The Fed, for example, promised zero percent interest rates until 2013 because it expects no growth. The only thing good about this is that it almost guarantees that the Democrat ticket will lose next November. Even then, Republicans have been nearly as addicted to spending as the Democrats, with G.W. Bush's Medicare prescription drug expansion being Exhibit A. And the debt overhang will accelerate the collapse of U.S. world leadership unless two things happen: (1) we cut spending, and (2) the economy grows at a sustained pace of growth, say at three percent annual GDP for a decade or two, and then some. I can't see things turning around unless we have a combination of those two things, and without that we'll see a steady erosion of both U.S. global influence and a decline in the U.S. standard of living at home.



So, yes, Michael O'Hanlon makes a good case for continued optimism, but a more thorough analysis must consider the current failures of the American political system, and most importantly, the epic failures of the Democrat Party's expansionist, economic-killing social welfare policies.



More on this later ...

Main Street Bank, Kingwood, Texas, to Go Out of Business

What's interesting about this is that the bank chairman, Thomas Depping, cites strangulating regulation as driving him from the market. See Wall Street Journal, "Fed Up: A Texas Bank Is Calling It Quits":

Main Street Bank lends most of its money to small businesses and is earning decent profits. But the Kingwood, Texas, bank is about to get out of the banking business.



In an extreme example of the frustration felt by many bankers as regulators toughen their oversight of the nation's financial institutions, Main Street's chairman, Thomas Depping, is expected to announce Wednesday that the 27-year-old bank will surrender its banking charter and sell its four branches to a nearby bank.

Mr. Depping plans to set up a new lender that will operate beyond the reach of banking regulators—and the deposit-insurance safety net. Backed by the private investment firm of Microsoft Corp. co-founder Paul Allen, the company won't be able to call itself a bank, but it will be able to do business the way Mr. Depping wants.



"The regulatory environment makes it very difficult to do what we do," says Mr. Depping, who last summer saw his bank hit with an enforcement order from the Federal Deposit Insurance Corp.

Continue reading.



If you're reading Mark Steyn's After America, this story is yet another eerie example, found in the book, of the kind of stifling anti-American regulatory burdens shutting down innovation and growth in this country. Perhaps Depping will do better in his new venture, but the move to shutter the bank is an real indictment of job-killing government oversight.

London Riots Make Front Page at Los Angeles Times

Yesterday's cover at the Los Angeles Times was a register of global social breakdown. At the left-hand side, "London Looks Inward, Lashes Out":

Facing a storm of criticism for remaining on vacation while his city burned, London Mayor Boris Johnson returned Tuesday to tour Clapham, a well-off south London neighborhood that was one of many stunned by three nights of hopscotching riots that left one man dead and littered the urban landscape with hundreds of damaged businesses and residences.



The shaggy-haired conservative was greeted by crowds of furious store owners asking where police were as their livelihoods were destroyed.



"I felt ashamed," he said after viewing the damage, "that people could feel such disdain for their neighborhoods."



Community leaders, sociologists, police and lawmakers were left groping for a meaning for the worst social unrest to hit London in a generation. The riots laid bare a phenomenon that has stirred deep unease in Britain in recent years: "yobbery," the anti-social behavior of a generation believed to be so alienated from the norms of civilized society that pockets of some cities live in fear.

Also at the paper, upper right, "Divided Fed Has Surprise for Markets." And then below that, "Angst on Main Street Threatens Recovery."



And at bottom is a story about long-shot GOP presidential candidate Fred Karger, "No Illusions, Just a Message for Gays":

Karger finally came out to his parents in 1991, after nursing a friend who died of AIDS. They accepted him, Karger says, but never seemed entirely comfortable. So he kept closeted, which was also better for business. Although he told his business partners — "it wasn't a surprise, and didn't change who or what he was," says one, Lee Stitzenberger — maintaining his secret kept Karger's sexuality from becoming a campaign issue.



When his parents died and he retired, Karger finally came out publicly. It was 2006 and he was 56 years old.



There was no grand announcement. He simply took a lead role in the unsuccessful campaign to save a Laguna Beach gay bar, the Boom Boom Room. Three years later, he founded Californians Against Hate to oppose Proposition 8, the measure banning same-sex marriage, and used his expertise to expose secret funding of the measure by the Mormon Church.



To some extent, his presidential campaign is an extension of that effort. By nudging Mitt Romney, the GOP front-runner and a prominent Mormon — preferably on stage, in front of a national TV audience — Karger would like to stop the church crusade against same-sex marriage. In his view, Romney could make that happen with a phone call.



Romney's feelings are unknown. His campaign declined to comment.

Karger might be a nice guy personally, but he's aligning himself with the progressive hate industry. And the Times is wrong on Mitt Romney. Romney recently "came out" and signed onto the pledge from the National Organization for Marriage to oppose gay marriage.



And last but not least, the one piece of front-page news that reflects the flip side of social decay, "Outlines of Downtown Stadium Deal Approved." There's a cool little graphic as well. We were just down there for X-Games and I was really impressed with the upbeat climate around Staples Center. That graphic looks like the stadium would be kinda crammed in there tight, although I'd have to spend more time downtown and get familiar with the area. The main thing though is that it would likely bring NFL football back to L.A., and needed jobs and civic vitality to go with it. That's the reverse of the social breakdown that seems to be breaking out everywhere these days.

'Our Debt Pool': People's Choice #5 at Power Line

This one was Hugh Hewitt's favorite:

U.S. Debt Downgrade Leaves China in a Bind

At Los Angeles Times:

The Chinese government has built what is now the world's second-largest economy in part by keeping its currency cheap in order to subsidize exports. To do that, it has bought gobs of U.S. Treasury bills and other securities. Any big move on China's part to unload its $1.2-trillion-plus trove of American debt would only result in a self-inflicted wound: sinking the value of the dollar further and eroding the value of its own reserves.



For the moment, at least, the economic and political consequences of dumping dollars are likely to keep Beijing from taking any such drastic action.



"There really isn't a better choice than U.S. Treasury bonds," wrote Huang Yiping, professor of economics at Beijing's Peking University, in a commentary published Monday in the influential financial magazine Caixin. "The basic requirements for foreign reserves are safety, stability in value and liquidity. Although U.S. Treasury bonds might not meet the first two criteria right now, the problem is still that we do not have a better choice."

Markets Plunged Despite President Obama's Reassurance

I meant to post this yesterday. And Stormbringer provides extra incentive, "BARACKALYPSE NOW: IT TANKED AS HE TALKED!"

And the latest at Wall Street Journal, "Markets Sink Then Soar After Fed Speaks":

The Federal Reserve sent investors lurching from worry to hope as it warned that the economy would remain weak for some time but said it was prepared to take further steps to shore it up.



The Fed's statement, which included plans to keep interest rates near zero for at least the next two years, ultimately sent the Dow Jones Industrial Average up 4%, its biggest daily gain since March 2009. Yields on Treasurys dropped as money poured in.



Trading was chaotic. Investors were initially discouraged by the Fed's announcement just after 2:15 p.m. EDT, disappointed that policy makers didn't announce any new initiatives and disheartened by the Fed's gloomy appraisal of the economy. That sent the Dow down more than 200 points within minutes.



Then, just as quickly, the market rebounded as traders focused on a phrase low in the Fed's statement, which said the central bank had discussed a "range of policy tools" that it was "prepared to employ." That prompted speculation that the central bank might soon step in with additional measures aimed at spurring the economy. In the last hour of trading, the Dow shot up 500 points, closing with a gain of 429.92 points, or 4%, at 11239.77. In Asia Wednesday morning, Tokyo shares opened higher, rising 1.9% at the start of trading.

See also LAT, "Dow gains 429 after remarks from Fed."



When in doubt, parse the Fed's statements (and ignore President Barack "Steve Urkel" Obama).

Stock Market Plunges

At USA Today, "Crisis of confidence leads to fears of bear market," and New York Times, "Stocks Plunge in Worst Day in Two Years." Also, at Wall Street Journal, "Downgrade Ignites a Global Selloff: Dow's Plunge Worst Since '08":

The downgrade of the U.S.'s credit rating sparked a global selloff on Monday, pushing the Dow Jones Industrial Average to its sharpest one-day decline since the financial crisis in 2008.



In scenes reminiscent of three years ago, selling accelerated as the day went on, and investors were forced to sell to meet margin calls from lenders demanding more collateral. The Dow ended the day down 634.76 points, or 5.5%, at 10809.85, its lowest close since last October. Trading volume of stocks listed on the New York Stock Exchange hit the fourth-highest level in history.



It was the Dow's biggest percentage drop since December 2008 and its sixth-largest point decline ever. Other major stock indexes also fell heavily. Traders also dumped corporate bonds and industrial commodities.



Investors fled to the traditional refuges: gold, currencies of safe-seeming countries such as Switzerland, and, ironically, the very securities that Standard & Poor's downgraded on Friday, U.S. Treasury bonds. For most investors, Treasurys seemed a lot safer than stocks.



Tuesday morning in Asia, Tokyo shares opened lower, falling 3.4% in the first minutes of trading.



The Financial Stability Oversight Council, a group of U.S. regulators led by Treasury Secretary Timothy Geithner, held an emergency conference call Monday afternoon to discuss the financial-market volatility, a person familiar with the call said.



"There's probably as much uncertainty as we've seen since 2008," said Eric Pellicciaro of asset manager BlackRock's Fundamental Fixed Income division, which has $612.5 billion in assets under management. "There's a general feeling that policy options are few and far between. There's a feeling that fiscal austerity is coming at the worst possible time."

Interesting how Treasury securities remained a safe haven. That can't go on forever.



I'll have more on this tonight.

Ross Douthat, Political Scientist

Douthat draws on political science research at New York Times, "Waiting For a Landslide." And for a second I thought he'd blow it, because "realignment theory," which he discusses, hasn't accurately explained, much less predicted, partisan trends for decades. But Douthat adds this, which is just right:

In reality, the next election may be no more transformative than 2008 turned out to be. The next Republican president may find himself as hemmed in and frustrated as President Obama has become. Meanwhile, America will still have a credit rating to fix, and a deficit to close.

More at that link at top, and Douthat had a great piece a few days ago on the debt deal, "The Liberals’ Dilemma." Note especially:

... American liberalism risks becoming a victim of its own longstanding strategy’s success. Because yesterday’s liberals insisted on making universal programs the costly core of the modern welfare state, on the famous theory that “programs for the poor become poor programs,” today’s liberals find themselves defending those universal (and therefore universally-popular) programs at the expense of every other kind of government spending — including, yes, programs for the poor. It’s a classic example of putting liberal political interests ahead of liberal policy priorities. In the short term, the insistence on ring-fencing Medicare and Social Security has left Democrats defending a system that often just ends up redistributing money from the younger middle class to the older middle class while accepting caps on programs that might do more (both directly and indirectly) to help downscale Americans get ahead. In the long term, by postponing any reckoning with the cost of entitlements, it’s making it more likely that the inevitable crunch will hit the poorest recipients of Medicare and Social Security harder than it should.

Read that whole thing. Basically, progressives will never cut entitlements because gargantuan socialist welfare states form the core of socialist existentialism.



Douthat's coming of his own as a New York Times columnist, by the way. He had cold feet or something after leaving The Atlantic, but he's been more consistent in posting some excellent commentary of late.

The Alinksy-Obama Minions

I love this title, from Pat Austin, "The Alinksy-Obama Minions Would Have You Believe In the 'Tea Party Downgrade'.



EXTRA: At The Other McCain, "Liberals Spinning S&P Credit Downgrade: BLAME IT ON THE REPUBLICANS!"

Asian Markets Fall in Monday Trading After U.S. Downgrade

At New York Times, "Asian Markets Fall Despite Efforts by Policy Makers."



But see Los Angeles Times, "No rush from U.S. Treasuries, as yields fall while Asian stocks slump":

U.S. Treasury bonds' status as a haven seemed intact in Asia on Monday, as yields fell despite Standard & Poor's downgrading of Uncle Sam's credit rating on Friday.



It may have helped Treasuries that Asian stocks were broadly lower, as some investors bailed out ahead of European and U.S. equity trading.



The 10-year Treasury note yield slid to 2.50% in late Asian trading, down from 2.56% on Friday.



Shorter-term yields also fell. The two-year T-note dropped to a record low 0.26% from 0.29%.

More at that link above, and see, "What the U.S. debt-rating cut may mean for markets":

If investors dump Treasuries, where would the money go?



They don’t have a lot of options if they want to keep their money in something relatively safe.



The bond markets of other countries still rated AAA -- including Germany, Canada, France, Finland and Australia -- are far smaller than the U.S. debt market. The appeal of Treasuries in part is their great liquidity, meaning it's easy for investors to instantly buy or sell bonds.



What’s more, Europe has its own worries: The continent’s government-debt crisis has worsened in recent weeks, with investors now fearing that Spain and Italy could be forced to seek European Union bailouts, following the paths of Greece, Ireland and Portugal over the last 15 months.



Some investors are likely to run to gold, another classic haven. Gold has been streaking this year, rising 16% year-to-date through Friday, to $1,648.80 an ounce.



Haven’t Treasury interest rates been falling lately, anyway?



Yes. Investors have been pouring cash into Treasury securities since mid-April, driving interest rates down, as global economic growth has faded. The rate on the 10-year Treasury note, a benchmark for mortgage rates and other long-term interest rates, fell as low as 2.40% last week from 3.59% in mid-April.



Because worries about the economy have only worsened in recent weeks, many analysts believe that any jump in Treasury rates related to S&P’s downgrade could quickly bring a torrent of buyers into the market, happy to snag higher yields.



“The fundamentals of U.S. and global growth are weakening, and that’s a fertile time to be in Treasuries” as a haven, said William O’Donnell, head of Treasury-bond strategy at RBS Securities.

RELATED: At CNBC, "No Chance of Default, US Can Print Money: Greenspan" (via Memeorandum).

America Gets Downgraded

At Wall Street Journal, "A spend and tax policy mix always leads to economic decline":

... is there anything that S&P said on Friday that everyone else doesn't already know? S&P essentially declared that on present trend the U.S. debt burden is unsustainable, and that the American political system seems unable to reverse that trend.

This is not news.

In that context, the Obama Administration's attempt to discredit S&P only makes the U.S. look worse—like the Europeans who also want to blame the raters for noticing the obvious. Treasury officials and chief White House economic adviser Gene Sperling denounced S&P for relying on a Congressional Budget Office scenario that overestimated the U.S. discretionary spending baseline by $300 billion through 2015 and $2 trillion through 2021.

But even adjusting for that $2 trillion would only reduce U.S. publicly held debt to 85% or so of GDP—still dangerously high. And that assumes that recently agreed upon spending caps are sustained over a decade, something which rarely happens.

We think the larger problem with S&P, Moody's and Fitch is that they make no distinction over how a nation balances its books—whether through tax increases or spending reductions. Like the International Monetary Fund, the raters care only about balance.

This takes too little account of the need for faster economic growth, which is the only real path out of a debt crisis. Britain's government has earned rater approval for its fiscal consolidation, but its increases in VAT and income tax rates are hurting its tepid recovery. Letting the credit raters dictate tax increases is the road to an austerity trap.

The real reason for White House fury at S&P is that it realizes how symbolically damaging this downgrade is to President Obama's economic record. Democrats can rail all they want about the tea party, but Republicans have controlled the House for a mere seven months. The entire GOP emphasis in those seven months—backed by the tea party—has been on reversing the historic spending damage of Mr. Obama's first two years.

Continue reading.

IMAGE CREDIT: The Astute Bloggers.

The Debt Downgrade Blame Game

I was up in time for the Sunday news shows. I flipped back and forth for a minute between ABC and NBC and finally settled on "Meet the Press." John Kerry and John McCain were interviewed, forgettably, with the exception of McCain's comments on Afghanistan. But the roundtable discussion was a keeper. Former Federal Reserve Chairman Allan Greenspan stole the show (a bit of which can be seen here). But frankly the reason I didn't channel surf further was Rachel Maddow. Maddow is maddening. The S&P downgrade dominated the discussion, and Maddow's entire shtick was political. David Gregory asked her about economic implications and she segued into an attack on "Republican intransigence." Check it out:

Visit msnbc.com for breaking news, world news, and news about the economy

Maddow was sticking like glue to S&P's press release, which claimed that the downgrade was a comment on political gridlock in Washington. But Maddow's fascinating because she perfectly encapsulates all that's wrong with the Beltway media mindset: She blames Bush for the crisis, citing the revised GDP numbers to argue that "the hole we've been getting out of is even deeper than we thought." Well, I guess if you're in a hole you stop digging, but the Obama-Dems 2012 budget was pegged to add $7.2 trillion in new debt over the next decade, and that's after racking up $1.7 trillion after the administration's first year in office. Congressional Republicans stood up to this, and that fortitude so enraged the progressive political class that "tea party terrorists" were claimed to be the greatest threat to national security since Nazi Germany. But Maddow goes on. And bless his heart, but Alex Castellanos fails to get a smackdown rebuttal until much later in the broadcast. I reported on Janet Daley's essential piece earlier, "A Capitalist Economy Can't Support a Socialist Welfare State." The GOP talking point has to focus on the unsustainability of big-government entitlements. Republicans won the day by standing firm, and the S&P downgrade ultimately will damage Democrat reelection prospects next fall, hence Maddow's desperate efforts to spin this as not an economic issue at all, but one of tea party "intransigence."

In any case, see Karl at Patterico's Pontifications, "For Whom the Downgrade Tolls":

In sum, the S&P downgrade marks a post on the road where progressive demagogy loses its power. The downgrade marks a post on the road to extinction for 19th-20th century progressivism. That’s why the Obama administration — and true progressive ideologues — made S&P their first target, however futile the gesture.

RTWT.

I wouldn't separate the partisan left from the ideological left so much (Maddow is both, for example), but it's a really perceptive essay otherwise.

UPDATE: Linked at Atlas Shrugs and Yid With Lid. Thanks! Also linked at Blazing Cat Fur!

U.S. Loses AAA Rating from Standard & Poor's

At Reuters, "United States loses AAA credit rating from S&P."

I'll update with reactions in a few minutes ...

6:27pm PST: At Doug Ross, "He's Historic, Alright: Standard & Poor's Downgrades US Debt to AA+." And a Memeorandum thread.

6:51pm PST: An analysis at Wall Street Journal, "S&P Downgrades U.S. Credit Rating":

WASHINGTON—A cornerstone of the global financial system was shaken Friday when officials at ratings firm Standard & Poor's said U.S. Treasury debt no longer deserved to be considered among the safest investments in the world.

S&P removed for the first time the triple-A rating the U.S. has held for 70 years, saying the budget deal recently brokered in Washington didn't do enough to address the gloomy long-term picture for America's finances. It downgraded U.S. debt to AA+, a score that ranks below Liechtenstein and on par with Belgium and New Zealand.

The unprecedented move came after several hours of high-stakes drama. It began in the morning, when word leaked that a downgrade was imminent and stocks tumbled sharply. Around 1:30 p.m., S&P officials notified the Treasury Department they planned to downgrade U.S. debt, and presented the government with their findings. But Treasury officials noticed a $2 trillion error in S&P's math that delayed an announcement for several hours. S&P officials decided to move ahead anyway, and after 8 p.m. they made their downgrade official.

Liechtenstein! I don't believe it!

8:12pm PST: At Zero Hedge, "S&P Downgrades US To AA+, Outlook Negative - Full Text."

John Kerry: Media Should Not Give Time to Tea Party

The left's elitist fallback position is authoritarianism and suppression of dissent, but you knew that already.

At The Blaze, "JOHN KERRY: MEDIA HAS ‘RESPONSIBILITY’ TO ‘NOT GIVE EQUAL TIME’ TO TEA PARTY." Also at Memeorandum.

The Keynesians Have Fired All Their Ammo and Here We Are

At Wall Street Journal, "The Global Rout."

Just read that whole thing. Nation-states can't afford their entitlements, and "structural reforms" are unavoidable. Better to do it earlier than later, before we end up like Greece. President Obama ... are you listening?

Senator John Cornyn: 'Time to Give GOP New Mandate to Govern'

From the Texas Sanator, at The Houston Chronicle:

With the support of the American people, Republicans told the president that raising taxes during a weak economy was unacceptable. Once again, the president backed down. And that option came off the table as well.

Republicans held the line on taxes and canceled the president's blank check. We won the argument that spending cuts are the key to reducing our debt and balancing our budget. That's pretty good work for a party that only controls one-third of one-half of the federal government.

Yet despite refocusing the debt-ceiling debate on out-of-control federal spending, the actual spending cuts in the compromise bill are too small. The $2.1 trillion in potential debt reduction is far less than we need to prevent a downgrade in the U.S. credit rating, according to many analysts. All the spending cuts so far are backloaded, with only $21 billion scheduled to be cut from next year's deficit. The Pentagon is specifically targeted for spending cuts, even as our troops are fighting three wars and other security threats loom on the horizon.

So I sympathize with my colleagues, as well as many Republican candidates, who say that the compromise bill does not fix the problem. They are right. A far better alternative was Cut, Cap, and Balance. A far better budget is the Pathway to Prosperity. I voted for both of those plans, and I wish we had the votes to enact both of them into law.

RTWT.

Republicans are looking ahead to 2012.

See also New York Times, "Republicans Set Sights on Balanced Budget Amendment."

Photo Credit: Wikimedia Commons.

Obama's One Term Presidency

I wrote yesterday morning that things were "not looking good for Obama and the Democrats." The thought came to me in a flash as I looked over the economic news. If Barack Obama's anything, it's a good campaigner, and hence I've been reluctant to bet against his reelection. But with folks talking about a double dip recession, and with unemployment likely to remain high regardless of economic growth rates, I think the GOP's chances are looking better than ever. Barack Obama will be a one-term president, I'm confident. And apparently, so are others, or at least there's some pessimism in the MSM that I don't recall seeing. At Politico, for example, "Obama's big drags":

The politics of the debt fight were a drag for President Barack Obama, yanking his popularity to new lows. Here’s an even bigger drag: Obama emerges from the months-long fracas weaker — and facing much deeper and more durable political obstacles — than his own advisers ever imagined.

The consensus has been that for all his problems, Obama is so skilled a politician — and the eventual GOP nominee so flawed or hapless — that he’d most likely be reelected.

Don’t buy into it.

This breezy certitude fails to reckon with how weak his fundamentals are a year out from the general election. Gallup pegs his approval rating at a discouraging 42 percent, with his standing among independents falling 9 points in four weeks.

His economic stats are even worse. The nation has 2.5 million fewer jobs today than the day Obama took office, a fact you’re sure to hear the Republicans repeat. Consumer confidence is scraping levels not seen since March 2009.

Where’s the bright spot? Hard to see. Obama has few, if any, domestic achievements that enjoy broad public support. No one assumes employment, growth or housing prices to pick up much, if at all — something Obama is essentially powerless to change. And the political environment and electoral map are significantly tougher than in 2008, especially in true up-for-grabs states.

It's long piece. Continue at the link.

RELATED: FWIW, see Andrew Hacker at New York Review, "The Next Election: The Surprising Reality." According to Hacker, "Although it is never openly stated, there are Americans who don’t want to be governed by a black man." (Racism, wouldn't you know?) Beyond that (as part of a book review), Hacker's main argument is about turnout: Obama's toast if he can't generate the kind of voter (and youth) enthusiasm that propelled him to victory in 2008. And if that's the case, I'm even more confident Obama's a one-termer. ("Hope & Change hasn't been all that great for young folks.)

U.S. Debts Tops Size of Entire Economy

See IBD, "An Unwelcome Debt Milestone."

With $14.5 trillion in total debt, we're already in deep trouble. Where will we be in 2021, 10 years from now, when total federal debt is expected to reach as high as $28 trillion and GDP is (generously, in our view) expected to reach $23.8 trillion? Then, by conservative estimates, our debt-to-GDP ratio will be close to 120%.

In short, debt will be a permanent millstone around the neck of the once-vibrant U.S. economy.

Bank of New York Mellon Charging Negative Interest on Deposits

When I went to deposit a check yesterday, the screen on the ATM machine flashed, "Special 1% Interest Rate on CDs of $25,000 or More!"

I thought, my God, banks don't pay interest anymore!

So, yep. You pay them, or at least on big money deposits at Mellon Bank. See New York Post, "BoNY: Big deposits will cost you a pretty penny."

You can keep your stinkin' money.

The financial markets are so foul that Bank of New York Mellon -- overwhelmed by a flood of investors pulling their money out of stocks and stashing it in bank accounts -- is going to start charging its largest institutional customers for holding their cash deposits.

The nation's largest custodial bank announced that it would charge customers more than a tenth of a percentage point for "extraordinarily high" deposits of $50 million or more.

The unusual move by the bank, which manages more than $1.1 trillion in assets for investment funds and money managers looking to safely park their dough, is hoping to discourage customers from plowing even more money into their accounts.

Also at New York Times, "Nervous Investors Chase Low-Risk Assets."

In a sign of just how much cash had poured into commercial bank accounts, Bank of New York Mellon said on Thursday that it would charge institutional clients with more than $50 million on deposit a fee of 13 basis points. The move is intended to recover some of the cost of managing the money, but is also a bid to slow the so-called hot money that has been ricocheting between Treasuries, money-market funds and pure cash balances at the big banks.

The Bank of New York Mellon said the fee would only be applied “to a small number of institutional clients with extraordinarily high deposit levels where the deposits have increased significantly in recent weeks, well above market trends.” The bank did not disclose just how much cash had poured into its coffers recently.

The good news is that investors are pouring their money into U.S. banks. We're lucky that way. When we've seen financial crises in Mexico and Thailand in recent decades, the money flowed out of those countries, leaving them dry and needing bailouts from the U.S. There's a reason we need to worry about our debt overhang. We don't want go the way of Mexico!