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Reality Check

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On Saturday, May 8, an extraordinary event took place. United States Senator Bob Bennett, a 3-term Republican, failed to make the cut for his party's primary. Not only was he not nominated to run, he did not make the cut to get nominated. He was a distant third. Two Tea Party candidates beat him.
 
Bob Bennett is a legacy Senator. His father served as Senator before him.

This was an insurrection.

Bennett had turned squishy years ago. He had an undeserved reputation as a conservative. He backed the TARP bailout in 2008. Then he backed Obama's health insurance bill. That did it. "No mas!" The folks back home sent him a message: "You're out of here!"

Then, three days later, across the country, it happened again. Congressman Alan Mollohan of West Virginia, was smashed in the Democratic Party's primary, 56% to 44%. He had held that seat for 14 terms – almost 28 years. He had supported Obama's health care bill. He was one of the Stupak Seven. When Stupak folded, Mollohan folded. That ended his political career.

This is a bipartisan insurrection. It indicates that the voters have finally had enough. It may represent a turning point in American politics.

Think about what these two votes mean. In American politics, voters decide between two parties. Politicians' campaign strategies are targeted at the 80% of the voters who are in play. The 10% at each end of the political spectrum are either true believers or staunch enemies. They are ignored. They get platitudes from the candidates, but that's all. A politician who campaigns on a straight ideological platform is extremely rare. Ron Paul is such a politician, but how representative is he of politics in general?

As soon as a person is elected to Congress, his party supports him thereafter, no matter what. Local politics is seen as "our man in Washington vs. their would-be interloper." The faithful party member now overlooks every deviant vote by the incumbent. The incumbent is always seen as better than the other party's candidate, no matter who that candidate is.

At the level of the Presidency, there are enough independents and enough marginal voters to enable a popular candidate to win votes from members of the other party. Think of Jimmy Carter in 1980. Reagan overwhelmed him. Carter lost votes from his own party. 

The nation is really divided. We have never seen before what happened under Clinton and Bush II: a pair of two-term Presidents from rival parties. There is now ebb and flow at the national level. No party has a lock on the Presidency.

This ebb and flow has not existed locally within a party. Once elected, a Congressman or a Senator who decides to run again is going to get the nomination of his party at the next election. The faithful conclude, "Our man, right or wrong." Bob Bennett and Alan Mollohan discovered that this tradition has ended.

It ended without warning. Bennett did not figure out what was about to happen to him until the last minute. To save his candidacy, he invited Mitt Romney to introduce him at the convention. How out of touch can a politician be? Mitt Romney represents the Eastern Republican Establishment. He was governor of Massachusetts. He passed a health care law similar to Obama's. That Bennett thought Romney could help him with the Republicans back home indicates how completely out of touch he had become.
Yes, Romney is a Mormon. Yes, Utah is Mormon. In the good old days, the folks back home would have thought, "It's us vs. them." But with his voting record, Bennett had moved into the camp of "them." He did not perceive this until it was too late.

In a CNN interview with a man identified as the founder of the Tea Party movement in Utah, the interviewer with the flowing hair tried to identify Bennett as a conservative. She reeled off names of supporting right-wing Beltway groups. The man being interviewed shrugged this off. "It isn't a matter of conservatism," he said. "It's a matter of responsibility." Bennett should not have voted to bail out failing companies, he said. But, she hastened to ask, "should a man's career end because of one vote?" His answer was perfect: "His career WILL end with that vote." And it did. CNN then switched to Bennett, who defended that vote. He is gone. The video is worth watching.

The incumbents are facing an insurrection. A fundamental assumption of all Congressional politics is being called into question: guaranteed re-nomination of incumbents. This means that the folks back home are going to nominate newcomers who are dependent on swing voters in a way unseen before in American politics. There will be no more of "our man, right or wrong." 

This means that voters back home are so angry that they would prefer to lose the November election with a candidate who reflects their views rather than win with an incumbent who doesn't. It means that the politics of the Capitol Hill club is no longer secure. It means that the Old Boy Network of incumbents on the Hill can no longer secure automatic re-nomination.

If this continues, the nation's political system will change. Incumbents will have to pay attention to the opinions of the voters in their parties in their districts. This places power in the hands of dedicated minorities back home who are willing to send a message to their men in Washington: "You will remain our man for only as long as you vote our way on the issues that matter to us." There will be no more free rides at the nomination level.
This is a positive development. It introduces an element of uncertainty into national politics. The informal alliances on Capitol Hill will be undermined as never before. The ever-popular game of logrolling will get more risky. Logrolling is this: "I'll vote for your pork-filled bill if you'll vote for mine." Incumbents play this game for pork's sake. But if voters back home are angrier about pork-for-all than they are about insufficient-pork-for-us, the political structure will begin to shift rightward. This will fundamentally change the rules of the game.

TARP AND THE MSM

I find it hard to believe that voters are finally willing to throw out an incumbent in their party because he voted the wrong way on some pork-filled law. But TARP really infuriated voters. In October 2008, voters were opposed to the bailouts. As one North Carolina Congressmen put it, his district was divided 50–50 between "no" and "hell no." But Paulson's warning of imminent collapse carried the day. It also carried Obama to victory a month later.

The general rule is this: voters forget in six months. They do not bear political grudges. The general rule got broken with TARP.

It will get broken with Obama's health insurance law, too. As the costs rise, the public will be reminded. When I say "the public," I mean the swing voters in both parties who are hopping mad about the law and willing to exact revenge.

Political revenge has been rare in American politics. That is because voters did forget. They moved on. They could be manipulated by the media to get them all in a dither about the latest political issue. But the Web is changing all this. The Web lets hopping mad people stay hopping mad. The mainstream media no longer control the flow of information. They no longer determine what issues will get attention by the public. With respect to the swing voters who can withhold the nomination from incumbents, the Web has become the crucial factor. The mainstream media no longer call the shots.

These is another factor to consider: single-issue voting. The single-issue voter is the bane of a politician's career. This voter will vote against anyone who votes against his issue. He also keeps informed about how politicians have been voting.

Congress has fought against this by concealing votes whenever possible. The language of bills to consider an issue is confusing. Sometimes, Congressmen vote by voice rather than by having their votes recorded. This policy has been facilitated by the local press, which could always choose not to write about a Congressman's unpopular vote.

Today, because of the Web, it is difficult for politicians to conceal their votes from special-interest groups and single-issue voters. They must therefore make choices regarding which groups to alienate. This in turn makes politics more divisive.

HOW TO INFLICT PAIN

An old friend of mine is retired California state Senator Bill Richardson. He taught me a great deal about local politics. He is the founder of Gun Owners of America. He told me that politicians want to avoid pain. If you can create pain for them, you can get them to change on specific issues. He said that one of his direct-mail strategies was to find a weak position in the voting record of a state representative who was in favor of gun control. In the man's district, he was not in trouble about his votes on gun control. So, Richardson would find an issue that did put him at risk. Then he would do mass mailings into the man's district that focused on his unpopular votes. The guy always knew who was creating the problem for him. Richardson made sure he knew. Richardson would then offer a deal: no more mailings in exchange for some crucial vote on gun ownership. He got votes this way.

The cover provided to local politicians by the mainstream media is worth less and less, because the mainstream media are dying. These media outlets are not being replaced by media outlets that gain the readership locally of large numbers of people. Instead, local readers focus on whatever single issue motivates them most. If a politician deviates from the acceptable line – not a party line – the voters in his district who are committed to the position find out.

These voters have generally not been political activists involved in precinct politics. But in the last year, the spending issue has mobilized a previously unorganized group of single-issue voters. Because spending encompasses everything that civil government does, the Tea Party movement is a major threat to politicians who are always ready to vote for more spending, which is most of them.

The first two sacrificial goats on the Tea Party's altar are Bennett and Mollohan. Because they are in different political parties, different regions, and different-colored states – red and blue – their defeat represents a serious threat to politics-as-usual. Defeat at the primary level is not supposed to happen. 

There is no media protection for politicians now. They can run, but they can't hide. In the case of Bennett and Mollohan, they can't even run. Their careers as politicians are over.

SEND THEM A MESSAGE!

That phrase was made popular by Gov. George Wallace in the 1972 election. So was his other phrase: "There's not a dime's worth of difference between the two parties."
Today, the Tea Party movement rests squarely on these two phrases. The defeat of Bennett and Mollohan has sent a message to Washington. It is the only message 80% of Congress understands: fear. They can see that their parties may not support them this year. They also see that a refusal to oppose new spending bills will lead to their departure from Washington.

This is going to change the political landscape in the United States. The Tea Party is in a position to do what Bill Richardson recommended: impose pain. Politicians respond to pain. The greatest pain is the loss of votes back home. Nothing else comes close.
The two primaries produced results that are historically unprecedented. These two primaries were preceded by the failure of Gov. Charlie Crist of Florida to receive the Republican Party's nomination for U.S. Senator. He says that he will run as an independent. This may kill the campaign of fiscal conservative Marco Rubio in November. But Rubio can get nominated again. He will not be seen as a loser; he will be seen as the victim of a spoiler. Crist is finished politically. The Republicans will resent him for not bowing out gracefully.

There is nothing wrong with spoiling, if you can continue to kill a party's chances at the general election. At some point, the party's hierarchy will have to work out a deal. Otherwise, they are doomed to defeat. But a one-shot spoiling campaign is suicidal. It kills the future threat. It sends this message: "These people don't have the votes. Ignore them." Crist is a threat this time only because he is the governor. He will not be governor again.

The Tea Party is sending a message across the country to both political parties: "Ignore us at your peril. We are in a position to end your careers." Hard-core big spenders in safe districts will not pay any attention. But without the votes of their vulnerable peers, they will not be able to ram through big-spending bills.

The ability of the Democrats to get votes for any new spending bills has been drastically reduced over the last week. Members of Congress in marginal districts will hesitate to commit political suicide. Also, there will be more announcements of long-term Democrats who plan to retire. No one wants to be publicly defeated by some upstart. It is easier to retire on a fat Congressional pension.

The familiar game of politics is now vulnerable to upstarts who are motivated by one issue: reduce government spending. They cannot be easily bought off. They are not pork-seekers. If they stick to their guns and get organized locally, they will be able to inflict enormous pain on incumbents. This process has begun.
 
CONCLUSION

I think the next Congress will be less ready to pass huge spending bills. Obama's domestic agenda was thwarted over the last week in Utah and West Virginia. It will be thwarted even more in November.

This will not be enough to save the country from a flood of red ink. That ink was guaranteed in 1965, when Lyndon Johnson signed Medicare into law. It was guaranteed by Bush II's prescription drug subsidy. The killer programs are at present untouchable. But, at the margin, the President's agenda is in trouble. He will be blamed for the deficit. He will be blamed for the costs of the health insurance law.
 
Mollohan's defeat was more significant than Bennett's. It sent Democrat incumbents a message: "No mas!" If a politician in a safe Democratic district thinks he can recruit volunteers in a self-immolation program of additional Federal spending, he will find that in January 2011, there will be far fewer members of his party willing to join him . . . or her. Nancy Pelosi will have a harder time rounding up the votes. She may even become the Minority Leader.

That thought cheers me up. I am a fan of the politics of revenge. 
http://www.lewrockwell.com/north/north843.html 

Democrat money advantage

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The combined Democratic cash on hand from the three national party committees (DNC/DSCC/DCCC) totals up to $57.8 million compared to a Republican combined total (RNC/NRSC/NRCC) of $36.3 million, giving the party in power a $21.5 million cash on hand advantage.  (And it is not lost on anyone in Washington circles that more than 75% of that cash on hand advantage is due to the huge DCCC advantage over the NRCC’s money machine.)

It isn’t all that surprising, of course, that the party in control of the House, Senate, and White House can emerge victorious in the fundraising battle over the minority party.
http://blogs.abcnews.com/thenote/2010/04/democrats-retain-money-advantage.html

RNC blew $340,000 on posh three-day Hawaii bash

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The Republican National Committee spent more than $340,000 at a lavish party meeting in Hawaii, according to recently filed campaign finance reports.

The news comes on the heels of a report last month which revealed that the Party had reimbursed a staffer $2,000 for an event at a risque bondage-themed Beverly Hills nightclub.

Federal Election Commission reports, noted in the DC-insider website Hotline, show that the party spent a whopping $167,000 for "facilities" during their three day stay. That comes to $56,000 per day, more than the average American makes in a year.

RNC officials spent another $90,000 for rooms and office space for party employees.
Hotline reports that at least 33 RNC staffers made their way to the Waikiki Beach party. Another 168 members of the party's national committee also attended -- meaning the cost per attendee comes to more than $2,000 each.

And the $340,000 total doesn't include airfare.

"The $340K documented in FEC filings does not include airfare for each staffer, which could amount to tens of thousands more," Hotline's Reid Wilson reports.

http://rawstory.com/rs/2010/0421/rnc-blew-340000-posh-threeday-hawaii-bash/

Third party candidates take root...

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Third party candidates in Colorado are galvanized by grassroots efforts permeating the country this election season.

A large number of so-called alternative candidates have joined a mix of Republicans trying to unseat Democrats by capitalizing on the pulsing tea party movement and a growing number of unaffiliated voters.
The Libertarian Party, for instance, trumpets eleven candidates in Colorado for U.S. senate, congress and governor. The Unity Party of America follows with four candidates, the Green Party has two, and the American Constitution Party has one in the state. Half a dozen independent candidates are also running in 2010.

The Libertarian Party emerged from its state convention on March 20 with the most candidates it has ever fielded in federal races, according to state party chair David Williams Jr. The party will hold primaries in three races — marking the first time Colorado Libertarians will require multiple primaries.

“That’s just indicative of the people’s mood and displeasure with the two party system,” Williams said. “We’ll use the opportunity to educate as many people as possible about the alternative to the two party duopoly that more and more represents big government.

“I think we’ll do historically well in this upcoming election,” he said.

Libertarian primaries will be held in the U.S. senate race between Maclyn Stringer and John Finger, in the gubernatorial race between Jaimes Brown and Dan “Kilo” Sallis, and in the CD 1 race between Clint Jones and Jeffrey Schitter. Five candidates are running unopposed: Curtis Harris in CD 2, Gregory Gilman in CD 3, Jerell Klaver in CD 5, Rob McNealy in CD 6 and Buck Bailey in CD 7.
State primaries will be held Aug. 10.

Unity Party to field three candidates

The Unity Party, established in 2004 as a centrist organization advocating system-wide tax cuts, a balanced budget, and carbon-free energy sources, also inches toward historical achievements. Following 2008 when state and national party chairman Bill Hammons became the first member to get on the ballot, the Unity Party will hold its first national convention in Boulder April 17. Unity membership covers 26 states.
http://www.coloradostatesman.com/content/991746-third-party-candidates-take-root

4 out of 5 Americans don't trust Washington

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WASHINGTON – America's "Great Compromiser" Henry Clay called government "the great trust," but most Americans today have little faith in Washington's ability to deal with the nation's problems.

Public confidence in government is at one of the lowest points in a half century, according to a survey from the Pew Research Center. Nearly 8 in 10 Americans say they don't trust the federal government and have little faith it can solve America's ills, the survey found.

The survey illustrates the ominous situation President Barack Obama and the Democratic Party face as they struggle to maintain their comfortable congressional majorities in this fall's elections. Midterm prospects are typically tough for the party in power. Add a toxic environment like this and lots of incumbent Democrats could be out of work.

The survey found that just 22 percent of those questioned say they can trust Washington almost always or most of the time and just 19 percent say they are basically content with it. Nearly half say the government negatively effects their daily lives, a sentiment that's grown over the past dozen years.

This anti-government feeling has driven the tea party movement, reflected in fierce protests this past week.

"The government's been lying to people for years. Politicians make promises to get elected, and when they get elected, they don't follow through," says Cindy Wanto, 57, a registered Democrat from Nemacolin, Pa., who joined several thousand for a rally in Washington on April 15 — the tax filing deadline. "There's too much government in my business. It was a problem before Obama, but he's certainly not helping fix it."

Majorities in the survey call Washington too big and too powerful, and say it's interfering too much in state and local matters. The public is split over whether the government should be responsible for dealing with critical problems or scaled back to reduce its power, presumably in favor of personal responsibility.

About half say they want a smaller government with fewer services, compared with roughly 40 percent who want a bigger government providing more. The public was evenly divided on those questions long before Obama was elected. Still, a majority supported the Obama administration exerting greater control over the economy during the recession.

"Trust in government rarely gets this low," said Andrew Kohut, director of the nonpartisan center that conducted the survey. "Some of it's backlash against Obama. But there are a lot of other things going on."
And, he added: "Politics has poisoned the well."
 http://news.yahoo.com/s/ap/20100419/ap_on_go_ot/us_government_distrust

DNC Spending Plans

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DNC to pour $50 million into fall races

WASHINGTON – The Democratic National Committee says it will spend more than $50 million in cash and other resources on the November elections, as the party struggles to limit expected losses in congressional races and possibly gubernatorial contests too.

The planned expenditure, worked out by top White House and congressional Democrats, would mark a significant investment in a non-presidential election.

Democratic officials confirmed the plans, first reported by Politico, but said they had yet to decide how much of the contribution would be in cash versus noncash resources, such as campaign workers. Candidates cherish cash because it allows them to pay for polls and TV or radio ads.

At the end of February, the DNC had $10.7 million in cash and $3.7 million in debts.
http://news.yahoo.com/s/ap/20100416/ap_on_el_ge/us_democrats_campaigns

More Taxes or More Jobs???

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More Taxes or More Jobs? California Shows We Can't Have Both

Overview California Politics

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Tea Party Demographics

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Appears to be a fairly substantial amount of debate over who exactly are Tea Party folks....so I'll do a deep dive here and see if I can come to some conclusions....or at least outline the controversy between the various polls.  Disclaimer - small sample sizes on all of them.  Try getting 1000 opinions and then stipulate that they represent 300 million opinions....

Adding to the drama, according to the latest Gallup poll, the parties are evenly split -

PRINCETON, NJ -- Gallup Daily tracking for the week ending April 4 finds the two major parties tied at 46% in the congressional voting preferences of registered voters nationally. In the two weeks since Congress passed healthcare reform on March 21, Democrats have tied or trailed the Republicans, after having at least a slight advantage in the weeks prior.

http://www.gallup.com/poll/127223/Parties-Even-Congressional-Midterm-Preferences.aspx
Myth-busting polls: Tea Party members are average Americans, 41% are Democrats, independents

For upwards of 12 months now members of the so-called Tea Party protest movement have been stereotyped, derogated and often dismissed by some politicians and media outlets.

They've been portrayed variously as angry fringe elements, often inarticulate, potentially violent and merely Republicans in sheep's clothing or disgruntled pockets of conservatives blindly lashing out at a left-handed President Obama and the same side of his Democratic Party finally getting its chance to drive home a liberal agenda after eight years of Republican rule and six under a centrist Bill Clinton.

Alas for stereotypes, they're convenient, often catchy. But not necessarily true.

Now, comes a pair of polls, including Gallup, that paint a revealing detailed portrait of Tea Party supporters in most ways as pretty average Americans. A Sunday poll -- actually three national phone surveys of 1,000 registered voters -- found that 17% of all polled, or more than 500, called themselves "part of the Tea Party movement."

"It's a good sample size," David Winston, polling director of the Winston Group that did the poll for an education advocacy group, told the Ballot Box blog of The Hill newspaper.

The Tea Party adherents broke down 28% independent, 17% Democrat and only 57% Republican. Not coincidentally, this bipartisan breakdown has been the way that Tea Party favorite Sarah Palin has often described movement members as "commonsense Americans" worried and....


...angered by the over-reaching one-party control of Democrats in Washington these last 15 months, rooted initially in opposition to Obama's $787 billion government economic stimulus package.

A new Gallup Poll out this morning of 1,033 finds nothing fringe about self-proclaimed Tea Party adherents; they are slightly more likely to be employed, male and definitely more conservative. But otherwise Gallup's Lydia Saad writes, "their age, educational background, employment status, and race -- Tea Partiers are quite representative of the public at large."

While economic issues like stubbornly high unemployment rates and declining home values cause widespread worries, Winston found top issues among the self-identified Tea Party followers are jobs/the economy and the exploding federal deficit. A whopping 95% told pollsters that Washington "Democrats are taxing, spending and borrowing too much."

Fully 87% told Gallup they oppose Obama's healthcare legislation.

The Winston poll says 80% of total Tea Party supporters dislike Obama's job performance, a higher negative rate even than the 77% of Republicans who disapprove of the ex-state senator's White House work.
They are, of course, only two polls and a long time politically until November.
http://latimesblogs.latimes.com/washington/2010/04/tea-party-obama.html

Four in 10 Tea Party members are either Democrats or Independents, according to a new national survey.
The findings provide one of the most detailed portraits to date of the grassroots movement that started last year. 

The national breakdown of the Tea Party composition is 57 percent Republican, 28 percent Independent and 13 percent Democratic, according to three national polls by the Winston Group, a Republican-leaning firm that conducted the surveys on behalf of an education advocacy group. Two-thirds of the group call themselves conservative, 26 are moderate and 8 percent say they are liberal.

The Winston Group conducted three national telephone surveys of 1,000 registered voters between December and February. Of those polled, 17 percent – more than 500 people -- said they were “part of the Tea Party movement.”
http://thehill.com/blogs/ballot-box/polls/90541-survey-four-in-10-tea-party-members-dem-or-indie

PRINCETON, NJ -- Tea Party supporters skew right politically; but demographically, they are generally representative of the public at large. That's the finding of a USA Today/Gallup poll conducted March 26-28, in which 28% of U.S. adults call themselves supporters of the Tea Party movement.

Tea Party supporters are decidedly Republican and conservative in their leanings. Also, compared with average Americans, supporters are slightly more likely to be male and less likely to be lower-income.
In several other respects, however -- their age, educational background, employment status, and race -- Tea Partiers are quite representative of the public at large.
Results are based on telephone interviews with 1,033 national adults, aged 18 and older, conducted March 26-28, 2010. For results based on the total sample of national adults, one can say with 95% confidence that the maximum margin of sampling error is ±4 percentage points.

http://www.gallup.com/poll/127181/Tea-Partiers-Fairly-Mainstream-Demographics.aspx

The Winston Group Study -
http://www.scribd.com/doc/29412899/29297844-Tea-Party-Memo-April-2010


Washington (CNN) -- Activists in the Tea Party movement tend to be male, rural, upscale, and overwhelmingly conservative, according to a new national poll.

A CNN/Opinion Research Corp. survey released Wednesday also indicates that Tea Party activists would vote overwhelmingly Republican in a two-party race for Congress. The party's GOP leanings, the poll suggests, may pose a problem for the Tea Party movement if it tries to turn itself into a third party to compete with the two major parties in this year's general election.

According to the survey, roughly 11 percent of all Americans say they have actively supported the Tea Party movement, either by donating money, attending a rally, or taking some other active step to support the movement. Of this core group of Tea Party activists, 6 of 10 are male and half live in rural areas.
Nearly three-quarters of Tea Party activists attended college, compared to 54 percent of all Americans, and more than 3 in 4 call themselves conservatives.

"Keep in mind that this is a pretty small sample of Tea Party activists," Holland said. "But even taking that into account, the demographic gaps that the poll finds between those activists and the general public on gender, education, income, ideology, and voting behavior appear to be significant differences."

The poll indicates that about 24 percent of the public generally favors the Tea Party movement but has not taken any actions such as donating money or attending a rally. Adding in the 11 percent who say they are active, a total of 35 percent could be described as Tea Party supporters. That larger group is also predominantly male, higher-income, and conservative.

Some 45 percent of all Americans say they don't know enough about the Tea Party to have a view of the movement; 1 in 5 say they oppose the Tea Party.
 http://www.cnn.com/2010/POLITICS/02/17/tea.party.poll/

The CNN Poll -
http://i2.cdn.turner.com/cnn/2010/images/02/17/rel4b.pdf

Excerpts below -

Interviews with 1,023 adult Americans, including 954 registered voters, conducted by telephone by Opinion Research Corporation on February 12-15, 2010. The margin of sampling error for results based on the total sample is plus or minus 3 percentage points and for registered voters is plus or minus 3 percentage points.

Would you favor or oppose having a third political party that would run candidates for President,
Congress and state offices against the Republican and Democratic candidates?
Feb. 12-15 2010
Favor            64%
Oppose         34%
No opinion      2%

CNN/USA TODAY/GALLUP AND CNN/TIME TRENDS
                                           Favor              Oppose          No opinion
1999 July 16-18*                    67                   28                    5
1995 Aug. 4-7*                      62                   29                     9
1995 April 17-19*                  60                   34                     6
1995 Feb. 28-Mar. 1**          56                   34                   10
1994 Aug. 31-Sept. 1**         58                   30                   12
1994 Aug. 17-18**                59                   32                     9
1992 Oct. 20-22**                63                    28                     9
1992 July 16**                      58                    31                    11
1992 July 8-9**                    59                     31                   10
1992 June 3-4**                   58                     32                   10

*CNN/USA Today/Gallup polls
**CNN/Time polls QUESTION WORDING 1992-1995: Would you favor or oppose the formation of a third political party that would run candidates for President, Congress and
state offices against the Republican and Democratic candidates?

End of excerpt.

Perspective via Bloomberg poll...
More than 90 percent of Tea Party backers interviewed in a new Bloomberg National Poll say the U.S. is verging more toward socialism than capitalism, the federal government is trying to control too many aspects of private life and more decisions should be made at the state level.

At the same time, 70 percent of those who sympathize with the Tea Party, which organized protests this week against President Barack Obama’s health-care overhaul, want a federal government that fosters job creation.

They also look to the government to rein in Wall Street, with almost half saying the government should do something about executive bonuses. Supporters are also conflicted over whether private-enterprise elements should be introduced into government programs like Social Security and Medicare.

“The ideas that find nearly universal agreement among Tea Party supporters are rather vague,” says J. Ann Selzer, the pollster who created the survey. “You would think any idea that involves more government action would be anathema, and that is just not the case.”

Wrong Track

Ninety percent of Tea Party supporters say the country is on the wrong track and almost the same number doubt that Washington can find solutions. Their top concern is money, with more than a third citing government spending and the deficit. More than 80 percent say expansion of the government’s role in the economy is a high threat.

“It’s just the fundamental right of people to protest,” says Victor Mondello, a 79-year-old retiree from Andover, Massachusetts. Mondello, an independent, opposes “big government” and the health-care bill.

Overall, 26 percent of those polled identified themselves as Tea Party backers, while 53 percent said they weren’t and 21 percent said they weren’t sure.

Still, majorities of both Democrats and Republicans agree that government spending is out of control and 92 percent of Republicans and 71 percent of independents say the government tries to control too many aspects of private life.

Older, White

Tea Party supporters are likely to be older, white and male. Forty percent are age 55 and over, compared with 32 percent of all poll respondents; just 22 percent are under the age of 35, 79 percent are white, and 61 percent are men. Many are also Christian fundamentalists, with 44 percent identifying themselves as “born-again,” compared with 33 percent of all respondents.

The poll of 1,002 U.S. adults was conducted March 19-22 by Selzer & Co. of Des Moines, Iowa. It has a margin of error of plus or minus 3.1 percentage points.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aLBZwxqgYgwI

 Real Clear Politics Generic Congressional Vote Tracking -
http://www.realclearpolitics.com/epolls/other/generic_congressional_vote-901.html


Neck and neck between Republicans and Democrats.  Most folks seem like they are sick of both though.  I see no measurable difference between the two.  Time for some fresh new blood....independent blood!  Get rid of the career politicians!

Disconnect between the two parties

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Major shift in Party Affiliation

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By contrast, the percentage of self-described political independents has steadily climbed, on a monthly basis, from 30% last December to 39% in April. Taking an average of surveys conducted this year, 36% say they are independents, 35% are Democrats, while 23% are Republicans. On an annual basis, the only previous year when independent identification has been this high was in 1992 when Ross Perot ran a popular independent candidacy.

As has been the case in recent years, more independents "lean" Democratic than Republican (17% vs. 12%). Yet an increasing share of independents describe their views as conservative; in surveys conducted this year, 33% of independents say they are conservatives, up from 28% in 2007 and 26% in 2005. Again, this ideological change is at least in part a consequence of former Republicans moving into the ranks of independents.
http://pewresearch.org/pubs/1229/political-values-core-attitudes-trends-2009

Corporation runs for Congressional Seat

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Murray Hill Incorporated is Running for Congress
Corporations are people too!

Until now, corporations only influenced politics with high-paid lobbyists and backroom deals. But today, thanks to an enlightened Supreme Court, corporations now have all the rights the founding fathers meant for us. It was their dream to build the best democracy money can buy.

That's why Murray Hill Incorporated is taking democracy's next step — running for Congress. Join us and build a vision for the future we can all be proud of. Vote Murray Hill Incorporated for Congress!
http://www.murrayhillincforcongress.com/



Facebook page -
http://www.facebook.com/pages/Murray-Hill-Inc-for-Congress/314963396608?v=wall

Foreign businesses might be the real winners in Citizens United v. Federal Elections Commission, the landmark case that allows corporations and unions to spend limitless amounts of money on presidential and congressional political campaigns. A majority of large businesses are now owned by foreign entities, and this means international corporations could pour tons of money into the United States political scene, potentially swaying the political climate.
 http://blog.newsweek.com/blogs/thegaggle/archive/2010/01/22/should-foreign-corporations-spend-money-on-u-s-political-candidates.aspx

While political observers have dissected much of yesterday’s 5-4 Supreme Court ruling in the Citizens United v. Federal Election Commission, one potentially huge (and probably unintended) consequence has gotten little notice: the impact the decision could have on foreign government spending on federal campaigns.
The ruling essentially gives corporations the same rights as individuals in their ability to spend freely on political advertising, even if those advertisements explicitly advocate the election or defeat of a federal candidate. This means that candidates who support, say, increased restrictions on tobacco products could find themselves up against the corporate treasury of say, a major American tobacco company. And even the fear of $10 million in attack ads blanketing the airways come re-election time may give sitting legislators pause before taking on moneyed industries.

But it’s one thing for U.S. firms to have their say. What about foreign companies that operate U.S. subsidiaries? Many of these, like American businesses, are owned by ordinary shareholders — but a host of others are owned, in whole or in part, by the foreign governments themselves.

One prominent examples is CITGO Petroleum Company — once the American-born Cities Services Company, but purchased in 1990 by the Venezuelan government-owned Petróleos de Venezuela S.A. The Citizens United ruling could conceivably allow Venezuelan President Hugo Chavez, who has sharply criticized both of the past two U.S. presidents, to spend government funds to defeat an American political candidate, just by having CITGO buy TV ads bashing his target.

And it’s not just Chavez. The Saudi government owns Houston’s Saudi Refining Company and half of Motiva Enterprises. Lenovo, which bought IBM’s PC assets in 2004, is partially owned by the Chinese government’s Chinese Academy of Sciences. And Singapore’s APL Limited operates several U.S. port operations. A weakening of the limit on corporate giving could mean China, Saudi Arabia, Singapore, and any other country that owns companies that operate in the U.S. could also have significant sway in American electioneering.
Federal election law has long prohibited any foreign national from directly or indirectly making “an independent expenditure, or disbursement for an electioneering communication.” And the Supreme Court’s ruling does not explicitly address the issue of foreign corporations. However, in his dissent in Citizens United, Justice John Paul Stevens cautioned that the decision “would appear to afford the same protection to multinational corporations controlled by foreigners as to individual Americans.”
http://www.publicintegrity.org/articles/entry/1913/

WASHINGTON -- Forty-one business leaders have co-signed letters sent to Democratic and Republican leaders in Congress voicing their opposition to Thursday's Supreme Court ruling that frees corporations to spend unlimited amounts on influencing elections.

"Is there a difference between campaign contributions and bribery?" said Alan Hassenfeld, chairman of Hasbro, Inc, who co-signed the letter.

"It is long past the time to stop requiring that our elected officials moonlight as telemarketers raising money for their re-election campaigns rather then devoting all their time to solving the problems before this nation," he said.


The letter read: "As business leaders, we believe the current political fundraising system is already broken. The Supreme Court decision further exacerbates this problem."

Signatories include current and former high-ranking corporate executives of enterprises such as Playboy Enterprises, MetLife, Ben & Jerry's, and Delta Airlines, among others.
http://rawstory.com/2010/01/business-leaders-finance-ruling-extremely-troubling/

Farmers win on Election Year

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Less than two years ago, Congress seemingly ended a decades-old practice of rushing to the rescue of farmers any time they suffered weather damage to their crops. The costly old system of “emergency aid” was a regular drain on the budget, and there were so many loopholes that some farmers with no appreciable losses were able to cash in.

But some habits are hard to break.  The Senate this week is on the verge of bypassing new procedures set up by the 2008 U.S. Farm Bill in order to bestow $1.1 billion of  emergency aid on farmers as part of a huge package of renewed tax provisions and a one-year extension of unemployment insurance. Also tucked into the legislation is nearly $350 million to help ranchers, fruit and vegetable producers, catfish farmers hit with high feed costs, and poultry raisers left high and dry by the closing of southern chicken processing plants.

For the legislation’s main champion, Senate Agriculture Committee Chairman Blanche Lincoln, D-Ark., obtaining the farm aid for Mississippi Delta cotton and soybean growers hurt by last fall’s heavy rains is a crucial step in an uphill battle to retain her seat in November.

Lincoln has been sharply criticized by conservatives for allowing health care legislation to proceed in the Senate, and has been hurt by a groundswell of anti-government feelings throughout her state.  Polls show her trailing several Republicans, and she is now also being challenged in the May 18 Democratic primary by Lt. Gov. Bill Halter, who is being backed by liberal groups who are displeased with her close ties to corporate agriculture and her stands on health care, union rules and global warming.

Lincoln ascended to chairmanship of the Agriculture Committee late last September, and since then has been pressing Senate Majority Leader Harry Reid, D-Nev., and other Democratic leaders to help her pass emergency assistance for farmers in her region.  An aide to Reid confirmed Monday that emergency agriculture assistance was included in the $138 billion package of tax extenders and unemployment insurance provisions awaiting action in the Senate.

But how Congress handles the farm aid issue will be a test of both parties’ commitment to control spending.

That’s because the 2008 farm bill was supposed to end such ad hoc payouts and replace them with a permanent — and less politically driven — system.

The farm bill set up a $3.8 billion trust fund, financed out of customs duties rather than appropriated funds. Last December, the Department of Agriculture followed up by announcing stringent eligibility standards that required farms to demonstrate substantial losses not just on one crop but across their entire farming operation. The new Supplemental Revenue Assistance Payment Program (SURE) closed significant  loopholes that had been part of emergency farm aid spending measures enacted by Congress. And it requires farmers to have purchased their own private crop insurance — providing incentives to growers not to rely on government alone to manage risks

Senate Budget Committee Chairman Kent Conrad, D-N.D., a principal architect of the program, hailed SURE as a better solution to the more expensive disaster bills common in Congress.

But the current push for special one-time aid — coming before a single dollar has been paid out by SURE — is being driven by strong political pressures and, less obviously, by striking differences in the ways farmers in different regions of the country cope with risk.     

“Arkansas’ farmers are the backbone of our state’s economy,” Lincoln said last week of the emergency assistance. “This will provide the helping hand they need to get back on their feet and save jobs.”

Theo Eldridge, director of the Farm Service Agency in Phillips County, Ark., in the Mississippi Delta, estimates 30 percent of the local soybean and cotton crop was lost due to record rainfall at harvest time. But that tells only part of the story because rice — a major local crop and the second largest after soybeans in the state — did not have significant losses, Eldridge said.       

Although Republicans and Tea Party activists are targeting Democrats for their free spending ways, Lincoln has political cover on farm aid because her legislation is co-sponsored by Sen. Thad Cochran , R-Miss., the top Republican on the Appropriations Committee.

Even so, after a year of record outlays, Democratic leaders are under enormous pressure to show fiscal restraint. That could involve standing up to the powerful farm bloc, something few in either party have been willing to do.
http://www.thefiscaltimes.com/Issues/Budget-Impact/2010/03/08/Farmer-Could-Reap-Big-Subsidies.aspx

Side note (with political map):

Few Democratic Governors Are Safe


"There are states where we didn't think we could play, say, two months ago, that now we think we can play in," says Tim Murtaugh, spokesman for the Republican Governors Association. "I don't think it has anything to do with Obama's personality as much as it has to do with his policies."

With 37 governorships up for grabs this year — including 23 left open by term limits or retirement — that likely translates into bad news for the Democrats.

http://www.npr.org/templates/story/story.php?storyId=124497762&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+StatelineorgRss-Headlines+%28Stateline.org+RSS+-+Headlines%29 

 

Unlimited Corporate Power in Politics

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Thursday was a bad day for democracy. The Supreme Court’s decision in Citizens United v. the Federal Election Commission paves the way for unlimited corporate and union spending in elections, and the drowning out of the average citizen’s voice in our public policy debates. In other words, the court has made a bad situation worse by enhancing the ability of the deepest-pocketed special interests to influence elections and the US Congress. http://www.csmonitor.com/Commentary/Opinion/2010/0122/Supreme-Court-s-campaign-ruling-a-bad-day-for-democracy

The Supreme Court recently freed [1] corporations to spend more money on aggressive election ads. But if businesses take advantage of this new freedom, the public probably won't know it, because it's easy for them to legally hide their political spending.Under current disclosure laws for federal elections, it's virtually impossible for the public to track how much a business spends, what it's spending on, or who ultimately benefits. Experts say the transparency problem extends to state and local races as well.

"There is no good way to gauge" how much any given company spends on elections, said Karl Sandstrom, a former vice chairman of the Federal Election Commission and counsel to the Center for Political Accountability. "There's no central collection of the information, no monitoring."

Companies invest in politics to win favorable regulations or block those "that could choke off their business model," said Robert Kelner, chairman of Covington & Burling's Washington, D.C., political law group. But they'd rather hide these political activities, he said, because they fear backlash from customers or shareholders.

For instance, a company may want to help Democratic politicians who support health care reforms that would benefit the company, but it worries about offending "Republican shareholders who may care more about their personal ideology than about their three shares of stock in the company," said Kelner, who says he represents many politically active Fortune 500 companies. "The same would be true on the other side of the political spectrum."

Businesses must reveal their identities on public [2] reports [3] to the Federal Election Commission if they buy advertising on their own. But one popular and perfectly legal conduit for companies wanting to influence politics under the radar is to give money to nonprofit trade groups such as the U.S. Chamber of Commerce.

The Chamber and its national affiliates spent $144.5 million [4] last year on advertising, lobbying and grass-roots activism -- more than either the Republican or Democratic party spent, according to a Center for Responsive Politics analysis of public records -- while legally concealing [5] the names of its funders. The Los Angeles Times reported this week [6] that the Chamber is building a grass-roots political operation that has signed up about 6 million non-Chamber members.

Some of the positions the Chamber has successfully advanced on behalf of its donors include a nationwide campaign to unseat state judges [7] who were considered tough on corporate defendants and opposition to a federal bill that would have criminalized defective auto manufacturing [8].

Now the Jan. 21 Supreme Court ruling that increases the potential political clout of businesses is drawing fresh attention to the problem of tracking them.
That decision [9] (PDF), Citizens United v. Federal Election Commission, allows corporations to run television ads that don't merely speak to an issue but say outright whether a candidate should be elected, and allows them to do so any time they want to, using their general funds. The ruling also gives nonprofit groups like the Chamber these new freedoms, because they are technically structured as corporations.

Before, corporations had to rely on employee and shareholder contributions to a separate political account to finance the most explicit commercials and, in the months before an election, any issue ads that mentioned a candidate. Although the decision addressed federal election rules, its constitutional rationale also dismantles similar restrictions in 24 states [10].
http://www.propublica.org/article/higher-corporate-spending-on-election-ads-could-be-all-but-invisible

Overview of Political Process

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"... why am I so interested in politics? If I were to answer you very simply I would say this: why shouldn't I be interested? That is to say, what blindness, what deafness, what density of ideology would have to weigh me down to prevent me from being interested in what is probably the most crucial subject to our existence, that is to say the society in which we live, the economic relations in which it functions, and the system of power which defines the regular forms and regular permissions and prohibitions of our conduct? The essence of our life consists, after all of the political functioning of the society in which we find ourselves." Michel Foucault 
From Wiki -

Since the 1790s, the country has been run by two major parties. The United States does not have a parliamentary system, in which governing coalitions are formed after elections, so coalitions are formed before elections under the umbrella of the party organizations. In the absence of a parliamentary system, third parties cannot thrive. Since the Civil War, the two major parties have been called the Republican and Democratic parties. Many minor or third political parties appear from time to time. They tend to serve a means to advocate policies that eventually are adopted by the two major political parties. At various times the Socialist Party, the Farmer-Labor Party and the Populist Party for a few years had considerable local strength, and then faded away. At present, the Libertarian Party is the most successful third party.
Most officials in America are elected from single-member districts and win office by beating out their opponents in a system for determining winners called first-past-the-post—the one who gets the plurality wins, (which is not the same thing as actually getting a majority of votes). This encourages the two-party system; see Duverger's law.

Another critical factor has been ballot access law. Originally, voters went to the polls and publicly stated which candidate they supported. Later on, this developed into a process whereby each political party would create its own ballot and thus the voter would put the party's ballot into the voting box. In the late nineteenth century, states began to adopt the Australian Secret Ballot Method, and it eventually became the national standard. The secret ballot method ensured that the privacy of voters would be protected (hence government jobs could no longer be awarded to loyal voters) and each state would be responsible for creating one official ballot. The fact that state legislatures were dominated by Democrats and Republicans provided these parties an opportunity to pass discriminatory laws against minor political parties, yet such laws did not start to arise until the first Red Scare that hit America after World War I. State legislatures began to enact tough laws that made it harder for minor political parties to run candidates for office by requiring a high number of petition signatures from citizens and decreasing the length of time that such a petition could legally be circulated.
It should also be noted that while the overwhelming majority of elected officials do identify with a political party, the political parties of the United States are much more individualistic than in other political systems (i.e. in a parliamentary system). More often than not, party members will "toe the line" and support their party's policies, but it is important to note that they are free to vote against their own party and vote with the opposition ("cross the aisle") whenever they please.

"In America the same political labels—Democratic and Republican—cover virtually all public officeholders, and therefore most voters are everywhere mobilized in the name of these two parties," says Nelson W. Polsby, professor of political science, in the book New Federalist Papers: Essays in Defense of the Constitution. "Yet Democrats and Republicans are not everywhere the same. Variations—sometimes subtle, sometimes blatant—in the 50 political cultures of the states yield considerable differences overall in what it means to be, or to vote, Democratic or Republican. These differences suggest that one may be justified in referring to the American two-party system as masking something more like a hundred-party system."


Youth Guide to Politics, Part One: What Are Political Action Committees? 

http://www.wiretapmag.org/rights/43192/ 

About PACs - Political Action Committees

http://usgovinfo.about.com/od/thepoliticalsystem/a/aboutpacs.htm


List of Political Action Committees via Wiki
http://en.wikipedia.org/wiki/List_of_political_action_committees

In the 2008 elections, the top 9 PACs by money spent by themselves, their affiliates and subsidiaries were as follows:
  1. IBEW PAC $3,344,650
  2. AT&T Federal PAC $3,108,200
  3. American Bankers Association (BANK PAC) $2,918,14
  4. National Beer Wholesalers Association PAC $2,869,000
  5. Dealers Election Action Committee of the National Automobile Dealers Association $2,860,000
  6. International Association of Fire Fighters $2,734,900
  7. International Union of Operating Engineers (IUOE) Political Education Committee $2,704,067
  8. American Association for Justice PAC $2,700,500
  9. Laborers International Union of North America (LIUNA) PAC $2,555,350
http://en.wikipedia.org/wiki/Political_action_committee

Power Struggle

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The Economic Elite Vs. The People of the United States of America
Part 1 of 6
http://ampedstatus.com/the-economic-elite-vs-the-people-of-the-united-states-of-america-part-i

State Unemployment Borrowing

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Arizona and Delaware given credit allotment and added to the unemployment borrowing list for March.  New Hampshire managed to make it through February without tapping their line of credit while Kansas, Maryland, Massachusetts, and Vermont began borrowing in February.  California is now over $7.5 billion followed by Michigan, New York, Pennsylvania, and Ohio for the top spots.  All together....over $33.6 billion in borrowing as of March 1st 2010 that is accruing 5% interest and doesn't show up in the state budgets as it will be taxed directly via employers.  Thus curbing future job growth for years to come.

http://www.treasurydirect.gov/govt/reports/tfmp/tfmp_advactivitiessched.htm

Here are some statistics on unemployment....
The National Employment Law Project (NELP) released a new report last week showing that
1.2 million jobless workers will become ineligible for federal unemployment benefits in March unless Congress extends the unemployment safety net programs from the American Recovery and Reinvestment Act (ARRA). By June, this number will swell to nearly 5 million unemployed workers nationally who will be left without any jobless benefits.
...
Currently, 5.6 million people are accessing one of the federal extensions (34-53 weeks of Emergency Unemployment Compensation; 13-20 weeks of Extended Benefits, a program normally funded 50 percent by the states).

According to the BLS, there are a record 6.31 million workers who have been unemployed for more than 26 weeks (and still want a job). This is a record 4.1% of the civilian workforce. (note: records started in 1948).
http://www.calculatedriskblog.com/2010/02/five-million-workers-to-exhaust.html
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The nation's employment picture continues to remain bleak.

The U-S unemployment rate fell from 10 to 9.7 percent in January, but a Gallup poll out yesterday found that nearly one out of every five members of the country's workforce is underemployed. That's about 30 million Americans who are without jobs or unable to find full-time work.

"Underemployed people spent 36 percent less on household purchases than their fully employed neighbors in January, while six out of 10 were not hopeful about their chances of finding adequate work in the coming month, the poll said…
The poll comes at a time when voter anger over the slow economic recovery is running high and President Barack Obama's hopes of boosting employment through government programs have been frustrated by partisan rancor in Congress."

The poll also found that underemployed Americans have a more favorable view of the president than those with full-time work.

There are increasing worries that the 6.3 million Americans who have been unemployed for six months or longer will continue to be out of work, possibly for years to come. The 6.3 million is a record number more than double what it was in the early 1980s.

The NY Times dubs them the "new poor," people who once enjoyed a middle-class life but since the recession have been forced to rely on public assistance for the first time.

Millions could soon face having to do without an unemployment check over the next few months, unless Congress approves an extension. And that's for those lucky enough to be getting any assistance in the first place, as many have no real social safety net to speak of and "are landing in this netherworld," as one expert puts it.

Economists think that the highly educated and those with specific skills are likely to bounce back, but the ability to eke out a middle-class existence with only a high school education and no specialized skills might largely be relegated to history books. Even if the economy begins to recover, it's going to take a long time to get the more than 15 million people who are officially jobless back into the work force, particularly since the speed with which jobs come back after downturns has been on a downward cycle over the past 50 years, according to The Times.

To make matters worse, it's difficult to be optimistic about the three sectors that have traditionally helped the country get out of a recession: the auto industry, home building, and banking.

If you are unemployed or underemployed, what are you doing to make ends meet?

For those of you who are employed, there is this sobering thought to consider: Since health insurance, and other fringe benefits, are routinely based on full-time employment, many of these under-employed Americans do not qualify for these benefits. It means that many more millions of Americans who, when they get sick, will be treated by hospitals, which will pass that cost onto states systems (those that have them) or, more likely, insurance companies. Couple that with rising health care costs in the medical field and the insurance industry and fewer and fewer businesses will be able to afford health benefits for their employees --or they'll lay off more people. Or close their doors.
Either way, a smaller and smaller pool of insured will remain, increasing the risk pool for private insurers who will then be forced to raise their rates --on you, and on group plans. This was precisely the reasoning Anthem Blue Cross in California used to justify their rate increase proposal of 39 percent this year and 41 percent last year (though they've now been found by the state to have committed over 700 violation, including late payment of claims and misrepresenting facts or insurance policies to consumers).
Bottom line: The unemployment picture is another aspect of health reform seldom discussed and another strong argument for single-payer national health insurance. If you want to argue that you don't want to pay for other people's health care, guess what: You already are, and under the current system, you will pay more.
 http://www.examiner.com/x-15870-Populist-Examiner~y2010m2d23-Poll-One-in-five-Americans-underemployed
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California saw 834,329 unemployment claims filed in January, a 34% increase over the 621,468 in January of 2009 when the financial meltdown escalated and employers started slashing payrolls, reports the state Employment Development Department.

The cost of unemployment in California also has soared as more people collect benefits for a longer period.

EDD reported the state paid out $2.44 billion in benefits this January up from $1.34 billion in January 2009, an 82% increase. That equates to about $81 million a day in pay outs.
http://economy.freedomblogging.com/2010/02/23/calif-sees-jobless-claims-jump-in-january/27613/

To put that in perspective, from my own research - average daily revenue for California for the current fiscal year ( July 1st 2009 through Dec 31st 2009) is $220 million per day.  That puts average daily unemployment expenses at over 36% of average daily revenue.....which is clearly unsustainable.  To top it off, unemployment expenses are rising while revenue is declining.  Average daily borrowing from the Fed for unemployment was $32.1 billion.

Five states will be added to the list (currently 30 states) in the next six months:

Arizona will begin borrowing from the Fed by the end of March - first of April.  Delaware will begin end of April - first of May.  Hawaii will start in June.  New Hampshire by mid March.  Tennessee in August.

The Trust Fund balances of the remaining states, that aren't borrowing from the Federal Government yet, have been declining at just under 10% per month since June 2009.  At this rate all but two states will be borrowing from the Federal Government by the end of 2012....and that is if the trend doesn't accelerate....which in all likelihood...will!
If global markets ever get tired of fretting over the debt situation in Europe there's certainly no shortage of cash-strapped government entities in the United States that give cause for concern. Setting aside the exploding federal deficit situation, ABCNews.com set out to take a close look at the 50 states from a variety of economic and demographic factors, including total population, projected 2010 budget deficits, credit ratings, foreclosure rates, energy costs, total outstanding debt and unemployment.
Here are the five states spiraling most dangerously toward insolvency:

California Reaming

With a fiscal year 2010 budget gap of nearly $52 billion, or 56 percent of its total general budget, California is hands down the poster child of fiscally imperiled states. It also enjoys the dubious distinction of having the single worst credit rating (A-) of any of the 50 states, as measured by Standard & Poor's.

Ill in Illinois

By most measures, Illinois has a troubling financial outlook. It has a $14.3 billion budget deficit, which amounts to 41 percent of its total budget, as well as double-digit unemployment. Illinois also has the second lowest S&P credit rating behind California.

Earlier this year a group of Chicago-based civic leaders created a Web site, Illinoisisbroke.com, to raise awareness and keep a running tally on the state's total debt which is expected to reach $130 billion by July. The state, according to the site, spends $3 for every $2 it takes in. Much of the debt is related to pension and health care benefits for state retirees.

Florida, Foreclosed

No state with a population as large as Florida's (at 18.5 million people) has a foreclosure rate as high as the Sunshine State. At 2.7 percent, it is twice the national average, according to the Mortgage Bankers Association's National Delinquency Survey.

New York State of Bind

The Empire State faces a $21 billion budget deficit this fiscal year which ends in April. To put that in perspective, that is 38 percent of New York's total budget. Only California has a higher absolute dollar deficit figure weighing it down, and only four states (California, Arizona, Nevada and Illinois) have larger gaps when measured as a percentage of total budget. The state has historically relied heavily upon revenues from taxes on bonuses paid out by Wall Street firms, in some years accounting for nearly one-fifth of the total budget. The collapse of several Wall Street firms, along with a backlash against financial industry pay in general, is expected to put the state in a severe bind. As state legislatures go, Albany gives Sacramento a run for its (ability to mismanage) money.

Michigan's Mess

Detroit's auto woes have pushed Michigan's unemployment level to 14.6 percent, the highest in the country. The eighth most populated state, Michigan has been forced to partially shut down state government functions twice in the past two years as lawmakers failed to agree on a budget, according to the Pew's study. It currently faces a $2.8 billion budget gap.

When the federal Bureau of Economic Analysis releases finalized 2009 data, Michigan is expected to be among the 10 poorest states, according to Donald Grimes, a senior research specialist at the University of Michigan.
 http://abcnews.go.com/Business/california-illinois-florida-york-michigan-states-dire-financial/story?id=9856552 

Side note on banking...

The Federal Deposit Insurance Corp. said Tuesday that its deposit-insurance fund fell to $20.9 billion at the end of 2009, a $12.6 billion drop in the final three months of the year, as bank failures continued at a pace not seen since the savings and loan crisis. The fund's reserve ratio was -0.39% at the end of the quarter, the lowest on record for the combined bank and thrift fund.

The deposit insurance fund is unlikely to soon see a respite from a decline in the number of failing banks: The FDIC said the number of banks on its "problem" list climbed to 702 at the end of 2009 from 552 at the end of September and 252 at the end of 2008. The number of banks on the list, which have combined assets of $402.8 billion, is the highest since June 1993.

"The continued rise in loan losses and troubled assets points to further pressure on earnings," FDIC Chairman Sheila Bair said in a statement. "The growth in the numbers and assets of institutions on our 'Problem List' points to a likely rise in the number of failures."

Industry indicators deteriorated nearly across the board. The FDIC said loan losses for U.S. banks climbed for the 12th straight quarter, while the total loan balances for U.S. banks continued to fall. The agency said the quarterly net charge-off rate and the total number of loans at least three months past due both were at the highest level ever recorded in the 26 years the data have been collected.

Net charge-offs of troubled loans occurred across all major loan categories, led by a $3.3 billion increase in residential mortgage loans. The FDIC said U.S. banks' coverage ratio--reserves divided by the amount of noncurrent loans--fell to 58.1% in the fourth quarter from 60.1% in the third quarter.
http://www.zerohedge.com/article/fdic-hits-record-default-levels-deposit-insurance-fund-plunges-127-billion-negative-209-bill
Bold and Underline Mine