Black Shards Press – Electronic Gumbo is Our Specialty

Bad Business of Recession

23.01.2008 (1:30 pm) – Filed under: Business,Finance,Politics ::

Investing in markets, stock, real estate, and otherwise, is a gamble and with all such bets there are inevitably going to be winners and losers. 

At the NY Times, David Leonhardt writes that the Federal Reserve’s "great moderation" may have been a mere illusion fueled by stock and land rushes over the last 16 years.

The recent financial turmoil has many causes, but they are tied to a basic fear that some of the economic successes of the last generation may yet turn out to be a mirage. That helps explain why problems in the American subprime mortgage market could have spread so quickly through the world’s financial system. On Tuesday, Mr. Bernanke, who is now the Fed chairman, presided over the steepest one-day interest rate cut in the central bank’s history.

The great moderation now seems to have depended — in part — on a huge speculative bubble, first in stocks and then real estate, that hid the economy’s rough edges. Everyone from first-time home buyers to Wall Street chief executives made bets they did not fully understand, and then spent money as if those bets couldn’t go bad. For the past 16 years, American consumers have increased their overall spending every single quarter, which is almost twice as long as any previous streak.

It’s natural for spending to rise as one’s income or worth, or the perception of same, is on the rise.  But was that perception based in reality?  Not in all cases.  While stocks are still overvalued – by 10%, according to a Merrill Lynch analyst – and real estate prices in many locations are as well, American consumers, many of whom should have known better, took on increasing levels of debt during the Clinton and Bush years.

Consumer spending kept on rising for the last 16 years largely because families tapped into their newfound wealth, often taking out loans to supplement their income. This increase in debt — as a recent study co-written by the vice chairman of the Fed dryly put it — “is not likely to be repeated.” So just as rising asset values cushioned the last two downturns, falling values could aggravate the next one.

“What people have done is make an assumption that these prices could continue rising at the rate they had been,” said Ed McKelvey, an economist at Goldman Sachs. “And that does seem to have been an unreasonable assumption.”

Exactly.  Unfortunately, today’s losers are often families and individuals who bet on the housing market by taking out loans they didn’t understand and/or could not afford.

Some have suggested that lenders preyed upon uninformed consumers and pushed them into riskier loans that was prudent.  Undoubtedly this has happened, but as a question of nation-wide scope, I cannot believe such practices are the root cause of the lending market’s implosion.  While both lenders and borrowers are culpable in this mess it is primarily because of lack of proper conservative thinking on their parts that is to blame far more than criminal wrongdoing.

Contrary to what Barbie says, math is not hard.  Percentages are taught from elementary school through high school in every district in this country.  If any American does not understand the implications of interest rate risk it is through an almost deliberate ignorance of reality.  Lending companies, like the savings and loan companies before them, made too many loans to the wrong customers, people who had to have known what they were capable of paying off, what they were risking, and that interest rates had to – had to – go back up.  But both parties acted in bad faith anyway.

Now President Bush is working hard with the Democrats, at last, on a economic stimulus package.  That is not great news, in my opinion.  We’ve overspent ourselves into this situation.  Exactly how is further taxation, debt, and interest supposed to rectify the current financial situation?  This approach is not just counter-intuitive, it’s wrong.

Worse, all of the Democratic presidential candidates are getting in on the act and turning it into a political necessity.  Hillary had this to say in the recent South Carolina debate:

I would have a moratorium on home foreclosures for 90 days to try to help families work it out so that they don’t lose their homes. We’re in danger of seeing millions of Americans become basically, you know, homeless and losing the American dream.

I want to have an interest rate freeze for five years, because these adjustable-rate mortgages, if they keep going up, the problem will just get compounded. And we need more transparency in the market.

Her last sentence is true, obviously, just as it was true in the wake of the Enron ponzi scheme and in the aftermath of the S&L collapse under President Reagan.  More transparency in government and markets is always needed but rarely achieved. 

Freezing interest rates and stripping banks of the option of foreclosure will shift some of the losses from the consumers to the financial institutions.  But this action would not make these losses go away.  The money has to come from somewhere, either from the pockets of consumers, lenders, or shareholders.

Similarly, the funds to be spent by the federal government as a part of a stimulus package cannot be created from thin air.

The deficit seems to be an afterthought as lawmakers race toward agreement with President Bush on a plan to pump perhaps $150 billion worth of deficit spending into the economy. The bulk of the plan would come as tax cuts, though Democrats are pressing for additional help for the unemployed and people on food stamps. Constituency groups in both political parties are pressing for even more, such as Democratic-sought aid to cash-strapped states and people with high heating bills.

The argument that tax cuts do not equate to spending is false because the government will spend $X in the FY 2009 budget regardless of whether the stimulus package is passed or not, regardless of the budget deficit, regardless, in fact, of anything short of bankruptcy.

Borrowing more money to stimulate the economy now is a fool’s errand that simply passes the buck for this generation of leadership’s bad behavior to our children and their children and their children, just as bailing out the consumers of ill-advised sub-prime loans at the expense of tax payers, stockholders, and those borrowers who resisted the siren call of the ARM loan penalizes these parties.

Caveat emptor, anyone?

Sit Down, Bill Clinton

23.01.2008 (9:06 am) – Filed under: Politics ::

What should Bill Clinton’s role in the election be?  What does his country need from him?  Here is the answer to these burning questions:

When you told us you didn’t inhale, with that little twinkle in your eye, we believed you and loved you even more.

I know you want your wife to win. A lot of us want a Democrat in 2008. But you’re getting mean Bill. That twinkle in your eye is starting to look more like crazy eye.

You’re actually disenfranchising folks this time around, dividing the electorate at a time we need to come together.

And Bill, you’re starting to make stuff up. And this time, we’re noticing. It’s a new era, Bill; everything you say is recorded and broadcast.

So what we’re asking, Bill, is that you just shut up.

Just shut up.

Sincerely, Pretty Much Everyone

While I’d rather have Hillary Clinton as president than the other Democratic candidates, Bill’s use of the bully pulpit has been excessive and people have noticed.  Not all of them approve.

Lawfare vs. Free Speech

20.01.2008 (1:14 am) – Filed under: Free Speech,Islam ::

There is a direct connection between the legal machinations some call "lawfare" that have ensnared high-profile Canadian writers Ezra Levant and Mark Steyn and the violence perpetrated around the world on a daily basis.  That connection is, of course, the religion of Islam, which either has been co-opted into a vehicle for terrorism or has simply rejuvenated its plans to inflict itself on the rest of the world, depending to whom one listens.

Ezra Levant is presently being dogged by the Canadian Human Rights and Citizenship Commission, that country’s bureaucratic version of the Thought Police.  His story is summarized nicely by Janet Albrechtsen here

She quotes Levant:

"No six-foot brownshirt, no police cell at midnight. Just Shirlene McGovern, an amiable enough bureaucrat, casually asking me about my political thoughts on behalf of the Government of Alberta. And she’ll write up a report about it, and recommend that the Government do this or that to me. Just going through checklists, you see … a limp clerk who was just punching the clock. She had done it dozens of times before and will do it dozens of times again. In a way, that’s more terrifying."

Steyn has been summoned before two different commissions of the same stripe as a result of Maclean’s published an excerpt from America Alone.

The American Spectator says:

The public inquisition of Steyn has triggered outrage among Canadians and Americans who value free speech, but it should not come as a surprise. Steyn’s predicament is just the latest salvo in a campaign of legal actions designed to punish and silence the voices of anyone who speaks out against Islamism, Islamic terrorism, or its sources of financing.

The Spectator article absolutely must be read in its entirety. 


Islamists with financial means have launched a legal jihad, manipulating democratic court systems to suppress freedom of expression, abolish public discourse critical of Islam, and establish principles of Sharia law. The practice, called "lawfare," is often predatory, filed without a serious expectation of winning and undertaken as a means to intimidate and bankrupt defendants.

THESE SUITS REPRESENT a direct and real threat to our constitutional rights and national security. Even if the lawsuits don’t succeed, the continued use of lawfare tactics by Islamist organizations has the potential to create a detrimental chilling effect on public discourse and information concerning the war on terror.

Already, publishers have canceled books on the subject of counterterrorism and no doubt other journalists and authors have self-censored due to the looming threat of suit. For its part, CAIR announced an ambitious fundraising goal of $1 million, partly to "defend against defamatory attacks on Muslims and Islam." One of CAIR’s staffers, Rabiah Ahmed, bragged that lawsuits are increasingly an "instrument" for it to use.

Similarly, Susan Duclos wrote an excellent, detailed piece about Ezra Levant’s legal problems and the deliberate way in which he has been targeted for legal harassment by Muslims who allegedly believed that Levant incited his readers to violence by his publication of this image in the Western Standard:


It is understandable that Muslims are offended by this image.  Susan makes this point clearly and offers some unpleasant pokes at Christian and Jewish religions as a talking point, correctly saying that these groups have dealt with much worse than this and have not responded with deadly threats such as those issued by Muslims.

It is undeniable that the Mohammed drawing contains truth as well.  Both aspects of the artist’s and editor’s means of communication – offense and truth – should be supported by every beneficiary of free speech.  This is particularly true of the major media providers, though as Stanley Kurtz points out, the Canadian media has been anything but vociferous in Levant’s defense thus far.

As for the United States, Levant’s case could just as well be happening in Outer Mongolia for all of the attention that has been drawn to it thus far.  Yet as Janet Albrechtsen says, the disease of passive acceptance of multicultural relativism is in danger of spreading out of Europe and Canada to Australia and the United States:

Canada shows where we will end up in due time: with a system of governance where large swaths of social policy have been delegated by parliament to the unelected grey bureaucrats, who get to implement "progressive" policies that could never get through a body of elected politicians.

As the jurisdiction of these commissions expands into areas never originally intended, fundamental freedoms contract. When state bodies start enforcing the religious prohibitions of Muslims, which forbid the depiction of the prophet Mohammed, it destroys a few fundamental Western values, namely the separation of mosque and state and, more critically, the freedom of speech.

At times like these it must seem to Levant and Steyn that they are utterly alone in knowing the value of free speech and how essential it is that it be maintained. 

Mark Steyn certainly remains unrepentant, as well he should:

"I don’t want to get off the hook. I want to take the hook and stick it up the collective butt of these thought police."

Awesome, in a word.  Truth should never be sacrificed for expediency, though few of us could blame either man if he were to fold under the weight of the full pressure of his country’s government.

Doing so would hurt each and every one of us more than we can know, for the lawfare aspect of the Muslim terrorists’ attack on western civilization would be given a massive boost in momentum by such a victory.

The American Spectator says exactly that in plain language:

Islamists with financial means have launched a legal jihad, manipulating democratic court systems to suppress freedom of expression, abolish public discourse critical of Islam, and establish principles of Sharia law. The practice, called "lawfare," is often predatory, filed without a serious expectation of winning and undertaken as a means to intimidate and bankrupt defendants.

Albrechtsen says that too many rights make a wrong.  There is a certain truth to that statement.  But there’s a more fundamental truth that should be recognized, that it is both necessary and right to make judgments in favor of our way of life and against that of enemies that would destroy it.

Levant’s attackers, as well as Steyn’s, are counting on the weakness inherent in politically correct thought to win a precedent-setting victory on which they can launch further attacks designed to limit the free speech rights of westerners in their own countries. 

It is the responsibility of Canada’s government to summon the courage necessary to deny them this victory, just as it will be the responsibility of the government of every western nation to do the same when faced with similar circumstances.

Self-Important Mudslingers

18.01.2008 (2:07 pm) – Filed under: Liberalism,Media,Politics ::


Fred Thompson, straggling behind the Republican pack as he has been in recent weeks, has not attracted as much negative attention from the liberal crowd as the other, more popular candidates.  But while he’s still ing 4th place, Thompson is polling reasonably well in South Carolina with 16% of the vote.  That’s enough to get him the attention – and the resulting barbs – of today’s #1 SIM (Self-important Mudslinger), Michael Gerson of the Washington Post.

Gerson’s thesis:  Fred Thompson is obviously a morally inferior person and unfit to be president because Thompson does not place the same importance on funding AIDS mitigation in Africa as he does.

To make his point that Thompson "lacks moral seriousness", he uses Thompson’s own words:

"Christ didn’t tell us to go to the government and pass a bill to get some of these social problems dealt with. He told us to do it," Thompson responded. "The government has its role, but we need to keep firmly in mind the role of the government, and the role of us as individuals and as Christians on the other."

Thompson went on: "I’m not going to go around the state and the country with regards to a serious problem and say that I’m going to prioritize that. With people dying of cancer, and heart disease, and children dying of leukemia still, I got to tell you — we’ve got a lot of problems here…"

That’s obviously true, what with the current financial issues in the lending market, wars in Iraq and Afghanistan, a declining but still obscene rate of 1.2 million abortions per year, a mediocre education system, and an ongoing health care/insurance debacle demanding attention.  Yes, the next American president will have a full plate of top-priority issues, regardless of who wins the election. 

Gerson’s use of the AIDS issue as a weapon to bash a second-tier Republican candidate is biased journalism of the worst kind.  His article abjectly fails the smell test because his entire premise is based on a lie, namely that AIDS funding in Africa is a national priority for America.  It’s not.  Nor should it be.  But that doesn’t stop Gerson from pulling out all the stops:

Thompson also dives headfirst into the shallow pool of his own theological knowledge. In his interpretation, Jesus seems to be a libertarian activist who taught that compassion is an exclusively private virtue. This ignores centuries of reflection on the words of the Bible that have led to a nearly universal Christian conviction that government has obligations to help the weak and pursue social justice. Religious social reformers fought to end child labor and improve public health. It is hard to imagine they would have used the teachings of Christ to justify cutting off lifesaving drugs for tens of thousands of African children — an argument both novel and obscene.

Support for the fight against AIDS is not a matter of being a "Christian" or a "conservative" — or a liberal or a Buddhist. It is an expression of compassion and empathy, which also reflects a serious conception of America’s role in the world.

These attributes are not only admirable in a president; they should be required.

Why is Gerson working so hard to slime a 4th place candidate?  Perhaps he truly wants more AIDS funding for Africa and is merely bare-knuckle brawling his way toward that goal.  Or perhaps Gerson, like so many liberals, is possessed of a deep, visceral hatred for anyone who dares to declare that the American federal government should not unnecessarily be involved in the business of wealth redistribution.

In light of Ron Paul’s recent troubles with alleged racism, the word "libertarian" has many negative connotations and it’s no accident that Thompson is tagged with it here. 

Libertarian = kook -> vote for someone else.  Easy.  Too bad it’s wrong.

Fred Thompson is, in my view, a true fiscal conservative of the type most hated by liberals.  As such he’s an immediate target for their guilt-riddled spittle, particularly when he makes, what from the perspective of a committed liberal, can only be described as the faux pas of mentioning his Christianity aloud. 

The dichotomy for liberals, one that they too almost always fail to recognize, is that faith, as they understand it, is always a private matter – except when it comes time for the collection agent of the public, the federal government, to pass the plate and use the billy-club of the law to "encourage donations".  Then one’s Christianity is all about serving the public, supporting the common good, and doing your duty.  Why?  Because you are not morally serious if you don’t believe that it’s the government’s responsibility to solve most or all problems and fall silently into line behind them.

All of this is patently ridiculous, as is Gerson’s assertion that there is a "nearly universal Christian conviction that government has obligations to help the weak and pursue social justice."

Salvation, Mr. Gerson ought to realize, has nothing to do with actions that the federal government takes on our behalf or that we perform under duress.  There is no virtue in taxation, none at all, even for the demagogues who champion welfare and other massive "financial redistribution" programs.  Neither is there compassion in voting for these fiscal profligates, only a temporary assuaging of the guilt some men feel for having been blessed and for which there is only one remedy – getting out there and actually helping someone one-on-one.

Contrary to Mr. Gerson’s writing, one’s salvation, the compassion it engenders, and the good works that follow are entirely individual.  None of these essential elements of Christianity can be divorced from the individual and transferred to the collective without their value being entirely lost.

The irony of this discussion is Fred Thompson would no more cut off the flow of American money to Africa than any other presidential candidate, Republican or Democrat would.  He might not increase funding as much as, say, Barack Obama, the current liberal de celebre, but like most governmental largesse this money isn’t going to be pulled back ashore by anyone.

Gerson would – and should – know this if he has an objective point of view and an inclination to use it.

These are attributes that are admirable in a journalist; they should be required by all reputable publications.

Michigan Primary

15.01.2008 (10:43 pm) – Filed under: Politics ::

Tonight Mitt Romney kept his presidential aspirations alive by, it’s projected, winning the Michigan Republican primary.

WIth 22% of precincts reporting, Mr. Romney, who was shown to be in a very close race with John McCain, is leading with 40% of the vote, 10% more than Mr. McCain. Mike Huckabee trails with 15%.

This will certainly make an already interesting race even tighter and place even more emphasis on next month’s Super Tuesday extravaganza when 24 states will cast their 2008 primary votes.

Romney, the son of former Michigan Governor George Romney, was making what might have been his last stand in his former home state and it showed up in the money count. CNN reports that Romney spent more than $3 million on TV ads in the state in defeating his two main rivals.

Once again the pollsters and pundits were shown to be less than omniscient. Newsweek wondered only a few days ago if Huckabee would defeat Romney there. Egg on face, again.

Romney, with his personal fortune backing him, has come back from the dead, at least in part. I would be surprised to see him in the lead after Super Tuesday – too many Republicans dislike him on sight. calling his polished image manufactured and his shifting positions too dependent on poll numbers. I concur.

Fred Thompson, unfortunately, is a study in the de-evolution of a candidate. Despite strong performances in recent debates and what I would consider to be a deeper understanding of economic policy than the other candidates have shown, Thompson managed a mere 4% of the vote in Michigan, less than Ron Paul, a candidate with his own image troubles.

A recent Rasmussen poll shows Huckabee leading McCain in South Carolina and Romney lagging in 3rd place, evidence that this race is a long way from being over.

Meanwhile, Barack Obama’s absence from the ballot made Michigan a non-story On the Democratic side. I suppose that we’ll have to wait and see what’s next in this aggressively contested race.

Words of Wisdom

15.01.2008 (1:40 pm) – Filed under: Music,Politics ::

I heard this song by Chris Rice a few minutes ago and, for obvious reasons, thought of the presidential race:

Everybody take a breath
why are all your faces red?
We’re missin’ all the words you said
you don’t have to yell.

Draw your lines and choose your side
’cause many things are worth the fight
but louder doesn’t make you right
you don’t have to yell.

That goes for bloggers, too!

Is the Times A-Changing?

14.01.2008 (5:47 pm) – Filed under: Liberalism,Media ::

The NY Times recently brought William Kristol onto its editorial pages and the uber-geniuses on the left fairly fell into heart palpitations at the news.

The hatred that liberals so often express against anything conservative is as visceral as it is vicious and the Kristol case is consistent with that kind of caustic commentary.

It’s certainly true that liberals regard the NY Times as their newspaper, just as they regard Fox News as the enemy.  The hiring of Kristol, who is despised by the libs for his positions on Iraq and his relationship with the neo-conservative movement that lead America there, must be seen as a sign that things are changing there.

More than that, however, is the fact that the left does not want the Times’ weight and reputation put behind the words of a conservative writer of any kind, let alone Kristol. 

Liberals do not want people to read or hear conservative points of view.  But if it must be done, let it be through AM talk radio or Fox News, sources that they’ve already lined up against with their buckets of pitch and paint brushes to paint the content of these news sources as inherently biased.

How much more revolting must it be for liberals to see conservative commentary like Kristol’s latest in the Times?

It’s easy to see why.  The left has so much to lose in the unlikely-but-suddenly-more-possible scenario that fair, unbiased reporting becomes the standard at the Times.  Should that happen we can undoubtedly look forward to more excellent pieces like this editorial in which the Times exposes the distended, pork-laden belly of one of the liberal left’s own, Representative John Murtha.

Antarctic Glacier Melt

14.01.2008 (12:25 pm) – Filed under: Energy,Environment ::


From the Washington Post:

Climatic changes appear to be destabilizing vast ice sheets of western Antarctica that had previously seemed relatively protected from global warming, researchers reported yesterday, raising the prospect of faster sea-level rise than current estimates.

"Without doubt, Antarctica as a whole is now losing ice yearly, and each year it’s losing more," said Eric Rignot, lead author of a paper published online in the journal Nature Geoscience.

Rignot theorizes that the warmer water of the Antarctic Circumpolar Current is the cause. Douglas Martinson, a senior research scientist fellow at the Lamont-Doherty Earth Observatory of Columbia University, has studied the issue and agrees.

Martinson said the current, which flows about 200 yards below the frigid surface water, began to warm significantly in the 1980s, and that warming in turn caused wind patterns to change in ways that ultimately brought more warm water to shore. The result has been an increased erosion of the glaciers and ice sheets.

Martinson said researchers do not have enough data to say for certain that the process was set in motion by global warming, but "that is clearly the most logical answer."

The next logical question is what we should do about it, if anything.

Personally it’s been my view that we should act to reduce the human component of global warming – something that’s still far from being proven to be a primary cause – by accelerating our investment in energy-related research, particularly in regard to nuclear and hydrogen technologies.

It’s a nice case of serendipity that we should be doing this anyway in order to decrease the west’s dependence on oil from the Middle East.

The MSM’s Staggering Stupidity

11.01.2008 (4:31 pm) – Filed under: Media ::

Read Eugene Volokh’s post and be stupified by Ms. Magazine’s cowardly decision not to run the ad he highlights.

Huckabee’s Fair Tax Endorsed

11.01.2008 (10:32 am) – Filed under: Finance,Politics ::

Economist Steven Landsburg has a new article in Slate magazine in which he gives his approval to Huckabee’s Fair Tax plan.  His conclusion:

the underlying issue becomes a lot clearer once you realize that a sales tax is a modified income tax. The right question is: Is the proposed modification a good one? The answer, according to a growing consensus among macroeconomists, is: Yes.

What’s even more interesting about Landsburg’s endorsement of the plan is the rather obvious distaste he has for Huckabee’s Christianity.  His approval is grudgingly given because of his evaluation of the idea’s merit; therefore, the highest form of endorsement.

Referring back to a previous Republican debate, Fred Thompson indicated that he would not be opposed to the plan on principle.  But Thompson was concerned about the possibility of ending up with both a consumption tax AND an income tax, the worst possible outcome for Americans.

Personally I like the idea because it distributes the tax burden based on consumption, allows fewer loopholes than the present system, and government tax increases cannot easily be hidden in arcane language, an important factor in my mind.