I’m sure you’ve already heard a variation of this from the White House many times.

The new jobs report came out this week and unemployment has fallen to 8.3%. From CNN: “Employers added 243,000 jobs in January, the Labor Department reported Friday, marking a pick-up in hiring from December, when the economy added 203,000 jobs. Meanwhile, the unemployment rate fell to 8.3%. That is the lowest since February 2009.”

On the surface, these look like good numbers for the economy, and great news for President Obama’s reelection campaign.

Unfortunately, this only tells part of the story.

When you see the number of jobs created, keep in mind that we need a monthly increase in the total number of jobs of about 100,000 just to keep pace with the growing population. And for instance, if 20,000 jobs are eliminated, then we need an increase of 120,000 new jobs just to keep the status quo. That’s more than one million new jobs per year.

(NOTE: I’ve seen many variations of these numbers over the years, and I’m unsure what the exact number of new jobs are that we need to create on a monthly basis. I’ve seen estimates anywhere from 85,000 to 150,000 new jobs needed per month. For today’s post, the exact number is not the point. We must create a lot of jobs just to MAINTAIN the current unemployment rate due to the growing population.)

But how does the unemployment rate drop from 8.5% to 8.3% when the economy creates 243,000 jobs? It can’t. The math doesn’t work. Unless the size of the workforce decreases. This may be one of the most important and least reported employment numbers by the media.

And this is one of the most significant problems we face today.

(Click on image to enlarge.)

The labor force expands in two ways. One, the population grows. And two, the percentage of Americans who consider themselves part of the workforce increases. This graph shows the labor force participation rate in the United States. In the ’80s and ’90s, the percentage of the population who considered themselves part of the workforce increased. For the last ten years we’ve seen these numbers continue to decline other than a short period preceding this most recent recession. Over the last couple of years, these numbers have been plummeting.

Americans are fleeing the workforce in droves. President Obama only needs a few million more people to leave the workforce to get his unemployment numbers under 8%.

Reagan Recession vs Obama Recession
Unemployment is a trailing indicator of the economy. The economy gets bad, and months later you see unemployment numbers rising. The economy gets better, and months later you see unemployment numbers going down. At least, this is what typically happens.

Following the Reagan recession, unemployment topped out at 10.8% late in 1982. Following the Obama recession, unemployment topped out at 10.2% in early 2011. The duration and depth of these two recessions are very similar. In each case, the recession was officially over months earlier. It takes several months to get to the peak unemployment numbers following a recession.

Keep in mind the chart above where labor force participation was increasing in the ’80s compared to what we see today. And here’s where we start to see some significant differences in the numbers behind the numbers.

From IBD: “To get a better sense of how bad Obama’s recovery is, consider this: Under Obama, real GDP has climbed a total of just 6% in the two-and-a-half years since the recession ended in June 2009. By comparison, real GDP had grown 16% by this point in the Reagan recovery, after the very deep and painful 1981-82 recession. Had Obama’s recovery been as powerful as Reagan’s, the economic pie would be $1.2 trillion bigger today. And had job growth under Obama kept pace with job growth during the Reagan recovery, there would be 10 million — yes 10 million — more people with jobs today.” (I added the bold.)

So during the Reagan recovery, the unemployment rate dropped despite the fact that the workforce increased by millions of workers.

And during the Obama recover, the unemployment rate has dropped because millions of workers have left the workforce.

IBD goes on to explain:

So what’s different? The presidents’ policies.

Reagan enacted sweeping and permanent tax cuts, aggressively eliminated or reduced regulations, reined in domestic spending, and championed the private sector.

Obama’s approach has been the opposite — a huge increase in regulations; meager, targeted and temporary tax cuts; a massive increase in size and scope of the federal government; and a barrage of invective against businessmen and the wealthy. Obama has bashed Reagan’s approach, saying that cutting taxes and regulations “has never worked” to spur growth.

The article in IBD was written before the new unemployment numbers came out. But here’s a recent article by one of my favorite writers, James Pethokoukis. Here’s the meat of his post:

1. If the size of the U.S. labor force as a share of the total population was the same as it was when Barack Obama took office—65.7 percent then vs. 63.7 percent today—the U-3 unemployment rate would be 11.0 percent.

2. But let’s not go all the way back to January 2009. In January 2011, the unemployment rate was 9.1 percent with a participation rate of 64.2 percent. If that were the participation rate today, the unemployment rate would be 8.9 percent, instead of 8.3 percent. As an analysis from Hamilton Place Strategies concludes, “Most of the shift of the past year is due not to the improvement in the labor market, but the continued drop in participation in the labor force.”

3. Now, to be fair, some of the decline in the participation rate is aging Baby Boomers dropping out of the labor force. But taking that into account still doesn’t get us very far, as HPS notes: “Demographic projections expect that participation rate to be at 65.3 percent. If that full participation rate is the goal, our economy is “missing” 3.8 million workers, up from the 3.4 million we noted in the white paper. The unemployment rate in that context has not budged at 10.4 percent.”

4. Then there’s the broader, U-6 measure of unemployment which includes the discouraged plus part-timers who wish they had full time work. That unemployment rate is still a sky-high 15.1 percent.

5. If the participation rate does level off at its current rate, according to HPS, the economy would need to generate 231,000 jobs per month to get below 8 percent unemployment by Election Day.

One more comment and we’ll move on. When the economy does actually begin to make some real improvement, disenfranchised workers will again start looking for jobs. It’s possible that a stronger economy will actually begin to drive up the unemployment numbers because of a higher percentage of people engaged in the workforce. Not much good news in any of these numbers.

People are talking about taxes. And specifically talking about Mitt Romney’s tax rate. There’s a lot of misunderstanding and misinformation out there about taxes. Take this graphic for example:

Mitt Romney finally released his tax returns this week, and we found out that he paid an effective tax rate of 13.9%. The Internet and the media have been buzzing. I was watching MSNBC and the anchors were gleefully discussing the unfairness of Romney paying only about 15% of his earnings in taxes. After all, teachers and others in the middle class have to pay more than this!

But do they really?

I did a quick Google and it appears the average teacher’s salary in Kansas is somewhere around $40,000. That does indeed put the teacher in the 25% tax bracket as the image above shows. So the teacher must be paying $10,000 in income taxes! (For the mathematically challenged, that’s 25% of $40,000.)

But no. That’s not how income taxes are computed.

First of all, income tax rates are really marginal tax rates. We currently have six tax brackets (see Wikipedia). Income tax is computed for your income through each tax bracket up to your last dollar earned. It’s confusing. Here’s an example:

For this example, we’re going to assume the teacher is single and without children. Under today’s rates, a tax payer who makes $40,000 pays 10% of their first $8,500 of income (the first bracket), plus 15% of the next $26,000 (the second bracket), and then 25% of the remaining $5,500 (the third bracket). Well that’s still $6,125 in taxes — an effective income tax rate of 15.3%! That’s still higher than what Romney is paying!

Except the teacher isn’t paying $6,125 either. At this income level, the teacher automatically takes a $5,800 “standard deduction” and a $3,700 “personal exemption”. This takes the teacher’s taxable income down to $30,500. Go through the math and the teacher is not paying $4,150 in income taxes — an effective tax rate of 10.375%. That’s assuming no other deductions or credits.

Hhhmm. That’s now lower than Romney’s effective tax rate.

But wait! Great news! The teacher has a baby! Yay! (For my math I’m going to assume the teacher is still single. Don’t judge.)

As the head of the household, the teacher’s “standard deduction” jumps from $5,800 to $8,500. (I think I’m understanding this correctly, but if I’m wrong on the standard deduction, shoot the IRS, not me.) Plus the mom now receives a $1,000 child tax credit. Tax credits are much better than tax deductions. Tax deductions reduce your taxable income. But tax credits actually reduce the total taxes owed.

So the teacher’s taxable income is now $27,800. Do the math and you end up with $3,745 in taxes minus the $1,000 child tax credit equals $2,745 in income taxes — an effective tax rate of 6.8%.

Does the teacher own a home? Deduct the mortgage interest. Make some charitable donations? Deduct that too. And there’s more.

I hope you get my point. When Romney pays a tax rate of 13.9%, he’s paying a higher tax rate than most of us. According to the Tax Policy Center, the average effective income tax rates of U.S. households is 8.2% (as of 2010). Nearly half of all U.S. households pay no income tax at all.

But we do pay taxes. Payroll taxes. Gas taxes. Sin taxes. Property taxes… We can talk about tax burden another time.

But Mitt Pays Less Than Other Rich People!
Yes he does. And there are reasons for this. I’m not defending the tax code, only explaining it.

Capital gains are taxed differently than regular income for several reasons.

Rich people have options for what to do with their money. And what we’ve found is that as we lower the capital gains tax rate, rich people engage in MORE activity that is subject to the capital gains tax. When the capital gains tax rate was lowered (first under Clinton from 28% to 20%, then under Bush from 20% to 15%), it created an increase in activity each time that actually generated MORE tax revenue for the federal government. When the capital gains rate was increased in 1980, tax receipts decreased.

Some people, including President Obama, believe that the capital gains tax rate should be increased to be more fair. But keep in mind, this will decrease tax revenues, and enlarge our deficits. That means less money to spend on education, the environment, shovel-ready jobs, whatever. (I discussed this in a previous post here.) All in the name of the rich paying their fair share.

Much of this income has already been taxed, and many economists believe it shouldn’t be taxed at all. I’m going to borrow this next bit from James Pethokoukis. He explains it well:

The capital gains tax is a double tax. For instance, corporate profits are taxed first as income and then a second time when they are distributed to shareholders as dividends. And capital gains from investments are not inflation adjusted, so taxes are often paid on illusory profits.

We shouldn’t tax what we want more of. And the real problem with the capital gains tax isn’t the rate or how it is structured, but what is taxed: gains on investments, which are savings put to work. Economists of all stripes have been saying Americans have consumed too much and invested too little over the past decade. So why would we want to tax investment even heavier, as the Obamacrats want to do?

Indeed, we shouldn’t want to tax capital at all. As an AEI study on consumption taxes explains: “The income tax’s penalty on saving is an undesirable distortion of consumer choice. It also causes less capital to be accumulated in the United States. The reduction in capital accumulation reduces labor productivity and lowers real wages throughout the economy, depressing the standard of living of future generations. Some studies have found that a switch to consumption taxation would increase the size of the U.S. economy by as much as 9 percent in the long run, although other studies estimate smaller gains.”

So the main reason people want to keep taxing capital—or even tax it more heavily—is one of theology rather than sound economics. As the Concise Encyclopedia of Economics puts it: “Strange as it may sound, most economists would agree that having zero taxes on capital income is theoretically the best thing to do. But many reject putting this theory into practice because they think that too much of the benefit would go to the ‘wrong’ people, namely high-income households and the wealthy.” That’s right, the desire to make sure the wealthy like Romney “pay their fair share” is desired by class warriors even if it make everyone poorer than they otherwise would be.

Take it away, JFK (in his Special Message to the Congress on Tax Reduction and Reform from Jan. 24, 1963): “The tax on capital gains directly affects investment decisions, the mobility and flow of risk capital from static to more dynamic situations, the ease or difficulty experienced by new ventures in obtaining capital, and thereby the strength and potential growth of the economy.”

Bottom line: Americans should pay taxes on their wages only, not on any income from saving. The right capital gains tax rate is zero, for everybody. Might a few rich people like Romney pay less in taxes? Maybe. But the result would be a stronger economy, more jobs, and higher incomes for all Americans.

I’m not advocating lower rates for capital gains. That’s not my point. Just trying to put a little reason behind the madness. A little fact behind the fiction.

Just a few thoughts on the Chiefs.

Beating the Packers
Interim head coach Romeo Crennel deserves a lot of credit for the Chiefs beating the Packers this past weekend. The defense has been inconsistent, but has shown glimpses of excellence this season. I wasn’t overly surprised that our defense played well against the Packers, who were missing their top wide receiver, their best running back, and were banged up along the offensive line.

The big surprise was the play of the Chiefs’ offense. They were effective, efficient, and dominated the time of possession. I have defended Todd Haley often, but there’s no denying that the offense looked it’s best with offensive coordinator Bill Muir and Jim Zorn putting together the offense without Haley’s interference. If you’ve never watched the Bill Muir interviews on the Chiefs’ website, you’re missing out. He’s a great guy and a good interview. This week he was asked about the offense’s efficiency. From the Star:

The Chiefs had one of their best offensive games of the year, piling up a season-high 438 yards in a 19-14 win over Green Bay.

Offensive coordinator Bill Muir suggested this was because the Chiefs were led for the first time by interim head coach Romeo Crennel rather than Todd Haley, who was fired earlier in the week. Muir didn’t mention Haley by name, but when asked about these observations, he said, “If you thought it appeared that, then it probably was.

“Romeo delegates authority and expects the people who are given authority to do their job. He’s hands-on and he knows what he wants. As long as he’s getting it, he’s pretty calm. If he’s not getting it, then the calmness disappears in a hurry.”

The offense had good balance. The play calling was good. The line protected quarterback Kyle Orton and gave him time to make his reads. The Chiefs were able to get the plays in quickly to Orton, who got to the line with plenty of time to read the defense, call out protections, and adjust his receivers. That’s something we haven’t seen all season.

The Future at Quarterback
Not only have I defended Todd Haley, I’ve often defended Matt Cassel. I still believe that Cassel is a good quarterback. He’s just not a great quarterback. If you believe that you can only win a Super Bowl with an elite quarterback, then the Chiefs are in trouble. And for those now clamoring for the Chiefs to keep Kyle Orton and cut Cassel, be careful what you wish for. I’ve watched Orton enough the last couple of years to know this — Kyle Orton is Matt Cassel. Their career numbers are virtually identical. They are decent quarterbacks who can manage the game when things are going well. Orton may be a little more accurate down the field than Cassel, but he’s just as likely to melt down and throw three INTs in a game.

My problem with playing Orton now is that we learn nothing about rookie Ricky Stanzi. And if you believe that the Chiefs need an elite quarterback, with every win we get further away from being able to draft Robert Griffin III.

The Next Head Coach
The best news we have about the head coaching search is that people have stopped talking about Josh McDaniels! The public support has swung considerably to Crennel. But once again, be careful what you wish for. Even if he wins the next two games and somehow manages to get the Chiefs into the playoffs, he would still be down my list of candidates.

My biggest concern is that Crennel is Wade Phillips. Phillips has repeatedly proven to be one of the best defensive coordinators in the NFL. And he’s repeatedly shown that he’s not up to the task as a head coach. And my second biggest concern is Crennel’s age. Pioli should be looking for a guy who can be the head coach for the next ten years. At 64 years old, can you really see Crennel as the long-term answer in Kansas City?

Now having said that, he wouldn’t be an awful choice. I just hope he’s not the first choice.

While there’s no evidence that Bill Cowher wants to return to coaching, I hope that Pioli at least makes that call. And if not Cowher, there’s still Jon Gruden and Jeff Fisher out there. Both have been successful head coaches (more successful than Crennel was in Cleveland where he went 24-40), and are young enough to be a long-term fit in Kansas City.

I like the thought of Gruden a lot. He was the last head coach to win the Super Bowl without an elite quarterback (Brad Johnson). Bill Muir was the offensive coordinator when Gruden took the Bucs to the Super Bowl. And you would think that Crennel would be willing to stay on as defensive coordinator under Gruden. The Chiefs don’t need to start over, and Gruden could keep quite a bit of the staff in place.

Their are a number of rumors that the Chiefs and Fisher are close to finishing up a deal. While I think Fisher is a good choice, my concern is that the Chiefs will have to start over with new coordinators. Since Matt Cassel has been here, he’s already had four offensive coordinators. The Chiefs need consistency. But more than anything, the Chiefs need the right head coach. I’d take Fisher over Crennel.

But now let’s take Gruden and Fisher off the table. Where do the Chiefs go now? I think that leaves Iowa head coach Kirk Ferentz or Romeo Crennel. I do not want to see the Chiefs take a flyer on an unproven coordinator when there are better, safer options available.

The Players Want Crennel
It certainly appears that Crennel is the top choice among the players, but this should be expected. Players don’t like change, and Crennel is a player’s coach. The players also wanted Gunther Cunningham when Schottenheimer left. And the players lead a revolt that got John Mackovic fired and Frank Gansz promoted. How did that work out?

CORRECTION: I misidentified Marv Levy as the coach who had been fired, when it was in fact John Mackovic. I have corrected it above.

You would think that the Chiefs will have to at least consider drafting a quarterback in the first round of the draft this year. And Todd Haley has (had) one year left on his contract. If Pioli believes in Matt Cassel, then he can allow Haley to coach the team through the final year of his contract before making a final decision on extending Haley’s contract or replacing him. But if the Chiefs draft a quarterback, you can’t let Haley dangle with just one year left. You either have to fire him at the end of the season, or extend his contract. It wouldn’t be fair to tell Haley he’s coaching for his job, and then hand him a rookie quarterback.

But on Monday, Pioli fired Haley.

Is it fair? From a coaching standpoint, probably not. Haley made mistakes this year, but there were circumstances well beyond his control. I’ve read many of the local and the national articles about Pioli’s decision, but I want to take this from a different perspective. The perspective of an employer.

I seem to be in the minority, but I like Todd Haley. I think he’s a good coach. Is he good enough to coach a team to the Super Bowl? Maybe. With the right team. But I don’t think Haley’s coaching ability had anything to do with why he was fired.

I have employed and managed hundreds of people. And one lesson I learned the hard way was that when you have an employee who is the wrong fit for your organization, the sooner you replace that employee, the better. There were rumors that Pioli wanted to fire Haley last year. Then there were rumors that Pioli would have fired Haley if the Chiefs had lost to the Colts and started the season 1-4. I tend to take rumors with a grain of salt. Many rumors are untrue and unfounded. But in hindsight, I think we can now assume they were true.

It’s clear that Pioli and Haley had a dysfunctional working relationship. And it’s likely that Pioli had come to the conclusion long ago that Haley was the wrong fit for the Chiefs. Or at least, the wrong fit to work for Pioli. But how do you fire a coach that just won the AFC West? That would have been a tough sell to Chiefs fans. Pioli decided he had to wait until he had “public justification” for the firing of Haley. And he finally got it with the loss to the Jets. The Chiefs could no longer pretend that they still had a shot at the playoffs. And Haley was fired.

I think the jury is still out on whether or not Scott Pioli can lead the Chiefs to the Super Bowl. There are some glaring holes on this roster, and Pioli is responsible. Some have even speculated that Pioli sabotaged the roster so that he could justifiably fire Haley. I don’t believe that for a minute. But that doesn’t mean that Pioli made all of the same decisions that he would have made if he had full support of his head coach. Only Pioli can look in the mirror and decide if he did everything possible to make this season a success.

And while I tend to like Haley more than I like Pioli, I might have come to the same conclusion and fired Haley. It’s great to have fire and passion. I like that in a head coach. But I don’t like disrespect. A heated discussion between Haley and Matt Cassel doesn’t bother me at all. But some of the public arguments between Haley and his assistants bothered me a lot. Those discussions should be behind closed doors, and should always be respectful. As a business owner, I would never undermine one of my managers by berating them in front of other employees. (Actually, I don’t think I ever berated an employee.) Haley not only berated his assistants, he seemed to relish that atmosphere. He wanted the confrontations, and obviously believed them to be beneficial to the team. I’m guessing Pioli came to a different conclusion.

One more comment and we’ll move on. I listened to the press conference with Scott Pioli and owner Clark Hunt. I’ve been surprised that I haven’t seen this comment anywhere else. On multiple occasions, Hunt said that he wanted a team that the fans could be proud of. I’m guessing that Hunt was not proud to have Haley as the face of the franchise.

The Next Head Coach
Chiefs fans are clamoring for Bill Cowher. I would love it, but I don’t see it happening. I’m not sure that Cowher has the desire to coach again. I do hope that Pioli at least makes the call. So if not Cowher, then who?

Personally, I would be very enthused by either Jon Gruden or Jeff Fisher. Gruden has a good job with ESPN, and it’s unclear if he wants to return to coaching. That leaves Fisher as probably the hottest available coach on the market. I will be very surprised if he doesn’t take a job somewhere this year. There are already openings in Kansas City, Jacksonville and Miami. And I think it’s likely that San Diego and possibly St. Louis will be in the market for a new head coach.

But let’s make a case for Gruden. The Chiefs are certainly in better shape today than they were a few years ago. This is a good job to walk into. Pioli does not need to blow this thing up and start over. He will probably try to keep as much continuity as possible. Gruden is an offensive minded coach. And who was his offensive coordinator when he was with the Bucs and won a Super Bowl? Bill Muir. Gruden called the plays, but Muir was his offensive coordinator. And I think it’s likely Romeo Crennel would be willing to stay on as defensive coordinator under Gruden. He’s been out of football for a couple years now. If he wants back in,  this would be an excellent opportunity. And remember, Gruden won a Super Bowl with Brad Johnson at quarterback. Pioli might be thinking that if Gruden can do it with Johnson, then he can do it with Cassel.

One thing I find interesting is that there isn’t a lot of buzz around the league about the offensive and defensive coordinators. Typically there are a few “hot” names out there. Not this year.

My biggest hope? Do NOT hire Josh McDaniels. Lots of people have been linking McDaniels to Pioli, and I think it’s very possible that Pioli would have hired McDaniels three years ago if Denver hadn’t gotten to him first. I think this would be a huge mistake. And Pioli can’t afford to make another mistake.

People have also been linking Pioli to Iowa head coach Kirk Ferentz. I don’t have any strong feelings either way about Ferentz. There have been a number of high profile college coaches who couldn’t cut in the NFL, but if you look at it objectively, MOST head coaches don’t make it in the NFL. Ultimately, most head coaches are fired within three-to-five years. And look at Jim Harbaugh. In his first season with San Francisco, he’s got the 49ers winning the NFC West.

Unless Pioli has his eye on a coordinator, this is something that could get wrapped up soon. There are strong candidates who are currently out of football. There’s no reason to wait.

But as usual, it’s rarely that simple. I have a few takes on what’s happened to the Chiefs this year, but today I’m going to focus on just one of them. How important is your best player?

It’s easy to get tunnel vision when looking at your team. Let’s step outside of Kansas City for a moment. For years the discussion in the NFL has been: who is the best quarterback in the league, Peyton Manning or Tom Brady? Over the last ten seasons, Manning and Brady have represented the AFC in the Super Bowl six times with four wins between them. They’re leaders. They put up great stats. And they do nothing but win big games.

But beyond these two quarterbacks, most have considered Indianapolis and New England to be among the best franchises in the league. Bill Polian has built the Colts into perennial winners and one of the most dominant teams in the NFL. From 1999-2010, the Colts have a regular season record of 138-54.

And in New England, Bill Belichick has done much the same. With four Super Bowl appearances and three wins, Belichick is widely considered the best coach in football. From 2001-2010, the Patriots have a regular season record of 121-39, which includes 2007 when the team went 16-0. The Patriots are the only team other than the Dolphins to finish a regular season undefeated.

Manning and Brady have not only been consistent winners, they’ve remained remarkably durable. Schottenheimer used to say that a player’s best ability was availability. And when you’re talking about an elite quarterback, nothing could be more true. But what happens when you take away a team’s best player?

In 2008 we got a glimpse of what the Patriots look like without Tom Brady. The Chiefs knocked Brady out for the season in their first game. In came their backup Matt Cassel. A kid who shouldn’t even have been in the league. Cassel was a backup quarterback at USC, never starting a game or playing meaningful minutes for the Trojans. How did he do? The Patriots finished the season 11-5, and Cassel played very well.

And now in 2011, we’re getting a look at the Colts without Peyton Manning. The Colts are 0-11, and could quite possibly finish 0-16. They’re that bad. Quite a turnaround from a team that won the AFC South last year and finished 10-6.

What’s the lesson to be learned? New England surrounded their backup quarterback with enough talent to be successful. Indianapolis did not. If anything, this has only reinforced what an incredible quarterback Peyton Manning has been.

Now, back to Kansas City. The Chiefs lost their best player, Jamaal Charles, early in the season. And while Charles is not a quarterback, he was the engine that drove the offense. Before the season began, I had this to say:

Last year the offensive line was receiving a lot of praise for the Chiefs #1 rushing attack. I credit Jamaal Charles much more than I do the line.

I strongly believe that the loss of Jamaal Charles, combined with a less than average offensive line, has completely derailed the Chiefs’ season. Yes, there are other factors as well. But the Chiefs have shown they cannot consistently run the ball behind this offensive line without Charles. And Matt Cassel has been under constant pressure all year. He’s had no time to find his receivers. The running game has struggled. The passing game has struggled. And the Chiefs have found it very difficult to score any points. As Len Dawson likes to say, it starts up front with the big guys.

Kansas City fans are ready to run Cassel out of town. But surround him with the right players and he can be productive as he’s proven in 2008 with the Patriots (11-5 record) and 2010 with the Chiefs (10-6 record). Cassel is not Manning. He cannot lift the team on his shoulders. He needs a strong supporting cast, and without Charles running the ball, the Chiefs don’t have the cast to be productive on offense.

It’s amazing what the loss of one player can do. Just look at Indianapolis.

As somebody who tracks polls, I’ve always liked how Real Clear Politics averages the results across multiple polls. As of November 11th, 2007, candidate Rudy Giuliani was leading the Republican field. And not just be a little. According to the RCP average, Giuliani held a 12.4 point lead with 29.4% of those polled favoring him for the GOP nomination. Here were the top six candidates four years ago this month:

Giuliani: 29.4%
Thompson: 17%
McCain: 15%
Romney: 12.4%
Huckabee: 9%
Paul: 3.8%

That’s five candidates with at least 9% of the vote. Thompson disappeared quickly leaving the GOP with four vying for the party’s nomination.

And if you look at the Democrats in November of 2007, Hillary had a huge lead over Obama. According to Gallup, Clinton held a 27 point lead with 48% favoring her for the party nomination compared to 21% for Obama. Here’s the Democratic field according to Gallup on November 16th, 2007:

Clinton: 48%
Obama: 21%
Edwards: 12%
Kucinich: 4%
Biden: 2%
Richardson: 2%

The moral of the story? There’s nothing new about what’s going on in the Republican party as they weed through their candidates. Primaries are a messy process. The newest CBS poll has a virtual three-way tie between Cain, Romney and Gingrich:

Cain: 18%
Romney: 15%
Gingrich: 15%
Perry: 8%
Paul: 5%
Bachmann: 4%
Santorum: 2%
Huntsman: 1%

Conclusion: Perry is still positioned well enough despite his many stumbles to make this a four horse race. It’s hard to imagine Paul, Bachmann, Santorum or Huntsman making a run at this point. And like 2008, I don’t think we’ll know for sure until Super Tuesday, which was the day that basically anointed John McCain as the GOP nominee four years ago.

Prediction: I still think it’s Romney’s race to lose. But he could sure lose it.

Click here to see the 2012 Primary Schedule.

Matt Cassel, on the other hand, has not been embraced by local fans. He too struggled his first year as a Chief — though I would make the case that most quarterbacks struggle in their first season with a new team. Cassel had a very productive season for the Chiefs last year leading them to an AFC West title. But after two crushing defeats to open the season this year, many in Kansas City were ready to run him out of town. One local radio host started the Kansas City “Suck for Luck” campaign, embracing the idea that the Chiefs should crash so hard that they end up with the first pick in the draft allowing them to pick Stanford quarterback Andrew Luck.

Both Green and Cassel are high-character guys. They’re tough. They’re leaders. Neither are the most gifted of athletes, but athletic enough to move around in the pocket or run for a first down. Neither has an incredibly strong arm. Personally, I see many more similarities between the two than differences. But you want to know the biggest difference? Their supporting cast. Let’s take a look. We’ll compare Green’s cast in his third season (2003) with Cassel’s cast this year, his third season as a  Chief.

Running Backs
2003: Priest Holmes, Larry Johnson, Tony Richardson, Derrick Blaylock
2011: Jackie Battle, Thomas Jones, Le’Ron McClain, Dexter McCluster

This comparison would be much more interesting if Jamaal Charles was healthy. I would have a difficult time choosing between Charles’ big play ability and Holmes’ nose for the endzone. But without Charles as a consideration, I would take every running back from that ‘03 team over their counterpart on the current team, and that includes Blaylock over McCluster.

2003: +4

Wide Receivers
2003: Eddie Kennison, Johnnie Morton, Dante Hall, Marc Boerigter
2011: Dwayne Bowe, Steve Breaston, Jonathan Baldwin, Keary Colbert

This is the one grouping that really shines today. I think we’ve got the best group of wide receivers I’ve ever watched play in Kansas City. Do you remember who caught the most balls for KC in 2003? Priest Holmes. Who was our second leading receiver? Tony Gonzalez. Only Eddie Kennison was a legitimate threat and could have hung with our current group of receivers. Kennison was roughly the equivalent of Breaston today.

2011: +3

Tight Ends
2003: Tony Gonzalez, Jason Dunn
2011: Leonard Pope, Jake O’Connell

A healthy Tony Moeaki wouldn’t alter this discussion. Gonzalez is the best tight end to ever play the game. And he was at the top of his game during these years in Kansas City. Dunn was a dominating blocker.

2003: +2

Offensive Line
2003: Willie Roaf, Brian Waters, Casey Wiegmann, Will Shields, John Tait
2011: Branden Albert, Ryan Lilja, Casey Wiegmann, Jon Asamoah, Barry Richardson

That offensive line in 2003 was possibly one of the most dominating offensive lines in NFL history. Roaf and Shields are likely Hall of Fame linemen. Waters was in his prime and received multiple trips to the Pro Bowl. Tait had been an effective left tackle, and was a very good right tackle. And Wiegmann was eight years younger and in his prime. Nobody on the current offensive line would be considered a Pro Bowl caliber lineman, let alone Hall of Famer. I would take every lineman from that ‘03 line over the current roster. It’s not even close.

2003: +5

I think it’s fair to say that Green had a MUCH stronger offensive cast around him. A dominating offensive line. Holmes was one of the best backs in the game. Gonzalez was the best tight end in the game. Even Richardson was widely considered the best blocking fullback in the game. (Read stats from the 2003 Chiefs here.)

So where does that leave Matt Cassel? Drawing the ire of Kansas City fans and many in the local sports media. Cassel will never be Peyton Manning, Tom Brady, Aaron Rodgers or Drew Brees. But under the right circumstance he could be every bit as good as a Trent Green. What has most impressed me with Cassel this year is that I think he’s throwing the ball down field with much more accuracy than I’ve seen him in the past. He’s hitting receivers in stride on crossing routes 20+ yards down the field. When given time in the pocket, and an effective running game, he’s been very good. When he’s running for his life and our ground game is anemic, he doesn’t stand much of a chance. But that’s pretty much true for every quarterback in the league.

So here’s the most important question. Can Matt Cassel lead the Chiefs to the Super Bowl? Not without a better supporting cast. The Chiefs must improve both their offensive and defensive lines considerably to become a contender. I don’t view Cassel as part of the problem. I do see him as part of the solution. I do believe that Cassel can play well enough on the right team to lead them to the Super Bowl.

But first, how about the Raiders going out and trading for Carson Palmer? A very interesting move. Palmer is a decent quarterback who probably has a couple years left in him. And news reports are suggesting that Palmer is likely to start against the Chiefs this weekend. Wow.

My take? Quarterbacks, even veteran quarterbacks, seldom excel in their first season with a new team. And that’s when they have an entire off-season and preseason to prepare. In 1993, Joe Montana took the Chiefs to the AFC Championship Game, but did so mostly on the back of an outstanding defense. And in 2009, Brett Favre took the Vikings to the NFC Championship Game and posted a quarterback rating of 107.2. A very impressive season late in his career. But do you want to know what’s more common? Last year the Washington Redskins traded for Donovan McNabb who struggled and finished with a quarterback rating of 77.1. The only season he had with a worse rating? His rookie year in 1999 where he posted a rating of 60.1. Carson Palmer isn’t Brett Favre. Heck, he isn’t even Donovan McNabb. He’s a mediocre quarterback who enjoyed his best seasons in 2005 and 2006. The Raiders made a bold move, but probably not a smart move. If they end up winning the division and making a run in the playoffs, then it was a great move. If not, they’ve given up two very high draft picks and have hurt the long-term development of their team.

Now let’s look around the standings in the AFC West.

San Diego Chargers (4-1): The Chargers have beaten Minnesota (1-5), Kansas City (2-3), Miami (0-5) and Denver (1-4). They’ve lost to New England (5-1).

Reasons for optimism: The Chargers have managed to start fast, but that’s been more the result of the teams they’ve played, than how they’ve played. They still have a lot of talent. Ryan Matthews appears to be a legitimate starting running back.

Reasons for pessimism: Antonio Gates has played little this season. Their schedule is going to get much tougher. And Norv Turner is still their coach.

Prediction: Their schedule is going to get much tougher. And they’re going to need to play much better. I have a difficult time finding more than 5 wins on their remaining schedule. I think they end up 9-7, which is right around the record most of Norv Turner’s teams end up.

Oakland Raiders (4-2): The Raiders have beaten Denver (1-4), New York Jets (3-3), Houston (3-3) and Cleveland (2-3). They’ve lost to Buffalo (4-2) and New England (5-1).

Reasons for optimism: Darren McFadden is a stud, and the Raiders are second in the league in rushing. They’ve been the most impressive team in the division so far, and are a legitimate playoff contender.

Reasons for pessimism: The Raiders are ranked #28 in the league in total defense, and are particularly vulnerable against the pass where they’re ranked #30 in the league. Quarterback Jason Campbell was having a decent season before breaking his collarbone last week. It will be a big question as to how Carson Palmer will respond to his new surroundings. I don’t see any reason to think that the team will be better with Palmer than they were with Campbell. And it’s likely that they’ll be worse.

Prediction: The Raiders have a clear shot to win this division, but difficult to see six wins on their remaining schedule. I’m guessing they end up 9-7 as well.

Kansas City Chiefs (2-3): The Chiefs have beaten Minnesota (1-5) and Indianapolis (0-6). And they’ve lost to Buffalo (4-2), Detroit (5-1) and San Diego (4-1).

Reasons for optimism: After two historically bad losses, the Chiefs appear to have righted the ship. And if they can pull off a win in Oakland this weekend, they’re sitting at 3-3, which is exactly where I had them (though I had them beating Buffalo and losing to Oakland to reach 3-3). If Jackie Battle can provide the Chiefs with a consistent ground attack, they’re going to be OK.

Reasons for pessimism: They’re still missing Jamaal Charles, Eric Berry and Tony Moeaki for the season. And they’ve got a tough schedule ahead.

Prediction: Believe it or not, a win this weekend would put the Chiefs in a good position to win the AFC West. They would have their two toughest divisional games behind them with a 1-1 record. That leaves them two games against Denver, and home games against San Diego and Oakland. I think they’ve got 5 or 6 more wins in them this season, which puts them at 7-9 or 8-8. My original prediction of 9-7 looks very difficult.

Denver Broncos (1-4): Denver has beaten Cincinnati (4-2). They’ve lost to Oakland (4-2), Tennessee (3-2), Green Bay (6-0) and San Diego (4-1).

Reasons for optimism: John Fox is in his first year with the team, and he’s a good coach. He just didn’t have a lot to work with. Their schedule does get a bit easier.

Reasons for pessimism: Lots of them, including that they just traded away their best wide receiver. I’m not a Tim Tebow hater, and I have no clue if he’s going to be a good quarterback or not. History has shown us that quarterbacks with bad mechanics seldom have sustained success in the league. But Tebow is an interesting young man and an incredible athlete. He will make it interesting to say the least.

Prediction: Hard to see more than a couple wins left on their schedule. I’m guessing 4-12.

NOTE: You can read my  original predictions for the AFC West here.

In economics, austerity is a policy of deficit-cutting, lower spending, and a reduction in the amount of benefits and public services provided. Austerity policies are often used by governments to reduce their deficit spending while sometimes coupled with increases in taxes to pay back creditors to reduce debt. “Austerity” was named the word of the year by Merriam-Webster in 2010. — from Wikipedia

Countries across Europe have been facing harsh austerity measures. After years of big government spending, Greece, Portugal and others have found themselves in such an economic crisis, and with so much debt, that they’re having to make huge cuts in spending and reductions in services to get their fiscal houses in order.

In the U.S., we’re facing many of the same problems. Our debt to GDP ratio has reached 100%, a very bad number to reach. Tax revenues are down. The economy is possibly headed towards another recession. We’ve now run three consecutive deficits of more than $1 trillion per year. Austerity has been the talk of Washington and in the press. The Republicans in 2010 ran on a platform of reduced spending, and were swept into office in historic numbers. The left pines to spend more money to “fix” the economy, and whines about the austerity measures imposed by the Republicans.

Here are just a few examples (borrowed from IBD):

A July article in USA Today, for example, claimed that “Already in 2011, softer government spending has sapped growth.”

Jared Bernstein, former chief economic adviser to Vice President Biden, wrote over the summer that “government spending cutbacks have been a large drag on growth in recent quarters and have led to sharp losses in state and local employment.”

Economist and New York Times columnist Paul Krugman argued in September that “the turn toward austerity (is) a major factor in our growth slowdown.”

So how much spending has been cut to make these people react in such a way? Also from IBD:

In fact, in the first nine months of this year, federal spending was $120 billion higher than in the same period in 2010, the data show. That’s an increase of almost 5%. And deficits during this time were $23.5 billion higher.

If government spending is related to growth, as these and others claim, then the economy presumably should be growing faster, not slower, given the current higher rates of federal outlays.

But what about at the state level?

Meanwhile, the claim that state and local government jobs have been severely cut is, at the very least, open to some debate.

“We know that the biggest problem that we’ve had in terms of unemployment over the last several months has not been in the private sector,” President Obama said at a recent press briefing. “It’s actually been layoffs of teachers and cops and firefighters.”

Monthly data from the Bureau of Labor Statistics do show that from December 2007 — when the recession officially started — until the end of 2010, state and local governments shed 221,000 jobs. And they’ve cut another 234,000 jobs so far this year.

But a separate annual survey from the Census Bureau shows that “full-time-equivalent” state and local employment climbed 200,000 between 2007 and 2010 (the latest year for which these census data are available.) The differences come from the methodologies used.

In any case, even using BLS data, the number of state and local government jobs has fallen just 2.3% since December 2007. That compares with a decline of 5.4% for private-sector jobs.

Austerity in the U.S.? Not so much.

If you haven’t followed this story, I don’t blame you. You’ve probably seen the headlines about the death of border patrol agent Brian Terry who had been killed by guns that had been allowed to walk as part of the ATF’s Fast and Furious operation. Let’s start with a little background and  a few terms.

ATF: The ATF is the Bureau of Alcohol, Tobacco, Firearms and Explosives. In 2003 it was transferred under the Homeland Security bill to the Department of Justice. The DoJ is lead by attorney general Eric Holder. (You can read the ATF’s mission here.)

Project Gunrunner: You’ll see comments about this project in the news. This is the ATF’s program dating back to 2005. The program is intended to stem the flow of firearms into Mexico, in an attempt to deprive the Mexican drug cartels of weapons. (Read more on Wikipedia or directly from the ATF.)

Operation Fast and Furious: A sting operation run by the ATF beginning in 2009 as part of Project Gunrunner. The stated purpose of the operation was to permit otherwise-suspected straw purchasers to complete the weapon’s purchase and transit to Mexico, in order to build a bigger case against Mexican criminal organizations suspected of being the ultimate buyer. (Read more on Wikipedia.)

Straw Purchase: A straw purchase is any purchase wherein the purchaser knowingly acquires an item or service for someone who is, for whatever reason, unable to purchase the item or service himself. This term can be applied to any such purchase, but it is most widely used in relation to the sale of firearms, especially in United States federal gun laws.

Gun Walking: Allowing guns to be transferred to suspected arms traffickers. This is the most controversial part of Fast and Furious.

It is the stated position of the DoJ that they do not allow guns to walk, despite testimony from ATF agents to the contrary. Here is testimony from former ATF Special Agent William Newell where he continues to deny that it was policy to allow guns to walk into Mexico:

Click here to view the embedded video.

Here’s testimony from ATF agent John Dodson who says that it was the policy under Fast and Furious to allow guns to walk:

Click here to view the embedded video.

And from CBS News:

Surveillance video obtained by CBS News shows suspected drug cartel suppliers carrying boxes of weapons to their cars at a Phoenix gun shop. The long boxes shown in the video being loaded in were AK-47-type assault rifles.

So it turns out ATF not only allowed it – they videotaped it.

More from Sharyl Attkisson and CBS in a moment.

Who Knew What and When?

The investigation from Congress has been lead by Darrell Issa (R), the chairman of the House Oversight and Government Reform Committee. You may have seen this exchange where he asks attorney general Eric Holder when he first learned about Fast and Furious, and Holder’s response that he “…probably heard about Fast and Furious for the first time over the last few weeks.”

Click here to view the embedded video.

But now that new documents have surfaced revealing that Holder had been continually briefed on Fast and Furious, the administration now says that Holder misunderstood the question. If you watch the video (above), it’s difficult to believe that he misunderstood the question. And in the video below, we see top DoJ officials discussing gun walking. Here’s more from CBS News and the released documents:

Click here to view the embedded video.

At the beginning of this post, I mentioned that I had come to the conclusion long ago that Holder and Obama were aware of this program from the start. Though they never mention it by name, they have talked around the edges of this program.

In 2009, the President explains how he has asked Holder to do a “complete review” of current gun enforcement operations during a joint press conference with Mexico’s President Calderon. He even mentions gun tracing, a key element of Fast and Furious, in this video:

Click here to view the embedded video.

Here is Deputy Attorney General David Ogden in March of 2009, who talks about new efforts from the ATF and gun tracing. This is right around the time that Operation Fast and Furious was launched:

Click here to view the embedded video.

It’s not proof, but it’s common sense. This was a big and important operation to the ATF, the DoJ and the White House. They all were talking about this “new” operation. They just never mentioned it by name.

Bullying the Media

In an interesting twist this week, Sharyl Attkisson was on the Laura Ingraham Show, and revealed that she had been “yelled” at by DoJ spokeswoman Tracy Schmaler and that White House associate communications director Eric Schultz “literally screamed at me” over her reporting on Fast and Furious. She was told that she’s not reasonable like other members of the media such as the New York Times, the Washington Post and the LA Times. She explains that she was told that she’s “the only one who thinks this is a story, and they think I’m unfair and biased by pursuing it.” This is about ten minutes long, but very interesting:

Click here to view the embedded video.

Bush Did It Too!

We are also starting to learn that under Bush’s DoJ that a program called Operation Wide Receiver may also have allowed guns to walk into Mexico.

This is a legitimate story despite claims from Team Obama to the contrary. It appears that the Attorney General has lied to Congress. Thousands of guns have been allowed to walk into Mexico. And it will be interesting to see who takes the fall as more information is exposed. It sounds like CBS and Attkisson have even more information to come, provided that CBS doesn’t shut down the investigation first. They wouldn’t want to be seen as unreasonable by the administration, would they? Stay tuned.

UPDATE (9:40 am, 10-7-11): I had meant to include this earlier. In April of 2009, Eric Holder visited Mexico and spoke about operations to limit gun trafficking to Mexico (see full text here):

The topic that has been addressed over the past two days could not be more important – the development of an arms trafficking prosecution and enforcement strategy on both sides of the border.

I would like to thank the Mexican and U.S. experts who have worked so hard on this issue. On our side, Secretary Napolitano and I are committed to putting the resources in place to increase our attack on arms trafficking into Mexico.

Last week, our administration launched a major new effort to break the backs of the cartels. My department is committing 100 new ATF personnel to the Southwest border in the next 100 days to supplement our ongoing Project Gunrunner, DEA is adding 16 new positions on the border, as well as mobile enforcement teams, and the FBI is creating a new intelligence group focusing on kidnapping and extortion. DHS is making similar commitments, as Secretary Napolitano will detail.

Does this sound like an attorney general who would not have been briefed about Operation Fast and Furious, which coincidentally, had just been launched by the ATF? That would be difficult to believe. (Note: I added the bold for emphasis.)