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The public policy blog of the American Enterprise Institute
Monday, September 17
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16:49 The Wall Street Journal reports that General Motors wants the government to sell the 27% of GM shares that it currently owns. Unfortunately for GM, the government isn’t so interested in doing that, for the fairly simplistic and political reason that if they sold their shares now, they’d lose trillions of taxpayer dollars. The WSJ:
GM executives have grown increasingly frustrated with that ownership, and the stigma of being known as “Government Motors.” Executives have said the U.S.’s shadow is a drag on its reputation and hurts the company’s ability to recruit talent because of pay restrictions. Privately, executives are also irked at the continued curbs on corporate jet use.
Earlier this summer, GM floated a plan with Treasury officials to repurchase 200 million of the roughly 500 million shares the U.S. holds in the auto maker, according to people familiar with the discussions. Under the plan, Treasury would sell the remaining shares through a public stock offering.
But Treasury officials aren’t interested in GM’s offer at the current price and aren’t in a rush to offload shares, according to people familiar with the matter. The biggest reason: A sale now would leave the government with a hefty loss on its investment.
This is what’s known as crony capitalism, my friends, and it’s a great illustration of why we need to move towards a true free enterprise system. Here we have a private company (which is supposedly “roaring back”) whose internal dynamics are being manipulated and controlled by the federal government. They’re being manipulated in such a way that makes them uncompetitive. In the end, nobody will win: Government oversight means GM can’t compete, and if GM can’t compete, its shares will never rise to the point where the government feels OK with selling. Catch-22.
16:36 The group Citizens United has struck a deal with a dozen t.v. stations to run its hour-long film, “The Hope and the Change,” in the final weeks of the election, Politico reports. The move features voters disaffected with President Obama. From the Politico story:
This movie — set to start airing on Tuesday and run through Nov. 6 on six cable and six broadcast networks — features forty Democratic and independent voters who backed Obama in 2008 and have since become disillusioned. Much of the film consists of the voters talking, with an overlay of world events over the last four years.
The voters talk about what they had expected Obama to accomplish once in office, and why they had supported him. Bossie says the voters, who come from swing states such as Florida, Iowa, Colorado, North Carolina, Ohio, Pennsylvania and Virginia, were picked from focus groups that were conducted by former Jimmy Carter adviser Pat Caddell.
The movie will run in its 60-minute entirety in an agreement with six cable networks like HDNet Movies and FamilyNet, along with local stations in Louisiana, Colorado, Indiana, Hawaii and Louisiana. It will reach 130 million homes, according to Citizens United, coupled with advertising dollars about the movie on cable networks.
Bannon and Bossie both said the goal was to feature average people, not the pundit class — and not any of the more incendiary, base-motivating claims about the president (the recent Dinesh D’Souza movie in theaters now about Obama, which came in just under Moore’s record for box office success with a documentary so far, does explore those).
“It’s just about his competence,” said Bannon. “(They) believed [Obama] connected with them…they thought it was a unique connection…they like him personally, they think he’s a great family man…it’s all about competence.”
16:14 A recent Pew Research Center poll shows that Americans are not sure about Obama’s handling of the turmoil in the Middle East, but they definitely didn’t approve of Mitt Romney’s comments about it.
As you can see in the chart below, only 45% of respondents approved of Obama’s handling of the situation. On the other hand, only 26% (!) approved of Romney’s comments. Even among Republicans, Romney’s words garnered only 58% approval.
It’s also important to note that 43% of respondents said they’ve been following news about the attacks. This means that the attacks were the most-followed news story tested, edging out the 2012 election by 1 point and the economy by 5. This issue is likely to remain in the news for a while.
16:04 On the trail today, the president said, “I’ve actually done my own taxes. I don’t know about some of these other folks but I’ve done them.” He claimed this was a reason he wanted to simply the tax code. Unfortunately, as Andrew Kaczynski of BuzzFeed reports, the president’s tax returns back to 2002 show that they were done by a preparer.
15:59 During his speech to the Hispanic Chamber of Commerce in Los Angeles, Romney claimed some credit for the Obama administration’s decision, announced today, to file new trade lawsuits against China. While he welcomed the administration’s action, he said it was a transparent political maneuver (it was), and said, “If I’d known that all it took to get him to take action was to run an ad citing his inaction on China’s cheating, I’d have run one a long time ago.”
15:38 Did you know that over the weekend, a team of 18 Afghan Taliban attackers wearing U.S. uniforms breached Camp Bastion in Helmand, Afghanistan? The attack killed at least 2 U.S. Marines and destroyed 6—yes, 6—Harrier jets and seriously damaged two more.
Bastion was regarded as extremely secure due to its location in the middle of the Dasht-i-Margo (the Desert of Death).
The destroyed Harriers represent 1/15th of the Marines’ entire inventory. Nine NATO personnel were injured in addition to the two dead Marines.
Now, this attack doesn’t change much strategically. But it does reveal the administration’s talk of “blunting” the Taliban’s momentum as hogwash. If you’re able to plan an incredibly complex operation into the Desert of Death, I think your momentum is doing just fine.
Moreover, it’s fascinating—though for many readers, probably not surprising—that we’ve heard nothing about this in the mainstream media. Given the attention that foreign policy has been getting over the last week, you’d think that we’d hear about such a brazen and successful attack. And if the president were a Republican, I bet you would be.
UPDATE: 16:55 A friend who is well versed in the foreign policy world tells me that the commanding officer of the Harrier jets was also killed in the attack, making this the country’s worst air loss since Vietnam. Yet still no one is talking about it.
15:28 This table, from Deltek, provides more detail on which agencies and programs stand to get cut under the sequestration budget. It’s not pretty.
Romney-Ryan should be hitting the sequestration issue early and often. For one, it corroborates their attacks that the president is weaker on national security than the media makes him appear. For another, a great many Americans rely on these programs for their livelihoods, particularly in state like Virginia, which is borderline must-win for Romney.
Finally, the chaotic nature of the sequestration cuts furthers the argument that Romney is the “Mr. Fix-It” type of guy we want making important decisions on what to cut and what not to cut.
15:18 Ah, the wonders of the 21st century:
15:08 You may not know it given their complete irrelevance, but today is the Occupy movement’s one-year anniversary. Despite Democratic efforts to turn Occupy into something resembling the Tea Party—you know, a political force that actually accomplished concrete objectives—the movement was simply too radical for mainstream America’s tastes. And the Massachusetts GOP is racing to take full advantage of that radicalism by tying Elizabeth Warren, the Democratic Senate candidate from MA, to the Occupy crowd.
Which is pretty easy to do given that Warren effectively claimed credit for starting the movement and specifically stated that she supports what they do.
14:44 Libya’s president, Mahamed Yousef El-Magariaf, told CBS’s Face the Nation on Sunday that 50 arrests have been made in connection with last week’s attack on the U.S. consulate in Benghazi which left four Americans, including U.S. Ambassador Chris Stevens, dead.
El-Magariaf was quite certain that the attacks were premeditated, saying, “It was planned, definitely. It was planned by foreigners, by people who entered the country a few months ago. And they were planning this criminal act since their arrival.
He didn’t sound very excited by the prospect of FBI investigators entering Libya, saying, “Maybe it is better for them to stay for a little while, for a little while. But until we, we do what we have to do ourselves. Any hasty action I think is not welcome.”
El-Magariaf made it clear that the Libyan people did not sympathize with the attackers, calling them “ugly” and “criminal” deeds.
I’m no foreign policy expert, but it seems to me that it’s El-Magariaf’s interest to have people believe that the attackers were foreigners (note that I’m not claiming he’s wrong—I don’t know enough about the specifics to say). But from his perspective, blaming it on foreign radicals is much better than having Americans believe the Libyan people are ungrateful for our assistance during their revolt against Gadhafi.
At the same time, it’s probably bad for the Obama administration if El-Magariaf is right, because it makes them look pretty incompetent. There was a group of foreign terrorists planning to kill the American ambassador in Libya for months and nobody knew about it? Not even enough to bother placing a contingent of Marine guards around the consulate? If it were truly a spontaneous attack, at least the administration could argue that it was impossible to have prepared for it.
14:13 According to Homeland Security Today, sequestration would mean the following cuts:
These are the kinds of specifics that Romney/Ryan need to talk about when attacking the defense sequestration. Particularly in swing state Virginia, cuts of this magnitude will cost many Americans jobs, and cuts to programs like the border patrol and the Coast Guard are bound to be unpopular.
For more on the effects of the OMB’s plan for sequestration, see this post by AEI scholar Mackenzie Eaglen.
13:54 Gallup’s Election 2012 Trial Heat, which is based on a seven-day rolling average, has President Obama ahead of Mitt Romney 48-45. The poll’s margin of error is plus or minus 2 points, so Obama is unambiguously ahead, as he has been since the beginning of September. Still, as you can see below, the overall trend shows Romney clawing back into striking distance.
13:23 Two new ads from the Romney campaign show the campaign’s refocus back to the economy. The first, called “The Romney Plan,” provides a simplified, 3-step explanation of how Romney will attempt to help the middle class. The second, called “Failing American Families,” is a more traditional attack on the president, focusing on the American family’s loss of income and the rise in our national debt.
12:03 This is a funny and creative ad from Team Obama. It’s two minutes long, so only useful as a web video, but its use of the popular home makeover t.v. show is a great idea.
11:59 BuzzFeed reports that President Obama is extending his lead among Jewish voters despite Republican attempts to portray him as a weak supporter of Israel. The unreleased Gallup data shows Obama ahead 70-25 among registered Jewish voters, compared to a lead of 69-25 in the spring.
11:43 Watch Soledad O’Brien and Peter King argue over whether President Obama embarked on an “apology tour” in the early days of his administration.
The whole argument is a bit silly. O’Brien willfully ignores King’s point that the “apology” is contained in the tone and content of the speeches. You’d think she could come up with a better defense of the president’s actions than simply saying that the words “apology” or “I’m sorry” don’t show up in the text. And King would do well to realize that there is a need for discretion in foreign policy, and that it is possible to stand up for American values without constantly thumping your chest about it.
11:16 Bob Woodward’s new book, The Price of Politics, is making waves in DC right now. Its main message is that President Obama fails to lead on issues unless it’s politically convenient for him to do so. The issue of entitlement reform is no different, and in the exchange below with on MSNBC’s Morning Joe, Woodward makes it clear that the only leadership being provided by anyone on the issue is from Paul Ryan, although Woodward disagrees with his approach. Take a look:
11:13 CNN reports that Team Romney will launch a new effort this week to increase the amount of policy details in the campaign. Romney himself will deliver a series of high profile speeches designed to flesh out more specifics on exactly what Romney would do differently than President Obama.
The first of these speeches is this afternoon at the Hispanic Chamber of Commerce in Los Angeles, where he will talk about immigration. Two other upcoming speeches are one about foreign policy at the Clinton Global Initiative and one about education at NBC’s “Education Nation” summit.
Paul Ryan will also have a more aggressive posture on the trail. Last week he hit Obama on a variety of issues, from the economy to abortion to the Middle East.
10:48 During his speech to the Hispanic Chamber of Commerce today, Mitt Romney will pledge to fix America’s broken immigration system. It’s an appeal to a powerful and growing group of voters that heavily favors President Obama.
“Americans may disagree about how to fix our immigration system, but I think we can all agree that it is broken,” Romney will say. He will also slam the president for failing to put a reform plan in place during his first term in office, particularly the first two years in which Democrats controlled both houses of Congress.
Romney will strike at least a somewhat-bipartisan tone, vowing to work with Republicans and Democrats to “permanently fix” our immigration system. He will also stress that any plan must first ensure the integrity of U.S. borders.
Romney will also try to weave in a few economic arguments, saying that “While national unemployment is 8.1%, Hispanic unemployment is over 10%. Over two million more Hispanics are living in poverty today than the day President Obama took office.”
10:30 More bad news when it comes to manufacturing. A report released today by the New York Federal Reserve showed that factory activity in New York state declined for the second month in a row, falling to its lowest level in 3.5 years.
The general business conditions index fell to -10.41 from -5.85 in August. Economists had expected it to improve to -2. This is the lowest level since April 2009.
This survey is one of the earliest monthly guideposts to U.S. factor conditions, so this bad report could mean more negative numbers to come.
10:22 CNN’s Don Lemon is not happy with how Mitt Romney handled this whole Libya situation!
10:13 This Spanish-language ad by the Obama campaign really seems like it’s racially motivated. Here’s the English translation:
I’m Barack Obama and I approve this message.
My name is Nydia.
I’m an attorney and a “Boricua” (slang for Puerto Rican)
I want to talk to you about Supreme Court Justice Sonia Sotomayor.
When she was nominated by President Obama, we all celebrated—Puerto Ricans and all Hispanics.
But Mitt Romney was opposed to Sotomayor.
He offended me when he stated he would have voted against her nomination.
… and now he wants our vote for President?
Mr. Romney, the time has come to pay the bill
There is no policy argument here at all. The message is basically that Latinos should punish Mitt Romney for not supporting a Latina nominee for the Supreme Court. Forget that the nominee in question has a different philosophical and governing outlook than Romney—the important thing is that she’s the same ethnicity as you!
Pretty shameful, particularly for a party that’s constantly talking about openness and tolerance.
9:55 The Cleveland Plain Dealer reports that today, the White House will demand through the WTO that China stop subsidizing auto parts made for export. The administration will argue that the practice undercuts American manufacturers and encourages U.S. companies to outsource jobs.
Of course, the president is travelling to Ohio today, where such a move is likely to be greeted warmly by auto workers and union leaders. According to the White House, the auto industry accounts for 12.4% of Ohio’s employment.
The decision could also be viewed as an attempt to blunt one of Mitt Romney’s main criticisms, of the president, namely that he is weak on trade, particularly with China.
9:40 The National republican Congressional Committee has released new attack ads in 8 districts across the country. Each of the ads are linked to taxes and jobs, and most of them also repeat the GOP attack that President Obama cut $716 billion from Medicare to pay for Obamacare.
I’m including the ad running in NY-21, but the others are quite similar and can be viewed here.
These ads signal that the GOP is still ready to do battle on Medicare and that they view the Democrats as vulnerable on the issue. The Democrats, of course, believe that the Republicans are vulnerable on Medicare because of Paul Ryan and his controversial reform plan, so it should be very interesting to find out which party is right.
9:22 President Obama is in Ohio today for a 12:25 speech at Eden Park. Then he flies to Columbus for a speech and closed-press campaign event at Schiller Park. He returns to the White House at 8:05.
Mitt Romney is giving a 12:15 PT speech to the U.S. Hispanic Chamber of Commerce in Los Angeles, California.
Joe Biden has a 3:15 CT rally in the Port of Burlington, Iowa.
Paul Ryan has a 3:30 CT rally in Des Moines, Iowa.
Michelle Obama is in Florida for a 3:30 rally in Gainesville and a 6:35 rally in Tallahassee.
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