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While its some of the finest work I've seen, this fair and detailed work is not from the MSM. It is from the blogger Baseball Crank. It really is a must read, particularly after a month of reading the Washington Post try to take down Palin for taking per diem expenses or the New York Times give the narrative of every Palin enemy they could find for their own front page story. Baseball Crank does the work an objective MSM should have done. Read it here.
(H/T Soccer Dad)
Friday, October 3, 2008
Finally, A Fair & Balanced Article On Gov. Palin's Background
The Subprime Crisis In Cartoons
Michael Ramirez has several cartoons that pretty much sum up the subprime crisis:
She's Back
Biden - strong out of the gate, charging the last eight years with being the cause of today's economic crisis. Palin's answer to this was very poor. Like McCain last week, she wholly failed to rebut this charge. Best line of the night – Palin: “Say it ain't so, Joe, there you go again pointing backwards again. You preferenced your whole comment with the Bush administration. Now doggone it, let's look ahead and tell Americans what we have to plan to do for them in the future.” 1. TAX VOTE: Biden said McCain voted “the exact same way” as Obama to increase taxes on Americans earning just $42,000, but McCain DID NOT VOTE THAT WAY.
The Palin-Biden Vice Presidential debate is in the history books. You can find the transcript here. My overall impression – Biden did well and did not hurt himself; Ifell did a reasonable job as moderator; Sarah Palin did very well. She had a grasp of most of the issues and got much stronger as the debate progressed. She was confident and she was Reaganesque in her ability to communicate with clarity and optimism. This was not the woman that I saw stumble with Katy Couric or assume the deer in the headlights position with Charlie Gibson.
Tonight was make it or break it for Gov. Palin. She made it. That said, her performance was not uniformly good. She was weak in response to the first few questions on the economy. She was strong in response to the foreign policy questions.
Some thoughts –
Palin - her populism is fine, but the economic problem is much more systemic than simple greed and predatory lending. The subprime crisis is a systemic crisis created by Fannie Mae and CRA.
Biden - was telling tall tales indeed about Obama and the subprime crisis. While McCain, two years ago, was sponsoring legislation to reign in Fannie Mae, Obama was AWOL. He was at the bank cashing Fannie Mae campaign contribution checks. Palin just completely miffed the response to this.
Palin - missed the opportunity to talk about deregulation. Her answer should have been regulation is neutral. Over-regulate and you shrink the economy. Under-regulate and you bring the economy to the brink of crisis. That is the perfect lead in to the subprime crisis which McCain and Palin have to educate the public on if they are going to win.
Biden - his claim to have always supported clean coal technology is just ridiculous. He’s given several interviews were he has spoken against clean coal – during his presidential campaign and again as recently as two weeks ago.
Palin - her support for carbon emissions caps left me shivering.
Biden - nothing is more counterproductive than a windfall profits tax on oil. It would only further punish an energy sector and increase the cost of energy. That combined with Obama's embrace of high prices for gas would be a knife in the heart of our economy. Palin never supported a windfall profits tax in Alaska. That is a gross mischaracterization.
Palin - very strong in the Iraq argument, though she could have quoted Biden from 2005 when he was still saying that we had to win in Iraq because the cost of failure would be unimaginable.
Palin - she should have eaten Biden alive over his claim that McCain voted against funding the troops when he voted against a plan that would have legislated surrender. That was weak.
Palin - forgot the name of the leader of al Qaeda – though she didn’t get called on it.
Biden - pointed out that Ahmedinejad does not control the power in Iran. Palin did not know enough to respond that, while Supreme Guide Khamenei holds true power, his mouthpiece is Ahmedinejad. It would be naive bordering on ludicrous to believe that, in theocratic Iran, the policies of Ahmedinejad vary from those of the Supreme Guide.
Biden – Hezbollah has been driven out of Lebanon? To the contrary, they are a state within a state the likes of which Iran has been trying to establish in Iraq also. That was a potentially major gaffe, but Palin did not call him on it.
Palin – I am pretty sure that Palin got the name of the commander of the ISAF in Afghanistan wrong. Gen. McClellan hasn’t said anything about counterinsurgency since he was relieved of command by Lincoln. Gen. McKiernan, on the other hand, may well have said that the general principles of counterinsurgency strategy are applicable to Afghanistan.
Palin – allowed Biden to claim as a strength what he has done as the head of the Senate Judiciary committee. She really missed a perfect opportunity to discuss how its been Joe Biden, more than anyone else, who has turned judicial appointments into a partisan circus and to discuss Obama’s embrace of activist judges.
Biden – Article I of the Constitution pertains to the Executive Branch? Wow.
Dick Morris, in the video below, gave this as a hands down win for Sarah Palin, making the comparison to Reagan in her ability to communicate. Its also fun to watch as Morris goes for the throat of Alan Combes.
(H/T Stop the ACLU)
According to a Frank Lunz focus group of undecided voters, Palin was the clear winner – to the extent that Luntz said there should be a significant movement in the polls over the next 48 hours.
Over at TPM Central, they note that a CBS snap poll of 473 undecided voters gave Biden a clear victory. Obviously, one of these two findings is incorrect. Polls over the next few days will tell us.
Protein Wisdom has posted a McCain camp response noting 14 half-truths or untruths uttered by Joe Biden tonight
2. AHMEDINIJAD MEETING: Joe Biden lied when he said that Barack Obama never said that he would sit down unconditionally with Mahmoud Ahmedinijad of Iran. Barack Obama did say specifically, and Joe Biden attacked him for it.
3. OFFSHORE OIL DRILLING: Biden said, “Drill we must.” But Biden has opposed offshore drilling and even compared offshore drilling to “raping” the Outer Continental Shelf.”
4. TROOP FUNDING: Joe Biden lied when he indicated that John McCain and Barack Obama voted the same way against funding the troops in the field. John McCain opposed a bill that included a timeline, that the President of the United States had already said he would veto regardless of it’s passage.
5. OPPOSING CLEAN COAL: Biden says he’s always been for clean coal, but he just told a voter that he is against clean coal and any new coal plants in America and has a record of voting against clean coal and coal in the U.S. Senate.
6. ALERNATIVE ENERGY VOTES: According to FactCheck.org, Biden is exaggerating and overstating John McCain’s record voting for alternative energy when he says he voted against it 23 times.
7. HEALTH INSURANCE: Biden falsely said McCain will raise taxes on people’s health insurance coverage — they get a tax credit to offset any tax hike. Independent fact checkers have confirmed this attack is false
8. OIL TAXES: Biden falsely said Palin supported a windfall profits tax in Alaska — she reformed the state tax and revenue system, it’s not a windfall profits tax.
9. AFGHANISTAN / GEN. MCKIERNAN COMMENTS: Biden said that top military commander in Iraq said the principles of the surge could not be applied to Afghanistan, but the commander of NATO’s International Security Assistance Force Gen. David D. McKiernan said that there were principles of the surge strategy, including working with tribes, that could be applied in Afghanistan.
10. REGULATION: Biden falsely said McCain weakened regulation — he actually called for more regulation on Fannie and Freddie.
11. IRAQ: When Joe Biden lied when he said that John McCain was “dead wrong on Iraq”, because Joe Biden shared the same vote to authorize the war and differed on the surge strategy where they John McCain has been proven right.
12. TAX INCREASES: Biden said Americans earning less than $250,000 wouldn’t see higher taxes, but the Obama-Biden tax plan would raise taxes on individuals making $200,000 or more.
13. BAILOUT: Biden said the economic rescue legislation matches the four principles that Obama laid out, but in reality it doesn’t meet two of the four principles that Obama outlined on Sept. 19, which were that it include an emergency economic stimulus package, and that it be part of “part of a globally coordinated effort with our partners in the G-20.”
14. REAGAN TAX RATES: Biden is wrong in saying that under Obama, Americans won’t pay any more in taxes then they did under Reagan.
Thursday, October 2, 2008
The Latest Obama Ad - "The World Supports Obama"
Er . . . at least the folks at TNOY told me it was his latest ad.
Heh
Wednesday, October 1, 2008
Democrats' Operation "Educate The Idiots"
In a confidential internal memorandum obtained by Face The State (PDF), the Colorado Democracy Alliance outlines a roster of "operatives" who worked for Democratic victory in the 2006 general election. The document outlines specific tasks for various members of the state's liberal infrastructure, including a campaign to "educate the idiots," assigned to the state's AFL-CIO union. Among the operation's intended targets: "minorities, GED's, drop-outs." Read the entire article. It really amazes me how the "progressive" left is able to gather so much support from the "idiots" among us while putting the screws to said "idiots" at the same time. Or is that the very definition of "idiot," perhaps.
Are you a minority? Do you have a GED? Did you drop-out of school? If you live in Colorado and if you fit into any of these categories then you are an "idiot" - at least according to the Colorado Democracy Alliance, a 527 consisting of high ranking members of the state Democratic Party. You are now being targeted as part of their "Educate The Idiots" program designed to teach you what to think - and that is to vote for Obama.
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The Democratic Party has little but disdain for their base. On one hand, they provide some give-aways to their base while to keep them in line, while on the other hand, at the highest levels, Democrats pursue policies that truly squeeze their base - energy policy being the most blatant example. High energy prices effect the lowest paid by far the most. And if you need any more proof of the disdain in which the base is held, there is this from Face The State on a confidential memo of the Colorado branch of the Democracy Alliance, a Colorado Democratic 527:
Individuals named in the document, marked "CONFIDENTIAL," "for internal use only," and "DO NOT DISTRIBUTE," are high-level elected Democrats . . . All are specially marked as "off-the-record or covert."
. . . CoDA is one of 18 state-based versions of the nationally focused Democracy Alliance, a self-described "investment partnership of business and philanthropic leaders" funding liberal infrastructure nationwide. For more information about the Democracy Alliance in Colorado, see day one and two of Face The State's week-long series on the group. . . .
(H/T Drudge)
Judicial Activism & The Next Supreme Court
[T]he Eighth Amendment’s protection against excessive or cruel and unusual punishments flows from the basic “precept of justice that punishment for [a] crime should be graduated and proportioned to [the] offense.” Whether this requirement has been fulfilled is determined not by the standards that prevailed when the Eighth Amendment was adopted in 1791 but by the norms that “currently prevail.” The [8th] Amendment "draw[s] its meaning from the evolving standards of decency that mark the progress of a maturing society." The activists then cast about for cases and facts that would support their policy preference. They held that a "consensus" existed at law that capital punishment should not be imposed on child rapists. Shortly after the Court announced the decision, a gaping hole in the activists' reasoning was brought to their attention. Congress had passed a law in 2006 applying to the military that allowed execution for child rape. "The views of the American people on the death penalty for child rape were, to tell the truth, irrelevant to the majority's decision in this case. The majority opinion, after an unpersuasive attempt to show that a consensus against the penalty existed, in the end came down" to its own judgment that the death penalty is too severe a punishment for a crime that does not result in death. . . . Of course, the Constitution contemplates no such thing; the proposed Eighth Amendment would have been laughed to scorn if it had read 'no criminal penalty shall be imposed which the Supreme Court deems unacceptable.'" If you like judicial activism, you'll love a President Obama. Given his opposition to both Judges Alito and Roberts as well as his devotion to radical philosophy, you could expect him to nominate judges who would rip Constituional law from its Constitutional moorings and move it into a whole new direction. It would be activism on steroids. This is a post from a few weeks ago by Power Line, speculating on likely Supreme Court nominees by a President Obama: Over at Bench Memos, our friend Ed Whelan has started a series in which he considers some of the individuals who have been mentioned as prospective nominees to the Surpeme Court, should Barack Obama be elected. Ed begins with Harold Koh, dean of Yale law school. [The transnationalist] tends to follow an approach suggested by Justice Blackmun in the late 1980s: that U.S. courts must look beyond national interest to the “mutual interests of all nations in a smoothly functioning international legal regime” and must “consider if there is a course that furthers, rather than impedes, the development of an ordered international system.” Ed notes that, true to his transnationalist philosophy, Koh filed an amicus brief in Lawrence v. Texas arguing that international and foreign court decisions compelled the Supreme Court to strike down Texas’s ban on homosexual sodomy. And he submitted an amicus brief (to the Connecticut supreme court) arguing that comparative precedents from foreign countries require recognition of a constitutional right to same-sex marriage. Read the entire post. Actually, of all the damage a President Obama could do to our country, it is in the choices he will make regarding Supreme Court nominees that he could do the most fundamental mischief.
The activist wing of the Supreme Court, that wing associated with the "living Constitution" theory and internationalism, has shown their true colors. The case of Kennedy v. Louisiana was a decision by the five activists on the Court holding that capital punishment could not be constitutionally imposed for child rape. Faced with evidence that the legal justification underlying their policy decision was demonstrably wrong, the activists have refused to revisit their decision. This is proof that they are legislating their policy preferences from the bench and only thereafter attempting to justify their decision with a bare patina of legal reasoning.
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I have posted previously on judicial activism and the fundamental danger it presents to our country. The term "judicial activism" refers to unelected judges who disregard the intent of the founders, twist precedent and ignore the limited powers of the court to make law of their own policy preferences. Three years ago, activists extinguished our 5th Amendment protection against government taking our private property and transferring it to another private party. A few months ago, activists crafted a vast expanion of Court powers to oversee decisions of national security and war. We have seen activists come within one vote of gutting the Second Amendment. And those are only a few of the activist decisions over the past few years. None of those decisions could be justified on original intent of the founders, nor could they be justified on precedent. Instead, these were policy decisions founded on faulty reasoning, twisting of precedent, and, under the relatively recent activist theory of internationalism, cherry-picking of precedent and laws from foreign jurisdictions.
If more proof of that were needed, it could not be clearer than in the case of Kennedy v. Louisiana, the recent Supreme Court case holding capital punishment for child rapists unconstitutional. I critiqued in a post here the legal reasoning of the activist wing of the Court in Kennedy. The foundation of the Court's reasoning was:
That law directly undercut the reasoning by which the activists on the Court reached their decision. If the activists were really engaged in anything other than announcing their policy preferences as Constitutional law, then they would have reopened the case and decided it anew. Instead, today, the five activisits on the Court who formed the majority in Kennedy voted to deny a rehearing. This was the reaction from Justice Scalia:
Koh is a self-described "judicial transnationalist." Here is how Koh explains this philosophy:
Generally speaking, the transnationalists tend to emphasize the interdependence between the United States and the rest of the world, while the nationalists tend instead to focus more on preserving American autonomy. The transnationalists believe in and promote the blending of international and domestic law; while nationalists continue to maintain a rigid separation of domestic from foreign law. The transnationalists view domestic courts as having a critical role to play in domesticating international law into U.S. law, while nationalists argue instead that only the political branches can internalize international law. The transnationalists believe that U.S. courts can and should use their interpretive powers to promote the development of a global legal system, while the nationalists tend to claim that U.S. courts should limit their attention to the development of a national system.
Watcher's Council Nominations On The Eve Of The Palin-Biden Debate
Submissions this week come at a time when there is much turmoil in the financial markets and the media continues its attempts to undermine John McCain and Sarah Palin. An explanation on how far the media will go to undercut the Republicans is that PBS VP debate moderator is Gwenn Ifill is a Palin critic. Even more alarming is that Ifill stands to gain financially from a book she wrote if Barack Obama wins the election. The book is due out on inaguration day. This week's nominations are:
First up, we have a vacancy on the Watcher's Council. If you would like to join, please visit the Watcher's site. You will find a link to instructions on how to apply on the right sidebar of the site.
Each week, the members of the Watcher's Council nominate one of their own posts and a second from outside the Council for consideration by other council members in a contest for best post. The Watcher publishes the results each Friday morning. There is never an organized theme to our submissions, but more often than not many posts cover different aspects of the same topic. Having looked at the submissions, the Watcher has commented upon the week that was and the weeks submissions:
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1. Rhymes With Right - In The Aftermath Of Ike – The Good, The Bad, And The Ugly
2. Joshuapundit - The Crap Sandwich
3. Wolf Howling - A Doddering Fool
4. Bookworm Room - When God closes a door, he sometimes opens a window
5. The Colossus of Rhodey - I thought the Left wanted to talk about issues?
6. Hillbilly White Trash - The little messiah unleashes his freikorps
7. The Glittering Eye - System Failure
8. Soccer Dad - McCain’s role
9. Cheat-Seeking Missiles - McCain’s Needed New Messaging Strategy
Non-Council Submissions
1. Submitted By: Rhymes With Right - St Louis C of CC Blog - Obamination: Obama Supporters Bob McCulloch, Jennifer Joyce Threaten to Prosecute People For Criticizing Obama
2. Submitted By: Joshuapundit - ShrinkWrapped - Everything Is New Under The Sun
3. Submitted By: Wolf Howling - Dinah Lord - Then The Gods Of The Market Tumbled . . .
4. Submitted By: Bookworm Room - Wall Street Journal - Debates Don’t Always Reveal Character
5. Submitted By: The Colossus of Rhodey - Gene Expression - Graphs on the death of Marxism, postmodernism, and other stupid academic fads
6. Submitted By: Hillbilly White Trash - Powerline - You Knew It All Along
7. Submitted By: The Glittering Eye - Infectious Greed - Voltaire, Batman and the Precipice
8. Submitted By: Soccer Dad - Q & O - Learning from history
9. Submitted By: Cheat-Seeking Missiles - American Thinker - Barack Obama and the Strategy of Manufactured Crisis
WSJ & Bill Clinton On Deregulation, Glass-Steagall & The Subprime Crisis
A running cliché of the political left and the press corps these days is that our current financial problems all flow from Congress's 1999 decision to repeal the Glass-Steagall Act of 1933 that separated commercial and investment banking. Barack Obama has been selling this line every day. Bill Clinton signed that "deregulation" bill into law, and he knows better. Read the entire article. Obama's disengenuous musings are actually a necessity. He was heavilly immersed in pushing lenders into the subprime market in his days as a community organizer and then as a lawyer. But I would not be surprised to find that Obama believes what he says. As discussed in the post below, his worldview is much closer to Marx than Adam Smith. 
Obama's meme is that our entire fiscal crisis centers not on the subprime crisis, but on deregulation of the financial industry. The facts are otherwise.
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Deregulation occured on Bill Clinton's watch. Former President Clinton, having already weighed in on the responsibility of Democrats in Congress for the Fannie-Freddie subprime crisis, has now weighed in, noting that deregulation and the repeal of Glass-Steagall was not the cause of the current crisis. The editors at the WSJ fill that in with facts and examples, noting that the securities implicated in the current crisis had begun issuance prior to deregulation and merely continued afterwards. Further, the WSJ notes that those organizations that have taken advantage of the deregulation have best weathered the financial storm. This from the WSJ:
In BusinessWeek.com, Maria Bartiromo reports that she asked the former President last week whether he regretted signing that legislation. Mr. Clinton's reply: "No, because it wasn't a complete deregulation at all. We still have heavy regulations and insurance on bank deposits, requirements on banks for capital and for disclosure. I thought at the time that it might lead to more stable investments and a reduced pressure on Wall Street to produce quarterly profits that were always bigger than the previous quarter.
"But I have really thought about this a lot. I don't see that signing that bill had anything to do with the current crisis. Indeed, one of the things that has helped stabilize the current situation as much as it has is the purchase of Merrill Lynch by Bank of America, which was much smoother than it would have been if I hadn't signed that bill."
. . . On the Glass-Steagall thing, like I said, if you could demonstrate to me that it was a mistake, I'd be glad to look at the evidence.
"But I can't blame [the Republicans]. This wasn't something they forced me into. I really believed that given the level of oversight of banks and their ability to have more patient capital, if you made it possible for [commercial banks] to go into the investment banking business as Continental European investment banks could always do, that it might give us a more stable source of long-term investment."
. . . The Gramm-Leach-Bliley Act passed the Senate on a 90-8 vote, including 38 Democrats and such notable Obama supporters as Chuck Schumer, John Kerry, Chris Dodd, John Edwards, Dick Durbin, Tom Daschle -- oh, and Joe Biden. Mr. Schumer was especially fulsome in his endorsement.
As for the sins of "deregulation" more broadly, this is a political fairy tale. The least regulated of our financial institutions -- hedge funds -- have posed the least systemic risks in the current panic. The big investment banks that got into the most trouble could have made the same mortgage investments before 1999 as they did afterwards. One of their problems was that Lehman Brothers and Bear Stearns weren't diversified enough. They prospered for years through direct lending and high leverage via the likes of asset-backed securities without accepting commercial deposits. But when the panic hit, this meant they lacked an adequate capital cushion to absorb losses.
Meanwhile, commercial banks that had heavier capital requirements were struggling to compete with the Wall Street giants throughout the 1990s. Some of the deposit-taking banks that were allowed to diversify after 1999, such as J.P. Morgan and Bank of America, are now in a stronger position to withstand the current turmoil. They have been able to help stabilize the financial system through acquisitions of Bear Stearns, Washington Mutual, Merrill Lynch and Countrywide Financial.
Mr. Obama's "deregulation" trope may be good politics, but it's bad history and is dangerous if he really believes it. The U.S. is going to need a stable, innovative financial system after this panic ends, and we won't get that if Mr. Obama and his media chorus think the answer is to return to Depression-era rules amid global financial competition. Perhaps the Senator should ask the former President for a briefing.
(H/T Hot Air)
Barney Frank In Bed With Fannie Mae
Prominent Democrats ran Fannie Mae, the same government-sponsored enterprise (GSE) that donated campaign cash to top Democrats. And one of Fannie Mae’s main defenders in the House – Rep. Barney Frank, D-Mass., a recipient of more than $40,000 in campaign donations from Fannie since 1989 – was once romantically involved with a Fannie Mae executive. Read the entire article. One wonders if Barney Frank's relationship with a Fannie Mae executive was not a huge conflict of interest? Irregardless, Frank's now claiming that the subprime crisis is wholly the responsiblity of Republicans or that the problem is deregulation is insipid. Barney Frank would have us believe he bears no responsibility for his own lifetime of actions aimed at lowering lending standards, driving us into the subprime swamp, and doing all he could to - succesfully - keep us there. Further, he would have America ignore the fact that all of the policies leading to the subprime crisis were put in place by Democrats.
Barney Frank, one of the prime architects of our nation's fiscal destruction, spent the last two decades in bed with Fannie Mae, both figuratively and, it would seem, literally.
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This from an exceptional article by Jeff Poor at the Business & Media Institute, documenting some of Barney Frank's efforts to drive our nation into the subprime swamp while maintaining an intimate relationship with a Fannie Mae executive:
The media coverage of Frank’s coziness with Fannie Mae and his pro-Fannie Mae stances has been lacking.
. . . The July 3, 1998, Reliable Source column in The Washington Post reported Frank, who is openly gay, had a relationship with Herb Moses, an executive for the now-government controlled Fannie Mae. The column revealed the two had split up at the time but also said Frank was referring to Moses as his “spouse.” Another Washington Post report said Frank called Moses his “lover” and that the two were “still friends” after the breakup.
Frank was and remains a stalwart defender of Fannie Mae, which is now under FBI investigation along with its sister organization Freddie Mac, American International Group Inc. (NYSE:AIG) and Lehman Brothers (NYSE:LEH) – all recently participants in government bailouts. But Frank has derailed efforts to regulate the institution, as well as denying it posed any financial risk. Frank’s office has been unresponsive to efforts by the Business & Media Institute to comment on these potential conflicts of interest.
While the relationship reportedly ended 10 years ago, Frank was serving on the House Banking Committee the entire 10 years they were together. The committee is the primary House body which along with the Office of Federal Housing Enterprise Oversight (OFHEO) has jurisdiction over the government-sponsored enterprises.
He has served on the committee since becoming a congressman in 1981 and became the ranking Democrat on the committee in 2003. He became chairman of the committee, now called the House Financial Services Committee, in 2007.
Moses was the assistant director for product initiatives at Fannie Mae and had been at the forefront of relaxing lending restrictions at the company for rural customers, according to the Feb. 23, 1998, issue of National Mortgage News (NMN).
“Herb Moses, who helped develop many of Fannie Mae’s affordable housing and home improvement lending programs, has left the mortgage industry,” Darryl Hicks wrote for NMN. “Mr. Moses - whose last day was Feb. 13 - spent the past seven years at Fannie Mae, most recently as director of housing initiatives. Over the course of time, he played an instrumental role in developing the company’s Title One and 203(k) home improvement lending programs.”
Hicks explained in his story how Moses orchestrated a collaborative effort between Fannie Mae and the Department of Agriculture.
“The Dartmouth grad also played a crucial role in brokering a relationship between Fannie Mae and the Department of Agriculture,” Hicks wrote. “This led to the creation of Fannie Mae’s rural housing program where the secondary marketing agency agreed to purchase small farm loans insured through the department.”
While Moses served at Fannie Mae and was Frank’s partner, Frank was actively working to support GSEs, according to several news outlets.
In 1991, Frank and former Rep. Joe Kennedy, D-Mass., lobbied for Fannie to soften rules on multi-family home mortgages although those dwellings showed a default rate twice that of single-family homes, according to the Nov. 22, 1991, Boston Globe.
. . . Moses left Fannie in 1998 to start his own pottery business. National Mortgage News called Moses a “mortgage guru” and said he developed “many of Fannie Mae's affordable housing and home improvement lending programs. Moses ended his relationship with Frank just months after he left Fannie.
Even after the relationship ended, however, Frank was a staunch defender of Fannie Mae even as other experts suggested there were serious problems building in Fannie Mae and Freddie Mac.
According to an article by Kathleen Day in the Oct. 8, 2003, Washington Post, Frank opposed giving the Bush administration the right to approve or disapprove business activities that “could pose risk to the taxpayers.” He told the Post he worried the Treasury Department “would sacrifice activities that are good for consumers in the name of lowering the companies’ market risks.”
Just a month before, Frank had aggressively thwarted reform efforts by the Bush administration. He told The New York Times on Sept. 11, 2003, Fannie Mae and Freddie Mac’s problems were “exaggerated,” a gross miscalculation some five years later with costs estimated to be in the hundreds of billions.
“These two entities – Fannie Mae and Freddie Mac – are not facing any kind of financial crisis,” Frank said to the Times. “The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”
. . . In a July 23 op-ed, Wall Street Journal Editorial Page Editor Paul Gigot put the blame for the GSEs’ collapse firmly on the members of the liberal establishment who took money from Freddie and Fannie. “Fan and Fred also couldn't prosper for as long as they have without the support of the political left... This includes Mr. Frank and Sen. Chuck Schumer (D., N.Y.) on Capitol Hill, as well as Mr. [Paul] Krugman and the Washington Post's Steven Pearlstein in the press.”
. . . [O]n Sept. 17, 2008, former Bush administration Deputy Chief of Staff Karl Rove elaborated on the Bush administration’s efforts to curb abuses at the two GSEs in 2003. He told Fox News’ “Hannity & Colmes” that Frank was among the most aggressive opponents of White House attempts to reform Fannie Mae and Freddie Mac.
“All of this bad stuff on Wall Street happened because people got greedy and the greed started at Fannie Mae and Freddie Mac,” Rove said. “And I know this because five years ago, the administration was alerted by the regulator, James Lockhart, that there was insufficient authority and that these institutions – particularly Fannie – were out of control.”
Rove said the Bush administration’s efforts to reform Fannie and Freddie were opposed by congressional Democrats – specifically Frank and Senate Banking Committee Chairman Christopher Dodd, D-Conn.
“And I got to tell you, for five years, I was part of an effort at the White House to fight this and our biggest opponents on the Hill who blocked this every step of the way were people like Chris Dodd and Barney Frank. And Fannie and Freddie are the $200 billion contagion at the center of this.”
Frank has been quick to blame deregulation for some of the problems in the financial environment, as he did on Bloomberg television’s Sept. 19 “Political Capital with Al Hunt.” However, as earmark crusader Rep. Jeff Flake, R-Ariz. pointed out – it’s not deregulation, but it was the structure of Fannie Mae and Freddie Mac that had been guarded by Frank and other members of Congress.
“Some people point at deregulation,” Flake said to the Business & Media Institute on Sept. 23. “It’s not deregulation at all. We have for far too long shielded Fannie and Freddie for example, with the implicit and now explicit guarantee. I just found it humorous.”
Flake specifically named Frank as one of the members behind letting allegations of transgressions at the two GSEs for slipping by without oversight from Congress.
“Just a few minutes ago, a reporter was asking me about this and saying, ‘Barney Frank is saying that’s just – because there were allegations,’ correct ones – ‘that Fannie and Freddie have been the playground for politicians for years and now the other side is saying Fannie and Freddie were just a small part of this and this goes far beyond.’ It does, but these same people a couple of weeks ago said, ‘You got to bail out Fannie and Freddie because they touch everything out there. They touch nearly every mortgage out there.’ And because of that explicit guarantee – that we would come and bail them out, nobody has been subject to market discipline.”
. . . The red flags were raised long before the government bailed out the two GSEs in August 2008. The first egregious scandal involving Fannie Mae occurred in 2004. A 2004 Wall Street Journal editorial was first to point out claims in an OFHEO report that showed accounting malpractices by the GSE.
“For years, mortgage giant Fannie Mae has produced smoothly growing earnings. And for years, observers have wondered how Fannie could manage its inherently risky portfolio without a whiff of volatility, the Oct. 4, 2004, editorial, “Fannie Mae Enron?” said. “Now, thanks to Fannie’s regulator, we know the answer. The company was cooking the books. Big time.”
(H/T Dr. Sanity)
McCain, Subprime Crisis, SEC & Suspension of Mark To Market
ARLINGTON, VA -- Today, Doug Holtz-Eakin, McCain-Palin 2008 Senior Policy Adviser, issued the following statement on the SEC's plan to relax mark-to-market accounting requirements: (H/T Ace)
This is good news. The McCain Camp is announcing that the SEC is partially suspending the recently intstituted mark to market accounting rules. This rule is playing a significant role in causing the current fiscal crisis. And once again, it appears McCain was on the side of the angels, calling for suspension of the mark to market rule months before the subprime crisis materialized.
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"Mark to market" requires accounting for the present day, fair market value of all assets. Given no market exists for subprime loans and related securities at the moment, financial institutions are being forced to account for them at far less than their actual value. Getting rid of mark to market accounting was a part of the House Bill that was killed Monday. The SEC has decided to act unilaterally. This from the McCain Camp, noting the suspension and McCain calls in the months leading up to this crisis.
"John McCain is pleased to see that the SEC has finally decided to permit alternative accounting methods to mark-to-market accounting for securities where no active market exists. There is serious concern that these accounting rules are worsening the credit crunch, making it difficult for small businesses to stay afloat and squeezing family budgets. In March, John McCain called for a meeting of accounting professionals to discuss whether mark-to-market accounting was magnifying problems in the financial markets."
Background:
In March, John McCain Called For A Meeting Of Accounting Professionals To Analyze The Current Mark To Market Accounting Systems. "[I]t is time to convene a meeting of the nation's accounting professionals to discuss the current mark to market accounting systems. We are witnessing an unprecedented situation as banks and investors try to determine the appropriate value of the assets they are holding and there is widespread concern that this approach is exacerbating the credit crunch." (John McCain, Remarks, Santa Ana, CA, 3/25/08)
Tuesday, September 30, 2008
Radicalism In Soothing Tones
. . . Throughout his Senate career, according to Americans for Democratic Action, the dean of liberal advocacy groups, Mr. Obama voted "right" 90% of the time. Actually this is misleading, since ADA counts an absence as if it were a vote on the "wrong" side. If we discount his absences, Mr. Obama voted to ADA's approval more than 98% of the time. the cynical attempt by Richard Perle and Paul Wolfowitz and other armchair, weekend warriors . . . to shove their own ideological agendas down our throats, irrespective of the costs in lives lost and in hardships borne . . . the attempt by political hacks like Karl Rove to distract us from a rise in the uninsured, a rise in the poverty rate, a drop in the median income . . . the arms merchants in our own country . . . feeding the countless wars that rage across the globe. In this litany of global perfidy, the issues of Saddam Hussein's murderous dictatorship, of American security, of the future of freedom, shrink to inconsequentiality next to the struggle of the oppressed against their American capitalist overlords. the underlying struggle—between worlds of plenty and worlds of want; between the modern and the ancient; between those who embrace our teeming, colliding, irksome diversity, while still insisting on a set of values that binds us together; and those who would seek, under whatever flag or slogan or sacred text, a certainty and simplification that justifies cruelty toward those not like us. In this reading, the lessons to be learned from the actions of Osama bin Laden and Mohamed Atta are that we must accept multiculturalism at home and share our wealth abroad. Read the entire article. There is much in there about Bill Ayers, the Chicago Annenberg Challenge, and Rev. Wright. I have pointed out many times before, using much the same reasoning as this author, that Obama sees the worlds problems and solutions through the naive and distorted lens of Karl Marx.
One of Obama's greatest strengths, it seems to me, is his ability make the radical sound perfectly reasonable to the uninformed. Joshua Muravchik, writing at the WSJ, thinks likewise. Mr. Muravchik examines the actions and ideology of The One, finding a man immersed in radicalism.
This from Joshua Muravchik writing at the WSJ:
This touches directly on the question of what, beyond the platitudes of unity, hope and change, Mr. Obama himself believes in. His voting record is one indication. Another is his intellectual evolution.
Abandoned by his father when he was still too young to remember him and then sent at age 10 by his mother to live in Hawaii with her parents, who enrolled him in a prestigious prep school, Mr. Obama spent much of his teen years searching for his black identity. Late in his high-school career he found a mentor of sorts in Frank Marshall Davis, an older black poet. According to Herbert Romerstein, former minority chief investigator of the House Committee on Internal Security, FBI files reveal Davis to have been a member of the Communist Party not only in its public phase but also when it officially dissolved and went underground in the 1950s.
According to Mr. Obama, Davis told him that a white person "can't know" a black person, and that the "real price of admission" to college was "leaving your race at the door." Perhaps influenced by this, he reports that at college, "to avoid being mistaken for a sellout, I chose my friends carefully. The more politically active black students. The foreign students. The Chicanos. The Marxist professors and structural feminists and punk-rock performance poets."
. . . Thanks to a grant from a left-wing foundation, he was hired by a small group of white protégés of Saul Alinsky, the original apostle of "community organizing." Alinsky's institutional base was the Industrial Areas Foundation, which he called a "school for professional radicals" and whose goal he announced to be "revolution, not revelation." As Mr. Obama himself would put it, there were "two roles that an organizer was supposed to play . . . getting the Stop sign [and] the educative function. At some point you have to link up winning that Stop sign . . . with the larger trends, larger movements." In other words, "community organizer," to Mr. Obama and his colleagues and mentors, was a euphemism for professional radical.
. . . Mr. Obama's turn to electoral politics signified no change in his basic ideological orientation. As his wife, Michelle, put it: "Barack is not a politician first and foremost. He's a community activist exploring the viability of politics to make change." ("I take that observation as a compliment," Mr. Obama said as late as 2005.)
. . . In his campaign for the Illinois senate, Mr. Obama was endorsed by the New Party, a coalition of socialists, Communists and other leftists. According to the newsletter of the local chapter of Democratic Socialists of America, whose members were said to constitute 15 percent of the Chicago New Party, "Once approved, candidates must sign a contract with the NP [which] mandates that they must have a visible and active relationship with the NP." Apparently, Mr. Obama signed such a pledge. After winning the primary (unopposed because his lawyers had succeeded in knocking all three opponents off the ballot), he appeared at a New Party membership meeting to voice his thanks.
Entering the national political scene eight years later, Mr. Obama did not, to be sure, appear as a radical, but he still bore the earmarks of the world in which he had been immersed for 20 years. He called himself "progressive," a term of art favored by veterans of the hard New Left, like Tom Hayden, as well as by old-time Communists. Early this year his wife, Michelle, lacking his tact, would kindle controversy by saying that his success in the presidential primaries made her feel proud of her country for the first time. The comment, a faux pas that she was soon at pains to explain away, flowed logically from her view, expressed in her standard stump speech, that our country is a "downright mean" place, "guided by fear," where the "life . . . that most people are living has gotten progressively worse."
. . . [Other] radicals, soft and hard, rushed to embrace Mr. Obama, often waxing rapturous in their support. Robert Borosage and Katrina vanden Heuvel enthused in The Nation that Mr. Obama's was "a historic candidacy," from which "new possibilities will be born." Michael Lerner wrote in Tikkun that the "energy, hopefulness, and excitement that manifests [sic] in Obama's campaign" was reminiscent of "the civil-rights movement, the anti-war movement, the women's movement, the environmental movement, and the movement for gay liberation." Most remarkably, Tom Hayden himself joined the chorus by breaking a New Left taboo against "red-baiting" and laying bare some of Hillary Clinton's own far-left history—this, in retaliation for the Clinton campaign's revelations about Mr. Obama's radical background.
Even after declaring his candidacy, and despite a certain inevitable sidling rightward, Mr. Obama still reflected the presuppositions of a radical worldview. In one notable remark, he said of voters in economic distress that in their desperation they "cling to guns or religion or antipathy to people who aren't like them." Chastised for his condescension, he responded: "I said something that everybody knows is true." This was elitism of a very specific kind—the mentality of the community organizer, according to which people in the grip of "false consciousness" need to be enlightened as to the true nature of their class interests, and to the nature of their true class enemies.
The same suppositions are again evident in Mr. Obama's stances on international issues. Iraq, as he sees it, is only a symptom. "I don't want to just end the war . . . I want to end the mindset that got us into war in the first place." And what would that mindset be? In a 2002 speech that he frequently cites, he said the war resulted from
When it comes to Iran, Mr. Obama has acknowledged that the regime presents a problem. But his actions—he opposed the Kyl-Lieberman amendment designating the Iranian Revolutionary Guard Corps a terrorist organization—as well as his rhetoric imply that the greater danger emanates from George W. Bush (who is allegedly seeking "any justification to extend the Iraq war or to attack Iran"). Likewise on defeating terrorism, where he rejects the America-centric focus that Bush has given to the issue; instead, in the words of his aides, Obama's main goal is to "restore . . . our moral standing"—that is, to put an end to our aggressive ways.
Even the events of 9/11 could not shake Mr. Obama from the mindset that the enemy is always ourselves. The bombings, he wrote, reflected
By this paradigm, he divides the world up into victim groups, America the victimizer, and economic concerns as the panacea for all ills. For example, in the wake of 9-11, Obama identified the primary cause of Islamic violence as "a climate of poverty and ignorance, helplessness and despair." We know that is not true – the typical terrorist is just as likely if not moreso to be educated and middle class. Then there was his comment that the "bitter" folk of our nation, those who take principled stands on their religion and Constitutional rights, only do so because they lack economic opportunity. Obama has expressed a similar view of Iran, positing that between his dynamic personality and just the right economic incentives, the mad mullahs can be divested of their religious principles that now drive their world-wide mayhem and murder. Indeed, he even held out WTO membership as the economic key to defusing the mad mullahs, not realizing that Iran had rejected WTO membership in 2006. They value their religion and their revolution far more than they care about the Iranian economy. For all of his intelligence, it would seem that Obama views the world through a naïve and distorted prism that, in the current circumstance, would prove not merely ineffectual, but highly dangerous.
Obama, ACORN, & The Subprime Crisis
While President Clinton was putting the Community Reinvestment Act on steroids in the 1990's to move our financial industry to move heavilly into the subprime lending market, Community Organizer Obama was on the grass roots end of it assisting the far left organization ACORN and bringing law suits against banks to force them to engage in subprime lending. (See here). Maintaining lending standards was apparently racist, don't you know. Stanley Kurtz follows up with his article on this in an interview with Fox News
Hear the Children . . .
. . . sing in praise of the Dear Leader
Ooops, sorry, wrong video . . .
Aren't political cults and the indoctrination of children so cute. . . . Let me see if I can find the one with the Hitler Youth Chorus glorifying Uncle Adolph. It will just melt your heart . . .
Update: And then there is this . . .
While the look is certainly militant, the language seems that of radical pacifism. Radical pacifists are, of course, not any less dangerous than other radicals. It is just that if a radical pacifist does happen to brutally attack you, it will be solely in the name of promoting peace.
(H/T Gateway Pundit)
Pelosi's Coverup
If Nancy Pelosi has her way, their will be no investigation and no justice for the Fannie Mae / Freddie Mac subprime crisis. This from the American Spectator:
. . . According to House Oversight Committee staff, [Congressman Rham] Emanuel has received assurances from Pelosi that she will not allow what he termed a "witch hunt" to take place during the next Congressional session over the role Fannie Mae and Freddie Mac played in the economic crisis.
Emanuel apparently is concerned the roles former Clinton Administration members may have played in the mortgage industry collapse could be politically -- or worse, if the Department of Justice had its way, legally -- treacherous for many.
The "many" includes vitrually everyone in the picture above.
Whether McCain wins the election - and how well Republicans do in the election - will be determined by how well they publicize responsibility for the fiscal crisis between now and November. Given Pelosi's plans, it is that or this seminal issue gets buried, allowing Democrats room to work ever more of their well intentioned, highly destructive policies on our nation.
Chris Dodd, Barney Frank & The Subprime Crisis
There is a wealth of information, video and audio on the left's responsibility for the subprime crisis. Two at the center of it all are Chris Dodd and Barney Frank, two men who insured that nothing was done about Fannie Mae and Freddie Mac in the name of "affordable housing" - that's code for a massive redistribution of funds on the basis of identity politics. Yet there is a total news blackout amongst all but a few media outlets on this. Fox News covers at least a portion of it today.
(H/T Hot Air)
Clinton Weighs In For McCain On Subprime Crisis
McCain's new ad finally starts to take Obama and the left to task for ownership of the subprime crisis, with a helpful assist from former President Clinton.
Failure to say any of this was what cost McCain at the last debate and may well be what tips the election in favor of Obama. Given that the MSM is so over the top for Obama, McCain does himself no favors by valuing bipartisanship above reality.
Wall St., Credit Default Swaps, Glass-Steagall, The Subprime Crisis . . . & Black Tuesday
. . . Starting back in 1995, the masters of the bond and credit market universe got too cute by half and structured a new and exciting financial instrument, the credit default swap and it's these credit default swaps that are the crux of the problem. The magnitude of the fallout from this hairy piece of "financial engineering" is staggering. Believe me, when I tell you that these things are so wrapped around the axle I don't think anyone knows who's got what. Under a CDS, a bank originates loan to a company. A second bank (or other financial institution) can agree to cover the credit risk for the loan, by agreeing to make payment to originating bank if the company defaults on the original loan. The originating bank pays a small insurance premium to the second bank for assuming the risk of the loan. But they didn't work out that way...the real estate bubble burst and the mortgage market melted down, factors of life their models didn't take into account. Which brings us to another Gods of the Copybook Heading meets Gordon Gecko Greed is Good moment...the moment when "Wall Street" took over and expanded the volume far beyond what was required for hedging risk. The traders at commercial banks and insurance companies, freed from the constraints of Glass-Steagall by Bill Clinton era deregulation, jumped in with both feet. After all, bonuses depend on the volume of business. Therefore, bank traders sold the credit risk of a loan not just once, but as many as 10 times. And they sold it not to solid banks and insurance companies, but to three solid banks, one solid insurance company, three dodgy brokers and three hedge funds. Then the traders went out and sold other CDS products that were not even related to actual loans on the books, but to imaginary indices of credit quality in the "widget" industry. See what I mean about being wrapped around the axle? The full post contains much more in the way of musings, and I highly recommend her blog to all readers.
"September 30 is the day when positions unwind and this is when the pain on Main Street will really start."
That dire prediction comes from Dinah Lord. Ms. Lord is a blogging friend who spent her formative years as a trader on Wall St. She has been kind enough to do a post explaining the role of deregulation of the finanicial industry with the repeal of the Glass-Steagall Act in 1998 as well as the credit default swaps that are at the crux of the subprime crisis. It fills in an informational gap that I have not seen anywhere else. This is mandatory reading for all taxpayers.
This from Ms. Lord:
Typically, payments under a CDS would only be triggered by the company’s failure to pay interest or principal on its debts due to bankruptcy or some other severe liquidity issue. But there are a host of intermediate or special cases that will doubtless provoke lawsuits when something goes wrong (CDS being a new market, it is by no means "recession-proof").
Credit default swaps were sold to the world as hedging transactions. Investors were told that they were simply transfers of risk, so that banks that made loans could transfer credit risks to insurance companies, which did not make loans directly, or to foreign banks that could not easily make loans in the U.S. market.
The credit risk of the system was hugely multiplied.
Instead of one $10 million credit risk loan, there are now ten $10 million credit risks on just one loan.
Because of this axle, banks around the world are under tremendous pressure. They've even stopped loaning to each other which tells you how bad it is. Bond traders have been standing around with their hands in their pockets - no one is making trades. LIBOR is quaking under the weight of the stress and the short term paper market has pretty much seized up. Commercial paper is how companies finance their day to day operations and make payroll. September 30 is the day when positions unwind and this is where the pain on Main Street will really start. A flood of redemptions is preparing to swamp Hedge Funds. The US Mint has stopped production of gold coins due to soaring demand. Tonight's Asian market open will indeed be interesting. . . .
This isn't over by a long shot. Unless this can get things moving quickly (and have you ever known anything to happen quickly when the US govt is involved?) havoc will continue to wreak the credit markets, the relief rally in the stock market will be brief. Will smart money continue to stay on the sidelines? Will there be any smart money left? At heart, financial markets are about confidence in the system and confidence has been gravely shaken.
In other words, the jig is up.
How bad it will be is anybody's guess. . . . I believe we will all muddle through somehow.
I'm also a free market trader and believe that the market has to work this out. These type of bailout programs just tend to delay the pain and there is going to be some pain, my friends. I oppose the structure of this bailout on principle, so watching these government types preening and posturing in front of the cameras this weekend was like watching a train wreck in slow motion. They are beyond clueless. And infuriating. For Nancy Pelosi to call the House Republicans for not attending negotiations that they weren't invited to attend is an outrage. To see these Democrats stand up in front of the cameras and outright lie their a$$e$ off just shows you what we're dealing with.
. . . If you are interested in learning more, this piece . . . is a good place to start and this will provide you a window into what's been going on with the banking side of the equation. If you want to laugh and learn as you get up to speed on these magillas go here and check out this horse race analogy.) . . . Some of Dinah's other Wall Street [blog posts] can be found here.
And please be reminded that the fasten seat belt sign is still illuminated. It's gonna be a bumpy one.
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