THE BAD NEWS: Sen. Chris Dodd (D-CT) is a great deal more vulnerable than one might have expected, less than two years before his 2010 re-election.
In February's Quinnipiac poll, Dodd's approval rating had dropped to 41 percent versus 48 percent who disapproved. Largely, this drop stemmed from revelations that Dodd had received sweetheart mortgage terms from Countrywide Financial. By a substantial 54 - 24 percent margin, Connecticut voters say they are not satisfied with Sen. Dodd's explanation of his mortgage deal and 51 percent say they are likely to consider voting for someone else.
Says Quinnipiac's pollster:
"Sen. Dodd is vulnerable. His approval has sunk to a new low. More voters disapprove than approve of the job he is doing for the first time in 15 years of polling," Schwartz said. "The mortgage controversy has taken a toll on his approval rating. Most voters are not satisfied with Dodd's explanation and say they are less likely to vote for him next year because of it."
THE GOOD NEWS: One of the leading Republican contenders considering a challenge to Dodd is conservative economist, CNBC host, and syndicated columnist Larry Kudlow.
Why is that good news?
Well, aside from former Sen. Phil Gramm (R-TX), there are few other economic types that have shown to be so disconnected from the recent economic realities than Kudlow. Despite his near-daily pontificating on CNBC and in his ubiquitous columns on Wall Street and the financial health of our country, Kudlow was one who was completely missed the boat on our current economic crisis which began in the fall of of 2007.
Since October 2007 -- a month before the recession began -- Kudlow ridiculed those who argued a recession was upon us, repeatedly asserted that the mortgage crisis was fully under control and nothing that Wall Street couldn't handle, agreed with Gramm that America is a "nation of whiners," and even went so far -- once he finally acknowledged recession was upon us -- to argue that "recessions are therapeutic." I kid you not.
So, I spent some time yesterday and today going through Kudlow's archives to lay-out an assortment of his pronouncements and predictions since about that time when our economy began to deteriorate. What you'll find is someone as out-of-touch as Phil Gramm but who gets paid by CNBC to offer his economic opinion on pretty much a daily basis.
Chris Dodd must be praying that Larry Kudlow is his 2010 general election opponent. I strongly suspect that left-leaning Connecticut voters -- many of whom work on Wall Street or in the state's significant insurance industry -- will surely not send to Washington someone so incredibly off-the-mark on the most important issue now facing them -- the American economy.
Here is a sample of Larry Kudlow's economic wisdom over the past 18 months:
The recession forecast is all but wiped out as the Dow hovers around 14,000, having engineered an impressive comeback from the August credit crunch valley.
Some will argue that the stock market is not a good economic predictor. And while there are always exceptions to the rule, over time stocks do have a good track record of predicting the economy.
Housing woes will take a percent off GDP for the next several quarters, leaving about 2 percent growth and 2 percent inflation. It is the quintessential Goldilocks soft landing scenario.
...A 2008 recession would have been devastating for the Republicans. Now, as Goldilocks moves ahead, they have a fresh, new opening to relaunch their fiscal message and make the case to the investor class and the rest of the voting public that they [GOP] can be trusted stewards of lasting growth and prosperity.
It's quite simple actually. If you want to fatten your wallet, and if you want to sleep better at night, then you need to own a piece of the American rock. Own it for the long run. Our dynamic system of free market capitalism works. It's still the safest, surest, most profitable investment strategy out there.
If things are so bad, why are they so good?
With all the gloom coming out of Wall Street, the Democrats on the campaign trail, and the mainstream media, a remarkable thing just happened: Real gross domestic product, the best summary report of the American economy, came in at a breathtaking 3.9 percent annual rate for the third quarter. In fact, following the 3.8 percent growth rate for the second quarter, the U.S. economy has posted its strongest quarterly growth in four years. The economy actually appears to be speeding up, following the relatively sluggish performance of the prior 18 months.
...But listening to the Democratic presidential debate on Tuesday, you'd think it was 1929 all over again. The litany of scare-talk complaints includes China trade unfairness, globalization, immigration, income inequality, stagnant wages, a shrinking middle class, the sinking dollar, and high oil prices.
Yes, there is home deflation on Main Street and loan deflation on Wall Street. It will continue. But what about the rest of the story? When you listen to the hedge-fund short-sellers and the liberal politicians as they attempt to discredit the Bush economic boom, you could almost fall for their bear-market seduction. But the seductress turns out to be an economic harlot -- not a beautiful woman.
The true message of the strong economy is that we're virtually guaranteed of a Goldilocks soft landing or better -- and certainly not a recession.
I think the election-year economy will be stronger than the Fed's estimate -- closer to 3 percent. Too much is being made of both the sub-prime credit problem and the housing downturn. A recent Bank of England study shows that residential mortgage-backed securities in the U.S. total $5.8 trillion. Of that, only $700 billion, or 12 percent, are sub-prime. Even when you add in $600 billion of so-called Alt-A mortgage paper, most of which will not default, the total of these home loans is still less than 20 percent of all mortgage-backed paper.
What's more, the entire market in sub-prime debt is just 1.4 percent of the global equity markets. On any given day, a 1.4 percent drop in world stocks would erase the same amount of value as the collective markdown of all sub-prime-backed bonds to $0. It's just not that big a deal.
The recession debate is over. It's not gonna happen. Time to move on.
At a bare minimum, we are looking at Goldilocks 2.0. (And that's a minimum). The Bush boom is alive and well. It's finishing up its sixth splendid year with many more years to come.
[E]ven if Wall Street takes $200-300 billion in mortgage losses, as a result of loan markdowns, profitability is more than adequate to stem the tide and hold us.
There ain’t no recession.
There is no recession. Despite all the doom and gloom from the economic pessimistas, the resilient U.S economy continues moving ahead 'quarter after quarter, year after year' defying dire forecasts and delivering positive growth. In fact, we are about to enter the seventh consecutive year of the Bush boom.
...There's no recession coming. The pessimistas were wrong. It's not going to happen. At a bare minimum, we are looking at Goldilocks 2.0. (And that's a minimum). Goldilocks is alive and well. The Bush boom is alive and well. It's finishing up its sixth consecutive year with more to come. Yes, it's still the greatest story never told.
Following last week's solid jobs report, the New York Times got back to its Bush-bashing recession mantra with the front-page headline: "Slowing Growth and Jobs Seen as Ominous Sign for the Economy."
This chant has been going on for quite some time. Doom and gloom from the economic pessimists has been political sport for seven years, even though the Bush boom just celebrated its sixth anniversary. The current expansion is now in its 74th month -- 17 months longer than the average 57-month business cycle since World War II.
This sort of fiscal and monetary coordination will continue the Bush boom for years to come. Though mainstream media outlets will never admit it, President Bush has kept America safe and prosperous. But history will eventually judge him in a more kindly light.
[B]anks are taking significant steps to repair their balance sheets. Even though some people might not be happy with the speed, the reality is things are improving.
At home, the economy is not nearly as weak as the Wall Street bears would have us believe. After-inflation income is rising rapidly. Family wealth is at an all-time high. Bank balance sheets are being repaired and corporate cash flows are unusually high.
I'm going to bet that the economy will be rebounding sometime this summer, if not sooner. We are in a slow patch. That's all. It's nothing to get up in arms about.
The greatest threat facing this country is not subprime, marginal tax rates, stimulus packages, etc. It's our safety.
Watching the venerable old firm pawned off to JPMorgan Chase for a couple hundred million bucks -- basically a bag of peanuts -- is painful to me. The building itself is worth at least $1.5 billion. And even though Bear made big mistakes with sub-prime hedge funds, the firm is chock full of talent and brainpower. Down through the years, the smart people at Bear were able to avoid numerous financial difficulties while helping the firm stay profitable. Bear alumni are scattered everywhere, as successful investment bankers, broker-dealers, and financial advisors.
Here’s what’s going on right now: The more the American public sees and hears Hillary and Obama, the more voters are moving to McCain. Democrats and independents are shifting to McCain in droves. McCain commands a strong lead over Hill-Bama in the national match-ups. And his favorables are rising while his unfavorables are falling. It’s just the opposite with Hill-Bama: Unfavorables are up, favorables are down.
...From my perch, we don’t look far from the point where John McCain establishes a commanding lead in the run-up to November.
And let's also remember that recessions are therapeutic. They're even necessary to create the foundations for the next recovery. Economic excesses always occur in free-market capitalist economies, and from time to time they must be cleansed. Just think about the excessive risk-speculation, leverage, and housing prices of the current episode. If anything, recessions make for clean starts.
Kudlow: I’ve been talking sir, a little bit, just in recent days and weeks, this funny story, I’m calling it the new socialism. Nobody can fail in America. If something fails, then government’s gonna come in and bail them out. Now the latest of course is Fannie and Freddie. There’s a huge housing bailout bill out there. Who knows? Maybe we may [bail out] the airlines, the automobile companies, I don’t know. You know, Phil Gramm may have had a point. We are a nation of whiners.
Media reports painted a pessimistic picture of today’s release on existing home sales, which fell 15 percent from a year ago and recorded higher inventories. But inside the report was an awful lot of very good new news, which appear to be pointing to a bottom in the housing problem; in fact, maybe the tiniest beginnings of a recovery.
...It’s a pity the mainstream media keeps searching for more and more pessimism. The reality is a possible upturn in the housing trend, and at the very least we are getting a bottom. Stocks sold off 165 points largely on media reports of terrible home sales and prices. But I am hoping the market comes to its senses and realizes the data are a whole lot better.
Mark Nickolas is the Managing Editor of Political Base, and this story was from his original post, "CT-SEN: Larry Kudlow Mulls Senate Run Despite Record Of Disastrous Economic Predictions."
Follow Mark Nickolas on Twitter: www.twitter.com/mnickolas
We are witnessing, right before our very eyes, the self-immolation of a political party of a magnitude never before witnessed in modern times, in my opinion. Not even the disarray the Democrats experienced, after Lyndon Johnson, can really compare. Ideological intransigence is key to the Rethuglican problem. Until, and unless, they address this very large elephant in their room, the hole they find themselves in will only get deeper and wider. They haven't stopped digging yet.
I could accept some sort of parity between the parties, provided the Republican Party can find it within themselves to submit to a constructive platform. Anything short of that, they deserve what they will get; Total Irrelevancy. Opposition for it's own sake is not trans-formative, unless the transformation that they are seeking is insignificance.
Keep talking, you who have all the answers but none of the power or the responsibility. You know who you are. You, who show up on TV screens and radio programs to crow, parrot, and howl...keep it up. Continue your infantile tirades, your childish historical revisionism, and your immature memory lapses where it concerns how the present fare came to be served to a nation. Historical comeuppance is sublime to witness when it is served as an ice cold meal to the self-righteously hypocritical and the self-appointed masters of universes of bluster, bull crap, and warped ideology fostering shill-inspired news reporting. Make no mistake (this from a mere grain of sand like individual) Mr. Obama, President Barrack Hussein Obama was not the chef of or the waiter who prepared or served up...this unwholesome cuisine of sputtering, flaming, crispy, half-dead eagle under glass. He was nowhere near the kitchen when this foul bird was being stuffed and prepared for the American pecuniary palate. All the spin, revisionism, and feigned loss of short term and long term memory will never obfuscate that fact.
Cutting to the chase, I pose a rhetorical question or two. If the free-market needs no government intervention, if it is self-correcting, self-healing, and self-regulating, then why are the Obama fiscal policies of a little over one month, purported by free market advocates and apologists to be the catalyst of bringing the big bad market to its knees? Liars lie so much they actually convince themselves of their lies. Either the market is God or it isn’t, you cannot have it both ways. The market should just shrug off the “empty suit” or impotent policies of the hollow man president. He has no weight, virtue, judgment, or anything else a leader needs, so says the Limbaughvian Zealots. Another question surfaces (please do not bother to answer, rhetorical remember, I will have my moment and then I am gone like the wind.)
What does Mr. Kudlow, Mr. Santelli, Mr. Kramer, and Mr. and Mrs. “Everything Obama Does Is Wrong” suggest to resolve the confidence problem, the credit problem, the foreclosure problem, the bad assets on the books problem, the mark-to-market asset valuation issue? What is their plan for the unsustainable rising healthcare cost problem and the equally unsustainable failing schools problem? How about the crumbling infrastructure problem, should we wait another twenty years to address that issue or how about another thirty to address the energy issue? Gas is cheap now, therefore that problem is no longer pressing -- right?
These people sound like John McCain. According to his campaign rhetoric, he and only he could bring Osama Bin Laden to justice, and like great mythical men and women of old, he suggested he would rough ride all the way to the gates of hell to bring that outcome to fruition. Well, how do you do Senator McCain, welcome to Hell Airlines. Your plane is now boarding for departure to the gates of hell and beyond. Lock and load, strap it on, and go and take one or deliver justice for the team. We are all pulling for you...
If the market is so omnipotent how could it have let the much-maligned idiots, do-nothings, know-nothings, and ne'er-do-well’s of the sub-prime class take down the magnificent, intelligent, awesome and glorious free market? How could all of those genius minds have let uneducated people -- who do not or cannot read the fine print -- put the nation...the world even...in the economic trick bag? On one hand they say, I went to an Ivy League school, I am rich, I have seen the world, read the greatest novels, and blah, blah, blah... On the other hand all of that hyped intelligence could not forestall the deep wounding of the economy by uncouth, ignorant and dumb, lazy and slovenly, driftwood sort of people? Which is it, you are a towering genius or you are so stupid that the lowly dregs got over on you?
Enough! That is what the president said regarding the childish antics of the perennially skewed, corrupt, and tainted. Mr. Obama is no Messiah, genie-in-the-bottle, Merlin the wizard, or anything that is something other than a human being...just like the rest of us. I say enough as well, but I say it with a different meaning than President Obama because I am in a different place than where he resides concerning patience with long-witnessed and long-tolerated tilts of the financial, governing, and judicial mechanisms of this country towards the waiting arms of a privileged few. It is a testament to him that I was ever inspired enough to publicly comment at all on the obvious desire of some who really want to embrace failure. Some who want to test the speed limit on the road of historical comeuppance.
I am all for letting the free market be free. I am all for tax cuts to the max and nothing else from government. In short, I can live and die in peace with anarchy all around...with Darwinian social theory taken to its projected conclusion. Why? Because I know that the best laid plans of the Bell Curve, cephalic index, insular, privileged, its-all-about-me set, are plans that are on a collision course with the strong winds of karma inspired change. I know that the hour nears where smirks will be permanently wiped off the face of those who claim they know what is best, and yet, when you hear their view of what is best it never deviates or varies from a two-word proposal that begins with “tax” and ends with “cuts”. The free market is changing facial expressions as I write this. It is causing smug mugs of hypocrisy to morph into scowls and grimaces from the painful reality that a major shift in the balance of power is unfolding. This shift has nothing to do with wealth redistribution. It concerns a redistribution of pain. The poor already know pain and therefore, sharp declines and downturns barely register. Who knows more about dog-eat-dog, and only the strong survive than someone who has nothing? It is the pampered, spoiled, supposedly highbrow, group of individuals that are just now detecting the rooster crow of a brand new day -- cockle-doodle-doo MF!
Let the banks fail. Let those who cannot afford their homes lose them. Let the roads crumble. Let the children stay uneducated, and if their parents are irresponsible, let the children starve and die on the cold concrete. If a person who has gotten on in years takes ill and cannot afford a doctor, too bad, they should have been more successful in life such that they can afford insurance. What we need is massive sustained die-off and that will solve all problems (along with tax cuts). This is what the GOP is really saying, except they do not have the courage to actually say it -- the cowards! Well let me say it for them, let the real games begin! The GOP needs to remember one thing from this poorly written diatribe, and one thing only, the best laid plans seldom go as planned...or that meant for bad may not be visited upon the intended target as desired, but may blow up in the smug face of the unsuspecting planner of evil deeds. The Party of the few is just now starting to realize what happens when the few screw the many over decades. Blowback is a female dog.
Ahhhhhhhhhhhhhh, I feel better now!
Thanks as always HP. So long!
The dainty way in which Democrats defend themselves is infuriating at times. I watch as the GOP executes assault after assault that goes unanswered. I wait for someone to respond in kind. I am often left waiting. Sometimes, in order to deal with a rabid dog, you have to become one to bring the message home to the rabid...that being rabid is not exclusive to them. The Santelli rant, the Kudlow slant, the Limbaugh gaseous bombastic plastic and classic idiocy...all are samples of the rabid needing to see true foaming at that the mouth. I call it the mirror offensive, where you stoop to the same level to show the perpetrator what it feels like to confront a crazed dog with no fear, no worries, no desires, no needs, no wants and no mission in life (in the moment) except to bring the pain to those who want to wallow in the mire of that which does not elevate. I am dainty with those worthy of such. I was taking out the trash with the preceding comment, so I was bound to get down and dirty. It's interesting this blogging thing. When I write so-called positive thoughts there are people I offend. When I write so-called negative thoughts, there is another group I offend. There are others who are always offended, no matter what.
High regards beyond mere hope and wishes that life for you manifests in a nurturing and loving reality that endures
But as far as the will of the electorate, do I need to remind you who the OTHER Senator from CT is???
Let's not paint the CT voters as the bastions of good electoral sense just yet.....
Then, when you pull in single digits in the primary election, we'll be rid of you, hopefully once and for all.
Those who can, do.
Those who can't, bitch about those who can on CNBC.