Jobs to Obama: You risk being a one-termer

From the cover of Walter Isaacson's biography of Steve Jobs available at Amazon.
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Apple founder Steve Jobs told President Obama he risks re-election because of a bad relationship with the business community, says a soon-to-be-published biography of the computer visionary.

"You're headed for a one-term presidency," Jobs told Obama in the fall of 2010, according to the biography by author Walter Isaacson that will be in bookstores next week.

The Huffington Post, which obtained an early copy of the bio, also reports that Jobs offered to do ads for Obama's 2012 re-election campaign.

"He had made the same offer in 2008, but he'd become annoyed when Obama's strategist David Axelrod wasn't totally deferential," writes biographer Isaacson.

From The Huffington Post account of the book:

Jobs, who was known for his prickly, stubborn personality, almost missed meeting President Obama in the fall of 2010 because he insisted that the president personally ask him for a meeting. Though his wife told him that Obama "was really psyched to meet with you," Jobs insisted on the personal invitation, and the standoff lasted for five days. When he finally relented and they met at the Westin San Francisco Airport, Jobs was characteristically blunt. He seemed to have transformed from a liberal into a conservative.

"You're headed for a one-term presidency," he told Obama at the start of their meeting, insisting that the administration needed to be more business-friendly. As an example, Jobs described the ease with which companies can build factories in China compared to the United States, where "regulations and unnecessary costs" make it difficult for them.

Jobs also criticized America's education system, saying it was "crippled by union work rules," noted Isaacson. "Until the teachers' unions were broken, there was almost no hope for education reform." Jobs proposed allowing principals to hire and fire teachers based on merit, that schools stay open until 6 p.m. and that they be open 11 months a year.

Jobs suggested that Obama meet six or seven other CEOs who could express the needs of innovative businesses -- but when White House aides added more names to the list, Jobs insisted that it was growing too big and that "he had no intention of coming." In preparation for the dinner, Jobs exhibited his notorious attention to detail, telling venture capitalist John Doerr that the menu of shrimp, cod and lentil salad was "far too fancy" and objecting to a chocolate truffle dessert. But he was overruled by the White House, which cited the president's fondness for cream pie.

Though Jobs was not that impressed by Obama, later telling Isaacson that his focus on the reasons that things can't get done "infuriates" him, they kept in touch and talked by phone a few more times. Jobs even offered to help create Obama's political ads for the 2012 campaign. "He had made the same offer in 2008, but he'd become annoyed when Obama's strategist David Axelrod wasn't totally deferential," writes Isaacson. Jobs later told the author that he wanted to do for Obama what the legendary "morning in America" ads did for Ronald Reagan.

Herman Cain's Impressive Resume

Herman Cain signs "9-9-9" hands symbolizing his proposed tax overhaul during a book signing last week in The Villages, Fla

Herman Cain is looking better and better everyday. I firmly believe that he would have the best chance to beat Obama and get the Black vote. In the debates, he is probably the only one who has continually zeroed in on the issues rather than continually attack other Republican candidates. This says much for this man.

Herman Cain is running for president. He’s not a career politician (in fact he has never held political office). He’s known as a pizza guy, but there’s a lot more to him. He’s also a computer guy, a banker guy, and a rocket scientist guy.

Here’s his bio:

1. Bachelor’s degree in Mathematics.
2. Master’s degree in Computer Science.
3. Mathematician for the Navy, where he worked on missile ballistics (making him a rocket scientist).
4. Computer systems analyst for Coca-Cola.
5. VP of Corporate Data Systems and Services for Pillsbury (this is the top of the ladder in the computer world, being in charge of information systems for a major corporation).

All achieved before reaching the age of 35. Since he reached the top of the information systems world, he changed careers!

1. Business Manager. Took charge of Pillsbury’s 400 Burger King restaurants in the Philadelphia area, which were the company’s poorest performers in the country. Spent the first nine months learning the business from the ground up, cooking hamburger and yes, cleaning toilets. After three years he had turned them into the company’s best performers.
2. Godfather’s Pizza CEO. Was asked by Pillsbury to take charge of their Godfather’s Pizza chain (which was on the verge of bankruptcy). He made it profitable in 14 months.
3. In 1988 he led a buyout of the Godfather’s Pizza chain from Pillsbury. He was now the owner of a restaurant chain. Again he reached the top of the ladder of another industry.
4. He was also chairman of the National Restaurant Association during this time. This is a group that interacts with government on behalf of the restaurant industry, and it gave him political experience from the non-politician side.

Having reached the top of a second industry, he changed careers again!

1. Adviser to the Federal Reserve System. Herman Cain went to work for the Federal Reserve Banking System advising them on how monetary policy changes would affect American businesses.
2. Chairman of the Kansas City Federal Reserve Bank. He worked his way up to the chairmanship of a regional Federal Reserve bank. This is only one step below the chairmanship of the entire Federal Reserve System (the top banking position in the country). This position allowed him to see how monetary policy is made from the inside, and understand the political forces that impact the monetary system.

After reaching the top of the banking industry, he changed careers for a fourth time!

1. Writer and public speaker. He then started to write and speak on leadership. His books include Speak as a Leader, CEO of Self,Leadership is Common Sense, and They Think You’re Stupid.
2. Radio Host. Around 2007—after a remarkable 40 year career—he started hosting a radio show on WSB in Atlanta (the largest talk radio station in the country).

He did all this starting from rock bottom (his father was a chauffeur and his mother was a maid). When you add up his accomplishments in his life—including reaching the top of three unrelated industries: information systems, business management, and banking—Herman Cain may have the most impressive resume of anyone that has run for the presidency in the last half century.

Did You Vote For Barack Obama?

President Obama's Message on the Debt Agreement

Debt Ceiling Bill

Half Full or Half Empty?
By Fisher Investments Editorial Staff, 08/03/2011

Number 103

The House of Representatives and Senate have both now passed the debt limit increase bill. This may have surprised some, but not us—as we expected, the 103rd increase in the debt ceiling’s 94-year history passed both houses of Congress and has been signed by President Obama, lifting the debt ceiling. While many in the press have suggested this debate was unusually heated, the fact is it played out nearly exactly as past debt limit debates. Amity Shlaes and John Thorndike included an illuminating anecdote from the annals of debt ceiling debate history in their piece Sunday. And in our recent piece, “Full Faith and Credit,” we gave three timelines as examples of how these debates have unfolded in the more recent past. We could have given many, many more.

There will be more debt ceiling debates in the future. Just keep this as a reminder to take media coverage that doesn’t take politicians’ statements about default, doom-and-gloom and deadlines with many grains of salt.

But It’s a Bad Deal

Now that there’s a deal, some opine it isn’t a good thing—we’re either not going to appease ratings agencies (why we’d want to or how we’d actually appease these confused analysts is beyond us) or it’s going to hurt the economy somehow. Beyond the raters (whom we address here), the reality is the new debt ceiling deal has almost no economic impact. A higher ceiling? Meaningless. Not enough cuts? We might agree, but that’s not crisis-inducing, especially considering how cheap our interest rates currently are. Too much in cuts? Well, some in the more-government-spending crowd have argued for two years that 2009’s $787 billion stimulus was too small. If that’s too small to have an impact, we wonder exactly how “cuts” (which are really more like a slower rate of spending) averaging less than $150 billion a year (and are almost non-existent up front) are big enough to have a dire impact. That doesn’t seem like a recipe for a 1937 redux to us (especially considering 1937 wasn’t all about spending cuts).

“Zombie” Consumers Save More Money

June US consumer spending fell -0.2%, missing estimates for slight growth. Personal incomes, meanwhile, rose—pushing the strangely calculated savings rate higher.

Some have recently suggested the US consumer is overleveraged and therefore is unable to drive recovery. And we’re sure some will find confirmation in Tuesday’s spending data. But let’s check the theory. First, consumer spending (like all economic data) frequently fluctuates. Consumer spending has fallen multiple times, like points in 2003 and 2005—and that didn’t presage recession. Expectations widely continue to be for ongoing growth this year—and we agree. Seeing economic data that miss expectations—even decline for a month—is just normal.

As for arguments US consumers are overleveraged, that usually hinges on comparisons of total debt outstanding to income. Which can be a faulty comparison. For example, you don’t have to pay off your mortgage in a given month or year. Rather, your income must be sufficient to service it. So the comparison should be income to debt-servicing costs—and that’s shown in Exhibit 1:

Exhibit 1: US Household Debt Service Payments as a Percent of Disposable Personal Income



Source: Federal Reserve Bank of St. Louis.

Looks like debt service to income has been falling recently. It may make a good headline, but it doesn’t look like consumers are increasingly overleveraged to us.

Moreover, if you fear consumers are overleveraged, then a report like today’s should be encouraging. Disposable incomes rose and consumers spent less—which makes them more liquid.

It’s Not All Government

Over in the UK, the punditry commonly bemoans the nation’s slow rate of growth—much as they do in the US. But beyond that point, there are some stark differences. Britain passed austerity measures in 2010 and has attempted to follow through—with a higher VAT tax, spending cuts, lower corporate tax rates and more. In the US, we’ve largely pursued a program of greater federal government spending. Yet growth rates are eerily similar—which should tell you there’s much more to what determines an economic growth rate than government policy. Just consider that point when you hear the competing arguments for either greater government spending or more austerity, both ostensibly to foster growth.

It’s Not All the Fed, Either

Amid the debt ceiling debate, an odd thing happened: Treasury rates fell. We’ve already discussed the fact this should have called into question the theory that the debt ceiling was such a problem, but beyond that there’s something else: QE2 ended a month ago and rates are down. So much for the theory the Fed was solely keeping rates low.

The Tug of War, Illustrated

It seems to us today’s debate over matters both economic and political (like the debt ceiling) are pure examples of the bifurcated sentiment we’ve written about this year. And they don’t stop with the discussions above—just consider China, who some fear will overtake the US as the world’s largest economy, while others simultaneously fear China tightening too much and tanking its economy. Or blaming corporations for boosting profitability while not hiring much. There’s fodder in each for bulls and bears alike.

Ultimately, a balanced, apolitical point of view is needed to see markets and the economy clearly. Otherwise, you’re likely to interpret any piece of data in line with your bias—and be highly disappointed by the outcome of every political debate. (After all, politicians often promise a lot and deliver very little.) A clear view shows solid global economic growth and US economic growth that isn’t torrid presently but has recouped nearly all of the output lost in the recession. Corporations are flush with cash generated by rising revenues, productivity and earnings. Stocks have roughly doubled since the beginning of the bull market. And there’s likely far more fuel in the tank for continued growth beyond what we see as a year of rotation within a broader bull market.

Feeling frustrated by political bickering in Washington is perfectly understandable (and believe us, we share that angst). Good thing we don’t have to rely on them economically. When you look up from the debt debate (in its many forms) and the primary worries of the day, the innovation and dynamism of capitalism become easier to see. Don’t believe us? Buried beneath all of Tuesday’s headlines was this story of industrial rebirth in what many still see as America’s “rust belt.” And that dynamism is the antidote to a frustrating Washington that’s utterly disconnected from Wall Street, Main Street and every street in between.



*The content contained in this article represents only the opinions and viewpoints of the Fisher Investments editorial staff.

Obama: Debt Ceiling Talks Fell Apart, Boehner Walked Out

WASHINGTON -- Social Security and Medicare may have been saved by the Tea Party's refusal to accept President Barack Obama's "grand bargain."

On Friday evening, Speaker John Boehner (R-Ohio) walked away from the latest offer on the table by Obama, who is now summoning congressional leaders back to the White House on Saturday to figure out an eleventh-hour plan. The most viable option left for addressing the debt crisis, crafted by a bipartisan pair of Senate leaders, calls for much smaller cuts than the ones the president was willing to make.

"No one wants to punt until default is the only other option," a Democratic aide said Friday morning, before the Senate voted down a House offer that coupled a debt ceiling raise with a radical constitutional amendment.

With the "Cut, Cap and Balance" bill out of the way, the lone obstacle to the debate's conclusion was the talks between Boehner and Obama. The collapse in those grand bargain negotiations paradoxically move the broader debt ceiling negotiations closer to an end. And not a moment too soon: The White House has repeatedly said that July 22nd was the day by which Congress must have identified a path forward and begun work toward its passage.

During a hastily called press briefing on Friday night, Obama said Boehner called him half an hour earlier and "indicated he was going to be walking away" from the compromise the two of them had been privately working on. A Democratic source told The Huffington Post that the president had called Boehner on Thursday evening to discuss the deal, but never heard back. The president tried again Friday afternoon. He finally got a return call at 5:30 p.m. The speaker, the source added, briefed the press about his decision to pull out of the deal before telling Obama.

Speaking to a half-filled room of reporters, the president laid out just how dramatic the cuts to the social safety would have been in the deal he was trying to give Republicans. He said that he couldn't believe Boehner walked away from the proposal he was offering: $3.5 trillion in spending cuts over 10 years, smaller tax increases than those laid out in a bipartisan Senate plan and cuts to entitlement programs, something Democrats have pushed hard against. It also didn't include revenues that Obama has insisted be in a final package, namely via closing tax loopholes and ending subsidies for the oil and gas industry.

"In other words, this was an extraordinarily fair deal," Obama told reporters. "If it was unbalanced, it was unbalanced in the direction of not enough revenue."



Obama: Boehner Withdraws From Debt Talks
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The president appeared genuinely flummoxed at the talks falling apart, saying there "doesn't seem to be a capacity for [Republicans] to say yes." He said he couldn't believe Congress would "end up being that irresponsible" as to impose a "self-inflicted wound on the economy at a time when things are so difficult."

The New York Times also played a major part in the breakdown of talks between Boehner and the White House, reporting Thursday that the pair had moved very close to a deal. Both sides spent the rest of the day knocking down the report, while Senate Democrats fumed that the White House was caving. Privately, Senate Republicans charged Sen. Charles Schumer (D-N.Y.) with orchestrating the debacle in an attempt to blow up the negotiations.

The latest breakdown comes with about a week left until the Aug. 2 deadline, at which point the government is expected to run out of money to pay its bills. Even if a default is averted, the protracted debate over raising the debt limit has left the U.S. government dangerously close to having its credit rating downgraded. In that event, Americans could expect a spike in interest rates on their credit cards, student loans and mortgages, with ramifications felt through the U.S. and global economy.

"We have now run out of time," the president said. He said he told congressional leaders to come back to the White House at 11 a.m. on Saturday "to explain to me how we are going to avoid default."

In a press conference later Friday night, Boehner accused the White House of having “moved the goal post” in negotiations.

“The president demanded $400 billion more” in revenues when the two of them met Thursday, Boehner said, which is “nothing more than a tax increase on the American people.”

He said he and House Majority Leader Eric Cantor (R-Va.) were “very disappointed” by that demand. Boehner also sent a letter to House Republicans on Friday night explaining why he pulled out.

"It has become evident that the White House is not serious about ending the spending binge that is destroying jobs and endangering our children's future," the GOP leader wrote. "A deal was never reached, and was never really close."



Boehner: No One Wants a Government Default
At a briefing with reporters shortly after the president spoke, three senior White House officials laid out in detail their version of where the discussions fell apart.

On the discretionary spending front, both sides had "identical offers," said one of the officials. There would be $1.2 trillion in cuts over the course of ten years; $1 trillion in savings that would come from the draw-down of the wars in Afghanistan and Iraq; and $250 billion in savings in Medicare over the course of 10 years. Both sides had also agreed to attach a second piece of legislation, to be decided via the reconciliation budget process, that would have changed the retirement age for Medicare and changed the premium structure for Medicare Part B and D, while eliminating certain kinds of supplemental insurance. That bill would also contain changes to the way Social Security benefits were paid starting in 2015, with buffers put in to protect the lowest-income beneficiaries.

There was, in addition, an informal agreement to try and extend Social Security's solvency by an additional 75 years. How they would get there, however, remained a point of contention, with the president wanting a package of benefit and premium changes and Republicans focusing just on the benefit side. Unable to overcome that impasse, the two sides settled on vague language requiring them to meet that 75-year goal with future reforms.

Where the two sides remained apart were on Medicaid cuts, with Republicans demanding tens of billions of dollars more in cuts than the president was comfortable making. White House officials described that difference as possible to overcome, however.

The revenue component, in the end, remained unbridgeable. According to senior White House officials, each side had agreed to pass tax reform down the road that would result in $800 billion in revenue generated -- the equivalent amount of savings that would be achieved if the top-end Bush tax cuts were simply allowed to expire. The administration wanted $400 billion in revenues on top of that. Republicans wanted zero, and in statements on Friday night GOP leadership aides insisted that the White House had changed the contours of the negotiations by making that demand in recent days.

Obama offered to move off that $400 billion mark should GOP leadership lessen the type of cuts to entitlement programs they were demanding, White House aides said.

In addition, the two sides could not figure out what to do if that aspirational tax reform package wasn't achieved. The White House, at various points, proposed that the fallback option be the actual expiration of the Bush tax cuts for the wealthy. Republicans demanded that they have something as bluntly frightening to Democrats. On Thursday, GOP leadership proposed that the penalty for inaction on tax reform be the repeal of the health care law's individual mandate as well as the newly created Independent Advisory Board, which has been set up to find cost savings in Medicare. The White House balked at the offer.



"Our view was we are not going to put the individual mandate in a deficit reduction package," said a senior White House official. "But we were open to other ideas and there are any number of formulations for us."

All of which does not mean that the big deal is now dead. In fact, White House officials made it abundantly clear that they would welcome GOP leadership back into those discussions.

"The speaker withdrew from the talks. This offer is still available,” said one of those officials.

Boehner, at his briefing, said he didn’t think his relationship with Obama, or debt talks, are beyond repair. He said he planned to go to the White House on Saturday with other leaders.

At this stage, the most viable proposal left on the table appears to be a far less ambitious debt plan put together by Senate Majority Leader Harry Reid (D-Nev.) and Senate Minority Leader Mitch McConnell (R-Ky.). Their proposal, dubbed a "fallback option," calls for $1.5 trillion in cuts, generates no new revenues and would put the onus fully on Obama to raise the debt limit, without Congress. It would also require the president to raise the debt ceiling in three increments over the next year and a half -- a politically driven requirement by McConnell aimed at making Obama take responsibility for all debt ceiling hikes ahead of the 2012 elections.

The other potential remedy -- for the president to exercise the so-called constitutional option and invoke 14th Amendment powers to raise the debt ceiling himself -- was ruled out, once again, during the White House briefing.

"There are no options other than a legislative solution,” said a senior White House official.

A Democratic staffer familiar with Hill negotiations concurred that the Reid-McConnell plan appears the most likely resolution. The fight now heads to the trenches: The leaderships of both parties will cobble together coalitions in the House and Senate that can move the package through. In both parties, the wings will generally oppose leadership and the center will hold, if history is any guide. The same coalition passed the Wall Street bailout and the Obama-GOP tax cuts.

"We are prepared to compromise consistent with our values," House Minority Leader Nancy Pelosi (D-Calif.) said in response to the news. "Speaker Boehner's ‘adult moment’ is long overdue. Our economy, our children's education, our seniors' security and our nation's fiscal soundness require that we act without further delay."

Of course, there's also the bipartisan Senate Gang of Six proposal, which would slash $3.7 trillion in deficits over 10 years and raise up to $1 trillion in new revenues through tax code reform. But that proposal has critics in both parties, and some say there isn't enough time to turn it into a bill, send it to various committees for debate and pass it by Aug. 2.

Frustrations are clearly high on both sides of the aisle. As Twitter blew up at the news of the Obama-Boehner talks crumbling, Cantor spokesman Brad Dayspring chimed in with a tweet knocking Obama for making it seem as if Republicans thwarted the process.

“As if there's really a question whether President Obama threw a tantrum at the White House last week - same guy just appeared,” Dayspring tweeted.

Rep. Peter Welch (D-Vt.) said Congress had to move fast now that things have gotten hairy. He warned that the situation is nothing like the government shutdown narrowly averted earlier this year.

"If you've got the speaker walking away from the White House -- astonishing in and of itself -- the next step is meltdown in the markets," Welch said. "This is tempting the markets to turn, and when they do, it will be sudden and savage, then things will be out of control and the damage will be huge and irreversible."