The Communist Party’s Role in the Rise of Joseph McCarthy

Murder, she programmed.As a postscript to
this morning’s item
 about Joe McCarthy, here’s a fun
question for you: What role did the Communist Party play in
McCarthy’s rise to federal office?
No, I’m not talking about
some crazy Manchurian Candidate scenario—just the
accidental effects of the party’s activities in the 1946
election.

Before then, Wisconsin was represented in the Senate by Bob
LaFollette, Jr. The senator had been affiliated with the Progressive
Party
, a left-wing outfit, but in the mid-’40s the Progressives
merged with the GOP. (That sounds extremely weird today, I know.
But it was possible to be an overtly liberal Republican back then.)
After the merger, LaFollette lost to McCarthy in the Republicans’
1946 primary.

Why did McCarthy beat LaFollette? The main reason is that the
Democratic candidate, Howard McMurray, campaigned hard for the
state’s liberals to vote for him in the Dem primary (where he was
running unopposed) rather than for LaFollette in the contested
Republican race. He was fairly successful in this: Not every member
of the old Progressive Party was eager to follow LaFollette into
the GOP, and even if they wanted to support LaFollette there were
candidates for other offices that they could back only if they
voted in the Democratic race.

Organized labor in particular decided, for the most part, to
vote for McMurray rather than LaFollette. And among the forces
pushing the unions in that direction were the Wisconsin Communists,
who hated LaFollette—like many people on the non-Marxist left, he
was strongly anti-Communist. (McCarthy, meanwhile, had not yet
embraced the issue that would make him famous. He appeared at this
point to be member of the
moderate, internationalist wing
of the Republicans,
attacking
LaFollette for “voting in opposition to world
co-operation.”)

Did the Communist Party play the deciding role in LaFollette’s
loss? LaFollette himself thought so, but he was probably wrong:
Patrick Maney’s bio
Young Bob
makes a good case that other factors were
more important. But the Communists did play a role in
McCarthy’s win. If you’re a fan of juicy historical ironies, you
can add that to your file.

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Gene Healy on Obama’s Soon-To-Be Transparent Kill List

Good news: thanks
to a ruling
 by the 2nd U.S. Circuit Court of Appeals
Monday, the “most transparent administration in history” is going
to have to tell American citizens when it believes it’s legally
entitled to kill them. Gene Healy writes that in matters of
transparency, the Obama Team can always be counted on to do the
right thing—after exhausting all other legal options and being
forced into it by the federal courts.

View this article.

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“Welcome To The Recovery”… And Your Parents’ Home: Surge In Number Of Middle Age Californians Living With Their Parents

In the latest indication of just how strong the US “recovery” is, we find that the number of Californians 50 to 64 who live in their parents’ homes has surged in recent years, which as the LA Times less than sarcastically adds, reflects “the grim economic aftermath of the Great Recession.” Wait, don’t they mean the great recovery? Because isn’t the S&P just 10 points from its all time closing high? Maybe all those middle-age Californians are merely seeking their comfort (and spare bedrooms) of their parents so they can all use the family E-trade terminal together.

But since everyone knows the latest handout to the population by the administration is ObamaTrade in which everyone gets $100,000 to BTFATH, we know that is not the case, so surely the LA Times is joking.

Unfortunately, it isn’t.

Here are the details – “for seven years through 2012, the number of Californians aged 50 to 64 who live in their parents’ homes swelled 67.6% to about 194,000, according to the UCLA Center for Health Policy Research and the Insight Center for Community Economic Development. Many more young adults live with their parents than those in their 50s
and early 60s live with theirs. Among 18- to 29-year-olds, 1.6 million
Californians have taken up residence in their childhood bedrooms,
according to the data. Though that’s a 33% jump from 2006, the pace is half that of the 50 to 64 age group.

Here, once again, we run into the lack of that R(ecovery) word again:

The jump is almost exclusively the result of financial hardship caused by the recession rather than for other reasons, such as the need to care for aging parents, said Steven P. Wallace, a UCLA professor of public health who crunched the data.

 

The numbers are pretty amazing,” Wallace said. “It’s an age group that you normally think of as pretty financially stable. They’re mid-career. They may be thinking ahead toward retirement. They’ve got a nest egg going. And then all of a sudden you see this huge push back into their parents’ homes.”

Hmmm, if it’s not the recovery, maybe it was the snow in the winter? After all that explained all the bad economic data in the past 3-6 months. Surely the polar vortex is the reason for all this renewed family circle “warmth?”

The surge in middle-aged people moving in with parents reflects the grim economic reality that has taken hold in the aftermath of the Great Recession.

 

Long-term unemployment is especially acute for older people. The number of Americans 55 and older who have been out of work for a year or more was 617,000 at the end of December, a fivefold jump from the end of 2007 when the recession hit, according to the Bureau of Labor Statistics.

 

As with Rohr, those in their 50s move in only as a last resort. Many have exhausted savings. Some have jobs but can’t shoulder soaring rents in areas such as Los Angeles or San Francisco.

 

Whatever the cause, moving in with Mom and Dad exacts a bruising emotional toll. Even asking to move the family in was difficult for Rohr.

Maybe not. Actually, in retrospect, maybe there was no recovery at all. Maybe the Second Great Depression – when one ignores the HFT-rigged and Fed-manipulated market hitting daily all time highs – has just been getting worse and worse.

“I said ‘Mom, I’m so sorry but I don’t know what to do,‘” she said. “I dreaded it. If it wasn’t for my boys I wouldn’t have done it. I would have lived in my car.”

 

Jenny Chung Mejia knows how tough it can be. As a public policy consultant at the Insight Center for Community Economic Development in Los Angeles, she helps people and communities regain their economic health.

 

“It’s unexpected vulnerability at this point in your life,” she said. “When you’re supposed to be the provider, sort of the rock for yourself and your family and maybe your parents, the table just gets turned on you and the rug gets pulled out from under you.”

 

That’s what happened to Janine Rosales, who moved into her mother’s San Francisco home two years ago after a career of mostly low-paying jobs left her unable to afford the city’s towering rents.

 

For Rosales, 53, it represented a personal defeat, an unofficial marker of unmet goals in life. 

 

“I sit here sometimes and I see baby pictures of myself and my teenage years and remember all the dreams I had,” Rosales said. “I never thought I’d end up where I am.

Fear not Rosales: every personal defeat and failure in life can be quickly converted into a win, if only on paper – just remember to BTFATH, and failing that, BTFD. The same goes for your parents:

The situation is also trying on elderly parents.

 

They feel the anxiety afflicting their children. Aging people on fixed incomes also worry that the extra money they spend on utilities or food will drain their own limited retirement savings. 

 

“When I use up all of my money, who’s going to help me?” said Rohr’s mother, Penny Goulart.

Well, there’s always Aunt Janet, and all those activisit who made billions in the past two months buying calls on a stock they knew would be acquired.

Either way, always repeat: the recovery, the recovery, the recovery:

Rohr is applying frantically for jobs. She’s willing to do anything but has had no luck.

Or not. Still, remember to smile, because it will only get worse beofre it gets much worse. Some context: “About half of all Italians between 24 and 35 still live with their parents, compared with 14% in the U.S.” … All coming to America’s “recovery” next.




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Gold Tumbles To 2-Month Lows… Because It’s Tuesday

Gold is down 6 days in a row and has broken back down to its lowest since mid-February (under its 200DMA once again).

 

 

As it seems someone wanted out in a hurry as Europe closed…

 

The reason… aside from growth stocks are rallying which must mean the economy is fixed and therefore no need for the world's central banks to print any more money (oh wait apart from the BoJ and ECB)… is unclear… though we suspect the driver is to do with the following crucial chart…

 

h/t @Not_Jim_Cramer

 

Of course, gold is still the winner in 2014 (for now)…

 

Charts: Bloomberg




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Gay Marriage Foes Urge GOP to Cling to Sinking Ship

Somebody toss Gary Bauer a life preserver, pleaseA new poll shows that Texas is
the latest state flipping for gay marriage. A poll put together by
Texas Tech University showed
48 percent of Texans
supporting same-sex marriage recognition
and 47 percent opposed. It’s nearly a 10 percent increase in
support in Texas since the Supreme Court’s ruling striking down
part of the Defense of Marriage Act last year. A federal judge also

struck down
Texas’ ban on same-sex marriage recognition in
February, though the ruling is stayed for appeals.

But polls be damned, the same gay marriage opponents who have
been fighting against gay marriage from the start are still trying
to insist that Republicans need to keep embracing this culture war
battle in order to please their base. They put together a poll of
Republicans and Republican-leaning independents to bolster their
claims.
Politico notes
:

The survey by the GOP polling firm Wilson Research Strategies
was of Republican and Republican-leaning independents and was taken
over a month ago, sampling 801 people from March 18 through March
20, with a 3.5 percent margin of error.

The survey showed 82 percent agreeing with a statement that
marriage should be between “one man and one woman.” It also found
75 percent disagreed that “politicians should support the
redefinition of marriage to include same-sex couples.”

First of all, the wording of the questions matter. Reason-Rupe
poll director Emily Ekins has previously noted that polls that ask
whether people want to
“redefine” marriage
get greater disapproval numbers than polls
that ask whether people want to “legalize” gay marriage. Both the
questions address only the idea of “defining” or “redefining”
marriage and nothing to do with policies or principles. It doesn’t
ask whether the government should recognize same-sex marriages or
whether government benefits or privileges should be extended to
same-sex couples. The question was designed to get more negative
responses.

And then there’s this
graph reminder from Gallup
:

Independent voter graph

It’s a reminder that the Republican Party has been bleeding
members since 2005. Only 25 percent of Americans identify as
Republicans, while 42 percent identify as independents and 31
percent identify as Democrats.
This marriage poll
included independents who said they leaned
toward the Republican party, but doesn’t indicate how many
independents they surveyed leaned toward the GOP. Another chart
from Gallup shows Democrats still outnumbering Republicans
significantly when independent “leaners” were included.

Even as the popularity of President Barack Obama and his
policies plunge, and the likelihood of the Republican Party taking
control of the Senate following midterms increases, the GOP is
still struggling with this issue. The Nevada Republican Party

removed opposition to gay marriage
(and abortion) from its
party platform earlier in the month. And yesterday the Consumer
Electronics Association, a trade association, announced it was
going to provide financial support to the
Log Cabin Republicans
, a group of gay conservatives, apparently
the first tech group to do so. As the
Mozilla controversy
has shown, there is political diversity
within the tech community, but it is nevertheless largely
supportive of same-sex marriage. Would any GOP operative look at
the shifts in this country on gay marriage (especially among the
young) and actually recommend listening to these guys?

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Mortgage Standards Are Plunging – It’s Muppet Fleecing Time All Over Again

Submitted by Mike Krieger of Liberty Blitzkrieg blog,

In February, I highlighted the fact that subprime loans were about to make a return in my piece: Subprime Mortgages are Back…This Time Marketed as “Second Chance Purchase Programs.” In that article, I posited that with the “all cash” private equity shops and hedge funds no longer able to make good returns through buying new homes to rent, these investors would need some sucker to sell to in order to realize a return (Blackstone’s purchases have plunged 70% recently). That sucker, as always, will be the retail muppets, and those muppets will be lured in through subprime. This is now starting to happen in earnest.

The following article from the Wall Street Journal is both depressing and disturbing. Rather than allowing home prices to reset at a lower level after the 2008 crash where normal buyers could afford a sane 20% mortgage, our central planners decided to do “whatever it takes” to re-inflate the housing bubble. This was achieved through wealthy investment pools buying properties for all cash. The trouble is, with home prices now inflated by these financial buyers and no real increase in wages, homes are simply unaffordable. So what do you do? You bring back subprime and get the peasants long real estate with essentially zero money down all over again. Truly remarkable.

From the Wall Street Journal:

While standards remain tight by historical measures, lenders have started to accept lower credit scores and to reduce down-payment requirements.

 

One such lender is TD Bank, Toronto-Dominion Bank’s U.S. unit, which on Friday began accepting down payments as low as 3% through an initiative called “Right Step,” geared toward first-time buyers and low- and moderate-income buyers. TD initially launched the program last year with a 5% down payment. It keeps the product on its books and doesn’t charge for insurance. Borrowers also don’t need to put down any of their own cash if a family, state or nonprofit group provides a down-payment gift.

So a measly 5% downpayment wasn’t good enough. They had to drop it to 3%. Frightening.

The changes also are a recognition by lenders that the business of refinancing old mortgages, which had been a huge profit center for banks, is nearly tapped out. To generate future profits, banks will have to compete for borrowers who may not have perfect credit or large down payments.

 

Valley National Bank, a community bank based in Wayne, N.J., lowered down-payment requirements to 5% from 25% this month on mortgages for certain buyers in New York, New Jersey and Pennsylvania. Next month, Arlington Community Federal Credit Union, based in Arlington, Va., will begin accepting 3% down payments on mortgages up to $417,000, down from 5%.

Yes, you read that right, 25% to 5%. Holy fuck.

Over the past year, however, more than one in six loans made outside of the FHA included down payments of less than 10%, the highest share since 2008, according to figures from data firm Black Knight Financial Services. That still is lower than the nearly 44% of the market they accounted for at the peak of the housing bubble in early 2007.

 

While smaller lenders are trying to appeal to first-time buyers, larger lenders are gradually reducing down payments for jumbo loans—those too large for government backing—to woo wealthy customers. EverBank began accepting down payments of 10.1% for jumbo borrowers with strong credit this year, down from 20%, and Wells Fargo reduced to 15% from 20% its minimum down payment for jumbos last year. Bank of America made the same change for mortgages of up to $1 million.

 

Any easing should give more options to first-time buyers like Nathan Davenport, 26, who purchased a one-bedroom condo for $195,000 in Atlanta this month with a 5% down payment. Mr. Davenport, who works for a phone-and-Internet services provider, says he has a high credit score but was worried that if he waited longer to save up for a larger down payment he would be priced out of the market.

 

“Twenty percent of this price and only being out of college a handful of years would have been really hard to pull off,” Mr. Davenport said.

I’m sorry, but on what sort of bizarro crackhead planet is putting 3% down toward an asset mean you are “buying it.”

The Truman Show rolls on…

Full article here.




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The Squeeze Continues… “Most Shorted” Stocks Are Screaming Higher

Yesterday we noted the dramatic squeeze of the “most shorted” stocks as they outperformed the broad market five-fold. The rout continues to gather pace as this morning sees the “most shorted” index soaring back near last week’s highs and up almost 8% from Wednesday’s lows.

 

“most shorted” stocks are ripping higher off last week’s lows…

 

But this week has seen the real pressure applied…

 

Charts: Bloomberg




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The Golden Age of Groupon Government!

Revealed: Government keeps
growing because we’re purchasing it at an apparent discount.
Between 2009 and 2013, for instance, the federal government
borrowed 33 cents of every dollar it spent. That makes it seem as
if we’re only shelling out 67 cents for every dollar of government
goods and services.

Since 1974, when new budget accounting rules went into effect,
the government has paid out of pocket for just 84 cents per dollar
of spending, giving us all a sweet 16 percent discount. Who
wouldn’t buy more at those low, low prices? In my latest Daily
Beast column, I call this “The
Golden Age of Groupon Government
.”

The idea behind Groupon is pretty simple: If you discount the
price of something, then people are more likely to buy it. While we
may not be willing to shell out $34 for artery-clogging amounts
of Cherry Garcia, Coffee Heath Bar Crunch, and Chubby Hubby,
we might sign on if the cost is just $17.

For decades now, we’ve been
getting much more government than we’re actually willing to pay
for. Which leads to…more government. About a decade ago, two Cato
Institute scholars—Peter Van Doren and the late William
Niskanen—reported on “Some Intriguing Findings About Federal
Spending.” Basically, they found that when the government
appears to charge citizens less money in the form of current taxes
and fees, people are happy to purchase more government.
“Controlling for the unemployment rate, federal spending [between
1981 and 2000] increased by about one-half percent of GDP for each
one percentage point decline in the relative level of federal tax
revenues.” Does anyone else remember a simpler, more parsimonious
America? “Gas, grass, or ass—nobody rides for free” is only a
bumper sticker these days….

At least with a Groupon deal, you settle your
bill up at the exact moment of the sale. Those heavily discounted
gallons of Ben & Jerry’s Ice Cream may give you a stroke, but
it’s not as if you—or your descendants—are still on the hook for
the other 50 percent of the purchase 10, 20, or 30 years down the
line. Yet that’s exactly where we are with Groupon Government: We
buy more than we can afford now, with no good idea of how we’re
ever going to pay up when the rest of the bill finally comes due.
Because if we’re lucky, we’ll be long gone before that day arrives.
As Keynes once quipped, “In the long run, we are all dead.”
You bet, but who’s paying for our funeral? And will they be paying
retail?


Read the whole thing here.

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Why People are Choosing to Remain Uninsured Under Obamacare

The New York Times today features a lengthy
article
profiling individuals who chose to remain uninsured this year under
Obamacare
.

For most of the people who appear in the story, it’s a financial
decision. They have tight budgets, and health insurance remains
expensive under the Affordable Care Act, even with whatever
subsidies they may qualify for. 

Cost is the most frequently raised issue, but it’s not the only
one. One Kentucky man featured in the story says he was put off by
technical troubles; he had decided to purchase insurance, and he
had selected a plan with what he thought was a fairly low
deductible. But that deductible, the Times reports, was
“miscalculated because of a programming error.” He ended up
deciding not to enroll in new coverage through the exchange this
year. 

And then there’s the story of Tammy Williams, a woman from
Washington state who “based her decision to opt out partly on
philosophical resistance to the law.” Here’s her story:

“The government comes into our life and makes these decisions
for us without even asking us,” said Ms. Williams, 56. “It just
makes me want to rebel.”

Ms. Williams, who earns less than $40,000 a year at a small
marketing firm in Seattle, said she did not want to hand over what
little discretionary money she had after rent and other living
expenses to an insurance company. She has been uninsured since
moving a year ago from Ohio, where she had a job with health
benefits.

She qualified for a subsidy to help buy coverage through
Washington’s marketplace, but said that she still would have had to
pay around $135 a month for the least expensive plan, with a $6,000
deductible that she said made it unfeasible.

“I am opting out,” she said on the last day of the enrollment
period, adding that she might instead buy dental coverage outside
the marketplace to take care of a chipped crown and a cavity.

A political independent, Ms. Williams said she at first chided
herself about not buying coverage, thinking, “There’s plans out
there that make it a good thing for people, and I’m just going for
rebelling against the government.”

But when she looked closely at the costs, she decided her
resentment was justified.

“If given a voice — ‘Do you want to participate or not?’ — I
would have said no,” Ms. Williams said. “But I don’t remember being
asked.”

The piece ends with the story of Cindy Whitely, a Kentucky woman
who had initially thought she might go without insurance, but did
end up getting covered after her work with a home improvement
company dried up last winter. Less work meant less income, which in
turn meant a bigger-than-expected subsidy for her and her
family. 

But now she’s worried that she might lose her new coverage if
work picks back up, her incomes rises, and the subsidy is no longer
as big as it is now. “If work picks back up and I jump right back
up there,” she told the Times, “then I’m stuck.” 

That’s a pretty good illustration of the tradeoff the law sets
up between working more and keeping benefits. When people talk
about Obamacare’s potential negative effects on employment, this is
the sort of thing they’re talking about. 

But it’s actually worse than that. If Whitely’s
income rises enough this year, not only will her subsidy for next
year go away, but she may have to repay part of this year’s
subsidy. People who underestimate their income and therefore
qualify for a larger subsidy than their actual income allows can be
dinged by the Internal Revenue Service (IRS) for repayment.

This is not a small issue. As many as 40 percent of the
beficiaries who receive subsidies under the law may end up on the
hook for repayment, according to a 2013
Health Affairs study
. Which means that if she ends up
with more work than expected this year, the extra subsidy that
Whitely was counting on to help pay for coverage might not really
be there at all.

Maybe all this will get sorted out as the law settles into
place. The IRS may just go easy on people who are on the hook for
repayment. But I wouldn’t be surprised if, in the years ahead,
these are the sorts of stories we hear more of when asking why some
people are still choosing to remain uninsured. 

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