Stocks Plunge, Inevitably

The Dow Jones lost 778 points – a record – and I personally lost about $8000 in paper/play money today after the House failed to approve the compromise banking bailout plan.  Thanks for nothing, guys.

Loren Steffy says that things may get really ugly now:

This long ago stopped being about mortgages, and it’s no longer a question of moral hazard. This is about the very foundation of commerce. How long can a typical business survive without access to credit?

That’s a good question, one to which I have no answer.  Nor does anyone else, I suspect.  As one of Loren’s commenters noted, the better off, better managed businesses won’t be adversely impacted.  Others will and closures and job cuts will follow quickly if credit truly dries up.

I don’t think that’s going to happen, though.  There’s money to be borrowed, though a demand-heavy market will require higher interest rates.  For some businesses, that in itself is a death sentence.

I’ve written several times about the “negative sustainability” of the U.S.’s economic situation.  Fundamentally, the value put on our assets isn’t based on reality.  Housing and stock prices are overblown, or they were until recently.  Some still are.  None of us wants to see their investments or home valuation decline, yet we can’t deny that it has to happen for the market to match reality.

That’s the real message behind the Bush administration’s panicky call for a trillion-dollar bailout of the banking industry:  the value of a substantial portion of the banks’ assets is a chimera.  Blink and it’s gone, like Enron, my $8K, and some people’s live savings.

Americans buy and sell as if their lives depend on it and increasing debt is the oil that keeps the machine running.  But what does this country actually produce that the rest of the world values?  Computer software and Hollywood movies, possibly; otherwise, less and less every year, even as we import vast amounts of energy and export I.O.U.’s to some of the worst people on Earth.

That’s not sustainable, period. 

Sustainability is safe, boring, and uninteresting.  It’s also the most important thing about economic growth.  It continues, it endures through good times and bad, it survives.  Why?  Because it’s internally consistent, it’s based on fundamentals, like providing value greater than or equal to the price of a good or service.

Sustainability is not dependent on the good graces of foreign oil exporters or on favorable credit terms from China; rather, it’s based on actual profits earned from production, not speculation, and a product that someone actually wants rather than one that sells because of flim-flam marketing.

Sustainability is a long-term strategy utterly unlike the stock price-driven scheming that currently dominates and directs the management of U.S. corporations. 

Perhaps best of all, sustainability has relatively little use for the financial ponzi schemes that have led us into our current predicament.

If a massive devaluation of overpriced stocks and homes is what it takes to make Americans realize that they have to build their lives on what’s going to sustain them through the inevitable ups and downs of the business cycle, perhaps this mess is not something we should avoid but rather what must be embraced lest now lest it destroy us completely later.

Red-staters in NYC? Get Outta Here!

This video is extremely educational when it comes to the mindset and core values of the American left.  At 5 minutes long, it says everything you need to know.

It never ceases to amaze me how utterly intolerant the defenders of multiculturalistic tolerance really are. 

It’s so sad.  Really, I mean that.  You’d think years of self-indulgence and psychotherapy would help them, but the bitter inner angst, the mass of internal contradictions, and the misdirected feelings of guilt that govern American leftists seem, unfortunately, to be insurmountable obstacles to logical thought. 

The result?  Hatred of anyone who disagrees with their scattered thinking.

h/t Gordo

Presidential Debate Review

Here are my comments about the first McCain/Obama debate:

Obama:  “although we’ve heard a lot about Wall Street, those of you on Main Street I think have been struggling for a while, and you recognize that this could have an impact on all sectors of the economy.

And you’re wondering, how’s it going to affect me? How’s it going to affect my job? How’s it going to affect my house? How’s it going to affect my retirement savings or my ability to send my children to college?”

I’m not sure that Obama has a clue what Main Street is thinking.  Because we know that we’re getting screwed by our so-called leaders, whether we allow the bailout to happen or not.  And we don’t believe in Washington’s ability to solve the problem that we – all of us – created.

Obama:  “we also have to recognize that this is a final verdict on eight years of failed economic policies promoted by George Bush, supported by Senator McCain, a theory that basically says that we can shred regulations and consumer protections and give more and more to the most, and somehow prosperity will trickle down.

It hasn’t worked. And I think that the fundamentals of the economy have to be measured by whether or not the middle class is getting a fair shake.”

Fair shake?  What is that, exactly?  And who says we’re not getting it?  Does the middle class have the opportunity to give its children the best education in the world?  Do we have the opportunity to live in homes and shop in supermarkets that are the envy of the world?

Of course we do.  It’s ludicrous to say that the American middle class hasn’t had the most opportunity of any middle class in human history.  But we’ve bungled those opportunities by settling for mediocre government-run school and may have ruined our future by completely mis-managing our finances.

When exactly is someone with the moral authority to be heard – if there is such a person in this country – going to stand up and tell us the hard truths that we know and refuse to acknowledge?

McCain:  “have no doubt about the magnitude of this crisis. And we’re not talking about failure of institutions on Wall Street. We’re talking about failures on Main Street, and people who will lose their jobs, and their credits, and their homes, if we don’t fix the greatest fiscal crisis, probably in — certainly in our time, and I’ve been around a little while.

But the point is — the point is, we have finally seen Republicans and Democrats sitting down and negotiating together and coming up with a package.

This package has transparency in it. It has to have accountability and oversight. It has to have options for loans to failing businesses, rather than the government taking over those loans. We have to — it has to have a package with a number of other essential elements to it.”

Loans to failing financial companies?  No, I don’t think so.  Far better to buy the bad loan portfolios outright and manage them as a investment that happens to be owned by the people.

That may mean making some unpleasant decisions such as evicting some “homeowners” who have little or no ability to repay loans, even on favorable (unprofitable) terms.  Can a government agency find the courage to do that?  I doubt it, myself, but taking ownership of the bad loans allows direct action to be taken.  Giving public money to collapsing banks, on the other hand, is like peeing in the ocean.  Where the money goes, no one will know.

Obama:  “there are folks out there who’ve been struggling before this crisis took place. And that’s why it’s so important, as we solve this short-term problem, that we look at some of the underlying issues that have led to wages and incomes for ordinary Americans to go down”

If we’re going to go there, let’s at least tell the truth.  We spend much more money on our education system than any other comparable nation and are getting poor results.  Young American workers are by-and-large less capable and less motivated than foreign counterparts.  And our businesses are burdened by higher corporate tax rates than in all western nations save one.  The world has become a more competitive place and we’ve failed to keep up.  That’s a fact and it’s directly responsible for our relative decline in wealth.

Obama:  “the nurse, the teacher, the police officer, who, frankly, at the end of each month, they’ve got a little financial crisis going on.

They’re having to take out extra debt just to make their mortgage payments. We haven’t been paying attention to them.”

Better questions would be, “Have they been paying attention to themselves?  Have they invested in their own education?  Have they invested in their own marriages?  Have they made appropriate financial decisions based on their income and future ability to maintain it?”

In many cases the answers are no, no, no, and no.  And that’s the government’s fault?  No.

McCain:  “I have a fundamental belief in the goodness and strength of the American worker. And the American worker is the most productive, the most innovative. America is still the greatest producer, exporter and importer.

But we’ve got to get through these times, but I have a fundamental belief in the United States of America. And I still believe, under the right leadership, our best days are ahead of us.”

Productivity and innovation are subjective terms.  American industry as a whole is very inventive; however, much of this comes from the upper echelons.  Joe Sixpack does not enjoy the competitive advantage that educated workers have over foreign workers.  Spend a day in an American public school and you’ll understand how little the up-and-coming generation understands the notion and importance of raw economic competition.

McCain:  “Senator Obama didn’t mention that, along with his tax cuts, he is also proposing some $800 billion in new spending on new programs.

Now, that’s a fundamental difference between myself and Senator Obama. I want to cut spending. I want to keep taxes low. The worst thing we could do in this economic climate is to raise people’s taxes.”

Obama:  “absolutely, we need earmark reform. And when I’m president, I will go line by line to make sure that we are not spending money unwisely.

But the fact is that eliminating earmarks alone is not a recipe for how we’re going to get the middle class back on track.”

Again in Obama’s mind it’s the middle class that needs to be helped by government.  Why?  We’ve had every opportunity we could reasonably ask for to help ourselves.  If we valued financial stability, we could have lived within our means and not gambled on doomed real estate schemes.  We could have saved more and spent less.  We could have forced real reform onto a broken public education system.  But we didn’t care.

Now Barack Obama thinks that new government programs will revive the middle class?  Not going to happen.  It’s government programs that cut the heart out of American workers in the first place by excising the need to provide value through their work in the marketplace.

Obama:  “Senator McCain talked about providing a $5,000 health credit. Now, what he doesn’t tell you is that he intends to, for the first time in history, tax health benefits.

So you may end up getting a $5,000 tax credit. Here’s the only problem: Your employer now has to pay taxes on the health care that you’re getting from your employer. And if you end up losing your health care from your employer, you’ve got to go out on the open market and try to buy it.”

McCain’s taxation of employer-provided health benefits is an abomination.  The plan offers $5,000 in tax credits for health insurance.  This isn’t bad if you have a good job, because your employer probably covers at least half of a family’s medical insurance.  Even so, there wouldn’t be much left over, to say nothing of those families whose employers offer little or no assistance with health insurance.  And then McCain would tax those companies who do?

It would be more honest to simply ban employer health care benefits since that would be the effect of McCain’s plan.  Just get rid of them and companies can add a bit to employees’ base pay.

This would not be such a bad option if health insurance itself were banished along with employer contributions.  Then people would realize that, yes, they must face the consequences of their eating, drinking, and smoking, as well as the relative quality of their DNA and living environments.  We’d be on our own and paying cash for medical care like our grandparents did but at least we’d know where we stood.

Obama:  “We have to fix our health care system, which is putting an enormous burden on families. Just — a report just came out that the average deductible went up 30 percent on American families.

They are getting crushed, and many of them are going bankrupt as a consequence of health care.”

Are they?  Medical cost increases are certainly not helping anyone, but that’s not what is forcing Americans to default on their home loans, not if we’re telling the truth.

Obama:  “The third thing we have to do is we’ve got to make sure that we’re competing in education. We’ve got to invest in science and technology. China had a space launch and a space walk. We’ve got to make sure that our children are keeping pace in math and in science.”

Yes, that’s very true.  But how does he propose to make them care enough to want to keep pace with people they’ve never met?  The competition is real but we don’t acknowledge it for what it is:  the end of American economic power, should we lose.

And it’s all about caring.  A dedicated American student/worker has no equal in terms of potential productivity.  One lacking in dedication is no better than a Chinese peasant working in the field.  Where is the moral center that instills the desire to excel to come from?  Certainly not from soulless, Godless public schools.

McCain:  “We have to have wind, tide, solar, natural gas, flex fuel cars and all that but we also have to have offshore drilling and we also have to have nuclear power.

Senator Obama opposes both storing and reprocessing of spent nuclear fuel. You can’t get there from here and the fact is that we can create 700,000 jobs by building constructing 45 new nuclear power plants by the year 2030. Nuclear power is not only important as far as eliminating our dependence on foreign oil”

Yes.  Renewable energy is great and we should pursue all forms of it until their viability is demonstrated one way or another, as ethanol has been shown to be a fool’s panacea.

But it’s hard-code nuclear and coal-based power plans that are going to have to do the bulk of the work for the next few decades, probably for the rest of my lifetime.  Considering it takes 10 years to get a nuclear plant on-line it’s a disgrace than no significant construction has been done on any plant since 9/11.

Obama:  “John, it’s been your president who you said you agreed with 90 percent of the time who presided over this increase in spending. This orgy of spending and enormous deficits you voted for almost all of his budgets. So to stand here and after eight years and say that you’re going to lead on controlling spending and, you know, balancing our tax cuts so that they help middle class families when over the last eight years that hasn’t happened I think just is, you know, kind of hard to swallow.”

That’s like a mallet between the eyes.  The Bush administration has been a disaster on so many levels.  On every level, really, except for having the fortitude to stick it out in Iraq, a place we never should have gone but once we went in, we owned the problem.  That’s perhaps the only major decision Bush 43 has made correctly since invading Afghanistan.

Spending?  He’s no conservative and has poisoned the Republican party with his inability to manage American taxpayer’s money.  McCain is tainted by association, even though I think his desire to cut spending is real enough.

McCain:  “I went to Iraq in 2003 and came back and said, we’ve got to change this strategy. This strategy requires additional troops, it requires a fundamental change in strategy and I fought for it. And finally, we came up with a great general and a strategy that has succeeded.”

“There is social, economic progress, and a strategy, a strategy of going into an area, clearing and holding, and the people of the country then become allied with you. They inform on the bad guys. And peace comes to the country, and prosperity.

That’s what’s happening in Iraq, and it wasn’t a tactic.”

McCain’s one and only true selling point is that he alone among presidential contenders was right about Iraq.  He does know how to make the hard decisions, there’s no denying it.  But that decision, right as it was, is in the past now.

Obama:  “Now, keep in mind that we have four times the number of troops in Iraq, where nobody had anything to do with 9/11 before we went in, where, in fact, there was no al Qaeda before we went in, but we have four times more troops there than we do in Afghanistan.

And that is a strategic mistake, because every intelligence agency will acknowledge that al Qaeda is the greatest threat against the United States and that Secretary of Defense Gates acknowledged the central front — that the place where we have to deal with these folks is going to be in Afghanistan and in Pakistan.”

Pakistan, indeed.  The assassination of Benazir Bhutto has perhaps doomed the relationship between the U.S. and Pakistan by leaving only Islamic-oriented parties to fill the vacuum left by her death and Pervez Musharraf’s inevitable implosion.

We cannot start a war on the ground with Pakistan.  Not ever and certainly not after stretching our military thin on two fronts.  Now it may be too late to crush the terrorists lurking inside Pakistan.  It is not too late to secure Afghanistan’s borders to a reasonable degree, but that country effectively has a terrorist nation on its border because we failed to finish the job there while we had the chance.

Obama:  “No U.S. soldier ever dies in vain because they’re carrying out the missions of their commander in chief.”

That’s bullshit, frankly.  If those missions are pointless or the follow-up that’s required to ensure success is not forthcoming, any casualties taken would have been in vain.  4000 Americans have died in Iraq and their deaths will be pointless if Iraq becomes another Iran.  Or Pakistan.  That cannot be allowed to happen.

Obama:  “we are also going to have to, I believe, engage in tough direct diplomacy with Iran and this is a major difference I have with Senator McCain, this notion by not talking to people we are punishing them has not worked. It has not worked in Iran, it has not worked in North Korea. In each instance, our efforts of isolation have actually accelerated their efforts to get nuclear weapons. That will change when I’m president of the United States.”

I think that’s correct.  McCain likes to bluster about Ahmadinejad and the evil he’s perpetrating on the work and say that he’s not going to allow it, as if there’s going to be a duel at high noon.  But Ahmadinejad is only the public face of Iraq, not the real power in the country.  Think of him as a particularly nasty little brute of a PR flack fronting for the Islamic mullahs.  These people need to understand, at the very least, that we’re prepared to confront them in every hotspot of Islamic terrorism, in every major country and city around the world, just as we did with the Soviets during the Cold War, that their maniacal brand of evil will not be allowed to spread unchecked through the world and particularly not into Israel, the U.S.’s only true ally in the Middle East.

To do that we should meet with Iran and deliver the message clearly.

Obama:  “we also have to affirm all the fledgling democracies in that region, you know, the Estonians, the Lithuanians, the Latvians, the Poles, the Czechs, that we are, in fact, going to be supportive and in solidarity with them in their efforts. They are members of NATO.

And to countries like Georgia and the Ukraine, I think we have to insist that they are free to join NATO if they meet the requirements, and they should have a membership action plan immediately to start bringing them in.”

Surprisingly aggressive for Obama to come right at the point like that.  But it’s absolutely the right thing for those countries and the world.  If Russia wants to go communist again that’s their business.  But they have no right to inflict their will on neighboring nations that are trying to foster democracy and freedom after generations under Soviet occupation.  They deserve our support and that of the other NATO countries, should they have the courage to provide any.  McCain understands this completely, so Obama’s sudden hawkishness is simply an admission of reality, in my view.

McCain:  “I can tell you that I think America is safer today than it was on 9/11. But that doesn’t mean that we don’t have a long way to go.”

I think it’s clear that we are safer from external enemies than we were on 9/11.  The record has proven that.  But we’ve given the federal government new and undesirable powers to reach that point and it’s imperative that challenges to these unconstitutional actions continue to be brought forward so that the current status quo does not become a permanent fact of life here.

McCain:  “Senator Obama still doesn’t quite understand — or doesn’t get it — that if we fail in Iraq, it encourages al Qaeda. They would establish a base in Iraq.

The consequences of defeat, which would result from his plan of withdrawal and according to date certain, regardless of conditions, according to our military leaders, according to every expert, would lead to defeat — possible defeat, loss of all the fragile sacrifice that we’ve made”

Obama:  “we’ve got challenges, for example, with China, where we are borrowing billions of dollars. They now hold a trillion dollars’ worth of our debt. And they are active in countries like — in regions like Latin America, and Asia, and Africa. They are — the conspicuousness of their presence is only matched by our absence, because we’ve been focused on Iraq.”

In the long view, Obama is undoubtedly correct.  But the truth is that it simply doesn’t matter.  We made a mistake, we broke Iraq, and we need to put it back together again.  We can do it, as has now been proven.  But the future will not take care of itself.  The Chinese can afford to wait us out; their advantage in terms of manpower gives them a certain luxury to do so.

Net-net, I’m reading the transcript thinking that Barack Obama got the better of McCain by a narrow margin, primarily by pointing out that, for all of our recent successes in Iraq, the world is more dangerous than it was 8 years ago and America’s place in it is, to the average observer, somewhat less secure than it was only a couple of weeks ago, before our national blinders came off.

Ironically, that’s all the more reason to vote for John McCain.

Liberals Then and Now

Here’s what Jimmy Carter had to say almost 30 years ago about the energy crisis of his time:

From now on, every new addition to our demand for energy will be met from our own production and our own conservation. The generation-long growth in our dependence on foreign oil will be stopped dead in its tracks right now and then reversed as we move through the 1980s, for I am tonight setting the further goal of cutting our dependence on foreign oil by one-half by the end of the next decade

I’m asking Congress to mandate, to require as a matter of law, that our nation’s utility companies cut their massive use of oil by 50 percent within the next decade and switch to other fuels, especially coal, our most abundant energy source.

We will protect our environment. But when this nation critically needs a refinery or a pipeline, we will build it.

Mr. Carter was no presidential genius, as those of us over 40 remember quite clearly.  And he’s not gotten any more brilliant with age, his worthy work with Habitat for Humanity notwithstanding.  But he’s a veritable sage compared with Al Gore:

"If you’re a young person looking at the future of this planet and looking at what is being done right now, and not done, I believe we have reached the stage where it is time for civil disobedience to prevent the construction of new coal plants that do not have carbon capture and sequestration."

Gore, whose words were met with cheers and applause, believes that the world has fallen behind in tackling climate change in the last year. "This is a rout," he said. "We are losing badly."

Of course it is.  Civilization as we define it depends utterly on electricity.  There’s no user sugar-coating it – that’s just the way it is.  Everything in our lives from employment to food storage requires a constant supply of power.  South Texas was recently blown back to the Dark Ages by Hurricane Ike and while most of us made it through just fine, no one was living a normal American life during the outage.  We were waiting for the lights to come on and marking time until they did.

Green energy fantasies aside, other than oil and coal there are no sources of energy available to us in the short term.  Jimmy Carter recognized that we needed coal to survive and prosper as a nation; modern liberals do not.  Hard as it is to believe, liberals have actually made themselves less in tune with reality than Carter was.

Your average American understands the connection between electricity and modern life quite clearly.  What is so difficult for Gore and his disciples to understand?

h/t Carol

Ron Paul and Principles

Say what you will about some of Ron Paul’s "less mainstream" ideas – the man has his principles and votes accordingly, even when it hurts.  Galveston was hammered by Hurricane Ike and Congressman Paul, whose district includes the hard-hit area, voted against a $23B aid packalge that would have brought a big chunk of that bacon home to his district. 

Not everyone is pleased:

Some Galveston officials aren’t too pleased with their Congressional representative, Ron Paul, R-Lake Jackson, for voting against the $22.8 billion disaster recovery aid package on Wednesday.

"That’s sad. That’s bad," said City manager Steve LeBlanc.

"I find it very distressing," said Councilwoman Karen Mahoney, who represents the West End of the island, where damage was extreme. "He’s voting against aid for the region that he represents? I don’t find that very representative."

What Mahoney and others need to recognize is that there are greater principles than what is currently happening in a small congressional district on the Texas coast.  Paul’s vote is one for the constitutional notion that the federal government exists to protect the states, not to succor them with the taxpayer’s largesse.

Yes, it’s highly unfortunate that Ike devastated the island.  But as in the case of New Orleans no one can claim that the disaster wasn’t both predictable and inevitable.  We make our choices and have to live with the consequences, don’t we?

I realize that idea is woefully out of fashion in this enlightened day and age.  It’s clearly not been in evidence during the brouhaha over the home mortgage bailout.  Still, there’s something solid and reassuring about a leader who knows what the limits of the federal government should be and acts accordingly, even when it hurts us here at home.

Conservatives Oppose Bailout

A Right Wing News poll shows that what I’d call hard-core conservatives oppose the bailout of Wall Street investment firms by an overwhelming margin.

Current results:


Loath as I am to lend support to people and corporations whose failure is undeniable, doing so seems to be the smart thing rather than sticking to principle while the economy burns to the ground.

John says:

Some form of "fix" is inevitable. Conservatives need to be thinking about rational solutions. Doing nothing might not be a rational solution.

It’s also not rational to give Henry Paulson and his successors unlimited control over the bailout process.  Some form of Congressional oversight – a responsibility one hopes they will begin to take seriously – is needed, as is a form of recapture in the event that some of the acquired debt proves to be salvageable.

Our Boat is Sinking – Should We Bail?

A lot of people agree with me in thinking the Paulson-Bernanke bailout plan needs to be thought out a lot more before it’s given the go-ahead.  Seems obvious and it looks like it’s going to happen.

Newt Gingrich says that conservatives in Congress are confused by the fact that it’s a Republican administration’s proposal:

If a Democratic administration were proposing this plan, Republicans would realize that having Connecticut Democratic senator Chris Dodd (the largest recipient of political funds from Fannie Mae and Freddie Mac) as chairman of the Banking Committee guarantees that the Obama-Reid-Pelosi-Paulson plan that will emerge will be much worse as legislation than it started out as the Paulson proposal.

If this were a Democratic proposal, Republicans would remember that the Democrats wrote a grotesque housing bailout bill this summer that paid off their left-wing allies with taxpayer money, which despite its price tag of $300 billion has apparently failed as of last week, and could expect even more damage in this bill.

But because this gigantic power shift to Washington and this avalanche of taxpayer money is being proposed by a Republican administration, the normal conservative voices have been silent or confused.

It’s time to end the silence and clear up the confusion.

Robert Reich sees the need to reign in Paulson’s proposed fiscal Nazism before it begins:

The public doesn’t like a blank check. They think this whole bailout idea is nuts. They see fat cats on Wall Street who have raked in zillions for years, now extorting in effect $2,000 to $5,000 from every American family to make up for their own nonfeasance, malfeasance, greed, and just plain stupidity. Wall Street’s request for a blank check comes at the same time most of the public is worried about their jobs and declining wages, and having enough money to pay for gas and food and health insurance, meet their car payments and mortgage payments, and save for their retirement and childrens’ college education. And so the public is asking: Why should Wall Street get bailed out by me when I’m getting screwed?

Both of these guys have plans that will add some accountability to the proposal, as does Chris Dodd, former Democratic candidate for president:

Banking Committee Chairman Christopher Dodd is taking much more aggressive approach to the Treasury bailout plan, demanding foreclosure assistance, limits on executive compensation and profit sharing for taxpayers if the Treasury begins to make money back on the bad debt it plans to purchase.

As one might suspect from Dodd’s past work, his proposal is part righteous anger, part wrong-headed leftist dogma.  The good:  Dodd’s plan would grant authority for bankruptcy judges to restructure mortgages for homeowners facing foreclosure.  Many of these loans are bad as they stand now.  Getting something out of them and keeping families in their homes is better than the foreclosure/eviction/bankruptcy cycle that will otherwise take place.

The bad:  “A provision that would require the Treasury to take a 65 percent portion of 20 percent any profits it makes from the newly purchased assets and put it into the federal government’s HOPE program, an affordable housing program.”

It’s not enough for Dodd’s liberal side that he take action to solve a problem.  No, there must always be an additional social program that he and other liberals *feel* should be in place for their constituents’ benefit. 

Hope is a great and wonderful thing to have so long as it’s based on something real.  HOPE, on the other hand, is simply another government-funded transfer of wealth.  It has nothing whatever to do with the home loan fiasco beyond the fact that some of the individuals who defaulted on mortgages they should never have committed to will now have another taxpayer subsidized program to take money from.  There’s no reason for it to be funded through Dodd’s bill save for ideologically-based pork.

Polimom says that we should throw the bums out of office and points out Congress’ failure to conduct their oversight responsibilities.  That’s an excellent idea, of course.  If only it could really happen.  But given the tweedle-dee vs. tweedle-dum choices we have, real change is impossible. 

Loren Steffy places the blame squarely on the shoulders of Phil Gramm, the leading proponent of the Gramm-Leach-Bliley securities/insurance deregulation act and worries that Gramm may get another shot at implementing his economic deregulation policies if John McCain is elected president.

But lest we forget, GLB was passed with overwhelming approval from both parties.  Its successor, the Commodity Future Modernization Act, was widely hailed as finally allowing U.S. investment markets to compete with those in other parts of the world.  While Gramm’s fingerprints are certainly all over the deregulation acts there is plenty of blame to go around, for both parties.  Where are the new bums to come from in the absence of term limits and/or a true third party?

Fact is that Congressional oversight is the check of last resort, one performed by political animals who have much more interest in nattering over the fine points for FISA’s immunity clause for telecoms, bickering over gay marriage, doing nothing while our energy situation collapses, and electioneering for their party’s presidential nod.  Small wonder they didn’t have time to save the free world’s economic base.

Even with Congress’ usual less-than-stellar performance, the fundamental blame for this mess has to be placed at the feet of consumers who deliberately took out mortgages they had no ability to repay.  “Who could have foreseen the rise in interest rates?”, some whine.  Anyone with half a brain for business, that’s who.  Why the lack of interest, no pun intended, on the part of borrowers?  Because there is no fear of consequences on their part.  The government, they corrected reasoned, is there to clean up their mess.

Similarly, banks’ failure to perform due diligence on their investments is either incompetence or malfeasance.  I’m not sure which is worse.  Steffy says that the $60T investment market is so arcane that few understand it.  Betting on a game one doesn’t understand is risky, foolish business.  If Steffy’s analysis is correct, banks had no business playing that game in the first place.  In a stock price-driven world, banks’ greed for short-term gains seems to have gotten the better of them.  They have no one to blame for themselves and deserve to reap what they sowed.

And therein lies the catch.  If we fail to bail them out, we’ll all suffer more in the long run than if we suck it up and pay of the house for investors’ and investment banks’ bad behavior.

Obama’s Race Problem – Real or Imagined?

Using Princeton political scientist Tali Mendelberg as a source, John Judis wrote:

…her ideas and those of other academics help to shed light on what has happened so far in the primaries and what might unfold once Obama wraps up the nomination. Their findings suggest that racism remains deeply embedded within the psyche of the American electorate–so deep that many voters may not even be aware of their own feelings on the subject. Yet, while political psychology offers a sobering sense of the difficulties that lie ahead for Obama, it also offers something else: lessons for how the country’s first viable black presidential candidate might overcome the obstacles he faces.

Now this from the AP’s Ron Fournier:

Deep-seated racial misgivings could cost Barack Obama the White House if the election is close, according to an AP-Yahoo News poll that found one-third of white Democrats harbor negative views toward blacks — many calling them “lazy,” “violent,” responsible for their own troubles.

Incendiary words.  But what are the numbers Fournier is making so much of?

Given a choice of several positive and negative adjectives that might describe blacks, 20 percent of all whites said the word “violent” strongly applied. Among other words, 22 percent agreed with “boastful,” 29 percent “complaining,” 13 percent “lazy” and 11 percent “irresponsible.” When asked about positive adjectives, whites were more likely to stay on the fence than give a strongly positive assessment.

One unasked question is, “What would blacks’ answers be to similar questions about whites?”.  That would be another interesting study to see done.

Certainly there is racism alive and well in white American voters.  One measure of blacks’ reciprocal prejudice is the 80+% number who plan to vote for Barack Obama in November.  Do 4 out of 5 black Americans truly believe that Obama would be a better leader for American than John McCain?  Unlikely, particularly considering the North Carolina Democratic primary:

He’s also the presidential candidate who they desperately long for to wipe away the horrid taste of the Bush years. But the enthusiasm is also fueled by the fact that he is black.

In exit polls in North Carolina, nearly a quarter of black voters admitted that race was the big factor in motivating them to vote for Obama.

What’s even more telling is that many blacks feel entirely justified in voting for Obama because he is black; i.e., these voters feel that their prejudice is legitimate.

That’s not universally true, of course, and one interesting example of that fact is that black voters are solidly against same-sex marriage:

The Obama/Proposition 8 situation [a measure on the November ballot that would amend the state constitution to ban same-sex marriage] appeals to those opposed to same-sex marriage, who are banking on a high turnout by blacks and conservative Latinos. “There’s no question African-American and Latino voters are among our strongest supporters,” said Frank Schubert, the co-campaign manager for Yes on 8, the leading group behind the measure. “And to the extent that they are motivated to get to the polls, whether by this issue or by Barack Obama, it helps us.”

Hopefully this will be the last American presidential election – or any election – where race is such a blatant issue.  Win or lose in 2008, Barack Obama has proven that a black man can lead this country.  It could even be him, if his policies were more mainstream.

Dan Riehl says something I’ve written about several times:

…were Obama conservative to Right-leaning, I’d vote for a guy like that in a minute and I suspect many other Right-siders would, too. In my opinion, were a Colin Powell or a Condaleezza Rice slightly more to the Right and able to appeal to values voters, they’d have strong backing from Right-side voters throughout much of the land, despite some existing stereotypes propagated by the media.

If only.

Bailing Out the Greedy

If the Powers That Be follow through with their plan to spend $700B dollars to buy up some of the bad debt that is dragging financial companies down, the net effect will be to bail the greedy and the stupid out of the consequences of their greed and stupidity.

This sort of dramatic rescue may make sense in the Grand Scheme that is international finance – who truly understands the forces at work there, if we’re to be honest with ourselves and one another? – but it makes no sense whatever in terms of the human factors involved.

The financial situation – not a crisis, yet – that we find ourselves in was fundamentally caused by two sorts of people: those who borrowed money they couldn’t pay back without a run of good fortune and those who let them do it in order to get their middleman’s cut.  Providing the former with a bailout now simply rewards their financial incompetence (or willful stupidity), teaching borrowers exactly the opposite of what they need to learn.  It remains to be seen whether the latter group’s malfeasance will be systematically punished as it should be, though I’m not holding my breath.

There’s a lot of high-sounding talk about Bernanke and Paulson and what financial geniuses they are, which would be all well and good if it were relevant.  But the question that too many people aren’t asking is, “How much of this almost $1T will ever be paid back?”


…the problem is that lots of bad loans were made, lots of people made highly leveraged investments in those bad loans, and still more people bet on those loans by insuring them. The loans are bad. The mortgages are not going to be repaid in full. Housing prices are not going to magically shoot up 50% over the next 6 months. People gambled and lost…

Quite.  Ever see the house take pity on a sucker in Vegas?  Nope, but in Washington it’s a different story.  The truth is that if the feds see half of our money returned on this deal they’ll be doing well.  The rest is piss in a boot, like the billions squandered in Iraq.

Leftist Relativism Inconsistent, Childish

At TalkLeft, TChris provides a textbook case of all that’s wrong with the far left’s moral relativism in this post about Saudi Arabia’s new death penalty crime – showing Turkish soap operas during Ramadan.

[Saudi Arabia’s Supreme Judicial Council, Sheikh Saleh al-] Lohaidan advised the station owners that “those who promote corruption in belief and actions … can be put to death through the judicial process.” Like death penalty advocates in the United States, Lohaidan subscribes to a deterrent theory: if lesser penalties don’t get the attention of offenders, death surely will.

Note Chris’ ham-handed use of liberals’ favorite tactic, the moral equivalency tar brush.  In this misguided view, the death penalty for murderers in the U.S. is equivalent to handing it out in Saudi over a television show.

Chris goes on to humorously mock the Saudis’ provincial narrow mindedness and justifiably so.  But readers are expected to follow along and paint the U.S.’s use of the death penalty with the same brush.

It’s nothing more than Ideological Slander 101.  There is no equivalency whatever between the two.  Chris undoubtedly knows this, although judging from the early comments many of his readers lack the capacity to understand the difference.

Murder is one of the most heinous crimes a person can commit.  It ends the existence of another human being, often brutally and painfully and always without the victim’s consent.  Saudi TV producers’ sole crime, should any be bold enough to challenge the law, would be providing a service desired by Saudi citizens.  Where is the correlation?  It’s MIA, my friends.

The fundamental problem is that the left is uncomfortable with making value judgments based on absolute moral standards.  It’s all relative according to the left’s dogmatic script, even when it’s not.  One need look no farther than liberals’ undying support for abortion of the innocent to see an illustration of the childishly inconsistent thinking that defines their ideology.