1. Underplayed story of the week Navy “corpseman" Whoa, I hear your screams. Underplayed? Surely, Obama's innocent mispronunciation of corpsman, said (OK, three times) in an otherwise inspiring speech, is not the most underplayed story of the week. It must be the most overplayed story of the week--a tempest in a (right wing) talk radio teapot.
I agree that Obama's “corpseman" gaffe is a trivial slip in the grand scheme. But it is the kind of gaffe that will stick. It will do small but permanent damage to Obama's presidency.
Here is why it will stick. Obama is a liberal Democrat and a liberal Democratic commander-in-chief simply has no margin to sound ignorant about his own military … just as, say, a Republican (Bush) has no margin to make flippant remarks after a major hurricane (Katrina) had devastated poor people in a poor city (New Orleans). In American politics it is always and everywhere stupid to reinforce your party's negative stereotypes.
“Corpseman" will further alienate the very voters Obama must keep to maintain his majorities in the House and Senate. Call these voters Jim Webb Democrats. They are mainly Southern, mainly small town voters with close ties to the military. Most have family, neighbors or friends who serve. The Jim Webb Democrats form one of the two largest blocs of swing voters right now. (Suburban independents are the other bloc. They will not be as alarmed by “corpseman." Suburban independents worry more about budget deficits and taxes.)
Insular urban liberal Democrats have little understanding how these kinds of gaffes hurt the president and the party. The mainstream media likewise doesn't know, or care, which is why the story was underplayed, except on Fox. But at the margin, “corpseman" is the kind of gaffe that could permanently cost Obama a point of support, another senator here or there (Specter? Bayh?) and five Congressmen.
2. Best positive story of the week Cisco blows away its numbers, and CEO John Chambers explains how.
3. Best negative story of the week Nouriel Roubini makes a strong case for a weak recovery. Honestly, I get sick of reading Roubini. But his predictive powers demand we pay heed.
4. So which is it--improving or worsening economy? Cisco is booming. Alas, so are deficits and unemployment. So are things getting better or worse? Answer: Depends on which economy you live in. Read “America's Two Economies" by Thomas F. Cooley and Peter Rupert. This is one of the best data-driven, unbiased analyses I've read lately.
5. Dow Slips Below 10K Yeesh. The question is why. For the answer, let us search among these choices: (1) The underlying economy is weakening again after the 3rd and 4th spurts (see Roubini); (2) The dollar is strengthening, which is typically bad for stocks in the short run but good in the long run; (3) Investors are unhinged by the Obama's determination to tack left and pile on the deficits in spite of sagging approval numbers and electoral rebukes in Virginia, New Jersey and Massachusetts; (4) The global carry trade is unwinding and margin calls are on the rise; (5) Relax, folks, it's just profit taking from a 10-month bull rally.
6. More thoughts on turbulent Chinese and American relations Read this disquieting piece by my Forbes colleague, Robyn Meredith. Then read this defense of China by our friend, George Gilder.
Key paragraphs in Gilder's column:
“Yes, the Chinese are needlessly aggressive in missile deployments against Taiwan, but there is absolutely no prospect of a successful U.S. defense of that country. Sending them $6 billion of new weapons is a needless provocation against China that does nothing valuable for the defense of the U.S. or Taiwan. Yes, the Chinese have also spurned America's quixotic effort to herd the gangs of anti-Semitic, anti-American oil-dependent felines at the United Nations to undertake an effective program of economic sanctions against Iran.
“A foreign policy of serious people at a time of crisis will recognize that the current Chinese regime is the best we can expect from that country. The Chinese revitalization of Asian capitalism remains the most important positive event in the world in the last 30 years. Not only did it release a billion people from penury and oppression but it transformed China from a communist enemy of the U.S. into a now indispensable capitalist partner. It is ironic that liberals who once welcomed appeasement of the monstrous regime of Mao Zedong now become openly bellicose at various murky incidents of Internet hacking."
7. Would you buy a Toyota now? Its stock, too? Yes and yes. I love Toyotas. My driving career began in 1970 and I've owned everything from a 1966 Ford Falcon with brakes so shoddy I had to open the door and use my left foot, Fred Flinstone style … to a brand new 1998 BMW 740i. My favorite car is the one I drive now, a 2007 Lexus RX350. When I need a rental car for four people, I always ask for a Toyota Sienna van or a Toyota Highlander SUV. This company offers great value, and I expect it will fix its problem and return to greatness soon.
Is Toyota a good stock buy? Yes.
Add your comments to my Friday musings … or make some musings of your own. Fire away--especially if you disagree. Just keep it clean and don't get personal.
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