Real Economic Stimulus

As the debate continues concerning how to spur the economy as we likely enter a recession, I have a suggestion. Stop filling the SPR.

What is the SPR you might ask and why should I care. The SPR stands for Strategic Petroleum Reserve. It was created in 1976 in response to the oil crisis of the early 70's. It primarily was put in place to address the threat to our imported oil in the event of war with the Soviet Union. I have learned that we now have nearly 700 million barrels of oil in salt domes in Texas and Louisiana. There is enough there to replace 80% of OPEC imports for over 5 months. The largest draw down on the reserve was 17 million barrels in 1991 during Desert Storm.

Currently DoE is still buying oil with 9 million barrels purchased in the last 6 months on the open market and added to the SPR. They bought 682,000 barrels in a recent week with prices over $100 per barrel.

One very useful and dramatic assistance to our economy would be to stop buying oil off the open market and allow that to be added to domestic supply thus taking pressure off prices. While the argument can certainly be made to actually be a net seller of SPR oil at least we can agree that enough is enough. Stop filing it!!

Hager for Chairman

Today I got a slick mailing from Jeff Frederick--the Northern Virginia Delegate who is running for State GOP Chairman. Boy, this looks just like a campaign piece. And they are expensive! He must be raising some decent money.

I haven't really weighed in on this race or given it much thought, but here goes. We've had 3 Chairman in the last 2.5 years. I bet most Republicans haven't a clue who they were. I myself had to think a minute. No one can argue this is good for the party. I think it shows how weak the party has become. I've always liked John Hager and he seems to be doing a good job. He inherited a tough situation and deserves a full two year term to turn things around.

John has participated at all levels of this party. He came up from the local level. He was our Lt Governor. He's run several Statewide campaigns. He's good at raising money and he's been around long enough to know everyone. We need some stability in this party. Now is not the time to change horses again. And I don't think Frederick is the right horse regardless. Vote for Hager.

Rasoul a Closet Republican?

There are some rumors floating around here in Roanoke that Sam Rasoul, who is running for the Democratic nomination to challenge Congressman Bob Goodlatte, is actually a Republican. Apparently Sam's thinking is that he is young and wants to make a name for himself and running as a Democrat is the most convenient way to make a splash.

Drew Richardson of Augusta County is also vying for the Democrat nomination. Conventional wisdom suggests that a candidate from the Roanoke area would have the advantage. But if a rumor like this picks up some momentum, Rasoul could have a much more difficult fight on his hands. No candidate in a nomination fight wants to have to defend his party allegiance. This race hasn't drawn much attention as of yet, but a contentious and divisive nomination fight would of course benefit Republican Bob Goodlatte.

Revenue or Profit?

There seems to be some confusion over whether Everquest Financial has $100 million in revenue or profit.

Here is the quote from the official Press Release I received from the Gilmore campaign:

"5. As a result of sound management, Everquest is thriving and has earned $100 million in revenue for its shareholders."

Taking a look at the Gilmore website, it looks like the campaign has changed the language:

"5. As a result of sound management, Everquest is thriving and has earned a $100 million profit for its shareholders."

There is a big difference between "revenue" and "profit". It looks like the Gilmore campaign doesn't know the difference. They should.

So, lets say Everquest "earned" a $100 million in profit. This leads to several questions. Where is the evidence to support this figure? Surely the campaign didn't just make it up. What was the time frame in which this money was made? What is the current financial position of the company? In the face of Bear Sterns' collapse and the meltdown of the subprime mortgage market, is Everquest still making money?

In the end, it still comes down to the fact that this deal stinks. Bear Sterns wanted to unload bad investments to those that would buy shares of Everquest in the IPO. Fortunately, the IPO was called off.

Gilmore should have come clean in the beginning and washed his hands of this. Instead, he chose to defend Everquest. I hope Jim is ready to keep defending himself....Mark Warner is going to have a field day.

Gilmore and BS

First off, let me say that I have no personal grudge against Jim Gilmore. I happen to like his campaign manager Dick Leggitt. Dick ran the media in my 1995 race.

I do however have some significant concerns about Gilmore’s record and his viability as our Party’s nominee for the US Senate. A few of my readers have left some pretty spiteful comments after reading my post from last week. We are vetting a candidate and I am just participating in that process. And I see no reason to back off.

The press release issued by Gilmore to defend himself was pathetic.

1) Everquest was not a subsidiary of Bear Sterns - True. But it was 60% owned by Bear Sterns.
2) Everquest doesn’t market securities - Everquest was created to move bad investment CDOs off of Bear Sterns’ balance sheet and on to the new company, Everquest. Stock would then be sold in Everquest. When the investments went bad, it would be Everquest shareholders, not Bearn Sterns that would suffer the consequences.
3) Primary Everquest holdings were sound corporate loans – Not so. The holdings were sub prime mortgages that were a high risk of default going into 2008.
4) Everquest is not a hedge fund – True. Everquest was created to take on the risky debt of hedge funds controlled by Bear Sterns.
5) Everquest is thriving – It’s a not a publicly traded company so we have no way of knowing how well it’s doing.

Points 6-8 are political in nature and were responses made to a political reporter. They have nothing to do with this issue.

Barclay’s filed a civil suit against Everquest in December 2007. SEC investigations are sure to follow and heads will role.

Again, the question is why would Jim Gilmore be involved in something like this? I think it’s because this was an easy, non-time consuming job. We can assume he would receive a significant salary as Chairman, but he’s not running day to day operations.

And Jim has done this before. He took a job at a Richmond law firm when he was running for Governor in 1997, knowing he wouldn’t have to actually “work” for the firm.

Proud Dawg

My Mississippi State Bulldogs weren't able to get past the athleticism of #1 Seed Memphis today. I felt they would match up well and did. It was one upset in my bracket I was really cheering for. They played with heart and never quit. Tough loss but I am very proud of those dawgs.

My NLS group brackets are all blown after the first two rounds. I went for a few 12-5 and 10-7 upsets and while there were several of those they just weren't the ones I picked. Anyway it was fun just the same. I still feel my overall pick of North Carolina will prevail.

Gilmore and Bear Sterns

The AP recently carried a story tying US Senate Candidate and Former Governor Jim Gilmore to a failed Bear Sterns subsidiary. You’ll remember that Bearn Sterns was the multi-billion dollar investment bank that recently collapsed due to risky sub prime mortgage investments. According to the AP, Gilmore was the Chairman of a subsidiary called Everquest Financial. In doing some basic research, it became clear to me that Everquest was nothing more than a scam to move these risky investments off of Bear Sterns balance sheet and thus reduce their exposure. But, when their true intentions became clear, investors was forced to call off the Everquest IPO.

My first question is why on earth would Jim Gilmore, who as an attorney would have no financial market experience that I am aware of, be chairing something of this nature? I suppose even former Governors need to earn a paycheck. Clearly his leadership was a bit lacking. I read the statement by Gilmore campaign manager Dick Leggitt, defending Gilmore’s role in the subsidiary. Dick seems to know even less about the financial markets than his boss. The entire deal stinks and no amount of cologne will prevent people from smelling it on Gilmore. Is this who we want as our Republican candidate for the US Senate?

I have heard a lot of people say that Mark Warner will deliver Virginia to the Democrat Presidential nominee. As much as Warner would like to do this, I doubt he will be able to. With Gilmore’s negatives as high as they are, I feel certain that the Independent vote will flock to Warner and likely to the Democrat nominee for President. If Jim Gilmore is our nominee, he, not Mark Warner, will be able to claim the distinction of handing Virginia to Clinton or Obama and maybe even the Presidency itself. So after mismanaging our State finances and fracturing the Republican Party over the car tax, Gilmore is set to turn this red state blue. The Democrats may end up loving Gilmore after all.

http://www.wdbj7.com/Global/story.asp?s=8037562

The Botetourt Power Grab

The Botetourt based power grab that started with Senator Brandon Bell’s ouster in a party primary now continues with former County Chairman Jim Crosby looking to unseat Fred Anderson as 6th District Chairman.

This move isn’t about Fred. Just as the primary wasn’t about Brandon’s voting record—which explains why no one ever really talked about it. They just said Brandon wasn’t “conservative” enough. The Primary and this challenge to Fred are both about Jim Crosby and his cronies’ desire to consolidate and control power within the Party. Don’t be fooled with talk of rebuilding and growth. Jim might be able to say he cares about expanding and growing our Party—but he can’t do it with a straight face. These folks are in the business of purging the Party of those they don’t agree with. The smaller the Party gets, the more power individuals like Jim will wield.

So how does one go about discrediting and defeating a Party stalwart like Fred Anderson? It’s simple. You lie. The whisper campaign has already started that Fred Anderson isn’t a “true conservative”. If you can’t beat your opponent by talking about issues and facts, you just make stuff up. It’s politics at its worst and no one does it better than Jim Crosby.

Does anyone really believe that Fred Anderson is not a dedicated, conservative member of our party? I would laugh the whole thing off if I hadn’t seen this very strategy work in the past. I’ve known Fred for a long time and I know what kind of leader he is. Fred is not a divisive leader. He is a consensus builder. Fred Anderson is an honest man and is dedicated to the success of the Republican Party and our candidates. He is the kind of leader we need in the 6th District right now. I wish I could say the same about Jim Crosby.

Roanoke Times Reports Budget Deal

Budget impasse ends; assembly to adjourn Thursday

By Michael Sluss, The Roanoke Times

RICHMOND – General Assembly negotiators reached a handshake deal on a new state budget this afternoon after protracted talks that dragged the legislature into overtime.
The Senate and House of Delegates will convene Thursday to vote on the compromise and adjourn a session had been scheduled to end on Saturday.
Negotiators from the two chambers spent Tuesday and part of Wednesday haggling over finer points of a two-year, $77 billion spending plan. The compromise contains funding for two local items that had been on the chopping block in the latter stages of the negotiations – the drug treatment court in the judicial district that covers Roanoke, Roanoke County and Salem, and the Western Virginia Regional Jail in Roanoke County.
House negotiators initially balked at funding drug court programs, and Senate negotiators had wanted to delay the 2009 opening of the regional jail that will serve Roanoke, Franklin and Montgomery counties and the city of Salem.

Another Year, Another Extended Session.

It’s that time of year again. Instead of coming home on time, the General Assembly is going into over time to get a budget passed. I remember those days well. Everyone is ready to get back home to their families and their normal lives. The last place you want to be is stuck in Richmond during a budget impasse. Not my fondest memories of being a legislator.

Extended Sessions are hard on legislators and unacceptable to the people of this State. Our citizens deserve better. They deserve an elected body that can work efficiently and get things done.

I believe it’s safe to say that our current budget process has some serious flaws. But we can fix it.

Our biennial budget is currently adpoted in even years. Odd year Sessions are used to amend the current budget and last 30 days with a 15 day extension. The original intent was for odd year Sessions to consider only carry over bills from the previous Session. Now bills can be introduced in either year.

Even year Sessions are 60 days to allow additional time to pass the budget. In this system, a Governor only really gets to introduce and fight for one budget that belongs to him. This was Kaine’s year to do just that. A Governor takes office in an even year, so he inherits the budget of the preceding Governor. He then leaves office in an even year, so he has to introduce a budget that he cannot advocate for. That’s the next Governor’s job. I don’t think this makes any sense.

Move the budget writing to the odd years. This would give the Governor an opportunity to introduce and advocate for two budgets, not just one. The odd year budget Sessions should be lengthened to 75 days. Regular even year Sessions would remain at 60 days. The extra 15 days in the even years should be used exclusively for budget negotiations.

Legislators would vote on the budget on the 60th day of the Session and then recess. Assuming the House and Senate pass different versions, this would also be the day in which conferees would be named. At 67 days, conferees must have a compromise report ready. If not, new conferees would be required to be named to iron out the differences.

If a budget is not passed by the 75th day, the legislature adjourns and the State continues operating under the previous budget’s spending guidelines. If less money is available, spending is reduced on a pro rata basis. If a surplus is created, that money is deposited in the rainy day fund. It cannot be spent.

Should a budget compromise not be reached in 75 days, legislators would forgo all salaries, benefits and reimbursements for the next fiscal year. They would also lose staff and office expense accounts. Many Senators and Delegates can survive without pay. Most cannot survive without their staffs.

Hopefully this system would create enough incentive to finish the budget in a timely manner. Regardless of the approach, we need reform. Right now it is not clear in our Constitution what would happen if we simply don’t have a budget. Lets fix it before we find out.

Interesting Analysis of the Bolling-McDonnell Match in 2009

http://www.washingtonpost.com/wp-dyn/content/article/2008/03/04/AR2008030402911_pf.html

Hillary's Big Win

First off, congrats to John McCain. I am glad we've got a nominee and that McCain can now start his general election campaign. He's got a lot of work to do and will need as much time as he can get.

I had a feeling yesterday that Hillary would win. I thought it would be close, but I felt like she would pull it off. She did and she's back in the race. This is not just a big win for Clinton, it's huge. Obama had won 11 straight contests. He had pulled ahead in the Delegate count and in national polls. The Democratic establishment was moving his way and there were calls for Hillary to drop out of the race. The fact the Hillary, facing those odds, could win in Ohio and Texas is astounding to me. The question is why.

I believe she finally found a message that resonated. And her hits on Obama finally did some damage. It wasn't the starry eyed college kids that gave her the victories. They are still with Obama. So were the liberal elite. It was the core Democrat base, the traditional working class Democrats, that put her over the top. Her new found populist message resonated with these folks. She was able to convince them that experience matters and Obama doesn't have enough of it.

There is no question that this race is far from over and Obama may win in the end. But Hillary has slowed down his momentum and picked a bit of it up herself. Now it's on to Pennsylvania.

How high will oil go before US takes action in Anwar?

Can someone please tell me why we are not drilling in Anwar, Alaska? Oil just hit $103.95 a barrel yesterday. And OPEC announced today they don’t see any need to increase production, which would lower costs. That hurts everyone. But it hurts the lower middle class and poor the worse. But our politicians, especially Democrats out of fear of the extreme environmentalists, continue to argue that Anwar is off limits. Even our presumptive Republican nominee John McCain made comments about the pristine setting. You have got to be kidding.

I doubt the average Joe is too concerned about the “pristine setting”. This illustrates the disconnect between the voters and our elected leaders in Washington. The first is worried about having enough money to fill up his gas tank to get to work. The latter is worried about the “pristine setting”. Voters have a way of refocusing priorities.

Look, I am not anti-environment. There is no question that we need a long-term clean energy development plan. We’ve got the technology to extract this oil with minimal disturbance to the surroundings. We should do it.

These high oil prices are contributing to our ailing economy. And as oil gets higher, it will be harder for us to get out of this mess. Not to mention the fact that when we buy oil from the Middle East, we are funding the other side of the War on Terror. It’s crazy!
Local, State and Federal representatives in Alaska want the drilling. The local residents want the drilling. Only a small area will be used and it will have a dramatic impact on the local economy. Lets get the oil in an environmentally friendly way and be on our way towards energy independence. It’s time.