Team Obama attacks Mitt Romney by illustrating how Bain private equity capitalism took over and closed a Kansas City steel mill between 1994 and 2001.  Team Romney counter attacks with an ad that illustrates the Romney (Bain) creation of a steel mill in Indiana.  Dueling steel mills.  This suggests that the Romney camp is well informed of the Obama camp class warfare tools, and is prepared to answer blow for blow.  What is the subject of this debate?  Capitalism and how it creates out of destruction.  The Kansas steel mill failed in the 20th century and the Indiana steel mill rises in the 21st century.  Note that there is no Electoral College advantage to either side, as KS and MO are red, and IN is clearly red.  Team Obama aims to advance the case that America is too fragile to trust in the hands of a capitalist overlord.  Will boss bashing work for keeping the vote blue?  It will work in blue states.  What about purple states?  Who in OH and PA does not want that Indiana mill, Steel Dynamics?

 

Spoke Gregory Zuckerman, WSJ, re the brouhaha of the JP Morgan Chase loss of more than $3 billion in hedging by the so-called "London Whale." This tale started with a pick-up by Zuckerman of outsized hedging trades by a unit of Chase on London, called CIO. The thinking was that Chase was too long in exposure, and needed to sell insurance in he unlikely event that the long positions would collapse. Zuckerman tells me that there is more to the hedge that just one direction. Jamie Dimon now scrambles to explain all this routine commerce. Zuckerman says that once upon a time, this hedging by a bank unit was so ordinary that it was never news, not even the losses. That was thin. The New Normal makes Chase vulnerable to the political noise of being too-big-to-fall. What of Congress? The Dodd Frank bill, I am told, does not much touch this exchange and would not have intervened if it could have figured it out. Many hedge funds are boasting of their paper profits of $30m, because they took the other side of the trade. Trader games and fancies. The White House is rushing to the story, because this event undermines the Obama re-elect claim that POTUS cleaned up Wall Street with his reforms and demands. Congress will investigate in order to snort and point at the offending parties. Dimon recorded a Meet the Press segment on Wednesday 9 in order to boast of the health and good conduct of his bank.   Learn that Dimon retaped the event on Friday afternoon, in order to explain himself (again). The Obama administration posturing these last three years make this episode appear more the unchecked moral hazard of the Bush administration. It is not. It is the cost of hedging positions with your own money (gathered up by taking the Fed's easy money and using it in the search for yield and so forth.) Hilarious. Will Romney use the (false) talking point? Since it is not truly a talking point, unknown. 

 

A wag calls this the low point of the campaign (so far); however there may be utility to Romney's campaign's eagerness to have the candidate apologize for bad behavior when the candidate was a teenager in Michigan. The positive is that the enterprising political reporters have completely run out of material on Mitt Romney.  This is the bottom of the pile.  There is no there within fifty years.  There is also evidence that Mitt Romney had a childhood.  High school confidential is not the happy memory for any adult.  Romney gets to apologize for being immature and a pack brat.  Gee.  Meanwhile the Obama re-elect floats a  rumor that it is ready to abandon NC (after the anti-same sex marriage vote) and give up the Charlotte convention site.  The White House uses the National Journal correspondent George Condon to put the story out in order to see who thinks it is a bad idea.  No evidence of pushback. Meanwhile, Salena Zito and Lara Brown report talk of Obama weakness in IA and CO; and both regard PA as fragile for Obama re-elect.  It is not wedge issues.  It is the economy showing hints of sliding again when the extended unemployment checks end.  Ben Bernanke regards QE3 not out of the ordinary if inflation remains low and the transfer payments end without vigorous GDP.

Last week, POTUS was off to Afghanistan to boast of the Bin Laden strike; this week POTUS is off to ABC to boast of his change of direction on the state issue of same-sex marriage; next week, nutrition? SpaceX? George Clooney's new movie? Anything but the GDP. Spoke Nicholas Confessore, NYT, who presents the case that the Democrats are pouring money into so-called grassroots building (GOTV) while Mitt Romney will help the GOP raise hundreds of millions for both the campaign and the Super Pacs. It is an arms race for the next six months to the Election. POTUS and Romney both know that there business is raising and spending money. The issues are fixed. Romney will talk about the GDP. Obama will not talk about the GDP. Changing the subject each day is not unsmart of the Obama re-elect, but then, it is mostly killing time. Who does not know the issues? Spoke Larry Kudlow, Phil Izzo, Bill Whalen, re the Electoral College. It comes down to a handful of states. NM, CO (and the same-sex marriage flip is most useful in CO), NV, IA, OH, PA, FL, NC, VA, NH. The GDP will make the decision for a few hundred thousand people the last week. I give Romney FL, NC, VA and OH. I give Obama PA, IA, CO, NV, NM. This means NH is the tie-breaker. Does NH vote about Bin Laden? Nah. About same-sex marriage? Nah. It votes straight up GDP. NH knows Romney well. NH voted for Obama in 2008. Flip a coin. It is that close.

Senator Rob Portman of Ohio makes his move to be not only the vice-presidential choice for Mitt Romney but also to remain a  major presidential contender for several cycles by ad-libbing a chicken-laying-an-egg imitation on CNBC.  You cannot teach this, nor can you make it up.  The boy just had to sing opera on the markets stage of CNBC.  Portman was already the perfect choice for region, temperament, experience, status and his Spanish language skills; but now that he is also a showman of the county fair quality, rivaling anything Bill Clinton can do from Arkansas, Portman sweeps into farm country with a policy that cannot be refused: chickens before eggs. Star is born. Buckeye wins.  Show me a contender from Ohio, and I will show you a Republican dream team of one.  Game over.

The work force participation rate is the percentage of all people who are both working or eligible to seek work, and we learn from the new BLS stats that the rate has fallen to a 30 year low. Why? Alex Kowalski of Bloomberg explains that a deal of the explanation is that a growing number of workers are taking advantage of the Social Security Disability Insurance. Up more than 22% since the beginning of the housing collapse. SSDI pays $1,111 per month, and is hardly a panacea; however the fund now costs $182 billion (2011) and is rising. Importantly, once a worker receives SSDI, he or she is officially off the work force, therefore no longer either working or seeking work or eligible for work. The labor force drop of more than 300k is another way of indicating that workers dropout regularly now. Where do they go? Nowhere good. SSDI is not for the aged or junior: it is entirely for workers 25-64 years old. The earning years; the family years; the strength of the economy. The Obama years describes a period to time when American workers have been thrown off course. Candidate Obama is wise to avoid the topic as long as possible. The trend does not favor the Obama re-elect; hover it remains Mr. Romney's work to explain where the unemployed are living. Point to a sad, grim, story I did with Mike Dorning, Bloomberg, re the jobless in Dayton, Ohio, the heart of the heart of the heart of the swing states (below, Cridersville is north of Dayton on 75 to Lima). A funeral director says more than a few families each year put notices in the paper asking for donations to pay for the services.  Also, the birth rate in Dayton's Montgomery County has dropped since 2007.  SSDI looks like the thing this year (and it may be the first of the entitlement programs to go broke, as soon as 2018, since half of all people who go on the rolls, stay on them until death). Can Romney tell the story? Unknown.

The Obama re-elect launches the campaign with back to back rallies in Ohio and Virginia.  Comparing these events to the spectacular rallies of 2008, what shows is that despair has gripped the young and bright.  The rallies showed a mechanical determination, a slow-motion defeatism.  The nation has changed considerably since 2008 -- grittier, quieter, more cautious, less confident -- and it is well to acknowledge the genuine face of doubt.  POTUS starts the conversation about his re-election with dollops of denial.  Mitt Romney is on theme, jobs and growth and jobs and Federal finances.  Mr. Obama is defending the status quo ante.  Candidate Obama aims to aim his remarks at Romney, not at the voters. The beginnings of the campaign are the whole of the story.  Obama will not explain.  Blame-shifting, chest-thumping, trash-talking, class-warring, stem-winding.  Six months to go and already Candidate Obama sounds tentative.  Why spend time talking about the other guy; why talk about the other guy?  The conventional wisdom is that Mr. Obama speaks of mild-mannered Romney and the oafish GOP, because he is not able to speak of his own work.  I am reconsidering.  Perhaps Candidate Obama does not speak of his work, because he has never spoken of such when in campaign mode.  Mr. Obama has always won campaigns on the basis of being Mr. Obama and not on the basis of what Mr. Obama has done.  We can see the scheme in place already: Not much about his record (Bin Laden and GM), not much about his plans (he will make the rich "pay their fare share), not much  about his policies ( what he will stop, not what he will do: such as stop Medicare from changing, stop the GOP from legislating, stop the rich from spending ill-gotten gains from tax dodging).  The Obama 2012 is about nothing much more than "Elect me, Obama, because I am me, and they are not me, and my me is better than any not me ever could be."  Can this work?  "Fired up, Ready to go!"

    

Two first rate WSJ reporters play the game of Jobs Report Please! on live stream, and it is fun to watch them scramble for continuity as not all the numbers print together. The general version of the April numbers is soft. The worker participation arte continues to plunge, now at a thorty year low, despite women in the workplace since 1980 in huge numbers. Why plunge? Spoke to Alex Kowalski, Bloomberg, who identified that a quarter fo the 2% drop in jobless rate since the peak in 2009 is explained by workers 25-64 moving off the charts by applying for and receiving Social Security Disability Insurance of $1,111 per month.  On SSDI, you are no longer jobless.  Half the recipients stay on it the res of the their lives.  The entitlement is likely the first one to go bust as soon as 2018 -- costing $182 billion last year.  This is where the unemployed go in recessions, and though we ended the decline in June 2009, the workforce still behaves as if we are in a recession.  Romney attacks immediately by pointing to the lackluster to fragile to nonexistent jobs recovery.  The White House and the Chicago re-elect team are muddied in response.  POTUS genuine problem in jobs.  The trend is soft and has been since the end of the snowless winter  in the East.  No reason to expect a better jobs number the rest of the campaign.  The 8.1% rate is entirely because of the shrinking workforce.  If you put the worker dropouts back in, we are still at witheringly bad jobless numbers.   Romney pounding on softly soft jobs is the thing this year. 

"We should be seeing numbers in the 500,000 jobs created per month," Mr. Romney said. "This is way, way, way off from what should happen in a normal recovery." 

POTUS must continue to change the subject, and each First Friday of each month remaining (May, June, July, August, September, October, and Friday November 2) will show weakness for POTUS.  Game on.

From left, Representative Michele Bachmann of Minnesota, Gov. Bob McDonnell of Virginia and Mitt Romney greeted supporters at a Romney campaign event in Portsmouth, Va., where Mrs. Bachmann officially endorsed Mr. Romney. 

  

The GOP whacks the Obama re-elect with a double blow that silences the White House and Chicago. First, Romney asserts about the Chen fiasco, "...if this is true...it is a day of shame for the Obama administration." Then Chris Smith stages a phone cll by activist Bob Fu at a Congressional hearing. Chen repeated much of the same information that Bob Fu remarked upon to me and Gordon Chang on Wednesday 2 May. The White House is off-balance and seeking rescue from the tangle. Jay Carney tried bluster: "He (POTUS) is focused on the need to advance US interests in our broad-based relationship with China... He has and will continue to make a priority in that relationship or a part of that relationship an open and frank discussion of our concerns about human rights."   The Obama re-elect is silent at Romney's bait.  Late news from China (midday) is that the Foreign Ministry is shopping a gambit that Chen is "free to apply for a Visa to study abroad."   Suprising to see the Obama re-elect knocked off its game during Bin Laden Victory week.  By a blind man.  Both China bosses and the Obama bosses are in trouble over Chen, and it is in their mutual interest to solve this swiftly before it gets stranger.  Late late word is that US officials will now be permitted to visit Chen in hospital.  Can they move fast enough to get Chen on the HRC plane leaving Saturday morning.

Spoke China hands Gordon Chang, Perry Link, Kelley Currie, Ann Lee, Bob Fu, Joseph Sternberg, re the Chen Guangcheng crisis in Beijing to learn the the US Embassy had plenty of reason to know that Chen was threatened BEFORE he decided to leave the sanctuary of the U.S. Embassy and enter a Chinese hospital. This is a major detail and will be the center of contention when Congress insistes upon hearings with China Ambassador Gary Locke and SecState HRC. What did you kno and when did you know it about threats to Chen's family by Chinese authorities?  All this is dangerous detail on the timeline.  State careers in the balance; Chen's life in the balance.  China relations with US in the balance.  Gordon Chang makes excellent argument that Chen returning into China embrace now destabilizes China.  Just 24 hours after POTUS Obama campaign stunt in Kabul, the China fiasco removes the Afghanistan headlines with a crisis in Beijing.  Chen reportedly tells Melinda Liu, Newsweek, that he and his family want to leave on HRC plane.  Meanwhile, PRC demands an apology from US.   How else can State mishandle this?  Stay focused on White House.

The Obama re-elect launches the negative campaign by heaping calumny upon the villainous, sinister, duplicitous, un-American, insufferable, Frenchified, out-of-touch, larcenous, did-I-mention-villainous? plutocrat Mitt Romney. The Washington wags argue that the attack ads will flow like the Tiber, and that the best chance for POTUS Obama to outlast the weak economy and the doubts about leadership is to buy his opponent in negativity.  (Bush-Kerry 2004 campaign is the model: Karl Rove guides David Axelrod's hand is the theory.)   Welcome to the permanent ad hominem campaign.  We are electing the least unacceptable man to be POTUS, and the case for Chicago is that it is okay to win by outlasting the smears.  Sure.  What will it do for turn-out?  Drive it down is the general rule.  This may conflict with the needs of the Obama team to encourage voting by the margins, such as the youth vote, the jobless or near to vote, the alienated.  Unknown at this time.  What will Team Romney do to answer?  Fight negative with negative.  Long six months of trash-talking.  The laugh lines will be few and wasted.  The Making of the Least Unacceptable, 2012.