There is plenty of shaking going on in
California and it's not an earthquake
fault line.  Lawmakers in Sacramento
have imposed a new 10% surtax on
it's citizens to relieve the multi-billion
dollar budget deficit.  Without any
warning, Californians will find their
paychecks smaller.

The Golden State has long been hand-
out-heaven, providing more services
and goodies to it's residents, including
illegal aliens, than any other state.  The
end result is a bloated budget, a budget
deficit (expected to top $20 Billion dol-
lars next year) and a flight of companies.
In addition to high taxes, California leads
the way on ridiculous regulations that
amount to zero benefits and further re-
strict businesses.

The past few years have seen a steady
flow of businesses and jobs leave the
state for better climes.  With this week's
action by the state legislature, more
companies and people will head for
states where their business and wallets
are respected.  The sheer audacity of
Sacramento is unbelievable.  Recent
ballot proposals have made it clear that
Californians think they are taxed too
much now.

The new surtax is said to be temporary
and that taxpayers will get their money
back come next April.  Yeah!  Rrrright!
Paid in worthless vouchers?  The state
is a disaster area and should be an
example of what Washington wants to
do with the rest of the country.  Unfor-
tunately, as the productive and clever
leave the state, the situation will only
snowball.  Without a radical change in
the political leadership, California may
very well go completely bankrupt.

San Francisco Mayor, Gavin Newsom,
recently decided to bow out of the up-
coming race for governor next year.
While citing the usual reasons for not
running, could it be that the REAL
reason is that he is just plain scared?
That he does not want to be holding
the pot as it boils over?  Whoever is
elected will have an enormous job in
front of them.
There is no doubt that California needs
a complete overhaul.  Services will have
to be scaled back.  Spending must be
slashed.  Regulations must be repealed.
They are not alone.  Many states are in
similar straits.  New York, Michigan
and Massachusetts are just a few.  They
share in being dominated by unions,
cities run by Democrat machines, and
bloated budgets with huge deficits.  The
shining example of health care, Massa-
chusetts has already begun rationing
care just since 2006 when the began
their program.  Ready for the same
nationwide?

The elections this past Tuesday showed
that the people are seeking smaller,
limited government.  Those states which
do not pay heed to the mood of it’s
voters will find themselves facing the
wrath of the electorate.  The problem
facing California is that it may be too
late.  As those who seek to live off the
suckle of government outnumber the
productive taxpayers, the power of the
vote is the power to self-destruct.

During the 1980 Republican primary
season, George H. W. Bush often
claimed that Ronald Reagan was prac-
ticing "Voodoo Economics".  What we
see coming out of the Obama White
House could be called 'Mumbo Jumbo
Economics'.

Despite numerous reports that counter
their numbers, the Obama Administra-
tion continues to claim that they have
"created or saved" some one million
jobs since the passing of the $787
Billion dollar stimulus bill in February.
Meanwhile, some 2.7 million jobs have
been lost during the same period.  The
problem with the White House numbers
is that they simply do not add up.  And
even if they did, have we gotten our
money's worth?

Up until October, about $160 Billion of
the stimulus has been allocated.  So,
if you divide that by 1 million jobs, you
get a number of $160,000 per job. Not
exactly a bargain, is it?  Especially given
that many of the jobs were part-time,
some lasting only 30 hours for one
week.  The average duration is 5 weeks
for the 80,000 construction jobs the
White House alleges it created.  The
'real world' average salary for a typical
construction worker is about $45,000
a year.

About half of the alleged 650,000 jobs
'saved' by the stimulus were teaching
positions.  Doing a little math, that would
work out to $52 Billion for those teacher
jobs, which would be consistent with the
cost of $160,000 per job.  I would like to
know how many of those 325,000
teachers are earning $160,000 a year?
My guess is very few, if any.

Remember "Cash for Clunkers"?  We
were told that the cost would be about
$4,500 per trade-in to replace an older
car for a brand new one.  But a new
report by Edmunds, an auto industry
publication, estimated that the actual
cost was $24,000 per vehicle!  The
White House has since declared war
on Edmunds, as they have with others
who dare to dispute them, such as
Fox News and the U.S. Chamber of Commerce.

Edmunds' numbers come from how
many cars were actually sold purely
due to the cash incentive.  Given the
'up-tick' in car sales during the period
of the program, only about 18% of
the cars purchased were directly due
to the incentive.  The remainder would
have been purchased anyway.  It
should also be pointed out that the
'cash for clunkers' program only gave
a short spike in consumer spending.

Speaking of which, consumer spending
fell 0.5% in September.  The White
House is trying to tout that the GDP
went up about 3.5% in the 3rd Quarter
of 2009.  But much of that was due to
government spending.  About 1.66%
was just with 'cash for clunkers'.  If
you subtract that, along with other
Federal spending, the actual increase
in 3rdQ GDP was barely 1.22%. Keep
in mind that when the government
spends money it doesn't have, which
it has been doing since mid-May.  I
wonder who will pay that nearly $12
TRILLION dollars of debt?

While most people's attention were on
the health care debate, we had more
bad news concerning the nation's banks.
We crossed the century mark and 106
banks have now failed in 2009, with still
more than two months to go.  Do not ex-
pect the situation to improve any time
soon, either.

An interesting hearing was held this
week by the Senate Banking Subcom-
mittee.  FDIC Chairwoman, Sheila Bair,
while keeping vague on actual details,
did confide that some 416 banks are
being watched closely by the FDIC.
When asked if next year would look
more like 2008, when only 25 banks
failed, or 2009, she confessed that next
year is more likely to resemble 2009.

The FDIC's own policies may be a
contributing factor.  While the large
investment banks have been given
bailouts and access to the Federal
Reserve's discount window, the
smaller regional and community
banks have been on their own.  But
the FDIC raised premiums on these
banks by 40% to cover the new
insurance level of guaranteeing
depositors up to $250,000 per
account.  On top of this, the FDIC
has ordered these smaller banks to
increase their cash-on-hand levels
and is now demanding that they
pay deposit insurance premiums
early, due to the FDIC running low
on funds.  They estimate that they
will need an extra $45 Billion per
year to keep pace with bank defaults.

The small banks and credit unions
are hurting.  Timothy Ward, Deputy
Director of the Office of Thrift, told
the panel of senators that the economy,
"has not yet hit bottom".  Joseph Smith,
who chairs the State Bank Supervisors
in addition to a commissioner of the
North Carolina Banks, said the situa-
tion for state chartered banks is,
"grim and declining."  He added that
their major concern now is the up-
coming deluge of some $500 billion
needed to refinance commercial real
estate loans.  Daniel Tarullo of the
Federal Reserve also added his con-
cern over commercial real estate loans.

Thomas Candon, Deputy Commissioner
of Vermont's Departing of Banking, also
added that credit unions, which had
faired well since they had few risky
assets, are now feeling the pinch of the
high unemployment.  The numbers of
loan delinquencies and charge-offs is
increasing.

What was not said at the hearing was
another fly in the ointment..., that next
year, some $5 TRILLION dollars in
U.S. Treasury notes will come due.  In
a ‘normal’ economy, these are usually
just rolled over by those who bought
them into more bonds.  Large invest-
ment institutions, such as insurance
companies, have to park their money
somewhere.  The big question is, will
they, and all those foreign bond buyers
in Europe and Asia, continue to see
U.S. treasuries as a sound investment?

The over all situation is still very grim.
The large investment banks are still
sitting on their toxic assets, unable to
repackage them into anything worth
while selling.  Fannie Mae and Freddie
Mac are still functioning like nothing
has happened, they’re even planning
some big bonus pay-outs (wonder
when the ‘pay czar’ will slap them
down?).  Unemployment rose this
past month in 46 states, half of which
reached record levels.  15 states now
have unemployment in double digits
and the Obama White House sees no
significant change any time soon.
Christina Romer, who chairs the White
House Economic Council, said this
week that the $787 Billion dollar stimulus
bill has already done whatever stimulat-
ing it’s going to do.  She said it will have
no impact on conditions next year, even
though most of the bill’s monies will be
spent in 2010.

President Obama has finally begun
talking up the need for helping small
businesses.  DUH!  Despite TARP,
the stimulus, and the trillions of dollars
of liquidity the Federal Reserve has
been pumping the last year, there is
still a credit crunch which is hurting
small businesses.  Obama may think
he can use this as a baton for getting
Stimulus II.  But why bother?  If his
health care and climate/energy legi-
slation are passed, these will nullify
any genuine direct assistance to
small businesses.  A second stimulus
package is more likely to serve as
another pork-a-thon for Congress to
pour cash into their own districts before
the 2010 elections.

More over, Fox News!  The Obama
White House has new enemies to
battle.  In the last few weeks, they
have been attacking the health insur-
ance companies, and this past week,
the White House has set it's sights
on the U.S. Chamber of Commerce.
What have they done to warrant the
ire of the Obama Administration?

We all know why Fox News has made
the White House enemies list.  Glenn
Beck installed a hotline to receive calls
from Anita Dunn, the communications
official the White House delegated the
monitoring of Fox News programs to.
Beck then exposed Dunn as being a
big fan of mass-murdering dictator,
Chairman Mao.  She, naturally, denied
this, stating that the video of her saying
such was just a joke.  Yeah, right!

Beck has been exposing all sorts of
members of Obama's staff as fans of
various socialists, communists, and
tyrannical dictators.  He got green-job
'adviser' Van Jones to resign after
showing his sorted past and pointed
the light of scrutiny on the White House
attempt to use Federal funds through the
National Endowment for the Arts to have
artwork made promoting the White
House's agenda.

Oooh, scary stuff!  As for the health care
insurance companies, of course they are
bad!  Aren't they the ones making health
care so expensive?  They had remained
silent for a long while as the various bills
were drafted in Congress.  This was due
to a back-room deal cut between them
and the White House.

But as the bills took shape, it became
obvious to the insurance companies that
they were going to get screwed.  So,
they went on the counter-offensive.  A
study was ordered by them through
Price Waterhouse, which showed that
unlike the propaganda the White House
has been spewing, the various legisla-
tive measures would, in fact, increase
costs dramatically!  A typical family of
four would see their premiums rise from
the current average of $9,800 a year to
well over $21,000 in the next 10 years.

This caused the White House to turn
up the heat and the rhetoric and attack
the insurance companies of playing the
old obstructionist game.  They do not
want reform because it would hurt their
bottom line.  The White House, naturally,
omits the fact that it's the bottom line of
the American taxpayer that will get gored
should any of the current bills become
law.  I have to wonder when they'll go
after Senator Harry Reid after he said
that the cost of the Baucus bill will not
be the projected $876 Billion dollars the
CBO scored the preliminary outline at,
but will exceed $2 TRILLION dollars
over ten years.

Now, the U.S. Chamber of Commerce
has been targeted after they came out
against the health care bills.  The White
House was already upset with them for
opposing the Cap & Tax Carbon bill as
a job killer.  The USCC was even the
target of a hoax this week.

On the 19th, the National Press Club
was the site for a press conference
billed to be an endorsement by the
USCC for Cap & Tax.  An alleged of-
ficial who called himself Hingo Sembra
held a press conference and stated
that the USCC has caved-in to pres-
sure and has reversed it’s position.
That they now support Obama’s Cap
& Tax scheme.

The press conference was carried by
the cable news agencies, as well as
by the wire services and other jour-
nalists.  A REAL official from the USCC,
Eric Wohlschlegel, arrived in mid-confer-
ence to call the speaker out as a fake.
Amazingly, many reporters did not want
to listen to the real official as they were
happy to see the USCC turn green.

The hoax-ster turned out to be Andy
Bichlbaum, a member of the Yes Men.
They are notorious for impersonating
officials from corporations like Exxon,
Dow Chemical and Haliburton.  While
no connection, as of yet, has been made
between the Yes Men and the White
House, it would seem that they are in
the same mind set of what is right.
Besides, the White Houses seems to
only want ‘yes-men’ to agree with their
agendas.

Slum-lord-turned-White-House-adviser,
Valerie Jarrett, has apparently been
visiting the USCC weekly, trying to cajole
them into cooperating.  Meanwhile, a
stealth agenda of attacking the USCC
has been underway.  Corporations that
are friendly with the White House are
withdrawing their memberships to the
USCC.  Gotta love it when a plan comes
together!  LOL!!!

Louise Radnofsky wrote in
today's Wall Street Journal
that the group which is over-
seeing how the stimulus
money is being spent, the
Recovery Accountability and
Transparency Board, issued
a report stating that ONLY
30,000 jobs have thus far
been created from the $787
BILLION dollar stimulus
package.  WOW!  I'm surprised
it's that many!  LOL!

Those companies which have
been awarded those 'shovel-
ready' contracts have, as of
the beginning of October,
received some $16 Billion
dollars and have actually spent
only $2 Billion so far.  A grand
total of 30,383 jobs were either
created or saved.  In Michigan,
which has the highest unem-
ployment in the nation, only
397 jobs were created or
saved.  This falls way short of
the numbers touted by the
Obama White House, which
claims over a million jobs have
been created or saved.

The White House derives it's numbers
from the Council of Economic
Advisers.  The CEA based it's
figures on their estimates of
how much unemployment there
would be now if the stimulus
package were not passed.
HUH?  Radnofsky also quotes
White House chief economist,
Jared Bernstein, who said,
"...it's too soon to draw any
global conclusions from this
partial and preliminary data".

Do you think it's too crazy to
contemplate that our govern-
ment is A) lying about the
benefits of the stimulus or
B) that these jobs cost us
taxpayers over $658,000
each to 'create or save'???
Not at all, unfortunately.

Over the past couple of weeks,
we have been hearing more
from Neil Barofsky, the TARP
inspector general.  According
to Barfosky, the Treasury
Department, under Tim, Turbo
Tax, Geithner, and his prede-
cessor, Hank Paulson, com-
pletely mishandled the bank
and AIG bailouts.  Most of the
money went to 9 of the nation's
largest banks, which now have
about 75% of all bank deposits.

Paulson publicly stated that
those banks that received the
TARP monies were "healthy",
and accepted the cash for
"the good of the U.S. econo-
my."  The idea was to calm
public fears and hope the
banks would increase their
lending to consumers and
businesses.  This extra lend-
ing never happened.  

Barofsky also reports that
Geithner did know full well
about AIG and others bonus
pay-out programs.  All of
the shock and indignity that
was expressed by the govern-
ment was fake.  While the
bonuses paid earlier this year
were contractually binding,
Barofsky stated in a report
this week that the Treasury
and Congress could have re-
negotiated the contracts for
2010, due to be paid out next
March.

Of course, what difference did
the $168 million in AIG bonus-
es make when compared to
the $165 Billion dollars they
received as part of the TARP
bailout?  Small potatoes, right?
Given that the taxpayers are
in the hook to AIG, owning an
80% share of the insurance
giant, who is representing us
in the decision making process
at AIG?  Tim Geithner?  Appar-
ently he’s supposed, but not
doing a very good job of it.

As unemployment moves to-
wards the 10% mark, nation-
wide (it’s nearly 20% if you
add up those whom are only
working part-time, have run out
of unemployment insurance
and just plain stopped looking)
one would think that job crea-
tion would be a high priority
for the government?  Aren’t
the Democrats always talking
about ‘jobs, jobs, job’???

The stimulus has been a total
failure.  The TARP has been a
total failure.  Even the Trillions
of dollars the Federal Reserve
have printed and dumped onto
the marketplace has been a
total failure.  The credit crunch
still exists.  The toxic assets
are still on the books of all the
banks.  The trillions of dollars
blown have done nothing to
turn the economy around.

As we brace ourselves for
another bad year with more
mortgage issues on the hori-
zon, perhaps it is high time
to put the brakes on all the
spending?  Nobody has ever
been able to spend their way
out of a downturn.  It is esti-
mated that perhaps as much
as $6 Trillion dollars is still
sitting on the sidelines, wait-
ing for a hint as to when things
will truly recover.  Had this
source of private sector money
been put into action, with tax
cuts and other market-based
incentives, the situation would
have been much different.

The massive government
debts being wrung up are hav-
ing the opposite effect.  With
Congress now gearing up to
unleash two new economy-
killers, Obama-Care and the
energy Cap-N-Tax bills, good
luck to anyone trying to run a
business!