Suitably Flip

Nanny State Year In Review

Michelle Malkin:

It was a nefarious year for nettlesome busybodies employed by the Nanny State. Here are the top power-grabbers of 2010 — those who just can’t leave us alone...

Federalist vs. National: Mitt Settles On a Nuanced Defense Of RomneyCare

He has a point, though I'm not convinced it creates the daylight he needs between himself and the enduringly unpopular ObamaCare.

(HT: Hot Air Headlines)

Americans Still Pinching Their Haypennies

A double dose of lackluster economic news this morning, as growth in monthly personal spending dropped from 0.7% to 0.4% in November (vs. expectations of 0.5%) and durable goods orders not only dwindled, but dwindled faster than expected (-1.3% vs. expectations of -0.6%), though not as hemorrhagically as in October.  Transportation orders were the primary drag on the number.

Initial jobless claims were nearly unchanged at 420,000, holding slightly less crummy than 2010's typical range of 425-475k, but still north of breakeven.

Stocks opened split and shaky on the news.

White House Admits Fib About DNI Clapper Being Oblivious To London Terror Arrests

Someone tried to trade trustworthiness for competence, and with this reversal, betrayed a lack of both.

Fox News Live 11-12

I'll be on Fox News Live (fka Strategy Room) this morning from 11-12.

On the docket:

• Democrats Push Ahead on Russia Arms Treaty
• Gays see repeal as a civil rights milestone
• DREAM Act Goes Down in Flames in Senate

You can stream the show (and join the live chat) here.

And now, if you miss part (or all) of it live, you can still watch the show in its entirety at FoxNews.com for up to 24 hours after it airs.

Update:  On the tape, our hour runs from 2:25:00 until about 3:15:00

Posterity Bonus:  KT MacFarland, who hosted the hour, has archived the whole show.

How About a Triple Dip?

Been admiring those gradually improving economic indicators these last few weeks?  Feeling like things might actually be starting to turn the corner?

David Leonhardt is here to bum you out.

But before getting too excited about these trends, let’s think back to the early part of this year. Back then, initial jobless claims were falling. Housing starts and the issuance of building permits were rising. A Federal Reserve index of manufacturing activity was rising too.

And then what happened? The recovery stopped. Some people blame the debt crisis in Europe (which, of course, has not ended). Others think we’ll never know exactly what stopped the recovery, because the aftermath of a financial crisis tends to be difficult.

That last point is important. Yes, the latest data has been good. But the economy remains both weak and vulnerable. The notion that a couple of weeks of decent news should cause the Fed to proclaim victory and halt its campaign to lift growth — a notion you’re starting to hear — seems misplaced.
...
[T]he recovery remains nascent and vulnerable. Any number of factors — Ireland, Spain, a post-holiday consumer pullback in the United States — could cause problems. Given all this, the Fed would seem to be taking a bigger risk by ending QE2 than by continuing.

Put it this way: When the last monthly jobs report showed a gain of only 39,000 jobs, far less than needed to keep up with population growth, economic weakness still appears to be the main reason for concern.

Tax Deal Resurrection

Passed in the House (without the amendment that would've furthered hiked the death tax), 277-148.  Possibly the most bipartisan (or at least the most complexly partisan) significant vote of the last few Congresses, with 139 Democrats and 138 Republicans voting yes (55% and 77% of the respective caucuses).

Stock futures didn't really care, but stood pat near the fresh 2-year-highs they've been setting since the compromise was first struck.

Another Nail In the Tax Deal Coffin?

This thing feels like it's crumbling.

Via Michelle Malkin, the Democrats have pulled the rule that would have allowed the debate on the tax deal.

RT @jamiedupree: URGENT URGENT URGENT - House Democrats just pulled the rule off the floor for the tax deal - must be short on votes

They've moved onto a list of mundane bills that they are simply postponing final action on. It's just time filler at this point.

Death Tax = Death Knell For Tax Deal?

Apparently a 35% levy against money that's already been taxed (or, in the case of dividend income, double taxed) isn't enough for some House members.

The Senate on Wednesday approved a sweeping tax package negotiated by the White House and congressional Republicans, and House leaders - who were looking to amend the measure in a way that would satisfy liberals without unraveling the deal altogether - said a House vote could follow as soon as Wednesday evening.

The Senate passed the package by a vote of 81 to 19.
...
After meeting for two hours with rank-and-file lawmakers late Tuesday, senior Democrats said the House is likely to stage votes to change the terms of a revived estate tax that many Democrats view as overly generous to the wealthy.

Outraged by the agreement to exempt individual estates worth as much as $5 million from taxation, senior Democrats said they would press to lower the threshold to $3.5 million. They also want to impose a stiffer tax on larger estates, by setting the rate at 45 percent rather than the 35 percent demanded by Republicans and agreed to by Obama.

(HT:  HA Headlines)

Video: Me On FoxNews.com Circa Yesterday

In case you missed it, here's a clip from yesterday's show, wherein we chat about the tax cut compromise winding its way through Congress.

ObamaCare Ruled Unconstitutional In Federal Court

Thus we pass the Virginia waypoint en route to the Supreme Court.

CNN has a breaking alert on a ruling by a federal judge in Virginia that rejects ObamaCare as unconstitutional:

A federal judge in Virginia has ruled parts of the sweeping health care reform effort led by President Obama to be unconstitutional. This is the first federal court to strike down the law, contradicting other recent rulings the law was permissible. The key issue of contention was the “individual mandate” requirement that most Americans purchase health insurance by 2014.

Seems like a no-brainer that choosing not to engage in a commercial transaction cannot itself be construed as an act of commerce.  But then, few are accusing ObamaCare of being excessively brainy.

Fox News Live 11-12

I'll be on Fox News Live (fka Strategy Room) this morning from 11-12.

On the docket:

• Tax cut deal up for vote in Senate; what happens next
• Clinton subs for Obama
• McClatchy poll favors Romney over Obama in 2012

You can stream the show (and join the live chat) here.

Apt Epithet Of the Day

To Ace, for his alarmingly fitting description of the Berkeley City Council, as they make a big show of contemplating publicly honoring military intel-sieve Bradley Manning.

Good Point, NYT, the Bush Tax Cuts Do Shift the Tax Burden To Upper Income Brackets

Yesterday, The New York Times solemnly pulled its violin from its case and reported that the benefits of extending the Bush tax cuts, while shared by nearly all taxpayers...

...will flow most heavily to the highest earners, just as the original cuts did when they were passed in 2001 and 2003. At least a quarter of the tax savings will go to the wealthiest 1 percent of the population.

What the Times left out was the fact that the top-earning 1% currently pays more than 38% of all income taxes.

Had the tax cuts expired, the seethingly evil top 1% would've pitched in just $0.25 of every new tax dollar (per the Times' analysis), ratcheting down their 38% share.  While taxes would've gone up for everyone, the relative burden on the wealthiest would've eased.

The "savings," then (a creative choice of words, given that we're talking about maintaining the status quo), are indeed disproportionately shared by the highest earners.  But not nearly as disproportionately as they share in the existing tax burden.

While it's undeniably true, the paper obviously doesn't mean to make the point that extending the tax cuts results in a more steeply graduated tax rate.  But maybe Obama should, if he really wants to sell the deal to his own incensed party.

With a Heavy Heart, Obama Concedes To Policy Measure That Sends Stocks To 15-Month High

Stocks raced out of the gate this morning, on news of a tentative deal to extend the Bush tax cuts, with the S&P 500 jumping to its highest level since September 2008 (the Dow Jones Industrial Average came within a point of a similar record).  The Nasdaq hit its highest level since 2007.

Slim consolation for the crestfallen President.

"I have no doubt that everyone will find something in this compromise that they don't like," Obama said. " In fact, there are things in here that I don't like -- namely the extension of the tax cuts for the wealthiest Americans and the wealthiest estates. But these tax cuts will expire in two years."

Fox News Live 11-12

I'll be on Fox News Live (fka Strategy Room) today from 11-12.

On the docket:

• Deal on tax cuts in the works
• Obama's leadership under scrutiny from the left
• PayPal dumps Wikileaks

You can stream the show (and join the live chat) here.

Extra Jobless Friday

Oy.

The unemployment rate edged up to 9.8 percent in November, and nonfarm payroll employment was little changed (+39,000), the U.S. Bureau of Labor Statistics reported today.

Somewhere in the White House, a balled-up draft of a speech is hitting the bottom of a trash can.

Economists expected the rate to tick up only to 9.7% and for payrolls to grow by 130,000.  Plus, as I noted yesterday, ADP's robust private payroll report hinted at an upside surprise, not a 91,000 downside whiff.

Unfortunately, we can't write off the miserable data as noise in the public sector, either.  Private payroll growth shrank from October's 160,000 to just 50,000 in November (versus expectations of 140,000), about half the number needed just to keep up with population growth.

NASA Discovers Alien Undocumented Life In California

Speculators speculated that today's much ballyhooed "astrobiology finding" might have to do with primitive life being detected on a distant moon.

It didn't.

At their conference today, NASA scientist Felisa Wolfe Simon will announce that they have found a bacteria whose DNA is completely alien to what we know today. Instead of using phosphorus, the bacteria uses arsenic. All [sic] life on Earth is made of six components: carbon, hydrogen, nitrogen, oxygen, phosphorus and sulfur. Every being, from the smallest amoeba to the largest whale, share the same life stream. Our DNA blocks are all the same.

But not this one. This one is completely different. Discovered in the poisonous Mono Lake, California, this bacteria is made of arsenic, something that was thought to be completely impossible. While she and other scientists theorized that this could be possible, this is the first discovery.

Jobless Thursday

Initial unepmloyment claims popped back up last week, increasing 26,000 to 436,000 (beyond the 422,000 expected).  The less volatile 4-week average continued to fall, as the downward trend remains intact, despite the rebound.  If that trend can hold for another month or so (which, y'know, it can't), we'll actually see a halt in the deterioration of the labor market.

Not actual improvement, mind you (that would take a sustained deeper dive in unemployment claims), but genuine maintenance of the woeful status quo.

Initial Unemployment Claims (blue) and 4-week Average (red)

Yesterday's ADP report showed private sector payrolls growing faster than expected in November, so - despite the report's uneven predictive value - tomorrow's official monthly employment data may likewise outstrip expectations.

That said, expectations are for the unemployment rate to tick up to 9.7%, so the bar ain't high.