Nobody denies that Chuck DeVore is a hard-working candidate. His bid to replace Barbara Boxer as senator is centered on tirelessly driving up and down the state building grassroots support. But he’s also working hard—maybe too hard—at painting his primary opponent, former Hewlett Packard chief Carly Fiorina, as a liberal “Scozzafava” Republican. Being loose with her record simply to score cheap political points threatens to damage his credibility in the long term.

It’s not that DeVore doesn’t have a case to make—he owns the more conservative resume—it’s that in his zeal to cast Fiorina as a moderate he takes artistic license with the facts.

For example, his website claims that Fiorina “supported stimulus for the tech industry”—implying that she wanted general infusions of cash into the entire industry—and helpfully provides a link for reference.  But the article it links to merely states:

Carly Fiorina, former Hewlett-Packard CEO and current chair of the board of directors for the Technology Policy Institute, said in a conference call with reporters that she finds it encouraging that Congress is spending substantial amounts of money on broadband infrastructure.  

While it’s true that broadband infrastructure is a component of the tech industry, it’s a leap to imply that she supports stimulus funds for the entire industry just because she supports federal funds for broadband.  What DeVore could have said instead is what he told Eric Hogue last week on his radio show: “She’s a lot more comfortable with the government intervening with the economy than am I.” That simple statement makes his case much more powerfully than exaggerating her position.

DeVore also attacked Fiorina for wanting to tax the internet after she made vague remarks that the Internet can’t remain a “wild, wild west” forever into the future. But she is on the record as saying:

And I remember being in his Senate office and talking with [John McCain] about internet taxation and why that was a bad idea.

Those that accuse Fiorina of moving to the right on some of her positions since she declared her candidacy should know that she said that last year in 2008. Just to remove any doubt, she clarified further and said, “I don’t support additional regulation or taxation on the internet.”

Yet DeVore’s website still contains the allegation.

His campaign was already forced to modify another misleading statement. During the summer, DeVore’s website said, “Carly Fiorina has never said whether she’s pro-life.” But in fact, she’s said it repeatedly.  The website was later changed to say that she’s “suspect” on abortion, implying that while Fiorina is “personally pro-life”, she may not support pro-life legislation for others.

When DeVore’s campaign strains credulity like that, it makes commentators reluctant to buy its message. In the end, overreaching like this will only serve to undermine his candidacy.

President Obama's decision to put Khalid Sheikh Mohammed on trial in New York City along with four others accused of helping destroy the World Trade Center and attack the Pentagon on 9-11 paints a bull's-eye for terrorists right on New York City, their favorite target. Now Obama has identified where the terrorists should focus their energies -- on New York City.

His decision to bow to political correctness and not to try Mohammed at a secure military base and to try him in a civilian court, according him all the rights of an American citizen, raises important questions:

Most importantly, is the admissible evidence against Mohammed damning enough to secure a conviction? The evidentiary requirements protecting an American citizen on trial are far stricter than those that would apply to an enemy combatant before a military tribunal. We already watched how the 20th hijacker, Zacarias Moussaoui, escaped the death penalty because the evidence the government could use against him in a civilian criminal court was limited by his civil liberties. As a result, the data from his computer, which had not been seized pursuant to the Fourth Amendment, could not be entered into evidence against him. Failing such evidence, the feds had to settle for a life sentence.

Since much of the evidence against Mohammed was gathered through interrogations before which he may not have been read his Miranda rights and during which he may have been water-boarded, one wonders how much of his statement that he was the mastermind of 9-11 is going to be admissible. It could be that he will use the very Constitution of the very government he seeks to destroy to protect himself from the death penalty or even life in prison.

The decision to try him in a civilian court also confronts the Department of Justice with a difficult decision on how much of the evidence against Mohammed should be aired publicly. Our anti-terror investigations depend on secrecy, and the FBI and Homeland Security agents may not relish having their methods publicized in open court. There is even the possibility that there will be a global backlash in favor of Mohammed as his defense lawyer -- paid for by the American taxpayer -- will make him appear to be the victim of overzealous investigators and prosecutors rather than the perpetrator of one of the greatest mass murders in history.

In any event, President Obama is affording the terrorists exactly what they wanted in the first place -- a global stage right near New York's theater district. The very goal of terrorism is to attract worldwide attention and, by trying Mohammed in a civilian court in the middle of New York City, President Obama is giving them the stage they want on which to articulate their perceived grievances.

Finally, there is the disturbing question of what will happen if Mohammed and/or his some of his confreres are found to be not guilty. Where will they be released? Will they walk out of the courtroom free to prowl the streets of New York, their transportation having been paid courtesy of the taxpayers? Will they be flown to Afghanistan to resume their plots against our government and our people, again at taxpayer expense?

 What Obama should have done was to try Mohammed before a military tribunal, without the full rights of an American citizen (which, of course, he is not) and, after a guilty verdict, execute him. But this president bows before political correctness above all else, and he may just have done Mohammed and al-Qaida a big, big favor.

Investors and political analysts should keep a sharp eye on the congressional assault on Federal Reserve independence. This is a transparent effort by members of Congress to use the financial-reregulation bills as a means of applying political leverage to stop the Fed from any 2010 midterm election- year exit strategies that might raise the federal funds target rate, stop the purchases of mortgage-backed bonds, and drain cash from the economy.

The Chris Dodd bill unveiled this week spells it all out. The White House would appoint the chairmen of the regional Federal Reserve banks (New York, Dallas, Richmond, etc.), subject to confirmation by the Senate. In addition, the Federal Reserve Board in Washington would appoint all the directors of these regional Fed banks. Right now, the local member banks appoint two-thirds of the directors, with the remaining one-third appointed by the Fed board in Washington.

These would be the biggest changes to the unique public-private composition of the Federal Reserve System since 1913, when the Fed was created under Woodrow Wilson.

Remember, the local Fed boards now appoint the reserve-bank presidents, who then vote on policy at Federal Open Market Committee (FOMC) meetings. So this is a transparent effort to influence Fed policy through the FOMC voting members by changing the people who vote on these members. Think of Barney Frank. The House Financial Committee chairman has often remarked that the hawks on the FOMC always seem to be the reserve-bank presidents. He wants doves.

Now, I’m not going to defend the Fed’s actual policy. As I have written many times, the Fed should be targeting financial and commodity price indicators, which today are all signaling that the Fed is too loose and that it is creating far too many new dollars. Gold keeps hitting new record highs in nominal terms. The greenback has become the U.S. peso. Instead, the Fed has been targeting the unemployment rate and GDP. In terms of preventing any new bubbles, this really is the biggest problem.

However, I will defend Fed independence. If the Congress, backed by the White House, runs monetary policy, the inflationary tilt will be even greater.

Americans for Tax Reform sent the following letter today to Congressman Kevin Brady (R-TX):

On behalf of Americans for Tax Reform, I am pleased to support H.R. 3905, “The Estate Tax Relief Act of 2009.”  While it falls short of our goal of full death tax repeal, it remains a tax cut relative to current law.

As you know, the death tax is scheduled to be reduced to a rate of “0” in 2010, only to shoot up to 55 percent in 2011.  Full repeal of the death tax remains the goal.  However, should full repeal not be possible, the next priority for taxpayers must be to avoid a tax increase relative to current law.

H.R. 3905 is a death tax cut relative to current law.  The bill calls for a ten-year, phased in reduction of the death tax rate—from 45 percent in 2009 to 35 percent in 2019.  Furthermore, the death tax exclusion rises from $3.5 million in 2009 to $5 million in 2019 (indexed to inflation after that).  This would be a permanent cut in the death tax, and moves closer to full repeal than current law would.

H.R. 3905 would score as a net tax cut relative to current law, which assumes a 55 percent death tax rate and a $1 million exemption level—permanently.  Repeal of the death tax would be preferable to H.R. 3905, but this bill is superior to current law after 2010.

I look forward to continuing to work with you and our other allies on Capitol Hill to fully repeal the death tax.

Silver.

What I mean is: as "poor man's gold," silver tends to rally last in precious metals rally. It's sort of like the penny stock of precious metals, and it will usually go parabolic and reliably help to mark the end of precious metals rallies.

Today, gold is at a record but silver is still nearly $4 (20%) below its all-time high, meaning speculators are not yet running wild in this group. Indeed, I've heard plenty of smart traders in recent days suggesting that people take profits in gold.

I could write here about the sign I think these profit takers are overlooking, but I actually wrote about this same set-up in September of 2007: http://www.greenfaucet.com/sector-etfs/the-best-thing-about-gold-is-silver

...from that point until early 2008, gold rallied from $750 to over $1000 for the first time. But silver went from below $14 to over $21, obviously a larger percentage gain. I sense the same  skepticism toward metals today.

Because speculative fever does not yet seem to be running hot in precious metals, I expect gold and silver to keep running, with silver being the biggest gainer from here.

Harry Reid can pass a bill in the Senate that has no public option or an easy opt out, shallow subsidies for the uninsured, a low total cost, weak penalties for not having insurance, no coverage for abortion and no general tax increase (except for the premium and medical device taxes).

And Nancy Pelosi can pass a bill in the House (on final passage) that has a public option with no opt out, steep subsidies for the uninsured, harsh penalties if they don't buy insurance, a higher cost, full abortion coverage and a surcharge income tax increase.

The question is: Can either one's bill pass the other's chamber?

Probably not.

So here's how all this is likely to unfold:

Pelosi's bill is dead on arrival in the Senate. Reid is going to have to give up his insistence on the public option and pass a bill in the Senate very much like the Max Baucus bill that came out of the Senate Finance Committee. After extensive negotiations with his liberal wing on the one side and the moderates in the Senate on the other side (led by Joe Lieberman), he will eventually strike a deal.

He'll let the bill pass with no public option or with a generous opt-out provision. Meanwhile, he will placate his liberals by telling them that the final version that the conference committee will report back to the Senate will have a robust public option, not to worry. (Just as Pelosi told her liberals that the final bill would not ban payments for abortions, not to worry.)

After weeks of negotiations, the Senate will probably pass its version of the bill as a Christmas present to America.

But ... in the course of all of these negotiations, Barack Obama and the Democrats are going to look worse and worse, more divided and less focused on the ultimate objective. Public antipathy to the bills will mount, and the worst-case scenario of each possible variation in the legislation will spark its own storm of opposition. By the time the Senate acts, the feminists will be angry, the uninsured will be angry, the senior citizens will be angry and the fiscal conservatives will be angry.

Support for the bill will drop week after week during November and December.

By the time Congress reconvenes in January to wrestle with the two competing versions, support for the bill will have dwindled to a perilous point. This reduced level of support will just serve to make senators and congressmen more intransigent in the negotiations. Since the bill will need 60 votes in the Senate after the conference report, Lieberman, Maine's Olympia Snowe and Susan Collins, and a handful of other moderates will each have a veto. And, collectively, the liberals in each chamber will have one as well.

Weeks and months of wrangling will ensue. The result could be the defeat of the bill or its amendment in positive ways (for those opposed to it).

Our task is to reduce public support for the bill by publicizing its provisions, notably:

            1. The $400 billion cut in Medicare.

            2. The inevitable scarcity that will result from the addition of 35 million new patients with no new doctors or nurses.

            3. The fine on the uninsured of 2.5 percent of their income if they don't buy insurance.

            4. The high cost of these mandatory insurance policies ($15,000 per family).

            5. The low level of subsidy available for the uninsured (only after they pay 8 percen to 12 percent of their incomes).

            6. The likelihood of a $1,700 increase in the average family's premiums.

            7. The possibility of up to five years in prison for failing to buy insurance or pay the fine.

            8. The taxation of medical devices like pacemakers, wheelchairs, prosthetic limbs, hearing aids, etc.

            9. The tax on sick people (increasing the threshold for deducting medical expenses from 7.5 percent to 10 percent of income).

            10. The additional fiscal burden on the states of the increase in Medicaid eligibility.

            11. The 40 percent tax on health insurance premiums that will effect households earning more than $75,000 by the fifth year of the plan.

            We can still win this fight!