Consumer confidence fell to a 28-year low

This is certainly not good. From MSNBC News:

NEW YORK - Consumer confidence fell to a 28-year low in May as inflation expectations soared, according to a survey released on Friday that presents a dilemma for the Federal Reserve.

The Reuters/University of Michigan Surveys of Consumers said the final reading in May for its index of confidence fell to 59.8 from April's 62.6, slightly above the median expectation of 59.5 in a Reuters survey of economists.

May's reading was the lowest since 58.7 in June 1980 but it was slightly higher than the preliminary reading of 59.5 published earlier this month.

However, the improvement was marginal and the report still paints a troubling picture, with one-year inflation expectations surging to 5.2 percent -- the highest since February 1982 -- from 4.8 percent in April.

Worse yet, five-year inflation expectations jumped to 3.4 percent, the highest since April 1995. In April this year they were at 3.2 percent.

The inflation measures challenge the Fed's view that soaring commodity prices have not yet led to an increase in long-term expectations for price growth. They also take the shine off encouraging inflation data earlier on Friday.

The government's core personal consumption expenditures price index, which excludes food and energy prices, showed underlying inflation slowed on a monthly basis in April, even though it remains above the Fed's perceived comfort zone on an annual measure.

The report heightens worries that the United States could be entering a period of stagflation like the late 1970s and early 1980s, characterized by a sluggish economy and accelerated price growth.

American consumers are getting squeezed by high gas and food prices, falling home prices, and big worries over whether they will have a job or not. American consumers no longer have confidence in this U.S. economy, and perhaps are even worried that stagflation is hitting them this year--when gas prices have increased to $4.00 a gallon, is it no wonder that Americans are in such a foul mood? And because of this loss of consumer sentiment, I'm expecting consumer spending will start dropping over the course of the summer and possibly into the fall. Consumer spending increased by 0.4 percent in March, followed by 0.2 percent in April. However, economists believe this increase in consumer spending could be reflecting increases in energy costs and food prices--in other words, inflation. Excluding inflation, consumer spending would have been flat in April. If the U.S. economy continues to go down the tubes, it may be more difficult for Republican Senator John McCain to become elected into a third Bush term.

More to come.

Some more thoughts on the Florida / Michigan compromise

Here are some more thoughts on the Democratic Rules Committee's compromise in seating the Florida and Michigan delegations to the Democratic National Convention. The first is some great political theater, with the Clinton campaign complaining about the Michigan compromise. From The Washington Post:

[The] Michigan plan, approved by a 19 to 8 vote, that drew sharper opposition because of the way that state's delegates will be awarded. Under the plan, Clinton will be given 34.5 delegate votes in Denver to Obama's 29.5 delegate votes, a percentage distribution recommended by leaders of the Michigan Democratic Party but opposed by the Clinton campaign officials, who said it violates the results of Michigan's Jan. 15 primary.

"This motion will hijack -- hijack -- remove four delegates won by Hillary Clinton," said Harold Ickes, who oversees delegate operations for the Clinton campaign and is also a member of the Rules and Bylaws Committee. "This body of 30 individuals has decided that they're going to substitute their judgment for 600,000 voters."

Arguing that the Michigan compromise "is not a good way to start down the path of party unity," Ickes warned that Clinton had authorized him to note that she will "reserve her rights to take it to the credentials committee" later. Campaign spokesman Howard Wolfson later affirmed that Clinton will reserve her right to challenge the outcome.

Don Fowler, another Clinton supporter on the panel but not formally tied to the Clinton campaign, voted for the Michigan plan. "It does not represent the first choice of my candidate, Senator Hillary Clinton," he told the panel. "But I think [it is] in the best interest of the party."

First, Harold Ickes works for the Clinton campaign in overseeing that Clinton gets every Michigan delegate from the January 15th primary. And Ickes is gambling all the delegates, or nothing, with the veiled Clinton campaign threat of sending this Michigan delegate fight to the convention. But the real surprise here is Clinton supporter, Rules Committee panel member Dan Fowler, who believes that the Michigan compromise represents the best interest for the Democratic Party over his support for Hillary Clinton. Fowler was willing to put the interests of unifying the Democratic Party first, over that of supporting one presidential candidate over another. Fowler voted in favor of the Michigan plan. That says something about why the Michigan plan was approved by the Rules Committee in a 19 to 8 vote--enough Rules Committee panel members may have realized that this was the best compromise to make in order to unify the Democratic Party, and bring the Michigan delegation into the convention.

Of course, Harold Ickes had a really bad day. Ickes was slammed hard by Michigan Senator Carl M. Levin. From the Washington Post:

During the first session, Ickes pointedly challenged Levin over the Michigan plan, saying it would strip Clinton of delegates she had rightly earned through the primary. "Why not take 10?" he asked indignantly. "Take 20. Just keep on going."

"You're calling for a fair reflection of a flawed election," Levin shot back. "And what we're trying to do is keep a party together so we can win a critical state in November."

Here is the YouTube video of the exchange:



Levin is right. This is a situation where you have to find some type of compromise to a screwed up primary election. Obviously the best thing to do is to strip the Michigan delegates of their voting rights in the convention. But because of this close Democratic primary fight, there had to be some way to include the Michigan delegation into the convention for the good of both the National Democratic Party and the Michigan Democratic Party. Levin wants to keep the Michigan Democratic Party together for the general election and winning the state for the Democratic nominee, regardless of who that nominee is. Ickes has a point that uncommitted votes should remain uncommitted, but he fails to take into account the screwed-up nature of the Michigan primary vote, where the state moved its primary date in violation of the Democratic primary rules, or that Obama took his name off the ballot and Clinton did not. Clinton may have rightly earned those delegates in the Michigan primary, but the entire primary was so completely screwed up. The votes and delegates should not count in the convention. The fact that the Rules Committee is trying to make some type of compromise in bringing the Michigan delegation into the convention says something about getting past this problem, and concentrating on organizing Michigan Democrats towards the general election in beating Republican John McCain.

It appears that Clinton advisers are seeing the writing on the wall now of an eventual Obama nominee. From MSNBC News:

The decision by the party's Rules Committee raised slightly the total delegates Obama needs to clinch the nomination. Clinton advisers conceded privately he will likely hit the magic number after the final primaries are held Tuesday night, but said the ruling threatened to dash any hopes of a unified party.

A senior Clinton adviser, speaking on a condition of anonymity about internal campaign decisions, said the decision could be used to help her raise campaign donations for a scaled-down campaign that might focus on a signature issue — such as health care reform — rather than a traditional fight for the nomination.

The advisers said no decisions had been made, and it was still possible that Clinton would bow out once Obama goes over the top.

The Clinton campaign was hoping to get their way in seating the Michigan delegates as according to the primary result, with 73 pledged delegates going to the Clinton, and 55 uncommitted delegates that Clinton could hopefully woe into her campaign. Obama should not get any Michigan delegates since he removed his name off the Michigan ballot. Had Clinton fully got her way on the Rules Committee, this could have allowed her enough delegates to just about pull even with Obama in the delegate count, and go into the convention in arguing to the super-delegates that she is the more electable candidate to win. The Michigan compromise shot down this long-shot Clinton strategy. It is, again, now a question of when Clinton will pull out. Clinton may use the last few days of her campaign to talk about her issues, and then either bow out after the final primaries of Montana and South Dakota on June 3rd, or when Obama cinches the nomination. It all depends on when Hillary Clinton decides to end her campaign.

This interesting detail from MSNBC News reports that the Obama campaign had enough votes on the Rules Committee to split the Michigan delegates in half, 50-50. What did the Obama campaign do? They supported the Michigan Democratic Party compromise:

Allan Katz, a Rules Committee member and Obama supporter, said the Obama campaign had enough votes on the committee to support the campaign's proposal to split the delegates 50-50 in Michigan. Ultimately, the campaign agreed instead to support the compromise negotiated by the Michigan Democratic Party as a way to resolve the matter.

"The ironic thing is Obama had the majority of that committee," Katz said. "The Obama campaign wants to move on and compromise. We did not muscle our way through it. It was a wise decision from a well run and wise campaign that will reverberate."

The Obama campaign had the votes to split the Michigan delegation 50-50. I was even open to accepting a Michigan 50-50 split in delegates for both candidates as a compromise in order to seat the Michigan delegation into the convention. However, a 50-50 split would skewer delegate votes over to the Obama camp, just as the January 15th Michigan primary results skewer delegate votes to the Clinton camp. However, there is a little class with the Obama campaign in accepting the Michigan Democrats' compromise proposal, rather than forcing down the 50-50 split proposal. And if the Clinton campaign is angry over the Michigan Democratic Party's compromise, just think of the various shades of purple on the Clinton campaign advisers' faces, or the steam coming out of their ears, had the Michigan 50-50 split in delegates proposal been approved.

And finally, MSNBC's political director Chuck Todd reports that the Clinton's no longer control the Democratic Party--it is now Barack Obama's party. From YouTube:



We're heading into a new era, with a new party, and a potential movement for change.

Update: The Jed Report has a great analysis on why the Michigan Democratic Party created this compromise:

The 69-59 itself was a compromise between a proposal by the Clinton campaign and the Obama campaign. Essentially, the RBC split the difference between each campaign's proposal, giving Clinton a slight advantage.

Let's start by looking at this from Ickes' perspective. (I'm being specific here because Clinton supporters like Don Fowler disagree with Ickes.)

Ickes says the primary election on January 15 was a valid reflection of Michigander preferences even though neither Barack Obama nor John Edwards were on the ballot. Ickes says that based on the vote, 73 of Michigan's delegates should have been allocated for Clinton and that 55 should have been allocated for "Uncommitted." Moreover, he says that the 55 "uncommitted" delegates should be truly uncommitted, equally open to support Barack Obama or Hillary Clinton.

The idea that the "uncommitted" vote was truly uncommited is absured; based on exit poll data, it was almost entirely a vote for either Barack Obama or John Edwards (with a few more for Bill Richardson). Moreover, decent chunk of Clinton's supporters said they would have voted for Obama had he been on the ballot (and some would have chosen Edwards as well).

Moreover, there were 30,000 write-in ballots, most of whom likely went for Obama, but since he didn't put his name on the ballot, the write-in ballots could not be counted. So they were literally tossed aside.

Unlike the Clinton campaign, the Obama campaign took the position that the election had no meaning because he was not on the ballot. He therefore proposed a 64-64 split.

So Clinton supported a 73-55 split, and Obama supported a 64-64 split. The Michigan Democratic Party essentially split the difference. For the Clinton proposal, this meant her total dropped by 4, from 73 to 69, and his increased by 4, from 55 to 59. For the Obama proposal, it meant that her total increased by 5 and his total dropped by five.

Another way of thinking about it: Clinton proposed she net 18 delegates from Michigan. Obama proposed a split. The RBC decided she would net 10, a compromise slightly tilted in her favor.

Ickes calls this a hijacking, but that's baloney, because the primary was never sanctioned; there never was a 73-55 split that the DNC had approved. Today was the first day that the DNC approved any delegates whatsoever for Michigan.

The more I look at this Michigan compromise, the more I like it.

Democratic Party resolves Florida, Michigan delegations

The sticking thorn of seating the Florida and Michigan delegations to the Democratic National Convention has been resolved today. From The Washington Post:

After hours of emotional testimony and sometimes contentious debate, Democratic Party officials agreed yesterday on a pair of compromises to seat Florida's and Michigan's delegations to their national convention. But a part of the deal drew an angry reaction and the threat of a subsequent challenge from the campaign of Sen. Hillary Rodham Clinton.

The compromises by the Democratic National Committee's Rules and Bylaws Committee called for both delegations, originally barred from the convention for violating party rules, to be seated in full in Denver but with each delegate casting only half a vote.

The actions by the committee were aimed at bringing the long and sometimes-bitter Democratic nomination battle between Sen. Barack Obama (Ill.) and Clinton (N.Y.) to a close and to ensure party unity as the Democrats head into the general election. But the decisions prompted bitter and sometimes-tearful reactions from some members of the audience, who repeatedly shouted over the committee members as they voted.

Obama remains the heavy favorite to win the nomination, with his campaign hoping that he can secure enough delegates over the next week to do so. Puerto Rico's primary will be held today, and the last two states, Montana and South Dakota will vote Tuesday.

The Florida agreement stated that the delegates would be allocated on the basis of the state's January 29th primary, netting Clinton 19 more delegates than Obama. The Clinton campaign had pushed a proposal to seat the full delegation with full voting power, however that proposal was shot down for the half vote compromise, which passed 27 to 0.

But the Michigan plan was the real sticking point because of the way the state's delegates will be awarded. Under the Michigan plan, Clinton will be given 34.5 delegate votes over Obama's 29.5 delegate votes. This percentage distribution was recommended by the leaders of the Michigan Democratic Party, which based this percentage on a combination of the January 15th primary results, exit polls, and an estimate of uncounted write-in ballots. The Clinton campaign argued for an allocation based on the primary, giving her 73 delegates to Obama's 55 delegates. The Obama campaign argued that the delegation should be split 50-50 between the two candidates. Michigan was the big enchilada for Hillary Clinton, providing her campaign enough delegates to reduce Obama's lead in the pledged delegate count.

The problem for the Democratic Party is that they were stuck with a bad situation. Yes, Florida and Michigan moved up their primary dates in violation of the Democratic Party Rules, and were stripped of their delegates to the convention. They really should not have been seated at the convention. However, there were two big problems with this Democratic primary race. The first problem is that we have a close primary race, with Obama's lead over Clinton in the pledged delegate count being around 175 delegates. Had the race been decided around Super Duper Pooper Tuesday, we would not have been in this situation here in trying to figure out how to seat these two states' delegations. But because we still have a close horse race between Obama and Clinton, some type of compromise was needed to bring these states' delegations into the convention. The second problem was the Michigan primary. Obama took his name off the Michigan ballot while Clinton kept her name on. The Michigan primary results were skewered into Clinton's favor, especially with the large number of "uncommitted" votes Michigan residents selected. Some of the "uncommitted votes may have been for Obama--others may have not been. I can't say. But the Michigan Democratic Party had to figure out a way to seat these "uncommitted" delegates, or even consider the number of Michigan residents that decided to stay home for the primary, knowing that their votes would not count. The Michigan Democrats had to figure out some type of compromise situation to reflect a probable outcome in a primary race between Clinton and Obama. It may not be the most perfect or democratic compromise, but it takes into account three different tallies of primary results, exit polling, and write-in ballots. It is a working compromise to get some type of Michigan vote into the convention during a Democratic primary race that has been the most unusual and out-of-the-ordinary primary race that I have ever seen in my lifetime. The Florida and Michigan compromise resolves this incredible sticking point for seating these two states into the Democratic National Convention. And since I was content with having either Clinton or Obama being the Democratic nominee, the compromise works for me.

Poor ticket sales scuttle Bush-McCain fundraiser

This is from The Phoenix Business Journal (Via TPM Election Central):

A Tuesday fundraiser headlined by President Bush for U.S. Sen. John McCain's presidential campaign is being moved out of the Phoenix Convention Center.

Sources familiar with the situation said the Bush-McCain event was not selling enough tickets to fill the Convention Center space, and that there were concerns about more anti-war protesters showing up outside the venue than attending the fundraiser inside.

Another source said there were concerns about the media covering the event.

Bush's Arizona fundraising effort for McCain is being moved to private residences in the Phoenix area. A White House official said the event was being moved because the McCain campaign prefers private fundraisers and it is Bush administration policy to have events in public venues open to the media. The White House official said to reconcile that the Tuesday event will be held at a private venue and not the Convention Center.

Convention Center personnel confirmed the event has been canceled at their venue.

Tickets to the event were to range from $1,000 to $25,000 for VIP treatment. Money was to go toward McCain's presidential bid and a number of Republican Party organs.

Anti-war protesters were planning to be out in force. President Bush's job approval rating stands at 31 percent, according to RealClearPolitics.com.

The McCain campaign referred questions on the fundraiser change to the White House press office.

Talk about an albatross hanging on McCain's neck. First we've got poor ticket sales to fill this McCain fundraising event at the Phoenix Convention Center, headlined by President Bush. Then it turns out that there may be even more anti-war protesters outside the convention center than there are Republicans attending the fundraiser--and let us not forget that the media will be covering this event, which will report the discrepancy between the larger number of protesters verses the attendees at the McCain fundraiser. And finally, the McCain campaign is referring questions about the fundraiser change to the Bush White House. It is almost like the McCain campaign wants President Bush's help in attending such events for raising money, but doesn't want to be involved with the Bush administration in coordinating these fundraising events.

Saturday Morning Cartoons--Private Snafu in Spies

In celebration of Memorial Day, I thought it would be fun to include a Private Snafu in Spies for Saturday Morning Cartoons. Private Snafu is the title character in a series of educational cartoons produced for the War Department by Warner Bros. Leon Schlesinger's Productions. Private Snafu is an American soldier who refuses to learn any lessons the U.S. Army instructs him for being a proper soldier during the Second World War. The lessons in the Private Snafu cartoons are rather simple, however the stories and humor are especially entertaining in these shorts--they were made by the Warner Bros. animators who created the iconic stars Bugs Bunny and Daffy Duck. And while the War Department had to approve the storyboards in terms of the educational instructions for the soldiers, the Warner directors were given a great latitude in dreaming up the stories to make these cartoons especially entertaining. Warner directors Chuck Jones, Friz Freleng, Bob Clampett, and Frank Tashlin all worked on Private Snafu cartoons, while Mel Blanc provided Snafu's voice--a clear Bugs Bunny Bronx and Brooklyn dialect. The name Private Snafu comes from the unofficial U.S. military acronym SNAFU, for Situation Normal: All Fouled Up.

Today's Private Snafu cartoon is titles Spies. Private Snafu has a secret he needs to keep--his troopship leaves for Africa at 4:30 and he is determined to keep it away from the Axis spies hungry to listen in on it. Unfortunately, Snafu gets plastered drunk and spills his little secret to his blond girlfriend, who is another Axis spy. She sends Snafu's secret to an anxious Adolf Hitler, waiting to send his wolfpack U-boats out to sink Snafu's troopship. In other words, loose lips sink ships. Private Snafu Spies is directed by Chuck Jones. Voice characterizations are by Mel Blanc, and the music is provided by Carl W. Stalling. From YouTube:

McCain releases medical records under shady circumstances

From The New York Times:

WASHINGTON — Senator John McCain is set to release 400 pages of medical records, including documents related to his melanoma surgery in August 2000, to a tightly controlled group of reporters on the Friday before Memorial Day weekend.

Mr. McCain said late last week that he had nothing to hide. Campaign officials have nonetheless said that even if nothing in the records suggests a problem with his health, a rush of news media reports focusing on the cancer surgery was not politically helpful and that they wanted to play down the information as much as possible — something that the timing of the release would seem to accomplish.

“There are going to be no surprises,” Mr. McCain, 71, told reporters last Friday aboard his campaign bus on a trip to West Virginia. His doctors, he added, “have told me that everything’s fine.”

Now you're probably thinking that it is about time for McCain to release his medical records to the public for scrutiny. Unfortunately, the McCain campaign has their ideas on what constitutes full disclosure of Johnny Boy's medical records:

On Friday, the campaign will allow a small pool of reporters access to the records from 7 a.m. to 10 a.m. Pacific time in a conference room at the Copper Wind Resort in Phoenix, near the Mayo Clinic Scottsdale. The reporters will be allowed to take notes but not remove or photocopy the records. Campaign officials said they were imposing the restrictions to prevent the actual records from wide dissemination.

Around the same time, campaign officials said, they will post medical summaries of each year from 2000 to 2008 on the campaign Web site. The summaries will not include doctors’ notes in the actual records.

The news organizations in the pool, selected by the campaign, include ABC News, The Arizona Republic, The Associated Press, Bloomberg, CBS News, CNN, Fox News, NBC News, Reuters, The Washington Post and, possibly, a newsmagazine.

Each organization is allowed two representatives and is expected to file a “pool report” for other reporters detailing the information in the records.

We're talking about a dog and pony show here. Only a few reporters are going to be allowed to look at the McCain medical records, and for only three hours. These reporters will not be allowed to copy the records, but the reporters can take notes. Note this NY Times quote--Campaign officials said they were imposing the restrictions to prevent the actual records from wide dissemination. The McCain campaign doesn't want these records made public! So they are releasing the records in a very limited and controlled fashion, on a Memorial Day weekend, on a Friday, when no one is going to be reading about this. The records are not being photocopied and handed out to reporters, so they can review them, or have doctors review them for any health problems McCain may have. This is not full disclosure, but rather a PR-spin that allows the McCain campaign to claim they've released Johnny Boy's medical records, even though nobody will ever know what is actually in these records since no copies will be released to the public.

So what is John McCain hiding in his medical records? The NY Times reports that McCain had melanoma surgery in August 2000 at the Mayo Clinic. According to the Times:

Mr. McCain, who still has a puffy left cheek and a scar down the back of his neck from his surgery, told reporters that he continued to see an oncologist for regular checkups. The most recent visit was this month.

“I could probably get away with seeing her every six months,” Mr. McCain said, “but just to be on the safe side, I see her every three months.”

The operation was performed at the Mayo Clinic Scottsdale in Arizona mainly to determine whether a melanoma, a potentially fatal skin cancer, had spread from the left temple to a pivotal lymph node in the neck. A final pathology analysis showed that it had not, Mr. McCain’s staff said at the time.

Mr. McCain has said he did not need chemotherapy or radiation.

Mr. McCain and his doctors have released little other information about the surgery.

And what is more interesting here is that the McCain campaign has refused to allow the New York Times into the reporter pool to review the records. According to the New Republic:

The last time McCain released his medical records, one of the reporters who viewed them was the Times' Lawrence Altman. Not only is Altman the dean of science reporters, but he's also an M.D.--i.e., somebody who, even in the short span of three hours, would be able to assess the significance and full meaning of the records. And in an article earlier this year, Altman started raising questions about McCain's present health--and his campaign's curious delay in making the records public.

It sounds like the Times isn't in the pool this time around, which means no Altman. Will any other organizations have physicians as their representatives? ABC and CNN are on the list, so maybe Tim Johnson and/or Sanjay Gupta, both of whom are physicians?

You can bet that McCain is hiding something about his health from the public, even as the campaign is "releasing" the medical records.

Friday Fun Stuff--An Engineer's Guide to Cats

This is just brilliant. An Engineer's Guide to Cats has been on YouTube for around three months and it has already gotten over 2 million views. I love the cat getting spun around the chair, and yes, tuna is cocaine for cats. From YouTube:

Obama raises $31 million in April

This is just....wow! From The New York Times:

Aided by his army of small donors, Senator Barack Obama bested Senators Hillary Rodham Clinton and John McCain in April fund-raising, taking in $31.3 million and ending the month with more cash on hand than either rival.

While fund-raising for Mr. Obama dipped slightly from the previous month, when he raised $40 million, he still outraised — and outspent — his Democratic opponent, Mrs. Clinton.

But Mrs. Clinton’s tally for April, $22 million, was an improvement over March, when she took in $20 million. And nearly half the April money, $10 million, came in online on the day after she won the Pennsylvania primary. Mrs. Clinton also had several days during the month in which she raised $1 million through online donations.

On the Republican side, Mr. McCain, who was once spending more money on his campaign than he took in, raised $18.5 million in April, his best month ever.

The totals were disclosed in campaign finance reports filed on Tuesday with the Federal Election Commission.

The Obama fundraising juggernaut is just incredible. And what is more, this is money coming in as small donations through the internet--not your $1,000-a-plate fundraising dinners courting the fat-cat donors. And still Obama rakes it in. If there is anything that election has shown, it is that you can run a presidential campaign funded by the average American.

A second interesting observation is that Democratic Senator Hillary Clinton raised even more money that Republican Senator John McCain--$22 million to $18.5 million. We're talking about a losing Democratic candidate raising more money than the Republican nominee. What this tells me is that the Democratic base is still energized over the Democratic horse-race, and are still willing to support, and give money to, their favorite candidates.

MSNBC's Chuck Todd explains the numbers on Obama's delegate lead

MSNBC's Chuck Todd explains how Barack Obama could win the pledged delegate lead, including the results from Florida and Michigan. From YouTube:

Obama takes delegate lead, Clinton wins Kentucky

This is off The Washington Post:

Sen. Barack Obama crossed another threshold last night in his march toward the Democratic presidential nomination, splitting a pair of primaries with Sen. Hillary Rodham Clinton and claiming a majority of the pledged delegates at stake in the long nomination battle.

Obama scored an easy victory in Oregon after being trounced by Clinton in Kentucky. The results left him fewer than 100 delegates short of the 2,026 currently required to win the party's nomination after one of the closest contests that Democrats have staged in a generation.

The senator from Illinois stopped short of claiming the nomination, a milestone he may not be able to reach until the end of the primaries on June 3. But he staged a victory rally in Iowa, the site of his first big win of the year, to highlight his near-lock on the nomination and to continue to shift his focus to a general-election campaign against Sen. John McCain, the presumptive Republican nominee.

Recalling the lengthy road he has traveled, Obama told a boisterous crowd gathered near the Iowa State Capitol: "Tonight, Iowa, in the fullness of spring, with the help of those who stood up from Portland to Louisville, we have returned to Iowa with a majority of delegates elected by the American people, and you have put us within reach of the Democratic nomination for president of the United States."

[....]

A total of 103 pledged delegates were at stake in yesterday's primaries. Under current rules, there are a total of 3,253 pledged delegates, which means Obama needs 1,627 to claim a majority. Current rules, which do not include delegates from Michigan or Florida, require the nominee to win at least 2,026 delegates -- pledged and superdelegates.

This primary is now over. Barack Obama is now the Democratic nominee. The two states of Montana and South Dakota will hold their primaries on June 3rd, while the territory of Puerto Rico will hold its primary on June 1st. Even if Hillary Clinton were to win big in both states and Puerto Rico (Let's say 100 percent of the vote and all the delegates), she will still not be able to overtake Obama in the pledged delegate count. Hence, Barack Obama will have the pledged delegate lead coming into the Democratic convention.

Should Hillary Clinton drop out now? Not yet. Hillary Clinton knows that she has an extremely long shot at taking the nomination--basically Barack Obama will have to do something really stupid that would force him to withdrawal out of the race. And what we can see of the Obama campaign, I doubt that will even happen. But there are important reasons for Clinton to stay in the race. The most obvious reason is that with Clinton in the race, all the media attention has been focused on the Democratic race, leaving Republican nominee John McCain out in the cold. That will slightly change know, as Obama shifts his campaign from a primary election to a general election. The second reason Clinton should stay in the race is that if she wins the last remaining states, or takes a close second-place finish to Obama, she still wins votes and delegates that she can use to position herself for a vice presidential spot on Obama's ticket, or to demand her policy positions to be incorporated in Obama's party platform. Hillary Clinton is staying in this race now as a political bargaining strategy with the Obama campaign and the Democratic Party. And you can bet that there will be some horse trading taking place between the Clinton and Obama campaigns just before the Democratic National Convention starts. It is going to take place because Clinton has already shifted her own campaign now. According to the WaPost:

As Clinton carries on her campaign, she has toned down direct attacks on Obama and has made it clear to her advisers that she does not want to do or say anything at this point that could hurt him in a general election. She also hopes to keep alive her case that she would be a stronger candidate in the fall, but she has indicated that she will have a better chance to rally her supporters to Obama's side, if he is the nominee, if she is allowed to finish out the nomination battle on her own terms.

Obama has been similarly careful, telling his staff not to do or say anything that appears to pressure Clinton to leave the race prematurely. Nonetheless, the Obama campaign's decision to stage its celebration in Iowa last night and claim a majority of pledged delegates rankled Clinton and her advisers.

The Clinton "kitchen sink" negative attacks against Obama are finished. Clinton will probably finish out her campaign with the last states in a positive way, talking about why she will be the stronger candidate for the nomination. She has already told her advisers that she doesn't want to do or say anything that will now hurt Obama in the general election. Clinton knows that she has probably lost the nomination, however she will not concede until after all the primary elections in Montana, South Dakota, and Puerto Rico. Only then will she concede the race to Obama. At the same time, Obama is making nice to Clinton, telling his staff not to do or say anything that will pressure Clinton to leave the race prematurely. Obama is allowing Clinton to leave the race in her own time and choosing. Okay, so the Obama celebration in Iowa may have rankled the Clinton campaign, but there is not much the Clinton campaign can do, knowing that Obama has taken the lead in delegates. And while Obama may have celebrated with his victory rally in Iowa, even he knows that he has not completely cinched the Democratic nomination, with the super-delegates watching, uncommitted, until all the primaries are finished. Obama's focus is no longer on Hillary Clinton, but rather John McCain with the general election. Both Democratic candidates will play nicely with each other in the final two weeks of this primary season.

Let the general election season begin.

Dow drops 200 points

Well, it was not a good day for the stock market today. From Marketwatch:

NEW YORK (MarketWatch) -- Stocks fell sharply on Tuesday, as oil near $130 a barrel fueled concerns that surging commodities prices will further crimp U.S. consumption, while an official signaled the central bank may be done with cutting interest rates to boost the economy.

"The number one concern on everyone's mind is higher oil prices," said Robert Pavlik, chief investment officer at Oaktree Asset Management. "Investors are questioning whether the rally we've had [over the past two months] is sustainable, with concerns about energy and remaining problems in the financial industry."
Oil surged to a new record of $129.60 a barrel, with bullish calls by investments banks, weakness in the dollar and supply concerns fueling the gains. Consumer-related stocks were among the worst decliners early on Tuesday.

The Dow Jones Industrial Average was off 209 points, or 1.6 percent, to 12,819 with 29 of its 30 components in the red. The S&P 500 fell 15 points, or 1 percent, to 1,411. The Nasdaq Composite dropped 29 points, or 1 percent, to 2486. What happened here is that investors got hit with some serious whammies. The first whammy was oil prices spiking to almost $130 a barrel. The second whammy was that the core Producer Price Index--which excluded food and energy prices--rose 0.4 percent in April, twice what analysts were expecting with the core PPI rate. Investors are, again, starting to worry about rising inflation. I would also include a third whammy of the first-quarter profit losses at Home Depot, Lowes, and Target. All three of these whammies point to serious problems within the U.S. economy--specifically the continued increase in energy prices, the rising fears of inflation, and a cutback in American consumer spending.

Can you say stagflation?

A tale of two retailers seeing big profit drops

I don't have much to comment on these two MSNBC News stories. The first story is titled Sustained housing slump slams Home Depot:

ATLANTA - The Home Depot Inc. reported a 66 percent drop in first-quarter profit Tuesday due to a large one-time charge and continued weakness in the housing market.

The results, excluding the charge, beat Wall Street expectations despite a decline in overall sales and sales at stores open at least a year.

The Atlanta-based company said it earned $356 million, or 21 cents a share, in the three months ending May 4, compared with a profit of $1.05 billion, or 53 cents a share, a year earlier.

Excluding a charge related to store closings and the shrinking of future store growth plans, Home Depot said it earned $697 million, or 41 cents a share.

Analysts were expecting earnings of 37 cents a share excluding one-time items.

Home Depot said revenue in the quarter fell 3.4 percent to $17.91 billion, compared with $18.55 billion recorded a year earlier.

Sales at stores open at least a year fell 6.5 percent in the first quarter, Home Depot said.

Its average sales ticket was $57.36 in the quarter, a 2.8 percent drop from $59.01 a year earlier.

“The housing and home improvement markets remained difficult in the first quarter; in fact, conditions worsened in many areas of the country,” Chief Executive Frank Blake said in a statement.

So American consumers are cutting back on their home improvement projects, resulting in Home Depots' huge 66 percent drop in first-quarter profits. Toss in a slumping housing market, where Americans are also not buying and refinishing homes, and you've got another tell-tale sign of a bad recession looming here in the U.S. (If we're not already in one right now). And it is not just Home Depot that is suffering here. Lowe's is also reporting an 18 percent drop in first quarter earnings saying that consumers are cutting back on renovation spending due to "the face of falling home values, tighter credit requirements and higher prices for basic items such as food and gasoline." So the do-it-yourself home renovation industry is now hurting.

Let us go to a second MSNBC story, titled Soft sales, higher costs dent Target’s profit:

MINNEAPOLIS - With first-quarter profits down 8 percent and the economy in a funk, Target is emphasizing the “pay less” part its “Expect More, Pay Less” slogan.

The nation’s second-largest discount retailer said softer-than-expected sales and higher costs caused the profit decline for the quarter that ended May 3, although the results beat Wall Street expectations.

With consumers tightening their belts, Target President and Chief Executive Gregg Steinhafel said on a conference call that Target is responding by stressing sale prices more in its advertising, especially the 50 million newspaper circulars it puts out, as well as with sale items at the end of its aisles.

“We’re just very mindful that the consumer is very cash-strapped right now and is looking for good values. They’re looking for more sale merchandise, and we are responding,” he said.

The company said profit margins declined slightly from last year because sales grew faster in low-margin categories, which generally includes food and essentials like paper towels.

“As gas and food prices continue to rise and housing markets slow, consumers are facing increased financial pressure and reducing their spending, especially in discretionary categories.”

Steinhafel said shoppers are increasingly buying replacement pillows and sheets rather than a whole new set. In its lawn and patio items, consumers are buying new seat cushions rather than all-new lawn furniture.

Target reported a profit of $602 million, or 74 cents per share, in the three months ended May 3, down from $651 million, or 75 cents per share, during the same period last year. Revenue rose 5 percent to $14.8 billion. Analysts surveyed by Thomson Financial expected a profit of 71 cents per share. on revenue of $14.92 billion.

Sales at established stores fell 0.7 percent. Retail profits not counting interest and taxes fell 2 percent to $959 million.

Again, consumers are slowing spending on household items, due to the rising food and gas prices. Instead of purchasing whole bedroom sheet sets, consumers are picking different pillows and sheet sets in order to save money. With the lawn furniture, consumers are purchasing seat cushions, rather than whole lawn sets. It is almost bargain-basement sales shopping that has caused Target to revamp their marketing strategy in the face of an 8 percent drop in first-quarter profits. I should point out that Wal-Mart's first-quarter profit rose 6.9 percent, but the retailer cautioned that second-quarter sales will be "between flat and up 2 percent." Wal-Mart is also stuck in a situation where American consumers are cutting back on spending, and are shopping for the bargains. It is rather interesting that Wal-Mart's first-quarter profit rose by 6.9 percent, while Target's first-quarter profit fell by 8 percent, however Wal-Mart has shown itself to be especially successful in reducing store costs, while keeping prices especially low. However, the higher food and energy costs will still hurt Wal-Mart, as their second-quarter sales are predicted to be flat. Target is also feeling the pinch, as I would imagine that they are also attempting to control costs, and provide low prices to keep Americans coming into their stores. I don't think Target can compete with the brutal efficiency that Wal-Mart has, but I would expect that Target's second-quarter sales will also probably be flat, or perhaps post a negative drop of a couple percentage points. Either way, the American consumer is getting worried over the looming U.S. recession, the increased food and energy costs, the continuing lousy housing market, and possibly even a deteriorating job market. And these American consumers are responding to these economic challenges by cutting back on their spending.

Oil tops $129 a barrel

This is from MSNBC News:

VIENNA, Austria - Oil prices spiked to a new trading high Tuesday, sweeping toward $130 a barrel as supply concerns intensified the momentum buying that has lifted crude deeper into record territory. Gasoline, meanwhile, reached an average of $3.80 at the pump for the first time.

The June contract for light, sweet crude traded as high as $129.60 on the New York Mercantile Exchange before settling back to $129.43, up $2.38. The imminent expiration of that contract created additional volatility in the market, and raised the very real possibility that crude could hit $130 before the end of the day, when the contract was ending.

Oil’s trek toward $130 coincided with the Labor Department’s report of an unexpectedly sharp rise in wholesale inflation last month. The combination raised fears that inflation will slice into Americans’ discretionary spending, and that sent stocks falling sharply on Wall Street.

Retail fuel prices also shattered records. The national average price for a gallon of regular gasoline touched $3.80, according to AAA and the Oil Price Information Service, while diesel jumped nearly 2 cents to a record $4.54 a gallon. Gas prices are up about 19 percent from this time last year.

Jim Ritterbusch, president of oil trading advisory firm Ritterbusch & Associates in Galena, Ill., said oil prices were being supported by strong demand for diesel fuel in Asia, and a weakening of the U.S. dollar against the euro, which makes oil cheaper for some investors overseas.

A couple of comments here. First, we're heading into the Memorial Day weekend, which is the start of the big summer driving season for Americans. Gas prices spike during the summer months as Americans take their summer driving trips, and vacations. But with gas prices going over $4.00 a gallon, I wonder just how many Americans are willing to take a summer driving trip? I'm sure there is a greater worldwide demand for gas that is outstripping the supply here, but I still have to wonder if we're seeing some price gouging taking place with the oil companies.

The second comment is about refinery capacity in the United States. According to this May 15, 2007 ABC News story:

For the week ending May 11, the EIA reported that the nation's 149 oil refineries operated at 89.5% of their total capacity, processing 15.3 million barrels of crude oil per day, up .5% from a year ago. The refineries produced 9.1 million barrels of gasoline per day, up from the previous week.

Drivers, however, used 9.3 million barrels of gasoline per day, 1 percent more than a year ago. The United States has had to import 11.5 million barrels of gasoline per day. For the year, Americans have been consuming an average of 9.1 million barrels of gasoline per day, up just more than 1.7 percent from the same period a year ago.

The EIA reports that as of 2006, the nation's 149 refiners could process more than 17.3 million barrels of crude oil a day. As recently as 2001 there were 155 refineries nationwide that had a maximum capacity of 16.6 million barrels of crude a day.

Refinery capacity peaked in 1981, when there were 324 refineries that could process a total of 18.6 million barrels of crude oil per day.

More than quarter of a century later, there are now less than half that number of refineries, but they have a larger refining capacity thanks to newer, more technically advanced refining technology.

The number of refineries in the U.S. have actually dropped from 324 refineries in 1981 to 149 refineries in 2006. Granted these 149 refineries have a greater refining capacity due to technological advances, but they are processing less oil today than in 1981, down from 18.6 million barrels of oil processed by 324 refineries in 1981 to 15.3 million barrels processed by 149 refineries for today. Big oil companies have cut back on their refining capacity. The refineries are producing 9.1 million barrels of gas per day, while drivers are using 9.3 million barrels of gas per day. It is almost like there is a built-in shortage in refining that Big Oil can exploit in raising gas prices on consumers. According to energy economist Philip Verleger, "Crude oil could be free and you'd still have these high prices because you can't make enough gasoline." This is a problem that has been going on for years, even to the point where, in October 2005, Shell Oil President John Hofmeister said that Shell Oil will not build any more refineries, even as President Bush and Congress provided incentives for oil companies to expand their refinery capacity.

Happy summer driving.

Democrat Travis Childers wins Mississippi special election

This is a huge upset victory for the Democrats. From Politico.com:

Democrats picked up a northern Mississippi House seat in one of the most conservative-minded districts in the country Tuesday night -- an upset that will reverberate darkly through a House Republican caucus already reeling from losses in special elections in Illinois and Louisiana.

With 434 of 462 precincts reporting, the Democratic nominee, Prentiss County Chancery Clerk Travis Childers, leads Republican Greg Davis, 53 to 47 percent. The Associated Press has called the race for Childers.

The victory marks the Democrats’ third straight special election pickup in three months. It will be a serious blow to the Republican Party’s already-flagging morale and will surely prompt a new round of finger-pointing among the already fractured GOP caucus.

"This loss is going to prompt serious introspection by our conference to figure out what went wrong and how to fix it," said a GOP leadership aide. "We have time to do that, and we will if we learn our lessons leading into November. But the next couple of days are not going to be pretty."

The special election was held to fill the seat of former Rep. Roger Wicker (R-Miss.), who was appointed to serve out the remainder of Sen. Trent Lott’s term last December. Wicker had never faced a competitive race since first elected in 1994, and the district gave President Bush 62 percent of the vote in 2004.

This upset win for the Democrats is even bigger than Hillary Clinton's win in West Virginia. Mississippi is about as red of a red state can be, with the Mississippi 1st Congressional District being the former seat of Senator Trent Lott. This should have been an easy seat for the Republicans to win, considering the nearly $2 million that GOP groups poured into the state, along with a pre-election stop by Vice President Dick Cheney, and President Bush, Senator John McCain, and First Lady Laura Bush making automated calls to voters urging them to support Davis. The Republican strategy was to make this race a national referendum by tying Childers to both Senator Barack Obama and House Speaker Nancy Pelosi. The National Republican Congressional Committee (NRCC) had spent almost $1.27 million in the district race--nearly 20 percent of the committee's entire cash on hand. All that money spent by the NRCC went down the drain in a huge loss to the Democrats. What is more, the Republicans have lost three congressional seats to special elections in seemingly safe Republican districts. This is such a shock that one GOP House leadership aid told Politico that "if we don't win in Mississippi, I think you are going to see a lot of people running around here looking for windows to jump out of."

The problem for the Republican Party is that the GOP elephant tied an albatross named George W. Bush around its neck, and then took a flying leap off a cliff, hoping to fly. The Party has tied itself completely to the Bush administration's failures in economic policy, domestic policy, and the war in Iraq. When you have 8 out of 10 Americans saying that the country is on the wrong track and almost 70 percent of Americans disapprove of President Bush's job performance, that is a huge hole the Republican Party has dug itself into. American voters are waking up and realizing just what a disaster this Bush administration has been for the country. And they are registering their disapproval of this disaster, and the direction both President Bush and the Republican Party has taken this country, to the polls by voting against the GOP candidates in supposedly safe Republican districts. In a sense, the Republicans are right that these three special election races were a national referendum.

It is just that the referendum was against the Republican Party, and President Bush.

Clinton wins big in West Virginia

No big surprise here. From The New York Times:

Senator Hillary Rodham Clinton won the Democratic presidential primary in West Virginia over Senator Barack Obama in voting fueled by strong turnout among the white, working-class voters who have spurned Mr. Obama in recent nominating contests.

Mrs. Clinton appeared headed for a strong victory in the primary, with early returns showing her with a 2-to-1 margin. In recent days, even Mr. Obama, who has not campaigned heavily in the state, has all but conceded the contest to her.

Given Mr. Obama’s leads in the popular vote and delegates, the West Virginia results are likely to have little practical effect on Mrs. Clinton’s chances at winning the nomination. Yet a Clinton victory in another general election battleground state — like her victories in Ohio and Pennsylvania this spring — could raise anew questions about Mr. Obama’s ability to take swing states in a contest against Senator John McCain in the fall.

In exit poll interviews conducted throughout the state by Edison/Mitofsky, nearly two-thirds of West Virginia voters said the economy was the most important issue facing the country, and they backed Mrs. Clinton by a 2-to-1 margin. About 9 in 10 voters say they were affected by the current economic slowdown, including nearly half who said they were affected a great deal. Mrs. Clinton was supported by about three-quarters of those most affected.

Obama still holds the lead in pledged delegates, and picked up four more super-delegates today. One interesting twist here, longtime Clinton supporter James Carville said that Obama would probably be the Democratic nominee:

“I think it’s likely Obama is the nominee, but not certain,” said Mr. Carville, the Democratic strategist who worked for Mr. Clinton in the 1992 campaign and is close to the couple. “I would have preferred another result, but I’m going to be for him.”

“Everybody is going to be with Obama,” he added, referring to Clinton staff and supporters. “I have an undated check written out for Obama. I’ll send it when this is over.”

It is not a good sign to have James Carville, former Clinton strategist and staunch supporter, actually admit that Barack Obama will be the eventual Democratic nominee on the day Clinton wins West Virginia. Even worst, Carville has a check written out for Obama, and ready to be sent once Obama is declared the nominee--or when Hillary drops out.

Not a very encouraging political sign here.

Wal-Mart profit rises, but cautions future sales

This is from The New York Times:

Wal-Mart Stores, the nation’s largest retailer and a bellwether for the economy, said Tuesday that its sales and profit surged in the first quarter, as belt-tightening consumers flocked to its bargain prices.

But the giant discount chain also cautioned that it was not immune to the economic slowdown. The company said its earnings might come in at the low end of analysts expectations for the current quarter because of higher transportation costs and customers facing problems between paychecks. It also predicted little, if any, growth in individual store sales.

During the first quarter that ended April 30, Wal-Mart’s profit increased 6.9 percent to $3.02 billion, or 76 cents a share, from $2.83 billion, or 68 cents, a year ago.

Sales increased 10.2 percent, to $94.1 billion, up from $85.4 billion, the company said in a statement.

Both figures represent record growth and Wal-Mart’s performance will probably tower over that of its competitors, which are expected to report earnings losses in the first quarter as consumers confronted higher food and fuel prices.

In my previous post, I noted that retail sales slowed for the second time in two months, and that a major factor was a 2.8 percent decline in auto sales. Excluding auto sales, retail sales rose by 0.5 percent, with the big general merchandise stores, such as Wal-Mart, posting a 0.5 percent increase, far better than the 0.1 percent increase in March. However, sales at department stores were down 0.1 percent, as Americans shift their shopping away from department stores and into bargains at the discount stores. And that is understandable in a slowing economy.

But Wal-Mart's forecast provides another nugget of important information--high transportation costs will be cutting into Wal-Mart's profit. I suspect that as Wal-Mart is cutting prices on their own merchandise, the company will also be facing high transportation costs from trucking merchandise from their distribution centers to their stores, due to increasing fuel prices. And while American consumers may be flocking to the big discount chain stores for their shopping, they are also going to face their own increased costs of energy through gas prices at the pump, and potentially increasing food prices. So American consumers may end up spending less money at Wal-Mart by purchasing only the basic merchandise that they may need. And that will certainly cut into Wal-Mart's profit margins as the company slashes prices in order to lure customers in.

I'm thinking this recession will be a bad one for the U.S. economy.

Retail sales slow for a second time in 2 months

This is from The New York Times:

The Commerce Department reported Tuesday that retail sales dipped 0.2 percent last month, right in line with economists' expectations.

It was the second drop in the past three months and was led by a 2.8 percent decline in auto sales, the biggest setback in this category in 10 months. It reflected the problems that automakers are having as a weak economy and soaring gasoline prices cut into demand for new cars.

Excluding autos, retail sales rose by 0.5 percent, a better performance than had been expected as sales at general merchandise stores, a category that includes big chains such as Wal-Mart, posted a 0.5 percent increase, much better than the tiny 0.1 percent rise in March.

However, sales at department stores were down 0.1 percent, indicating that tough economic times may be pushing people to seek out bargains at giant discount stores.

In other economic news, the Commerce Department said that business inventories edged up a tiny 0.1 percent in March, the smallest advance in a year and another sign of the weakening economy.

The small inventory rise was below the 0.4 percent increase that many economists were expecting and was an indication that businesses are holding back on adding to their stockpiles in the face of slowing demand.

Many analysts believe the economy has slipped into a recession. However, overall economic growth, as measured by the gross domestic product, has not yet turned negative.

Regardless of the Bush administration's happy talk, we are heading straight into an economic recession. American consumers realize this, and are cutting back on their spending. The big news here is the 2.8 percent decline in auto sales. This is a big ticket purchase that is usually done through financing. With the WaPost poll showing Americans even more gloomy about the economy and the state of the country, the last thing Americans will want to do is go shopping. So Americans are starting to cut back on spending, or are spurring the big department stores for the bargains at the discount chain stores. And it is only going to get worst, as more Americans start to feel even more bitter about the slowing economy and the myriad of problems this country faces.

Eight out of ten Americans say country heading in wrong direction

The gloomfest continues here. This is off The Washington Post:

Americans are gloomier about the direction of the country than they have been at any point in 15 years, and Democrats hold their biggest advantage since early 1993 as the party better able to deal with the nation's main problems, according to a new Washington Post-ABC News poll.

Despite more than eight in 10 now saying the country is headed in the wrong direction, coupled with growing disaffection with the Republican Party, Sen. John McCain, the GOP's presumptive presidential nominee, remains competitive in a hypothetical general-election matchup with Sen. Barack Obama, the favorite for the Democratic nomination, and he runs almost even with Sen. Hillary Rodham Clinton.

Those findings indicate that McCain continues to elude some of the anger aimed at his party and at President Bush, whose approval ratings dipped to an all-time low in Post-ABC polling. Maintaining a separate identity will be a key to McCain's chances of winning the White House in November. Overall, Democrats hold a 21-percentage-point advantage over Republicans as the party better equipped to handle the nation's problems.

There are a lot of interesting statistics within this story, of which you can find the results here. But the important point to remember is that as Americans' mood continues to sour with the direction this country's economy is heading, that anger is going to be reflected against President Bush, the Republican Party, and GOP presidential nominee John McCain. So far McCain has avoided the brunt of Americans' anger because the election focus is on the Democratic race between Senators Hillary Clinton and Barack Obama. According to the ABC/WaPost poll, six out of 10 Democrats say that Obama has the better shot at winning the general election, however two-thirds of the Democrats also say that Clinton should stay in the race. Democrats really don't want the Clinton-Obama race to be decided yet, even though they know that Obama will be the Democratic nominee. What is especially interesting here is that the Democrats seem unconcerned that the protracted nomination battle is actually hurting the party's chanced in November, with 56 percent saying the contest had no impact on the party's prospects, and 15 percent saying the contest has been helpful. Only 27 percent say that protracted battle will cause long-term damage to the party. Democrats like that the media is focused on this horse race, giving all the spotlight to both Clinton and especially Obama. The ABC/WaPost poll shows Obama with a 12-point advantage over Clinton in a national race. In a hypothetical general-election race, Obama leads McCain by a slim 51-to-44 percent margin, while they split with 49 percent for Clinton and 46 percent for McCain. But this particular stat really shows McCain's problem:

McCain romps against Obama among the 16 percent who think the country is headed in the right direction, but among the near-record 82 percent who hold a pessimistic view, Obama runs more than 20 points ahead of McCain. Similarly, about seven in 10 of those who disapprove of Bush said they would back Obama over McCain, while McCain picks up most of those who are still behind the president. The trouble for McCain is that Bush's approval has slipped to 31 percent, and has been lower than 50 percent for 38 consecutive months.

The economy remains the biggest issue on Americans' minds, although its importance dipped for the first time since last fall. In the new survey, 36 percent cited the economy and jobs as their top voting issue; 21 percent named the Iraq war. All other issues remained in single digits, including health care and the price of oil and gasoline.

Talk about bad news for the McCain campaign. Americans who hold the pessimistic views of the country going on the wrong track are pummeling McCain by giving their support to Obama, who runs 20 points ahead of McCain. Even more, the seven in 10 who disapprove of President Bush said that they would back Obama over McCain--the Bush albatross is sinking McCain, and we haven't even gotten to the general election yet. The McCain campaign has tied itself to the Bush administration on both the U.S. war in Iraq and the economy (Supporting Bush tax cuts). So far McCain is sinking badly.

Barack Obama also holds double-digit leads over McCain on domestic issues of health care, gas prices and the economy, while McCain has a 21-percent lead on handling the U.S. battle against terrorism. Both Obama and McCain run almost even in managing the U.S. war in Iraq and on immigration. The Great War on Terrorism was McCain's signature issue for jumping into the 2008 race, the issue which would propel McCain into the White House. McCain would lead the U.S. through the war in Iraq and our battle against the evil terrorists! The big problem for McCain is that the war in Iraq took second stage to the slowing U.S. economy, giving Obama huge double-digit leads on both the economy and domestic issues. And with a majority of Americans wanting to pull out of the Iraq war, Obama has pulled to almost even with McCain on the Iraq war. So even McCain's single issue campaign of leading the U.S. through the war in Iraq has started to crumble, as Americans are demanding an end to the war.

Certainly not very promising for John McCain.

Clinton, Obama beat McCain over economy in LA Times poll

I found this very interesting Los Angeles Times story showing both Democratic presidential candidates Hillary Clinton and Barack Obama polling ahead of Republican presidential candidate John McCain over the issue of the U.S. economy. From the Los Angeles Times:

WASHINGTON -- Although Democrats are tangled in a fractious primary contest, both Hillary Rodham Clinton and Barack Obama probably would win the White House against presumptive GOP nominee John McCain if the election were held now, according to a new Los Angeles Times/Bloomberg poll.

Arizona Sen. McCain remains competitive, but the poll identified one important vulnerability: Voters ranked him lowest among the three candidates on who could best handle the nation's economy -- by far the most pressing concern for the public irrespective of party, gender or income. Of the three main candidates, New York Sen. Clinton inspired the most confidence on the economy.

In a hypothetical matchup, the poll gave Illinois Sen. Obama 46% to McCain's 40%, with 9% undecided.

Clinton led McCain 47% to 38%, with 11% undecided. The nationwide poll, conducted May 1 through Thursday and released Friday, had a margin of sampling error of plus or minus 3 percentage points.

The results represent a shift from a Times/Bloomberg poll in February, when McCain led Clinton by 6 percentage points and Obama by 2, within the poll's margin of error.

"Although there is such infighting now between the two Democratic candidates, we are finding that both Democrats are beating McCain, and this could be attributed to the weakening of the economy," said Times Polling Director Susan Pinkus, who supervised the survey.

For example, among the 78% of voters who said they believe the economy has slid into a recession, 52% would vote for Obama, compared with 32% for McCain. A Clinton-McCain matchup showed nearly identical results.

The poll was based on telephone interviews with 2,208 adults nationwide -- 1,986 of them registered voters -- several days before and after Tuesday's primaries in Indiana and North Carolina, which Clinton and Obama split.

The slowing U.S. economy has become the big election year issue, supplanting even the U.S. war in Iraq. The LA Times poll reports that 56 percent of voters said the economy should be the top priority for the presidential candidates to address, over that of the 34 percent who said that the Iraq war should be the top priority. This is not a good situation for John McCain to be in, considering how McCain has already admitted that he doesn't know much about economic issues. McCain's economic plan is really another rehash of the Bush economic plan--more tax cuts, deregulation, cuts in domestic spending, and his ridiculous gas tax holiday. McCain has even admitted that "there’s been great progress economically" since the Bush administration took office and that "the fundamentals of America’s economy are strong." So that is a round-up of the McCain economy.

And the American people are not buying John McCain's economic happy talk.

The fact here is that John McCain is completely clueless as to the workings of the U.S. economy, or even how to address the serious challenges U.S. faces with this latest slowing economy, the housing crisis, the financial institutions mortgage meltdown, the huge U.S. debt, the cost of the U.S. war in Iraq, the job losses, the eroded U.S. infrastructure, and so many other problems this country faces. It is no wonder that John McCain is losing ground to both Clinton and Obama on the economy.

Of course, John McCain's entire presidential campaign was never based on the economy, but rather about the U.S. war in Iraq. McCain staked his presidential claim to the Bush administration's war in Iraq, calling it "necessary and just." McCain has advocated to sending even more U.S. troops to Iraq over the current Bush White House troop surge. Of course, back in 2007, the U.S. war in Iraq was generating most of the political headlines with the presidential wannabes aligning themselves over the war. The McCain campaign felt that they had a strong position in supporting the war as a means to both generate terrorism fears within Americans and to blame the Democrats not just losing the war in Iraq, but also surrendering to al Qaeda terrorists. It is still the standard talking point that the GOP used against the Democrats in 2004, 2006, and even now in the 2008 elections.

But the political dynamics have changed since 2007. The U.S. economy, and not the war, has taken center stage in the presidential elections. Pocketbook issues are now the big fear among American voters. And they are looking to the presidential candidates for the answers to the U.S. economic, and their pocketbook, problems. John McCain's presidential campaign was centered around McCain's "strength" as a Commander-in-Chief in fighting the evil al Qaeda terrorists in Iraq for another 100 years. The McCain campaign was never expected to deal with economic issues during this election.

Clueless McCain.

Boehner, Bush play cheerleaders to a glum GOP

I found these stories last week through Carpetbagger Report, and I've been meaning to comment on how they relate to the current GOP moral at this time. First some quick background information. Republicans have been hopeful in winning two House seats through special elections--the first in the Illinois 14th Congressional district, previously held by former Speaker of the House Dennis Hastert. Democrat Bill Foster defeated Republican James D. Oberweis in the 14th District by six points. The second special election was held in Louisiana's 6th Congressional district, with Democratic State Rep. Don Cazayoux narrowly beating Republican publisher Woody Jenkins, 49-46 percent. Both districts were strong Republican territories, with the National Republican Congressional Committee (NRCC) spending at least $1.3 million in the Illinois 14th District and around $436,000 on independent expenditures in the Louisiana 6th District. Both Republican strongholds were lost to the Democrats. The GOP is also facing another Democratic challenge with Republican Greg Davis is fighting against Democrat Travis Childers in a May 13 special election for Mississippi's 1st Congressional seat, a seat vacated by GOP appointee Roger Wicker after Trent Lott resigned. So the Republican Party is facing some serious election defeats in supposedly safe districts. It is no wonder the GOP is feeling glum.

Enter stage right, the new GOP Cheerleaders--House Minority Leader John Boehner and President George W. Bush! On April 30, 2008, Boehner unveiled a fall election strategy to Republican colleagues at the Capitol Hill Club, complete with a Powerpoint presentation entitled "Why We Can Win." You can view the Powerpoint presentation here via Slate's Alex Koppelman:

| View | Upload your own

Looking at Boehner's slides here, it is fascinating at how Boehner presents a combination of outright lies, propaganda, and some very wacked-out ideas on the upcoming November election. Boehner claimed that Democrats "have a significant financial advantage, funded by trial lawyers and labor unions, NOT by middle-class Americans." It is a rather strange combination of both lies and propaganda, considering that Democratic presidential candidate Barack Obama's huge fundraising machine relies on large numbers of Americans giving small donations, $100 or less, through the internet. "Without the strength of House Republicans and the President's veto pen," Boehner said, "House Democrats would have achieved a record Obama would be proud of." Boehner said that Democrats will "surrender to al-Qaeda, with our soldiers unfunded and unarmed," and create huge expansions of government-run health care, domestic spending, and "job-killing bureaucratic mandates." Of course, a majority of Americans support some type of government-guaranteed health insurance. The phrase of Democrats surrendering to al Qaeda is a complete lie and a GOP propaganda talking point. And while Boehner rails against the Democrats on domestic spending, he refuses to admit the huge waste of a half trillion dollars spent in the Bush administration's war in Iraq. Boehner also railed against the Democratic congressional leadership for doing nothing "about rising energy & gas prices," "to make health care more affordable," to "securing our borders," to "reform entitlements," or "to congrol government spending." Again, Boehner lied in his presentation, knowing that the Republican Party has been obstructing everything through Congress with filibusters. Boehner stated that GOP presidential nominee, Arizona Senator John McCain "has strong appeal to independents and Democrats," while Senators Hillary Clinton and Barack Obama are "creating enemies in their own party." Of course, the best line Boehner makes in his Powerpoint presentation is this:

By November, it will be clear that Obama's appeal is limited to arugula-eating college professors, hard-core liberal Democrats, and the residents of Nancy Pelosi's Congressional District.

I don't what to say about this wacked-out Boehner quote.

Boehner's little presentation was really a "rah rah" challenge to regain the spirit and fight of Republican congressmen facing an American public that overwhelmingly feels the country is on the wrong track, disapproves of President Bush's job performance, is opposed to the Bush administration's war in Iraq, and believes that the U.S. economy is heading into a recession. No amount of Powerpoint slides or "rah rah" cheerleading is going to help the Republicans if the American people blame these disasters on Bush and the GOP.

The second story I saw was also through both Carpetbagger and Crooks and Liars, where dejected Republicans are offered a trip to the White House. From a May 7, 2008 Politico.com story, titled GOP leaders warn of election disaster:

House Republicans will hold a rally with President Bush on Wednesday morning, with all 199 members invited to 1600 Pennsylvania Ave. to show solidarity with the president, according to GOP sources.

I'm wondering what will be said at this GOP love-fest between House Republicans and King George The Deciderer--will Boehner bring his Powerpoint presentation? What amazes me here is that these 199 Republicans are attending this White House rally at a time when a majority of Americans both disapprove of President Bush's job approval ratings and believe that the country is on the wrong track--and still these 199 Republicans are aligning themselves to this weakened president. And of course, George W. Bush will be there with his own "rah rah" cheerleading megaphone:

George W. Bush as a cheerleader at Andover

What kind of Kool-Aid are these Republicans drinking?

Then again, I seriously wonder if Georgie's megaphone or Boehner's Powerpoint presentation can even lift up the GOP's spirits. Continuing with the Politico.com story:

Shellshocked House Republicans got warnings from leaders past and present Tuesday: Your party’s message isn’t good enough to prevent disaster in November, and neither is the NRCC’s money.

The double shot of bad news had one veteran Republican House member worrying aloud that the party’s electoral woes — brought into sharp focus by Woody Jenkins’ loss to Don Cazayoux in Louisiana on Saturday — have the House Republican Conference splitting apart in “everybody for himself” mode.

“There is an attitude that, ‘I better watch out for myself, because nobody else is going to do it,’” the member said. “There are all these different factions out there, everyone is sniping at each other, and we have no real plan. We have a lot of people fighting to be the captain of the lifeboat instead of everybody pulling together.”

In a piece published in Human Events, the Republicans’ onetime captain, former House Speaker Newt Gingrich, warned his old colleagues that they face “real disaster” on Election Day unless they move immediately to “chart a bold course of real reform” for the country.

And in a closed-door session at the Capitol, National Republican Congressional Committee Chairman Tom Cole (R-Okla.) told members that the NRCC doesn’t have enough cash to “save them” in November if they don’t raise enough money or run strong campaigns themselves.

Although a top House Republican brushed aside Gingrich’s broadside as “hype from a has-been who desperately wants to be a player but can’t anymore,” the harsh words from Cole were harder to ignore.

“It was a pretty stern line that he took with us,” said one House Republican.

Cole, on the defensive in the wake of special election losses in Louisiana and Illinois, pointed his finger Tuesday at his Republican colleagues, telling them that they had been too stingy in helping fund party efforts. He also complained that the Republicans ran weak candidates in both Louisiana and Illinois — a charge Cole made despite the fact that, as NRCC chairman, he could have played a major role in choosing the party’s candidates if he hadn’t made the decision to stay out of GOP primaries.

In his meeting with members, Cole distributed a document showing that even former Republican political guru Karl Rove had badmouthed Jenkins, according to GOP sources. It’s not clear whether Cole meant it as a criticism of Rove or of Jenkins.

There is a lot of bad news coming out of the GOP in this Politico story. First you have the GOP being shocked by the losses in the two special election races. You've got NRCC Chairman Cole telling Republican representatives that they are on their own with raising money for re-election, since the NRCC doesn't have enough cash to "save them." And considering the amount of money the NRCC poured into the two special election races, I'm not surprised that Cole is pulling back from dumping even more money into potentially losing races. Then you have Newt Gingrich flapping his mouth about how the GOP is facing a "real disaster," while Newt is offering himself as a new savior to the Republican Party, where he will be happy to “chart a bold course of real reform” for the Party. Come on now--did you really expect the GOP to chart this bold new course without Newt at the helm? That is just obvious Newt here. Of course the real kicker in this shellshocked Republican Party is Karl Rove's badmouthing Republican Woody Jenkins after his loss in the Louisiana special election. If this is even true, then we've got some infighting taking place within the GOP over who is to blame for these latest disasters. Even Cole gets into this infighting with his distributing a document on this Rove-Jenkins spat during the closed-door meeting with GOP representatives.

If the disparity and glumness is this bad in the Republican Party, they are going to need more than Powerpoint slides, White House rallies, or even spiked Kool-Aid.

Saturday Morning Cartoons--Chilly Willy in The Legend of Rockabye Point

I found a great Saturday Morning Cartoon starring Chilly Willy in The Legend of Rockabye Point. This 1955, Academy Award nominated, cartoon has our tuxedoed-dressed friend competing with a starving polar bear in stealing tuna off a ship guarded by a vicious dog. To placate this dog, the polar bear sings Rock-A-Bye-Baby to make the dog fall asleep, so the bear can stock up on the tuna. Chilly Willy, however, creates as much noise as he could, waking the dog up, and causing the dog to constantly bite the polar bear in the tush. The Legend of Rockabye Point was directed by Tex Avery, who created of two of Warner Brothers biggest animation stars Bugs Bunny and Daffy Duck. Strangely enough, Chilly Willy's character, the style, and plot line of Rockabye Point seem more in line of a Droopy cartoon. Then again, Avery also created Droopy in 1943's Dumb-Hounded. So let us delve into The Legend of Rockabye Point. From YouTube:



Sing it to me again, will you Charlie?

Friday Night Fun Stuff--Lady Marmalade from Moulin Rouge

For tonight's Friday Fun Stuff, how about a gaudy music video featuring Christina Aguilera, Pink, Missy Elliot, Mya, and Lil' Kim--we're talking Lady Marmalade from the movie Moulin Rouge. Lady Marmalade was originally recorded by Patti Labelle with her R&B/Soul group Labelle. The original song topped the Bilboard Hot 100 singles chart in the U.S. during the week of March 23 to March 29, 1975. The Moulin Rouge re-recording of Lady Marmalade also became a number-one hit on the U.S. Billboard Hot 100 for the second time, reaching number one in its eighth week and staying there for five weeks at the top position from May 27 to June 30, 2001. So let's have some gaudy fun for this spring weekend. From YouTube:

Republicans vote against Moms; No word yet on Puppies, Kittens

That is the actual headline of this Washington Post story:

It was already shaping up to be a difficult year for congressional Republicans. Now, on the cusp of Mother's Day, comes this: A majority of the House GOP has voted against motherhood.

On Wednesday afternoon, the House had just voted, 412 to 0, to pass H. Res. 1113, "Celebrating the role of mothers in the United States and supporting the goals and ideals of Mother's Day," when Rep. Todd Tiahrt (R-Kan.), rose in protest.

"Mr. Speaker, I move to reconsider the vote," he announced.

Rep. Kathy Castor (D-Fla.), who has two young daughters, moved to table Tiahrt's request, setting up a revote. This time, 178 Republicans cast their votes against mothers.

It has long been the custom to compare a popular piece of legislation to motherhood and apple pie. Evidently, that is no longer the standard. Worse, Republicans are now confronted with a John Kerry-esque predicament: They actually voted for motherhood before they voted against it.

Republicans, unhappy with the Democratic majority, have been using such procedural tactics as this all week to bring the House to a standstill, but the assault on mothers may have gone too far. House Minority Leader John Boehner, asked yesterday to explain why he and 177 of his colleagues switched their votes, answered: "Oh, we just wanted to make sure that everyone was on record in support of Mother's Day."

By voting against it?

My comment to this latest Republican insanity is this: