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Flap’s Links and Comments for June 3rd on 12:32

These are my links for June 3rd from 12:32 to 12:50:

  • Proposed political district maps would sever most of Thousand Oaks from county – Most of Thousand Oaks would be politically detached from the rest of Ventura County under staff proposals presented Thursday to the Citizens Redistricting Commission.

    The proposals, the first maps to emerge from the commission, were presented as the panel prepares to release its full set of draft legislative and congressional districts next week.

    Under these first-draft ideas, the commission's line-drawers suggest Thousand Oaks be split in Assembly, Senate and congressional districts, with most of the city being grouped with portions of Los Angeles County.

    Perhaps most significant was the line-drawers' proposal to place about three-quarters of Thousand Oaks' population in an L.A. County-centered congressional district. If that recommendation were to be adopted, it would create a Ventura County-only district to the west that retains Simi Valley, the home and political base of incumbent Republican Rep. Elton Gallegly, who has represented most of the county for more than two decades.

    Earlier this week, commissioners suggested that most of Simi Valley —– rather than Thousand Oaks — be detached in order to meet the population requirements for a district that would contain nearly all the remainder of the county.

  • Obama’s Economic Debacle – Major news outlets are suddenly all agog because the vaunted Obama economic recovery not only never was much of a recovery at all, but also seems to be disappearing. “We are on the verge of a great Great Depression!” screams Drudge’s massive headline in red. The Wall Street Journal reports the bad news that the private-sector economy added only 38,000 jobs last month. The Washington Post announces that “U.S. economic recovery is faltering.” CNBC says Wall Street is “baffled.”

    The only thing that should be baffling is why anybody at all is surprised.

    This is what happens when government becomes too big, too intrusive, too debt-ridden and too unpredictable. Almost every root of the current economic distress – the longest post-WWII recession on record – stretches down to rotten government policy. The reasoned compassion of Jack Kemp’s promotion of home ownership was shifted by the Clinton Administration into forced lending practices. Fannie Mae and Freddie Mac, while paying exorbitant salaries and bonuses to Clinton cronies, ran amuck. Lending standards were eviscerated at government’s behest.

  • Greenspan ‘Scared’ Over Deficit; Calls for Debt Ceiling Rise – The debt and deficit problem in the US is so serious that former Federal Reserve Chairman Alan Greenspan finds himself in the position of recommending the highest tax rates in more than a decade.

    In an interview with CNBC, the former central bank chief described himself as a "small government, free-market economist" who nonetheless believes that in order to raise revenue and close the debt gap, 1990s-era taxes must be reinstituted.

    It's a measure, he said, of how serious the problem has become.

    "The fact that I am in favor of going back to the Clinton tax structure is merely an indicator of how scared I am of this debt problem that has emerged and its order of magnitude," he said.

  • Economic Recovery Is Languishing as Americans Await Signal of Better Times – In 1901, William Randolph Hearst’s New York Journal launched a cartoon featuring two overly polite friends named Alphonse and Gaston. Each insisted with conspicuous courtesy that the other go first. Amid elaborate bowing, scraping, and apres-vous-ing, Alphonse and Gaston never managed to make it through an open doorway.

    Now, 110 years later, economists have a name for the Alphonse and Gaston routine that’s hobbling the U.S. economy: “coordination failure,” Bloomberg Businessweek reports in its June 6 edition. Companies won’t hire because customers won’t spend. Customers won’t spend because companies won’t hire. This stare-down has been going on since approximately December 2007, when the worst slump since the Great Depression took hold. Many Americans would like someone to make a move so they can get back to prosperity. Yet they’ve lost confidence in the actions that were designed to build confidence and restore growth –namely, near-zero overnight interest rates, the bailout of the financial system, a weakening dollar, and stimulus measures that add to the federal budget deficit and the national debt.

  • When Will Economy Recover? 2014, If Ever, Survey Says – Americans are growing increasingly doubtful about direction of the US economy, according to the latest survey from business-advisory firm AlixPartners.

    In fact, an increasing number, some 61 percent, say they don't expect to return to their respective pre-recession lifestyles until the spring of 2014, if ever.

    What's worse, a full 10 percent said they expect they will never return to pre-recession spending.

    That's a more pessimistic view than last year, when those surveyed expected that they could be back to pre-recession spending levels by the middle of 2013.

    "Americans continue to push their expectations for return to a pre-recession 'normal' further and further into the future—close enough for comfort, but far enough away to seem realistic," said Fred Crawford, CEO of AlixPartners. "But as that happens, more and more it seems normal is actually where we are right now."


    Not until Obama is gone….

  • Obamanomics in a Nutshell – The Auto Bailouts – It's a sign of grim times indeed when the Obama administration is touting a potential $14 billion loss to the taxpayers as a great economic success.

    The White House is running on its auto bailouts as courageous acts that saved the industrial Midwest. To critics of government intervention, the administration holds up the revival of General Motors and Chrysler as proof of the efficacy – nay, the necessity – of bailout economics.

    It's a telling point of pride. In bragging about the bailouts, the administration is boasting of a process shot through with lawlessness and political favoritism, not to mention reckless disregard for taxpayer dollars. Few acts have so powerfully captured Pres. Barack Obama's corporatism.

    The administration believes it trumps all criticism with one data point: GM and Chrysler are still with us. GM has even been making money, and had the biggest IPO in American history last November.

    Yet, as Megan McArdle of The Atlantic tartly observes, it shouldn't have been in doubt that if government threw $80 billion at two companies, not expecting to get all of it back, it could save them. She points out that the loss from the bailouts (the administration's estimate is $14 billion) will be close to the entire market capitalization of GM in 2007. It will be several times as big as the company's 2008 market capitalization.

    McArdle figures that, at a cost of roughly $10 billion to $20 billion, we might as well have given GM's pre-bankruptcy workforce of 75,000 hourly workers $250,000 each and called it a day.


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