What?! James Pethokoukis Must Be High.

I just heard James Pethokoukis on Kudlow's radio program say Gov. Rick Perry is very conservative, to the right even of . . . Rep. Paul Ryan.

Wow! Whoopee! Imagine that, someone to the right of a moderate Republican.

Mish's Whopper of the Week

"Bank closings remain elevated. We have had 106 bank failures so far in 2011."

-- Mike Shedlock, here on Friday

The rate of failure this year so far has fallen to 2 per week from 3 per week last year.

Failures year to date number 64, not 106.

Figures reported here in May put costs of failures to the FDIC's Deposit Insurance Fund through 2010 at $24.18 billion. That estimate is 9 percent more than previously estimated.

Mish thinks this is one among many indicators showing continuing deflation in the economy.

Don't bailouts of this kind get counted as government expenditures accruing to GDP? Counting them as such would make GDP less reliable as an indicator of growth in the economy, but you must admit the number is tiny in a $15 trillion economy, not even 2/10ths of 1 percent.

California Becomes Ninth State Seeking To Overthrow Electoral College

The story, reported here, reveals that the anti-constitutional National Popular Vote initiative had its origin in California:

California's involvement, combined with the other eight states, brings supporters nearly halfway there, to 132 votes, said Vikram David Amar, associate dean at the UC Davis School of Law. Amar, along with his brother and another law professor, started the movement a decade ago.


Check the relevant Wikipedia entries and you will find that name, Vikram David Amar, liberally referenced.


The proposal, despite all the protestations to the contrary, is an end-run around the constitution, setting up a process alien to its electoral college assumptions. States who join this plan are in effect agreeing to allocate their electoral votes in a manner different from that prescribed by Article II, Section 1, which assumes that each state will appoint its own electors.

In effect, the National Popular Vote proposal seeks subtly to alter this provision by making the electors creatures not of the individual states, but of the voters and electors of the participating states as a whole. It does this by replacing the method of appointing electors based on winner-of-the-state-takes-all with winner-of-the-country-takes-all.

It is an ingenious and devious scheme which exploits the absence of a prescribed method for appointing electors, something the constitution wisely left up to the states.

It dives into this vacuum with a rival system which will award electors who by law must ignore the will of the very people whose Representatives and Senators appointed them, and represent instead the interests of a larger constituency which did not appoint them.

In Michigan, I expect my electors to cast votes for president based on who won Michigan, not on who won California, Texas, Florida and New York. The electors appointed in those states are appointed by Representatives and Senators for whom I did not, indeed cannot, vote. Requiring my electors in Michigan to answer to them, just because there are more of them, rather than to me thus severs me from my representation, and thus from my liberty.

Put another way, the National Popular Vote seeks to sever the electoral college electors from the people and the states whose Representatives and Senators are the basis for their existence.

Get the word out to stop this pestilence before it goes any farther.

  

Stinging Blow to ObamaCare Delivered by 11th Circuit Court of Appeals

As reported here:

A divided three-judge panel of the 11th Circuit Court of Appeals ruled Friday that Congress overstepped its authority when lawmakers passed the so-called individual mandate, the first such decision by a federal appeals court. It's a stinging blow to Obama's signature legislative achievement, as many experts agree the requirement that Americans carry health insurance — or face tax penalties — is the foundation for other parts of the law and key to paying for it.

The case will go next before either the full 11th Circuit or the US Supreme Court.

Newt Gingrich Rightly Slams Gang of Twelve on Secrecy

The DC has the story here. Newt called the Super Committee one of Washington's dumber ideas.

Sen. Rob Portman Will Shill for Gang of Six Taxes on Gang of Twelve

There's Portman on July 21 giving aid and comfort to the Gang of Six enemy while the US House is trying to push the only true plan to cut spending:

The bipartisan “Gang of Six” proposal on the deficit continues to draw attention from rank-and-file senators, even as House leaders come out in opposition to any plan that includes new revenues as part of a deal.

“It's a step in the right direction,” Sen. Rob Portman, R-Ohio, who was budget director under President George W. Bush, told us on ABC’s “Top Line” today. “It's the one effort out there where you've got Republicans and Democrats coming together. And I think it could actually mesh well with what I think is the ultimate solution here with regard to the debt limit increase.”

While many Republicans are pushing back against the notion of including revenues as part of any deal, Portman said tax reform must be built in to a bipartisan solution.

“We've signed up to the concept that we do need a bipartisan approach here, and it's got to deal with tax reform, and it's got to deal with the long-term problem -- which is sustainability of these entitlement programs,” Portman said.

S and P 500 Downsy Daisy Upsy Daisy: Now 14 Percent Off April Highs

Another Jim Cramer machine-caused flash rally?

Watch For The Sucker Rally Starting From S and P 500 1100, She Says

“The sucker rally is what’s going to get people. Because then we’re going to implode from there.”

-- Kathy Boyle, president of Chapin Hill Advisors in New York, quoted here

People have been able to bank their gains comfortably in this cyclical bull for quite some time, but haven't because the alternative places to park profits all seem so unattractively high priced, and cash so unthinkable. Who wants to go from spectacular gains in equities to the somnolence of a money market account?

Trust me. Sleep is worth its weight in gold. And you're going to need it for what's coming.

S and P 500 Down 17.8 Percent Since April Highs

AP Reports Householders Converted to Renters Total 3 Million

With 3 million more expected by 2015:

Since the housing meltdown, nearly 3 million households have become renters. At least 3 million more are expected by 2015, according to census data analyzed by Harvard's Joint Center for Housing Studies and The Associated Press.

Read the rest of the story here, which says that the GSEs presently own 250,000 foreclosures.

Meredith Whitney's Caricature of Tea Party is Sexist and Liberal: Video and Transcript

She expressed her opinion on CNBC this morning (here is the video), saying the Tea Party is at bottom a phenomenon of unemployment, but composed mostly of freaked-out white men who've lost their jobs and their identities. She's obviously worried about it enough to offer advice to Machiavellian Democrats to defuse this supposed bomb before it's too late.

I guess she never examined the Gallup poll on the subject (here), which found that 45 percent of the Tea Party is female, is barely 5 percent more non-Hispanic white than the general population, and that the unemployment rate in the movement was lower than in the general population. Gallup concluded the Tea Party is fairly representative of the general population, unlike Whitney.

Sexist remarks start at 5:55 into the interview.

Translation: I'm a Machiavellian Democrat

Cost-Cutting and Job Creation Helped Republicans in Wisconsin

So says David Freddoso for The Washington Examiner here:

How did Republicans hold out? It hasn't hurt that Walker's reforms have dramatically helped school districts within the state save millions of dollars by abolishing the main Wisconsin teachers' union's insurance racket. Nor does it hurt that Wisconsin, under the business-friendly leadership of Walker and a Republican state legislature, created more than half of the jobs created in the United States during the month of June.

Republicans Keep Senate in Wisconsin Recalls Despite Millions Spent by Unions

The Republicans retained 4 of 6 seats in the unusual recall elections yesterday, narrowing their hold on the Wisconsin Senate to a 1 seat majority.

But two Democrats still face recalls next week. If they lose that would return the situation to the margins of the status quo ante and suggest that all the sound, fury and expense since March signified nothing, except folly.

Upwards of $35 million is being spent on the recalls, launched by angry unions and Democrats against Republicans under Governor Scott Walker who successfully pushed through legislation to curtail public union power over salaries and benefits in Wisconsin.

Read all about it at The Milwaukee Journal Sentinel Online, here:

By keeping a majority in the Senate, Republicans retained their monopoly on state government because they also hold the Assembly and governor's office. Tuesday's elections narrowed their majority - at least for now - from 19-14 to a razor-thin 17-16.

Republicans may be able to gain back some of the losses next week, when two Democrats face recall elections.

Jim Cramer's 'Machines' Cause Flash Rally, Reversing Some of Yesterday's Losses

Now 14 percent off the April highs.

S and P 500 is Almost 18 Percent Off the Recent Highs

And it's a long way back down to 683, another 39 percent.

Food Stamps in Michigan: 30K College Students Removed From Program

Who knew? Apparently that number on the program was huge, 10 times more than in other states.

New rules for eligibility are coming, requiring assets to be counted. Like lotto winnings.

The Detroit News has the story here:

Even after the recent removal of 30,000 college students from the food stamp program, close to 2 million Michigan residents — one in five — are on the program, [Brian] Rooney [Deputy Director, Department of Human Services] said.

Jim Cramer Blames The Machines

Here:

"You have to believe that it's related to the machines . . .."

Obama Talks Again of 'Balanced Approach' Meaning New Taxes, Market Tanks

CBS News reported here at 2:36 pm on the president's remarks made today after the lunch hour:

Mr. Obama noted that S and P attributed its downgrade in part to doubts about the U.S. political system's ability to act to reign in the nation's ballooning deficit and debt, and called for a "balanced approach" to deficit reduction - one that includes both tax increases on high earners and "modest adjustments" to Medicare and other health care programs.

At 1:47 pm the S and P 500 was down 56 points. At 2:18 pm it was down 67 points. By the close it stood at nearly 80 points down for the day:

Democrats Still Play The Dictator, Commit Crime Against Democracy: Attack Tea Party Over Credit Downgrade

Pat Caddell last September, referring to ramming ObamaCare down our throats:

"The Democrats had a chance to do this right — most people supported aspects of reform — but because of the way it was passed, as a crime against democracy, the country has simply not accepted it. The lies, the browbeating, the ‘deem and pass’ — all of it was a suicide mission. ...

“Democrats used to be the voice of the common man in America, not his dictator.”

The whole interview, here, is as applicable now as it was then.

China Lectures America While Failing To Comply With The Rules

From Ambrose Evans-Pritchard, here, who points out there is a dwindling supply of growth to steal from the future:

China has already pushed credit to 200pc of GDP. It cannot repeat the trick. ...

As for China's bluster, it is chutzpah and self-delusion. We all agree that the US needs to "cure its addiction to debts", but so will China soon.

China buys US debt in order to recycle $200bn a quarter in foreign reserves, hold down the yuan, and continue its mercantilist export strategy. If China had not distorted world trade in this fashion, the US would not be in such a mess.