Here's all you need to know about the financial crisis

Two British comedians get perilously close to the truth



The alarming thing is that the video is 12 months old yet it is totally up to date. Even comedians could foresee what the Democrat Congresscritters could not. (H/T Agmates)

**************************

Sarah smarter than the pundits

She knew who the President of Iraq is. They didn't

A hilarious example of press bias against Palin occurred last FridayI on "The Diane Rehm Show," a production of Washington's WAMU-FM. The exchange between hostess Rehm, caller Tom of Norwich, Vt., and Washington Post columnist E.J. Dionne begins at about 46:10 of the "10:00 News Roundup":

Tom: I just wonder why not more has been made of the statement by Palin during the debate last night that "Maliki and the Talabani"--this is a quote from the transcript--"also in working with us are knowing again that we are getting closer and closer to the point of victory." The Talibani obviously are our absolute enemy and have been since 9/11; Maliki, our central ally in Iraq. This to me is a tremendous blunder, revealing a very superficial familiarity with these sorts of terms.

Rehm: Thanks for calling, Tom. . . . E.J.?

Dionne: I think that "superficial" is absolutely the right word for the knowledge or the lack of knowledge Palin showed yesterday. I'm glad the caller raised that one, and I suspect there is going to be a scouring of that transcript for exactly that sort of gaffe. That has echoes of some of the stuff she said to Katie Couric.

If you look at the debate transcript, however, you will see that the reference is not to "the Talabani" but to Talabani--as in Jalal Talabani, the president of Iraq.

Source

*************************

Sarah brings part of the American dream to life

When Sarah Palin appeared on the national stage, she was stepping into an archetype that already existed. In personality, looks, and behavior she resembled nothing less than our cultural image of the frontier woman. She was something out of history -- something that we already knew, were quite familiar with, and strongly approve of. But at the same time it's true that few people living (and those very aged) have ever met a frontier woman of the original breed. Our archetype comes from somewhere else. It comes, in fact from the movies. And in large part, from Maureen O'Hara.

While Palin looks nothing like O'Hara (who was a redhead, just for starters), the gestalt -- the overall picture -- is strikingly similar. The same strong features, the same sense of character, the same way of holding themselves. They even have the same powerful jawline that would look masculine on a less feminine woman.

The importance of the frontier woman cannot be overrated, because it was the women, in the end, who broke the frontier. Mountain men and related types had been traversing the wilderness for decades before the Westward Migration got rolling, without leaving behind as much as a scratch on the landscape. It was the women -- and their families -- who made the land bend, who brought with them a sense of permanency, who civilized the frontier. Where men went, they created forts and outposts. When women followed, they established settlements and towns.

The frontier was supposed to have "closed" by 1900, when no area existed in the continental United States that remained unsurveyed, unsettled, or untrod. That was undoubtedly the case in the real world. But in the American psyche, it's another story. There, the frontier will never be closed -- it survives as a living reality. The Westward Migration is this country's Odyssey, in the same way that the Civil War is its Iliad. What the road west implanted in our character remains, for good or ill, and is likely to remain for as long as there is an America.

That is why Sarah Palin will prove immune to attacks by the legacy media, no matter what form they may take. Palin reflects an ideal - an aspect of our best selves burned into history and made a permanent part of us all. In Palin they have come up against an archetype, a facet of the American character. This is not something you run into every day, not something the media has much experience with, and something that they will discover is not at all vulnerable to the techniques they're used to.

More here

**********************

THE CASE FOR CORPORATE INCOME TAX CUTS

Many countries now have lower taxes on business than the USA does -- and are doing very well as a result

Because they contribute to capital flight, high corporate tax rates lower government revenue. With increasing capital mobility, multinational firms respond to higher taxes by moving activities to lower tax jurisdictions. This capital flight means fewer taxes are paid domestically. In fact, governments frequently find that at a higher rate the tax actually raises less revenue. This finding adds support for the Laffer Curve, says Mehreen Younis, a research assistant with the National Center for Policy Analysis.

The insight behind the Laffer Curve is that if a tax rate is high, a government can raise the same amount of revenue (or more) by lowering the tax rate. Most countries have found that tax revenues rise following cuts in their corporate tax rates. For example:

* The average corporate income tax rate worldwide fell from 46 percent to 33 percent between 1982 and 1999, while corporate income tax collections rose from 2.1 percent to 2.4 percent of national income, reports the Cato Institute.

* Similarly, the average corporate tax rate in 19 Organization for Economic Co-operation and Development (OECD) countries fell from 45 percent in 1985 to 29 percent by 2005, while corporate tax revenues soared from 2.6 percent to 3.7 percent of gross domestic product (GDP).

* Over the 2000 to 2005 period, according to the U.S. Treasury Department, average corporate income tax revenue as a percentage of GDP was one-third greater in OECD countries (3.4 percent) than in the United States (2.2 percent).

The revenue-maximizing corporate tax rate in developed countries was about 34 percent in the late 1980s and has declined steadily to about 26 percent in recent years, estimate Alex Brill and Kevin Hassett of the American Enterprise Institute (AEI). Thus, at 39.25 percent, the U.S. corporate tax rate is not only high but also inefficient in producing revenue, says Younis.

Source

For more postings from me, see OBAMA WATCH (2), TONGUE-TIED, EDUCATION WATCH INTERNATIONAL, GREENIE WATCH, POLITICAL CORRECTNESS WATCH, GUN WATCH, SOCIALIZED MEDICINE, FOOD & HEALTH SKEPTIC, AUSTRALIAN POLITICS, IMMIGRATION WATCH INTERNATIONAL, EYE ON BRITAIN and Paralipomena

List of backup or "mirror" sites here or here -- for readers in China or for everyone when blogspot is "down" or failing to update. Email me here (Hotmail address). My Home Pages are here or here or here

****************************

The Big Lie of the late 20th century was that Nazism was Rightist. It was in fact typical of the Leftism of its day. It was only to the Right of Stalin's Communism. The very word "Nazi" is a German abbreviation for "National Socialist" (Nationalsozialist) and the full name of Hitler's political party (translated) was "The National Socialist German Workers' Party" (In German: Nationalsozialistische Deutsche Arbeiterpartei)

****************************

A shattering moment in America's fall from power (?)

I rarely fisk Leftist ignorance but I will do so now because the article below is typical of the frantic self-congratulation that Leftists are trying to extract from the banking crisis. It relies heavily of course on a belief that empty assertion can replace the facts. A great combination of supreme self-confidence and supreme ignorance is excerpted below

OUR gaze might be on the markets melting down, but the upheaval we are experiencing is more than a financial crisis, however large. Here is a historic geopolitical shift, in which the balance of power in the world is being altered irrevocably. The era of American global leadership, reaching back to the Second World War, is over. [Yet it was America that the world looked to to solve the global banking crisis]

You can see it in the way America's dominion has slipped away in its own backyard, with Venezuelan President Hugo Chavez taunting and ridiculing the superpower with impunity. [Why should America be worried by a Chihuahua?]

The setback of America's standing at the global level is even more striking. With the nationalisation of crucial parts of the financial system [All that is happening in the main is that some banks are taking over others. The big bank nationalization spree has been in Left-run Britain, where they have a history of that sort of thing], the American free-market creed has self-destructed while countries that retained overall control of markets have been vindicated. [So why are European banks in meltdown?]

In a change as far-reaching in its implications as the fall of the Soviet Union, an entire model of government and the economy has collapsed. Ever since the end of the Cold War, successive American administrations have lectured other countries on the necessity of sound finance. Indonesia, Thailand, Argentina and several African states endured severe cuts in spending and deep recessions as the price of aid from the International Monetary Fund, which enforced the American orthodoxy.

China, in particular, was hectored relentlessly on the weakness of its banking system. But China's success has been based on its consistent contempt for Western advice and it is not Chinese banks that are going bust. [The Chinese banks are VERY shaky and have long been propped up by the Chinese government]

Despite incessantly urging other countries to adopt its way of doing business, America has always had one economic policy for itself and another for the rest of the world. Throughout the years in which the US was punishing countries that departed from fiscal prudence, it was borrowing on a colossal scale to finance tax cuts and fund its overstretched military commitments. Now, with federal finances critically dependent on continuing large inflows of foreign capital, it will be the countries that spurned the American model of capitalism that will shape America's economic future. [Like how?]

The dire condition of America's financial markets is the result of American banks operating in a free-for-all environment A typically Leftist reversal of the truth. It is Congressional regulation preventing normal market operations that led to the problems] that these same American legislators who have been debating a bail-out created. It is America's political class that, by embracing the dangerously simplistic ideology of deregulation, has responsibility for the mess.

In current circumstances, an unprecedented expansion of government [All that has happened is that the Feds have bought a huge gob of undervalued paper which they will in due course sell back to the market at a profit] is the only means of averting a market catastrophe. The consequence, however, will be that America will be even more starkly dependent on the world's new rising powers. The federal government is racking up even larger borrowings, which its creditors may rightly fear will never be repaid. It may well be tempted to inflate these debts away in a surge of inflation that would leave foreign investors with hefty losses....

There has been a good deal of talk in recent weeks about imminent economic armageddon. In fact, this is far from being the end of capitalism. The frantic scrambling in Washington marks the passing of only one type of capitalism - the peculiar and highly unstable variety that has existed in America over the past 20 years. This experiment in financial laissez-faire [Heavy and stupid regulation = laissez faire?] has imploded. While the impact of the collapse will be felt everywhere, the market economies that resisted American-style deregulation will best weather the storm..... Yadda, yadda, yadda

More here

*************************

George Bush has been in office for 7 1/2 years. The first six the economy was fine. A little over a year and a half ago:

1) Consumer confidence stood at a 2-1/2 year high;
2) Regular gasoline sold for $2.19 a gallon;
3) The unemployment rate was 4.5%.
4) The DOW JONES hit a record high -- 14,000+
5) American's were buying new cars, taking cruises and vacations overseas, living large!

But American's wanted 'CHANGE'! So, in 2006 they voted in a Democratic Congress & yep -- we got 'CHANGE' all right!

1) Consumer confidence has plummeted;
2) Gasoline is now over $3.75 a gallon & climbing;
3) Unemployment is up to 5% (a 10% increase);
4) Americans have seen their home equity drop by $12 trillion dollars & prices are still dropping;
5) 1% of American homes are in foreclosure.
6) THE DOW is probing another low ~11,300 -- $2.5 TRILLION DOLLARS HAS EVAPORATED FROM THEIR STOCKS, BONDS & MUTUAL FUNDS INVESTMENT PORTFOLIOS!

YES, IN 2006 AMERICA VOTED FOR CHANGE...AND WE SURE GOT IT! ....

REMEMBER THE PRESIDENT HAS NO CONTROL OVER ANY OF THESE ISSUES, ONLY CONGRESS. AND WHAT HAS CONGRESS DONE IN THE LAST TWO YEARS, ABSOLUTELY NOTHING.

NOW THE DEMOCRATIC CANDIDATE FOR PRESIDENT CLAIMS HE IS GOING TO REALLY GIVE US CHANGE ALONG WITH A DEMOCRATIC CONGRESS!!!! JUST HOW MUCH MORE 'CHANGE' DO YOU THINK YOU CAN STAND???

Source

**********************

ELSEWHERE

European glee faded fast: "The only thing more predictable than European glee at American economic trouble is how quickly it fades amid Europe's own problems. So no sooner did Der Spiegel publish its latest eulogy for American power last week ("The Price of Hubris") than European banks had to be rescued one after another. The euro's recent fall of about 5% against the dollar is further proof that the credit mania was a global phenomenon and its aftermath requires global responses. In contrast to the U.S., Europe has no lender of last resort. The European Central Bank was created to manage the supply of euros, not to rescue failing institutions. It can provide short-term liquidity against collateral -- which it has done admirably so far. But it can't ease a solvency crisis. ECB President Jean-Claude Trichet can provide intellectual leadership, but in Europe there are 27 separate national purses and no central treasury."

Dry-Cleaning Economics in One Lesson: "Another day, another news story about economic wackiness. Gas prices rise, the dollar sinks, and stores are limiting rice sales. What could be next? Clothes hangers. Yes, clothes hangers. Marie Sledge, co-owner of Rome (Georgia) Cleaners, states, "Hangers last year at this time were $28 a box, where now they are $56." News reports indicate that cleaners in Springfield, Missouri; Birmingham, Alabama; and Harlem are also encountering doubling hanger prices. In response, many cleaners are posting signs in their shops encouraging customers to return used hangers. Hangers can't, even if combined with government subsidies, be converted into biofuels. So what is causing the rapid increase in hanger prices? Government, of course, though in this case it's the trade bureaucrats at the Department of Commerce rather than the folks behind other debacles in the news these days".

For more postings from me, see OBAMA WATCH (2), TONGUE-TIED, EDUCATION WATCH INTERNATIONAL, GREENIE WATCH, POLITICAL CORRECTNESS WATCH, GUN WATCH, SOCIALIZED MEDICINE, FOOD & HEALTH SKEPTIC, AUSTRALIAN POLITICS, IMMIGRATION WATCH INTERNATIONAL, EYE ON BRITAIN and Paralipomena

List of backup or "mirror" sites here or here -- for readers in China or for everyone when blogspot is "down" or failing to update. Email me here (Hotmail address). My Home Pages are here or here or here

****************************

The Big Lie of the late 20th century was that Nazism was Rightist. It was in fact typical of the Leftism of its day. It was only to the Right of Stalin's Communism. The very word "Nazi" is a German abbreviation for "National Socialist" (Nationalsozialist) and the full name of Hitler's political party (translated) was "The National Socialist German Workers' Party" (In German: Nationalsozialistische Deutsche Arbeiterpartei)

****************************

Site blocked

Apparently, this site has been blocked in some places. An email recently received:

I thought you needed to know that you are being censored at various US locations. I tried to access your site, a daily ritual over my morning coffee, and now suddenly my employer has labeled your site as "unacceptable". I am pursuing a redress and am hopeful that reason will prevail. The Tech folks have not given me any idea on why your site is suddenly blocked while Daily Kos is not....

If it happens to you, don't forget my mirror sites listed: here and here

*********************

Who were the defaulters among holders of sub-prime loans?

The following report seems intended to show that whites were the main culprits. It fails to do that, however. It shows that it was mainly whites who got the loans but it does not show who were the main defaulters. I suspect that will be kept a deep, dark secret

ComplianceTech, a provider of technology and business intelligence for consumer lending institutions and government agencies, has released an industry report indicating that the majority of subprime-rate loans originated in 2006 were made to non-Hispanic Whites and upper-income borrowers (conventional, 1st lien, 1-to-4 family, owner-occupied, home purchase and refinance).The findings are contrary to the way subprime-rate lending has been portrayed. Frequent media portrayals and congressional dialogue refer to subprime-rate lending as a minority and low-income issue. Findings in the report are based on data submitted by lenders under the Home Mortgage Disclosure Act (HMDA) analyzed with the data-mining tool LendingPatterns(TM).

The report concluded that a disproportionate share of loans made to minorities and low-income borrowers were subprime-rate loans, but the majority of subprime-rate loans were made to non-Hispanic Whites and upper-income borrowers. Of the 1,917,809 subprime-rate loans originated in 2006, non-Hispanic Whites had 70.82 percent of the loans, and 56.23 percent of the subprime-rate loans. Upper-income borrowers had the highest share of the subprime-rate loans at 39.37 percent, followed by 27.55 percent for middle-income borrowers and 20.99 percent for moderate-income borrowers.

Contrary to popular belief, low-income borrowers had only 149,173, or 7.57 percent, of 2006 subprime-rateloans. The report also concluded that the majority of subprime-rate loans were originated in predominately-White geographic regions (areas representing census tracts less than 30 percent minority).

More here

***********************

With One Month To Go: Why McCain Will Close and Win

By Hugh Hewitt

Because the country cannot afford the greatest gamble in its modern history at this moment in time. A confrontation with Iran looms and instability in Pakistan grows. The Islamist threat has been beaten back in Iraq, but continues to nurse its fanatical hatreds in many other places, from Waziristan to London. Israel is ringed not with an enemy that wants a state but by two enemies that want Israel to be destroyed.

The world's financial system is teetering, and the estrangement between the American people and their government has never been this deep in modern times.

The cost of energy has soared and will continue to climb. The entitlement trap has only grown worse in the three years since George Bush asked the Democrats to work with him on Social Security and they said no. The corrupt, self-dealing culture of the Beltway has poisoned the decision-making of many bureaucracies and in ways only the burdened know, and the credibility of the big media is shattered even as their audiences shrink and many of their news rooms come close to shuttering.

So, despite the rapture of college students and the registration of the homeless in Ohio, the common sense of Americans will override curiosity about Barack Obama and infatuation with his celebrity, and trust John McCain to pilot the country for the next four years.

More here

************************

Advice from Karl Rove

On experience, I'm all for it. But judgment is at least as important. Biden has 35 years in the Senate, yet his record on national-security issues during that span has been atrocious. He might be able to name Germany's chancellor, but he was wrong in his fierce opposition to Ronald Reagan in the 1980s and to the surge in 2007. Even Democrats don't see Biden as president. He got 0.9 percent of the vote in the Iowa caucuses. Forced out of the 1988 White House race for plagiarizing, he is that blend of longevity and long-windedness that Washington accepts as statesmanship.

McCain and Palin face an uphill struggle. Economic woes, war and the natural desire of Americans to give the other side a chance (after eight years with one party in the White House) should mean a big edge for Obama and Biden. But the race is tight, no candidate can get above 50 percent for more than a day or two, and it is likely to stay close right to the end.

The reason is, people have persistent doubts about whether Obama is qualified. NEWSWEEK's poll last month found that 47 percent felt Obama "has enough experience in politics and government to be a good president" but 46 percent said he didn't. In the recent ABC/Washington Post poll, 45 percent said Obama doesn't have "the needed experience," the same as last March. Even the late-September CBS News/New York Times poll found that while 46 percent feel "Obama has prepared himself well enough for the job of president," 45 percent do not. For good reason: Barack Obama has less than half a term in the Senate, where he's proposed little, accomplished less and spent virtually every day campaigning-as if being on the trail is a principal qualification for president.

McCain-Palin must deepen those doubts by pounding away on questions about Obama's character, judgment and values. Drawing on Obama's own record and statements, they need to paint him as a big spender, class warrior and cultural elitist; they need to say he's never worked across party lines or gotten his hands dirty solving big issues. But the duo must also give voters reasons to support them. They must crystallize a positive, forward-looking vision so people who see Obama as unqualified have something to hang on to. It can't be a laundry list of positions. McCain-Palin must offer a narrative about what they will do to help America see better days, especially on kitchen-table concerns.

More here

For more postings from me, see OBAMA WATCH (2), TONGUE-TIED, EDUCATION WATCH INTERNATIONAL, GREENIE WATCH, POLITICAL CORRECTNESS WATCH, GUN WATCH, SOCIALIZED MEDICINE, FOOD & HEALTH SKEPTIC, AUSTRALIAN POLITICS, IMMIGRATION WATCH INTERNATIONAL, EYE ON BRITAIN and Paralipomena

List of backup or "mirror" sites here or here -- for readers in China or for everyone when blogspot is "down" or failing to update. Email me here (Hotmail address). My Home Pages are here or here or here

****************************

The Big Lie of the late 20th century was that Nazism was Rightist. It was in fact typical of the Leftism of its day. It was only to the Right of Stalin's Communism. The very word "Nazi" is a German abbreviation for "National Socialist" (Nationalsozialist) and the full name of Hitler's political party (translated) was "The National Socialist German Workers' Party" (In German: Nationalsozialistische Deutsche Arbeiterpartei)

****************************

Even a British Leftist lady grudgingly finds great virtue in Sarah Palin

Excerpts from a comment in "The Times" about the VP debate

And the joy of Mrs Palin, what endears her to Middle America and fascinates every British woman I know, is her quality that cannot be bottled and sold: authenticity.

It shines out, even through her shopping-channel presentation, the Day-Glo patriotism of her XXL Old Glory lapel pin, her talent for talking while perpetually smiling (which, ask Gordon Brown, is a tough trick to pull off without looking deranged), the cheeseball winks, the local DJ shout-outs to kids at her brother's elementary school, the exaggerated nose wrinkles when uttering something as disgusting as "single-sex relationships" or "redistribution of wealth". She is Nicole Kidman as the driven weather girl in To Die For, Reese Witherspoon, the ruthless high-school candidate in Election. A candy-coated ball of granite.

When she offered "a bit of reality from Wasilla Main Street", Joe Biden had to counter quickly with the word down in Kay's Restaurant and the Home's Depot in Wilmington. When Mrs Palin played her son in Iraq, her special-needs baby, her worries about college fees, Mr Biden had to match it with a soldier boy of his own and raise her with his dead wife and daughter, then an emotionally welling remembrance of struggling to raise two injured sons alone.

And you could detect frustration and pique in Mr Biden's lament that, "just because I'm a man", he doesn't understand the hard decisions made over that mythical American kitchen table. But perhaps in this alone women politicians have an advantage, being the ones most able to convince voters that they have seen the inside of a maternity ward, a supermarket, a classroom, have dried tears and chewed pencils over household budgets....

Authenticity is now at a premium. William Hague, with his soft Yorkshire tones, his tales of delivering fizzy pop to streets like my own, is an asset at this hour. Perhaps he is dragging out his kitchen-table conservatism even now. Even John Prescott, oddly, is a voice for these times, as is Alan Johnson, who raised three kids on a council estate. Peter Mandelson, with his slick suits and slippery mortgage, is the last face voters can bear. But then Gordon Brown has the more clearcut task of steering the ship between the icebergs: Cameron must get with the bodies in the water.

After that debate, those who loathe Mrs Palin will still loathe her; those who cleave to her will find no new reason to be repelled. It is just shtick, she's sticking to the rigid train tracks of her notes, you tell yourself when she says how Saturday soccer parents fret at the touchline over their investments. But then the debate ends, her great messy family spreads out on stage, and Mrs Palin tenderly passes her always-placid Down's baby to her little girl. The sound is off, the scripted babble is over. It is a silent gesture, something compellingly real in a cooked-up world.

More here. It's a pity the lady commenting does not speak Australian. Australian English has a very apposite word for the virtue she sees in Sarah. Sarah is "fair dinkum".

***********************

Nothing's the Matter With Kansas

My bank is still making loans. We have none in default

Here in the heart of Kansas, the sky isn't falling and Chicken Little isn't running around without a head. Community banks like mine are still making loans and serving the needs of customers.

I used to worry about competing in the world of mega "too-big-to-fail" banks. But now I know community banks offer something the monsters can never offer -- real personal service. Many financial-type businesses say they offer the same thing, but they usually don't list personal numbers in the phone book and probably aren't driving the volunteer fire truck. My father always told me that character repaid many more debts than collateral ever would. Community banks form long-term relationships with customers.

During the farm crisis of the 1980s the over-line credits we had placed with the city correspondent banks were called. A community bank used to rely on participating loans with large metro banks. For example, if my bank had a regulatory loan limit of a million dollars and I made a two million dollar loan, I would "sell" the over-line to a large bank. These large banks suddenly suspended and called all rural credits. This is probably similar to what is happening to borrowers who use super-large banks in today's panic environment. There was nothing wrong with these loans but every small bank suffered from this irrational wrath.

A group of fellow bankers formed an ad hoc loan-pooling arrangement and we traded loans. Not a dime was lost, no borrowers were sold out and we didn't need a government bailout. It did instill a fierce sense of independence and self reliance.

Today we are reacting to a crisis that absolutely everyone knew was going to happen. Can you tell me that the entire congressional delegation from California didn't read a newspaper or watch any TV when unregulated brokers were offering 100% loans and allowing borrowers to make up their income?

Appraisal rules were established after the savings-and-loan debacle. The brokers and packagers weren't regulated so some appraisers really had a field day being creative. And now the government thinks we need new rules? They didn't enforce the existing ones.

Community bankers get really ticked off when Treasury can, with the stroke of a pen, guarantee $50 billion in money-market mutual funds, including the tax exempt funds. These funds didn't participate in generating the guarantee dollars, weren't regulated, and aren't subject to Community Reinvestment Act (CRA) rules. Why does that not surprise me? The CRA was passed in 1977 to ensure that banks meet the credit needs of their local communities but in effect practically compelled some regulated lenders to make loans to people and projects that have limited ability to repay them. Billions of these loans have been made, with a large percentage of the housing loans ending up at Fannie Mae. Community banks feel that if we must follow these CRA rules to comply with deposit insurance regulators, then anyone else receiving government guarantees should as well. Banks paid for all of the FDIC fund dollars as well as the operating costs of their regulators. We have been competing with these money-market funds for years, they mess up and now are handed a "get out of jail free" card.

All of the media pressure about this terrible crisis has really worried people. We community bankers must spend time reassuring folks that everything will be fine. The best way I have found to do that is to make more loans this September than we made a year ago, offer new products, and serve a fantastic group of customers with home loans at our bank where all is well and none are facing foreclosure.

If the government really wanted to help banks stimulate this economy, all that would be needed is a bonfire eliminating redundant red tape. While starter homes may cost a half-million dollars in some parts of this country, they are one-tenth of that here. So why does the borrower sign but three pieces of paper to process a $50,000 auto loan but needs two dozen-plus documents (which are never read) for a home purchase of the same amount? All that extra paperwork sure didn't protect anyone in this crisis.

Can anyone tell me why my small bank headquartered in a town of 1,100 is subject to the onerous rules of CRA, HMDA, CIP, FACTA, Red Flag and others? We have no red-lined areas or stop lights and everyone is making a low or moderate income. We were probably at the hospital when the borrower was born.

I am really concerned about my grandchildren's future being mortgaged by a $1 trillion porked-up bailout. But our small bank, along with many others, is alive and well and still making loans. To paraphrase the late great Kansas newspaperman William Allen White: What's right with Kansas are the more than 300 local banks taking care of Main Street.

Source

***********************

ELSEWHERE

Big, Big Audience for VP debate: "I think we've probably seen the last presidential debate on a Friday night for a while. Last week's presidential debate had an audience of about 52 million. They're talking 70 million to 75 million for last night's Palin-Biden showdown."

The Biden Error/Lie/Hallucination List (UPDATED to 22): "Below, you'll find a list of 14 "lies" Biden told last night, distributed by the McCain campaign. I'd just note two observations: first, when you tell stories of things that didn't happen with the frequency of Joe Biden, coupled with his fervent belief of these untrue and inaccurate statements, I don't think "lie" is the appropriate term. "Hallucinations" seems more accurate, I think. Second, they missed a bunch, so Biden's list of li- er, hallucinations is well beyond 14."

Great news!: "O.J. Simpson has been found guilty on all charges in the gunpoint robbery of two sports memorabilia dealers in a Las Vegas casino hotel room more than a year ago. The 61-year-old former football faces up to life in prison. A somber Simpson released a heavy sigh as the charges were read Friday in Clark County District Court. He was immediately taken into custody. The verdict comes 13 years to the day after Simpson was acquitted of killing his ex-wife, Nicole Brown Simpson, and her friend, Ronald Goldman, in Los Angeles. Co-defendant Clarence "C.J." Stewart also was found guilty on all charges and taken into custody. The men were tried on 12 criminal charges."

Cash strapped British Navy cuts destroyer fleet : "The Fleet now has just five air defence warships left to protect vessels missile or aircraft attack at a time when other nations such as China, India and Iran are investing heavily in anti-ship warfare. Three Type 42 destroyers – Exeter, Nottingham and Southampton – have been "parked up" in Portsmouth at "reduced readiness" up to two years before they were due to be decommissioned. Britain's force of destroyers and frigates has now been reduced from 35 to 22 in the last decade despite government promises it would not slip below 25. It will be another two years before the first of six of the highly sophisticated Type 45 destroyers can be deployed on operations leaving a "gaping hole" in defences. Senior Navy commanders have told The Daily Telegraph that the nation is taking "serious risks" in protecting carrier groups or amphibious flotillas and have accused the Government of neglecting the Fleet that protects the 90 per cent of Britain's imported trade"

For more postings from me, see OBAMA WATCH (2), TONGUE-TIED, EDUCATION WATCH INTERNATIONAL, GREENIE WATCH, POLITICAL CORRECTNESS WATCH, GUN WATCH, SOCIALIZED MEDICINE, FOOD & HEALTH SKEPTIC, AUSTRALIAN POLITICS, IMMIGRATION WATCH INTERNATIONAL, EYE ON BRITAIN and Paralipomena

List of backup or "mirror" sites here or here -- for readers in China or for everyone when blogspot is "down" or failing to update. Email me here (Hotmail address). My Home Pages are here or here or here

****************************

The Big Lie of the late 20th century was that Nazism was Rightist. It was in fact typical of the Leftism of its day. It was only to the Right of Stalin's Communism. The very word "Nazi" is a German abbreviation for "National Socialist" (Nationalsozialist) and the full name of Hitler's political party (translated) was "The National Socialist German Workers' Party" (In German: Nationalsozialistische Deutsche Arbeiterpartei)

****************************

A selection of conservative comments on the VP debate



Maybe John McCain should fire the advisers who won't let Sarah Palin do more interviews. The Alaska Governor has faced two major campaign challenges -- her acceptance speech and last night's debate -- and each time she's shown herself worthy of the national stage. Let Mrs. Palin be herself, and then when she makes a mistake, as every candidate does, it won't be treated like some epic judgment on her fitness to be Vice President.

Mrs. Palin couldn't match Mr. Biden's fluency on Bosnia or Darfur last night, but not too long ago neither could Barack Obama. The Republican nominee more than held her own on foreign policy in general, and in our view won on points at least on Iraq and Afghanistan. She didn't let Mr. Biden get away with interpreting the comments of a U.S. general in Afghanistan as a rejection of Mr. McCain's strategy. And on Iraq she exposed both Mr. Biden's change of heart on the war, and his change of heart on Mr. Obama's views on the war. At times Mr. Biden even looked a little frustrated -- as if he couldn't quite believe he had to share the stage with someone who hasn't hung out with Dick Lugar or . . . Mike Mansfield back when the Senate was still a civil place. Or someone who says "doggonit."

More here

*********************

She killed. She had him at "Nice to meet you. Hey, can I call you Joe?" She was the star. He was the second male lead, the good-natured best friend of the leading man. She was not petrified but peppy.

The whole debate was about Sarah Palin. She is not a person of thought but of action. Interviews are about thinking, about reflecting, marshaling data and integrating it into an answer. Debates are more active, more propelled-they are thrust and parry. They are for campaigners. She is a campaigner. Her syntax did not hold, but her magnetism did. At one point she literally winked at the nation.

As far as Mrs. Palin was concerned, Gwen Ifill was not there, and Joe Biden was not there. Sarah and the camera were there. This was classic "talk over the heads of the media straight to the people," and it is a long time since I've seen it done so well, though so transparently. There were moments when she seemed to be doing an infomercial pitch for charm in politics. But it was an effective infomercial.

Joe Biden seems to have walked in thinking that she was an idiot and that he only had to patiently wait for this fact to reveal itself. This was a miscalculation. He showed great forbearance. Too much forbearance. She said of his intentions on Iraq, "Your plan is a white flag of surrender." This deserved an indignant response, or at least a small bop on the head, from Mr. Biden, who has been for five years righter on Iraq than the Republican administration. He was instead mild.

The heart of her message was a complete populist pitch. "Joe Six-Pack" and "soccer moms" should unite to fight the tormentors who forced mortgages on us. She spoke of "Main Streeters like me." A question is at what point shiny, happy populism becomes cheerful manipulation.

Sarah Palin saved John McCain again Thursday night. She is the political equivalent of cardiac paddles: Clear! Zap! We've got a beat! She will re-electrify the base. More than that, an hour and a half of talking to America will take her to a new level of stardom. Watch her crowds this weekend. She's about to get jumpers, the old political name for people who are so excited to see you they start to jump.

More here

***********************

Governor Palin destroyed Senator Biden tonight and had fun doing it. She was a smiling barracuda teasing a guppy. The joy on her face was infectious - it was lost on Biden until she even made him smile broadly with her "There you go again" Reaganisms. There were no teleprompters. There were no MSM editing the footage to make her look bad. It was just plain Sarah - the most authentic person working as a politician I have ever seen in my lifetime.

Now if you thought Senator Biden was the winner you should have listened to Karl Rove on the roundup. He said Biden made ten undisputable misstatements and another eleven he could argue about. Biden may have sounded experienced - unfortunately he was spewing fiction. However, I never heard a word about the most damaging thing he had to say. No one apparently caught it or if they did I didn't catch it.

He said the bankruptcy courts should be able to readjust not just the interest rate on your home (in default) they should be able to adjust the principal. For example your $500,000 mortgage now is supported by a $250,000 house. He and Obama want taxpayers or the lender to foot the bill for the $250,000 loss. They support having taxpayers footing the $250,000 bill (or the lender) so the homeowner could keep their home.

That is communism. Taking property by government fiat. It is most surprising that Democrats have become so comfortable with Karl Marx that a vice-presidential candidate would espouse confiscation of private property on national TV in a presidential debate. However, if Barrack Obama and the Democrats take over the administration and the Congress I guess we need to get a copy of Das Capital to discover the many ways the American culture will be undermined and our sovereignty stolen

Comment from Dick McDonald, not online elsewhere

*********************

Senator Joe Biden lied at least 14 times during the vice presidential debate according to those counting at John McCain's presidential headquarters. Tucker Bounds, a spokesman from GOP presidential candidate John McCain's campaign said in a statement, ""Joe Biden graduated from his trademark verbal gaffe to outright lie in tonight's debate." McCain's blogger-in-chief Michael Goldfarb chronicled the 14 lies HERE.

On the foreign policy front, Biden challenged Republican vice presidential candidate Sarah Palin when she said Barack Obama's pledge to meet with any foreign leaders, including Iranian President Mahmoud Ahmadinejad, without precondition "goes beyond naivete and goes beyond poor judgment." Biden lectured Palin, "That's just simply not true about Barack Obama. He did not say he'd sit down with Ahmadinejad." During the YouTube Democratic primary debate last July Obama was asked if he would meet the leaders of Iran, Syria, Venezuela, Cuba, and North Korea without "precondition" during his first year in office. "I would," he replied.

Biden appeared to attack Obama for making that very statement in August 2007. While Biden was challenging Obama for the Democratic nomination for president Biden said he would not support such a pledge. "Would I make a blanket commitment to meet unconditionally with the leaders of each of those countries within the first year I was elected president?" he said in an appearance at the National Press Club. "Absolutely positively no."

Five of the lies Biden told were related to tax and energy votes. During the debate Biden adamantly claimed McCain voted the same way as Democratic presidential candidate Barack Obama did on a vote to raise taxes on those making $42,000 a year. The legislative record shows McCain was not present in the Senate for either of those votes and is recorded as "not voting."

More here

***********************

Sarah won this by a mile. This was her first unscripted moment on national stage and she proved herself. This makes me wonder how many good answers Gibson and Couric left on the cutting table. It would be interesting to see how the MSM spins their insistance that Palin is dumb.

Was Biden better with points? Maybe. But who in the audience noticed that? Biden mostly made wonkish points that will give boners to Washington insiders. Sarah talked in a language ordinary Americans understand.

Even fluffy Plouffe agreed (sort of) that Sarah did good. McCain's chances just went way up. McCain has taken a big hit by suspending his campaign to work on the economic crisis. This debate makes up for that.

More here

*************************

Kos: "Sarah Palin won!" He tried to be sarcastic, he tried to spin it, but he had to admit it.

And this was the most telling part of his post: "So who won? Who cares. Nothing happened to change the dynamics of this race. Palin proved that she's still unable to answer the questions posed to her, but she also didn't fall flat on her face. And in the ridiculously depressed expectations for the governor of Alaska, she didn't crash and burn. But she didn't need to maintain the status quo. That's toxic territory for her. She needed to prove that she could get beyond pre-packaged talking points to demonstrating some capacity for analytical thought. In that regard, she failed."

Those grapes are sour.

Source

****************

Republican Sarah Palin flicks off Democrat Joe Biden's talking points. The moose hunter bags another one.

Biden has veered off the facts into Daily Kos land. Biden saying Republican John McCain was wrong on the war. Two words: The Surge. Palin has sliced this guy bad. She shows he knows nothing about energy, the economy and the war. Every answer he has is Bush, Bush, Bush. He's scripted. She's not. Biden's lying. She's not.

I don't know if she can still save McCain, but she got game. Line of the night: Doggone it, Joe. : The shot of the night, after the debate, she took a sleeping Trig and perched him on her shoulder. Not fair but them's the breaks.

Source

For more postings from me, see OBAMA WATCH (2), TONGUE-TIED, EDUCATION WATCH INTERNATIONAL, GREENIE WATCH, POLITICAL CORRECTNESS WATCH, GUN WATCH, SOCIALIZED MEDICINE, FOOD & HEALTH SKEPTIC, AUSTRALIAN POLITICS, IMMIGRATION WATCH INTERNATIONAL, EYE ON BRITAIN and Paralipomena

List of backup or "mirror" sites here or here -- for readers in China or for everyone when blogspot is "down" or failing to update. Email me here (Hotmail address). My Home Pages are here or here or here

****************************

The Big Lie of the late 20th century was that Nazism was Rightist. It was in fact typical of the Leftism of its day. It was only to the Right of Stalin's Communism. The very word "Nazi" is a German abbreviation for "National Socialist" (Nationalsozialist) and the full name of Hitler's political party (translated) was "The National Socialist German Workers' Party" (In German: Nationalsozialistische Deutsche Arbeiterpartei)

****************************

There are TWO ways the U.S. government has destroyed the financial system

The email below from someone in the system (Steve Goodman of Voorhees, NJ) explains all. Not only did the government cause the problem with its insistence on lending money to anybody capable of staggering into a bank but it is now preventing any recovery of the system with its "mark to market" regulation. The essential point is that most sub-prime borrowers are in fact making their payments but the regulations not only ignore that but force the financial system to treat the mortgages concerned as worthless

I am an attorney and have spent most of my career advising banks and other lenders on compliance with the many laws and regulations that govern loans to consumers and businesses.

I think that the culprit behind this mess is fast coming to light. It is our government. In part the crisis is a runaway subprime loan giveaway foisted on regulated lenders by the government. Banks and other mortgage lenders were required by federal law to make and invest in mortgages made to persons who could not afford to borrow, or they would be in violation of the federal 1977 Community Reinvestment Act (CRA). Over the years, consumer activist groups, such as ACORN (but there are others), used the CRA to interject themselves in the regulatory process regarding requests by banks to open new branches or to merge with other institutions. Initially, the Federal Reserve Board gave little weight to these activist claims but, as the Congress criticized the Fed to enforce the CRA (and thereby to STOP discrimination in home lending, of which there was little or no evidence), banks were forced to enter into contracts with ACORN and other activist groups under which they committed to make billions of dollars of subprime loans.

The CRA was used more recently as a cudgel to force banks to make loans the banks would not make on their own. How could a bank refuse to make a loan if it would be approved by applying the very low approval standards adopted by the gse's (Fannie and Freddie)? And, under Andrew Cuomo, the Chairman of HUD in the 90's, the then "normal" rules for rejecting loans were replaced by very lax standards intended to rapidly increase home ownership by those persons who could not afford to buy homes under the old rules. HUD permitted the charging of broker's fees, ALT-A loans, interest only, and whatever the market would bear. It created the subprime market we know today and induced lenders to participate. States and localities are adopting laws and ordnances to regulate the practices of mortgage lenders and brokers, with no real understanding of how the market got to this point.

The majority of CRA (subprime) loans are now performing. But, that fact seems to have no impact on their "market" value, at least to regulators, auditors and accountants. The market for subprime loans has quickly dried up because the "mark to market" rule adopted by the Financial Accounting Standards Board requires that all assets be valued and revalued based on their current market worth. If the secondary market for any financial product (such as a loan) tends to dry up, the mark to market rule comes into play to further devalue those products traded in that market. Thus, fairly quickly, an otherwise performing subprime loan secured by residential real estate collateral has a near zero market value. Even if a buyer wanted to purchase the subprime mortgage for what the buyer deemed its worth based on the performing stream of payments. interest rate, and the like, the buyer would be required to immediately mark the asset value down on its books and undermine its own stock market value.

So, if a buyer purchased a mortgage that, based on the likelihood of payment, remaining payments, interest rate, and credit worthiness of the borrower it valued at $100,000, it would then have to apply the mark to market rule to value the loan at near zero on its books. No publicly traded or regulated company or bank can do that. Moreover, in my experience, the bank regulators will soon demand that other loans, such as prime mortgage loans, car loans, installment loans, and the like, be written down as their marketability will come into question. The regulators can themselves bring a loan market to a standstill. They did it before and will do it again.

Thus, the net effect of the mark to market accounting rule is to create a downward spiral in valuation of all loans, without regard to their true worth. And, while the mark to market rule was supposed to create a better understanding of a company's (or bank's) value, which the cost basis somehow did not do (although it worked for a long, long time and there was no perceived need to change it), it has quickly been found to artificially undermine that net worth.

So, instead of throwing $700 Billion into a black hole, to be doled out at the discretion of some bureaucrat who will have no idea what he or she is doing, and thereby prolonging instability in the market and inviting a depression, we should simply rescind the mark to market rule and let buyers and sellers reach the price for loans that would allow them to value loans in the real world and use that cost or historical value for bookkeeping purposes. To do so will keep bank regulators, accountants and auditors at bay and open the market to market trading.

(It would be a positive on public confidence in the banking system to raise the cap on deposit insurance, too but, in my opinion, that is not as essential as rescinding the mark to market rule.)

Note that by requiring the use of the mark to market rule, the government that required that subprime loans be made, is now requiring that they be written down to near zero values that Secretary is advising the Congress are much less than their real worth. After all, his argument in selling his plan to the Congress is that the government can hold the loans for a short while and then sell them into the market for large profits. But, unless and until the mark to market rule is rescinded, The government will be able to sell subprime loans only to nonpublicly traded companies. So, to unload these loans for the promised profits, the mark to market rule will rescinded when it is in the interests of our government to do so.

In essence, the U. S. Government has required banks and other mortgage lenders to make imprudent subprime loans and, under Paulson's plan, gets to steal them and later sell them for a profit. This is not a bailout. It is highway robbery. And, we are now getting to see the Paulson plan for what it is. This is a very incompetent man who rose far above his capabilities.

On Jews and the Left and the Book of Job

A couple of days ago I wrote "A small meditation for the Jewish New Year", in which I commented on a possible lesson to be learnt from the book of Job. I expected that I might hear from one or two of my Jewish readers about it and I am pleased to say that I have. Because of my strange combination of utter atheism and great respect for Judeo-Christian religion, I get a fair bit of correspondence from religious people and I appreciate it all. I reproduce below an email from a religious Jewish reader that comments further on the issues I raised earlier:

The book of Job is a profound book; we read it on Tisha B'av, the commemoration of the destrruction of the Temples in Jerusalem. The main thrust of it is that one has to have faith, ultimately, that God has reasons for what he does. While God does "attack" Job, He later gives back everything, but the story really speaks to the problem of theodicy, trying to explain the existence of evil in a world we believe is run by a benevolent God. Of course, there ARE no answers that make sense, and one either takes it on faith that it is so, or goes the way of atheism. And I am not condemning the latter at all!

But I began being a religious Jew in part because I loved the "non-answer" of Job, that there ARE no real answers. Job's friends try to make sense of what is going on, but they can't persuade Job, and that is because, philosophically and superficially, there ARE no answers that make sense. I fell in love with my own religion because it recognized that, even as the rest of the time, it acts as if it does know the answer.

Same thing in that on the day of a funeral for a close relative, there are certain prayers and things not done by the mourner. Why? Because Judaism realized it is impossible to fully accept the idea of a god or benevolent deity in the face of grief. And the rest of it may seem pretty crazy, the stuff we do (and I can step into an outsider's shoes and understand that!), and as always, this is not an attempt to persuade towards Judaism...we don't do that...but I loved these couple of things that I wrote about above.

As to Jews and evangelical Christians...I AGREE WITH YOU 100%. During the intafada, the only ones who supported Israel were Orthodox Jews and evangelical Christians. The lack of brains on the part of Jews concerning this, as well as them voting Democratic, has nothing to do with anything from Heaven! More like some suicidally stupid something from Hell.

Part of the problem is that the Nazis were labeled as "right wing", which is a perversion of what they really were. But I didn't learn or understand that until a number of years ago either. And to this day, nationlistic movements, especially in Europe, SOME (and some mistakenly) are labeled anti-Semitic AND are termed "right wing". In my father's time, in Europe, prior to the Holocaust, the anti-Semites were the Hungarian and Romanian "right-wing" nationalistic groups that allied with the Nazis, and many Jews still equate the terms.

It's wrong, but it's almost an educational problem, plus a blind spot on even the idea of learning anything new. It's the same thing of Jews voting Democratic. They still refuse to accept that FDR was an anti-Semite, or at least no friend of ours...that all the totems of the early Left that were supported by Jews were WRONGLY supported by Jews...but we have this weak spot in our hearts..and brains..that buys into the same crap, excuse the expression, that the Left is always the side of good intentions and caring about the "forgotten man"..but as has been pointed out, the very idea of that phrase was PERVERTED by FDR for political use, just as the very word "liberal" came to be coopted into something it wasn't meant to be.

Does this mean I give my fellow Jews a pass? NOPE. I am livid that we don't learn the truth, that we can't even bother to look into it (though I go to a small congregation where 90% will vote for McCain/Palin and the Republicans!). It's not just Abe Foxman, either. He's but one of many.

Finally, the other problem is that the biggest proportion of Jews in the United States are anti-religious, not just not religious. They are more concerned about "gay" and "abortion" rights than protecting Israel (or themselves, in my opinion, since they don't see the damage this does to our own people). It makes me sick, truthfully, but there it is. The irony is that most Jews are afraid of the Christian Right because of those kinds of issues, but will also say "but they are trying to convert us!". It's true, but so the hell what?! 75% of the Jewish religious Left intermarries out and loses connection to Judaism anyway, plenty getting married in churches. So what are they really worried about?

Religious Jews vote increasingly for Republicans, and though we tend to not like conversion efforts directed our way, realize we have commonalities with the Christian Right. We can still be friends...maybe not the closest, but we can certainly be allies to a point, because we absolutely believe in Israel and even many social issues.

***************************

Desperate dissing of Palin

A dispatch by Jason Szep of Reuters carries the headline "Palin's Troubles Mount for McCain in White House." What are these "troubles"? Here's the list:

An editor at Newsweek wrote a column saying that Palin is "unqualified."

Palin's interviews with CBS, Fox News and ABC "raise questions over her nomination and dealings with the media."

Palin faces "a stubborn investigation into charges that as governor she abused her power by firing a public safety commissioner."

A conservative columnist "called on Palin to step down ."

Palin has been mocked on "Saturday Night Live" and "Late Show With David Letterman."

A "conservative New York Times columnist . . . called her candidacy 'embarrassing.' "

Mitt Romney "questioned the campaign's strategy of restricting Palin's media exposure."

Except for the "stubborn investigation," all of these "troubles" are troubles with the media. One wonders why Szep did not include his own article in the list.

Source

For more postings from me, see OBAMA WATCH (2), TONGUE-TIED, EDUCATION WATCH INTERNATIONAL, GREENIE WATCH, POLITICAL CORRECTNESS WATCH, GUN WATCH, SOCIALIZED MEDICINE, FOOD & HEALTH SKEPTIC, AUSTRALIAN POLITICS, IMMIGRATION WATCH INTERNATIONAL, EYE ON BRITAIN and Paralipomena

List of backup or "mirror" sites here or here -- for readers in China or for everyone when blogspot is "down" or failing to update. Email me here (Hotmail address). My Home Pages are here or here or here

****************************

The Big Lie of the late 20th century was that Nazism was Rightist. It was in fact typical of the Leftism of its day. It was only to the Right of Stalin's Communism. The very word "Nazi" is a German abbreviation for "National Socialist" (Nationalsozialist) and the full name of Hitler's political party (translated) was "The National Socialist German Workers' Party" (In German: Nationalsozialistische Deutsche Arbeiterpartei)

****************************

Bailout nonsense

By Steven E. Landsburg, a professor of economics at the University of Rochester in Rochester, New York

We are embarking on the most radical transformation of the American economy since the New Deal, committing hundreds of billions in taxpayer money to save banks and other financial institutions from the consequences of their own bad investments. This, we are told, is the cost of averting a crisis. But I sure wish someone would explain to me exactly what crisis we're trying to avert.

What's clear is that a bunch of financial institutions have made mistakes and lost money. What's unclear is why anyone (other than the owners and managers) should care. People make mistakes and lose money all the time. Restaurants fail, grocery stores fail, gas stations fail. People pick the wrong stocks, they buy the wrong cars, and they marry the wrong spouses without turning to the Treasury for bailouts.

So what's special about banks? According to what I keep reading, it's that without banks, nobody can borrow, and the economy grinds to a halt. Well, let's think about that. Banks don't lend their own money; they lend other people's (their depositors' and their stockholders'). Just because the banks disappear doesn't mean the lenders will. Borrowers will still want to borrow and lenders will still want to lend. The only question is whether they'll be able to find each other.

That's one reason I feel squeamish about the official pronouncements we've been getting. They tell us bank failures will make it hard to borrow but never that bank failures will make it hard to lend. But every borrower is paired with a lender, so it's odd to state the problem so asymmetrically. This makes me suspect that the official pronouncers have not entirely thought this thing through.

In the 1930s, a wave of bank failures did make it hard for borrowers and lenders to find each other, and the consequences were drastic. But times have changed in at least two relevant ways. First, the disaster of the 1930s was caused not just by bank failures, but by a 30% contraction of the money supply, which is something today's Fed can easily prevent. Second, as any user of match.com can tell you, the technology for finding partners has improved since then. When a firm wants to raise capital, why can't it just sell bonds over the web? Or issue new stock? Or approach one of the hedge funds that seem to be swimming in cash? Or borrow abroad?

I know, I know, the rest of the world is in crisis too. But surely in the vast global economy, it should be possible to find someone capable of introducing a lender to a borrower. (Note that I'm not talking about going to foreign lenders, though that's another option. I'm just talking about the same American borrower and American lender who would have found each other through Bear Stearns finding each other through Barclays instead.)

In other words, I'm not sure these big Wall Street banks are really necessary, and I'm not sure we'd miss them much if they were gone. Maybe there's something I'm missing, but if so, I think it should be incumbent on Messrs. Bernanke, Paulson and above all Bush to explain what it is.

Source

**************************

ELSEWHERE



Bailout marks Karl Marx's comeback : "In his Communist Manifesto, published in 1848, Karl Marx proposed 10 measures to be implemented after the proletariat takes power, with the aim of centralizing all instruments of production in the hands of the state. Proposal Number Five was to bring about the `centralization of credit in the banks of the state, by means of a national bank with state capital and an exclusive monopoly.' If he were to rise from the dead today, Marx might be delighted to discover that most economists and financial commentators, including many who claim to favor the free market, agree with him."

Why I oppose the bailout, by US Rep. Mike Pence (R-IN): "Economic freedom means the freedom to succeed and the freedom to fail. The decision to give the federal government the ability to nationalize almost every bad mortgage in America interrupts this basic truth of our free market economy. Republicans improved this bill but it remains the largest corporate bailout in American history, forever changes the relationship between government and the financial sector, and passes the cost along to the American people. I cannot support it."

A damn good defeat: "There is no disputing that financial firms have too much unidentified and unpriced, semi-performing assets on their books. To regain access to the credit and capital markets, all these firms have to do is identify and price those assets. The resulting write-downs will trim the share price and capital will once again flow in. It's that simple, kind of. You see, these firms don't just want access to the capital markets again, they want it at the share price they can command with those overvalued assets on their books. Hey, I want $30K for my `92 Accord with 200k miles on it, too, but I'm not holding my breath. The Billionaire Bailout scheme, in a round-about fashion, is to force you to take on these overvalued assets at book value or, in most cases, higher thus replacing ??? with cash on the books of financial firms. When the scheme fell apart this afternoon, the stock market resumed its one-and-only function: discovering the share price at which firms can access capital markets."

Economic laws of conservation: "One of the economic broad principles that I am familiar with is that, while the market can be wrong, you (whoever you are) are almost certainly unable reliably to do better than the market. Claims that the government will probably recoup its investment and even profit violate this principle. Another of the economic broad principles that I am familiar with is that the market works by no other means than rewarding wise investment and punishing foolish investment. That is how it works. A more general broad principle, upon which this relies, is that you get more of what you reward. The bailout violates this principle as well. Miron, and other economists who have spoken out against the bailout, have tended to make arguments that I find comprehensible and persuasive, because they appeal to broad economic principles that I am familiar with and have long since accepted. Those who have spoken out in favor of the bailout - well, for one thing, rather than see actual arguments from them I have seen appeals to authority, appeals to hidden knowledge, sky-is-falling warnings that have no actual content but serve merely to shift the reader into panic mode, vehement attacks on those who disagree, and the like".

If you're going to bailout anybody... : "It is not clear whether there would be a financial catastrophe if the bailout were not passed. Credit is still available; millions of people are still using their credit cards. Businesses are still getting loans. However, it is true that many firms can't obtain funds except at quite high risk premiums, or not at all. The credit markets are somewhat stuck, but maybe that is because lenders are waiting for the government to act. Any plan that bails out banks and mortgages is going to favor some at the expense of others. Many who have been dutifully paying their mortgage payments, or fully own their homes, will not get any aid. If there is a major liquidity problem, and if government has to step in to prevent financial chaos, the egalitarian solution would be to provide money to everyone equally. Money to the people!"

The end of the US financial system as we know it? : "A number of Republican House members and staff, along with others who are plugged in, are telling me that Nancy Pelosi and the Democrats will come back with a new bill that includes all the left-wing stuff that was scrubbed from the bill that was defeated today in the House. . Of course, this scenario will lose more Republican votes. But insiders tell me President Bush will take Secretary Paulson's advice and sign that kind of legislation."

Bush signs sprawling spending bill: "President Bush on Tuesday signed a sprawling, stopgap spending bill to keep the government running for the next 12 months. The president's move, which came on the last day of the government's budget year, was expected even though the measure spends more money and contains more pet projects than he would have liked. The legislation is one of the few bills this election year that simply had to pass. The $630 billion-plus spending bill wraps together a record Pentagon budget with aid for automakers and natural disaster victims, and increased health care funding for veterans returning from Iraq and Afghanistan. The measure also lifts a quarter-century ban on oil drilling off the Atlantic and Pacific coasts, a victory for Bush and fellow Republicans."

UK: We'll protect bank savings: "`Prime Minister Gordon Brown has told the BBC that he will do "whatever it takes" to protect people's savings.Moves to guarantee bank deposits up to 50,000 pounds - compared with the current 35,000 limit - are expected shortly.He declined to offer an unlimited guarantee, as has happened in Ireland, but pointed out the government had not let any UK depositor lose out. .. The Irish government has made an emergency decision to guarantee the safety of all deposits in six of its main savings institutions for two years."

You can trust us with your personal data? "Britain's MI6 intelligence service is investigating how a camera holding sensitive information about al-Qaida suspects came to be lost by one of its agents and then sold on eBay, police said on Tuesday. `We can confirm we seized a camera after a member of the public reported it,' said a statement by police in Hertfordshire, north of London, after the camera was handed into a police station."

For more postings from me, see OBAMA WATCH (2), TONGUE-TIED, EDUCATION WATCH INTERNATIONAL, GREENIE WATCH, POLITICAL CORRECTNESS WATCH, GUN WATCH, SOCIALIZED MEDICINE, FOOD & HEALTH SKEPTIC, AUSTRALIAN POLITICS, IMMIGRATION WATCH INTERNATIONAL, EYE ON BRITAIN and Paralipomena

List of backup or "mirror" sites here or here -- for readers in China or for everyone when blogspot is "down" or failing to update. Email me here (Hotmail address). My Home Pages are here or here or here

****************************

The Big Lie of the late 20th century was that Nazism was Rightist. It was in fact typical of the Leftism of its day. It was only to the Right of Stalin's Communism. The very word "Nazi" is a German abbreviation for "National Socialist" (Nationalsozialist) and the full name of Hitler's political party (translated) was "The National Socialist German Workers' Party" (In German: Nationalsozialistische Deutsche Arbeiterpartei)

****************************

A small meditation for the Jewish New Year

Although I am an atheist, I am acutely aware of the vast influence that the New Testament has had on my thinking. And I regret not one jot or tittle of that. Whenever I follow the teachings of Christ (alas far too seldom) I get a blessing -- sometimes very rapidly.

I also however have great respect for the Old Testament and often read it with pleasure. One book however stands out for its difficulty: The book of Job. However you explain it, the fact of the matter is that the God of Israel placed great burdens and afflictions on a good and holy man.

If I were a Rabbi, I would see that as a metaphor for the relationship between the God of Israel and his people as a whole. The God of the Jews has given his chosen people enormous gifts but in his wisdom he has also given them one enormous handicap: political stupidity. Israel and the Jews have only ONE powerful friend in the world: American evangelical Christians. And yet Jews generally despise them. Through the despicable Abraham Foxman, they do all they can to thwart evangelical Christians and they vote in droves for the antisemitic Democratic Party, the party that also despises evangelical Christians.

Now that seems to me to be a curse from on high but I speak from a particular perspective. What Jews do politically is virtually inexplicable from an Anglo-Saxon viewpoint but to the rest of the world it may not be so at all.

This is not the time or place to spell it out in historical detail, but a large element in Anglo-Saxon exceptionalism is the way they value alliances. When Anglo-Saxons go to war they generally do so as "Allies". They in fact refer to their side of a conflict as "the Allies" or "Allied forces". They have an instinctive appreciation of the importance of friends, banal though that may seem. There is much egotism in the world that causes both people and nations to "go it alone" at times but that is something that seems to be missing in Anglo-Saxon thinking.

And that seeking of alliances even overcomes old wounds. There is only one country that has burnt Washington to the ground and that is Britain -- in 1812. But, despite that bad start, the commonality of attitudes and values has prevailed and the USA and Britain have fought alongside one-another repeatedly since then.

Why cannot Jews do the same? Christians were once a plague upon Jewry but they are not so now. Both fundamentalist Christians and Jews want to see Jews in Zion but very few Jews will grasp the hand of friendship that is held out to them by the Christians. That blindspot does seem to me very much like a curse from on high.

There are of course some Jews who fight the good fight: Charles Krauthammer, Jonah Goldberg, Jeff Jacoby, Dennis Prager etc. But on some accounts 88% of Jews voted for the Islam-loving Democratic party at the 2006 mid-terms -- so the curse is pervasive despite that.

There has always been antisemitism on both sides of politics but at least since Karl Marx it has always had its principal home on the Left. Jews can remember conservative businessmen keeping them out of country clubs but forget that Hitler was a socialist. One should be able to expect better than that from a generally clever people. In the late 19th century, the British Conservative party made a Jew (Disraeli) their Prime Minister. About 50 years later the socialist Hitler incinerated 6 million Jews. Can anybody see a difference there?

In 1939 Germany went to war with a powerful ally on its side: Soviet Russia. The German Panzern that stormed through France were powered by Soviet fuel. Germany later however turned on its ally, with disastrous results for itself. One hopes that Jews will not similarly antagonize THEIR best ally. Abe Foxman, take note.

**********************

Jewish Left Wins, Jews and Israel Lose

by Dennis Prager

For decades most of the organized left has fought against Republicans and conservatives more than against the world's greatest evils. During the Cold War, starting in the late 1960s, one heard little if anything from the left about the evils of Communism or of Communist societies such as the Soviet Union or Communist China. But one heard a great deal about the evils of American anti-Communists; Ronald Reagan was vilified much more than Soviet leader Leonid Brezhnev.

But last week, a new line seems to have been crossed. The organized Jewish left -- i.e., left-wing Jewish organizations that claim to be committed to the welfare of Jews -- made it clear that even in the fight against the greatest enemy of the Jewish people, the Jewish left prefers to fight what it considers an even greater enemy -- conservatives and Republicans.

Mahmoud Ahmadinejad, the president of the Islamic Republic of Iran, who has repeatedly called for the annihilation of Israel and who denies the Holocaust, came to speak at the United Nations. The day before he was scheduled to speak, Jewish organizations across the religious and political spectrum had organized a "Stop Iran" rally at the Dag Hammarskjold Plaza across from the UN. They had invited Sen. Hillary Clinton, D-N.Y., and then invited Republican vice-presidential nominee Alaska Gov. Sarah Palin.

The intent was to maximize publicity for the anti-Iran cause, the most important Jewish concern (and arguably the most important world concern) today. With Clinton and Palin present, the world press would cover the anti-Iran rally, and the Jewish community could show the world and America that this was one cause that knew no politics -- the most prominent female Democrat and the most prominent female Republican would both lend their names and prestige to this rally.

However, the moment that Clinton learned that the organizers had invited Palin, she withdrew. For Clinton, giving the other most popular woman politician in America publicity was unacceptable -- even among New York Jews, one of the steadfast liberal and Democratic groups in America. The near collapse of the Stop Iran rally was of less consequence to Clinton than denying Palin a public platform.

Not many were surprised by Clinton's action. What was alarming was the realization that for much of the Jewish left -- not leftists who happen to be Jews and for whom the welfare of the Jewish people is not particularly significant, but left-wing Jews who claim to care deeply about Jewish survival -- fighting Palin is of greater importance than fighting Ahmadinejad.

Left-wing Jews and Jewish organizations put intense pressure on the Conference of Presidents of Major American Jewish Organizations to cancel the invitation to Palin. And the pressure worked. As the liberal editorial page of New York's major Jewish newspaper The Jewish Week put it: "But somehow, a big-tent cause like Iran as a terrorist power seeking nuclear arms has become so politicized within our community that Monday's rally was more about the non-presence of Gov. Sarah Palin than about the very real presence at the UN of a Holocaust denier whose goal is to destroy our way of life."

Yet, in a rare move, publishing an entire speech that was never given, Ha'aretz, Israel's equivalent to The New York Times in its prestige and in its liberal politics, published the speech that Palin would have given. In Israel, liberal and even many left-wing Jews know that Iran is a greater threat to Israel than American conservatives.

The Palin speech was so good it should be read by every American concerned with Israel's survival. And it was so nonpartisan that it praised Clinton for being at the rally. To say that Palin -- who has the American, Alaskan and Israeli flags in her Juneau office -- is a better friend of the Jews and Israel than much of the American Jewish left sounds odd only to Jewish leftists.

But the Jewish left acts as if it fears and hates her more than it fears and hates Ahmadinejad. That is why within days of her nomination Rep. Robert Wexler, D-Fla., announced that "John McCain's decision to select a vice presidential running mate that endorsed Pat Buchanan for president in 2000 is a direct affront to all Jewish Americans. Pat Buchanan is a Nazi sympathizer with a uniquely atrocious record on Israel. . It is frightening that John McCain would select someone one heartbeat away from the presidency who supported a man who embodies vitriolic anti-Israel sentiments."

Wexler's statement was false: Palin supported Steve Forbes, not Buchanan. And associating Palin with Nazi or anti-Israel sympathies is morally loathsome, not to mention weakens the struggle against real anti-Semites.

For left-wing Jewish organizations and their supporters -- as opposed to many rank and file liberal Jews -- the real fight is against Republicans and especially Christian conservatives (as a community, the Jews' best friends) more than against a nuclear Iran.

After the cancellation of Palin, a left-wing Jewish organization that was influential in opposing Palin's appearance, an organization called J Street, on whose Board of Advisors sits the executive director of MoveOn.org, headlined on its website: "We Won!" That is indeed the case. The Jewish left did win. Which is why the Jews and Israel lost.

Source

For more postings from me, see OBAMA WATCH (2), TONGUE-TIED, EDUCATION WATCH INTERNATIONAL, GREENIE WATCH, POLITICAL CORRECTNESS WATCH, GUN WATCH, SOCIALIZED MEDICINE, FOOD & HEALTH SKEPTIC, AUSTRALIAN POLITICS, IMMIGRATION WATCH INTERNATIONAL, EYE ON BRITAIN and Paralipomena

List of backup or "mirror" sites here or here -- for readers in China or for everyone when blogspot is "down" or failing to update. Email me here (Hotmail address). My Home Pages are here or here or here

****************************

The Big Lie of the late 20th century was that Nazism was Rightist. It was in fact typical of the Leftism of its day. It was only to the Right of Stalin's Communism. The very word "Nazi" is a German abbreviation for "National Socialist" (Nationalsozialist) and the full name of Hitler's political party (translated) was "The National Socialist German Workers' Party" (In German: Nationalsozialistische Deutsche Arbeiterpartei)

****************************

SHANA TOVA

To my Jewish readers. And may the New Year bring shalom to us all, Jew and goy alike.

WHOSE MESS, CONGRESSMAN FRANK?

By Jeff Jacoby



"The private sector got us into this mess. The government has to get us out of it." That's Barney Frank's story, and he's sticking to it. As the Massachusetts Democrat has explained it in recent days, the current financial crisis is the spawn of the free market run amok, with the political class guilty only of failing to rein the capitalists in. The Wall Street meltdown was caused by "bad decisions that were made by people in the private sector," Frank said; the country is in dire straits today "thanks to a conservative philosophy that says the market knows best." And that philosophy goes "back to Ronald Reagan, when at his inauguration he said, `Government is not the answer to our problems; government is the problem.' "

In fact, that isn't what Reagan said. His actual words were: "In this present crisis, government is not the solution to our problem; government is the problem." Were he president today, he would be saying much the same thing.

Because while the mortgage crisis convulsing Wall Street has its share of private-sector culprits -- many of whom have been learning lately just how pitiless the private sector's discipline can be -- they weren't the ones who "got us into this mess." Barney Frank's talking points notwithstanding, mortgage lenders didn't wake up one fine day deciding to junk long-held standards of creditworthiness in order to make ill-advised loans to unqualified borrowers. It would be closer to the truth to say they woke up to find the government twisting their arms and demanding that they do so -- or else.

The roots of this crisis go back to the Carter administration. That was when government officials, egged on by left-wing activists, began accusing mortgage lenders of racism and "redlining" because urban blacks were being denied mortgages at a higher rate than suburban whites.

The pressure to make more loans to minorities (read: to borrowers with weak credit histories) became relentless. In 1977 Congress passed the Community Reinvestment Act, empowering regulators to punish banks that failed to "meet the credit needs" of "low-income, minority, and distressed neighborhoods." In 1995, under President Clinton, the law was made even more stringent. Lenders responded by loosening their underwriting standards and making increasingly shoddy loans. The two government-chartered mortgage finance firms, Fannie Mae and Freddie Mac, encouraged this "subprime" lending by authorizing ever more "flexible" criteria by which high-risk borrowers could be qualified for home loans, and then buying up hundreds of billions of dollars' worth of the questionable mortgages that ensued. Some state and local governments added pressure of their own.

All this was justified as a means of increasing homeownership among minorities and the poor. Affirmative-action policies trumped sound business practices. A manual issued by the Federal Reserve Bank of Boston advised mortgage lenders to disregard financial common sense. "Lack of credit history should not be seen as a negative factor," the Fed's guidelines instructed. Applicants lacking sufficient savings to cover a down payment and closing costs should be allowed to rely instead on "gifts, grants, or loans from relatives, nonprofit organizations, or municipal agencies." Lenders were even directed to accept welfare payments and unemployment benefits as "valid income sources" to qualify for a mortgage. Failure to comply could mean a lawsuit.

As long as housing prices kept rising -- and with millions of otherwise unqualified borrowers adding to demand, they did -- the illusion that all this was good public policy could be sustained. But it didn't take a financial whiz to recognize that a day of reckoning would come. "What does it mean when Boston banks start making many more loans to minorities?" I asked in this space in 1995. "Most likely, that they are knowingly approving risky loans in order to get the feds and the activists off their backs . . . When the coming wave of foreclosures rolls through the inner city, which of today's self-congratulating bankers, politicians, and regulators plans to take the credit?"

Not Barney Frank. And yet his fingerprints are all over this fiasco. Time and time again, Frank insisted that Fannie Mae and Freddie Mac were in good shape. Five years ago, for example, when the Bush administration proposed much tighter regulation of the two companies, Frank was adamant that "these two entities, Fannie Mae and Freddie Mac, are not facing any kind of financial crisis." When the White House warned of "systemic risk for our financial system" unless the mortgage giants were curbed, Frank complained that the administration was more concerned about financial safety than about housing.

Now that the bubble has burst and the "systemic risk" is apparent to all, Frank blithely declares: "The private sector got us into this mess." Well, give the congressman points for gall. Wall Street and private lenders have plenty to answer for, but it was Washington and the political class that derailed this train. If Frank is looking for a culprit to blame, he can find one likely suspect in the nearest mirror.

Source

****************************

The bailout: McCain is the Man who Got Action

He secured the compromises without which there was no way that House Republicans would have supported the bill

Weisman's article sums up the objectives of both McCain and Obama:

"McCain has been trying to help the House guys, trying to get their ideas into the broader bill," said a senior Republican Senate aide. "If McCain can do that, he can bring 50 to 100 House Republicans to the bill. That would be a big damn deal." . One Republican in the room said it was clear that the Democrats came into the meeting with a "game plan" aimed at forcing McCain to choose between the administration and House Republicans.

If Democrats did succeed in forcing McCain to choose between House Republicans and President Bush McCain choose wisely. President Bush is effectively a lame duck and without the support of House Republicans John McCain cannot be elected President. But more to the point, without McCain's action to stop the runaway freight train that the Obama-Dodd-Frank-Paulson bill had become, the bill might very well have failed to gain passage in the House causing further panic in world financial markets.

In an orchestrated attempt to showcase Obama's leadership ability, it's clear that instead, Obama only served to foster division by stoking the unease House GOP leaders felt over being pressured to sign off on what they knew was a bad bill. Weisman described Obama's participation at the White House meeting as a "hectoring performance" certainly not one designed to win over converts to the Democrat plan.

McCain's performance was much more presidential. Instead of doing all the talking, he LISTENED to what House GOP leaders were saying instead of trying to browbeat them into a bad agreement. And in the end, McCain is motivated by lifelong principles dedicated to protecting the taxpayer from big government boondoggles which is exactly what the Democrat plan pushed at the White House had become. If the current compromise passes, as many insist it must to avoid financial disaster, there will be only one man to thank: John McCain!

Much more here

***************************

ELSEWHERE

A stupid priest who is so far out of his depth he is drowning "The Archbishop of Canterbury Dr Rowan Williams has spoken up in support of Karl Marx, defending key aspects of his critique of capitalism. Dr Williams warns that in the face of the credit crisis, the financial world needs new regulation and says that our society is running the risk of idolatry in its relationship with wealth. In an article in Friday's Spectator, Dr Williams compares today's debtors and financiers to the feckless young clerics and landowners described in the novels of Anthony Trollope. He writes: "Individuals find that their own personal financial decisions and calculations have nothing to do with what is happening to their resources, in a process for which a debt is simply someone else's wholly disposable asset."

No Funds for Squirrely ACORN: "Given that the bailout bill is largely agreed upon as a necessary "crap sandwich" that "sucks," it is worth noting that conservative outrage did succeed in stripping the most egregious pork from the bill- funds in an "affordable housing trust fund" that could have gone to Democrat-allied and often nefarious advocacy groups like ACORN. All possible proceeds from the sale of these toxic assets will now go toward the national debt, not to affordable housing groups that pressure politicians to pressure banks to offer risky loans to low-income families, so those families can get into mortgages they can't afford. Hmmm, doesn't that sound familiar? Unhappy with the revocation of another round of gorging at the government teat, ACORN is releasing angry press releases, which is at least one reason to smile"

There is a new lot of postings by Chris Brand just up -- on his usual vastly "incorrect" themes of race, genes, IQ etc.

For more postings from me, see OBAMA WATCH (2), TONGUE-TIED, EDUCATION WATCH INTERNATIONAL, GREENIE WATCH, POLITICAL CORRECTNESS WATCH, GUN WATCH, SOCIALIZED MEDICINE, FOOD & HEALTH SKEPTIC, AUSTRALIAN POLITICS, IMMIGRATION WATCH INTERNATIONAL, EYE ON BRITAIN and Paralipomena

List of backup or "mirror" sites here or here -- for readers in China or for everyone when blogspot is "down" or failing to update. Email me here (Hotmail address). My Home Pages are here or here or here

****************************

The Big Lie of the late 20th century was that Nazism was Rightist. It was in fact typical of the Leftism of its day. It was only to the Right of Stalin's Communism. The very word "Nazi" is a German abbreviation for "National Socialist" (Nationalsozialist) and the full name of Hitler's political party (translated) was "The National Socialist German Workers' Party" (In German: Nationalsozialistische Deutsche Arbeiterpartei)

****************************